Insights From the World’s Premier Lithium Conference

0:08 Hello, everyone, and welcome to the Nevada Lithium live event hosted by 6. I'm pleased to introduce our speaker for today, Stephen Ranchler, the CEO. He'll be answering some questions and providing insights about the FastMarkets Las Vegas Lithium Conference that he attended, 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. As always, this event is being recorded and will be available to watch shortly afterwards. So without further ado, let's get right into the questions. So Steve, just to kind of kick things off here and start us off, can you tell us what this conference is?

0:42 Sure. This is the lithium conference that's hosted annually by FastMarkets, one of the pricing analytical firms that works in a lot of different areas, but is well-known for their work in lithium. And it's a different type of conference. I think a lot of our investors are familiar with PDAC, or if you're out in Vancouver with VRIC, that kind of thing. This is much more of a conference that has investors, I think, of larger assets under management. All the end users are there, the service providers are there. It's a much more encompassing industry type of a conference that you can get significant exposure to by basically being present and working your way through the crowds, et cetera. Unlike PDAC, where you have, of course, the massive halls in Toronto and thousands of booths, etc.

1:39 I would say people think about, oh, maybe 100 or so booths, 8 by 8 foot, so whatever, 3 meters by 3 meters type of a thing, with companies doing everything from water filtration systems to, you know, people who have projects in Nevada or DLE projects. However, I think that we were one of the smallest publicly traded companies out there, But we were definitely being noticed. Awesome. So since you were there at the last year's Vegas Lithium Conference, can you give us a comparison between the 2? Yeah, I think it was as well attended certainly as last year. I mean, very full. We have foot traffic coming by all day long. And I can tell you that I had a meeting schedule that essentially started early in the morning and went till late at night with some dinners that we were asked to attend.

2:31 So very, very full schedule of all different types of, again, industry participants

2:37 and investors. One of the things that I could say I really noticed was that, in particular, the end users, now I'm talking specifically the OEMs, They are really building out their internal teams in terms of evaluating projects. I was very very impressed with the caliber of the technical caliber of being what's brought to bear by the car companies in terms of evaluating our projects and that was something that I think was really a noticeable difference from last year. I think I mentioned this a couple of months ago after coming back from PDAC, etc. There is a very, very high level of technical interest in our project because of the size and of course now the high grade mineralization. And the people who were coming to ask about it had very, very high levels of insight as to these types of deposits and essentially what some of the latest news that we've been releasing, what that potentially means for the project going forward.

3:36 So I would say that was probably the biggest difference that I took away. And you're saying you had a lot of people that you spoke to. So what was the sentiment like at this year's conference?

3:49 The sentiment, of course, is still being dominated by spot lithium prices. And I think it's fair to say that the issue is, of course, spot prices right now are extremely volatile because this is an extremely immature industry. And that's coupled with what's going on with EV sales, you know, which are obviously facing a headwind, I'd say pretty much globally, except perhaps China right now, because of a weakening economy, rising interest rates and things like that. But I think on top of that is sort of the acknowledgement that the US is going to take its place in terms of global production over time. One of the big things that I think I've seen again is a transition in terms of people's understanding of the importance, particularly of Nevada, going forward in terms of what the contributions are going to have to be made if the supply demand scenarios are even remotely correct.

4:51 So you had all that going, sort of people are living in the moment. I think you have this very strange bifurcation where business development people understand, and now I'm talking specifically about strategics and OEMs, they understand that now would be the time to get involved with projects all up and down the food chain. But the problem is, of course, that they're being hampered, now I'm talking specifically about the OEMs, by the revenues that are falling right now with their sales. If I take all of that and wrap it up sort of in something the size of a baseball and now wrap that in a layer that's even larger, I would say, now we're talking about something the size of a softball, it's a question about what's going on with the US elections, you know, and the, you know, quote unquote, uncertainty of what might happen, you know, in the event basically that Donald Trump is elected,

5:46 And frankly, also some uncertainty about whether or not Joe Biden stays, remains as president for a second term. That on top of everything else is sort of the icing on the cake in terms of sentiment. It's what was being talked about all the time. And speaking of what was being talked about, what are some of the questions that you got asked the most? Yeah, you know, other than the project specific questions, the most general question always seems to come down to, well, What happens if essentially Donald Trump is elected? What's that gonna mean for all the money that's supposedly in the food chain for projects and developing the entire lithium or critical minerals supply chain in the US? I mean, everybody, I think these questions tend to come more of course from Non US and investors because I understand that sort of our election process can be a bit of opaque again I'm an American but you know, this is what I tell people and of course, this is just my opinion.

6:47 That money is, in my opinion, again, safely ensconced in the budgetary accounts in the US Treasury. These are 10-year types of budgets. Once the money is earmarked, it takes bipartisan legislation to actually agree on something like this. It is basically got an inertia all of its own. And what I will tell you is that I think that that was confirmed by some of the featured speakers and specifically the government speakers who were there and here I'll just sort of I may as well take it off in a little bit of a tangent because one of the questions I always get asked is you know, well, what about money? You know, can you guys get a hold of money, you know to basically advance Bonnie Clare? It was it was very interesting because as I said, my my schedule was full so I was doing nothing but talking to people constantly, so I didn't get to go to see the featured speakers. But as people would come and talk to me, they would say, hey, I just heard such and so, and it sounds like the government is clearly ready to lend money to help the smaller companies get going. And then I would literally have people later in the day come and say, no, no, it's a no-go. So we had diametrically opposed opinions as to what is happening with the government.

8:04 Now, so what do I do? So I listened to it on replay, and to me, it's very clear. The bulk of the money, right, when we all see all these hundreds of billions of dollars that are available through the DOE, through other entities, the DOD, These are at much more advanced stage projects. They are not targeting money for mining.

8:25 It's very interesting to me because even though in that particular case of one of the largest offices, and this is if you think about it on the risk spectrum, I think it's called the manufacturing office here, which has got $200 billion to essentially invest. And the deputy director gave a very nice speech about what's going on, but they are very, very concerned about the safety of U.S. Tax dollars. And they are also very clearly trying to pick winners. All of this, in my opinion, is of course exactly what they shouldn't be doing. Not that they shouldn't try to – They don't want to throw away tax dollars, obviously, but they are far more concerned in picking winners at an advanced stage as opposed to just getting the entire lithium supply chain going.

9:11 And that is something that's going to need to be worked about. You know, If we're going to get that to change, that is going to be, of course, like trying to sort of move a battleship. You're not going to do it all at once. But what I will tell you as well is that was very, very different than the level of understanding what's going on at the state of Nevada's in the governor's office, in which they clearly want to help everybody because they understand mining from beginning to end. And even though there have been a lot of technical, a lot of technical experts, people with petroleum engineering degrees, all the sorts of things that are now being installed sort of in leadership positions in the DOE for these big programs, I don't believe they have the entrepreneurial background. They don't understand that you can't start at, again, something with a feasibility study and they don't understand that the merits of getting a construction loan, while they might be great for an advanced project, have little to nothing to do with a bunch of projects

10:10 that are trying to get from PEA to pre-fees, or even from a resource estimate to PEA. So that's in stark opposition to what's going on at the state level. And the idea is that we will be using the state level as much as possible to try to get to the federal government, because then by the time we're ready to access those kinds of dollars, potentially we'll be able to do a little bit earlier. But I just wanted to tell people that certainly from my standpoint, it's not like the federal government yet understands that they have to help developers who are putting shovels in the ground and it wouldn't take a lot of money to do, but they still have not reached that level of understanding yet. So they can sort of point to gaps in their models, you know, sort of these are the areas in the supply chain that we know we need to fill in. They're not going farther or earlier enough to where, you know, the rubber really meets the road, Not yet. So that's a work in progress. But I thought that was a pretty important outcome sort of going to the conference and finding out firsthand what the government is up to.

11:16 Interesting points there. And in terms of the, so you mentioned that a number of people that were coming by were quite knowledgeable about deposit types and things like that. Were there any interesting questions that you got asked that were related specifically to Nevada Lithium and the project? Yeah, again, it's very interesting. I think, again, in remarks I've made in the past months, when we are out at these types of conferences and my VP of exploration, Jeff Wilson is with me, right? So PhD in geology and all that sort of thing. It is like watching somebody hold court. There is such a level of professional interest in this, in our project, in everything, not only from the mineralogy, But also again to the borehole mining method.

12:05 And this you just never know who you're going to meet. So again this time I would say out of everybody. What's what struck me that the questions that were coming to us were. Well, did you know in the past that some of these other projects actually tried X, Y, and Z, and they're very similar? Or you might find this as the way to do this or whatever. And this QP who had worked on this project showed up, et cetera.

12:29 Very much a high level of interest in what we're doing because of course they've got historical knowledge of projects they've worked on. Again I think I mentioned that the breadth and the expansion of the teams coming from the OEMs is very, very impressive And their understanding of sort of what the next steps for us are, in other words, they're able to take our PEA, take a look at the high grade mineralization, which is not included in it, and start sort of on the cuff, making assumptions, evaluations of what this ultimately could mean for for Bonnie Clare. So all sorts of comparative questions about, you know, stacking up against Rhyolite Ridge, which you've, if you've seen our recent news releases, you know, I've been using as more of an analog lately, because of those elevated levels of boron right. 15,000 PPMs of boron. That piques people's interest. You know what are you going to do with with the boron. And I may as well just tell everybody right now the boron industry is a very very opaque industry. And the way I'm looking at it is, is that if extracting the boron can give us a cost savings, that's great.

13:39 Sort of what happens with Rhyolite Ridge. But if we simply need to address it to get the extremely high, you know, lithium levels at Bonnie Clare taken, you know, recovered at adequate levels, I'll take that as a wind as well. So, all of those sorts of questions, questions about future plans, about the trade-offs between sort of getting to the PFS as quickly as possible or perhaps making sure that we have the optimal setup with an updated PEA before we go into PFS. Just all sorts of different questions. And then again, as I said, sort of if you wanna call it for the layman, I'd say what the overriding question is, once again, what could possibly happen in the U.S. With a change in government if the Republicans were to win?

14:27 So what would you say are your biggest takeaways from this conference? I think that there is a real transition going on right now as to people's understanding of what's going on in Nevada. You know a number of years ago I would speak about again how in particular the OEMs Everybody thought that the panacea was going to be, you know, direct lithium extraction, you know, and I get it And because that was what was understood first That's where all of the lithium was coming from down South America And of course and there was the transition over to the hard rock with the Australians things like that And to me that's a simpler type of a thing to think about as well. Get the hard rock and crush it up and put it through to a concentrator and upgrade it, et cetera. I would say that essentially almost all, let's just say anything in Nevada that's not going to end up being brine.

15:18 So all of these clay or sedimentary deposits, the understanding that these are massive projects, that they're essentially a beginning to end, meaning go from dirt to a battery-grade material that's going to literally go right into a battery factory, so no

15:34 upgrading. That realization I think is becoming more and more mainstream and also the quantity of what could potentially come out of Nevada and how it will fit into the overall supply and demand schedule. This is something that I think was being realized more and more not only by the OEMs, but also by the big industrial firms, the big consultants, the big people who build the plants and everything. I mean, I had some of them tell me this outright. And within that context, I want to say that Bonnie Clare is getting noticed. So again as I said, I had essentially non-stop meetings, very high quality meetings. And then on top of that we were invited to some private dinners- you know 2 out of the 3 nights with some of the largest.

16:23 You know industrial consulting firms and also by 1 largest OEMs in the world. So you know It's all a way of my saying that the interest is there. There is unfortunately an override right now at the macro level. But if we continue to do the work and advance the project in a way that makes sense that people can understand, we maintain our transparency, I think the value is just going to continue to come through more and more. And of course, that's what we hope to get us through these periods of market weakness. And, you know, hopefully astute investors, those who particularly believe in electrification, understand that the value of Bonny Clare, this is not going to be a small project, the value is going to be massive. So I would say that's pretty much the biggest takeaway, as I mentioned before, with the government.

17:13 To me, by the time it's all said and done, this is still going to be mostly a private sector type of endeavor. The government's going to be able to come in but farther out in the future. By the time they sort of figure out, you know, the entrepreneurial spirit or method or whatever and they realize they shouldn't be trying to pick singular winners, I think we're going to be far down the road. Again, in juxtaposition to the state and how clearly optimistic they are and willing to help in any way possible, And then the leverage to be able to use that to help get through the federal government, I think is a very, very interesting attack that certainly we're going to try to exploit. So, you know, in all, I would say, despite lithium spot prices, I would be optimistic about what's going on.

18:01 People are certainly not throwing in the towel. I think it's just a bit more of a hiatus. And then I think particularly after the US election, we're gonna start to see things bubble up again. I'd say pretty much that that would be the extent of what I thought about the conference, Max.

18:17 Okay, perfect. We have some audience questions, but Before we get to those, do you have any final comments on what you're currently working on? Yeah. Purposefully, I've not released what our work program is for this year. And that's because it's this is a very, very dynamic time for Nevada lithium. And specifically, it's a consequence of what's going on with this high grade mineralization in the boron, right, that we just announced, whatever, a few months ago, and how we need to sort of attack this project in a way, again, so that we don't basically sterilize anything to make sure that we've accounted for changes in mineralization, all this sort of stuff, before advancing essentially to PFS.

19:04 So we not only went to the conference, we also actually took people out on site. So these would be investment bankers, end users of lithium, all sorts of different folks, individual investors again. And we had a rig there that had just started drilling. So what I will just tell everybody right now is that that drill rig now is essentially almost to, I think, total depth. We're now over 2,700 feet in depth and we're still encountering essentially the host rock that should have the lithium and the boron in it. Now we don't have the assays and we're not going to have them probably for 6 to 8 weeks type of a thing,

19:47 but I think that it bodes very well For the fact that we're down past 2500 feet and if you remember that was sort of the maximum level that we were going to last year and I've made some comments about we want to make sure that we're getting all the way through the mineralization. Well here we are in a step out hole again- sort of to the north and to the east- and this is 500 meters- 16 1650 feet away right so. Well over a third of the statute mile. And it looks like we're encountering you know- the type of mineralization. Again the clay stones the mud stones. That should host the lithium so we won't know for sure- but the way with that we're gonna play this is sort of see okay, what does this bring?

20:35 We're going to be making decisions about additional holes relatively soon, and the idea is to see where is a logical place to stop in terms of taking the data from these holes and including it into an updated PEA. So the idea is, again, everybody knows Bonnie Clare is a massive, massive resource, one of the largest already on earth. What I think is going to happen coming out of all the drilling that we have done in the last 2 years, as well as this last hole, which will be included, is we're going to see changes, and I think they're going to be very positive changes to the grade of the material that we're processing which is going to change the dynamics of an updated PEA. So it's sort of okay we're weighing off the potential time and cost of additional drilling.

21:23 Verses the impact of potentially pushing out an updated PEA. And therefore APFSA little bit farther into the future to make sure that we're maximizing the value of I would say the the precursor step which is the updated PEA before jumping into into PFS and of course that's just a consequence of of this beautiful mineralization that we have at Bonnie Clare. That's the that's the biggest piece of news there The other stuff that's going on is very technical with regards to our studies on metallurgy, water, all the different facets that of course we continue to address. But we are drilling and we're down pretty deep and things look good. So that's pretty much what we're up to right now. And we'll be having news releases relatively shortly where I'll put things in a more comprehensive view for everybody. But that's what I can say right now.

22:16 Awesome. Yeah, thanks for that update. Now, we'll get into some of the audience questions, starting with a pretty general one. Just broadly asking about why there are so many mining companies headquartered in Vancouver, Toronto, Canada in general. Maybe you can answer that one. Yeah, you know, I, again, right, I just always put, try to put this in the context of my past. Again, I was an institutional investor in natural resources for close to 30 years. It has always been the Canadian markets that have been sort of the natural birthing place for natural resource companies. And you know maybe if we went back a little bit earlier, the US for oil and gas, we might have sort of seen the equivalent. But all I can say is that there has just always been a natural preponderance for whatever reason of Canadian companies to look at natural resource projects, put the money behind them, and get everything going. And I do know that over the course of at least last 20 years, you know, American investors have been preoccupied with technology, biotechnology, cannabis, all this sort of stuff.

23:26 I do think that there's going to be a change. I think, you know, everything from gold, silver, copper to certainly lithium, as these commodity values increase because of messed up supply-demand dynamics, you're gonna see that interest come back. And I think there's sort of like the green shoots. I think you're gonna see more and more American companies starting at the very beginning by staking property and incorporating the U.S. But the reality is it's the Canadian markets that have this figured out. And I think it's just it's historical and you certainly can't deny it. And I don't think that that's a problem, quite honestly. I think it's just that's the outcome right now and everybody understands it. And if we get a little bit more migration to the US, I think that would be great.

24:12 I don't think the US investor base is ready for it yet, but it wouldn't surprise me to see it over time. So that's about all the light I can shed on that. Okay. Thanks for that. There's a couple of questions here compacted into one, so I'll dissect it here. So briefly, just When will the current financing be closed? We really can't because this is going out into the US, etc. I can't even get into the thing about the financing. So sorry about that. Yeah. Next question is, will the hydraulic borehole mining method be done at Bonnyclare in 2024? I don't think so. I don't think so right now. And I could be wrong, but my gut is no.

25:01 And a lot of this goes back to again what I was mentioning again about what this high grade mineralization has done. We would we can't the PFS to me is step B right or step 2. Step 1 is first of all making sure that this PEA this updated PEA shows the maximum amount of value. And they're going to be right, there's clearly going to be trade-offs, things like tons, grade, you know, boron, all these sorts of things that we have to come, we have to come and make decisions about. The borehole mining test is something that we continue, however, to address in terms of ways to think about it, in terms of financing it. Obviously, the most secretive money would be offtake. There are headwinds with that kind of thing right now, again, because of car sales and lithium spot prices. It's not hard to figure out.

25:48 You know you were basically progressing at I would say a very steady pace very good pace. Things are slagging off a little bit. I don't think that should be a surprise to anybody. However that doesn't mean that's over. You know but that's 1 avenue. Strategic partners are another one. Another way of potentially thinking about it is, would in fact a feasibility study author need to necessarily have a borehole mining test? You know, the one that we had envisioned right now had said, yeah, they thought so. However, there are multiple companies that are willing to offer to write the PFS. This goes back to, again, a very, very interesting thing, I think, at the conference, which is that here we are, 30 million market cap, whatever, 25, 30 million market cap.

26:34 I'm pretty sure, pretty damn sure that we were the smallest publicly traded company at that conference. And all of the big engineering firms, right, coming by, we really want to get involved. I told you we had a dinner, just them and us, telling us about their capabilities. They recognize that Nevada is going to be a hotbed of activity. And they also recognize that Bonnie Claire is going to stand out in a lot of different ways. Now, whether it's the boron, whether it's the size, the combination of the size and grade, I'm not sure. But my point in all this is that we're going to have multiple options for that PFS. So I'm advancing under the basically the, what would be the word, under the assumption that we're going to need that borehole mining test that has always been what the assumption has been for PFS.

27:25 However I will say that there has been more and more talk with more and more people about the potential for not necessarily needing it and doing it after PFS. But again, that's step 2. Step 1 right now is I want to make sure we get this updated PEA done correctly. Yeah, and I guess that leads into that third part of this question, which is when should we expect the new PEA and VFS? This is the way I would think about it right now. And again, it is dynamic because it's going to depend upon the number of holes that we put in. And again, if you just sort of think about it in this way, If this first hole is essentially done and then it takes 2 weeks for assays, if we were to stop here, and I'm not saying we are, but if we were, then I would say after the assays come back, give it basically another month, 6 weeks to basically get that updated PEA done.

28:17 I don't think we're gonna have just 1 hole here. So I'm gonna put this in a in a time span of somewhere from you know, end of late summer into the end of the year, depending upon the number of holes you could probably backtrack. But the question is, again, what are we trying to do? With the drilling, we're trying to move as much again into inferred as we can, even though we have, but I would say even more importantly is getting a significant slug over into indicated status, right? From inferred to indicated, upgrading the confidence, the statistical confidence. And that'll be an infill drilling hole that essentially is coming up next. So let's just say towards the end of the year, and I'm gonna definitely be able to talk more freely about this in the not too distant future and give everybody more precision.

29:07 But you know I know you know just in general terms you know and I've always said this my hope was to get that PFS done this year. I don't think it's going to be done this year. And I'd say the really good reason it's not going to be is because of this high grade mineralization. So that's where we are now with that, Max. Okay, thanks. A bit of a hypothetical here for you. And again, okay, so I'll just read it for you. Okay. So if a solid deal or partnership was presented, would you consider it or is the company set on waiting until the FS? And again, solid deal or partnership is up to your interpretation. There's no particular definition for that.

29:53 Right. So let me answer, you know, I think in this way, right, you know, everybody wants to get value for the shareholders. You know, in my mind, the the absolute highest value we can get for shareholders, again, is a creed of money in the form of offtake, essentially some form of offtake, as opposed to bringing a strategic in who wants a third of the project at this point for a 15% premium, sort of the typical things that you often see in the mining space. However, I will say that the structures, the, what should I say, The imagination, the ingenuity that's going into a lot of these different types of structures makes it very hard to say, hey, I would never do something. I mean, obviously it's a board decision, et cetera, But there are a lot of variations on the theme. I guess that's the way that I would put it. The overall preference is, as we've always said, get the offtake, get slugs of offtake.

30:55 Again, I don't want to repeat the experience of the number of the uranium companies 20 years ago, et cetera, when spot prices rocketed, but of course, they had all fixed price contracts. So none of that value was reflected in the net present value of the projects because again ultimately right the value of our market cap should be approximated by the net present value and then divided by however many shares we end up with at that point in time. So we don't want that locked in. We want that optionality of rising lithium prices because we're bullish on lithium prices going forward. And if you go back to any of our investor decks and you look at the pricing sensitivity you know going on the old P.A. Right we're about to update it. If you go off the old P.A. You know 13,000 400 hour lithium because it's 1 and a half billion dollars of NPV.

31:45 All you got to do is go to 20,000, 20,000, 25,000, and you're talking about 3, 4 billion dollar NPV. Right. Now, I'll tell you is too, is if you look at all of the PEA updates and PFS is things that have been done in Nevada relatively recently, you know, you're looking at 20,000, 22,000, 24,000 dollars, somewhere in there. That seems to be the price, the long-term price that the banks and the consultants you know the engineers are all willing to use for the long-term prices. So it's telling you again right there's a huge cushion here and I think we got built in to offset and that what we know are going to be increasing cost. But that's a very big very big net present value right. A big project is going to move the needle for a lot of different companies. And we don't want to give too much of that away again by by you know basically giving off take on the wrong term.

32:33 So again, comes back to how much imagination can you use? How much flexibility do you have? And I will tell you again, the potential partners going back and forth, and I'll tell you this too, we signed some more NDAs coming out of this conference because the level of interest, you know, people are willing to think about this in different ways. And I think in the end, this is gonna bode very well for Nevada Lithium shareholders. Perfect. Thanks a lot, Steve. So I think that's it for the questions that we have for today. Thank you, Steve, for taking us through the updates and the Q&A session. I also want to thank everyone who submitted their own questions here. Today's reporting will be available to watch on-demand in the coming day or so, so feel free to look out for that. Before we wrap up, just passing things back over to you Steve for any closing remarks Super. Thanks max as always for hosting this So I would just tell everybody, you know, believe me I get it. We're in the middle of summer doldrums now and Vegas was miserable at basically 115 degrees Fahrenheit. And yet the place, you know, where we are for this conference was packed from people around the world, right? Lithium is not dead is what I will tell people.

33:43 Right now, I think at the macro level, we got to get ourselves sort of past the next 5 or 6 months. Right. We're going to have news flow coming out of Bonnie Clare. I anticipate it's going to be positive. I would hope that people who are looking at this you know as an investment again not as a trading vehicle and I certainly would never advise that because we don't have the characteristics for that anyway right. We're not going to be drilling 50 holes here you know 100 meters deep and announcing you know whatever essays from now to King to come. We're drilling very deep holes because we have something already here that is significant. And I will tell you the people people who are in a position to help us going forward and increase shareholder value. They understand the significance. That being said, we'll continue to work at it.

34:30 I'm sure that we're going to be at different conferences in the fall, but until then, don't worry about it. We right now, we're very, very busy going through all the nuts and bolts, crossing the T's, dotting the I's, making sure that this updated PEA is good as it can be. I will certainly update things for you as I have more certainty and I don't anticipate that that will take much longer. So with that, thanks very much for taking the time to listen. Thank you once again to everyone for participating and I hope you