Andrada Mining (LSE:ATM) — Investor Presentation

0:00 Good morning and welcome to the Afritan Mining Limited Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab limited investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be switched at any time by the q and a tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. Have the company will review all

0:31 questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to select the following poll. I'd now like to hand you over to Anthony Gildjian, CEO. Good morning to you, sir. Good morning, Alessandro. Thank you everybody for attending this lithium webinar. Please note the relevant disclaimers, for your benefit. 2022 continues to be an exciting year of growth and development for Affington as we've recently completed construction and expansion of our operational project. We've increased the confidence of our lithium and tantalum resource and, importantly, providing a solution through the construction of our lithium pilot facility to realize revenues from our outstanding lithium resource.

1:20 With the addition of a lithium byproduct from the Wiese mine, Afritan will be well on its way to achieving its goal of becoming a producer of numerous technology metals. We are very pleased to be presenting this webinar on what we believe to be a lithium project of global significance to provide the broader market our findings and hopefully establish the commensurate level of excitement that the team have with this very unique element and asset.

1:52 The lithium market continues to be one of the fastest growing markets with the exponential growth driven by the increased demand for lithium batteries and electric vehicles, portable electronic devices, and energy storage systems as the world pushes towards a greener future. There's currently no viable battery alternative technology in the market supporting the long term demand fundamentals of lithium. The current supply deficit is expected to grow to over 3,500,000 tons of lithium carbonate equivalents by 2040. Even if all current possible and probable lithium projects come online, there's still expected to be a supply shortage owing to the lack of investment in the discovery and development of new supply in recent years, much the same as we have seen recently in the tin market.

2:43 Whilst investment is picking up in this regard, it would likely take between seven to ten years for newly identified projects to come online. The Chinese industrial complex has realized this and have rapidly stepped up converting lithium concentrates into battery grade material capable of supplying the numerous planned gigafactories around the world. This lack of capacity has been popularized recently by the Tesla CEO, Elon Musk. This supply deficit, however, provides a a unique opportunity for Afritan to timelessly develop its lithium strategy, already having a fully permitted mining license with a chalk compliant lithium resource and an existing tin operation, which will be capable of providing early production of lithium at existing facilities.

3:35 In addition to the battery or chemical industry, the biggest user of lithium is within the industrial or technical industry dominated by use in the glass and ceramics application, which includes smartphone screens, glassware, pharmaceuticals, and stovetops. Not so long ago, the industrial market purchased lithium feedstock at a premium to the battery grade feedstock owing to a high purity of lithium in the concentrate. Supply into both the battery and industrial markets is typically from three major primary lithium sources. To date, brine supply from South America has dominated the industry. However, hard rock supply, mainly from Australia, has picked up in recent years. Hard rock production is expected to increase its market outputs dramatically in the next few years.

4:23 Hard rock resources include the well known spodumene mineral as well as petalite and lepidolite. Additional supplementary supply is also sourced from sedimentary clay deposits. Whilst brine supply can feed directly to a lithium carbonate or lithium hydroxide conversion facility, hard rock or sedimentary sources are first concentrated into an intermediate lithium mineral concentrate such as spodumene or petalite concentrate. These concentrates are both then roasted at varying temperatures in a kiln to produce a beta spodumene. Beta spodumene can then undergo processing into an intermediate lithium sulfate concentrate or be further processed to produce lithium hydroxide or lithium carbonate chemical concentrate.

5:15 Both lithium hydroxide and lithium carbonate act as a feedstock into the lithium battery facilities. To date, the market has primarily used spodumene as the hard rock supply owing to its higher lithium content of around 6%. However, petalite with a lithium content of four and a half percent offers an attractive alternative. This owing to the fact that spodumene and petalite differ only in the quantity of contained silica and oxygen atoms. A four and a half percent petalite concentrate can directly supply the industrial market with no further processing and is considered a premium product owing to its low iron and low alkali content. Afritan has the unique advantage that it can, in fact, provide feedstock to multiple lithium markets.

6:05 Whilst lithium carbonate and spodumene concentrates have previously been utilized as feedstock into the industrial market, it is expected that this supply will be absorbed into the battery market creating a supply deficit into which a petalized concentrate can be directly supplied.

6:26 African has been operating in Namibia since 2017. The country offers a stable mining jurisdiction with a strong democratic government supportive of the mining industry. The country was rated second in Africa in terms of its mining policy perception and has established regulated mining and ESG laws. The country continually invests in large scale infrastructure upgrades, including the recently completed deepwater port at Valfas Bay through which the company currently exports its tin concentrate. The upgrading of the national road network to the Ouis project and plans to expand the existing national desalination supply network continue. The unique geology of the Oranga region in Namibia consists of exceptionally large and uniquely continuous pegmatite belts. These pegmatite belts play host to a smorgasbord of different metals that have all been periodically mined over the last century.

7:25 Afritan has honed in on the largest of the historical mining operations and since since listing in 2017 has moved rapidly to production, now completing plant expansion and soon to begin production of lithium. These rapid developments have provided a unique competitive advantage for African in what we believe will become a region of global significance in the race to transition to a new technology future. African declared a 72,000,000 ton jog compliant tin, lithium, and tantalum resource on the v one v two pegmatite in 2019, the blue ore body in the center image and left cross section. The company had historical drill information from the mine's previous owner's ESCORE and validated this dataset with a confirmatory drilling program.

8:18 Down dip drilling resulted in the resource on the v one v two pegmatite being 70% bigger than the historical resource declared by ESOK with the ore body thickening at depth. This resource currently contains 1,100,000 tons of contained lithium carbonate equivalent with the lithium mineral being petalite, making the v one v 2 pit on its own one of global significance. The company is currently completing an additional drilling campaign on the v one v 2 ore body to increase the resource confidence of the lithium and tantalum to a measured and indicated category. In addition to the v one v two pegmatite, the company has information for over 700 further historical drill holes covering an additional 12 pegmatite bodies.

9:05 This information was modeled in LeapFrog software as imaged in the center image and will be used to plan a confirmatory drill program over these additional ore bodies to reach a targeted 200,000,000 ton resource across these historical pits. In addition to the previously explored pegmatite, the Weiss license contains over 180 additional pegmatites located within five kilometers of the processing facility, all with visible mineralization, further supporting long term resource upside potential for the Wiese license being a behemoth lithium deposit. The current operations are fully permitted and producing 720 tons of tin concentrate per annum.

9:54 We are nearing completion of the expansion project, which will increase the production by 67% to 1,200 tons of tin concentrate per annum. All bulk infrastructure supporting the phase one operation is in place, including a grid power connection, an established groundwater supply network, and well maintained national roads linking the project to the Vulfas Bay Port. Construction on a pit light pilot facility is underway that will provide a bulk testing facility with an ultimate incorporation into the run of mine circuit. Given the sheer size of the resource, the company intends constructing the phase two facility that is anticipated to be at least 10 times bigger than the current facility.

10:40 All work undertaken with the current operations will effectively derisk the phase two construction that will inevitably attract favorable terms with our existing funding partners, which currently includes Standard Bank of South Africa. As the company expands to bring on the additional tantalum and lithium streams, the importance of the lithium stream becomes evident with the company anticipating nearly 60% of revenue coming from the production of a pet like concentrate. With the offset provided by the production of tin and tantalum, the company is forecasting a negative all in sustaining cost of around 490 tons of lithium carbonate equivalent for the production of a petrolite concentrate.

11:25 What this bit simplistically means is that either the production of tin will come at zero cost or more likely the lithium will come at zero cost of production given that both elements will be mined and processed within one processing facility. Whilst a number of lithium projects have been identified globally, few of these are currently in production or expected to be completed and come online in the next few years. With a targeted resource and expansion of the OIS project to large scale phase two processing facility, it is envisaged that the OIS project will be among the largest lithium projects on an annual mineral concentrate production as well as in the top 10 projects based on resource size globally.

12:10 This coupled with an early route to production makes African's lithium resource one of global significance. The company has been working with industry leaders such as NAGROM in Australia and Anzaplan in Germany to conduct metallurgical test work on its petalite ore to better understand the required extraction techniques. To date, test work has confirmed a high grade, low iron, and low alkali petalite concentrate, which meets the product specifications for use in the industrial market. The company also expects this concentrate to be suitable as feedstock into the battery market with a number of potential battery conversion facilities already indicating the interest in a petalite concentrate.

12:58 The company is currently completing bulk test work and expects to have large scale samples available by the end of the year in order to commence with prequalification work in both battery and industrial industries. In addition to lab scale work, the company has completed advanced engineering work to construct a pilot lithium processing facility at Wiese, which will be completed in due course. This facility will test the current process flow and produce bulk samples required for further prequalification test work with battery conversion facilities. In addition, concentrate produced from this facility will be sold directly into the industrial market, which provides an opportunity for early revenue streams from the pilot facility.

13:44 Following completion of all test programs on the pilot facility, the stream will then be added to the existing phase one processing facility as indicated in the process flow diagram. Most of the process flow relies on simple gravity based separation followed by a flotation circuit, which then ultimately produces the lithium concentrate. Whilst the initial process flow is to produce a pet like concentrate for offtake, the company is also investigating the potential to vertically integrate the Ouis project with a downstream conversion facility in country or even at Ouis. Namibia naturally lends itself to further downstream capacity development and is actively encouraged by the governments of Namibia who are strong supporters of inward investment into the country.

14:35 This provides a number of potential downstream chemical products, including lithium sulfate, lithium carbonate, and lithium hydroxide. The company plans to target initial sales into the industrial market owing to the ability to sell a petalite concentrate directly to a downstream producer at a premium due to the preference for petalite over spodumene or lithium carbonate in this industry. These sales are expected to begin from our pilot facility and continue once the lithium stream is integrated into the phase one processing facility, providing early revenue, derisking the development of this process, and providing a long term stable revenue stream. As the phase one stream reaches full capacity, it is envisaged that additional concentrate will be sold to a downstream battery converter for use in the production of lithium carbonate or lithium hydroxide.

15:28 The volumes expected to be produced in in the large scale phase two processing facility provides the optionality for the company to investigate the production of downstream lithium chemical production, further diversifying the revenue streams of the WES project. Conversion facilities for both the industrial and battery industries are largely concentrated in the Northern Hemisphere and dominated by China. While there's a big push for both Europe and North America to increase their conversion capacity, it is evident that facilities are failing to secure upstream supply for these new facilities. Conversion facilities in the battery industry are highly sensitive to stable, consistent feed supply and tend to secure long term offtakes from one or two projects in order to spec the chemical process accordingly.

16:20 The sheer scale of the waste resource as well as its untapped upside potential makes it an ideal project for such a conversion facility. The proliferation of battery gigafactories is disproportionate to the amount of new lithium supply coming on stream, and Averyton is positioned to take advantage of this in the near term. Numerous unsolicited offers to finance the lithium project as well as potential strategic partners who typically finance off the back of an offtake agreement or the leveraging of existing cash flows from the current tin production have been received. These are now receiving the highest priority focus of the Afritan management team. All lithium activities are, however, currently being financed through existing cash reserves and finance facilities.

17:10 The company is excited about the development of its lithium optionality. To date, we have completed a preliminary economic assessment for the large scale phase two project for OIS, which will include the production of tin, lithium, and tantalum concentrates, The updated jaw compliant resource for lithium and tantalum on the v one, v two is expected to be declared before the end of the year along with the completion of construction for the Petlight pilot facility. Further test work and feasibility studies will continue in 2023 to rapidly ramp up production and downstream opportunities. African's fully permitted Ouis project continues to prove to be a world class resource in an investment friendly mining jurisdiction.

17:58 We maintain strong relationships with our local community and relevant government departments, all while ensuring our operation is guided by the best international environment, social, and governance practices. Our existing tin production due to be increased by 67% with the current expansion project provides stable revenue, derisking the development of the lithium stream as the company pursues its goal of expanding its portfolio of strategic technology metals. African is committed to achieving its ambition of bringing early supply of lithium to the market and establishing itself as a world class repository of technology metals required for the rapid evolution to a cleaner, greener future.

18:44 We thank you for joining us for today's presentation and now look forward to answering your questions, which you kindly submitted to the investor meet company dashboard ahead of today or during the presentations. If you have any further questions, please do not hesitate to get in touch with us directly at info@afritanmining.com.

19:08 Anthony, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just using the q and a tab situated in the right hand corner of your screen. I'd also like to remind everyone that recording of this presentation along with a copy of the slide and the published Q and A can be accessed via your investor dashboard. Anthony, we received a number of live questions as well as a number of pre submitted questions from investors and I want to start off the Q and A session with the first one, which reads as follows. Considering the huge opportunity on lithium, will you rename the company? Thank you. Thank you very much, Alessandro. Yes. It's definitely a consideration. You we wanted to definitely highlight exactly what what we are as a company and where we aim to be, and a rebrand would be necessary in that regard. Perfect. Thank you very much. The next one relates to your dual listing and asks, what do you think of a dual listing in Australia because the lithium companies are valued so high there? An example of this, Atlantic Lithium.

20:06 The Australian market, as some of it does seem to understand the value proposition of lithium given that there are significant miners. But we're confident that London investors will, in due course, see this opportunity. Perfect. Thank you very much for that. The next one is more around the lithium strategy and ask what you're doing to drive that. Well, that's very important, Alessandro. We're obviously upgrading the confidence level of the of the lithium resource, and we're also commissioning the pilot plant. And we'll be adding lithium specific technical expertise to our team relatively shortly. That's great. Thank you very much. How does 10 and lithium fit in the same portfolio?

20:54 So both elements are actually mined together as one ore body. So there isn't really a differentiation. And in fact, the mining the two elements together complements one another from a unit cost per

21:11 Perfect. Thank you very much. I'm just turning to the next question, which asks, where is the downstream interest coming from? Well, look, there's there's no shortage of downstream interest at this stage.

21:22 Primarily, obviously, the Chinese battery manufacturers seem to have a competitive advantage over the Europeans and North Americans. But there is such a huge demand for lithium products that there's no shortage of suit of potential suitors that that or that won't just speak to us. Thank you very much. How do you plan to fund the development? So, Alessandro, funding is generally from internal resources and our existing partners and shareholders. But as I mentioned, there there's there's so many approaches from different strategic investors, and we will consider each of these on a case by case basis. Perfect. Thank you very much. And the next one relates to your growth plans and ask, what's your growth plans outside of UIS?

22:14 Alessandro, we wanna be a multi mine battery technology miner of global significance, and we want to scale this in the near future. Perfect. Thank you very much. We've got another question here, which asks about what opportunity exists for mining the historic tailings for lithium? So, Alessandro, I'll hand it over to our COO, Frans van der Lem, and he'll answer some of these questions going forward. Thanks, Anthony. So on the historic tailings, definitely an opportunity for lithium. We will be exploiting the existing stream of ore through our current current plant as a primary source of lithium, but we obviously consider the opportunity of the tailings to increase lithium without increasing our mining rate.

23:07 Thank you very much for that, Frans. Will you be able to use the previous tin tailings to extract lithium? And if so, will that lead to higher throughput on the lithium circuit?

23:17 I think it's more or less the same as the the previous question. So so, yes, I think apart from our existing ore stream from the mine, it will definitely be a source of higher lithium throughput. Thank you very much. The next question here asks us, has Afratin investigated selling its ultra low iron petalite concentrate as a sweetener to enhance spodumene concentrates which have excess iron contaminant? Yes. In the industrial market, contaminants such as iron and alkalis are very important, and you do get both petrolite and, to a limited extent, spodumene technical grade feedstock. In general, the lower your contaminants, the more desirable, and our product can potentially be used by off takers to blend with higher contaminant ores.

24:12 In the lithium conversion space for for for batteries, contaminants are are less important. Thanks very much for providing a bit more color there. The next question reads as follows. Regarding the drilling of the v one and v two pegmatites, do many of the previous cores still exist to enable their reanalysis for lithium and tantalum, or is it the case that the entire area is having to be redrilled? Unfortunately, the old drill core does not exist anymore. That is the reason we are currently doing infill drilling for lithium and tantalum. But, fortunately, the historical drilling provides a very good estimate of ore envelopes, which means that our drilling requirement is much lower compared to a virgin pycma type body.

25:02 Perfect. Thank you very much. The next question comes from an investor who says, I've read that tantalum recovery rate is expected to be very low even as little as 10%. Can you talk about the actual expected recovery rates and the potential for US firm the potential for improvement? Yes. So, Sandra, we're actually expecting around 15 to 20% overall recovery. But the reason for this relatively low figure is that a portion of the tantalum is either fine or intergrown with our tin minerals, which makes the magnetic separation, a bit difficult, at least for that portion of the tantalum. We are, however, looking at ways of improving, liberation of tantalum minerals to increase the recovery. We are also investigating smelting of the concentrate and recovery from, of the tantalum from the slag as alternative method for producing a tantrum concentrate.

25:58 That's great, Frans. The next question here asks, please talk about ore sorting. What trials have been done, what they show, and the likely cost and time scales for implementation. Do the impact efficiencies of recovery for each of the metals equally? This simplistically asks whether all the all the metals occur clustered in the same parts of the ore or some more dispersed than others. Yes. So all sorting employs different types of sensors to exploit the differences in material characteristics and to affect mechanical separation of the relative course or particles. There are two sensor types that we look at. The one is X-ray transmission or XRT. The other one is near infrared or NIR. XRT exploits the differences in mineral densities, and it works well for preconcentrating tin and tantalum minerals.

26:53 NIR, can identify the lithium minerals. We have completed about two rounds of bulk ore sorting tests for both sensor types, and we are busy with more off-site test work. We are also currently building an on-site pilot facility with both XRT and NAR shorter to run more comprehensive bulk test of our run of mine material. And on on completion of those pilot test work, we we would be able to proceed to integrate that circuit with our current plant. Thank you. That's great. What is the lithium equivalent grade, and how does it compare globally? Okay. So our lithium equivalent grades, now take into account the the tantrum and the tin that that occurs together in the same ore as the lithium, is about, is in the region of about 1%, lithium oxide, which compares well with, some of the best standalone lithium projects and operations in the world. I think you can refer back to the peer comparison bubble graph in the in the investor presentation.

28:04 That's great. Are you planning to go downstream to produce lithium chemicals? Yes. There's definitely an incentive for us to explore downstream production opportunities. There's quite a large price differential between ore concentrates and more advanced lithium products. Now we have to be honest, the hydromethylurgical lithium conversion plant is not a simple undertaking. It requires advanced IP and skills, but we are investigating various options available to us in this regard, and we are also engaging with potential technical partners. Perfect. And I know we had thirty minutes scheduled for today, but maybe one final question.

28:50 If you reach the exploration target for UIS, would you increase the stage two plant size? Yeah. I assume that stage two refers to phase two. Our long term objective is to maximize the scale of of the operations at Wizz, so to exploit economies of scale. The projected size of the phase two plant is not fixed, and we are looking to do various trade offs, to determine the optimal plant size that can be sustainably supported by the by the mineral resource as well as the mining operation. Perfect. Anthony, France, thank you very much for that. I think you've addressed those questions that you can given the time today. And, of course, the company will review all questions submitted today and will publish those responses on the investor meet company platform.

29:38 Just before we direct investors to provide you with their feedback, which you know is particularly important to the company, Anthony, can I just ask you for a few closing comments? Yeah. Alessandra, thanks very much for this, and thank you everybody for listening into the webinar today. We are very, very excited by the opportunity that the lithium pro proposes, and we are literally winning the race right now to be the first lithium listed producer in London. Thanks a lot, Alessandro, and good day, everybody. Anthony, France, thanks once again for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback order that the management team can better understand your views and expectations.

30:24 This will only take a few minutes complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Atherton Mining Limited, we'd like to thank you for attending today's presentation, and good morning to you all.