ADVANCING CHILE S HIGHEST-GRADE PRE- PRODUCTION LITHIUM BRINE PROJECT CORPORATE PRESENTATION

Transcription

1 ADVANCING CHILE S HIGHEST-GRADE PRE- PRODUCTION LITHIUM BRINE PROJECT CORPORATE PRESENTATION September 2017 TSX-V:BRZ OTCQB:BRGRF

2 DISCLAIMER This presentation includes certain "forward-looking information and "forward-looking statements (collectively "forward-looking statements ) within the meaning of applicable Canadian and United States securities legislation including the United States Private Securities Litigation Reform Act of All statements, other than statements of historical fact, included herein, without limitation, statements relating the future operating or financial performance of the Company, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects, "anticipates, "believes, "intends, "estimates, "potential, "possible, and similar expressions, or statements that events, conditions, or results "will, "may, "could, or "should occur or be achieved. Forward-looking statements in this press release relate to, among other things: completion of the proposed transaction with Li3, completion of a Prefeasibility Study and completion of a Definitive Feasibility Study. Statements concerning mineral resource estimates may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that will be encountered if the Maricunga Project is developed. Actual future results may differ materially. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made and are based upon a number of assumptions and estimates that, while considered reasonable by the respective parties, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements and the parties have made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: the absence of a material adverse change in the Maricunga Project; fluctuations in the price of lithium or certain other commodities; fluctuations in the currency markets; changes in national and local government, legislation, taxation, controls, regulations and political or economic developments; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and flooding); the presence of laws and regulations that may impose restrictions on mining; employee relations and receipt of all necessary regulatory and shareholder approvals for the Li3 transaction. Readers should not place undue reliance on the forward-looking statements and information contained in this news release concerning these times. Except as required by law, Bearing does not assume any obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law. Robert Cameron, P.Geo., Technical Advisor to Bearing Resources, is the Qualified Person for the purposes of NI and has approved this written disclosure. 2

3 LI3 ENERGY TRANSACTION Overview Bearing Lithium (TSXV:BRZ) entered into a definitive agreement with Li3 Energy (OTCQB:LIEG) to acquire it for consideration of 16M shares. The transaction will close on October 2, Li3 Energy s primary asset is a 17.7% interest in the Maricunga lithium project in Chile, which is free-carried through the delivery of a definitive feasibility study (DFS) by the projects partner. The Maricunga Project is the highest grade, undeveloped lithium salar in the Americas. It is second in grade only to the Salar de Atacama, which accounts for 100% of Chile s lithium production and about 40% of global production. Over US$30 million has been invested in the project to date which has generated a NI Measured Resource of 1.7 Mt LCE and Inferred Resource if 0.4 Mt at an average grades of 1,160 mg/l Li. The project is comprised of a number of tenements totaling 4,463 hectares, some of which are grandfathered under a previous mining code which allows for the immediate exploitation of lithium. POSCO (NYSE:PKX), one of the world s largest steel manufacturers, invested US$18M into Li3. Developed proprietary lithium extraction technology which recovered over 80% of lithium from brine in under 24 hours with a fraction of the environmental footprint. POSCO is anticipated to own ~8% of BRZ post-transaction. 3

4 THE LITHIUM MARKET Global Lithium Supply Source: VisualCapitalist 4

5 THE LITHIUM MARKET Lithium Pricing & Applications Source: Data provided by Benchmark Mineral Intelligence and compiled by VisualCapitalist Source: VisualCapitalist Source: VisualCapitalist 5

6 THE LITHIUM MARKET China Leading the Battery Charge Megafactories to Grow 6x by 2020 Source: Data provided by Benchmark Mineral Intelligence and compiled by VisualCapitalist 6

7 THE LITHIUM MARKET Lithium Demand Composition & Growth Drivers Source: VisualCapitalist 7

8 THE LITHIUM MARKET Automakers Outline EV Growth Plans Volvo, Betting on Electric, Moves to Phase Out Conventional Engines All new models introduced starting in 2019 will be either hybrids or pure electric VW says it needs '40 gigafactories' for electric-car batteries by 2025 Based on production projections of 3 million electric cars with 60-kilowatt-hour battery packs BMW to produce 12 EV models & 13 hybrid models by 2025 All models to offer electrified powertrain options (full electric or hybrid) by 2020 Jaguar Land Rover All cars will have EV or hybrid version by 2020 Every new model line will be electrified from 2020 The Power Consumed by Electric Vehicles Is About to Surge 300-Fold Vehicles seen accounting for 5% of electricity use by 2040 Electric vehicles will be more than half of new cars sold The Electric Car Revolution Is Accelerating Electric cars will be as cheap as gasoline models by 2025 Battery manufacturing capacity will triple in the next four years BMW reportedly takes aim at Tesla Model 3 with all-electric 3-Series sedan BMW to unveil an all-electric 3-Series line of cars at the Munich Auto Show in September 2017 BMW states vehicles will have a range of 248 miles per charge 8

9 MARKET COMPARABLES Attractively Positioned Relative to Peers Company Ticker M.Cap Grade (mg/l Li) Primary Project Stage C$M Resource Sample Orocobre Limited TSX:ORL 877 Olaroz Producing 690 Lithium Americas Corp. TSX:LAC 672 Cauchari Construction 585 Bearing Lithium Ltd. TSXV:BRZ 37 Maricunga M&I Resource 1,160 Lithium X Energy Corp. TSXV:LIX 177 Los Angeles M&I Resource 456 Neo Lithium Corp. TSXV:NLC 121 3Q M&I Resource 716 Advantage Lithium Corp. TSXV:AAL 66 Cauchari Inf. Resource 380 Pure Energy Minerals Limited TSXV:PE 72 Clayton Valley M&I Resource 149 Wealth Minerals Ltd. TSXV:WML 161 Atacama Exploration untested LSC Lithium Corporation TSXV:LSC 68 Various Exploration untested Millennial Lithium Corp. TSXV:ML 68 Pastos Grandes Exploration 392 Sourced from Capital IQ on September 13, 2017 Bearing presented pro-forma post Li3 Energy acquisition 9

10 MARICUNGA PROJECT Highest Grade Undeveloped Lithium Project Maricunga¹ Atacama² Hombre Los Olaroz⁴ Cauchari⁵ Muerto³ Angeles⁶ Tres Quebradas⁷ Rincon⁸ Uyuni⁹ Country Chile Chile Argentina Argentina Argentina Argentina Argentina Argentina Bolivia Owner ORL / Energi LPI / MSB / SQM / LAC LIX / SESA COMIBOL SQM / ALB FMC Toyota / Neo Lithium Group BRZ / JEMSE / Aberdeen (Gov't) JEMSE (Private) Lithium (mg/l) 1,160 1, Potassium (g/l) 8,500 22,626 7,404 5,730 4,849 4,945 6,537 7,513 8,719 Magnesium (g/l) 7,540 11,741 1,020 2,270 1,421 1,850 1,458 3,419 7,872 SO₄/Li Mg/Li K/Li K/Mg Altitude (masl) 3,800 2,300 4,000 3,900 4,000 4,000 4,100 3,700 3,700 Sources: ¹ Minera Salar Blanco NI resource report, August 2017 ² SignumBOX ³ Roskill, 2009 ⁴ Salar de Olaroz Technical Report, May 2011 ⁵ Cauchari-Olaroz Updated Feasibility Study, March 2017 ⁶ Sal de Los Angeles Technical Report, August 2016 ⁷ Tres Quebradas Technical Report, May 2017 ⁸ Enirgi Group Press Release, July 2016 ⁹ Roskill,

11 MARICUNGA PROJECT Joint Venture Development Timeline June 2017 December 2017 December 2018 PHASE 1 PHASE 2 PHASE 3 Resource Estimation & Reserve Evaluation Processing Test Work Environmental Impact Assessment (EIA) Exploration & Resource Drilling Groundwater Model Define Production Schedule Pumping Well Drilling & Testing Reserve Estimation Resource Update Evaporation Pond Construction Pilot Plant / Process Design Pilot Plant Operation Brine Sampling & Testing Brine Sampling & Testing Flowsheet Optimization Pilot Plant Design Engineering Studies Brine Sampling & Testing Monitoring Well Installation Environmental Monitoring Environmental Monitoring Weather Station Construction Submission of EIA Government Approval Feasibility Study & Design Engineering Infrastructure Plan Award Engineering Contract (WorleyParsons selected) Infrastrucure Studies (Power & Water) Enginnering Design Pre-Feasibility Study Definitive Feasibility Study Fully Carried for US$22M Program US$12.45M Spent US$9.55M Remaining Completed Underway Deliverables: Pre-Feasibility Study (PFS) in Q4/17 Definitive Feasibility Study (DFS) in H1/18 11

12 MARICUNGA PROJECT Updated Resource Estimate (NI ) M&I Resource has tripled in size while adding a significant Inferred Resource and maintaining high grades M&I Resource of 1.72 Mt of lithium carbonate (Li₂CO₃) plus Inferred Resource of 0.43 Mt Li₂CO₃ Brine Volume (km³) Concentration (mg/l Li) Concentration (mg/l K) Contained (kt Li) Contained (kt K) Measured ,174 8, ,250 Indicated ,071 7, ,100 M&I ,143 8, ,350 Inferred ,289 9, Numbers may not add due to rounding Contained Lithium Carbonate (kt Li₂CO₃) Contained Potassium Chloride (kt KCl) Measured 900 2,400 Indicated 820 2,100 M&I 1,720 4,500 Inferred 430 1,200 Numbers may not add due to rounding Lithium is converted to lithium carbonate (Li₂CO₃) with a conversion factor of 5.32 Potassium is converted to potassium chloride (KCl) with a conversion factor of 1.91 Updated resource does not incorporate resource below 200 metres (c.f. 360m hole which terminated in high-grade brine) Exploration target could add an additional 1.0 to 2.5 Mt of lithium carbonate & 2.9 to 6.6 Mt of potassium chloride SEE APPENDIX FOR DETAILS 12

13 MARICUNGA PROJECT Future Growth Potential Resource estimate includes all concessions down to a depth of 200 metres Potential for significant growth below 200 metres as evidenced by hole S-19 which terminated in high-grade brine assaying 877 mg/l Li Geophysical & seismic surveys indicate the extends to at least 400 metres and possibly more than 500 metres deep. JV exploration holes, 2016 MARICUNGA JV JV pump test wells,

14 MARICUNGA PROJECT High Grade Results from Latest Drilling Assay results from old code tenements are highly encouraging: demonstrating grades consistent with or better than observed in the Litio concession (which is host to the current M&I resource). Hole Tenement Total Assay Lithium Potassium Lithium Depth (m) Interval (m) (mg/l avg) (mg/l avg) (mg/l max) M10 Cocina ,239 8,611 1,571 M1 Cocina ,447 9,903 1,946 M2 Cocina ,605 1,700 S5 Salamina ,005 6,934 1,270 S3 San Francisco ,040 7,708 1,240 S13 San Francisco ,294 1,260 S6 San Francisco ,368 9,468 3,375 M1A Cocina ,104 2,006 S2 Cocina ,580 1,940 S18 Litio ,382 11,041 1,740 S19 Cocina ,273 1,614 P4 Cocina 180 Pumping well averaging 25 litres per second Source: Lithium Power International Ltd. Press Releases Results from Phase 1 exploration program (Sept 16 Jan 17) successfully delineated high-grade lithium brine in all holes, with 200m deep holes averaging from 822 to 1,382 mg/l lithium and 6,104 to 11,041 mg/l potassium. Expansion of the lithium brine body is indicated as deep drilling encountered a continuation of the sandy units to the end of the hole at 360m, suggesting significant additional brine underlies the current resource drilling defined to 200m. JV exploration holes, 2016 JV pump test wells, 2016 MARICUNGA JV 14

15 MARICUNGA PROJECT Extremely High Flow Rates from Pump Testing Flow rates from pump testing at the Maricunga project are highly encouraging as they rank amongst the highest reported values from other projects in South America Images: V-notch weir (left) and fluid flow meter (right) 15

16 MARICUNGA PROJECT De-risking Plan Led by World Renowned WorleyParsons Field evaporation testwork began in October 2016 Initial testwork has been highly encouraging, with concentration increasing 5x over the first three months (from 1,260 mg/l to over 6,300 mg/l lithium by the end of December 2016). Lithium concentrations continue to increase with potassium chloride precipitating in the ponds as the brine concentration increases. Potassium chloride or potash is a beneficial by-product of lithium brine production. WorleyParsons has been awarded a multi-million dollar contract to lead the project design and feasibility study work Image: Test evaporation ponds 16

17 MARICUNGA PROJECT Tenement Map & Potential for Consolidation The Maricunga salar is located in northern Chile with excellent infrastructure: adjacent to International Highway 31 (which connects northern Chile & Argentina) with grid power accessible to the east. The project is located close to critical roads and port infrastructure: 170 km northeast of Copiapó and 250 km from the Chilean Coast. The project is comprised of a number of tenements located in the northern (lithium-rich) section of the Maricunga salar: The Maricunga Salar has been subject to significant past exploration under the previous partners, MSB and Li3 Energy. More than US$30 million has been invested in these tenements over the past four years. MARICUNGA JV 17

18 MARICUNGA PROJECT Joint Venture Structure All the tenements / concessions are held by the Maricunga Joint Venture company (Maricunga JV). Under the terms of the joint-venture, Minera Salar Blanco (MSB) and Bearing (BRZ) are free carried with Lithium Power International (LPI) funding all expenditures beyond to the delivery of a Definitive Feasibility Study (DFS) by LPI has earned in an initial 32.5% through exploration, property and share payments totaling US$21.7 million. In order to earn-in their remaining interest, up to a maximum of 50%, they are to fund an additional US$9.55 million in exploration and development costs. The Board and Technical Committee for the Maricunga JV will be split by LPI, MSB and Bearing. Vested Interest Current Final MSB 43.6% 32.3% BRZ 23.9% 17.7% LPI 32.5% 50.0% Additional US$9.6 million expenditures by September 2018 If LPI is unable to meet their financial obligations under the earn-in agreement, Bearing & MSB may: Repurchase LPI s vested interest at a 20% discount Contribute funds to earn the remaining interest All JV partners have a right of first refusal in the event of a sale 18

19 CHILEAN MINING LAW AND WAY FORWARD Special Circumstances Around Lithium In Chile, lithium is considered strategic and therefore under the current mining law, it is a non-concessible substance Only mining exploitation concessions initiated before 1979 are authorized for the exploitation of lithium. The Cocina, San Francisco, Salamina, and Despreciada mining concessions fall under this category (also referred to as old code or grandfathered tenements / claims) The Chilean government acknowledges that it is time to redefine the strategic categorization of lithium and new government has lithium as a priority In June 2014, the government established the National Lithium Commission to recommend a new State Policy for the exploitation of lithium and promotion and development of new projects The recent announcements by the Chilean government provide positive steps for the lithium industry in Chile. Government is committed to provide mechanisms for non-grandfathered lithium claims to advance their projects and Chilean President directly instructed Codelco to move forward with its Maricunga and Pedernales lithium claims to promote new lithium production. In early 2017, Codelco announced it had formed a lithium subsidiary to facilitate a process is its currently running to identify a partner for it s lithium projects, for which it anticipates to announce by year-end In addition, Codelco was recently awarded a permit by the Chilean Nuclear Energy Commission (CChEN) to extract up to 1.73 Mt of lithium carbonate (325,045 t Li) from the Maricunga salar. In early 2017, the Government granted Albemarle (NYSE:ALB) an amendment of it s lithium production rights with the Chilean Economic Development Agency (CORFO) to expand its quota to 80,000 tonnes annually of technical and battery grade lithium sales over the next 27 years. Government initiatives bring Chile to the forefront to advance lithium production in one of the best jurisdictions worldwide, attracting world class strategic partners 19

20 MANAGEMENT TEAM Knowledgeable, Experienced, Proven Jeremy Poirier President and CEO Jeremy Poirier has over 12 years of experience in the capital markets, built a strong network of investor and industry contacts, served on a number of boards, and held senior officer positions at several public and private companies. Most recently, Mr. Poirier was a co-founder of Pure Energy Minerals Limited (TSXV:PE) and served as a Director from December 2013 to September 2016, in addition to holding a senior management role. During his tenure with Pure Energy, he reviewed numerous lithium assets and fostered relationships with various partners throughout the supply chain. Mr. Poirier was instrumental in the formation of Bearing Resources in it s current form, including facilitating a number of over-subscribed capital raises, in addition to the acquisition of Li3 Energy and a number of other corporate developments. He also serves as a Member of Advisory Board at Nevada Energy Metals Inc. (TSXV:BFF) since April 2016 and serves as a Director of CVR Medical Corp. (TSXV:CVM) since September Luis Saenz President of South American Operations Mr. Saenz is a finance executive with nearly 25 years of experience in mining finance and metals trading with a focus on Latin America. Mr. Saenz has served as CEO and Director of Li3 Energy since 2009, in addition to serving on serving on the board of Atico Mining (TSXV: ATY) and acting as an advisor to Faro Capital in Peru for all mining transactions. Throughout his career, Mr. Sáenz has held senior rolls with Standard Bank of South Africa, Merrill Lynch and Pechiney World Trade. He holds a degree in Economics and International Affairs from Franklin & Marshall College in Lancaster, PA. Benjamin Asuncion VP Business Development Ben Asuncion has over a decade of experience in the capital markets and natural resources sector. Mr. Asuncion was at Haywood Securities Inc., a privately owned Canadian brokerage firm, in equity research from 2007 through to As a research analyst, he covered companies from exploration through to production in the precious metals, diamond and lithium space. Prior to joining Haywood, Benjamin was involved in the management of an endowment fund at Simon Fraser University (SFU). Mr. Asuncion holds a Bachelor of Business degree from SFU with concentrations in finance, accounting and management science. Ann Fehr CFO & Corporate Secretary Ann Fehr is the founder of Fehr & Associates and has several years of senior management and consulting experience. She has worked in management since she received her CGA designation in During her career she also spent several years providing senior level accounting services to publicly traded companies and currently holds CFO positions in several. As such, Ann is specially qualified to assist with senior management level problem solving and support the CFO/controller functions of a company. The majority of Ann's senior management and board governance experience is in the real estate and mining industries, as well as through volunteer work. She has also worked extensively with tax and year end accounting. 20

21 BOARD OF DIRECTORS Knowledgeable, Experienced, Proven Jeremy Poirier Bearing President, CEO and Director Patrick Cussen Director Mr. Cussen is an industrial civil engineer with 45 years of mining industry experience. He has extensive experience in minerals and mining and specifically in marketing, sales, project exploration, project evaluation and economic assessments. Mr. Cussen is currently the Chairman of the Board of Li3 Energy Inc. ( Li3 ). As previously announced, the Company has entered into a binding letter of intent to acquire an interest in the Maricunga Lithium Project in Chile from Li3. Mr. Cussen has served as the Chairman of The Center for Copper and Mining Studies for 15 years, Cesco, a Chilean think tank on mining. Mr. Cussen holds an engineering degree and a Masters of Economics from the University of Chile. Kirk Shaw Director Mr. Shaw retains extensive experience with public company disclosure requirements, tax law and business development. Shaw is currently the head of Odyssey Media Inc. With offices in Vancouver, Los Angeles and Brisbane, Kirk actively finances and produces multimillion dollar movies with stars such as John Cusack and Sharon Stone. His past work in the entertainment industry includes the academy award winning The Hurt Locker as well as leading Canada's largest independent film and television production company where he produced, financed and delivered over 165 movies, series and documentaries (aggregate revenue exceeding $600 million) to clients such as Sony and NBC Universal. In addition to the entertainment industry, Kirk Shaw is an active director, officer and investor in exploration companies listed on Canadian stock exchanges. Timothy W. Heenan Director Mr. Heenan has over 26 years of exploration experience throughout the Americas, and has worked exclusively in South and Central America since Mr. Heenan has a wide range of diversified exploration experience throughout a range of geographic and geologic environments and is considered to be a highly skilled explorationist. Mr. Heenan has extensive experience in design and implementation of generative to advanced exploration activities, and has been directly involved in the discovery and advancement of several high profile projects which are currently in production, and others entering into their feasibility stage. Mr. Heenan is a founder of Mirasol Resources Ltd, and a former director of Mirasol for over 12 years since its inception and listing on the Canadian Ventures Exchange. Mr. Heenan has been based in Mendoza, Argentina with Mirasol as Exploration Manager since its inception in 2003, and prior to that lived and worked for numerous mining and exploration companies in Chile for over a decade. Amar Balaggan Director Mr. Balaggan is a Certified General Accountant (C.G.A., C.P.A.) and holds a Bachelor of Technology degree in Accounting, along with a Diploma in Financial Management, from British Columbia Institute of Technology (BCIT). He was one of the founding members of Odyssey Media Inc. and has been serving as Odyssey Media Inc.'s Corporate Controller since Mr. Balaggan has worked as the Corporate Controller at Insight Film Studios Ltd, as the treasurer for a local non-profit, as an tax advisor / accountant at a local Chartered accountant Firm and has also served as the Chief Financial Officer at Sophia Capital Corporation (TSX-V) and Folkstone Capital Corporation (TSX-V). 21

22 TECHNICAL ADVISORS Vast Experience in Lithium Brine Deposits in South America Don Hains, P. Geo. Qualified Person under TSX NI Standards An industrial minerals exploration and economic geologist with over 35 years of experience in development, use and analysis of industrial minerals properties; Prepared valuation reports to feasibility and market studies in Canada, United States, Europe, Africa and Asia; Registered Professional Geoscientist (Ontario License #0494); Author of CIM Best Practice Guidelines for Estimation of Lithium Brine Resources and Reserves. Frits Reidel, CPG Qualified Person under TSX NI Standards Hydrogeologist with 25 years of working experience on water, brine and infrastructure related projects for the mining industry in North and South America; Previously involved with the reserve evaluation and feasibility study of Orocobre Ltd; Technical advisor to Lithium Americas Corp on the Cauchari Lithium Project, and participated in the initial resource evaluation of Salar de Hombre Muerto for FMC. Robert Cameron P. Geo. Advisor & Qualified Person Mr. Cameron is a graduate of Carleton University and a member of the Association of Professional Engineers and Geoscientists of British Columbia. Mr. Cameron has over 30 years of experience in the mining industry. He was the Chief Executive Officer (and President until Aug 2010)of Valley High Ventures from Sept 2008 to March 2011, when it was sold for ~$120 million. He held the position of Vice President and Manager of Exploration for Phelps Dodge Corporation of Canada Limited (a subsidiary of Freeport McMoran Copper and Gold Inc.) between 2001 and Mr. Cameron's career includes all aspects of mining exploration throughout the world including North and South America, Asia and Europe. Mr. Cameron is a qualified person for the purposes of NI Peter Ehren, Aus IMM Independent consultant, expert in development processes and technical and economic assessment of new projects, especially relating to lithium (brine and minerals) and potassium. Previously evaluated projects in China, Chile, Argentina, and Australia and currently working for Orocobre. Macarena Gonzalez Environmental consultant, expert in the environmental and social fields, current consultant and partner of Process and Environmental Consultancy; Handled environmental matters and developed DIA s and EIA s for Salar de Olaroz, Salar de Maricunga, Salar de Aguas Calientes, among others. Pedro Pavlovic Chemical senior engineer with 40 years of experience in project development, particularly in production of potassium nitrate, lithium carbonate, potassium chloride, and iodine. Previously prepared sampling procedures for brine, evaporation design for test work and lithium processing routes. Carlos Espinoza, PhD Current Associate Professor of Universidad de Chile, extensive experience in hydrogeological simulation and modeling, baseline studies evaluation of environmental impact studies and water resources, and evaporation well simulation (Salar de Atacama). 22

23 BEARING CAPITALIZATION Capital Structure & Financial Position Current Insider Ownership: 8% Insider Ownership Post-Transaction: 16% 23

24 CONTACT INFORMATION Jeremy Poirier President & CEO (604) TSX-V:BRZ OTCQB:BRGRF