Compass Minerals Intl Inc · NYSE:CMP
Compass Minerals Intl — Compass Minerals International — Investor Day (September 2022)
42 slides from Compass Minerals Intl's investor day presentation, Sep 15, 2022
Slide 1: Lithium Strategy Update
LITHIUM STRATEGY UPDATE // Sept. 15, 2022 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about the company’s efforts to create a safe and inclusive workplace and manage its environmental
Slide 3: Cautionary Statement Regarding Material Resource Estimate
Cautionary Statement Regarding Material Resource Estimate Certain information in this presentation concerning the proposed lithium development project, including expected production, projected life-of-project, mineral resource estimates and the sensitivity analysis presented at the end of this prese
Slide 4: Agenda
Lithium Strategy and Investment Thesis | Kevin Crutchfield, President and CEO AGENDA Lithium Project Overview | Chris Yandell, Head of Lithium Direct Lithium Extraction (DLE) Technology | Dr. Ryan Bartlett, Senior Vice President, Lithium Commercial and Technology Project Economics | Chris Yandell, H
Slide 5: Compass Minerals at a Glance
Compass Minerals at a Glance ~$1.2B Largest sulfate of potash (SOP) in annual revenue1 producer in the Western Hemisphere ~$185M Leading salt producer Adjusted EBITDA1,2 in North America and the U.K. ~2.4M metric tons LCE 175+ years in operation total lithium mineral resource3 Focused on Our Workfor
Slide 6: Led by an Experienced Senior Management Team
Led by an Experienced Senior Management Team Kevin S. Crutchfield Rick Axthelm Dr. Ryan Bartlett PRESIDENT AND CHIEF CHIEF PUBLIC AFFAIRS AND SENIOR VICE PRESIDENT, EXECUTIVE OFFICER SUSTAINABILITY OFFICER LITHIUM COMMERCIAL AND TECHNOLOGY Rob Fisher Mary Frontczak Lorin Crenshaw CHIEF INFORMATION A
Slide 7: Compass Minerals Lithium Journey and Overview
Compass Minerals Lithium Journey and Overview Drilling and Kickoff formal Ogden site formed sampling EnergySource Li project and as part of Lithium First production of campaign begins Minerals pilot First DLE pilot team Corporation of sulfate of potash EnergySource complete America from Ogden site p
Slide 8: Leveraging Core Competencies in Adjacent Markets Expected to Accelerate Growth
Leveraging Core Competencies in Adjacent Markets Expected to Accelerate Growth and Reduce Weather Dependency World-Class Assets Provide Potential New Growth Avenues ASSET FOOTPRINT CORE COMPETENCIES PRODUCTS MARKETS Goderich Mine Underground Extraction Rock Salt Deicing Cote Blanche Mine Chemical Sa
Slide 9: Our ESG Approach Guides Our Decisions and Business Practices
Our ESG Approach Guides Our Decisions and Business Practices We approach our environmental, social and governance (ESG) work through a fundamental commitment to four key pillars: safety, growth, transparency and stewardship; together, these pillars form our sustainability compass, guiding our decisi
Slide 10: Compass Minerals is Fully Funded through 2024 and Poised to Execute on Lithium
Compass Minerals is Fully Funded1 through 2024 and Poised to Execute on Lithium and Deliver Value Unique low-cost, brine-based, brownfield U.S. lithium development project Value Proposition Major Permits in Place, Brownfield Asset Leveraging Existing Infrastructure 1 o One of the largest U.S. brine
Slide 11: Delivering Responsible Domestic Lithium From an Advanced Brine Project
Delivering Responsible Domestic Lithium From an Advanced Brine Project 11
Slide 12: Proven Lithium Leadership Team with over 100 Years Combined Experience
Proven Lithium Leadership Team with over 100 Years Combined Experience Chris Yandell Clint Parham Jordan Taylor HEAD OF LITHIUM VICE PRESIDENT, LITHIUM VICE PRESIDENT, PROCESS AND TECHNOLOGY LITHIUM OPERATIONS • <1 year at Compass Minerals • <1 year at Compass Minerals • 2+ years at Compass Minerals
Slide 13: The Need for Domestically Sourced Lithium has Never Been More Acute
The Need for Domestically Sourced Lithium has Never Been More Acute and Limited Capacity Exists Today THE Extraction Capacity vs. Refining Capacity by Country1, % INFLATION REDUCTION ACT OF 2022 Rest of World Rest of World 100% 2% 2% 1% 3% Passed into law on August 16, 2022 and includes several new
Slide 14: Exceptional EV Market Fundamentals Continue to Drive Lithium Demand
Exceptional EV Market Fundamentals Continue to Drive Lithium Demand Battery-grade lithium demand is expected to increase by 7x in North America by 2025 and more than 10x by 2030 Global Commodity Demand Growth (CAGR 2022 – 2030)1 Global Battery Grade Lithium Supply & Demand3,4 (LCE MT) ~19% Projected
Slide 15: Lithium Price Outlook Indicates a Step-Change from Previous Decade
Lithium Price Outlook Indicates a Step-Change from Previous Decade A low-cost position is essential for projects to deliver long-term value as price normalizes YEAR YEAR Prices expected to remain high for the next few years and then normalize to a new equilibrium as more supply comes online Source:
Slide 16: Foundational Operations and Anticipated Synergies Drive Project Attractiveness
Foundational Operations and Anticipated Synergies Drive Project Attractiveness Planned domestic lithium production Utilizing existing infrastructure to Utilizing solar evaporation for a with experienced enterprise support ramp-up production sustainable lithium operation Our asset in Ogden, Utah, nea
Slide 17: Ogden Lithium Resource: A Two-Phase Growth Opportunity
Ogden Lithium Resource: A Two-Phase Growth Opportunity The advancement of our lithium project is intended to occur over the course of two GREAT SALT LAKE distinct development phases On the east side of the Great Great Salt Lake – North Arm Salt Lake, where much of our PHASE 1 existing infrastructure
Slide 18: Mineral Rights and Permitting Status Enables Speed to Market
Mineral Rights and Permitting Status Enables Speed to Market Compass Minerals is fully permitted to access its lithium resource and expects minimal additional permitting requirements to produce battery-grade lithium Existing Ogden Operations – East Ponds Proposed Phase 1 Site Adjacent to Existing Op
Slide 19: DLE Technology is a Potential Driving Force to Unlock Additional Lithium Supply
DLE Technology is a Potential Driving Force to Unlock Additional Lithium Supply Sources of lithium for extraction can include spodumene (hard rock), brine and clay Traditional Brine BRINE Solar Evaporation Purification Crystallization salt pans, underground brine pools Hybrid Solar Evaporation DLE P
Slide 20: Direct Lithium Extraction Technology Overview
Direct Lithium Extraction Technology Overview: Selection Process Leading to EnergySource Minerals ILiADTM Technology for Phase 1 20
Slide 21: DLE Technology Types – Advantages and Disadvantages
DLE Technology Types – Advantages and Disadvantages DLE Type Resin/Material Potential Advantages/Disadvantages Commercial Examples CMP DLE Choice Elution with water Adsorption/ Alumina or Ligand No acid required Catamarca, Argentina “Commercially 1 In production currently Desorption based Qingha
Slide 22: Rigorous Evaluation of DLE Technologies to Identify Best Fit
Rigorous Evaluation of DLE Technologies to Identify Best Fit for Our Brine Resource Complete for Phase 1 DLE Lithium Magnesium Low Environmental Commercial Technology Recovery Rejection Impact Readiness • Compass Minerals trialed multiple DLE Lithium 3 Magnesium 12 3s2 technologies to determine the
Slide 23: EnergySource Minerals – Background and Information
EnergySource Minerals – Background and Information ✓ EnergySource Minerals (ESM) is a privately held company leading the development of Project ATLiS, a premier battery-grade lithium hydroxide project located in Imperial County, California ✓ ESM’s experienced team has extensive commercial experience
Slide 24: ILiAD Direct Lithium Extraction Technology at a Glance
TM ILiAD Direct Lithium Extraction Technology at a Glance All Steps are Performed Simultaneously Only two inputs and two outputs with consistent composition; Compass Minerals ILiAD testing results No external recycles, washes, or displacements required have demonstrated robust Li recoveries Multi-Po
Slide 25: Compass Minerals Planned Lithium Production Process – Phase 1
Compass Minerals Planned Lithium Production Process – Phase 1 Commonly Used Today Commonly Used in Li and Other Chemical Process Today Step 3: Step 5: Ion Step 9: Step Step 2: Step 6: Step 8: Step1: Step 1: 1: Ponds Step 4: Exchange & Step 7: Packaging and Evaporation Evaporation Ponds Ponds Pre-Fil
Slide 26: Low-Cost Operations Expected to Deliver Strong Returns with Minimal Environmental Impact
Low-Cost Operations Expected to Deliver Strong Returns with Minimal Environmental Impact 26
Slide 27: Phase 1 Project Economics Support Substantial Value Creation
Phase 1 Project Economics Support Substantial Value Creation and Competitive Cost Position Expect to Deliver Strong Financial Returns with Minimal Environmental Impact Based on FEL-1 $20,645/MT LCE Selling Price $4,347 $985M 36% Cash Cost/MT LCE2 After-tax NPV1 After-tax IRR1 (Base +30%) 2025 ~11k $
Slide 28: Positioned Favorably Across Global and North American Cost Curves
Positioned Favorably Across Global and North American Cost Curves North American Assets (Brine Evaporation, DLE, and Hard Rock with Conversion)1 Brine - Evaporation Only Brine - DLE Hard Rock with Conversion • Compass Minerals' lithium project is expected to be among the lowest cost brine-based glob
Slide 29: Phase 1 Capital Intensity In-Line with Announced Projects
Phase 1 Capital Intensity In-Line with Announced Projects Global Lithium Brine Projects Capital Intensity • Anticipated synergies with existing operations and infrastructure at Ogden facility support competitive capital intensity profile relative to other global brine resources • DLE process adds ca
Slide 30: Leader in Environmental Stewardship, Sustainability and Engagement
Leader in Environmental Stewardship, Sustainability and Engagement Leadership on: Past Awards: • GSL Advisory Council • Utah DNR Earth Day • GSL Salinity Advisory Committee • Governor’s Energy Excellence • Utah Water Quality Board In one year, the sun provides free energy for evaporation equivalent
Slide 31: Progressing Our Go-to-Market Strategy with Leading Companies
Progressing Our Go-to-Market Strategy with Leading Companies Partnering with leading companies in the EV supply chain will enable us to diversify across a broad spectrum of battery platforms ~35k MT LCE Phase 1 - Under negotiation Phase 2 - Under negotiation • Signed non-binding MOUs with Ford and A
Slide 32: Focused Efforts Across Anticipated Project Timeline and Key Milestones
Focused Efforts Across Anticipated Project Timeline and Key Milestones H1 H2 2022 2024 2025 2026 2027 2028 2023 2023 Phase 1 – East Side (estimated at ~11kMT LCE) FEL 2 (PFS) Commercial scale DLE unit FEL 3 (DFS) Construct East Side Li2CO3 Asset Operate Phase 2 – West Side (estimated at ~24kMT LCE)
Slide 33: Funding Strategy and Valuation Considerations
Funding Strategy and Valuation Considerations 33
Slide 34: Funding Considerations
Funding Considerations • Maintain current credit profile • Strategic partnerships that reduce execution risk and offer value beyond simply capital • Minimize all-in cost of capital • Maximize lithium ownership / exposure to upside • Match funding timing with when capital is needed to enable speed to
Slide 35: Phase 1 Project Milestones and Capital Requirements
Phase 1 Project Milestones and Capital Requirements • FEL-1 level estimate of 2023 and 2024 funding requirements fully funded1 • ~75% ($200M) of FEL-1 level estimate of total funding requirements has been secured1 • Additional funding requirements to occur after project / technology is de-risked ~$2
Slide 36: Implied Valuation of Ogden Resource Suggests Considerable Upside
Implied Valuation of Ogden Resource Suggests Considerable Upside to Compass Minerals Shares Over Time Lithium Valuation Benchmarking Compass Minerals Market Capitalization / Expected Annual Production, US$ 000 / t LCE Lithium 110 Precedent Transactions Brine Developer Hardrock Developer In-Place 88
Slide 37: Phase 2 Project Economics Support Substantial Value Creation
Phase 2 Project Economics Support Substantial Value Creation and Competitive Cost Position Expect to Deliver Strong Financial Returns with Minimal Environmental Impact Based on FEL-1 $21,753/MT LiOH Selling Price $4,462 $2.2B 30% Cash Cost/MT LiOH2 After-tax NPV1 After-tax IRR (Base +30%) 2028 ~28k
Slide 38: Capable and Ready to Deliver Our Vision
Capable and Ready to Deliver Our Vision Major Permits in Place, Long-Life Brownfield Asset, Leveraging Existing Infrastructure o One of the largest U.S. brine resources, fully permitted for extraction, expect minimal additional permitting for production, facilitating near-term commercialization Inte
Slide 39: SOON
SOON MINERALS NZ
Slide 40: Appendix
Appendix 40
Slide 41: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information Reconciliation for EBITDA and Adjusted EBITDA (unaudited, in millions) Twelve months ended June 30, 2022 Net loss from continuing operations $ (36.4) Interest expense 54.8 Income tax expense 24.6 Depreciation, depletion and amortization 113.1 EBITDA from contin
Slide 42: Sensitivity Analysis Indicates Economic Value Creation Across a Wide Range of Scenarios
Sensitivity Analysis Indicates Economic Value Creation Across a Wide Range of Scenarios Valuation of Phase 1 – East Side (~11k MT LCE)1 Valuation of Phase 2 – West Side (~24k MT LCE)2 After-Tax NPV: $626M After-Tax NPV: $1,400B $200M $400M $600M $800M $1M $600M $1.0B $1.4B $1.8B $2.2B Lithium Lithiu
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