Desert Lion Energy INDUSTRIAL MINERALS LITHIUM CONFERENCE - June 2017
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Desert Lion Energy
INDUSTRIAL MINERALS LITHIUM CONFERENCE
June 2017
Private and Confidential
Corporate Presentation – June 2017
Disclaimer
Cautionary Note Regarding Forward – Looking Information
This presentation contains “forward-looking information” within the meaning of applicable securities laws. Generally, any statements that
are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-
looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”,
“intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or indicates that certain actions,
events or results “may”, “could”, “would”, “might” or “will be” taken, “occur” or “be achieved”. Forward-looking information includes, but is
not limited to: statements and expectations regarding the initial targeted resource tonnage and grade for the Desert Lion lithium project in
Namibia (the “Project”); timing and structure for the proposed going public transaction of Desert Lion Energy Corp. (the “Company” or
“Desert Lion”); the Company’s applications for additional licenses; the Company’s planned work program for the Project and its
exploration and development schedule and timetable; the rate at which electric vehicle penetration will increase and the resultant effect on
global lithium demand; and the Company’s anticipated budget.
Forward-looking information is based on certain factors and assumptions management believes to be reasonable at the time such
statements are made, including but not limited to, continued exploration activities, lithium and other metal prices, the estimation of initial
and sustaining capital requirements, the estimation of labour and production costs, the estimation of mineral reserves and resources,
assumptions with respect to currency fluctuations, the timing and amount of future exploration and development expenditures, receipt of
required regulatory approvals, the availability of necessary financing for the Project, permitting and such other assumptions and factors as
set out herein. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by
such forward-looking information, including but not limited to: risks related to changes in lithium prices; sources and cost of power and
water for the Project; the estimation of initial capital requirements; the lack of historical operations; the estimation of labour and operating
costs; general global markets and economic conditions; risks associated with exploration, development and operations of mineral deposits;
the estimation of initial targeted mineral resource tonnage and grade for the Project; risks associated with uninsurable risks arising during
the course of exploration, development and production; risks associated with currency fluctuations; environmental risks; competition faced
in securing experienced personnel; access to adequate infrastructure to support exploration activities; risks associated with changes in the
mining regulatory regime governing the Company and the Project; completion of the environmental assessment process; risks related to
regulatory and permitting delays; risks related to potential conflicts of interest; the reliance on key personnel; financing, capitalization and
liquidity risks including the risk that the financing necessary to fund continued exploration and development activities at the Project may not
be available on satisfactory terms, or at all; the risk of potential dilution through the issuance of additional common shares of the Company;
the risk of litigation.
Although the Company has attempted to identify important factors that could cause actual results to differ materially from the forward-
looking information set out in this presentation, there may be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking
information. Forward-looking information is made as of the date of this presentation and the Company does not undertake to update or
revise any forward-looking information that is included herein, except in accordance with applicable securities laws.
Private & Confidential 2
Corporate Presentation – June 2017
Disclaimer – Cont’d
THIRD PARTY INFORMATION
This presentation includes market, industry and economic data which was obtained from various publicly available sources and other
sources believed by Desert Lion to be true. Although Desert Lion believes it to be reliable, Desert Lion has not independently verified any
of the data from third-party sources referred to in this presentation, or analyzed or verified the underlying reports relied upon or referred to
by such sources, or ascertained the underlying economic and other assumptions relied upon by such sources. Desert Lion believes that its
market, industry and economic data is accurate and that its estimates and assumptions are reasonable, but there can be no assurance as
to the accuracy or completeness thereof and Desert Lion does not make any representation as to the accuracy of such information.
CONFIDENTIALITY
This presentation and its contents are confidential and proprietary to the Company and no part of it or its subject matter may be
reproduced, redistributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person (as hereafter defined) or
published in whole or in part for any purpose (collectively, “Disclose”) except as permitted hereby. The recipient of this presentation (the
“Recipient”) by accepting this presentation hereby covenants with the Company that the Recipient: (i) shall maintain the information
contained in this presentation (the “Confidential Information”) in the strictest confidence; and (ii) shall not, at any time, without the prior
written consent of the Company, which consent may be unreasonably withheld, Disclose to any individual, firm, corporation, organization,
government or government agency, or any other entity (collectively, “person”) this presentation or any Confidential Information. The
Recipient further covenants that the Recipient and/or its representatives (as permitted by the Company) will not use the Confidential
Information in any way detrimental to, or so as to obtain any commercial advantage over the Company. The Recipient agrees to be
responsible for any breach of the covenants contained herein by the Recipient and/or its permitted representatives. The Recipient agrees
to make all appropriate efforts to safeguard the Confidential Information from disclosure to any person other than as permitted hereby. If
this presentation has been received in error then it must be returned immediately.
CAUTIONARY NOTE REGARDING HISTORICAL TECHNICAL DATA
The reader is cautioned that the technical data contained herein is considered historical in nature as it is based on prior data and reports
prepared by previous owners of the Project and specifically the reports entitled “Rubikon Dumps Mapping and Resource Calculation” and
“Report on Tailings Dump Resources, Rubikon Mine”, each dated October 2014 and prepared by Phoenix Mineral Resources Ltd. for the
previous owners of the Project. Reference is also made to the report entitled “NI 43-101 Technical Report on the Rubikon Lithium
Exploration Project” dated November 26, 2016 prepared by Benzu Minerals (Pty) Ltd. The Company was not able to verify the quality
assurance and quality control processes and methods used in compiling this historical technical data. While there can be no certainty that
the historical technical data contained herein is accurate, the Company believes that the historical technical data is relevant to the overall
potential of the Project as it may indicate the presence of lithium mineralization. As sufficient work to complete the classification of the
mineralization on the Project as current mineral resources or mineral reserves has not been completed by the Company, the Company is
not treating the historical technical data as current and does not have a current mineral resource or mineral reserve estimates in respect of
the Project. This technical data cannot, therefore, be treated as compliant with National Instrument 43-101 – Standard of Disclosure for
Mineral Projects and should not be relied upon.
Private & Confidential 3
Corporate Presentation – June 2017
Disclaimer – Cont’d
CAUTIONARY NOTE REGARDING POTENTIAL QUANTITY AND GRADE FOR TARGETS
The potential quantity and grade of the Project disclosed herein is conceptual in nature; there has been insufficient exploration to define a
mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Estimates provided
are based on the initial prospecting works carried out by the previous owners of the Project.
QUALITY CONTROL AND ASSURANCE
The scientific and technical content of this presentation was reviewed and approved by Desert Lion’s Vice-President, Exploration, Cesare
Morales, who is a Qualified Person within the meaning of National Instrument 43-101.
STATUTORY RIGHTS OF ACTION
In certain circumstances, purchasers resident in certain provinces of Canada, are provided with a remedy for rescission or damages, or
both, in addition to any other right they may have at law, where an offering memorandum (such as this presentation) and any amendment
to it contains a misrepresentation. Where used herein, “misrepresentation” means an untrue statement of a material fact or an omission to
state a material fact that is required to be stated or that is necessary to make any statement not misleading in light of the circumstances in
which it was made. These remedies, or notice with respect to these remedies, must be exercised or delivered, as the case may be, by the
purchaser within the time limits prescribed by applicable securities legislation.
The following summary is subject to the express provisions of the applicable securities laws, regulations and rules, and reference is made
thereto for the complete text of such provisions. Such provisions may contain limitations and statutory defences not described here on
which the Company and other applicable parties may rely. Purchasers should refer to the applicable provisions of the securities legislation
of their province for the particulars of these rights or consult with a legal adviser.
The following is a summary of rights of rescission or damages, or both, available to purchasers resident in the province of Ontario, New
Brunswick, Nova Scotia and Saskatchewan. If there is a misrepresentation herein and you are a purchaser under securities legislation in
Ontario, New Brunswick, Nova Scotia and Saskatchewan you have, without regard to whether you relied upon the misrepresentation, a
statutory right of action for damages, or while still the owner of the securities, for rescission against the “Company”. This statutory right of
action is subject to the following: (a) if you elect to exercise the right of action for rescission, you will have no right of action for damages
against the Company; (b) except with respect to purchasers resident in Nova Scotia, no action shall be commenced to enforce a right of
action for rescission after 180 days from the date of the transaction that gave rise to the cause of action; (c) no action shall be commenced
to enforce a right of action for damages after the earlier of (i) 180 days (with respect to purchasers resident in Ontario) or one year (with
respect to purchasers resident in Saskatchewan and New Brunswick) after you first had knowledge of the facts giving rise to the cause of
action and (ii) three years (with respect to purchasers resident in Ontario) or six years (with respect to purchasers resident in
Saskatchewan and New Brunswick) after the date of the transaction that gave rise to the cause of action; (d) with respect to purchasers
resident in Nova Scotia, no action shall be commenced to enforce a right of action for rescission or damages after 120 days from the date
on which payment for the securities was made by you; (e) the Company will not be liable if it proves that you purchased the securities with
knowledge of the misrepresentation; (f) in the case of an action for damages, the Company will not be liable for all or any portion of the
damages that it proves do not represent the depreciation in value of the securities as a result of the misrepresentations; and (g) in no case
will the amount recoverable in such action exceed the price at which the securities were sold to you. The foregoing is a summary only and
is subject to the express provisions of the Securities Act (Ontario), the Securities Act (New Brunswick), the Securities Act (Nova Scotia)
Private & Confidential 4
Corporate Presentation – June 2017
Disclaimer – Cont’d
and the Securities Act (Saskatchewan), and the rules, regulations and other instruments thereunder, and reference is made to the
complete text of such provisions contained therein. Such provisions may contain limitations and statutory defences on which the Company
may rely.
In Manitoba, the Securities Act (Manitoba), in Newfoundland and Labrador the Securities Act (Newfoundland and Labrador), in Prince
Edward Island the Securities Act (PEI), in Yukon, the Securities Act (Yukon), in Nunavut, the Securities Act (Nunavut) and in the Northwest
Territories, the Securities Act (Northwest Territories) provide a statutory right of action for damages or rescission to purchasers resident in
Manitoba, Newfoundland, PEI, Yukon, Nunavut and Northwest Territories respectively, in circumstances where this presentation or an
amendment hereto contains a misrepresentation, which rights are similar, but not identical, to the rights available to Ontario purchasers.
The statutory right of action described above is in addition to and without derogation from any other right or remedy at law.
RESALE RESTRICTIONS
The securities offered in connection herewith are being offered on a private placement basis in reliance upon prospectus and registration
exemptions under applicable securities legislation. Resale of the securities offered in connection herewith will be subject to restrictions
under applicable securities legislation, which will vary depending on the relevant jurisdiction. Generally, such securities may be resold only
pursuant to an exemption from the prospectus and registration requirements of applicable securities legislation or pursuant to an
exemption order granted by appropriate securities regulatory authorities.
Private & Confidential 5
Corporate Presentation – June 2017
The Goal
The making of a world class lithium project
Lowest cost quartile production
— Reagent supply, including logistics
— Energy cost
— Labor
— Lithium units
Capital efficiency
— Infrastructure; power, transport and
water
— Labor; experienced local construction
labor force
— Climate; winterization
Execution timeline
— Permitting
— Long lead items
— Mobilization timeline
— Mining/ process technology;
implementation and ramp up
— License to operate
Private & Confidential 6
Corporate Presentation – June 2017
Lowest Cost Quartile Production
Lithium carbonate production from hard rock and brine
Hard Rock Brine
Reagents 30-40% Reagents 45-60%
Concentrate 20-35% Salt Harvesting 10-20%
Energy 15-25% Energy 7-15%
Labor 10-20% Labor 10-20%
Maintenance 3-5% Maintenance 5-8%
Operating Efficiency (US$/ t LC) 3,800 - 5,000 3,000 - 4,500
Higher operating cost, driven
by cost of concentrate
production and energy
Key to low cost production from hard rock production is ability to access low
cost concentrate, energy and close proximity to reagents
Private & Confidential 7
Corporate Presentation – June 2017
High Capital Efficiency
Lithium carbonate production from hard rock and brine
Hard Rock Brine
Concentrator 25-35% Evaporation Ponds 45-60%
Infrastructure 15-25% Infrastructure 20-40%
Lithium Carbonate Lithium Carbonate
45-60% 25-40%
Plant Plant
Capital Efficiency (US$/ a-t LCE) 10,000 - 15,000 13,000 - 17,000
Higher capital efficiency, Conversion plant required to
typically due to absent of be built at the location of the
evaporation ponds and lower deposit
infrastructure costs
Equipment generally internationally sourced, making labor the most significant
component of capital cost between regions
Private & Confidential 8
Corporate Presentation – June 2017
Low Cost mining Friendly Jurisdiction
Project highlights
Desert Lion Energy Corp. (“Desert Lion”)
holds 80% of the Desert Lion lithium project Li
in Namibia (“Project”) 2
1
Location: Namibia
Legend
— 240km from Walvis Bay
Li Project
— 210km from Windhoek
Airport
Three past producing mines on the land
package (Rubicon, Helikon and unnamed Port
Lithium Mines) Highway
Company believes target has potential for Railway
10-15 MT @1.2%-2.0% Li2O(1)
Near-term production potential from Desert Lion Energy will operate two sites,
stockpiles: waste rock and fines from the connected by existing road and rail
historic floatation plant (1)(3) infrastructure:
1.1 Mine and concentrator: located 30-
Go public: RTO anticipated Q3 of 2017(2)
km south-east of Karabib, Erongo
2.2 Conversion plant: located in Walvis
Bay. Will transform concentrate to
lithium carbonate for export
(1) Refer to “Cautionary Note Regarding Historical Technical Data” and “Cautionary Note Regarding Quantity and Grade for Targets”.
(2) Refer to “Cautionary Note Regarding Forward-Looking Information”.
Private & Confidential (3) Desert Lion has not made a formal production decision. A formal production decision will be made in respect of the stockpiles following receipt of all necessary permits, expected to be completed in 9
September 2017. A production decision by the Company in respect of stockpiles will not be based on a feasibility study of mineral reserves as defined under NI 43-101.
Corporate Presentation – June 2017
Proximity to Existing Infrastructure
Proximity to existing infrastructure
Karabib
Primary
Road
Helikon Lithium Mine
Secondary
Existing Road
NamWater Exclusive Prospecting
Pipeline License (EPL) Area
Rubicon Lithium 301 km2
Existing Mine
Powerlines
Unnamed Lithium Mine
Private & Confidential 10Corporate Presentation – June 2017
Desert Lion Lithium Geology
Highly prospective geology including three historic lithium mines
Legend
Pegmatite Outcrops Potential
Past-Producing Mines Pegmatites to Field
Exclusive Prospecting License (EPL) Check
Key Target Zones, Known Lithium Occurrences
Secondary Targets, Future Exploration Areas
Helikon Lithium Mine
Zoned Pegmatites
with Lepidolite
Zoned Pegmatites
with Lepidolite
Potential
Pegmatites to Field
Rubicon Lithium Mine Check
Zoned Pegmatites
with Li-Ta Bearing Unnamed Lithium Mine
Potential
301 km2 EPL with potential to expand land package by >350 km2 with pending additional
EPL applications (1)
Private & Confidential (1) Refer to “Cautionary Note Regarding Forward-Looking Information”. 11Corporate Presentation – June 2017
Significant Geological Intelligence
Rubicon Lithium Mine
Petalite zones
Outer zone
Lepidolite
zone
Outer zone
zoned pegmatite, c.40m wide
Rubicon Mine, looking NW
Private & Confidential 12Corporate Presentation – June 2017
Rubicon Lithium Mine Geology
Company believes target has potential for 10-15MT @ 1.2% - 2.0% Li2O(1)(2)
Private & Confidential (1) Refer to “Cautionary Note Regarding Historical Technical Data” and “Cautionary Note Regarding Quantity and Grade for Targets”. 13
(2) Refer to “Cautionary Note Regarding Forward-Looking Information”.Corporate Presentation – June 2017
Project Execution Schedule (1)
The next operating lithium mine
Phase 1 - PEA Phase 2 – Feasibility Phase 3 – Execution
Execution Planning
2017 2018 2019 2020
Activities Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Phase 1
Measured and Indicated Resource Definition
Environmental Studies
EIA for Stockpile Processing
EIA for Mine and Concentrator
EIA for Conversion Plant
Permitting Approvals
Stockpile Processing
Mine and Concentrator
Conversion Plant
Feasibility Study
Mine and Concentrator
Conversion Plant
Execution and First Production(2)
First Production from Stockpiles The next operating lithium mine
EPCM – Mine and Concentrator Commercial conc. production
EPCM - Conversion Plant
Planned TSX.V Listing LiC production
Private & Confidential (1) Refer to “Cautionary Note Regarding Forward-Looking Information”. 14
(2) Production timeline is indicative only and is dependent on results of feasibility study. The company has not made a production decision.Corporate Presentation – June 2017
The Next Operating Lithium Mine
Historic stockpiles dumps provide opportunity for early production
Rubicon and Helikon mines were historically mined for beryl, tantalum, amblygonite, petalite
and lepidolite with target head grades of between 1.7% and 3.8% Li2O. Material that was either
not required or did not meet the exceptionally high insitu grades was stacked in piles adjacent
to the mines. (1)
Two types of stockpiles; (i) approximately 500k - 1Mt of rock and (ii) approximately 500k - 1Mt
of fines from the historic floatation plant (1)(3).
Applications for mining license to crush and export expected to be received September 2017(2).
Advanced discussions with Chinese processors for offtake of stockpile materials.
(1) Refer to “Cautionary Note Regarding Historical Technical Data” and “Cautionary Note Regarding Quantity and Grade for Targets”.
(2) Refer to “Cautionary Note Regarding Forward-Looking Information”.
Private & Confidential (3) Desert Lion has not made a formal production decision. A formal production decision will be made in respect of the stockpiles following receipt of all necessary permits, due to be completed in September 15
2017. A production decision by the Company in respect of stockpiles will not be based on a feasibility study of mineral reserves as defined under NI 43-101.Corporate Presentation – June 2017
Phase 1 Underway
Phase 1 Activities:
Inferred Resource Definition
Market Studies
Metallurgical Testwork Program
Environmental Permitting Analysis
Social and Community Engagement
Preliminary Economic Assessment (“PEA”)
Key Deliverables
Preliminary resource estimate, June 2017
PEA resource estimate
PEA report
Private & Confidential 16Corporate Presentation – June 2017
Value Created & Project De-Risked
Significant progress advancing project in 2017
Since completing its last financing round, Desert Lion has completed the following milestones:
Key Activities
Closed the acquisition of the property with the sellers
6,500m of DD and RC drilling, extensive mapping/ sampling, structural analysis, hydrogeological
survey completed
Initial NI43-101 technical report expected end May
Have a plan to process and export the stockpiles
Currently being executed. Permitting submission underway. Off-take terms being negotiated.
Signed off-take Letters of Intent for the future concentrate production
Complete for potential 400ktpa of production with another 300ktpa expected from third partner
Arranged the ability to co-develop a conversion plant with existing lepidolite converters
Started PEA with Hatch
Started EIA with RBS
Private & Confidential 17Corporate Presentation – June 2017
Project Execution Team
Significant lithium project, geology and capital market experience
Tim Johnston Cesare Morelli Thomas Mushimba
President & CEO VP Exploration Namibian Management
10+ years of experience 29+ years of experience 20+ years of experience
Former Senior Lithium Consultant, Hatch Former Exploration Manager across Africa Namibian expertise and relationships
Evaluated hundreds of lithium Currently Technical Director of Assists with logistics,
projects globally Rainbow Rare Earths Ltd. & management of government and
Managed lithium projects for Rio Benzu Minerals social relations in Namibia
Tinto, Bacanora, AMG-NV, and Managed exploration projects Depth of logistics expertise
many others across Africa with De Beers gained within Namibia through
Co-authored 7 technical Previously Exploration Manager clearing and forwarding roles at
publications in the lithium sector for Africa with BHP Billiton Kuehne & Nagel
18Corporate Presentation – June 2017
Board of Directors
Highly credentialed board with mining, lithium, and finance expertise
Adonis Pouroulis Tim Johnston Peter McCague
Non-Executive Chairman President & CEO VP Corporate & Legal Affairs
Founded Pella Resources, an 10+ years developing and 15+ years corporate finance and
African-focused natural resource executing lithium projects M&A experience in the mining sector
and energy group Strong network across the Depth of securities law experience
>US$ 2 Bn raised & invested to date lithium value chain at Cassels Brock
Chris Berry Stephan Theron John Vettese
Independent Energy Metals analyst 18+ years of mining capital project Prominent corporate finance and
since 2009, lithium domain expertise development and M&A experience M&A partner at Cassels Brock
12+ years of buy & sell side capital Mining project experience Recognized as a leading lawyer by
markets experience throughout Africa, North America Chambers Canada
19Corporate Presentation – June 2017
Recap – The Goal
The start of something great in Namibia
Lowest cost production
— Above average quality resource; low cost lithium units
— Close proximity to existing infrastructure for reagents and concentrate transport
— Low energy costs
— Low cost, experienced local labor
Capital efficiency
— Existing transport, power and water infrastructure
— Low cost, experienced local labor
— Moderate climate, all year operation
Execution timeline
— Well defined permitting framework with ability to move into execution quickly
— Existing local construction contractors available
— Existing technology, with standard processing equipment
— Excellent in country relations
20Corporate Presentation – June 2017
Contact
Please direct all inquiries to:
Tim Johnston
E: tjohnston@desertlionenergy.com
Private & Confidential 21Corporate Presentation – June 2017
Appendix A
Spodumene v. Lepidolite
Parameter Units Spodumene Lepidolite
Chemical Formula - LiAlSi2O6 KLiAl2Si3O10(F,OH)3 *
Theoretical max Li
%Li 3.8% 1.7-4.6%
content
Concentrate target % Li2O 5-7% 4-4.5%
Calcination
- ~1150oC ~800oC
temperature
Concentrate + acid roast
Processing Concentrate + acid roast
- leach or sulphate roast or
methodology leach
chloride roast
* Lepidolite exists in many forms including K2(LiAl)5-6Si6-7Al1-2O20(F,OH)4 and K2Li2Al4Si7O21(F,OH)3
Private & Confidential 23Corporate Presentation – June 2017
Appendix B
Property history
The Project and the applicable mining claims were mined intermittently between 1930 and
1994.
Past production of approximately 17,000 tonnes of lithium mineral concentrate via small scale
open pit and underground mining methods for ceramics and glass industry(1)(2).
Reported head grades varied between 1.70% and 3.75% Li2O(1)(2).
Most recently held by LiCore Mining (Pty) Ltd., who completed rock sampling, mapping, and
ground geophysics.
(1) Refer to “Cautionary Note Regarding Historical Technical Data” and “Cautionary Note Regarding Potential Quantity and Grade for Targets”.
Private & Confidential
(2) NI 43-101 Technical Report on the Rubicon Lithium Exploration Project Namibia dated November 26, 2016.
24Corporate Presentation – June 2017
Appendix F
Risk Factors
The operations of the Company are subject to significant uncertainty due to the high-risk nature of its business, which is the acquisition,
financing, exploration, development and operation of mining properties. The following risk factors could materially affect the Company’s
financial condition and/or future operating results and could cause actual events to differ materially from those described in forward-looking
information relating to the Company.
Risks related to the Offering of Securities Generally
There is currently no market through which the common shares of the Company (the “Common Shares”) may be sold and purchasers
may not be able to resell the Common Shares. While the Company’s intends to complete a go-public transaction before the end of the
third quarter of 2017, there is no assurance that the Common Shares will be admitted to a listing or qualified for distribution in Canada
or any other jurisdiction.
An investment in the Common Shares is highly speculative given the uncertain nature of the Company’s business and its present
stage of development, and may result in the loss of an investor’s entire investment.
The Company was formed on June 26, 2016, has not yet commenced commercial operations and has no assets other than the EPL.
The Company has no history of earnings and will not generate earnings or pay dividends for the foreseeable future. The Company’s
lack of operating history may make it difficult for investors to evaluate the Company’s prospects for success. There is no assurance
that the Company will be successful and the likelihood of success must be considered in light of its relatively early stage of operations.
The development of the business of the Company and its ability to execute on the opportunities described herein will depend, in part,
upon the amount of additional financing available. Failure to obtain sufficient financing may result in delaying, scaling back, eliminating
or indefinitely postponing the Company’s current or future operations. There can be no assurance that additional capital or other types
of financing will be available if needed or that, if available, the terms of such financing will be acceptable.
Forward-looking information may prove inaccurate. Investors are cautioned not to place undue reliance on forward-looking information.
By their nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, of both a
general and specific nature, that could cause actual results to differ materially from those suggested by the forward-looking information
or contribute to the possibility that predictions, forecasts or projections will prove to be materially inaccurate. Additional information on
the risks, assumptions and uncertainties are found in this presentation under the heading “Cautionary Note Regarding Forward-
Looking Information”.
Risks Related to the Company’s Business
Lithium is considered an industrial mineral and the sales prices for the different lithium compounds are not public. Lithium is not a
traded commodity like base and precious metals. Sales agreements are negotiated on an individual and private basis with each
different end-user. In addition, there are a limited number of producers of lithium compounds and it is possible that these existing
producers will try to prevent new-comers from entering the chain of supply by increasing their production capacity and lowering sales
prices. Factors such as foreign currency fluctuation, supply and demand, industrial disruption and actual lithium market sale prices
could have an adverse impact on operating costs and stock market prices and on the Company’s ability to fund its activities. In each
case, the economics of the Project could be materially adversely affected, including to be rendered uneconomic.
Private & Confidential 25Corporate Presentation – June 2017
Appendix F – Cont’d
Risk Factors
The mining industry is heavily dependent upon the market price of the metals or minerals being mined. There is no assurance that a
profitable market will exist for the sale of the same. There can be no assurance that mineral prices will be such that the Company’s
properties can be mined at a profit. The price of the Common Shares and the financial results of the Company, like its mining activities,
could undergo in the future, important negative effects because of the fall of the prices of minerals, resulting in an impact on the
capacity of the Company to finance its activities.
The Company has not generated any revenues since incorporation and anticipates it will continue to have negative cash flow from
operating activities in future periods until commercial production is achieved at the Project. Even if commercial operations are achieved
at the Project, short-term operating factors relating to the lithium deposits, such as the need for orderly development of the deposits or
the processing of new or different grades of ore, may cause any mining operation to be unprofitable in any particular accounting period.
The exploration and development of the Project, and the construction of mining facilities and commencement of mining operations, will
require substantial additional financing. As the Company does not have revenues, it is dependent upon future financings to continue its
plan of operation. Failure to obtain sufficient financing will result in a delay or indefinite postponement of exploration, development or
production on the Project. Additional financing may not be available when needed or if available, the terms of such financing may not
be favourable to the Company and might involve substantial dilution to existing shareholders. Failure to raise capital when needed
would have a material adverse effect on the Company’s business, financial condition and results of operations.
The Company expects future mining operations at the Project to account for most or all of the Company’s ore production unless
additional properties are brought into production or other producing properties are acquired. Any adverse condition affecting the Project
could be expected to have a material adverse effect on the Company’s financial performance, results of operations and prospects.
The acquisition and maintenance of title to mineral properties is a very detailed and time-consuming process. While the Company has
reviewed and is satisfied with the title to the EPL, and, to the best of its knowledge, such title is in good standing, there is no guarantee
that title to the EPL will not be challenged or impugned. Title insurance is generally not available for mineral properties and the
Company’s ability to ensure that it has obtained secure mine tenure may be severely constrained. Third parties may have valid claims
underlying portions of the Company’s interests, including prior unregistered liens, agreements, royalty transfers or claims, including
native land claims, other encumbrances and title may be affected by, among other things, undetected defects.
The mining industry is intensely and increasingly competitive, and the Company competes with many companies with greater financial
resources and technical facilities than itself. Competition in the mining industry could adversely affect the Company’s ability to develop
the Project.
The Company is dependent upon a number of key management personnel. The Company’s ability to manage its operating,
development, exploration and financing activities will depend in large part on the efforts of these individuals. As the Company’s
business grows, it will require additional key financial, administrative, mining, marketing and public relations personnel as well as
additional staff for operations. The Company faces intense competition for qualified personnel, and there can be no assurance that the
Company will be able to attract and retain such personnel. The loss of the services of one or more key employees or the failure to
attract and retain new personnel could have a material adverse effect on the Company’s ability to manage and expand the Company’s
business.
Private & Confidential 26Corporate Presentation – June 2017
Appendix F – Cont’d
Risk Factors
From time to time, the Company examines opportunities to acquire additional mining assets and businesses. Any acquisition that the
Company may choose to complete may be of a significant size, may change the scale of the Company’s business and operations, and
may expose the Company to new geographic, political, operating, financial and geological risks. The Company’s success in its
acquisition activities depends on its ability to identify suitable acquisition candidates, negotiate acceptable terms for any such
acquisition, and integrate the acquired operations successfully with those of the Company. Any acquisitions would be accompanied by
risks. There can be no assurance that the Company would be successful in overcoming these risks or any other problems
encountered in connection with such acquisitions.
The development of the Project requires the construction of significant new facilities. The success of construction projects, plant
expansions and the start-up of a new mine by the Company is subject to a number of risks and challenges including the availability
and performance of engineering and construction contractors, suppliers and consultants, unforeseen geological formations, the
implementation of new mining processes, the receipt of required governmental approvals and permits in connection with the
construction of mining facilities and the conduct of mining operations, including environmental and operating permits, price escalation
on all components of construction and start-up, engineering and mine design adjustments, the underlying characteristics, quality and
unpredictability of the exact nature of mineralogy of a deposit and the consequent accurate understanding of ore or concentrate
production, the successful completion and operation of haulage ramp and conveyors to move ore and other operational elements. Any
delay in the performance of any one or more of the contractors, suppliers, consultants or other persons on which the Company is
dependent in connection with its construction activities, a delay in or failure to receive the required governmental approvals and
permits in a timely manner or on reasonable terms, or a delay in or failure in connection with the completion and successful operation
of the operational elements in connection with the Project could delay or prevent the construction and start-up of the Project as
planned and may result in additional costs being incurred by the Company beyond those budgeted. There can be no assurance that
current or future construction and start-up plans implemented by the Company will be successful.
The current operations of the Company and anticipated future operations, including exploration, development activities and
commencement of production for the Project are subject to laws and regulations governing prospecting, development, mining,
production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental
protection, mine safety and other matters. Companies engaged in exploration activities, and in the development and operation of
mines and related facilities, generally experience increased costs and delays in production and other schedules as a result of the need
to comply with applicable laws, regulations and permitting requirements. Failure to comply with applicable laws, regulations, and
permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities
causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of
additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss
or damage by reason of mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or
regulations and, in particular, environmental laws.
Private & Confidential 27Corporate Presentation – June 2017
Appendix F – Cont’d
Risk Factors
The Company is subject to various laws and regulations governing the protection of the environment. Environmental legislation
provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain
mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of
such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and
approval of environmental impact assessments. Environmental legislation is evolving in a direction of stricter standards and
enforcement, and higher fines and penalties for non-compliance. Environmental assessments of proposed projects carry a heightened
degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental
regulations has the potential to reduce the profitability of operations.
The Company’s activities and operations require permits from various domestic authorities. There can be no assurance that various
permits which the Company may require in the normal course for its current and anticipated exploration and development activities
and mining operations, including without limitation, on the Project, will be obtainable on reasonable terms or on a timely basis or that
such laws and regulations would not have an adverse effect on any mining project which the Company might undertake, including,
without limitation, the Project. Furthermore, any delays in obtaining the anticipated construction permits in respect of the Project, would
have an adverse effect on the Company’s timing and costs associated with start-up. Such delays could also allow other third-party
projects to commence production before the Project, thereby potentially reducing the Company’s target market share, which would
have an adverse impact on the level of product sales and economics of the Project.
The business of exploration for minerals and mining involves a high degree of risk that even a combination of experience, knowledge
and careful evaluation may not be able to overcome. Few properties that are explored are ultimately developed into mineral deposits
with significant value. Unusual or unexpected ground or water conditions, geological formation pressures, fires, rock bursts, power
outages, labour disruptions, flooding, earthquakes, explosions, cave-ins, landslides, mechanical equipment and facility performance
problems, the inability to obtain suitable adequate machinery, equipment or labour and other unfavourable operating conditions are
some of the risks involved in the operation of mines and the conduct of exploration and development programs. Unknown rock
mechanics and hydrogeological conditions that cannot be predicted ahead of mining, such as faulting, zones of weak rock, or zones of
unanticipated water inflow, may only be discovered during mining and may require significant changes to the mining plan. While lab
testing may reduce uncertainty in some of the rock properties, it is never possible to identify all of these potential risks in advance. The
Project and any future mining operations will be subject to all the hazards and risks normally incidental to exploration, development
and production, any of which could result in work stoppages and damage to or destruction of exploration or development facilities,
mines and other producing facilities, damage to life and property, environmental damage and possible legal liability for any or all
damage.
The mining industry is subject to significant risks that could result in damage to or destruction of property and facilities, personal injury
or death, environmental damage and pollution, delays in production, expropriation of assets and loss of title to mining claims. No
assurance can be given that insurance to cover the risks to which the Company’s activities are subject will be available at all or at
commercially reasonable premiums.
Private & Confidential 28Corporate Presentation – June 2017
Appendix F – Cont’d
Risk Factors
Certain of the directors and officers of the Company also serve as directors and/or officers of other companies involved in natural
resource exploration and development and, consequently, there exists the possibility for such directors and officers to be in a position
of conflict. The Company expects that any decision made by any of such directors and officers involving the Company will be made in
accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Company and its
shareholders, but there can be no assurance in this regard.
All industries, including the mining industry, are subject to legal claims, with and without merit. Legal proceedings may arise from time
to time in the course of the Company’s business. Such litigation may be brought in the future against the Company or the Company
may be subject to another form of litigation. Defense and settlement costs of legal claims can be substantial, even with respect to
claims that have no merit. As of the date hereof, no claims have been brought against the Company, nor has the Company received
an indication that any claims are forthcoming. However, due to the inherent uncertainty of the litigation process, should a material
claim be brought against the Company, the process of defending such claims could take away from the time and effort management of
the Company would otherwise devote to its business operations and the resolution of any particular legal proceeding to which the
Company may become subject could have a material adverse effect on the Company’s financial position and results of operations.
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