Bonnie Claire’s Optionality Continues To Increase: Boron Enters the Arena

0:08 Hello everyone and welcome to the Nevada Lithium live event hosted by 6. I'm pleased to introduce our speakers for today, Stephen Rentschler, CEO, and Jeff Wilson, DP Exploration. They'll be talking about the news that they've had about the high-grade boron byproduct at Bonny Clair. 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.

0:31 And as always, this event is being recorded and will be available on SIGS.com to watch afterwards. So without further ado, Steve, handing things over to you, so we can get started. Super. Thanks, Max. Thanks to everybody for taking the time to join us for a little bit here. So yesterday we announced that we basically have found some very, very high grade boron at Bonnie Clare and have identified that it's essentially open-ended in 3 directions and seems to coincide with a high grade lithium that we've identified over the course of the past 2 years of drilling. I wanted to give everybody a little bit more color as to why we think this is important. I've got Jeff with us today who can give it to you from a technical perspective that, of course, I can't give you, but I can give you the 30,000 foot overview and typically I like to start sort of with a top-down approach and give you an idea about the way that we're thinking about Bonnie Clare now given this information.

1:29 So just to back up a step if you recall we've been working on updating a PEA on our way to preliminary feasibility study. And we wanted to incorporate this high-grade material that had never gotten into the PEA that we released essentially 2 years ago, a little over 2 years ago. So this is all drilling that occurred over the course of the last 2 summers. And this is where we found these massive swaths of high-grade lithium intercepts. And as we've been working on the metallurgy, which was necessary to continue to do, to do the updates on the PEA, which would again be used in the PFS, we started to notice that there was a bit of a change in mineralization with a higher grade of the lithium.

2:16 And upon further review and study, we found that the boron levels, which we had seen boron before in earlier drilling and earlier assays, had really started to rise. And essentially, I'll let Jeff walk you through some of the technical details again. But as the assays came through, and there were different types of assays and things like this, we realized that the boron, which we had previously thought probably would not be much of a contributing factor to the economics at Bonny Clare, actually had a very good chance of contributing significantly. And the analog here is of course Rhyolite Ridge, which is about 110 kilometers away from us. So what we have again in Bonnie Clare is we have an upper zone, which is let's just call it lower grade lithium material, up to say a thousand parts per million.

3:06 And then we've got, you know, underneath that, so anywhere from say 700 feet, go down another 500 feet, 1,200 feet, ballpark in there, we have sandstone. And then we have the beginnings of what we call the lower mineralized zone. And this is where the high-grade lithium was found. And at the bottom of that lower-grade zone is where we've been finding this blanket of very high-grade lithium mineralization, which now seems to coincide with the boron. As we do that testing, continue going forward, we want to try to unlock, see what the percentages are going to be, see what the different types of materials that could be made out of this, et cetera, and see how similar it is to rhyolite ridge, which again, takes, I think it's about, they have an $800, something like that per ton cost credit to their lithium.

3:55 The analog is really striking. Again, it's only 110 kilometers away. We again don't know how far this kind of mineralization extends at Bonnie Clare, but the reality is we think it's going to be worth taking the time to not put a pause, but just look in different directions from a metallurgical point of view to see what kind of things we can discover, what's the best way to optimize the metallurgy that we have now, and once again determine where the best spots are going to be to drill going forward. The way I look at it is this is very, very exciting. We've often talked about byproducts in the past. One of the big ones that we'd always thought about was potassium sulfate or potash fertilizer.

4:42 We did not get to look at that yet. We had been working on lithium hydroxide,

4:47 which we did not quite get to yet, of course, after the battery grade lithium carbonate. But this is just too striking. The potential is too much given what we see at Rhyolite Ridge. So I think with that, that's the 30,000 foot view as to what's going on. Boron seems to be a critical material that I'm not sure, but we think is going to be covered under the US Critical Minerals Act. There's all sorts of high tech things that are possible to make out of boron. It's not just all boric acid, and all of this is yet to come. So again, we put the words optionality into the news release, and we do that for a reason. I just think that, again, Bonnie Clare has got one of the best optional attributes of any project out there, whether or not it's the potential for brine, whether it's open pit, whether it's continuing to go down to deeper depths with a borehole mining, and now of course we have the boron.

5:45 So to me as an investor that's the kind of thing you want to see, particularly for early stage investments. But at this point in time, I'd like to have Jeff basically put some more details around this for you, probably get ahead of some of your questions, and then obviously we'll take some questions after the fact. So Jeff, if you wanna give a couple minutes, that would be great. Yeah, just alluding on from what you were talking about, what we have, Bonnie Claire, we've, as you were saying, we had some idea of the presence of boron in previous drilling, 2022, and we've been pursuing the lithium angle, and as a result, because We wanted to get well reproducible results with the lithium.

6:34 We went to a 4 acid digest for our primary analytical method.

6:39 Unfortunately, that kicks out boron, so we were unable to look at the boron. We subsequently went back and re-analyzed for boron and realized that the numbers are significantly higher, especially in the lower zone. At the same time, XRD results came back indicating that we had up to 35, 36, 40% seralzite, which is a relatively unusual sodium boron mineral, but may constitute a significant portion of our lower high-grade zone. I think we're still coming to terms with that because we are only one of a handful of lithium boron deposits globally.

7:27 And we're having to think carefully about how that's going to affect the metallurgy, how it's going to affect the recovery, so forth. It shouldn't affect the mining method, but certainly it's something we have to think about and think about whether we can incorporate that into the resource and so forth.

7:46 So I think probably it's as good a time as any to start taking questions. Obviously, we can get into more technical aspects if we want to, but we'll just open it up here, Max. Perfect. Thank you, Benjy. So about roughly how much do you expect the estimated CapEx for the Bonny Clare project to raise since the initial PEA due to inflation? Some of your peers did CapEx wise before X, the original estimates. You broke up a little bit. Was that sort of what do we think inflation is going to do, the capex of money? That's right. Yeah, exactly. Yeah, capex is clearly going to come into it. I can't give you a factor yet. You know, the updated PEA is taking into account a number of different things, including inflation.

8:32 One of the big things that was going to be taken into account is the higher grade material that's coming through, which is going to change the throughput and obviously all this stuff has a follow on effect. I mean, you know, ballpark terms, you know, we've been hearing out in the field, certainly, inflation running 20% a year kind of stuff. So there's clearly going to be an impact.

8:54 I think, though, one of the big things that would go into any sort of an update is the fact that, again, despite where lithium prices are now, say, call it $15,000 for lithium carbon equivalent, something like that, nobody really believes that that's gonna be the kind of price that is gonna be going forward for any length of time because it's simply not enough to bring in all of the supplies that are needed to meet demand. And everything that's been going on in Nevada, you see 20,000,

9:25 22,000, 24,000 for feasibility studies and updated PEAs, things like that. So the banks seem to be comfortable with that. The reason I bring that all up, tremendous positive impact to anything we do at Bonnie Clare and that offsets those inflationary pressures. So we're unable to tell you how much inflation is specifically gonna hit there because there's a lot of moving pieces, but clearly it's going to be in there. Thank you. What's your worst case timeline on the updated PEA and also the worst case timeline for the PFS and what would go into that worst case?

10:03 Well, I would say that if we just start with the PFS, which is ultimately where I've always said to me, that's the big inflection point when you're talking to any of the big mining companies or even the car companies, because their consultants are from the mining companies and that's in their DNA. You know, with us, that's going to be the borehole mining test that we're going to have to do. And I think, you know, worst case is somewhere in 2025. Don't know. We're obviously having talks with people about getting the funding for that, looking for ways to basically defray that funding. Updated PEA, there are different paths that we could take, which could end up making things take longer. If we go to an updated resource first and then to an updated PEA or go straight to an updated PEA.

10:48 You know my gut is telling me that we're going to be somewhere we're right now we're what almost to the end. Well we're coming to fifth month 6 month. You know we're probably talking about fall somewhere in there

11:00 going into the fourth quarter. That's sort of what I think is worst case, and probably best case, pardon me, would be my best guess at this point in time. Be somewhere in there for an updated PEA, late summer going into fall. All right, thank you. Do boron and lithium require separate processing points? That's interesting. I'll give you my take on it is that I know the boron needs to be removed to get to the battery-grade lithium. We've seen that before in our existing metallurgy. So I think there they coexist as part of the same circuit, but then what might be different is upgrading to whatever the intermediate product, whether it's boric acid or use that as a final product, that might require something different. But I do know that extraction of the boron has been part of what we've already been doing at Bonnie Clare. Jeff,

11:53 I don't know, do you have a different take on that? I think it's too early to say. I don't expect there to be a different circuit, because as you say, we have the boron extraction. And in plants like Rhyolite Ridge, it's a single plant, but it's just probably more complicated than than what we proposed thus far.

12:15 OK, makes sense. Are you considering royalties for new investors or partners as opposed to warrants or warrants to reduce dilution? Royalties to new investors? No, we have we have not been thinking about that. OK. Have you looked at other boron producers and do you have any idea about the possible recovery rate?

12:40 We started to look at all the different boron producers that we can find. Like anything, there's a very, very wide spectrum of what's going on in boron. You've got some very high-grade, I want to call them pure, but like borax mining, it's in the teens of percent, the stuff that they're mining. I think the recoveries are pretty high. The boron, of course, is what we're talking about as a byproduct of what we're doing with the lithium and things are very different again. Rhyolite Ridge seems to have the same sort of mineralization that we do. Fort Katy has got some stuff going on with lithium boron but they seem to have a different mineralization. Not sure what their recoveries are. You know, it's sort of like, it's almost like anything else. You're gonna have different combinations of grades and recoveries that come out with either an economic outcome or not. And we're just gonna have to see how this comes. But again, the backstop is the lithium, right? So when you look at us versus, say, Rhyolite Ridge again, you know, the boron looks like its ballpark about the same in terms of the grades, but the lithium that we're finding in our deeper stuff, that lower grade zone, is, you know, 3 times more. So you know, we don't want people to think that all of a sudden this is turning into a, you know, a boron mining operation. It's a lithium boron mining operation, but still, capital L, I would say small b. That's again, the way that I think about that.

14:01 Yeah, I mean, the analogy with Rhyolite Ridge, Rhyolite Ridge is running 80% boric acid recovery and 85 to 90% for lithium, you know, so they're not mutually exclusive, they go hand in hand in these circuits. And are there any comparables outside of the US that you've seen or no?

14:24 I haven't gotten a real handle on what's going on over in Turkey. A lot of the production is coming from there. And then as I said, some of the borax operations, mining, Rio Tinto is involved with them. That stuff, it's sort of like when you look at uranium and you look at guys trying to do in situ leach and then you look at what's going on at MacArthur or something like that and you've got pods of 80% uranium. It's just, it's all over the place. So to the best of our knowledge, we're one of a handful of these sorts of deposits, like one of maybe 3 lithium slash boron. So I'm not sure we're going to find too many more pure analogs or analogs that are as good as say Rhyolite Ridge by looking overseas, but we're definitely doing a lot of homework right now.

15:12 How has this discovery changed your, I guess, your timeline or your upcoming catalysts? Are you shifting any kind of focus on this or is it just kind of business as usual for now? Well, to me, the big thing is that if you know that you can get a significant byproduct credit out of this, then the economics make it that you have to take a serious look at this. And that's going to take some more time, you know, certainly to work through it. I would think that where we're going to be concentrating specifically on that is really around the metallurgy. Because to Jeff's point earlier, I don't think the borehole mining really, we would expect anything to change from what we've seen of the cores at the very bottom of the holes. It's not like all of a sudden you hit material that's like granite, meaning real hard, or like you can't get through it, anything like that. The stuff is still very crumbly, et cetera. So this is one of those things that gets, it's gotta be worked out, you know, in the labs.

16:07 And that's the kind of thing that takes time. The scientific method, it's just, you know, I'm certainly, again, I'm no metallurgist, you know, but by listening in and seeing what's going on, you know, it has to be methodical. And that kind of stuff takes time. It literally takes time to get results back every time you do an experiment. The assays could take a week to 10 days. There's just really no shortcutting it. So I think we just have to allow some more time to get through that. And that's why I'm saying, you know, in terms of an updated PEA might be pushed back a little bit. But really, the conclusion was it was certainly worth the time. Frankly, looking at the market malaise out there I'm not necessarily sure that you know if we were to announce something in you know in the next 6 weeks it would have made a tremendous amount of difference.

16:55 Just you know everybody again still seems to be concentrated on auto sales and where lithium prices are in the short term. I see nothing that's changed the long term outlook, frankly. But I think, you know, again, the trade off seems like it's it's really quite worthwhile again, because we just have such a very good analog 100,100 kilometers away in Rhyolite Ridge. Perfect. OK, thank you. Yeah, so that's all the questions that we have for today. So thank you both for this update on the news. And if anyone has any additional questions, please feel free to reach out to myself or the team here. So thank you all for submitting these questions. This recording will be available to watch shortly afterwards. So before wrapping up, I'll pass things back over to you, Steve.

17:45 OK, thanks, everybody, again, Thanks for taking the time. You know, we have a big battery metals conference lithium conference out in Vegas Towards the end of June. We're going to be heading out there with a you know, a bunch of our crew talking to people It looks like attendance is going to be high again from the end users, from the strategics, et cetera. In the past, I think that this particular conference has generated, frankly, the best sort of body language, et cetera, from all of these people. Tends to sometimes mark inflection points in the market. We'll see if that happens. You know, we're doing everything we can to get interest into Bonnie Clare. I think that certainly this boron is going to make a difference with some people. It's just one more good thing here that optionality keeps building. Obviously, we'll keep you apprised of where we are as we learn things.

18:38 I think it's all good is what I'm saying. So everybody hang with us. We'll continue to tell you what we can, when we can. And we appreciate your interest in Novato Lithium. Thanks very much. Perfect. Thanks again to everyone for participating and I hope you