Lithium Universe Limited · ASX:LU7
Lithium Universe — Investor Presentation (October 2024)
43 slides from Lithium Universe's investor presentation, Oct 24, 2024
Slide 1: Watch Presentation Here
For personal use only WATCH PRESENTATION HERE A person in a suit and tie Description automatically generated
Slide 2: Upstream Mine Supply – The Lithium Gap
UPSTREAM | MINE SUPPLY For personal use only • +40 companies Quebec • >500Mt +1% Li2O resource • Transatlantic supply – Canada, Brazil, Africa THE LITHIUM GAP
Slide 3: Downstream Demand – The Lithium Gap
DOWNSTREAM | DEMAND For personal use only • Nth America battery manufacturing • +20 manufacturers • Add 1,000GW by 2028 • Tenfold increase in current capacity • 850,000t LCE per year THE LITHIUM GAP
Slide 4: The Lithium Gap: Current Conversion
For personal use only THE LITHIUM GAP CURRENT CONVERSION
Slide 5: Downstream Regulation
DOWNSTREAM | REGULATION For personal use only • Cut Chinese battery material reliance • Chinese firms ordered to exit • 25% tariffs on Chinese LCE • Canada needs downstream solutions THE LITHIUM GAP
Slide 6: Lithium Convertors
For personal use only LITHIUM | CONVERTORS • No current lithium converters • Only 100 Ktpa of converters planned • No lithium refining experience THE LITHIUM GAP
Slide 7: Closing
For personal use only CLOSING
Slide 8: Problems Filling the Gap
PROBLEMS FILLING THE GAP For personal use only • Complex chemical business • Many failures, technical difficulties Proven Technology • Existing Lithium producers • Technology and People Experienced Operators
Slide 9: Experienced Lithium Operators – The Dream Team
EXPERIENCED LITHIUM OPERATORS For personal use only • Ran Greenbushes Li in 1995 • Commissioned Li Carb Plant • Galaxy - First mine to refinery project • Built Mt Cattlin Spod Mine (137 ktpa) • Built Jiangsu Li Carb Plant (17 ktpa) • GXY MCap <$10 m $2.5b at merger Iggy Tan Chairman THE DREAM TEAM
Slide 10: The Dream Team
For personal use only GREENBUSHES LITHIUM VETERAN INTERNATIONAL DOWNSTREAM EXPERT • Ran Greenbushes Mine for 25 • Ex-Galaxy GM Technology years • Leading technical expert in the • Oversaw expansion from 200 Ktpa Lithium Industry to 1.4 Mtpa • Designed & Operated world- • Largest spodumene & highest
Slide 11: For personal use only
For personal use only
Slide 12: The Lithium Dream Team
THE LITHIUM DREAM TEAM For personal use only Terry Stark Roger Pover John Loxton John Sobolewski Head of Mining Head of Processing Head of Li Refinery Chief Financial Officer Ex Galaxy GM Operations Ex Galaxy Plant Manager Ex Hatch Li Carb Plant Ex Galaxy CFO & Co Sec
Slide 13: Failed Canadian Li Projects
FAILED CANADIAN Li PROJECTS For personal use only North American Lithium Nemaska Lithium • Shutdown 2015 • DFS completed 2018 • Spent circa CAD 250m • Spent CAD 411 m • Produced 109 t LC • Failed to start up 2019 THE COMPETITION
Slide 14: Troubled LiOH Plants
TROUBLED LiOH PLANTS For personal use only Tianqi Kwinana LiOH Albemarle Kemerton LiOH Alkaline Pressure Leach • 8 Years so far • 5 years so far • New Technology • Capital Cost Blowout • Still <20% of design rate • Unproven • > A$1 billion • Shut trains 2,3,4 • 1995 Greenbushes 5Ktpa • < 20% of desi
Slide 15: Why Have These Projects Failed?
WHY HAVE THESE PROJECTS FAILED? For personal use only • Lack of operating supervision - design • Chinese batch → Western continuous • Use of unproven technology Our Lithium Dream Team are Operators DESIGN
Slide 16: Dream Team Track Record
DREAM TEAM TRACK RECORD Jiangsu Li Carbonate Plant For personal use only 2 Years to Commercial Production Ground Start of Project Breaking Construction Completion 21 Feb 2010 1 May 2010 6 Dec 2011 6 May 2012 (19 months) (6 months Commissioning) • Capital Cost – US$120 m • At design rate 20,000 tpa •
Slide 17: Jiangsu Lithium Carbonate Plant
For personal use only Jiangsu Lithium Carbonate Plant
Slide 18: Closing the Lithium Gap – Bécancour Lithium Refinery
CLOSING THE LITHIUM GAP BÉCANCOUR LITHIUM For personal use only REFINERY • Replicate the success at Jiangsu • 18,270 tpa green BG lithium carbonate plant • Bécancour, Quebec’s Battery Hub • Same flow sheet, same equipment, same suppliers
Slide 19: Robust PFS – Becancour Lithium Refinery
BECANCOUR LITHIUM REFINERY STRONG POSITIVE For personal use only ROBUST PFS 1. LU7 ASX Announcement 30 Sept 24 – “Strong Preliminary Feasibility for Becancour Lithium Refinery” 1. LU7 ASX Announcement 30 Sept 24 – “Strong Preliminary Feasibility for Becancour Lithium Refinery”
Slide 20: The Big Whys
THE BIG WHY’s For personal use only • build a plant – low price environment? WHY? • build a plant - others closing theirs? • can you compete with China? • lithium carbonate not hydroxide? LU7 LITHIUM STRATEGY
Slide 21: Counter Cyclical Strategy
COUNTER CYCLICAL STRATEGY For personal use only Why build a plant in a depressed-price environment? • Been through 3-4 lithium cycles • Prices have and will always recover • Li demand from EVs and BESS growth strong • Develop a project ready for price recovery LU7 LITHIUM STRATEGY
Slide 22: Supply Demand Balance
SUPPLY DEMAND BALANCE For personal use only • Impact of supply reduction • Dramatic reduction 17%, 21% next year • Demand is severely underestimated • Focus on EV’s only, BESS dark horse • 1.8 TWh of batteries - 600 GWh solar plants PRICES WILL RECOVER QUICKER THAN EXPECTED LU7 LITHIUM STRATEGY
Slide 23: New Capacity Is Required
NEW CAPACITY IS REQUIRED For personal use only Why build a plant when others are closing theirs? • Higher costs operations being closed • Operations not performing, shutting down • New efficient capacity is required for the growth • World needs non-Chinese conversion • Build conversion that works LU
Slide 24: Quebec Lithium Conversion
QUEBEC LITHIUM CONVERSION For personal use only Why can you compete with China? • Access to Cheap Green Power • 2.6 cents per kWhr (5 times cheaper) • Nearby feedstock - Canada, Brazil and Africa • Decrease in transport costs of spodumene • End market North America • Eliminate 25% tariff on Chinese
Slide 25: Bécancour Cost Advantage
BÉCANCOUR COST ADVANTAGE For personal use only Why can you compete with China? Comparison to Chinese Conversion US$/t Canada Tariffs +US$960/t 15% CHEAPER Transport +US$600/t USA US$3,250 /t LU7 US$3,970 /t Africa Brazil LU7 LITHIUM STRATEGY
Slide 26: Li Carbonate Will Dominate
Li CARBONATE WILL DOMINATE For personal use only Why Lithium carbonate not hydroxide? • Track record in Li Carbonate • Li Carb feed for LFP lithium batteries • Switch to LFP battery - safety and costs • LFP 67% of EVs, 87% of BESS LU7 LITHIUM STRATEGY
Slide 27: Good Location – The Lithium Refinery
GOOD LOCATION For personal use only THE LITHIUM REFINERY
Slide 28: The Lithium Refinery – Becancour Lithium Refinery
For personal use only THE LITHIUM REFINERY BECANCOUR LITHIUM REFINERY
Slide 29: Good Location
GOOD LOCATION For personal use only 30,000 Spodumene Shipments Bécancour Lithium Refinery THE LITHIUM REFINERY
Slide 30: Lithium Refinery Flow Sheet
LITHIUM REFINERY FLOW SHEET Sulphuric Acid For personal use only Cooler Calciner Cooler Sulphating Hydrated Alpha Kiln Hydrated Beta Lime Spodumene Spodumene Lime Spodumene Ball Milling Water Filter Process Liquor Leaching Polishing Wash Tank Filter Mg Ca Water Alumina Precipitation Precipitation So
Slide 31: Lithium Refinery Design
LITHIUM REFINERY DESIGN For personal use only ß Spod Sulphation Calciner Spodumene Storage Kiln Storage Leaching Residue Sodium Storage Sulphate Plant Boilers Residue Cooling Processing Towers Process Water Treatment Product Warehouse Reagents LiC Production Storage & Purification Maintenance Buildi
Slide 32: Robust Process
ROBUST PROCESS For personal use only • Refinery to process all types of spodumene • Sampled - international sources of spodumene • Imports while Canadian Li industry develops • Achieve battery grade specs 99.5% Li2CO3 1. LU7 ASX Announcement 30 Sept 24 – “Strong Preliminary Feasibility for Becancour
Slide 33: Project Advancements
PROJECT ADVANCEMENTS For personal use only • Application 22.5 MW electricity, Hydro Quebec • Environmental survey – no showstoppers • Co-operation with W8banaki First Nation • Previous farm land • Permitting should be straight forward THE LITHIUM REFINERY
Slide 34: Conservative Price Forecast
BECANCOUR LITHIUM REFINERY CONSERVATIVE For personal use only PRICE FORECAST SC6 US$1,170/t LC $20,970/t 1. LU7 ASX Announcement 30 Sept 24 – “Strong Preliminary Feasibility for Becancour Lithium Refinery”
Slide 35: Net Present Value
BECANCOUR LITHIUM REFINERY NET PRESENT VALUE 8% For personal use only US$ 779 MILLION 1. LU7 ASX Announcement 30 Sept 24 – “Strong Preliminary Feasibility for Becancour Lithium Refinery”
Slide 36: IRR and Payback
BECANCOUR LITHIUM REFINERY IRR PAYBACK For personal use only 23.5% 3.5 YEARS 1. LU7 ASX Announcement 30 Sept 24 – “Strong Preliminary Feasibility for Becancour Lithium Refinery”
Slide 37: EBITDA and Capex
BECANCOUR LITHIUM REFINERY EBITDA CAPEX For personal use only US$ 147M US$ 494M 500,000 Quebec Lithium Refinery Pre -Tax Cashflows 400,000 300,000 200,000 100,000 - US$'000 (100,000) (200,000) (300,000) (400,000) (500,000) (600,000) Capex Spodumene Costs Processing Costs Revenue Net Cashflow 1. LU7
Slide 38: Funding Strategy
FUNDING STRATEGY For personal use only Project Ownership • Sell 49% project to 1-2 strategic partners Partner 2, 25 LU7 , 51 • Target OEM with spodumene offtake • Equity from sale injected to project • Debt and Equity of 50/50 • Appointment of debt adviser • Discussions with various banks Partner 1,
Slide 39: NPV Breakeven
BECANCOUR LITHIUM REFINERY BECANCOUR For personal use only NPV BREAKEVEN SC6 US$780/t LC $14,000/t 1. LU7 ASX Announcement 30 Sept 24 – “Strong Preliminary Feasibility for Becancour Lithium Refinery”
Slide 40: All Upside – 25% Price Increase
BECANCOUR LITHIUM REFINERY ALL UPSIDE – 25% PRICE INC For personal use only NPV US$1.24 Billion EBITDA Sensitivity to Lithium Carbonate Price 600 500 EBITDA (US$ MILLIONS) 400 300 200 100 - $14,000 $16,000 $18,000 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 $40,00
Slide 41: DFS and Offtake Discussions
DFS AND OFFTAKE DISCUSSIONS For personal use only • Strategic Investors at Project Level • Offtake Discussions with OEMs • Complete full Definitive Feasibility Study • Project Permitting • Funding Plan Underway THE LITHIUM REFINERY
Slide 42: Investor Highlights
For personal use only LITHIUM DREAM TEAM Proven Lithium Track Record PROVEN TECHNOLOGY Derisking Lithium Conversion Technology BÉCANCOUR LITHIUM REFINERY Competitive & Closing the Conversion Gap INVESTOR HIGHLIGHTS
Slide 43: Cautionary Statements
CAUTIONARY STATEMENTS Information Required by Listing Rules For personal use only The Becancour Lithium Refinery Preliminary Feasibility Study (PFS) does not rely upon estimated ore reserves / and or mineral resources. The spodumene concentrate feedstock for the proposed refinery has been assumed to
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