AN EMERGING MULTI-COMMODITY BATTERY MATERIALS PRODUCER

Transcription

1 AN EMERGING MULTI-COMMODITY BATTERY MATERIALS PRODUCER CORPORATE PRESENTATION DECEMBER 2018

2 DISCLAIMER AND FORWARD-LOOKING INFORMATION Disclaimer and Information About this Presentation Prospective investors should rely only on the information contained in the preliminary prospectus dated 19 June 2018 (the prospectus ) and, if applicable, the related U.S. placement memorandum. A prospective investor is not entitled to rely on parts of the information contained in this presentation to the exclusion of others. This presentation is qualified in its entirety by reference to, and must be read in conjunction with, the information contained in the prospectus. Neither the Company nor any of the Underwriters has authorized anyone to provide prospective investors with different or additional information. If anyone provides prospective investors with additional or different or inconsistent information, including information or statements in media articles about the Company, prospective investors should not rely on it. Prospective investors should not assume that the information contained in this presentation is accurate as of any date other than the date of the prospectus, or where information is stated to be as of a date other than the date of the prospectus, such other applicable date. No securities regulatory authority has expressed an opinion about the securities described herein and it is an offence to claim otherwise. An investment in the securities described herein is speculative and involves a number of risks that should be considered by a prospective investor. Prospective investors should carefully consider the risk factors described under Risk Factors in the prospectus and other information included in the prospectus before purchasing the securities described herein. The Company is not offering, or soliciting offers to acquire, the securities described herein in any jurisdiction in which such offer or solicitation is not permitted. For prospective investors outside Canada, neither the Company nor the Underwriters have done anything that would permit the offering or distribution of this presentation together with the prospectus in any jurisdiction where action for that purpose is required, other than in Canada. Prospective investors are required to inform themselves about and to observe any restrictions relating to the offering and the distribution of this presentation and of the prospectus. In this presentation, all amounts are in Canadian dollars, unless otherwise indicated. Capitalized terms used but not defined herein have the meanings ascribed to them in the prospectus. A preliminary prospectus containing important information relating to the securities described in this presentation has been filed with the securities regulatory authorities in each of the provinces and territories of Canada. A copy of the preliminary prospectus, and any amendment, is required to be delivered with this document. The preliminary prospectus is still subject to completion. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for a final prospectus has been issued. This presentation does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary prospectus, the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision. Forward-Looking Information This presentation contains forward-looking information within the meaning of applicable Canadian securities laws, which may relate to the Company s future outlook and anticipated events or results. In some cases, but not necessarily all cases, forward-looking information can be identified by the use of forward-looking terminology such as plans, targets, expects or does not expect, an opportunity exists, is positioned, estimates, intends, assumes, anticipates or does not anticipate or believes, or variations of such words and phrases or state that certain actions, events or results may, could, would, might, will or will be taken, occur or be achieved. In addition, any statements that refer to expectations, predictions, indications, projections or other characterizations of future events or circumstances contain forward-looking information. Forward-looking statements are not historicalfacts but instead represent management s expectations, estimates and projections regarding future events. Forward-looking statements in this presentation may include statements regarding management s beliefs, expectations or intentions regarding the size, completion, expenses and timing of the closing of the Offering, industry trends, market growth rates and the Company s future growth rates, plans and strategies, projections of commodity prices and costs, the future financial or operating performance and condition of the Company, including its business, operations and properties, planned exploration and development activities and the costs and timing thereof, the intended use of the net proceeds of the Offering, trends in the global cobalt, lithium and graphite markets, the adequacy of the Company s financial resources, timing, receipt and maintenance of approvals, consents and permits under applicable legislation. The foregoing list should not be construed as exhaustive and should be readin conjunction with the information in the prospectus under the heading Cautionary Note Regarding Forward-Looking Information. These statements and other forward-looking information are based on opinions, assumptions and estimates made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate and reasonable in the circumstances as of the date of this presentation, including, without limitation, assumptions about the ability to raise additional capital; future prices of cobalt, lithium and graphite; the Company s competitive advantages; current market dynamics; the timing and results of exploration and drilling programs; and the availability and amenability of metallurgical and processing technologies for processing extracted minerals;. There can be no assurance that such estimates and assumptions will prove to be correct. If any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking information. Accordingly, prospective investors are cautioned not to place undue reliance on such information. The foregoing list of assumptions should not be construed as exhaustive and should be readin conjunction with the information in the prospectus under the heading Cautionary Note Regarding Forward-Looking Information. While such opinions, assumptions and estimates are considered reasonable by the Company as of the date such statements are made, they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to future requirements for additional capital, a limited operating history, the demand for and prices of lithium, cobalt and graphite, property title risk, exploration risk, mineral processing risk, uncertainty in relation to Inferred Mineral Resources, a negative cash flow; governmental regulation of the mineral exploration and development industry; the loss of an investor s entire investment; an arbitrary offering price; volatility in the price of the ordinary shares; the potential for additional dilution; absence of a market for the ordinary shares and future sales of ordinary shares by directors and officers of the Company. These factors and assumptions are not intended to represent a complete list of the factors and assumptions that could affect the Company. Refer to Risk Factors in the prospectus. The forward-looking statements included in this presentation are expressly qualified by this cautionary statement and are made as at the date of the prospectus. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as requiredby applicable securities laws. 2

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4 INTRODUCTION AND INVESTMENT HIGHLIGHTS Battery Mineral Resources Limited ( BMR ) is a Canadian-based, multi-commodity resource company engaged in the discovery and development of battery minerals (cobalt, lithium, graphite) in Canada, USA and South Korea. Our goal is to become a significant, low cost battery materials producer as well as continuing our positive record of new discoveries from our extensive portfolio of advanced exploration projects. + High-quality portfolio of assets located in mining-friendly jurisdictions Rare, high-grade primary cobalt projects located in Canada and the U.S. Largest mineral claim holder in Ontario, Canada (all minerals) and the U.S. (cobalt) + Significant upside potential beyond existing resource base Underexplored land package in the Ontario Cobalt Belt with significant resource expansion potential Highly prospective lithium and cobalt exploration projects in the U.S. and brownfield graphite projects in South Korea + Experienced management team and board with proven track record Board and technical teams with capabilities in exploration, mine development, operations and downstream Li-B applications + Strategic investment provides financing certainty and de-risks future development Strategic investment by Yorktown Partners LLC. 1 funds phase one cobalt processing facility and de-risks future development Clear pathway to production with minimal shareholder dilution Clear vision to maximize shareholder returns through growth and capital efficiency Well defined exploration program over the next 18 months across the portfolio Strong balance sheet, conservative capital management with no debt or overhang from warrants or options 1. Yorktown Partners LLC, through its partnerships, owns 87.6% of the outstanding common shares of ESI Energy Services Inc., which is a party to the agreement with BMR. 4

5 BMR has amassed a dominant 1,900 km 2 land package in the Ontario Cobalt Belt, Canada. Our continuing goal is to locate and develop multiple high-grade deposits and process the cobalt at a central facility in the district.

6 COBALT (ONTARIO, CANADA) The largest area of high- grade cobalt- focused mineral exploration claims in North America + Ontario Cobalt Belt (8,720 mineral claims covering 1,746km 2 ); plus 12 leases and 5 patented claims. + Staked or acquired dozens of high-grade cobalt prospects (1-21% Co) + 20,000m drill program underway across district-scale cobalt exploration belt The Ontario Cobalt Belt is a 200 km long, arcuate zone that is located between the Abitibi gold and base-metal belt and the Sudbury nickel-copper-platinum-palladium mining district of Ontario and western Québec between Sudbury and the town of Cobalt, Ontario. Defined in the NI Cobalt Exploration Project Technical Report completed by Exploration Services International and Micon International (7-Feb-18). 6 6

7 McARA INITIAL RESOURCE ESTIMATE MINERAL RESOURCE ESTIMATE COBALT GRADE COMPARISON (%) 1 Tonnage Co Grade Contained Co Project & Grade (% Co) Operator Jurisdiction 0.30% Cut-off (tonnes) (%) (lbs) (tonnes) McAra 1.27% BMR Canada Indicated 72, % 2,011, Inferred 26, % 461, Kamoto 0.55% Katanga Mining DRC Mutanda 0.39% Glencore DRC Ruashi 0.30% Jinchuan Group DRC Tenke Fungurume 0.26% CMOC DRC Boss 0.19% ERG DRC Moa Bay 0.14% Sheritt Cuba + Discovery hole intersected four cobalt zones 1.26% Co including 3.09% Co Voisey's Bay Ramu 0.13% 0.10% Vale Met. Corp. of China Canada PNG + 4 new cobalt zones + Follow-up drilling Q4:18 Sudbury Ops 0.09% Glencore Canada Murrin Murrin 0.08% Glencore Australia + Potential for resource expansion with multiple lookalike targets identified by geology and geophysics to be drilled Q Prospect of continued high average grades 208kg outcrop sample collected in Dec 18 for metallurgical testwork averaged 10.1% Co, 1.64g/t Au and 1.25% Ni. Ambatovy Ontario Division 0.07% 0.04% Sheritt Vale Madagascar Canada Source: Company filings, SNL 1. Indicates a Fraser Institute Policy Perception Index risk rating of below 40/100; McAra reflects Indicated Resource grade; Vale only discloses Reserve grade. 7

8 NUMEROUS ANOMALIES INDICATE POTENTIAL FOR WIDESPREAD COBALT MINERALIZATION Significant upside potential across Cobalt District Exploration Project More than 800 documented cobalt occurrences are being assessed and identified. Targets are being prioritized for drill testing winter drilling program underway. OUTCROP COBALT GRADES (%) PROJECT Co (%) COMMENTS Iron Mask Magnetite Prospect 21.3 High Au, Bi, Fe skarn Iron Mask Cobalt Prospect 20.9 Ni, Au, Cu, sediment hosted Iron Mask Cobra Prospect 16.9 Ni, Cu, structural zone, skarn Gowganda: new high-grade outcrop discovery with 38 samples averaging 2% Co, grading up to 13.7% Co. White Reserve/Elk Lake: drill-testing of multiple new discoveries Q1/Q2:19 Gowganda 13.7 McAra 13.3 Very high Co and Ag, > 250 drill holes, 2Mt of dry tailings. 13.7% Co in newly discovered Capital Vein +5,000m BMR drilling, high-grade cobalt resource, open Wilder/Kell 8.8 Cu, Ni, Ag, ultramafic association Fabre East 8.5 Fabre West % Co, 2,245 g/t Ag, 13.2 g/t Au (avg. 20 samples) 0.5 m at 8% Co in drilling, very high Ag Roy 7.4 Cu, Ag, numerous old workings White Lake 6.6 Ni, extensive outcrop bloom Island Drill interval 4 m of 4.18% Co (incl. 1.7 m at 6.3%) White Reserve 4.5 High Ag, numerous old workings Iron Mask: drilltesting of sulphide targets and bulk sampling for testwork Q1:19 McAra: high-grade cobalt resource. Resource drill-out and met testwork, Q1:19 Fabre: numerous drill targets (20) identified from geology, and geophysics. Drilltesting Q1:19 8

9 COBALT (U.S.A) The largest cobalt claim holder in the U.S.; uncovered widespread cobalt mineralization that extends for over 1,000 miles + Current tenement holding: 30,000 acres spanning 9 cobaltmineralized districts, including large holding in Idaho Cobalt Belt. + Previously unrecognized and underexplored. + Ongoing assessment and acquisition of additional properties. + Sampling, geological mapping, and ground IP at most properties + Airborne magnetic and radiometric geophysical surveys Q4:18. + Drill permitting in progress. 9 9

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11 LITHIUM (U.S.A.) Highly prospective exploration projects, including North America s largest lithium exploration project + Panamint Valley Basin is large (> 30km long, 5-10km wide and 300-1,000km deep); filled with saline to high-saline brine. + Basin assessment (flora, fauna, geology); confirms existence of a very large system capable of hosting a significant li-b deposit. + Gravity survey defined basin structure + MT survey defined high salinity water zones; exceptionally thick in north (additional staking to cover extensions) + Drilled two holes ( m each) in south of basin where access allowed: - Hole 1: high pumping yields, low Li - Hole 2: anomalous Li in some hole levels, poor drilling recoveries. - Next drilling planned in North (Q1:19) 11

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13 FLAKE GRAPHITE (SOUTH KOREA) Largest footprint of graphite in the country + The Geumam project is located 20 km from Korea s 2nd largest Li-ion battery factory, and is the country s only NI compliant graphite resource - 5.4% TGC for 407,000t contained graphite + Active technical program leading to resource upgrade and NI PEA H1:19 - Ongoing geophysics identifies + 7km extension to anomalous graphite horizon - Metallurgical testwork by IMO (Perth) Review of previous testwork (KPMC 1986 and ACTLABS 2014) Additional testwork and flow sheet development to produce optimal concentrate for battery anode (Q1:19) Phase 2 drilling intersects multiple wide zones of high-grade graphite. On target to increase mineral resource Hole No. Zone From m To m Width m TGC % GM-02 C GM-09 B GM-10 B GM-11 B GM-18 B GM-19 B GM-22 E GM-24 E GM-26 E GM-30 E GM-37 E GM-40 E GM-41 E

14 STRONG MARKET FUNDAMENTALS DRIVEN BY EV ADOPTION GLOBAL ANNUAL ELECTRIC VEHICLE SALES FORECAST ( 000s) Passenger Car Light Commercial Vehicle Heavy Commercial Vehicle 4,750 3, ,879 3,673 5, ,080 4,571 7, ,312 5,679 8, ,548 6,976 10, ,786 8,143 11, ,037 9, A 2017A 2018E 2019E 2020E 2021E 2022E COMMODITY CONTRIBUTION BY BATTERY TYPE (g / KWh) TARGETED EV VOLUME BY AUTOMAKER Cobalt Lithium Nickel Manganese Other (1) 1,099 67% of sales by new EV models by 2023 (US$4.5 bn) , million EV sales per year by million EV sales per year by 2025 (20% - 25% of sales) 1 million EV sales per year by million EV sales per year by LCO NCA LMO LFP NMC111 NMC433 NMC532 NMC622 NMC811 15% - 25% of sales by % - 25% of sales by new EV models by % of sales by 2020 Source: Bloomberg, company filings, Wood Mackenzie. 1. Other are aluminum (NCA) and iron (LFP). 14

15 EXPERIENCED BOARD WITH PROVEN TRACK RECORD Gary Lewis Executive Chairman Dr. Ian Pringle Technical Director Lazaros Nikeas Director Founding director with 30+ years in capital markets and business strategy development Invested, financed, and / or operated resource projects valued at more than US$400 mm, including the acquisition and ultimate sell-down or listing of high-value, multi-commodity resource projects in Australia, UK, Asia, and the Americas Senior mining executive with an exceptional track record of successful mineral resource evaluation, discovery, project development, and operations Managing Director of several ASX-listed resource companies with 15 years of experience specifically with cobalt 15+ years of strategy and capital markets advisory for resource, chemicals and industrial companies, with over US$25 bn of M&A transactions completed Currently a Principal Investment Manager of Weston Energy LLC, a Yorktown Partners LLC portfolio company with investments in energy minerals assets and previously a partner of Traxys Capital Partners, a private equity firm backed by The Carlyle Group Stephen Dunmead Non-Executive Director Senior global business executive with 30+ years of strong operational leadership experience in the advanced materials and specialty chemical industries Previously COO of NYSE-listed SWM International and also held several senior roles with NYSE listed OM Group where he led their cobalt business for more than 10 years; 7 years as Chair of the Cobalt Development Institute James Hughes Non-Executive Director George Young Non-Executive Director George Pirie Non-Executive Director Currently CEO and Managing Director of Prisma Energy Capital, a private entity focused on investments in energy storage Previously CEO and Director of First Solar Inc., AEI Services LLC, and President and COO of Prisma Energy International 40+ years of experience acquiring, financing, and developing mines in North and South America as a mining executive, lawyer, and metallurgical engineer Instrumental in over US$600 mm in financings within the mining space and over US$9 bn in financings within the utilities industry Co-founder of MAG Silver and International Royalty with previous senior counsel roles at several private mining and utility companies Canadian-based international mining executive with 35+ years of experience in project development, mine building, asset optimization, and operations Previously CFO and Executive VP with Placer Dome, President and CEO of Breakwater Resources, San Gold and Director, Timmins Economic Development Corp. 15

16 EXPERIENCED TEAM WITH PROVEN TRACK RECORD Dr. Henry (Rick) Sandri Chief Commercial Officer Seasoned executive and mineral economist with 35 years experience in financing, planning, business development, and executive management and has worked with cobalt, copper, nickel and related metals on six continents over the past three decades Previously President & COO of Duluth Metals and VP of Inco Ltd. Dr. Clyde Smith Head Exploration Geology Exploration and mining geologist for over 50 years Successfully guided projects through feasibility and development, and served as director on several successful public companies Peter Doyle VP Exploration Canadian Cobalt 40 years experience in all aspects of mineral exploration from regional reconnaissance to project evaluation and development, in a variety of geological terrains throughout Canada, the U.S., South America, and Australia Previously with PT Freeport Indonesia, Gold Fields, and Troy Resources Scott Close VP Exploration U.S. Cobalt Extensive knowledge of mineralizing systems throughout North America. Worked on world class projects leading to major discoveries; transitioned to managing technical programs from grassroots discovery through to development, production and closure of mines. Dr. Warwick Browne VP Stakeholder Relations & Sustainability 30+ years of natural resource project management experience Specialized in multi-stakeholder engagement and management of social and environmental corporate performance as well as community development and benefit programs in the agriculture, watershed management, and extractive industries Jack Cartmel Chief Financial Officer Chartered Professional Accountant and finance executive with 15+ years of experience in the mining industry with expertise in M&A, IPOs, taxation, public company accounting and disclosure, and financial and risk management Previously with TSX-listed Monument Mining, a mid-size gold producer in Asia, and White Tiger Gold, a mid-size gold producer Dr. Joe Ferron Technical Advisor Over 40 years as a metallurgist with a specialization in hydrometallurgy of base and precious metal extraction. Holds a number of patents and patent applications dealing with the extraction and recovery of base, precious and specialty metals, including cobalt. 16

17 STRATEGIC INVESTMENT DE-RISKS FUTURE DEVELOPMENT On May 22, 2018, ESI and BMR entered into a processing facility and cobalt supply agreement ( ESI Agreement ) Benefits to BMR Shareholders: Avoids dilution with no balance sheet impact BMR shareholders retain greater ownership of BMR s assets, a continued 100% interest in the Company s other assets, and the bulk of the Cobalt District Exploration Project De-risks the financing and development of the Cobalt District Exploration Project, i.e. risks associated with cost overruns, permitting, environmental and process issues remain with ESI Allows BMR to continue to focus on building its asset base through the exploration of existing assets and acquisition of new assets SUMMARY OF KEY TERMS ESI Commitment Technical Committee ESI made a $10 mm payment to BMR by July 17, 2018 for the right to participate in the project ESI to provide up to $90 mm of capital to build a cobalt processing facility with the intention of achieving commercial mining operations A five-member technical committee is to be established by ESI and BMR to oversee a planned feasibility study for mining operations and to make a recommendation on whether to proceed with the project If the project is approved, the technical committee would oversee mining, construction and operations Cobalt Deliveries BMR would deliver a certain volume of cobalt feedstock material, including associated by-products, to ESI BMR Earn-In BMR Buyback Termination BMR would earn an initial 35% interest in the processing facility and related assets once sufficient quantities of feedstock material have been delivered such that ESI achieves a one-time return of its capital BMR would earn a further 40% interest once ESI achieves, on a cumulative basis, two-times the return of capital If BMR earns a cumulative 75% interest, BMR and ESI would establish a joint venture to assume responsibility for purchasing feedstock material from BMR, operating the process facility and marketing cobalt concentrate BMR would have a right of first refusal to purchase ESI's interest if ESI wishes to sell to a third party and an option to purchase ESI's remaining 25% interest after the joint venture is formed Certain events (failure by ESI to raise required finance, commence design and procurement activities or advance construction by determined dates) would entitle BMR to terminate the ESI Agreement and receive a $20 mm fee 17

18 DEVELOPMENT AND PRODUCTION TIMELINE Development Strategy Minerals Co Li Gr Cu Ni Near Term (1-6 months) Medium Term (6-12 months) Long Term (+ 12 months) Canada Further drilling to grow resource base, including update McAra mineral resource estimate and publish one or more additional compliant mineral resources. + Bulk sampling, testwork and flow sheet design. + Preliminary Economic Assessment ( compliant PEA). + Cobalt processing plant site selection and assessment. + Environmental baseline studies. + Definitive Feasibility Study. + Ongoing drilling across Ontario Cobalt Belt to expand existing, and define additional, resources. + Government and stakeholder engagement. + Mine development application. + Mine development based on best social and environmental practice. + Construction and enter production. + Ongoing resource and reserve drilling. USA Cobalt + Acquisition and staking. + Permitting, fieldwork and geophysical surveys. + Resource drilling. Lithium + Resource drilling. + Bulk sample and testwork. + Geophysical surveys. Cobalt mineral resource estimate. + Drilling across portfolio to grow resource base. + Preliminary Economic Assessment ( compliant PEA). Lithium mineral resource estimate. + Flow sheet design + Preliminary Economic Assessment ( compliant PEA). Cobalt + Definitive Feasibility Study. + Mining lease application. Lithium + Definitive Feasibility Study. + Mining lease application. South Korea + + Drilling and modelling to update Guemam mineral resource. + Anode and battery testwork. + Preliminary Economic Assessment ( compliant PEA). + Environmental baseline studies. + Initiate discussions with potential strategic partners. + Definitive Feasibility Study. + Mining lease application. + Mine development based on best social and environmental practice. + Construction and enter production. + Ongoing resource and reserve drilling. 18

19 CORPORATE OVERVIEW CAPITAL STRUCTURE OWNERSHIP STRUCTURE Capitalization Current Cash Position Current Shares Outstanding Options and Warrants C$6.1 mm mm Nil (1) Directors, Officers & Senior Management 18% Fully Diluted Shares Major Shareholders mm Other Institutional and Retail 67% Weston Energy LLC 18% Weston Energy 17.6% Lewis Superannuation Fund 8.8% LTL Capital 7.3% JP Morgan Nominees Australia 4.6% Merrill Lynch (Australia) Nominees 4.2% Top 20 Shareholders 65.9% 1. Cash balance as at

20 SCIENTIFIC AND TECHNICAL INFORMATION Dr. Ian Pringle, Technical Director and Director of the Company, supervised the preparation of and approved the scientific and technical information in this presentation. Information about data verification procedures used to support scientific and technical information on the Company s material properties presented herein, as well as with respect to the results of, processing and interpretation of exploration data and assumptions regarding Mineral Resource estimates are available in each the following technical reports filed by the Company under the Company s profile at Cobalt Exploration Project, SE Ontario and SW Quebec, Canada, dated as of April 10, 2018 with an effective date of February 7, 2018, prepared by Michael Page, FAusIMM, of Exploration Services International, and Tania Ilieva, Ph.D., P.Geo., of Micon International/M.Plan; Technical Report on the Panamint Valley Lithium Project, Panamint Valley, California dated as of March 25, 2018 with an effective date of November 16, 2017, prepared Donald Hains, P.Geo, of Hains Engineering Company Limited; and Geumam and Taehwa Graphite Projects, South Korea, National Instrument Technical Report dated as of March 9, 2018 with an effective date of January 1, 2018, prepared by Robert Dennis, MAIG, Rodney Graham, and Andrew Newell, MAusIMM, CPMet and MEA, CP Eng., each of RPM Global. BATTERY MINERAL RESOURCES LIMITED First Canadian Place 100 King Street West, Suite 5600 Toronto, ON M5X 1C9 info@batterymineralresources.com batterymineralresources.com 20