Illite Identified as Dominant Lithium Mineral in High-Grade Lower Zone

0:03 Hello everyone, and thank you for joining us for this live Nevada Lithium event. Today we're joined by Stephen Rentschler and Jeff Wilson to share their commentary on yesterday's exciting news. Alite has been identified as the dominant lithium mineral in the high-grade lower zone at Bonny Clare. We'll be diving into why this discovery is so significant, but first just a couple of housekeeping items. Now this event is being recorded and the replay will be available shortly after we conclude today. We also encourage your participation, So feel free to submit your questions and comments using the

0:34 chat box in the bottom right corner of your screen. So with that out of the way, let's get into it. Steve, can you share your thoughts on the news? The 19,815 ppm lithium result from the clay fraction is significantly higher than the 6000 bulk rock assay it came from. What does that contrast tell you about the overall potential of the lower zone and how are you thinking about what comes next? Super. Hi everybody and Thanks for taking the time to be with us. So, what Kyle just talked about was obviously, I think the highlight from the technical release that we put out yesterday. And I just wanna back up for a second before I specifically address the numbers, because there's some interpretation that's necessary here. But one of the main questions that, you know, we've wanted answered pretty much from the beginning of time at Bonnyclare is exactly where is the lithium? Where does it reside? You know, you've heard us talk about Bonnyclare as a sedimentary deposit, claystone-hosted, all of this, and really didn't have the science, the analysis behind it to make that determination.

1:40 But through the work that we commissioned with the University of Naples, we finally basically come up with the answer, which you think has got some really very forward looking positive impacts as to how we can address exploration and the potential to upgrade, you know, our resource or lithium resource of Bonnie Clare going forward. And of course, any increase in grade that you get essentially drops to the bottom line, all else being equal. Now, I'd say the headline number is the clay fraction, the 19,000 ppm, or if you put it into different terms, 1.9%

2:17 lithium that is in the clays. And the way to think about this is that when you look at an assay, right, when we all read the assays that come out, they're over a certain interval, right? Maybe 10 feet, 20 feet, whatever it is. But within that interval, not every part of that interval contains the type of material that contains, in our case, the lithium that we want. We know that the yellow light carries the lithium. And now we know that the lithium percentage within the overall bulk rock assay runs much higher than what the bulk rock assay was. So in other words, the actual assay over the interval was 6,000 ppm, which is representative of a lot of the very high grades that we get at Bonny Clare in the lower zone. Some of them go up to 8 9000 PPMs.

3:05 But when you strip away all the other material, right, that's not the claystone in there, that's not the yellite, you find that the actual grade goes up to almost 20,000 PPMs. 2 percent. Which sort of gives you a basis for what we know now, what the upper carry limit of lithium is in the clays of Bonnie Clare. Right. So if we can go and we can find areas where we have more of a percentage of clays within the overall limit, the overall grade, right, the containment of the lithium will necessarily go up. And when you start to talk about 2, pardon me, 20,000 ppm or 2%, Just again, to put it in context, you're talking about hard rock types of

3:51 spodumene kinds of grades. And remembering the tonnage that we have is all out of context in comparison to most hard rock deposits. Not saying that we would have the billions of tons of ore that we have at 20,000 PPM, but again, there are many ways to skin a cat. And Bonnie Clare has got, of course, the bulk, the grade, and now I would argue the potential to take the grade incrementally up higher as we can try to target more specifically areas with even higher grade lithium. That's a 30,000 foot perspective from the non-geologist in the room. So at this point, I want to give Jeff the opportunity to correct my mistakes, give us some more color on everything, why he thinks it's important, probably for a lot of the reasons I think.

4:39 But again, this is a very big question that we haven't answered for a while, so we're very happy with the outcome so far. So Jeff, let me just give it over to you for a while. Yeah, and I won't go into too much detail around this. But, you know, since I joined the company, one of the questions that people have always had is, yeah, you're calling it a And, you know, through the work that we're doing with the University of Frederick II through Francesco Puzzolo, who is the leader on that site at DISTAR,

5:14 we took, We've given them a suite of samples. This is the first one. We wanted to look at the lithium residence in the lower part of the lower zone because that's where we intend to target production. So we wanted to have a look at the the bulk rock XRD to assess variations in mineralogy, XRD in shortwave infrared on a clay fraction to determine the dominant clay mineralogy, and then ICP-OAS to determine the concentration. So Between the XRD and SWIR, we determined that alloys is the dominant clay mineral within the high-grade rock, the high-grade samples at BodieClear.

6:00 This is predicted by the lithium, magnesium, aluminium ratios within our existing

6:09 drill database supplemented by this work by distar. I think it's very important because we are perhaps one of only 2 deposits of this type where illite has been determined, us and Thakrapas. And in Thakrapas it's a relatively narrow band. In our case we have potentially a much larger volume of illite material. The first example of its type outside of a caldera system. Thacker, they're saying the illite is the result of a resurgent caldera. In our case, I don't think we have that. We've still to try and work out why we have the allite. But I think we've established pretty convincingly that it is there and it is the dominant clay mineral within the lower part of the lower zone.

7:10 And to your point, again, a distinction between say Thacker and what we have is the size, the vertical size, the intercepts that we have, where we've got hundreds of meters of clay stones, again, broken up, it's not 100% over the interval, but the point is, again, knowing now sort of what that, I call it the saturation level of the clay what what it can handle up around 2% 19,000 ppm. It tells us if we can target the areas of increased clay stones, we're going to get more lithium to throw through the system. So that is just one of the natural attributes that Bonnie Clare has over the other systems. Yes, we are at depth. We're not going to be an open pit. But instead of talking about tens of meters or something or 100 feet or 150 feet, we're talking about, again, the vertical extent of, you know, every bit of what, 1500 feet. So there's a lot to play with. Plus, our guys don't think that we found the deepest part of the basin where we would expect to find even more of the clay stones. So I think it's gonna be just another tool that we can use but it gives us very good handle on why we're seeing a high grades at Bonnie Clare.

8:22 Yeah and I would certainly second that. I mean our grades get higher and thicker as we move to the northeast and east and the southeast from the existing resource. So there is the potential to increase those grades and thicknesses as we continue to drill. Yeah, So Kyle, probably, you know, I think that's probably enough of an overview. We don't want to get too far down in the weeds, but if there are any questions, you know, we can certainly take these. Certainly. And if you're just tuning in, feel free to ask the questions in the chat box in the bottom right corner. It looks like we will get a little more into the weeds. We have some geologists joining us and there's an interesting question here. I'm interested in knowing whether allite and smectite are easily recognised respectively in the drill cores and therefore determined and related to lithium grade?

9:19 At the moment, no. When you look at the drill core, like most of these claystone deposits, it's a very, very fine-grained sub-10 micron, sub-20 micron fraction. Very fine-grained alkali feldspar clay of whatever type, plus cerlozite, the boron mineral. So you can't tell the difference between the 2 at the moment. It might be that there are handheld devices out there that can do that, but I'm not aware of any at the moment. In terms of the field, If you're going more than 3,000 ppm, you're probably moving into the realm of elite.

10:06 Our kind of inflection point is at 1,500-2,000. So if the work continues to reinforce the point from this press release, If we're seeing rocks that are 2000 ppm plus, chances are they're elite. But we can't tell, I can't tell that in the field. Great, thank you. I would like to learn more or hear more about the TRLs, the technology readiness levels of various aspects of this project. Does this announcement being discussed today change the TRL in any way? I would say not at the moment. I mean, we restated our PEA last summer, very successful.

10:54 And our next stage will be to keep drilling and move towards pre-feasibility study. You know, This certainly informs the direction that we drill, but it doesn't change the overall technology readiness level of the project, I would say. Yes, I would add on, I think the way to think about this again is, you know, as we move from PEA to PFS, we continue to de-risk, you know, not only the, you know, the deposit through infill drilling, but also the metallurgy through, you know, upscaling the size of the work that we're doing, etc. Again, probably going to try to bring in some other critical minerals, depending upon how some preliminary analysis turns out, you know, that we're looking at caesium and rubidium right now.

11:46 The thing to remember is, is that to have a market impact on economics, something like grade does not have to double. A 5 or 10 percent increase in grade has got a tremendous impact because essentially you're treating the same amount of overall dirt. You're just dropping out more of your desired element at the end. Your change in variable costs is going to be very, very small if anything, and your fixed costs aren't really going to change, assuming that you don't get to a point where you have such a large change that you'll have to redesign things. But let's just set that up, you know, and say, hey, for a for a 5% or 10% increase in grade, you know, on something like Bonnie Clare, where we're talking about, you know, a model 62,000 tons of lithium a year for 60 years.

12:34 You know 10% increase obviously takes you over another 6000 you know 5 6000 tons. Of lithium. At you know depending upon what value 1 was signed I've been talking for a long time saying how spot prices. Are relevant at the yet you know basically in center pricing that's needed. To get all of these projects like Bonnie Claire and everything else I would say new in- Nevada coming online is. Is around 25,000 dollars well. In 25,000 times 5000 dollars- pardon me 5000 tons. You know you're talking about 120 million dollars additional revenue. The year for essentially no other cost so. You see the net present value of that kind of an increase is massive. And that's why finally getting the characterization of this you know dominant mineralization was so important. It really lets you potentially again nothing's guaranteed but let's potentially drill down to that kind of optimization at the resource level.

13:32 So very, very big potential NPV benefits here. But in terms of the, you know, the TRLs or whatever, it doesn't change anything. It just, to me, it just basically drops down to the bottom line on the economics.

13:47 Gentlemen, I know we want to keep this brief. Thank you so much. We have one more question upon registration and please take this as the opportunity for closing remarks because it works rather nicely for that. Nevada Lithium appears to be undervalued next to other promoted lithium stocks in the Americas. When should we expect to see proper valuations for Nevada lithium? Well, you know, obviously, I wish I knew when proper valuations would occur. I would just say that when you look across the entire spectrum of the lithium players, It's been a very, very choppy, I would say, year for everybody. I mean, I think a lot of the bigger players definitely got some positive impact out of the whole U.S. Department of Energy investment, you know, in Thacker Pass. But other than that, people really haven't been paying attention. The way I would think about it to lithium, they've been obviously occupied with silver, gold and copper.

14:41 However, we are starting to get sniffs that people are starting to look at basically the spot price in China. And as I've mentioned to many people before, I'm a believer that over the long term, the spot price in China is going to be nothing. We're going to have a bifurcated price, just like we're seeing in silver established now, where you've got a physical market doing one thing and then you've got the paper market doing something different. Again, this leads back to the fact that A, you need a higher incentive pricing to get all of these projects going and all of these projects are going to be needed if you're talking about a 3 and a half or 4 million ton

15:17 type of a demand to satisfy in only a few years out. And also the fact that you can't get around the fact that clearly now the U.S. Government is taking much more seriously the security of its supply chains. You see very recently the talk President Trump putting out there about the establishment of a critical minerals vault, basically a short term trying to buy in the short term 12 or $13 billion worth of critical minerals and get them in there to essentially focus or function, I should say, as a strategic petroleum reserve, but for critical minerals. Short term, but that's about all you can really do in the short term, because again, anybody who's involved in this industry understands that these projects, whether they're in the U.S., whether they're in Africa, Serbia,

16:07 the Ukraine, Greenland, whatever it is, they are not going to be built overnight these are in many cases multi decade projects. However in other cases where we you know obviously done development over the course of many years, maybe only another 5 years away, but you can't get around the fact that it's going to take a number of years. And you're going to need funding all along the way. And then What's so important about that is the establishment, a sort of, I would say, an office of strategic capital that goes along with the ministerial that we saw put on, where basically the US got essentially 50 allies together to start to talk about acting as a purchasing consortium, to start to act to put floors on these prices of certain minerals, where we know, in particular, that the Chinese have been basically, you know, getting off sides and depressing prices in the markets is a way to deter future development.

17:04 And it's something again I've talked about this before we saw this in the rare earths. 15 years ago was the same strategy. But now we finally have the recognition by the U. S. Government that is taking place. And we're starting to see some I'll just say things that make more sense than in previous administrations start to take place. So what I would say to people just in general about this whole space is, the foundation has always been the electric vehicles and electric vehicles you know globally again last year. Almost 21 million units sold up 20% year

17:39 over year China's the leader there's no doubt. I think they sold 13 million units and they're still at like 17% year over year. And remember the base is getting bigger. So it gets harder to maintain that, but those are high double digit growth numbers. You know, by the same token, the US remains the second largest auto market and is untapped by the Chinese. I believe that we're going to have, you know, basically Chinese JVs come in and we're going to see what we saw basically reversed in previous years where these EVs will be built in the US soil because we know that the US OEMs do not have the same technology. But that, in my opinion, is going to come and is going to unleash the Chinese EVs into the US markets. And we've already seen basically a crack in the dam in Canada, where the Prime Minister has made a deal, I think it's for 50,000 EVs in the introductory import level to come in. And I find it very hard to believe that people are going to ignore the technology, the price points, all of this kind of stuff, the performance that the Chinese vehicles are clearly demonstrating.

18:46 So that remains the backbone. And then you still have the rollout of the energy storage. They call it the best, the battery energy storage systems, typically hooked up of course to the alternative energies, the wind, the solar, all of this kind of stuff. And that has been going very, very quickly. And what it looks like it's going to be joined by is the AI. These data centers are tremendously power intensive. Down here in the US rates are already starting to go up. As some of these are being built, they're starting to be switched on. I see a lot of talk about it. I think there's a possibility that some of the storage aspects of this might get delayed a little bit in an effort to get these things built as quickly as possible. However, you won't be able to avoid the fact that the grid, at least down here in the US, is not going to be able to handle it.

19:36 And this is the source of lithium demand that I just think few people really have seen coming. When you wrap it all up, you're talking about, again, in the course of the next couple of years and people often look at 2030, which is only 4 years away now, you know, needing 3 and a half, 4 million tons of lithium. And if you went back 5 years ago, you'd say that was the very, very high end of what the global lithium demand was. Now it's much more mainstream. And we're sitting here somewhere around 1 and a half million tons of supply. You're starting to have to get significant increases in percentage of supply off a much higher basis than you did only 4 years ago. The point is, you know, if you start at 1 and a half you need another 1 and a half or 2 2 and a half million tons a year to come in. As an example Bonnie Clare is 60,000 tons a year. You know you need 20 30 40 Bonnie Clare's.

20:27 All of these projects are going to be needed if demand is going to be satisfied for the EVs, the AI and the battery storage. That's just the reality. And I think we're already seeing the price start to respond to that. And in case to wrap up finally for Bonnie Clare, remember, it's more than just a lithium story, right? We already have the second largest lithium resource out there after Thacker. Could we make it bigger? Sure. Would we necessarily do it? I don't know at this point in time. We already have a 61-year mine life. The PEA has tremendous economics, a $24,000 ton lithium, which I think is necessary as an incentive price to get not just us, but basically everybody else in Nevada going. Not only do we have the lithium, we have boron as a byproduct, turning into boric acid over 120,000 tons a year. That knocks down our operating costs by $2,000 at a time. You know, it takes us getting, we're starting to get close to tier 1, not quite, but for a clay project, that's pretty good. Then on top of that, we've got the critical minerals that are coming, the other critical minerals, because remember, lithium and boron are critical minerals.

21:31 So the cesium, the rubidium, we announced that a while ago, we're doing the work, hopefully in a couple of weeks, we'll have some analysis that we can talk about to give us a better handle on recoveries. But remember, we already saw cesium and rubidium in our pregnant leach solution. And if you're not familiar with it, remember, Bonnie Claire, we're going to take all this dirt, we're going to throw a bunch of sulfuric acid at it. And that gives you a pregnant leach solution. That's where the lithium boron is, then we're going to do different things to it to recover. But the point is the cesium, the rubidium are there. So we think that gives us a leg up into actually being able to get recovery all the way at the end of the system. So cesium, rubidium are the starting point. And then, you know, we're going to look at the rare earths. Everybody is, you know, obviously, that's the focus of everybody's attention. Would we ever be a primary rare earth producer? No, we wouldn't.

22:20 But the reality is, at Bonnie Clare, we're talking about taking almost 3 million tons of dirt out of the ground every year. So even if you have a very low concentration of something in there, right, We're talking about lifting concentrations of over 4000 ppm in general going through to get us 60,000 tons at an 85% recovery level. But even if we have only a couple 100 ppm, okay, rare earths or something like that, and we get a decent recovery number, It might not be the economics that makes it important. It may just be the fact that it's of strategic value to the US government. So there's a tremendous amount of optionality at Bonnyclare that is yet to be basically, let's just say monetized in one way or another. So the team is putting together the technical work program to go forward. We obviously want to work towards pre feasibility study we have a lot of other analytical work in these areas like the rare earths and the other critical minerals that we want to explore that we take might might bring short term value to the share price. Quicker than some of the other things all of this to be determined.

23:20 But I think there's a light at the end of the tunnel it's been a brutal 3 3 years- you know I think clearly the more dense developers had a better time of it than a lot of the- of the smaller caps- but Bonnie Clare is just got a tremendous amount of value embedded in it. And I think we are undervalued, but going forward, I think that we've got a great chance here to basically unlock that value for shareholders. And I think the rise in lithium prices are gonna help everybody here going forward in the not too distant future. So on that probably it's as good a time as ever for me to wrap it up, Kyle. Yeah, and I'll just add very briefly, in terms of the deposit space, the Volcano Sedimentary Lithium space, we're the second largest example so far identified, were as high grade as any.

24:11 Thacker Pass is bigger and it behaves differently to us, but I think in time Thacker and Bonnie Clare will be comparable in terms of the understanding within the volcanic sedimentary lithium-boron space. I think It's just a matter of time before the market recognizes that. Gentlemen, I'd love to end on that note, but people join us live instead of watching the replay because they want to ask questions and there have been a couple questions since we've been talking here. Clifford joined late, but we haven't addressed this. He's just wondering, is there a potential delay in the PFS? Well, I don't want to say there's a potential delay in the PFS because it all depends on how quickly you get to financing.

24:58 Right now, the main steps that we're doing right now is still evaluating what we learned out of the PEA. Remember the PEA only came out last August and frankly the critical minerals have been a very big thing that we didn't know about in the PEA at that point in time. So I think the way to look at it is when we start, first of all, we also have to declare, or I should say determine who the author of the PFS is going to be. And frankly, we're in the process of figuring that out right now. I think that the PFS is going to be on the order of 16 to 18 months to finish. This is sort of my just swag at that point in time. I don't think it's from right now. I wish I could say that we were starting right now, but I think we'll have a much better handle in a couple of months of how quickly we're actually gonna be starting work that's gonna be addressable in the PFS.

25:49 So I don't want to say it's delayed. I wish I could have said that we could have started right after PEA, but we never believed that we would be able to. But we're getting close to digesting the last of what we need to before we would say, OK, yeah, we're going to start progressing with work that's going to be incorporated into the PFS. We're getting close. And then another question from Juergen here. Nevada Lithium has relatively low trading volume. What is being done to increase interest by the market? Well, obviously the work has been of primary importance, but as we determine now what the technical work program is and our overall needs are, we understand that marketing is clearly going to be something that is gonna have to be addressed more. I will tell you that I think that there are more there are things that we are looking at right now still in the technical aspects sides of things that I think we're going to give the market more not ease but more of an understanding what's going on here. The borehole mining specifically has been something that we talked about many times about the fact, well, lithium producers don't use it. Well, essentially, nobody uses it other than Cameco and some other, you know, mineral sands, nothing on the scale that we're talking about.

27:04 But we have commissioned basically an independent audit, for lack of a better word, of this system, of the mining system, to see about, you know, how it stacks up in terms of not only by itself, in terms of what was put out at the PEA, but also in terms of other potential mining scenarios, possible alternatives. And I think that when this report comes out, which I would expect again, over the course of the next couple of weeks, a month or whatever, that that's going to give the market a lot more certainty around the mining method, which I believe is frankly probably, I don't want to say the overhang, but the biggest question mark about what we have. The other thing that I would just say is What's very difficult when you're small, which we are, is just the way that the industry works in terms of, say, research coverage. We, you know, paying for research coverage is one thing. Banks would pick you up over time because of investment bank business, but we're still really not big enough for the institutions, generally, to get involved with us. So the issue is, how do we tell the story, you know, in the best way? How do we basically find people who can not only tell the story in a good way, but also people who believe in lithium. Because what you find is in so many of these commodities, not just to pick on lithium, it's very hard to find people who stick their necks out and say, hey, I believe in the fundamentals. I believe that over the next 5 years, this is going to happen in lithium.

28:35 This is not how things work anymore. It's very much a short term thing. We all understand it. People driven by quarterly earnings, short term prognostications. In the old days, it used to be you would have people taking that fundamental stance. It's sort of like Robert Freeland on copper. Copper has to go much higher. The equity price, the copper price has got to be much higher to incentivize new production. That whole argument. You don't find many people who do this anymore. So it's very, from my perspective, finding those people who are able to write the stories and tell the stories with that framework is very important. Because again, at spot prices of 8 or 9000 a dollar lithium, none of this is going to work, frankly, including Bonnie Clare. So it's a long-winded way of saying it's not a simple thing to just say we're going to turn the marketing on. We need to find the right marketing.

29:27 We're working on that right now. Getting that PEA done last year was monumental. I can't stress enough for people, you have to sort of go back and look at it in the context of all the other Nevada PEAs, PFSs, things like that. And when you see how Bond and Clair stacks up already, right, just based on this not being optimized or anything like that, no critical minerals, no boric acid price increases, which have taken place since then. And you see that we're in the, you know, 32% IRR kind of a thing and PV of almost $7 billion. We're already, in my opinion, above everybody else. And it's only going to get better. So the story is there. We got to find a way to tell the story better based upon the finances that we have. Plus the what we want to do is continue to advance the technical work. Because, again, PFS is the most critical point. That again is where the off takers get very serious about what's going on, but make no mistake, it is a different environment than it was 4 years ago when lithium was $80,000 and the OEMs had basically committed suicide by bringing, you know, a lot of EVs to market that were too high priced and didn't have the features that the Chinese EVs did.

30:37 So we are doing the work. We're going to be spending some money to get the name out there. So again, I wish I could promise, but obviously the intent is there to get everything going from a marketing perspective. Perfect. Gentlemen, congratulations on the news. Thank you for the update. We look forward to the next one. Keep plugging away here, but thank you everyone else for attending. If you did come in a little late, within a couple of hours here it will be available on YouTube so just look out for that. But thank you everyone for your time.