Seismic Survey Insights: Defining Major Fault Zone & Lithium Brine Target

0:08 Hello everyone and welcome to the Nevada Lithium live event hosted by 6. I'm pleased to introduce the speaker for today, Stephen Rentschler, the CEO. Steve will discuss the recent seismic survey results and after that we'll be accepting questions. As a reminder, you can submit your questions in the chat at any point during the presentation. As always, this event is being recorded and it will be available to watch shortly afterwards. So without further ado, I'd like to hand things over to you, Steve, so we can get started.

0:36 Super. Thanks very much, Max. Happy New Year to everybody. Hopefully everybody got a chance to take a look at our news release from yesterday. It's really got some interesting and I think some very exciting, you know, basically things that we can think about that could generate additional shareholder value of Bonnie Clare. And I wanted to take a couple of minutes today to go over them with you because when you have situations like this where there are a lot of moving pieces, I just want to make sure that people understand that we have a primary focus that we're sticking with. However, there are other things that we can do and are doing simultaneously to see if we can unlock this value. And I think everybody's going to agree with us that this is a pretty exciting opportunity and something that we've been working on for a while.

1:27 So let me take a minute first and set the stage with what we have and then basically how this all sort of ties together with what I would say is this new opportunity for brine. So remembering the Bonn and Clare, the existing resource that we have right now is a huge sedimentary deposit, right? So over millions of years, we had the weathering of rocks and lithium was deposited in these huge blankets that we've basically been, you know, unveiling over the course of the past couple of years, most recently with one of our very deep drill core holes where we see these increasing grades as you continue to go deeper and deeper. And in fact, the latest drill hole that we did went down another say 500 feet or 150 meters below what we've normally done at Bonnie and Claire, and we continue to see this mineralization expanding, become even a higher grade.

2:24 And that's sort of the first part of the recipe that I think we want to talk about with regards to a potential brine opportunity. So all of that, you know, the sedimentary package remains in place. We have the PEA that was done 2 years ago. We're working on the PFS. The metallurgy is, all of this is continuing to advance towards that huge net present value that was established in the PEA. And to those of you who don't know, again, at very low lithium prices, that was about 1 and a half billion US dollars, 13,400 hour lithium, that would give us 32,000 ton LCE mine for 40 year mine life, use a very, very small portion of the overall resource. And of course, at anywhere, what I think people consider to be normalized higher long-term prices, say $25,000, $30,000 a ton, the NPV raises to $5 billion, $6 billion. I mean, just tremendous amounts of value here.

3:23 Well, that seminary package is also sort of the first I would say of the parts of the recipe for if we can unlock an additional brine opportunity here. And I sort of think about it like baking a cake where you always need certain things, you know, flour, eggs, whatever. And then some things start to change if you want to make a vanilla cake versus a chocolate cake. Well, the sedimentary deposit that we have will basically be the source of the lithium if we were to find it in brine. So we know we have all of that already in place. The second piece, or the second component of the recipe that we were hoping to find was basically a way for water that was more acidic to get down into that very very deep and very thick sedimentary package and dissolve those lithium sediments and put them into a brine suspension, make them basically a water-based brine.

4:19 Now, the interesting thing about Bonnie Clare is that the water in our basin is very alkaline, right? So if you remember going back into school, pH 7 is neutral, You start going above, it becomes more and more alkaline. You start going farther and farther below 7, becomes acidic, and the acids are typically what dissolves things. So if the water in our basin is say 9, 10, or 11, very alkaline, What we were hoping to do is find a way that you basically have water come in that was more acidic. So this would be rain water, would be drainage water, the same way sort of all those sediments got drained in over millions of years, and find a way to essentially trickle down through that entire package to generate the lithium brines.

5:07 And what we have is an analog to what's going on at Clayton Valley, which is 50 miles to the north of us. That's Albemarle silver peak mine up there. That's the only US producing lithium mine right now. And it has essentially one of these structures underneath. And here when I talk about a structure, I'm talking about a geological structure that's underneath the ground down by the basement. It's basically, you know, mountain ranges that over time have contracted, extended, things like this. And the way I simply think about it is that it's created fractures in the ground that you are essentially hoping over time water would have percolated in our case downwards into those sediments and created the brines.

5:54 It's a little different than what Clayton Valley has for the source of their brines, but that's okay. Like I said, to me, all the, you know, the cake recipes are all a little bit different. But having that structure underneath was sort of the key. And it's just something that we, or our technical guys had postulated was there for a very long time. And that's where the seismic came into this, because what was found sort of at Clayton Valley is that if you're going to drill and find these brines, you have to be drilling sort of within a certain distance of this structure because what happens is, again, if you can think about the water coming down through all of the fractures in the ground, if in fact lithium brine is generated and it's denser than the other salt waters in there, it would start to fill from the bottom up and it would continue to fill into areas where there is porosity, right? So sort of think again, porosity is like a sponge is the way I think about it, open areas.

6:54 And those things could extend laterally for a while, but generally we would think about this more of as from a bottom up type of approach and laterally, not so much. So the point is, we want to be fairly precise with the targeting of a well. And that's precisely what the seismic came in and allowed us to do. Or it's going to allow us to be even more precise ultimately when we get the, well, let's just say the finalized target. We have a target picked out. We put that on the news release. That doesn't mean it will ultimately be the best one because, frankly, as I've already seen from the amount of interpretation that goes into these surveys, there's a tremendous amount of science, but there's a tremendous amount of art as well. So it wouldn't surprise me in the end, if it basically, if the technical teams continue to refine that target a little bit better. But if you look at that news release, you'll see that essentially the drill location would extend right down, let's just say along the flanks of that structure.

7:55 So, and then the idea would be to intercept any, you know, zones of porosity or permeability where the brines could have basically taken place. And that is something that we're going to start putting into our plans as we go forward in 2024. Now, this type of a drill hole would be something, first of all, that I would consider to be deeper than any other ones that we're drilling. And again, going back to what we're doing in our core resource upgrade area, we've been going to 2,000 feet in depth, but of course the last hole that we drilled where we got the assays back down to 2,500 feet, they were tremendous, that extra 500 feet. So the last hole that we did and for which we are awaiting assays,

8:40 we went down to 2,500 feet. But these kinds of brine targets would be things that you should think about when we're going to go down to the basement. And the basement is basically the lowest level down there before all the sediment started being deposited on there. So the way Bonnet Clair works is if you just think about you're looking at a map, you're looking from the west on your left to the east on your right, the basement continues to fall away as you go towards the right. Now, it also gives us the potential for even thicker packages of sediments, but that structure that's down there that's giving us basically the ingress route for all of the fluids that we hope you know collected down there would be you know extend all the way down there and the point being again is that these are the types of things that would require a drill to go all the way down I would say essentially to basement so it's gonna be deeper more expensive hole obviously we'll figure it out has different connotations for the capacity of the rigs, etc. And the type of testing that you do.

9:42 But we're tremendously excited about because what I really want to impart to everybody is that this is not an either-or type of a situation. I consider this sprying to be entirely additive to the potential for shareholder value at Bonnie and Claire. Now, It's going to take some time to figure this out. The only way we're ultimately going to know is to drill. Seismic was, you know, I guess we could say the sediments were the first step, the seismic was the second step. We have the structure. We've confirmed that that structure runs underneath. That's the third step. Now we're going to drill it. The way to think about this is also that if you were to look again at the news release and look at the figures, you'll see that the seismic was run over a very, very small area, the entire portion of Bonnie Clare.

10:34 Now, this is a north-south trending structure, so there's no reason, at least in my mind, to think that all of a sudden this thing stopped at the end of the seismic lines. The structure should continue as we go along, And the point being is that I would think about this as an evolution of continuing to run seismic, going back interpreting that seismic, and then taking another shot at it if we don't find brine or a target, you know, the first time around. Things like that. Think of this as an iterative type of process where we get multiple bites at the same apple. So, you know, when I think about natural resource development in general, it's all about de-risking things. Or another way of saying that is it's about increasing the odds for success. And I think that what we found with this structure that runs underneath Bonnie Clare is precisely something that increases our odds of our success for something totally different that we hadn't even counted on.

11:29 So I mentioned yesterday in a little video that I had done just to sort of alert people to the news release that Bonnie Clare is a beast and there's a lot of things going on here and we're going to look at all of this in a non-exclusionary way. To me, these again are all additive pieces of potential value. They all require time, they'll require money. A great game plan to do this in the most practical way is going to take a bit of time, there's no doubt. But don't think for a second that we're moving away from our core

12:07 progress of getting towards PFS because I can tell you that OEMs continue to ask me how quickly can you get me the lithium, Regardless of what we see, you know, with short term car sales or lithium prices or with the Chinese traders are doing things like that. As I always say to people in 30 years, I've never seen a commodity that's able to go from 500,000 tons a year to 2 or 2 and a half or 3 million tons in the space of 7 or 8 years. It's just simply a growth rate that can't be sustained. So you'll certainly have your ebbs and flows, but the tailwind is stronger lithium prices for as far as I'm concerned for higher and for longer than what people think is going to help us tremendously as we move forward. So we're just starting out of the blocks right here.

12:54 The company is just starting to make itself known for its core project. I think this is a tremendous example of extra value optionality. You'll often hear me talk about it. I'll continue to talk about it going forward. And I want everybody to be aware that we are going to do what we can to exploit this. And we're certainly going to be telling you more about this in the near future. And if everything goes well, I would certainly hope by the end of 2024 we're going to know a lot more about brine at Bonnie Clare. So I think that's from an overview perspective that's probably enough to say right now Max if anybody wants to get down into the weeds a little bit about it, more than happy to do that to the extent that I can, and then we'll take it from there.

13:39 Excellent, thank you for that. Question here, would it be possible to see the real seismic, what I see in the seismic survey are schematic images. So is that something that you do? You know I could talk with our technical guys or something like that. My initial reaction is probably that would be something that you wouldn't have covered under a confidentiality agreement. I'm assuming that the person who wants to see it is some sort of a geophysicist because I can tell you just from from looking at it, it's to me it's almost an absurd type of thing that you're looking at. I have no idea how people interpret these things. That's the kind of thing though, feel free to follow up to one of our emails and then we can take it to next steps if that's something that seems to be important.

14:28 Yeah, perfect. We had a question come in by email. What are some of the catalysts that I should look forward to going into this quarter?

14:40 Okay, well that was certainly I think one of them. We started talking about this back in October. What we have is the second of our, the 2 diamond drill holes that we did last year before, you know, we got out of the field with the weather coming in, etc. Those assays I think will be coming in fairly soon. Let's just say somewhere around the end of January, maybe we'll be lucky, get a little earlier, maybe a little later, somewhere like that. I always like to be conservative about these things, but that'll be coming in. Hopefully I'll be able to say more about metallurgy. We're working on lithium hydroxide. I've been telling the market that for a while. Again, it's an iterative process, so hopefully be able to update you with something about that. But we're going to be developing a new work plan for 2024 going forward. A lot of it obviously is

15:30 going to be very similar I think to 2023 because we know the area that we want to upgrade the resource in, right, this is again going from an inferred to a measured indicated status with an existing set of drill holes that it's already been set out. Obviously I hope at any point in time that I could talk to people about an OEM offtake agreement. We all want to know that. Believe me, this is one of those things. However, you can't talk about anything until it's done. That's just the way it is. I can't tell people who I'm talking to or what I'm talking about, et cetera. It's all under confidentiality agreement. All I can ask people to do is just say, take my word, people are still talking about it. These are important things, but they take a long time to do. As you can imagine, very, very complex trying to work that out. So I mean those are the major ones. Of course as soon as we get back into the field then we'll start the whole progression again of a bunch of drill hole data coming out. We're also going to have a report I think at some point in time, not quite sure I was probably on the order of, I don't know, late spring, let's say, or we talked about some of the conclusions, the borehole mining report, we have consultants who've been working with our PEA authors and people who are also going to author our PFS, talking about the requirements to be needed for PFS.

16:53 You know, basically what the borehole mining report has a lot to do with is, you know, how does the ground behave at various steps, what are the horsepower requirements, you know, the power requirements necessary to get material up and out of the ground. Remember this is sort of a, at this point in time, this mining technique is not something that has been

17:14 used, certainly to this extent. Cameco does use it at Cigar Lake. It's used in hydraulic excavation other areas of the world But this is you know, this is from my perspective a whole, you know, it's a whole different ballgame with regards to that. So I think what's going to happen coming out of that is clearly going to be important to talk to the market about. So that would be one more thing. And I think the rest of it is just basically to make it as clear as we go along where we are in the entire game plan of getting to PFS, which I consider to be, again, the sort of the linchpin, the normal leverage point where large mining houses want to start talking to you more and you've car companies, things like that. As I've said previously, there's a lot of mining house DNA and in these car companies, I can tell because they're consultants, I can tell by the questions they ask and etc So it sort of comes back to PFS that being said I still don't think this is just my opinion that you know PFS is necessarily going to be as important historically as it always has been, meaning that I think people are going to be getting involved with lithium players at earlier stages, simply because of those supply demand dynamics that I talked about earlier. So when I could talk about that, I certainly will. So there's a host of things that we'll be talking about going forward.

18:36 A little bit of a follow-up on

18:39 the topic of OEMs and the NDAs signed. We have someone asking here, how many NDAs were signed? But probably a better way to phrase it maybe if you can say where the companies are headquartered, are they all US and also how many companies are currently in competition. Yeah, no, I'm not going to say anything about that because that's to me that, you know, gives you a way of competitive advantage. I think though, this is how I would think about it if I were an investor, you've seen, you know, the Inflation Reduction Act in the US, you've seen even later swaths of sort of legislation coming through, which are going to dictate where the EV tax credits are gonna be able to be utilized, right? So clearly, let's just say China, right? A Chinese car company or, you know, not that Chinese, I don't believe tremendous presence in the US auto market. But as an example, you know, any country that's seen as being non-friendly to the US, if they get involved with either, you know, the component making, the batteries, which is sort of an interesting nuance, right, Well, if those types of countries are involved, then the US tax credits are not going to be available to the end purchasers. So I would simply think about the players would be all of those who essentially are non-Chinese or affiliated in that way. And I think that'd be a pretty fair representation the type of people that we're talking to.

20:07 Perfect. Thank you. And due to Brian exploration that needs additional drilling, will it add additional expenses that were not turned into the prior estimates for which you had to dilute last year?

20:23 It would. I mean, I think certainly it would if you just think about it in its simplest form. Even, let's just say For example, a brine target just happened to be within the resource upgrade area and happened to be in one of our already previously chosen drilling locations. We would be essentially extending that underneath down to the basement, so there would be additional costs for that. I will tell you that cost to go up quite a bit, as you would imagine, the deeper that you go, things happen. You know, again, horsepower requirements to turn the drill. Sometimes you need a larger well board to start all sorts of things. So, you know, there's no free lunch, let's put it that way. But it's the kind of thing that again, you plan for there, there's always going to be dilution, right? And obviously, we're non revenue producing company, all, you know, essentially, juniors are in the same boat. Our job is to try to minimize that dilution to the extent that we can without throwing away opportunities.

21:25 You know, I would argue this is a tremendous opportunity. It doesn't mean that all of a sudden we'll go drill 50 holes looking for brine, but we can be judicious using the science and the money that we've already spent to look at places, et cetera, perhaps think about more seismic going forward. And it's just, it's a balancing act, but in the end, Obviously it would cost more money to do it. However, if we were to hit prime, well, there's the opportunity.

21:53 Perfect, thank you. Ready here says, I see a lot of royalty companies interested in providing financial support to junior miners. Are you in talks with anyone who could provide financial support if needed? Are you thinking this avenue as an option as well? Yes. You know, since day 1, started thinking about the potential for royalties or stream. You've often heard me talk about with metallurgy, the fact that we have a lot of potassium and the thought is that we could generate a potassium fertilizer, potassium, well potash, the way I've always known it. So these are the kinds of things that we continue to think about. Now, streaming money, royalty money can be very expensive money, traditionally it has been. But, you know, thinking about that, thinking about JVs, thinking about, you know, all sorts of different things, I can't think of too many different types of things that we haven't been approached about. It's just again, being judicious about when you do something, why you're doing it, how much does it cost, etc.

22:56 But the short answer is yes, talking to all sorts of people. Okay, perfect. Yeah, I think that answers all the questions that we have right now. So oh, like we just had another one here come in. So Steve here says, I may have missed Steve addressing this, but is the company pursuing an active funding ground at this time? If not, is 1 plan? You know, you never say never. Right now we're fine with cash. Going into the new year, we're certainly hoping that we're gonna see a different tenor in the markets. We're going to need additional money to finish all of our work plans. But it's the kind of thing that I think we announce when we're ready to announce it as opposed to doing it right now.

23:42 But obviously, it'll become very clear when the time comes. You know, the way I look at it as we go forward towards PFS, there are going to be some big ticket items that we're going to have to plan for farther down the road, but right now we're just going to be sticking with essentially the drilling, the ongoing network, you know, starting to get the reports written and, you know, our marketing, which is very, very important. We're just starting to get off the ground with the marketing starting to talk to people we never essentially had the funds to do to do so previously. So I'd say probably let's just leave it like that. It'll become very apparent you know when we're ready to go. You know, in the meantime, I just tell everybody, again, don't get too wound up on what's going on at the macro environment. These are the kinds of things the walls of worry, etc, that all investors face. But when you've got an underlying fundamental strength in a commodity like we have in lithium, it really will bail you out of a lot of different things. And as I said, we're busy de-risking Bonnie Clare in as many different ways as we possibly can. And all of that just cumulatively adds up to increased chances of success. And that's ultimately how we're gonna get the payoff.

24:55 So that's probably how I'll leave it for now, Max. Yeah, perfect, thank you. And what are your thoughts regarding statements about different types of batteries, including, you know, sodium element batteries and things like that? Yeah, my thoughts are generally, it takes a tremendous amount of time to develop something new towards commercialization. And, you know, one of the things I always liked about lithium was that, you know, not only you know, anode cathode, but it's, it's essentially all the it's in what's in the center. So I've seen a lot of talk about, you know, essentially how, you know, nickel has, you know, nickel demand has materialized because they've sort of thrifted that out, cobalt the same way, that kind of stuff. I just don't see that happening with lithium, certainly not within the time span that we're talking about. I mean, it's one of those kinds of things, can you realistically take a take a chance as a car company, you know, just saying, Hey, we think that, you know, sodium batteries, the greatest thing since sliced bread, and we're going to put all our eggs into something that really doesn't exist in the form that lithium batteries do and then hope everything is ironed out going forward.

26:06 I'm sure that there can be some, you know, basically co-mingling of these things over time. But out of all of them, I mean, Lithium is the one clearly has a dominant position. I just don't see it being essentially displaced anytime soon. So I'm very comfortable with it. If I were an investor, that would not be my primary worry about this whole thing. So that's the way I look at it. Yeah, that's a great answer. Thanks for that. Randy here says that you looked excited and energetic in the site tour video. And he's wondering when the next time you'll be having a site tour is and if there will be an opportunity to participate? I'd say there'll be an opportunity. I don't know. We don't have 1 planned right the second. You don't really want to be out there in the desert right now.

26:55 I mean, sure, it's great to go back to Vegas if you want to go have some fun. You know, think about it probably in the, maybe in the spring, something like that. We'll see if it's, if it looks smart for us to, to arrange something. It's, it is, look, it's, it's great. There is one thing I will say that definitely becomes clear when you are actually standing on Bonnie Clare. And that is just the sheer magnitude of it. I can sit here or stand here all day and point at, you know, drawings on the ground and tell everybody it's, you know, it's 25% larger than the, you know, the island of Manhattan and this, that and the other thing. It just doesn't do justice. You know, one of the stories that I tell, and I'll tell it quickly here, is, you know, we took 2 buses going up, I don't know, hell, we must have had 45 people in there, just jam-packed going up.

27:42 And I said to people, as we're coming up, coming up from the South, remember Vegas is 2 and a half hours to the Southeast of Bonnie Clare. You know, I knew where to sort of look, but I could see where the ground color started to change. You know, Richard will be, he'll be technical about it. Well, that's the playa. Okay, fine. Here's the dried lithium on the ground is the way I think about it. It starts turning white. So nobody else knew it. And I said, hey, folks, take a look over on the left, right? You know, now we're still going to drive for another 5 or 6 minutes, basically at 65 miles an hour, right? Before we hit the gate to Bonnyclare. Remembering again that the project literally abuts an interstate, a US interstate highway. So with high power lines right overhead. And the point is, is you're sitting there on the bus, you know, and now we're not talking about moving 10 miles an hour, but interstate speeds, and you go for another 5, 6 miles until you finally get to the gate. And then you drive in, and you drive in for another 20 minutes on essentially the gravel road, and you're just looking all around you, you know, and the mountain ranges are way up there or over there, this kind of stuff, and you just say, oh my goodness, we have no neighbors. There's just not, again, no endangered flora, fauna, anything like that. We have this entire basin to ourselves.

28:56 So that is something that is definitely hard to conceptualize unless you're there. I wish I could take everybody there to show them it because I think it would really give people peace of mind. But anyway, long story short, if we get the chance, we'll try to get another tour up there when there's some activity up there. So stay tuned is what I would say. Perfect. Thanks for that answer. So yeah, that looks like that's all the questions that we have for today. So thank you, Steve, for taking us through the updates and Q&A session. I also want to thank everyone who submitted questions. So today's recording will be available to watch on demand shortly after today or tomorrow, so look out for that. And before we wrap up, I'd like to pass things back over to you, Steve.

29:43 I appreciate, obviously, everybody's time. I know, you know, a lot of people are just getting back into the office. We didn't want to do something last, well, the last couple of days, give everybody just an opportunity to sort of settle down. This is a very, very important piece of information as far as I'm concerned. Our technical teams thought that this structure was there. This is confirmation that it is allows us to go forward with confidence for next steps, trying to evaluate the potential for Brian here. But it's indicative again of the multiple bites of the apple that we're going to get up on Eclair. And if you're not a shareholder I encourage you to become 1 and for those that already are obviously thank you for the support. We are moving as quickly as we can in as many different ways as we can to to increase shareholder value. So I'm sure I'll be talking with you soon.