Bradda Head Lithium (LSE:BHL) — AGM

0:00 Good morning, and welcome to the BRADDA HEAD LIMITED AGM Proceedings. After recorded meeting, attendees will be in listen only mode. Questions can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in your question and press send. The company may not be in a position to answer every question received today. However, all questions can be reviewed with responses published on the investment company platform where appropriate to do so. I'd now like to hand you over to Ian Stallwood, Executive Chairman. Good morning.

0:27 Okay. Thank you very much, Paul. It's 11:00 here in Douglas and the Isle Of Man. So ladies and gentlemen, those present, welcome to the Third Annual General Meeting of your company. My name is Ian Stalker, and I would like to be Chairman for the purposes of this meeting. The core message to constitute this AGM of the company is one member holding not less than two of the votes of the shares entitled to vote present in person or by proxy, so the requisite quorum is present. The notice convening the meeting has been in your hands for the required time period. And with your approval, I suggest it should be taken as read. Before I start the official proceedings, can you please note that in the event of a fire alarm here in the Isle Of Man, we will make our way to the fire exit that is sign posted very clearly in this particular hotel.

1:18 And other than that, there's no one else here. We've all got our phones on mute, so we are ready to go. I have with me today, I think it's interesting for everyone to hear, the the board of BRADDA HEAD, in fact, all of us. We have sitting next to me, Ewen Jenkins, we also have Denham Eck and Alex Morelli, and Jim was at the end of our phone, Jim Mellon. And we also have president, our CFO, and Katie Eerock, our company secretary. So we're all represented here, hopefully, to demonstrate that we are big believers in the company and also to answer questions that shareholders may have at the end of this presentation. The format for the meeting today will be as follows. I will go through the basic resolutions of the company and get them approved, hopefully, and then move forward to a presentation, which I'll go through as quick as I can. It's quite a long presentation, but I think most of the people involved are aware of it. It's just an update. And then we have a period for questions and answers.

2:22 So let me continue with the main body of the resolutions. I should let you know that we've received 26 proxy forms representing 135 136,560,000 votes cast. So there's been a fair amount of interest, and we've received a large body of votes. And I thank everyone for their attention. Resolution one, which is an ordinary resolution. To receive and adopt the report of the directors and the financial statements for the year ended 02/28/2023 together with the report of the independent auditor. Can I have someone to propose that resolution and someone to second it? Alex. So can we or mister Jenkins to second it? I will now put the resolution to the votes.

3:11 Can I ask those in favor to please raise their hands? I'm done here. And we have the number of votes given to us, and they're all approved. I can assure everyone by the health of majority up in the 99% tail region. Resolution so I declare that resolution carried. Resolution two, which is a nonmory resolution again, is to appoint PKF LITHIUM as the auditor to hold office from the conclusion of this meeting to the conclusion of the next meeting, at which time the financial statements are made before the company after remuneration will be determined by the directors. Could I get someone to propose that we go ahead with that? Reviewing and seconded it. Thank you. I'll put it to the board. Can I ask those in favor to please raise their hands?

3:56 And it's inclusive. And we also have a vote. The number of votes taken were a 136,000,000. And once it comes to a 100% of the votes cast, and we had a 100% in favor of that as well. So resolution three, moving on, which is again an ordinary resolution to elect the directors of the company who will serve until the end of the next AGM or until their successors are appointed. Could I ask for a proposal for that? Mister Barelli and the senator. Mister Jenkins, all those in favor here. Unanimous. Thank you very much. And, the vote that was put forward was highly supportive. And thank everyone for their support on that. So I declare that resolution carried.

4:43 Resolution four, which is a normal resolution to consider and have deemed advisable pass with or without variation, a resolution of shareholders improving the company's equity incentive and compensation plans. Can I have someone to propose? Alex? And someone second? Ewan, thank you very much. Those in favor, please raise your hands. You now have to pass. And again, I've report that the same sort of level of voting, 99.5% of the West Gas were in favor of this particular resolution. So I declare that resolution carried as well. Resolution number five, which is a non resolution, is to grant the directors with authority to allot and issue shares and grant rights to subscribe for up to 390,609,439 new shares in the company, being 100% of the entire share capital of the company as of the date of this document.

5:34 That's excluding shares issued by the company pursuant to the exercise of options and or warrants held by employees, management, or other advisers. These are known as the excluded securities. The resolution replaces any existing authorities to issue shares of the company, and the authority under this resolution will expire at the conclusion of the next AGM meeting of the company. Can I ask one to propose that again, Alex? And then I'm as the senator. Thank you very much. And, again, I can report that the votes in favor were over 99.49%. So, again, unanimously approved. So that detail resolution carried. And the final resolution of today, which is resolution six, which is a special resolution requiring a 75% majority of the votes cast, that if resolution five was passed, the directors are authorized to issue equity securities as continuing authority up to the $390,609,490.39 new shares, being 100% of the issued share capital company as the date of this document.

6:38 The authority granted by this resolution will expire at the conclusion of the next annual meeting. Once more, could I ask for the proposal of this resolution? Others, thank you. And, again, general seconds. So all those in favor, unanimously passed. And again, I can I'll indicate that the resolution itself received 99.5 that was cast. That then completes all the resolutions that were sent out and closes the formal part of the meeting. I will move forward in that case to the presentation, which is hopefully on the screen or in your screens in front of you, and I will rattle through this. It gives an update of where we are in BRADDA within The USA. BRADDA is located in The USA, and its assets are focused in The USA.

7:26 We have our safe harbor statement, and then we move on to the projects themselves and very rapidly. We have projects in Arizona. We have projects in Nevada, and they cover the spectrum of lithium in clays, lithium in pegmatites, I. E, spodumene, and we do have some brine assets as well, Eureka and Wilson in Nevada. And these are this range of different products, of course, gives us the reduced risk in case one works and one doesn't work. We do have them all, and that means that we can move forward with a level of confidence, I think, despite the market backdrop with the work that we've got in hand. We are well funded. We are busy with an updated budget match back. We know we're well funded through to mid twenty twenty four.

8:13 And at the end of October, I think it was, with $3,500,000 in the treasury, which in these tough markets is a very strong position to be in compared to a lot of our competitors. And we're optimistic, and I think it's important to mention at this time as we go forward, we're optimistic that we can achieve the 3.5 sorry, the 2,500,000 tons in total of lithium carbonate equivalent to the basin by the next drilling campaign, which we're optimistic will get started fairly quickly. And as a consequence of that drilling campaign, we can make it accessible to us, the $3,000,000 that come from the lithium royalty company as per the original contractual agreement between them and us dated 2021. So we're 100% lithium focused. We are intent on unlocking the value, and that's what we've been doing since we started. And I think the board and the management team do have the required experience to move forward.

9:10 We are a tier one company in a political location that says everything about where we should be. Is like one of those property programs, location, location, location, where we are in the right spot. America is almost under the example of the Thacker Pass is desperately keen to get its own lithium. They are spending at least 2,300,000,000 as the current billion. I'll repeat it. The current budget number for that particular project of which 750 is coming from one of the car manufacturers in USA, and money is coming from the American government as well because they want American lithium, and that puts us in a strategically important position. The board of management are in the game. Over 20% of the shares held by the board of management, so we are committed, like all shareholders, to our success in this company.

9:58 And like all shareholders, we are as disappointed as everyone is about the current share price. We have got frustrated local and regional infrastructure. We've got reduced geological risk we've talked about, and we're very conscious of the ESG factor. In fact, we we work it to our advantage because we are so close to the car manufacturers. The actual footprint of carbon footprint that we is needed when you move and mine and transport by comparison to the bulk of people in the same environment, we are very small. So we believe it's the right time, right place for us as we go forward. Management team, you can see everyone there who's with us. And Joy are part of the management team, and they form a very, very strong team indeed. We've now got over two years experience under our belt, and I think the reflection of that is the way in which our current exploration programs are running and, in fact, the fiscal control, which is very important, particularly at this time of the market as we move forward as well. And we've got a very good team, and we include the advisers which we use as needed, with probably the most important adviser being the ESG one who is getting us into Washington, in actual fact, in the month of February to go and talk to the USA government and tell them what we're doing, see if we can get some feedback that's both beneficial to us. Projects we have in Arizona are the basin project, which is the sedimentary clays, and the Santa Minka project, which is the spodumene pegmatites.

11:25 So we as you can see there, we have been busy throughout this 2023 period with the exposure of drilling in San Domingo, where we will finish that this current program by the end of the year. Assays should be out plus or minus six weeks after that. We've had some encouraging signs, as you can see there. So we're very keen to complete that and get what results we've got in the public domain as we will report when as they come in. In the clays, the 23 activity was successful. We increased the basic resource number to over a million tons, which allowed us to collect the $2,500,000 from our colleagues, LRC. And again, we're getting some interesting results to show consistent thickness and good grades. So we have a great starting point that sooner rather than later will be recognized by the market, I'm sure, and we're working with this consequence in the share price movement.

12:20 Just a quick overview. We after our first drilling program in Santo Domingo, we collected a lot of extra ground, so we now have approximately, I think, now almost 30 square kilometers of ground. We wanted to make sure that our competitors weren't hedging in on us as they tend to do in North America. There's a lot of people just take ground because of the success of the guy next door to them. So we picked up a lot of ground. We're busy now in a professional and efficient manner working our way through the targets. There is a incredible amount of targets. When we get on the ground earlier this year and we saw the number of peptides, it really is trying to focus on what we think is priority by a visual assessment, and we're doing the second drilling campaign. And you can see up the top, Midnight Owl is where we've been working, and BOLT was a new target. And when we drilled BOLT, lo and behold, we did find spodumene bearing pegmatite. So there is pegmatites, spodumene bearing pegmatites both, but it does take time to unlock them. You just gotta work our way through this drilling program and just complete the exercise. And it will be this time around. That would give us a total of around about 12,000 meters that have been drilled. So by comparison to any peer group, that's a relatively small amount, and it's it it will demand, I'm sure. At some stage, we're gonna go back in and redo it.

13:35 The the plan for us optimistically is to take the current drilling and with a bit of luck, and you can see some highlights there with a bit of luck, move this through to our resource number, a four three one zero one compliant resource number, so we can then make use of this for the test work that would then follow to ensure that the resources we've got are, in fact, the potential to deliver an economic project for ourselves. We put out a press release earlier this week, which I think I just quickly revert to. The press release highlighted that we were able to produce a sellable product from the sample that we sent to the laboratory, and it's in no way representative, and and there's no way at this meeting anyway should think otherwise. I repeat it. It's not representative, but it is equally a sample that is not unusual. And we took that to the laboratory, and we produced a sellable lithium concentrate at over 6% lithium with sales in the marketplace for around about $2,000 a ton, and we did that just by the simple gravity association of minerals.

14:38 So there is no chemicals used whatsoever, and the benefit of that, of course, is the permitting aspects when you move forward to permitting the extraction of this lithium. So it was very encouraging to get that, and that came out in the market on Monday, and we did see volumes moving up quite nicely in terms of the total number of shares sold. The second project we're on is oh, I'm gonna be one. The second project we're on, of course, is Basin. We've concentrated down in the bottom right hand side of that slide, which is Basin East, Basin North. It constitutes roughly about 10% of the total land package we've got. We've got a million tons now. We think we'll pick up two and a half. It will pick up another one and a half to give us two and a half. And if you just as ASRK would do, say that equals 10% of the land package, then 10 times that would be a very large number discounted because of the relative risk. And you can see why we've got a target in here of 6,000,000 tons of lithium carbonate equivalent.

15:35 That the plan for the next few months is to get over there. We are busy with the budgeting aspects. We've gone over quotes for a drilling rig to move over to Basin East, and the intention is to get that started early in 2024. And we are encouraged with the results we got. We feel much more comfortable about our knowledge of the basin area, the thickness of the material, the consistency of the material, and some of the ancillary byproducts that may come out as a consequence of extracting these lithium and clay ore bodies. So we're comfortable that we're moving in that. We are the Wiki app is currently on hold, not because of the lack of prospectivity, but because we have more than enough to do down in basin, and that's where we'll spend our time and money.

16:21 We too have the brain assets. I'm gonna spend a little bit of time on this presentation peripheral on subject, We have the prime assets that still remain good targets and still remain in areas where we should drill. But, again, it's not a a lack of intent. It's just a lack of resources, people, and finance to get in there. So we're keeping them just under just keeping them warm and ready to go, but we will attend to them in the not too distant future as things progress. But I wanted to, just before I go through this timetable, also also to mention to those present that we also have oil brands in Pennsylvania and in Texas. And in recent days, the Exxon, the big oil and gas company, has been making some pretty bullish statements about their intention to extract the lithium from these oil brands.

17:08 They believe they've got not only knowledge, but the financial muscle power to do that quickly and therefore become a decent sized producer, excuse me, within this North American market. Their areas of where they're they're interested in is the smart home district, and we have property close to them. And the area where we are in Pennsylvania harbors the same kind of lithium and brines both in terms of grade and quantity. So as a consequence of Exxon getting excited, naturally, it's no surprise that we're getting a little bit more excited, and we will be examining that opportunity as we move forward. The slide I put on there is just the highlighting where we are and when we're moving. That will be updated in due course as we complete the budget and then understand the the timetable associated with the contract that is coming in. So these are outlined timetables that we will hopefully stick with, but if they can be improved, we will improve them.

18:03 The ESG environment, we still continue to work very closely with the local communities and under our sort of environment, both to ensure that we get good access, good working relationships, but we comply with the highest standards of ESG that we can. Water conservation initiatives, community website initiatives. We are, I can report, I believe, well received within the local communities. So it's a case of so far so good, and we will continue with our initiatives and try and ensure that we dot the i's and cross the t's in moving along. So in summary, we are aggressively moving forward with our San Domingo pegmatite spodumene asset in Arizona. We hopefully will get a resource out by the early part of this year, but it obviously depends on assays, timing, and the results themselves.

18:57 We had put out earlier this year the new and indicated resource at basin. We're looking now to increase that to 2,500,000 targets, and we expect to do something out on that as we work program unfolds and with Peuter, I enjoy just how we're going to implement it. I think the management is much better now than it was previously in terms of the experience we have. We've been drilling at San Domingo and the basin for over a year. I think we've streamlined the process. I think the guys understand the challenges and are able to deal with them quicker and more efficiently. So I believe that aspect of our business has been enhanced and will continue to be enhanced as we understand working in the environment. We recognize the world we live in in terms of the carbon footprints and the environmental challenges that are faced. We think we're in a strong position. We've got strong ESG focus.

19:51 We are next door to the main demand for lithium in the American marketplace. It's literally one state across the next state. We're not having to ship lithium concentrate or lithium carbonate all the way across half the world from China. So there's a very strong reason to believe we will get and we are seeing American government desire to help, but it's about time they they introduce that help. The basin in particular, we've got we're working in the area, again, where there's been mining historic mining there for some considerable time. So everyone's well aware of how to mine, how to operate in the area. There we go. I beg your pardon. So the rest are appendix, which are part and parcel of the site. I'll let you guys see it. Ladies and gentlemen, you can take your time with it and go through it, but it just supplement the conversation we just had. So that completes the presentation, and now we can move on to the question and answer session, which I have some questions in front of me. And with the help of the board, we will try and address them as well as we can.

20:56 And the first piece of information is why is the share price in continuous movement downwards at the moment despite positive news? I think the board would agree with me if we knew the answer to that, then we would change it immediately. But there is a very sad backdrop of lithium pricing in the marketplace moving in one direction, which unfortunately is in a downward trend. There is an expected there is a toughness in the market with all the challenges that exist external to the commodity sector, but I can assure people and comfort we take is that the demand for the lithium products is there. We have lithium. We know we've got lithium in the basin. We know we've got lithium at San Domingo. The intersections were getting demonstrated.

21:42 I think we've gotta put ourselves in a position to to survive this tough time, and I can assure you the board has focused on that and then come through it so that when the next wave of the lithium market starts to be seen, we are ready to take advantage of that. The next question was the the timeline in the October presentation. So it shows our three decision points at the start of twenty one. Are the board able to confirm the decision to continue with the step out drilling at Basin North and Basin East has been taken? That was the one of the deliberations we've been at today. We are just checking one or two smaller comments on it just on the budgeting aspects, but the intention providing everything adds up is, yes, we would be intent to drill there in the early part of twenty twenty four with permits already in place.

22:34 The next part of that question is what is the decision that will need to be made upon the completion of the current drill program results at San Domingo? The answer to that is we need the assays to assess just what kind of quality of lithium we have from these spodumene pegmatites. With a bit of luck, we'll be sufficiently encouraged that there's a potential for a resource calculation, but it is really just a potential. I don't know at the moment. It's certainly our hope and expectation we head in that direction, but we have to wait for results to know. But if we can get to a resource, then the next logical step for us is to take that resource and consider doing a preliminary economic assessment on it to demonstrate the economic opportunity of the project itself.

23:19 The next question, to gain access to grants funding from the US government, what is the minimum criteria that BHL, as in Florida, will need to satisfy? The first that we are busy talking to the government and the government talking to us. There is a desire to encourage lithium producers in The States. There's no doubt about that, as I mentioned earlier, but you need to be a near term producer. Drilling is not something that they want to get involved in. They recognize the risk that we must take as a company ourselves. But we head to Washington in February is the plan at the moment, and it may change, but that's certainly the intent. And we go over there with the the hope that we can let the US government know that we are doing well. Both projects are based on the Andes and Domingo.

24:06 As a consequence, we will look to see what access we can get to funding that may be available. I would just caution everyone on the meeting today that these things never happen overnight. You just don't pop into an office and say, can you give me money? And they they write you a check. There's a lot of work involved in justifying this, that, and makes them to make sure the government has dotted the i's and crossed the t from their own perspective. But certainly, it's our intent as a board and as a company to access that funding as possible as quickly as we can. As the board identified a clear path to access government funding, I think I've answered that question, is there a clear route to fulfill the criteria? We will know more when we go to Washington, and we will understand just exactly what path we have to follow and the steps that we have to take in that path.

24:58 Note, I think, previously, we indicated that BRADDA HEAD were some way of being able to access any government funding. It's true. Previously, that was the case because exploration is regarded as our own risk. But if we could move closer to that potential economic extraction of, for example, the spodumene pegmatites of San Domingo, if we can get that far, then I think that would be more encouraging for the likes of the US government because we could demonstrate a reasonably quick path to production, but there's a lot of big gaps in that. It's only at the moment a program that we will work towards. There's no guarantee of success in it. How will the brain opportunities be how will the brain opportunities be developed over the coming year? Well, I mentioned two brain opportunities. I think the latter one, which is the oil brains, just seems to be getting more attention.

25:52 We are putting a little bit of effort ourselves into it. We wanna go and get into a recon back up in Pennsylvania, which we think is the better of the two assets we've got. We have had some indication of interest from third parties. We will encourage that as we see fit. We are fully engaged in our own projects in Basin and in Santo Domingo, we I don't wish to dilute the effort in those areas at this moment in time. So if we can get a third party interest, we will certainly encourage it. But we would like particularly to see the oil grades develop in the next few months that are coming up. We think there's an opportunity. The board likes the idea. And if we can get that attention, particularly with Exxon in the background, we will certainly be grabbing it with both pilots.

26:40 When do you think we'll start to drill Morningstar? This is from Josh. Very exciting prospect. Could be a big find there. Well, Josh, I hope you're right. We have started drilling. In fact, we're getting probably more than halfway through it now. Visually, things are what they are. I can't say too much in an open forum like this. We always have to wait for results, and they should be out within the next six to ten weeks, I guess, by the time we finish. So by the early part of twenty twenty four, those results will be out, and we'll just know how good a prospect morning, Sarah, actually is. The next one, thinking ahead, it is anticipated there will be scope for sharing our facilities with neighboring developers as part of the development plans of our assets.

27:25 We are a long way away from our neighbors, which are predominantly in the state of Nevada. Certainly, where we're working near in Arizona near Baghdad, there's an opportunity of shared infrastructure, I. E, power and access roads, etcetera. Water is a separate challenge altogether. We're in a dry part of this Western part of America, so we have to ensure that there is sufficient water for all needs, and we'll be doing that individually. But where we can work with our partners, we certainly would. Where did the company rather hit come from? There's another question going well. As I understand it, and I'm sure the board will correct me if I go wrong here, there is a part of the island over here that had some historic mining undertaking in it. And therefore, it was appropriate because of an island mine company that we associate with something that comes from the island mine. So that's where the BRADDA HEAD came from.

28:21 Do wanna add anything, Kevin? No. It was Yeah. Absolutely. But but So and we we like that name, so we're sticking with it at this moment in time. Progress and the funds of new CEO, we are busy. We spent a bit of time this morning discussing it to our board meeting. I find significant help from the entire board, but we've been looking at these CEOs. I think the earliest you would expect us to for a CEO in place would probably be sort of February time of next year. Because remember, the candidates we are looking at may well be already employed, and they have to give notice to their current employers. But we certainly come across some characters who, in in our world, fit the part, but we have to just finish it off and deal with it. But it's been an active period over the last two or three months just getting that aspect dealt with. And that concludes the question and answer session. So I think I can hand back now to our manager in charge of the meeting today. Ian, thank you very much, and thanks to the board for updating attendees today. Now please ask attendees not to close this session. It should be automatically redirected to provide your feedback in order the board can better understand your views and expectations.

29:33 This will only take a few moments to complete, and it's greatly valued by the company. On behalf of the board of BRADDA HEAD LIMITED, we'd like to thank you for attending today's AGM proceedings. Good morning to you all. Thanks.