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As Neo Lithium Works Towards Final Feasibility, CATL Maintains Ownership Stake

This week Contemporary Amperex Technology Co. Limited (CATL) announced it was maintaining its 8% ownership stake in Neo Lithium Corp. (TSXV: NLC | OTCQX: NTTHF | FSE: NE2) by completing a C$2.6 million equity investment that was triggered after Neo Lithium closed a C$30.2 million financing last month.

CATL completed its original investment of C$8.5 million, representing an 8% equity stake, in Neo Lithium, in September 2020.

CATL is a leader in the development and manufacturing of lithium-ion batteries, with divisions covering production, research & development, and sales of battery systems for electric vehicles (EVs) and energy storage systems. According to a report by SNE Research in 2020, CATL ranked number one in terms of EV battery consumption volume for four consecutive years.

Neo Lithium is advancing its 100% owned Tres Quebradas (3Q) project, a high-grade lithium brine lake and salar complex in Argentina. The 3Q Project is located in Latin America’s “Lithium Triangle” and covers 350 KM2 (~86,500 acres) in the largest lithium-producing area in Argentina.

Neo Lithium - Lithium Triangle

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Recent Financing Accelerates Project

Last month, Neo Lithium closed a C$30.2 million bought deal financing. The Company intends to use the net proceeds from the financings to fund development work at the 3Q Lithium project and begin construction of the larger evaporation ponds with a view of getting the project into production by 2023.

The 3Q Project

The 3Q Project is one of the highest-grade lithium deposits in the world with an average grade of over 1000 mg/litre of lithium.

The project also has a large Proven & Probable Reserve of 1.2 million tonnes of LCE, from a larger Measured & Indicated Resource of 4.0 million tonnes, and also has an Inferred Resource of 3.0 million tonnes of LCE.

Extraction of lithium from liquid brine reservoirs involves pumping the brine from underground into evaporation ponds. Through evaporation over a period of a year or until most of the water has been removed, the concentrated brine is further processed in a plant into lithium carbonate.

Neo Lithium has been operating test evaporation ponds for more than three years and a pilot lithium carbonate plant for almost two years.

In January, Neo Lithium announced that its Pilot Plant produced Battery Grade lithium carbonate to 99.797% purity, up from 99.599% previously. According to the Company, the purity and quality already meet worldwide premium specifications and are very close to CATL’s high standards of product quality.

The process improvement is expected to reduce capital and operational costs while minimizing power, reagent, and water consumption.

Neo Lithium - Project Grade Comparisons

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Robust Pre-Feasibility with Full Feasibility Due in Q3 or Q4

In March 2019, Neo Lithium released a pre-Feasibility Study on the 3Q Project that included an initial Capital Expenditure of US$319 million, an after-tax Net Present Value (NPV) of US$1.14 billion, and an Internal Rate of Return of 49.9% over a 35-year mine life that would produce 20,000 tonnes of lithium carbonate per year and annual EBITDA of US$167 million.

The company is on track to deliver the Final Feasibility Study in the late third quarter of early fourth quarter this year.

EV and Lithium Market

Electric vehicles currently represent less than 4% of the market share but are expected to grow to 30% in the next 10 years.

Lithium is a key material for rechargeable batteries that will be part of the global energy transformation to electric vehicles from fossil fuels cars.

The accelerating EV demand could tighten the current supply of lithium in the market so lithium producers need to come on stream to help meet demand.

Final Thoughts

With the recent financing, Neo Lithium has a significant cash position of approximately C$59 million although it plans to spend at least C$30 million this year to advance the construction of the evaporation ponds.

Upcoming milestones for the year include the construction and environment permits, the Final Feasibility Study, and a larger financing of approximately C$260 million to fund the construction of the processing plant.

The Company is in a solid position to benefit from the increase in demand caused by the shift towards the electrification of transportation.

Neo Lithium closed just shy of C$3.00 and below its 52-week high of C$3.88 with a market capitalization of C$382.9 million.




Neo Lithium’s Gabriel Pindar on the rising demand for lithium in electric vehicles

In a recent InvestorIntel interview, Tracy Weslosky spoke with Gabriel Pindar, COO and Director of Neo Lithium Corp. (TSXV: NLC | OTCQX: NTTHF) about their recent news release about CATL increasing its investment in Neo Lithium.

CATL is one of the largest battery manufacturers for electric vehicles in the world which made a strategic investment in Neo Lithium in September last year. In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Gabriel went on to say that CATL is expanding its plants globally and “for every one of those plants they will need more materials. That is why they are talking to us about lithium.”

Neo Lithium was recently named to the 2021 OTCQX® Best 50. Speaking on the competitive advantages of Neo Lithium’s 3Q Project, Gabriel said that it is a high-grade lithium brine project which is “one of the lowest impurity projects in the market” which allows for efficient lithium carbonate production.

To watch the full interview, click here

About Neo Lithium Corp.

Neo Lithium Corp. has quickly become a prominent new name in lithium brine development by virtue of its high quality 3Q Project and experienced team. Neo Lithium is rapidly advancing its 100% owned 3Q Project – a unique high-grade lithium brine lake and salar complex in Latin America’s “Lithium Triangle”.

The 3Q Project is located in Catamarca Province, the largest lithium producing area in Argentina covering approximately 35,000 ha including a salar complex of approximately 16,000 ha.

To learn more about Neo Lithium Corp., click here

Disclaimer: Neo Lithium Corp. is an advertorial member of InvestorIntel Corp.




Neo Lithium closes CATL strategic investment and looks to be the leading lithium junior miner

It’s not every day that the world’s largest battery manufacturer chooses to invest in your company. There are literally almost one hundred junior lithium miners (not yet in production) to choose from. Yet the world’s largest battery manufacturer, Contemporary Amperex Technology Co. Limited (CATL), has chosen to partner with Neo Lithium Corp. (TSXV: NLC | OTCQX: NTTHF), with an initial 8% equity investment deal closing yesterday. Why did they choose Neo Lithium?

Why Neo Lithium?

Neo Lithium has the best undeveloped global lithium brine project in the world. Here are 7 reasons why they are the best:

  1. Neo Lithium 100% own, and has fully paid, their 3Q lithium project in Argentina. Neo Lithium own the entire salar, which covers 160Km2 (6th largest salar in the world). This means they won’t ever have an issue of competing for lithium from their salar, unlike several other lithium brine miners who share their salar.
  2. The 3Q Project has the 4th highest lithium grade globally, or the 3rd highest if counting only their high grade core. The average grade to be mined for the first 10 years is forecast to be 1,000 mg/L lithium.
  3. The 3Q Project has the lowest level of impurities globally. This should result in the 3Q Project having industry lowest quartile operating expenses (OpEx forecast of US$2,914/t LCE) and also low capital intensity; that is the CapEx required to produce a certain amount of lithium carbonate equivalent (LCE).
  4. The 3Q Project has a significant lithium P&P reserve (1.3Mt LCE) and a very large lithium M&I Resource (4.0Mt LCE). Mine life is forecast at 35 years taking into account only 1/3 of the known resource.
  5. The 3Q Project has an outstanding PFS, including a post-tax NPV8% of US$1.144 million, post-tax IRR of 49.9%, and CapEx of US$319 million, based on 20,000t pa LCE production, and assuming a life of mine lithium carbonate average price of US$11,882/t. Payback is just 1 year and 8 months.
  6. The 3Q Project is already at a fairly advanced stage. The 3Q project site is now advanced with construction including pilot ponds, improved access, and infrastructure. The Environmental Permit is granted for Exploration, Mining and Development. All permits are granted for the chemical plant. Final Environmental permit for construction has been presented to the government and is in the process of approval. An agreement is in place with local municipality to build the lithium processing plant in Fiambalaon on government land near town.
  7. Neo Lithium is well cashed up with C$37 million in cash.

Neo Lithium is a standout on all metrics

Source: Neo Lithium company presentation

Looking ahead Neo Lithium is targeting to complete a final Feasibility Study in Q2 2021, obtain the EIA for final construction permit, then to ideally complete financing discussions with CATL to fund the project and assign off-take. All going well a final investment decision would then be made, project construction would occur over about 1 year, and then begin lithium production in 2022. Investors should note that miners don’t always hit these targets, and should view them as aspirational.

About Contemporary Amperex Technology Co. Limited (CATL)

CATL is China’s and the world’s largest battery manufacturer, based on 2019 figures. They are also one of Tesla’s preferred battery suppliers for China. CATL also supplies PSA, Hyundai, Honda, BMW, Daimler AG, Toyota, Volkswagen, and Volvo. In China, CATL’s clients include BAIC Motor, Geely Automobile, GAC Group, Yutong Bus, Zhongtong Bus, Xiamen King Long, SAIC Motor and Foton Motor.

According to Fitch Ratings: “CATL had a global share of 28% of lithium-ion battery installation volume in 2019. CATL’s strong market position is driven by the large Chinese electric vehicle (EV) market, which accounts for about 50% of global EV shipment, and CATL’s dominant position (54% market share) in this segment.”

CATL is currently in talks with Indonesia to build a US$5 billion lithium-ion battery factory in Indonesia, with plans to commence production by 2024.

CATL was the world’s largest lithium-ion battery supplier in 2019

Source: Bloomberg Green

Closing remarks

Neo Lithium is looking like the most exciting lithium junior (non-producer) in the market right now. They have outstanding project metrics, a very strong PFS with a post-tax IRR of 49.9% with low CapEx/low OpEx and a 35 year mine life, an advanced stage project, and the world’s largest battery manufacturer as their equity partner. What more could you want?

Neo Lithium trades on a market cap of just C$175 million.

Disclosure: The author is long Neo Lithium Corp. (TSXV:NLC).




Announced today the UK gasoline and diesel car sales ban by 2030 is a strong tailwind for Neo Lithium

Today the U.K. Prime Minister Boris Johnson announced about his ten point green plan. Perhaps the two biggest parts of the plan are – “UK sales of new gas and diesel cars to be banned from 2030” and “quadruple U.K. offshore wind production to 40GW by 2030”. The implications for the electric vehicle (EV) and wind sectors are enormous. One common denominator for EVs and wind energy is that they need batteries to store the energy. This means demand for batteries and for battery metals such as lithium is set to boom this decade. In the US, also announced today, a group of more than two dozen utilities, EV-charging companies, battery suppliers and EV manufacturers have formed the Zero Emission Transportation Association (includes Tesla) calling for emissions caps and 100% EV sales in the USA by 2030.

Even prior to today’s announcements the lithium sector has been forecast for demand to increase “more than six times” this decade (from 2019 levels to end 2029), as the EV and energy storage booms take off. The chart below was done before the latest news of a Biden victory and the Johnson Green Plan, meaning that the demand curve will likely be significantly larger.

Lithium looks to be heading towards very large deficits later this decade as demand soars

Source

With all of this demand for lithium in the years ahead one company looks extremely well placed to ride the next wave of the lithium boom. That company is Neo Lithium Corp. (TSXV: NLC | OTCQX: NTTHF).

Neo Lithium 100% own (and has fully paid) their Tres Quebradas (“3Q Project”) lithium project in Argentina. The Project is a standout for numerous reasons.

  • Neo Lithium 100% own the entire salar, which covers 160Km2 (6th largest salar in the world).
  • The 3Q Project has high grade lithium brine (3rd-4th highest globally).
  • The 3Q Project has extremely low impurities (the lowest globally). This should result in 3Q having very low capital intensity to develop and industry lowest quartile operating expenses (OpEx).
  • The 3Q Project is already at a fairly advanced stage and looks set to be a likely near term lithium producer.

Neo Lithium’s 3Q Project ranks 3rd-4th for the highest lithium brine grades globally

Source

Neo Lithium looks set to be the next major new lithium brine producer following Lithium Americas

Source

The 2019 amended Preliminary Feasibility Study (PFS) resulted in a post-tax NPV8% of US$1.14 billion and IRR of 49.9%, payback of < 2years with a 35 year mine life. The PFS was based on an initial 20kt pa lithium carbonate production and has a CapEx of US$319M and OpEx of US$2,914/t lithium carbonate. These are excellent numbers.

Neo Lithium has another huge plus going for them. That is, China’s and the world’s largest battery manufacturer, Contemporary Amperex Technology (CATL), is a strategic investor in Neo Lithium with an 8% equity stake and board representation.

The 3Q Project is quite advanced with some pilot ponds already constructed and a lot of infrastructure already in place. The Environmental Impact Statement (EIS) is currently under assessment with results due out soon. The Feasibility Study (FS) is underway and is due out by end Q2, 2021, assuming no COVID-19 disruptions.

CATL will also be a part of the technical committee that will be leading the FS forward. While this does not yet guarantee CATL off-take rights it puts them in a prime position. Once the FS for the 3Q Project is completed, I strongly suspect that CATL will assist in the financing plan for the future construction of the 3Q Project, and collect significant lithium off-take rights. CATL is a very large company with over US$60 billion in market capitalization and over US$3 billion in cash. Also of relevance was yesterday’s announcement that CATL will invest $5.1 billion for a battery factory in Indonesia. No doubt it will need plenty of lithium.

Closing remarks

Neo Lithium’s 3Q Project is arguably the best and next lithium brine project set to go into production after Lithium America’s Cauchari-Olaroz Project, both in Argentina. Management is top tier led by Waldo Perez, who discovered both the projects mentioned just above. If all goes well with the FS, CATL relationship, and project funding, it is possible to see Neo Lithium commence production by late 2022 or early 2023. This would be perfect timing as the EV boom should be taking off at that time as EVs and Internal Combustion Engine vehicles reach purchase price parity. The UK gasoline and diesel ban by 2030 and the US Zero Emission Transportation Association call for 100% EVs by 2030 are all just icing on the cake.

Risks exist due to not yet being a producer and the risks involved with lithium prices and sovereign risk in Argentina.

Neo Lithium currently trades on a market cap of C$182M. Investors should not wait too long as the EV trend is very rapidly gaining momentum (notably in China, Europe, UK and USA) and quality lithium miners like Neo Lithium have potential to be huge winners this decade.

Disclosure: The author is long Neo Lithium Corp. (TSXV: NLC).




The Technology Metals Show with Neo Lithium’s Waldo Perez on the state of the lithium market

Technology Metals Show hosts Jack Lifton and Peter Clausi interview Waldo Perez, President, CEO and Director of Neo Lithium Corp. (TSXV: NLC | OTCQX: NTTHF) on the state of the lithium market. “When it comes to lithium there are two places and two sources.” Waldo started. “First is the Puna plateau which is Chile, Bolivia and Argentina for brine resources. 60% of the lithium of the planet is located in an area that covers this plateau.” He continued, “The other source is a mineral called spodumene. This mineral is more common in the planet but the best spodumene is found in Australia.”

In this interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Waldo went on to say that CATL – largest battery producer in the world, is a strategic investor in Neo Lithium. He explained that Neo Lithum’s Tres Quebradas (3Q) Lithium Project was selected by CATL because it is the highest grade undeveloped project in the world and has low OPEX and CAPEX. The project has 50% IRR and payback of less than 2 years. To watch the full interview, click here

About Neo Lithium Corp.

Neo Lithium Corp. has quickly become a prominent new name in lithium brine exploration by virtue of its high quality 3Q Project and experienced team. Neo Lithium is rapidly advancing its recently discovered 3Q Project – a unique high-grade lithium brine lake and salar complex in Latin America’s “Lithium Triangle”. The 3Q Project is located in the Catamarca Province, the largest lithium producing area in Argentina covering approximately 35,000 ha including a salar complex of approximately 16,000 ha.

To learn more about Neo Lithium Corp., click here

Disclaimer: Neo Lithium Corp. is an advertorial member of InvestorIntel Corp.




Giyani Metals CEO on huge market demand for manganese

July 4, 2018 – “The market is very strong at the moment. I do not know if you noticed, but CATL listed in Hong Kong raising over a billion dollars. They are going to be the largest battery manufacturer. Demand is just going to be huge for the manganese units going forward.” states Robin Birchall, CEO & Director of Giyani Metals Corp. (TSXV: WDG), in an interview with InvestorIntel’s Peter Clausi.

Peter Clausi: We are here to talk about Gyiani Metals and manganese. You have 3 properties in Botswana.   

Robin Birchall: That is correct. We have the K. Hill, Otse, and Lobatse.

Peter Clausi: Which is your favorite? 

Robin Birchall: I would say my favorite is K. Hill. It is the most advanced of all of them.

Peter Clausi: Did you buy that in advanced stage or were you the ones who moved it along?

Robin Birchall: No, we have moved everything along. We have done all the drilling this year. We have done that in a very short period of time, about 4 months, completed our drilling at K. Hill. We are now drilling at Otse, which is our second property. Because we are under budget, cash and meters wise we are even going to drill at Lobatse.

Peter Clausi: Nice. You do not hear that too often. How many holes did you drill at K. Hill?

Robin Birchall: We drilled 18 holes there. One of which was a metallurgical hole. We have drilled now 4 holes at Otse, a good 3 holes left to do there. We plan probably about 6 at Lobatse.

Peter Clausi: Where do you assay those? Is it in country or do you ship them out?

Robin Birchall: No. They go to SGS, Randfontein in South Africa. All the samples have gone from K. Hill to SGS, Randfontein and we are waiting for them to come back. They will be back in the next 10 days.

Peter Clausi: It takes what, about a week for you to compile those into a press release?

Robin Birchall: Yeah, I am hoping to have some initial results. Yeah, that is our next press release will be something on the grades we are seeing in the holes.

Peter Clausi: That is often a major catalyst; looking forward to seeing that. Will that include the second drill program as well or just K. Hill?

Robin Birchall: No, K. Hill is for resource and Otse is where it is not quite exploration, but it is not quite enough to be a resource. It is really for us to understand that deposit a little bit better.

Peter Clausi: If I remember your press releases correctly, you were counting on premium pricing for your manganese given its quality.

Robin Birchall: That is correct. From the visual inspection we are pretty happy with what we have got there, but obviously the assays have to come back.

Peter Clausi: What do you see happening in the manganese market?

Robin Birchall: That is a really good question. The market is very strong at the moment. I do not know if you noticed, but CATL listed in Hong Kong raising over a billion dollars. They are going to be the largest battery manufacturer. Demand is just going to be huge for the manganese units going forward…to access the complete interview, click here

Disclaimer: Giyani Metals Corp. is an advertorial member of InvestorIntel Corp.