Corporate Presentation - Li3 Energy · Corporate Presentation October 2016 1. ... 5 While difficult...
Transcript of Corporate Presentation - Li3 Energy · Corporate Presentation October 2016 1. ... 5 While difficult...
Disclaimer
Any statements contained herein which are not statements of historical fact may be
deemed to be forward-looking statements, including, without limitation, statements
identified by or containing words like "believes,” “expects,” “anticipates,” “intends,”
“estimates,” “projects,” “potential,” “target,” “goal,” “plans,” “objective,” “should”, or similar
expressions. The Company gives no assurances the assumptions upon which such
forward-looking statements are based will prove correct. Forward-looking statements
involve risks, uncertainties and assumptions, and are based on information currently
available to us. Actual results may differ materially from those expressed herein due to
many factors, including, without limitation: validation of the POSCO technology; obtaining
and the issuance of necessary government consents; confirmation of initial exploration
results; the Company's ability to raise additional capital for exploration; development and
commercialization of the Company's projects; future findings and economic assessment
reports; issuance of necessary government consents; the Company's ability to identify
appropriate corporate acquisition or joint venture opportunities in the lithium mining sector
and to establish appropriate technical and managerial infrastructure; political stability in
countries in which we operate; and lithium prices. For further information about risks faced
by the Company, and its Maricunga Project, see the “Risk Factors” section of the
Company’s Form 10K, filed with the SEC. The Company undertakes no obligation to
update any forward-looking statement contained herein to reflect events or circumstances
which arise after the date of this release.
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Lithium
– Significant growth potential in the medium and long term
– Brine projects significantly lower operational costs compared with hard rock
Chile
– The best lithium resources in the world
– Recent announcements by the Chilean government provide positive steps for the lithium industry
and show commitment to provide mechanisms for advancement of new projects
– Chilean President directly instructed Codelco to move forward with its Maricunga and Pedernales
lithium claims to promote new lithium production
Maricunga
– Located in the 2nd largest lithium bearing brine deposit in Chile with exceptional grades
– 4th top brine lithium project in the world out of 37 other brine salars
– NI 43-101 Measured Resource for minimum 20-year life with significant upside potential
POSCO
– 21% cornerstone shareholder with $18mm invested to date
– POSCO owns proprietary Technology, pilot tested on Maricunga and potential to significantly change
the Lithium industry through faster recovery and lower cost structure
Management
– Chile-based with top level technical team and significant experience in mining and financing
Li3 EnergyInvestment Highlights
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Maricunga ProjectMaricunga Lithium Brine JV – Structure
LPI, MSB and Li3 have agreed the following ownership structure for
the new JV entity in Chile (“NewCo”):
Lithium Power - 50.0%
Minera Salar Blanco - 32.3%
Li3 Energy - 17.7%
NewCo has now been incorporated, with the Maricunga tenements
and assets held by all three parties to be vended in shortly.
LPI to fund exploration and development costs over the next 2.5yrs
to earn its 50% equity interest in NewCo, with the target of
completing a Definitive Feasibility Study by late 2018. LPI will hold
50% voting rights from the start of the JV.
MSB to sell to LPI three options over the San Francisco, Salamina
and Despreciada tenements in exchange for 16 million ordinary
shares in LPI, voluntarily escrowed until 24 June 2018. The share
issue will be subject to LPI shareholder approval.
LPI to provide up to US$3.5 million via a secured loan to NewCo in
order to fast-track the initial exploration activities, funded from
current cash on hand.
The Board and Technical Committee for NewCo will be split between
LPI, MSB and Li3 from the outset, based on each company’s
respective shareholding in the Maricunga JV.
Lithium Power International Limited | 4
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Maricunga projectLithium Brines in South America – Lowest On The Cost Curve
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While difficult to directly compare lithium brine vs hard-rock, we can make the following broad observations:
Brines are typically easier & cheaper to explore.
Brines are typically cheaper & quicker to develop to production (depending on permits).
Brines require less opex once in production, and see less cost volatility.
Brines can be purified onsite to >99% lithium, while hard-rock production is sold as beneficiated ore.
Brines have historically been preferred by battery manufacturers.
Brine operations are generally regarded as having less environmental impact over time.
For the reasons above, South American lithium brines inhabit the bottom of the cost curve, as can be seen below:
Maricunga projectMaricunga Lithium Brine JV – Project Overview
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The Maricunga Salar is located in northern Chile and sits within the “Lithium Triangle”,
which contains the largest and highest quality lithium brine deposits in South America.
Maricunga is regarded as the highest quality pre-production lithium brine project in
Chile, with characteristics comparable to the world-leading Atacama lithium brine
deposit operated by SQM and Abermarle (which sits at the bottom of the global lithium
cost curve).
The Maricunga project has a foreign resource estimate* (from 2012) of 574,000
tonnes of lithium carbonate equivalent, with a very high average grade* - lithium
(1250mg/l) and potassium (8970mg/l).
Maricunga is located in Region III of Atacama in northern Chile. It is approx 170km NE
of the mining town of Copiapo. In terms of infrastructure access, Maricunga is directly
adjacent to International Highway 31, which connects northern Chile and Argentina,
and 250km from the Chilean coast.
Maricunga projectOne of the highest quality lithium salars in South America
Known foreign resource estimate* of 574,000 tonnes of
lithium carbonate equivalent, based on previous exploration.
An additional 1125 Ha of new tenements now under
exploration.
Second highest lithium grade* (1250mg/l) of the major salars
in South America.
Magnesium grade* below the Atacama deposit, with a similar
Mg/Li ratio.
High potash byproduct resulting in improved project
economics.
Close to critical road & port infrastructure.
Recent study of 37 salars ranked Maricunga as #7 salar
worldwide^.
Chilean Geological Survey has classified Maricunga as a
Category 1 deposit (one of only four in Chile).
^ signumBOX Aug 2016 * refer to LPI announcement on the 28 July 2016 and page 2 disclaimers 7
In April 2012, Hains Technology & Associates completed a NI 43-101 Compliant Measured
Resource Report with the following lithium and potassium resources (as compounds) estimated at:
The April 2012 NI 43-101 Compliant Measured Resource Report includes the following conclusions
and recommendations:
– “Results of airlift testing during the RC exploration drilling program and pumping tests on test
trenches indicate that future brine production can be achieved through a combination of
production wells and open trenches”
– “The analyses of brine chemistry indicate that the brine is amenable to lithium and potash
recovery through conventional technology”
– “It is believed that through the application of proprietary technology developed by Li3’s strategic
partners, lithium recovery from the Maricunga brine can be significantly enhanced and may range
from 45 percent to more than 70 percent”
– “It is the recommendation of the authors that a full feasibility study be completed for the
Project”
Lithium Carbonate (tonnes) Potash (tonnes)
Measured Inferred Total Measured Inferred Total
603,960 59,304 663,264 1,482,638 145,771 1,628,409
Average Concentration (g/L)(SO4+2B)/
K Li Mg Ca SO4 B Mg/Li K/Li (Cs+Mg)
8.97 1.25 8.28 12.42 0.72 0.61 6.63 7.18 0.184
Maricunga ProjectResource NI 43-101 compliant
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Maricunga projectTenement Map
The JV tenements consist of a collection of holdings in the northern (lithium-rich)
section of the Maricunga salar:
The Maricunga Salar has been subject to significant past exploration under the
previous partners, MSB and Li3. More than US$30m has been invested in these
tenements over the past 4yrs, in order to generate the existing lithium resource.
Pumping results from two test production wells (see P1 and P2 opposite)
undertaken by MSB in 2015 indicated strong brine flow rate and high lithium grades.
Under the new JV, the next phase of exploration will include the drilling of 16 diamond
drill holes and 2 pumping wells across the salar, starting later this month. This drilling
program is targeting an update of the existing lithium resource, with a new JORC
report anticipated in 1H 2017.
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In Chile, lithium is considered “strategic” and therefore under the current mining law, it is a non-
concessible substance.
Only mining exploitation concessions initiated before 1979 are authorized for the exploitation of
lithium. The Cocina mining concessions fall under this category
The Chilean government acknowledges that it is time to redefine the strategic categorization of lithium
and new government has lithium as a priority.
In June 2014, the government established the National Lithium Commission to recommend a new
State Policy for the exploitation of lithium and promotion and development of new projects
The recent announcements by the Chilean government provide positive steps for the lithium industry
in Chile. Government is committed to provide mechanisms for non-grandfathered lithium claims to
advance their projects and Chilean President directly instructed Codelco to move forward with its
Maricunga and Pedernales lithium claims to promote new lithium production
Government strategy fits well with Li3/MSB plan to advance Cocina claims as a "starter" project.
Government initiatives bring Chile to the forefront to advance lithium production in one of the best
jurisdictions worldwide, attracting world class strategic partners
Chilean Mining Law and Way ForwardSpecial circumstances around lithium
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Luis Saenz – Chief Executive Officer, President, and Director
Former head of Standard’s Bank PLC. mining and metals team, Americas
Joined Standard Bank Plc’s investment banking unit in New York (1997) and relocated to Peru
(1998) to establish Standard’s local Rep office to lead its mining and metals organization in Latin
America
– Standard Bank (JSE:SBK) is South Africa’s largest bank, conducting operations worldwide with a
focus on emerging markets
Previously worked for Pechiney World Trade in base metals trading before joining Merrill Lynch as
VP Commodities (Latin America)
Currently Director of Atico Mining and CEO of Compañia Minera Quiruvilca
Over 25 years of experience in mining finance and metals trading
Luis Santillana – Chief Financial Officer
Over 15 years mining industry experience in finance and fund raising, debt facilities, deal negotiation
and execution, strategic and financial planning, treasury management, and financial and
management reporting
Former Strategic Planning Manager for ENRC PLC, a $7bn revenue diversified mining company
listed on the LSE (FTSE 100)
Former member of the core management team at Hochschild Mining plc, a Peruvian gold and silver
producer, that led Hochschild’s successful IPO and listing on the LSE (FTSE 250). Financial
Manager for the Peruvian subsidiaries
MBA from IESE Business School (Spain) and a Bachelor’s Degree in Industrial Engineering from
Universidad de Lima (Peru), CIMA (UK)
Management TeamKnowledgeable, Experienced, Local
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Don Hains, P.Geo – Qualified Person under TSX NI 43-101 Standards
An industrial minerals exploration and economic geologist with
over 35 years of experience in development, use and analysis
of industrial minerals properties; Prepared valuation reports to
feasibility and market studies in Canada, United States,
Europe, Africa and Asia; Registered Professional Geoscientist
(Ontario License #0494); Author of CIM Best Practice
Guidelines for Estimation of Lithium Brine Resources and
Reserves
Frits Reidel, CPG – Qualified Person under TSX NI 43-101 Standards
Hydrogeologist with 25 years of working experience on water,
brine and infrastructure related projects for the mining industry
in North and South America; Previously involved with the
reserve evaluation and feasibility study of Orocobre
Ltd; Technical advisor to Lithium Americas Corp on the
Cauchari Lithium Project, and participated in the initial
resource evaluation of Salar de Hombre Muerto for FMC
Peter Ehren, Aus IMM
Independent consultant, expert in development processes and
technical and economic assessment of new projects,
especially relating to lithium (brine and minerals) and
potassium. Previously evaluated projects in China, Chile,
Argentina, and Australia and currently working for Orocobre
Macarena Gonzalez
Environmental consultant, expert in the environmental and
social fields, current consultant and partner of Process and
Environmental Consultancy; Handled environmental matters
and developed DIA’s and EIA’s for Salar de Olaroz, Salar de
Maricunga, Salar de Aguas Calientes, among others
Pedro Pavlovic
Chemical senior engineer with 40 years of experience in
project development, particularly in production of potassium
nitrate, lithium carbonate, potassium chloride, and iodine.
Previously prepared sampling procedures for brine,
evaporation design for test work and lithium processing routes
Carlos Espinoza, PhD
Current Associate Professor of Universidad de Chile, extensive
experience in hydrogeological simulation and modeling,
baseline studies evaluation of environmental impact studies
and water resources, and evaporation well simulation
(Salar de Atacama)
Technical AdvisorsVast experience in lithium brine deposits in South America
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Patrick Cussen – Chairman of the Board
35+ years minerals and mining experience; President of Celta,
a mining consulting company based in Chile ;Former Managing
Director of Chile Copper Ltd., subsidiary of Codelco, in
London; Chairman of the Board of Cesco, the Chilean think-
tank on mining
Luis Saenz – CEO, President, and Director
Patricio Campos – Director
40 years minerals and mining experience in project exploration,
evaluation, technical and economic preparation; Consultant to
Anglo American and SQM (Salar de Atacama project), Falcon
Mines, MAGSA, ACF Minera S.A., Former Professor of Mining
Economy and due diligence at the Mining Department,
Universidad de Chile and Instituto de Ingenieros de Minas de
Chile
Gi-Chen Eom – Director
Mr. Eom is a designee of POSCO Canada, Ltd. (“POSCO”). Mr.
Eom has worked for POSCO since December 1990, starting his
career as a steelworks engineer. Mr. Eom joined the steel
business division of POSCO in 2001 and has served as the Vice
President of PosLX Business Planning Team in its New Business
Development Group, Finance and Investment Division since
September 2015. Mr. Eom received his B.A. in Mechanical
Engineering from Sungkyunkwan University (SKKU) in 1991.
David Wahl – Director
Current Chairman of Southampton Associates, a Geological and
Engineering Consulting firm, specializing in mining and technical
issues for corporate clients, financial institutions and governments
Board of DirectorsActive and supportive board with a wealth of experience
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APPENDIXThe key growth for lithium is car batteries, particularly in China
16Source: CRU
According to CRU, total gloal lithium demand across all applications is forecast to grow at +8% pa (CAGR) over the next 5 years to 2020.
Last year, 44% of global lithium consumption was for lithium-ion rechargeable batteries, with demand expected to grow at +13% pa in this segment over the
next 5 years.
Within battery demand, growth in electric & hybrid vehicle batteries is expected to grow at +23% pa over the next 5 years.
The main driver of this EV/HEV/PHEV growth is China, which represents >50% of global battery production capacity.
LPI exploration manager on site (2016)
.
A combination of strong demand and supply interruptions has resulted in the Chinese lithium price rallying from ~US$5,000/t in mid 2015 (contract) to >US$20,000/t
currently (spot).
APPENDIXLithium prices continue to rally, driven by strong demand
APPENDIXThe fundamentals for lithium are strong in the medium term…
LPI exploration manager on site (2016)
Based on CRU’s forecasts, the supply/demand balance for lithium will continue to remain tight over the next 5 years.
Sonic Drilling Truck
at C-3
Sonic Drilling Truck
at C-3
C-3 Core Samples Core Sample
Sonic Drill Hole
Lab Samples C-3 Core Samples
Maricunga Exploration 2011/2012: Sonic drilling (C-1 to C-6) and core samples
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Production Well Pump,
Located at P-1 and P-2
P-2 and
Monitoring WellTrench
Brine
Pumping
Monitoring Well
(Total of 4 per
Production Well)
Well Drilling Truck
P-2 Samples
Well Pump
Maricunga Exploration 2011/2012: P-1 and P-2 production wells
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Rock Drilling / Boart Longyear Camp
Core Samples
OfficeStorage
Dormitories
Kitchen & Dining
Trucks
LabShowers
Restrooms
Legend:
1 – 58: 2007 Campaign Drill Holes
S1 – S6: Seismic Lines
C1 – C6: Sonic Core Boreholes
P1 – P2: Production Wells
Camp is located 4km northeast from
the Project
Maricunga Exploration 2011/2012: Site map and camp
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