2023: Steadily Advancing Towards a Resource

0:08 Hello and welcome everyone to Ion Energy's live investment summit today hosted by 6. I'm pleased to introduce our speaker today. We have Ion Energy's CEO and director, Ali Haji. Ali will walk us through a company presentation, and after we will be taking questions live. So as a reminder, you can submit your questions at any time during the presentation, and we'll try to get to them at the end. And as always, this event is being recorded and available to watch afterwards on six.com. But without any further ado, I'll hand it over to Ali to kick it off. Thank you, Dasha, I appreciate that. And thank you for everybody that's dialed in here today to take a listen to not only ION as a story, for those of you that are new to it, I will be providing sort of a quick overview and for our existing shareholders, of course, a recap of what we accomplished last year and what you can expect from the company for 2023.

0:57 Typical disclaimer as required. Those that are new to the company, I'll sort of walk through this very quickly. I'm, of course, Ali Hadji, the chief executive and co-founder and director of Ion Energy. I started the company back in 2017. Matthew Wood is my chairman, an individual with a fair bit of mining experience around the world, specifically in Mongolia for the last 13 years. We have representation in Asia through Wen-Di Lee, an ex-Nobel Group employee. 0.5 our board is Mongolian, so Bata and Enki. So, of course, that's important, irrespective of jurisdiction. And then I want to touch on very quickly some of our more lithium focused advisory board members that have been along our journey for since the inception of the company and those would be Paul for Natsari. He was the original chairman of Lithium Americas founding director at Neo Lithium and a senior partner at Faskin that facilitated the sale of Neolithium to Zijin about a year and a half ago now I suppose.

1:53 So an individual that's vastly considered or widely considered I should say a pioneer in the lithium brine space in the Americas. Don Haynes is our Chief Technical Advisor. He currently assists with designing and overseeing all the exploration activities in the country of Mongolia where we hold our assets. And he's also on the board of various other lithium companies. So an individual that, again, considered very much a pioneer in terms of lithium exploration. There's probably no spot on the globe that Don hasn't stepped on with respect to lithium exploration. Dr. Hashpat is our in-country lithium expert. He follows instruction from Don and Dr. Mark King, who we'll touch on in just a second. And then Dr. David Deak is the ex-CTO and SVP of Lithium Americas. He was also at Tesla where he built or helped build the supply chain for Gigafactory 1 in Nevada.

2:43 So we assembled a strong team right off the hop, as I think most of our shareholders know. We knew that we were at the tail end of the last lithium cycle when ion was born. And of course, now we see prices that are well over anyone would have imagined. Let's say that $4,000 a ton prior to the pandemic. And now prices in China hovering around the $75,000 per ton mark. We control 110,000 hectares in Mongolia. We're first movers in terms of Mongolia and lithium. We're the first brine explorer in Mongolia. And we started exploration shortly after we went public in 2020. For those that are new to our story, why Mongolia? Mongolia is about 1.5 million square kilometers, population about 3.5 million people. It's about 1.5 times the size of Ontario for any sort of comparison purposes.

3:32 The economic growth is really accelerating. We're seeing a new younger government, very supportive of foreign investment, so much so that Rio Tinto in the last little while here acquired the outstanding shares of Turquoise Hill, for all you told boy, essentially equating to about an $8 billion investment into the country by a global major in the mining space. And something that's rather new to Mongolia, of course, is the entry of Chinese investors. And so Zijin, which is a Chinese global major that I mentioned earlier, acquired neolithicium, has entered into a strategic relationship with Xanadu in order to help fund their exploration activities and ultimate expansion of their operations in countries. So that's a little new to the Mongolian story, because historically you would not have seen the Chinese directly invest in now and have that announced.

4:22 We are seeing now, importantly, the prime minister of Mongolia spending a fair bit of time in Beijing trying to encourage additional investment from the Chinese given their proximity to that border. Our advantage as a team, as I mentioned, you know, Matthew Wood went over to Mongolia in 2009 looking for a gold company, ended up being there during the last coal boom, acquired a company by the name of Hunu Coal through an IPO in Australia, $20 million. And then he sold that company with an inferred resource indication to Hunu Coal of Thailand, and that was A0A billion dollar sale. In 2016, we revisited the group, or the country I should say, to look for a gold asset that we ultimately acquired from Sentara, and that's Step Gold, a producer in country today.

5:08 350 employees, 1 expat, 50,000 ounces per annum, so you can actually get work done with local Mongolians. You do not require expensive expats, and so it's a fantastic place to do business. Ion Energy, why we're all here today, the IPO happened in 2020. It was a $2.7 million IPO. And for those of you that have been following the story, you do know that we've done, or We completed a bought deal for $5.75 million additionally back in 2021. So our flagship asset is Bava Ayl. It's 81,000 hectares, about 23 kilometers from the Chinese border at its closest point. For a sense of scale, It's about 60 kilometers wide by 20 kilometers tall at its tallest spot. So a significant asset. We went public in August 2020, a time in which Mongolia was very much shut down for international travel. In fact, it opened up in February of last year.

6:01 We spent some time on the asset conducting a very shallow drilling program. The historical results showed us an average rate of 426 ppm, an average maximum rate of 811 ppm with favorable chemistry. We spent a fair bit of time drilling that asset back in 2020, 21 in order to get a better understanding of it. But because we're first movers in Mongolia for lithium, the necessary skill set or the skill set that you would expect to see in Chile, Argentina, Bolivia, Nevada, or anywhere else that you currently have lithium exploration or production did not exist in Mongolia. And so we opted to get a sense of this behemoth of a license by using an auger program. We did so with 222 holes. We found a grade of 1502 ppm at our highest sort of spot at AU17, which is almost double the 811 that was historically found. And then importantly, we also found a very promising copper-nickel discovery by the name of victory.

7:01 It spans about 2.5 by 2 kilometers and we will focus our exploration efforts on Bavaio later this year or perhaps early into next. And the reason for that of course is Urgatnarran. Urgatnarran is an asset we acquired before we concluded, or right around the time that we concluded our bought deal with PI Financial and Stiefel GMP. It's in Dorongovia province, about 150 kilometers from the Chinese border. And it's very much a basin in a typical sense, very similar to what you would expect to see in Chile, Argentina or Bolivia for that matter. So understanding that the country had opened up last year, Don, myself, Mark and the rest of the team prepared an exploration program to get out to country and actually get to work on Urgak-Narren.

7:49 We went out there in April of last year, we collected a surface sample of brine that measured 918 milligrams per liter lithium. Of course, if you compare that to numbers in Latam, It would very much be a tier 1 grade, not to say that that would be the grade at depth, but very promising indeed. And that forced us or encouraged us rather to get started on a drilling program. There was an auger program, but also a TEM geophysics program. TEM geophysics is a process or methodology or technology that is used very widely in the lithium space to get a better understanding of low resistivity zones beneath surface because these solars have a body of brine beneath the surface, they're not on surface. The TEM study that we did in country showed us that we have resistivity starting at about 0.2 ohm going all the way up to about 500 ohm but very similar to what you would expect to see in the lithium triangle.

8:43 We then opted to do, and that's just a quick picture of our exploration camp and myself, Don, Mark and Ninki on site. Some commentary there from Dr. Mark King, sort of speaking to the similarity between what we have at Udgatnaran and what he's seen in South America and Nevada. So those 8 lines that we did initially with the 0.2 ohm were encouraging enough to tell us to do 0.111 line. So, we did a 16-line kilometer TEM survey across the previous 8 lines, and that gave us a rather exciting result. It showed us that at 0.5 an ohm, we have a 9.9 billion cubic meter low resistivity aquifer. And 0.5 an ohm is extremely conservative for any junior mining company out there. At 6.5 ohm, we had 22.7 billion cubic meters of low resistivity volume beneath surface.

9:32 That, of course, even at 6.5, again, a bit more conservative than everybody else, but this is indicative of a large brine body beneath surface. And if you were to look at some of the grades, and very conservatively, again, say that you have 100 milligrams per liter, you're looking at anywhere between 9.9 and 22.7 million ton lithium carbon equivalent potential, Edward Vatnar. It's of our view that anything above 10 million ton justifies the capex to bring an asset to production. And so, we're down the path of better understanding this, and we'll talk about what we accomplished during the drilling program last year. We went out to site, I was in Mongolia 3 times last year, my technical team was there twice, and I think we've shared updates with those that follow us with respect to the progress that has been made.

10:18 We completed 3 diamond core holes. I will share the results in the following slide, but we also started 3 water wells that are 10 meters step out from our existing diamond wells. And those have shown really good lithology in terms of gravelite, porous zones, to fascia sand zones. So we're expecting a fair sense of porosity. The water wells that are being drilled, in fact 2 have been completed, the third should be completed in and around the middle or end of February. Those go down to the same depth as the diamond holes, but they were done with a six-inch tricone bit. We inserted four-inch slotted stainless steel pipes with gravel casings. We've acquired balers from Solins as well as various other equipment that is currently sitting on site that will be deployed sort of mid to end of February into early March given it is rather cold and this is rather sensitive equipment. The last thing we want to do is have a team out there using sensitive equipment that doesn't yield any results.

11:16 And so that's some of the images of what we have been doing in country. That's our water well rig on the right there, the diamond rig. Some of the UNDH03, the hole has been completed, as mentioned. But let's talk about results. And I think these are important for you to get a sense of why we're encouraged, why we're excited, and why we think 2023 is going to be a very good year for ion energy. We completed 3 holes, as mentioned. Of the 3 holes, the notable two-meter drill core intercepts include 123 meters at 278 ppm, 100 meters at 362 ppm, and then 71.4 meters at 360 ppm. These are encouraging because they are within 2.5 and 4.5 kilometers apart across that underlying brine body that we looked at in the previous slides.

12:01 But the grades here average around 320 plus PPM. And why that number is important is if you look at Albemarle Silver Peak Mine in Nevada, it is the only operating producing brine mine in North America today. When they concluded a very similar drilling program, their average grade was about 121 ppm. As far as elevation is concerned, they're about 100 meters above where we are, we're at 1200, they're about 1300 meters above sea level. And that has, they've been using an evaporation technique, which is the more traditional way to extract lithium using massive evaporation ponds, and their cycle is about 18 months. We're opting based on our proximity to the closest town, being 7 kilometers from the grid, as well as the, you know, taking into account the environmental impact of evaporation, we're looking closer at DLE technology in order to extract our lithium, and we're seeing that done around the world today with grades as low as 60 milligrams per liter. So it's rather encouraging. We are expecting to collect those brine samples using the balers that I've discussed in and around March and the results we put to market shortly thereafter. So an encouraging sort of next quarter for us as a company.

13:18 I don't need to tell this group why lithium, I think most of you wouldn't be on here if you were just being educated on the lithium front, but it's evident that it is required. The joint venture that we entered into with a commonly controlled yet independent company by the name of Orange and Resources to help explore the copper nickel that I mentioned earlier on BaBaiul. That would hopefully start to spend some money on this and de-risk it. And the advantage for ION is ION has a 20% carried interest on any base metals found on this asset. So that allows Ion Energy to monetize a mineral that we didn't know was there given the scale of the asset. Today, we have about 60 and 500,000 shares outstanding, management and insider control just over 25%. We continue to buy on markets. We are escrowed, so we've never sold a share.

14:07 We have warrants outstanding at about 11 and 500,000, I beg your pardon, 11 and 500,000 warrants at 70 cents. They expire in April 2024. We have some options that expire in 2025 at $0.32, and other options that have been issued across the board. And as you can see, every instrument that's ever been issued has always been at a price higher than the prior issuance. So fully diluted, about 71 million shares. Our share price today, I believe, is about $0.20, giving us a market cap of about $12.3 million. Our other investors of note are Mongolian nationals that have invested in the company. They hold about 9% of the company. Family offices around 7%. Funds including Dalbrook, Spartan, Alpha North, Maxit, Broma, US Global control another 30% of the company as well combined. So a nice strong institutional and retail sort of ownership table, if you will.

15:02 So we've been rather aggressive, as I hope you can appreciate, despite not having access to country. We found White Wolf. We completed our bought deal. We did the JV agreement with Aramgen to better understand how we could monetize the base metals there. Done some hydrogeological sampling. We've concluded site visits with potential partners, both on a DLE front as well as a strategic front. We were hoping we have an early resource indication based on the volume of brine that I've spoken about. But for Q1, you can expect us to complete that water well drilling, obtain those samples of brine, use those to determine an average grade of brine across the brine column, measure porosity, do airlift tests, pumping tests, and then start to infer resource, measured and indicated. The hope is to be there by Q2 of this year. And in Q3, Q4, we will start to focus heavily on scoping and pre-feasibility to better understand a path to production.

15:59 We are continuing to advance talks with strategics, and I think that has been very clear to those that have been following us. And we will, of course, update the market when there's something to share on that front. For a comparison perspective, for those that are new, you know, very quickly, we are very undervalued relative to our peers. We believe that has to do with 2 reasons, or maybe 3. First one being the country had not, we did not have access to the country to advance our exploration efforts, whereas other jurisdictions that had the skill set were able to advance their assets, but also get the love on the market, in the equity markets. Whereas we had very little news flow for a while because we didn't have country access. Beyond that, we're first movers. So we don't have a proximity play. We can't point at Albemarle or SQM or a neighbor that says, hey, we're sharing a border with these guys or we're on the same aquifer. And so as a result, you have no comparison unless you look at the technical information and that's where the gap is. So once we start to move towards inferred resource, measured and indicated, then you can truly compare apples to apples.

17:01 And hopefully the example I gave you with Albemarle Silver Peak and our grades relative to what they've seen historically has proven or at least helps you better understand that we are in fact undervalued. So we do sit on the bottom of the value chain, but we're not concerned about that. We've been executing and we will continue to do so. And as we start to move towards inferred resource, I think the market will give us the necessary equity love. So kept it Nice and brief for those that already know our story and hopefully for those that are new to our story, you have enough information to pique your interest. And there's my contact detail for both existing and new investors to get in touch with me at any time. So thank you very much and Dasha over to you. Great, thank you so much Ali. We're gonna move on to the live Q&A so continue to submit your questions if you have them.

17:52 Ali, you've talked a lot about really exciting things that are in store for ION and in anticipation of the resource indication this year. Realistically, what are the potential operational challenges that you may encounter along the way and how are you preparing for them? I think the one key sort of challenge that we've faced has been with respect to government announcement of Canada. So, the Canadian government announced that they would be forcing 3 companies to ensure that any Chinese investment in those organizations would have to divest. And that of course, given we're 23 kilometers from the Chinese border, has sort of slowed things down a bit for us, but it is our view and the view of our council that we will not be affected. And I think some of the examples that I give when I'm on some of these calls or conversations with investors is, you have to think about it very much like you would say the oil sands in Alberta and the oil from there being shipped over to Saudi Arabia.

18:48 Doesn't make sense. Whereas the vast majority of the world's lithium is being consumed by those that are in China. And so our expectation is that we would not have any pushback, and it's been quite evident as well with respect to Xanadu mining and Zijin. They announced something about a month ago and the government of Canada let that happen. So I think they may have moved a bit too fast with respect to the decisions that they made and that's the one operational issue that we had to deal with alongside the cold weather. So you can't go out there with very sensitive equipment and expect individuals to be able to operate minus 35 when they have to be extremely sensitive. So hopefully that answers the question. Yeah, thanks. And can you tell us a bit more about the growing global confidence in investing and working in Mongolia?

19:37 Yeah, absolutely. I think, you know, the Rio Tinto example that I gave our listeners earlier, that's a prime example of a very major group doubling down on their investment in the jurisdiction that most either don't know about or have been uncomfortable about because of previous sort of misgivings on both sides, public and private, with respect to doing business in-country. The new government there is very pro-foreign investment. As I mentioned, he spent a fair bit of time in China trying to encourage investment from there. Last time I was there, I bumped into the Indian government and they were looking at Mongolia. So you're now seeing more and more organizations pay attention to Mongolia. Mitsubishi has a presence there. They built the airport. The Koreans, Samsung and LG, have had the longest standing off-take agreement in the world with Mongolia. So it is a nation that we believe has potential. It's one that we're long on, and it's one that now we've been in for about 13 years.

20:34 That's great. Barry's asking when would you announce something on the strategics? Hey Barry, thanks for joining. Like I said, we've had A few conversations. We will announce something to the market as soon as it is material. We continue to have various conversations with a number of strategics from around the world, Asian, European, LATAM, and otherwise. So We're pursuing that goal and we'll announce it as soon as it's material. And I will give you a ring sometime next week, Barry. Thank you. Great. Lithium supply continues to be top of mind for the industry. What is your prediction for the ongoing supply crunch dilemma? I think it's going to continue. More and more countries are moving towards a cleaner future. I think if anybody's following the news, and hopefully we all are, a number of countries are reporting heatwaves. You look at Europe, for instance, it's the hottest winter on record. There was no snow in Davos, where the vast majority of the world's billionaires are meeting today.

21:35 So, climate change is a big problem. Electrification is the only way that we move away from this. And I think the prices will start to come down a tad. You know, nobody has that crystal ball and can't tell you exactly where it's going to go to. But currently the margins are strong and that's going to encourage more and more folks to go out there and look for lithium to bring it online. And as more supply comes on board, of course, that price will start to dip as well. As you said, ION's very actively engaged in strategic partnership discussions. Are you seeing a shift in Chinese interests? And the headlines seem to imply that consumer demand for EVs and lithium prices are softening in China with a decrease in government intensity. They certainly are. And I think that has a lot to do with You know the country was locked up for for close to 2 years 0 COVID and all So you if you're measuring who's buying cars and if you're stuck in sort of your city You're probably not going to be going out there buying a new vehicle because there's nowhere to go. So there's a bit of a lag effect with respect to the prices, or rather the demand slowing down in China. There's also of course inflation and various other items that would affect that, consumer spending. But I think we're now in this state where the vast majority of conversations I'm having are telling me that China's open, that's affecting the global markets. Folks are now inviting us to China to visit them in person.

22:57 And I think that'll start to change quite quickly. But strategic interest from China did dip based on what I said in my first answer to the first question, which is a result of Minister Champagne's announcement on critical metals. But now that's been abated. We don't see that affecting us as Ion Energy. It makes sense when a country looks to secure its own critical metals within its own border. But when you step outside of your jurisdiction, it opens up a whole can of worms. And I think, as I said, the government moved quicker than they should have without thinking that through. Dimitri says, thank you for the presentation. Do you already have some plans to test DLE sorbents and DLE technology? And will this process start in 2024 or later?

23:43 So yes, absolutely. We are in conversation with various DLE partners, some that may want to become equity partners to help us along the way, but others that may want us to purely use their technology for processing. And so as a result, we have spoken with a number of them and we will start sending brine samples out of the country to those various DLE providers as soon as, probably around April. So around April, the 1st 20 liters to each one of those DLE technology partners will get out. And then as they have some success in their labs, then we're talking cubic meters. But that's going to happen this year. Oh, great. Stephen's asking, once the water monitoring wells are completed, can you please give your expected timetable of collecting samples and releasing SA results?

24:33 Sure, so around the first week of March is when we get the team out there. As I said, the third water well is about halfway done and should be complete in and around the end of February. So the beginning of March, it starts to warm up a fair bit. They deploy the balers. And the balers, if you're not familiar with what those are, and Stephen you may be, but for a broader audience, it's essentially, think of it as a capsule that goes down into a brine column or a water well, seals off at a certain depth, and then brings that brine up in exactly the same chemical composition that it would have been in that depth without mixing along with the brine on surface or along that brine column, and of course the denser the brine, the higher the chemical or metallic content. So the higher grade stuff is more than likely at the bottom. And you collect those brine samples from various intercepts, call it 20 meters, 10 meters, wherever it may be. But you're getting a sense of your average grade across the entire brine column.

25:30 And so that will, you're not collecting 300 samples per hole. You're collecting, if the hole is 300 meters and your intercept is 100 meters, that's 10 samples. And so the lab in Mongolia can turn that around pretty quickly. So as soon as we ship our first brine to the lab, Of course, that may take anywhere between 10 and 14 days to provide assay to market. All right. Thank you. I don't see any more questions. But I will say if you do have any questions following this summit, feel free to reach out directly to Ion Energy. Ali's contact is on the slide there, so feel free to ask questions. Another question just came in actually, so before we close up, Jesse's asking, when do you anticipate you will need to raise money? That, in our view, would likely be in and around a couple of quarters from today. So the exploration program that we've concluded on site, including the water holes and the sort of the heavy lifting with the diamond holes, that's been paid for. So there is no more overhang there from a cash perspective.

26:32 Our burn rate has been reduced as a result of that, we're not spending a fair bit on the balers being pulled up, that's gonna cost us close to nothing in relative terms, as will SGS samples. So we have enough funding to keep us going on a G&A basis for at least the next 6 months. And Jesse, I see your question there, how do we plan to raise money? It, a number of different ways. And I think one of the questions that people have put out there is what are, you know, what's, I didn't realize it was Steven Walston. Hey, Steven. Jesse, how we plan to raise money, we talked about strategics, right? So we're focusing on strategics because a strategic partner that comes in has skin in the game and would ultimately would want to have the company be successful. And so That's one of many paths that the company is currently considering.

27:22 Great. I think we'll wrap up there. There's obviously more information on Ion Energy's website. So, ionenergy.ca. And As I said, if you have any further questions, feel free to reach out directly to Ali. Thank you so much for the presentation, Ali. I'll pass it back to you if you have any final remarks before we close out. Sure, just a quick closing statement. Thank you all again for your time and thank you for joining us here today. Hopefully that was insightful to our new and prospective shareholders and for our existing shareholders. Thank you very much for your support and your faith in the company. And hopefully this paints a picture of what you can expect from us as an organization this year. So thank you