TRES QUEBRADAS(3Q) LITHIUM PROJECT CORPORATE PRESENTATION - March 2019 - March 2019 PDAC
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TRES QUEBRADAS(3Q) LITHIUM PROJECT
CORPORATE PRESENTATION
March 2019
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Scientific and Technical Information Forward-looking statem ents in this presentation may include statements r egarding
The scientific and tec hnic al information of this pr esentation has been reviewed and management’s beliefs, ex pectations or intenti ons regarding lithium producti on, electric
approved by Dr. Waldo Per ez, Ph.D., P. Geo., a qualified person purs uant to National vehicle and energy storage industry trends, mark et growth rates and the C ompany’s
Instrument 43-101 of the C anadian Securities Administrators. Mr. Perez is the future growth rates, plans and strategies , projecti ons of c ommodity prices and costs , the
President and CEO of the Com pany, and is a Ph.D in Geology with a technical future financial or operati ng performance and c ondition of the Company, including its
back ground i n mineral explor ation, incl uding lithium brines. Additional technical and business, operati ons and properties , planned explor ation and dev elopment activities and
exploration i nformati on on the 3Q Projec t is available in the Company’s technical the c osts and timing thereof, trends in lithium usages and applicati ons, future gl obal
report entitled “Updated Mineral Resource Estimate Tec hnical Report on the Tres battery c ons umption, the us e of the PEA (as defined below) as an indication of potenti al
Quebradas Lithi um Proj ect Catamarca Provinc e, Argenti na”, with an effec tive date of positive economic outc omes from the devel opment of the 3Q Projec t, the adequacy of
August 15, 2018 (the “Technical R eport”). Information about the potential economic the Company’s fi nancial res ources , Argentina as an attractiv e place to conduct busi ness,
viability of the 3Q Projec t incl uded in this pr esentation is bas ed on the previously and the timing, recei pt and mai ntenance of appr ovals, c ons ents and permits under
announc ed res ults of a preliminary economic ass essment (“PEA”) conduc ted on the applicable legislation. T he foregoing list of forward looki ng statements should not be
dev elopment of the 3Q Proj ect by the Company. T he Com pany has reported an construed as exhaustive.
increase in its estimates of mineral res ources sinc e the PEA w as c ompleted and the These s tatements and other forward-looking information are bas ed on opini ons,
results announc ed, and has not yet completed an economic study of the 3Q Projec t assumpti ons and es timates m ade by the Company in light of its experienc e and
taking the l arger mineral res ource estimate into acc ount. While the C ompany does perception of historical trends, current conditions and ex pec ted future developments, as
not ex pec t miner al ex traction methods to change as a result of the increased mineral well as other factors that the C ompany believes are appropriate and reas onabl e in the
resource estimate, and ther efore considers the PEA rel evant as a preliminary circumstances as of the date of this pr esentation, incl uding, without limitation,
indicati on of the potential economic feasi bility of the 3Q Projec t, as a res ult of the assumpti ons about the ability to raise additional c apital; future prices of lithium; the
increase i n the larger mineral resource es timate and devel opments in the lithium Company’s competitive advantages ; current mark et and end-user and product dynamics;
market from the effectiv e date of the T echnical Report to the date of this and the timing and res ults of drilling and pilot tes ting pr ograms. There c an be no
presentation, certain ec onomic and other parameters that apply to the PEA may no assurance that s uch es timates and ass umptions will prov e to be correct. If any of the
longer be c urrent. T herefore the C ompany is, and readers s hould, treat the PEA only assumpti ons or es timates made by management prove to be inc orrect, actual res ults and
as a rel evant preliminary i ndicator of the ec onomic potential of, and not a current dev elopments are likely to differ, and may differ materially, from those express ed or
economic ass essment of, the 3Q Project, subject to the ass umptions and parameters implied by the forward-looking information. Acc ordingly, readers are c autioned not to
of the PEA. place undue relianc e on suc h information. The foregoi ng list of assumptions s hould not
be construed as exhaustive.
Cautionary Note Regarding Forward-Looking Information While such opinions, ass umptions and estimates ar e c onsidered reas onabl e by the
This pres entati on contains “forward-looki ng information” withi n the meani ng of Company as of the date s uch statem ents are made, they are subject to known and
applicable Canadian s ecurities laws, which may relate to the Com pany’s future unk nown risks, unc ertainties, assumptions and other fac tors that may cause the ac tual
outl ook and anticipated ev ents or results . In some c ases , but not nec essarily all results, lev el of activity, performance or achi evements to be materially differ ent from
cases, forward-looking information c an be identifi ed by the use of forward-looking thos e express ed or implied by suc h forward-looki ng information, i ncludi ng but not limited
terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, to future requirements for additi onal capital, a limited operating history, the demand for
“an opportunity exists”, “is positioned”, “estimates”, “intends”, “ass umes”, “anticipates” and prices of lithium, property title risk, ex plorati on risk, mineral proc essing risk,
or “does not anticipate” or “believes”, or variati ons of s uch words and phras es or state unc ertainty in r elation to mineral res ource es timation, and gover nmental regul ation of the
that c ertain ac tions , events or res ults “may”, “coul d”, “woul d”, “might”, “will” or “will be mineral ex plorati on and dev elopment industry. Thes e factors and ass umptions are not
taken”, “occ ur” or “be ac hiev ed”. In additi on, any statements that refer to intended to repres ent a c omplete list of the factors and ass umptions that c ould affec t the
expectations , predictions , indications , projec tions or other characterizations of future Company.
events or circumstances contai n forward-looking information. Statements containing The Company does not undertake any obligation to publicly update or revise any
forward-looking i nformati on are not historical facts but ins tead repres ent forward-looking statements, whether as a result of new information, future
management’s expectations, estimates and projections regarding future events. events or otherwise, except as required by applicable securities laws.
1
WHY NEO LITHIUM?
T HE RIGHT PROJECT
100% owned
5th largest resource
Size and ownership of any Unique project qualities of
6th highest grade brine project
Lithium brine project is high grade and low impurities
important. 3Q is one of the few High grade core makes it 2 nd in the world (~1Mt and make it easier to process with
large project that 100% owned over 1,000mg/L) off the shelve technologies
Lowest critical impurities of any known project (3.5
Mg/L and 0.5 Sulphate/L)
Pilot ponds ~4% concentration
Pilot plant finished and in commissioning
TH E R IGH T Pilot wells and hydrological T HE RIG HT
model complete INT ANG IBLES
STR U C TURE
$45M in cash All technical people including
CEO/COO are in-country and have
Best in class institutional ownership strong experience and local knowledge
Strong research coverage Charmain and CFO have
Over $25M invested proven capital market expertise
Two full seasons of drilling with Government support and tax stability
two resource estimates granted for 30 years
Environmental base-line completed,
Strong historic PEA results
People EIA Q1 ‘19
FS work ongoing which will include in the team
Strong community
project enhancements have already done
program
this in Lithium and have
financed multi-billion projects
in the mining industry
2
LOCATION
• Project is located 30km from the Chilean
border in the Province of Catamarca,
Argentina, with direct road to pacific ports
• The company controls a total of 350km2 up
to the border with Chile
• Project is easily accessed through a
provincial highway and a recently upgraded
project road
• 100% ownership of the entire salar complex
with no option payments
• No inhabitants or aboriginal communities in
the area
• Surface easement for mine construction
granted by mining authorities
4
3Q PROJECT
• The project is located at 4,000 masl and has
similar evaporation rates as other salars in the
Puna Plateau
• Salar and brine reservoir complex that includes
three brine reservoirs and three salars
• There is only one example in the world of a
brine lake: Zhabuye (in China) and is a
producing lithium mine
• Geothermal springs (yellow stars on map) feed
the northern part of the project
• The geothermal springs contain high grade
lithium and feed into the lakes and salars
7
LITHIUM BRINE RESERVOIR AND SALAR COMPLEX
8
DRILLING PROGRAM
• 2019 drilling program underway focused on the
high grade north section
• A total of 9,334m drilled in 2 seasons
• 6,208m diamond drill holes
• 3,126m rotary holes
• Total of 48 drill holes
• Deepest hole: 647m
9
3Q PROJECT 2018 RESOURCE ESTIMATION
800 mg/L Lithium Cut-off
Li2CO3
Avg. Lithium Mg/Li Sulfate/Li
Equivalent AREA DRILLED
(mg/L)
(tonnes) DOWN 100 M
Total M&I 1,007 746,000 1.71 0.38
Inferred 1,240 186,000 1.68 0.35
400 mg/L Lithium Cut-off AREA DRILLED
DOWN 600 M
Avg. Li2CO3
Mg/Li Sulfate/Li
Lithium Equivalent
(mg/L) (tonnes)
Total M&I 614 4,000,000 3.3 0.5
Inferred 584 3,000,000 4.5 0.6
Numbers Rounded-up for ease of reference
10
DEPTH OF THE RESOURCE
• More than 50% of the resource is hosted in the upper 100m of very porous rocks
• 33% of the resource is hosted in the deeper sediments with large blue sky potential
Depth (m) Rock Type Resource % Effective Porosity
2 Lakes 1.29 100%
35 High Porosity Halite 11.74 14.7%
70 Upper Sediments 19.57 9.1%
100 Porous Halite 19.04 6.3%
> 100 Massive Halite 15.21 3.8%
>300 Deeper Sediments 10.21 5.2%
>500 Fanglomerate 22.95 11.2%
11
SIZE AND ENTERPRISE VALUE COMPARISON
• 3Q is now the fifth largest brine project worldwide, and of those
it is the only project with low critical impurities that is not in production
SQM/ALB - Atacama
Uyuni High Mg and Sulfate
and low grade
Energi - Rincon
Zhabuye
5 NLC - 3Q Project $7 EV/Resource Significant portion of this resource was
mined out and remains unreported
ORE - Olaroz $77 EV/Resource
LSC - RG / P / PG $17 EV/Resource
LAC - Cauchari $68 EV/Resource
GXY - Sal de Vida $148 EV/Resource
LTHM - Hombre Muerto
ML - Pastos Grandes $18 EV/Resource
Producing Li Brine Mine
AAL - Cauchari $28 EV/Resource
Citic - W. Taijinar
Lithium Brine Project
Nextview - Diablillos
LPI - Maricunga $22 EV/Resource
3Q Lithium Project
ILC - Mariana $12 EV/Resource
BRZ - Maricunga $36 EV/Resource
ALB - Silver Peak
ALB - La Isla
0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000
Lithium Tonnes
12GRADE COMPARISON
• 3Q is the sixth highest grade project worldwide based on 400mg/L Lithium cut-off
• High grade core of 1,106mg/L Lithium and ~1mt Lithium Carbonate make it #2 in the world
2 ~1mt of LC
6
Producing Li Brine Mine
Lithium Brine Project
High Mg and/or Sulfate
3Q Lithium Project
13IMPURITIES & CASH COST – PROJECT COMPARISON
• There are no brine projects in production worldwide with high Sulfate or Magnesium impurities
• 3Q has the lowest combined critical impurities worldwide
90
LSC - Rio Grande
80 OPEX in US$/t Lithium Carbonate
of Producing Projects
70 Zhabuye $5,500
Silver Peak $4,500
AAL - Cauchari
60 Olaroz $3,800
Zhabuye Hombre Muerto $3,500
SO4/Li Ratio
50 ILC - Mariana Atacama: $2,500
Source: company reports and industry research
40
* Excludes by-products
ALB - Silver Peak
Energi - Rincon
30 LAC - Cauchari
ORE - Olaroz
FMC - Hombre ALB - Antofalla Uyuni Citic - W. Taijinar
20 Muerto
ML - Pastos Grandes
NEXT - Angeles
ALB - La Isla
LSC - Pozuelos Producing Li Brine Mine
10 SQM/ALB - Atacama Lithium Brine Project
GXY - Sal
de Vida 3Q Lithium Project
LPI/Bearing - Maricunga
0
0 3Q 5 10 15 20 25 30 35 40
Project M g/Li Ratio
Mg/Li Ratio
13
14GRADE AND CAPEX
• The lithium grade is directly related to the size of the ponds. The size of the ponds is usually near
50% of the CAPEX of a brine project
• The higher the grade, the lower the CAPEX, but in a logarithmic scale
Other Variables:
• Evaporation rate
o Elevation
o Sun Irradiation
o Temperature
o Wind
• Pond design
• Brine Chemistry
• Rain Fall
• Snow Fall
Producing Li Brine Mine
Lithium Brine Project
3Q Lithium ProjectPRODUCTION SCALE WELL DEVELOPMENT
Highest production well in Argentina: 100 l/s
16PILOT EVAPORATION POND STRINGS
1/1200 Scale
1/600 Scale
173.8% LITHIUM BRINE PRODUCED
• The brine is calcium rich and calcium chloride precipitates naturally with 6 molecules of water,
decreasing the size of the ponds calculated in the PEA
• Losses of impregnation are a serious issue in all projects worldwide because magnesium
hydroxide and calcium sulfate, common waste minerals in the brine process, absorb water
causing up to 50% lithium losses
o 3Q does not have that waste, and has calcium chloride waste that does not adsorb water and therefore
higher recoveries are expected.
4% Lithium Brine with Calcium
chloride CrystalsLITHIUM CARBONATE PILOT PLANT IN THE PROJECT • Pilot plant has been commissioned to produce 100 tonnes per year of battery grade lithium carbonate
CURRENT DEVELOPMENT
• Over $25 million invested in the 3Q Project
o Two seasons of drilling with ~10k
o Historical PEA completed
o 100 person year-round camp
o Paved highway access plus
60km all weather road
• 2 years of weather monitoring
• 1.5 years of pond operation
• Full geochemical analytical lab
• Ponds and pumps in full operation
22HYDROGEOLOGICAL MODEL COMPLETED
• Hydrogeological model demonstrates that the project can extract high grade first, lowering the capex of
the ponds and construct more ponds as grade decreases over 20 and 30 years.3Q PROJECT – HISTORIC PRELIMINARY ECONOMIC ASSESSMENT HIGHLIGHTS
• The economic analysis of the historic PEA was based on the following assumptions:
o Construction commencing in 2019 with a three years ramp-up from 2021 to 2023
o All numbers based on a constant U.S. dollar basis
o Average lithium carbonate pricing over the life of mine is ~US$11,760/t
– Current average pricing is close to US$14,000/t (Source: Benchmark)
PEA H IGH L IGHTS AN D R ESULTS
After-Tax Net Present Value ("NPV") @ 8% Discount Rate US$1,200 million
After-Tax Internal Rate of Return ("IRR") 27.9%
Capital Expenditures US$490.2 million
Cash Operating Costs (per tonne of LCE) $2,791
Steady-state Annual Production (lithium carbonate) 35,000
Mine Life 20 years
Payback Period (from commencement of production) 1 year 8 months
23STRONG CAPITAL STRUCTURE
TSX.V: NLC;
$0.62 ~$73M
OTCQX:NTTHF; FSE:NE2
Ticker Price (February 27, 2019) Market Capitalization
GMP ($3.25) – Cormark ($3.25)
117.5M ~$45M (no debt) Canaccord ($2.00) – VII Capital ($3.00)
Macquaire ($1.60) – Beacon ($2.20)
Issued & Outstanding Shares Net Cash (September 30, 2018) Research Coverage
128.8M ~45%* ~16%
FD Outstanding Shares Institutional Ownership Insider Ownership
Note: all numbers in Canadian dollars except per share data
* Estimated, major shareholders include BlackRock, JPMorgan, RBIM, Manulife, Mackenzie, Sprott, Guardian
27NEXT STEPS
• Continue our process to select a “Strategic Partner”
• Strong interest from several parties to develop the 3Q Project
• The company believes a JV is the most logical way for project success
• News coming at the end of the Q1 2019:
• Pre-feasibility completed by GHD
• Reserve estimate
• Lithium carbonate pilot plant to be operational on site
• Final EIA to be presented
• News coming on the Q2 2019:
• Community Consultation Process for mine operation (poll completed in the city
shows very strong support of local community)
• Drill results on the drilling on the high grade zone ongoing today
• Drilling oriented to provide an updated resource and reserve estimation for final feasibility
33WHY NEO LITHIUM?
Large Simple Solar
Resource Evaporation Process
100% Owned
Strong Results Large Project
Experienced
High Grade & Technical and
Low Impurities Financial Team
Neo Lithium has discovered
one of the most promising
NEW lithium project in the world
34Contact for additional information: Headquarters:
info@neolithium.ca 401 Bay St, Suite 2702
www.neolithium.ca Toronto, Ontario, Canada M5H 2Y4You can also read
