Pure Energy - Corp Presentation 120117 Compressed · Chief Financial Officer Paul has more than 35...

CORPORATEPRESENTATIONDECEMBER2017

Certainstatementscontainedinthispresentation,includingallstatementsthatarenothistoricalfacts,containforward-lookingstatementsandforward-lookinginformationwithinthemeaningofapplicablesecuritieslaws(“forward-lookinginformation”).Suchforward-lookinginformationincludes,butisnotlimitedto,statementsorinformationwiththerespecttotheoverallobjectivesandstrategicplans,workprograms,explorationbudgetsandtargetsandmineralresourceestimatesofPureEnergyMineralsLimited(“PureEnergy”orthe“Company”).ReadersshouldreviewalloftheCompany’spublicdisclosureincludingitsmostrecentAnnualInformationFormandtheriskfactorscontainedtherein,thetechnicalreportsonitsproperties,anditsauditedfinancialstatementsandManagement'sDiscussionandAnalysis (MD&A),allasfiledonwww.sedar.com fromtimetotime.

Forward-lookinginformationincludes,butisnotlimitedto,statementsrelatedtoactivities,eventsordevelopmentsthattheCompanyexpectsoranticipateswillormayoccurinthefuture,including,withoutlimitation;statementsrelatedtotheCompany'sreleaseofthePEATechnicalReport(“PEA”)fortheClaytonValleyLithiumProject(“Project”);theeconomicanalysisoftheProject;themineralresourceestimatefortheProject;theestimatedannualproductionofLiOH-H2OandLCE;theavailabilityanddevelopmentofmoresustainabletechnologiesforuseattheProject;theexpectedminelife;theestimatedNPVoftheProject;theestimatedIRRoftheProject;estimatedaverageoperatingcosts;estimatedcapitalcosts;estimatedEBITDA;theestimatedpaybackperiodfortheProject;theestimatedtimelineforconstructionoftheProject;theestimatedproductionscheduleattheProject;anticipatedchemistryofbrinesattheProject;expectedgrowthinthemarketforlithiumhydroxide;anticipatedchangesinbatteryformulationtechnologies;estimatedmarketpricesforlithiumhydroxide;anticipatedlithiumrecoverylevelsattheProject;expectedpilotplanttestingattheProject;designworkattheProject;andthedevelopmentofatimelineforcompletionofafeasibilitystudyfortheProject.Forward-lookinginformationisoftenidentifiedbytheuseofwordssuchas"plans","planning","planned","expects"or"lookingforward","doesnotexpect","continues","scheduled","estimates","forecasts","intends","potential","anticipates","doesnotanticipate",or"belief",ordescribesa"goal",orvariationofsuchwordsandphrasesorstatesthatcertainactions,eventsorresults"may","could","would","might"or"will"betaken,occurorbeachieved.Forward-lookinginformationisbasedonanumberoffactorsandassumptionsmadebymanagementandconsideredreasonableatthetimesuchinformationisprovided.Forward-lookinginformationinvolvesknownandunknownrisks,uncertaintiesandotherfactorsthatmaycausetheactualresults,performance,orachievementstobemateriallydifferentfromthoseexpressedorimpliedbytheforward-lookinginformation.

AnumberofotherfactorsmayadverselyimpactPureEnergyandtheProject,including:theCompany’sinabilitytocompletefurthermineralresourceandmineralreserveestimates;theinabilitytocompleteasubsequentfeasibilitystudy;theinabilitytoanticipatechangesinbrinevolumeorgradedueanumberoffactors;changestotheeconomic analysis;thefailuretoobtainnecessarypermitstoexploreanddeveloptheProject;environmentalissuesordelays;inabilitytosuccessfullycompleteadditionaldrillingattheProject;andinabilitytoobtainfinancingforfutureexplorationanddevelopmentworkandconstructionofaplantattheProject.AlthoughPureEnergyhasattemptedtoidentifyimportantfactorsthatcouldcauseactualactions,events,orresultstodiffermateriallyfromthosedescribedintheforward-lookinginformation,theremaybeotherfactorsthatcauseactions,events,orresultsnottobeasanticipated,estimated,orintended.Therecanbenoassurancethatforward-lookinginformationwillprovetobeaccurate.Theforward-lookinginformationcontainedhereinispresentedforthepurposeofassistinginvestorsinunderstandingtheCompany'splan,objectives,andgoalsandmaynotbeappropriateforotherpurposes. Accordingly,readersshouldnotplaceunduerelianceonforward-lookinginformation.PureEnergydoesnotundertaketoupdateanyforward-lookinginformation,exceptinaccordancewithapplicablesecuritieslaws.

CAUTIONARYSTATEMENT

2Mineralresourceswhicharenotmineralreservesdonothavedemonstratedeconomicviability.Thecategoryofinferredresourceistheleastreliableresourcecategoryandissubjecttothemostvariability.Untilmineralreservesandresourcesareactuallyminedandprocessed,thequantityofmineralreserveandresourcegradesmustbeconsideredasestimatesonly.PatrickHighsmithMSc.,CPG.,isaqualifiedpersonasdefinedbyNI43-101,andhassupervisedthepreparationofthescientificandtechnicalinformationthatformsthebasisforthispresentation.Mr.HighsmithisnotindependentoftheCompanyasheisadirector.

ThePEAisbaseduponaprocessflowsheetthatmaychange,whichwouldimpactallcostsandestimates.OperatingcostsfortheProjectwerebaseduponassumptionsincludingfutureenergycosts,watercosts,labor,regulatorycostsandothervariablesthatarelikelytochange.Capitalcostswerebaseduponplantequipmentandotheritemsthoughttobenecessaryforproduction.Lithiumhydroxidemonohydratepriceforecastswerebaseduponthird-partyestimatesandmanagementassumptionsthatmaychangeduetomarketdynamics.Changesinestimatedcoststoacquire,construct,install,oroperatetheequipment,orchangesinprojectedpricing,mayadverselyimpactProjecteconomics.

TheeconomicanalysisincludedinthePEAisbaseduponinferredmineralresourcesonly.Mineralresourcesthatarenotmineralreservesdonothavedemonstratedeconomicviability.ThePEAispreliminaryinnatureandincludesinferredmineralresourcesthatareconsideredtoospeculativegeologicallytohave theeconomicconsiderationsappliedtothemthatwouldenablethemtobecategorizedasmineralreserves.ThereisnocertaintythattheProjectenvisionedbythisPEAwillberealized.Themineralresourceestimates,uponwhichthePEAisbased,relyuponassumptionsoutlinedinthe“ResourceEstimate”sectionofthetechnicalreportrelatingtothePEA.Somefiguresintheresourceestimatemayhavebeencalculatedusingafactortoconvertshorttonstometrictonnes.

CAUTIONARYSTATEMENT(cont.)

3Mineralresourceswhicharenotmineralreservesdonothavedemonstratedeconomicviability.Thecategoryofinferredresourceistheleastreliableresourcecategoryandissubjecttothemostvariability.Untilmineralreservesandresourcesareactuallyminedandprocessed,thequantityofmineralreserveandresourcegradesmustbeconsideredasestimatesonly.PatrickHighsmithMSc.,CPG.,isaqualifiedpersonasdefinedbyNI43-101,andhassupervisedthepreparationofthescientificandtechnicalinformationthatformsthebasisforthispresentation.Mr.HighsmithisnotindependentoftheCompanyasheisadirector.

ANEWMANAGEMENTTEAMWITHTHERIGHTEXPERIENCETODELIVER

PAULZINKChiefFinancialOfficerPaulhasmorethan35yearsexperienceinprojectfinance,financialanalysis,strategicplanning,royalties,mergersandacquisitions,andbusinessdevelopment.BeginninghiscareerininvestmentbankingwithJ.P.Morgan&Company,hehasheldseniormanagementpositionsatInternationalRoyaltyCorporation,RareElementResourcesLtd.,EurasianMineralsInc.,PegasusGoldInc.,andKochIndustriesInc.

PaulholdsaB.A.inEconomicsandInternationalRelationsfromLehighUniversity.

WALTERWEINIGMSc,CPG,PPMVPProjects&PermittingWalterhasnearly30yearsofexperienceinmininghydrogeology,permitting,andprojectmanagementatsitesaroundtheglobe.Hehasmanagedmulti-disciplinaryengineeringandscientificteamstoaccomplishcomplexdesignandpermittingprojectsinsurfaceandundergroundminingandenvironmentalarenas.

WalterhasaBScingeologyfromtheUniversityofWisconsinandanMScinhydrologyandwaterresourcesfromtheUniversityofArizona.

PATRICKHIGHSMITHMSc,CPG;CEO,Director

Seniorminingprofessionalwithover25yearsmulti-commodityexperience,includingexploration,operations,andbusinessdevelopmentwithBHPBilliton,RioTinto,andNewmont.FoundingCEOofLithiumOneInc.andco-engineeroffriendly2012mergerwithGalaxyResources.

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LITHIUMDEMANDISDRIVINGEXPLORATION…ANDANEXPLOSIONOFCOMPANIES!

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CONSENSUSISGATHERINGAROUND500KTPABY2025…BATTERIESAREDRIVINGDEMAND

77BenchmarkMineralIntelligence,LithiumHydroxideMarketForecast,April,2017

GLOBALEVBUSINESSISJUSTSTARTINGTOMAKEWAVES

GlobalAutoSalesin2016at88MVehicles:~$2Trillion

AreWeReadyfora$300BEV

Industry?

88

$0

$200

$400

$600

$800

$1,000

$1,200

2010

2011

2012

2013

2014

2015

Source:BloombergNewEnergyFinance 99

AverageBatteryPackPrice(BEV&PHEVBatteryPacks)

$/kW

h

$0

$200

$400

$600

$800

$1,000

$1,200

2010

2011

H12012

H22012

H12013

H12014

H22014

H22015

AverageEVBatteryPricePercentageChangeBetweenPeriods(2010– H22015)

$/kW

h

-20% -14% -7% -7% -5% -5% -35%

WHYISTHISFORREALTHISTIME?BATTERYCOSTSAREPLUMMETING

World-ClassInfrastructurePowerLines,Roads,andNorthAmerica’sOnlyLithiumProducer…

CLAYTONVALLEYNEVADA– APRODUCTIVEDISTRICTCLAYTONVALLEY,NEVADA– HOMETOANOLDPRODUCERANDNEWPOTENTIAL

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THECLAYTONVALLEYPROJECTCONTINUESTOGROW

EXPANDEDPUREENERGYCLAIMS:

ExistingClaims: 24,600ACRES

ClaytonNE: 1,060ACRES

Triton: 390ACRES

TOTAL:26,050ACRES

ExistingClaims

AlbemarleSilverPeakMine

AdvantageClaimAreas

Wells

TRITONCLAIMBLOCK CLAYTONNECLAIMBLOCK

NewAcquisitionsfromAdvantageLithium:- AdjoinsAlbemarle’sSilverPeakMine- Includes6ExplorationWellsonEastSide- AverageLithiumGrade:204mg/L- MaximumLithiumValues:322mg/L- AllShareTransactionfor100%Interest

AREASOFEXPLORATIONFOCUSIN2018

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CLAYTONVALLEYPROJECT– SUMMARYOFPRELIMINARYECONOMICASSESSMENT(PEA)

KeyEconomic Indicators(CurrencyinUS$)

AfterTax - Net PresentValue(8%Discount) $264million

AfterTax- InternalRateofReturn(IRR) 21%

Average AnnualProduction(LithiumHydroxide) 10,300 tonnes

AverageAnnualProduction(Lithium CarbonateEquivalent) 9,100 tonnes

MineLife 20 year

Production Royalties 3%

Steady-State AnnualEBITDA*(nameplateproduction) $100million

PaybackPeriod(fromcommencementofproduction) 4.4 years

*- EBITDAisanon-IFRSearningsmeasurewhichdoesnothaveanystandardizedmeaningprescribedbyIFRSandthereforemaynotbecomparabletoEBITDApresentedbyothercompanies.EBITDArepresentsearningsbeforeinterestexpense,incometaxes,depreciationandamortization.Investorsarecautionedthatthisnon-IFRSfinancialmeasureshouldnotbe construedasanalternativetoothermeasuresoffinancialperformancecalculatedinaccordancewithIFRS. 1313

DescriptionofCapitalCosts US$

BasinActivities $29M

PlantFacilities&Equipment $100M

Infrastructure&Utilities $30M

DirectCosts $159M

IndirectCosts* $34M

Contingency $56M

Owner’sandOtherCosts** $48M

TotalInitialCapitalCosts $297M

SustainingCapitalCosts(LoM) $62M

*- IndirectCostsarethosecoststhatcannotbedirectlyattributedtotheconstructionofthephysicalfacilitiesbutarerequiredtosupporttheconstructioneffort.Itemsincludedinthiscategoryinclude,butarenotlimitedto:spareparts,freight,EPCMservicesandstart-upservices.

**Owner'sCostsencompassallthosecostsspecificallyattributabletotheOwnerthatarenotincludedelsewhereintheestimate.Typicalitemsincludedinthiscategoryinclude,butarenotlimitedto:landownershipcosts,feasibilitystudycosts,legalfees,permittingcostsandfees,Ownerprojectsupportstaff,specialistconsultants,andoperationsorganizationestablishment(includingtraining,etc).OtherCostsincludeinitialpurchaseandchargingoftheplantwiththeproprietarysolvent.

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AFIRSTPASSESTIMATEOFCONSTRUCTIONCOSTS

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DescriptionofSteadyStateOperatingCosts(US$)UnitCostLiOH·H2O

UnitCostLCE

%ofTotal

Labor $427/t $485/t 14

Power $394/t $447/t 12

OperatingSupplies&Services $2,227/t $2,528/t 69

MaintenanceSupplies $169/t $192/t 5

Total $3,217/t $3,652/t 100%

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FIRSTPASSESTIMATEOFDIRECTOPERATINGCOSTS– VERYENCOURAGING

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KEYASSUMPTIONS:

100%EquityFinancing

ProductionRamp-upover~15months:

4,100tonnesLiOH�H2Oin2021



ConstructionCommencingin2019

EffectiveTaxRateof20%

Theeconomicanalysisisbaseduponinferredmineralresourcesonly.Mineralresourcesthatarenotmineralreservesdonothavedemonstratedeconomicviability.ThisPEA is preliminaryinnatureandincludesinferredmineralresourcesthatareconsideredtoospeculativegeologicallytohavetheeconomicconsiderationsappliedtothemthatwouldenablethemtobecategorizedasmineralreserves.ThereisnocertaintythattheProjectenvisionedbythisPEAwillberealized

NEWTECH=HIGHMARGINS

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0

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20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

MILLIONS(USD

)

YEAR

REVENUE

DIRECTCOSTS

NON-OPERATINGCOSTS

LITHIUMHYDROXIDEBASECASEPRICINGMODELFORCLAYTONVALLEYPROJECT

ADynamicPricingModelBasedonRealMarketAnalysis

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BaseCasePricingusedinPEAFinancialModel

VERYCOMPETITIVEDIRECTPRODUCTIONCOSTS

PUREENERGYEstimatedDirectCosts$3,217/tonne

18SlideborrowedfromNemaska Lithium

PHASE3DRILLPROGRAM– IMPORTANTINPUTSTONEWRESOURCE

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Li=209mg/L

StrongPumpTest

HigherGradeat

Depth

Li=70mg/L

Li=175mg/L

Li=134mg/L

Variabledrainableporositywithgeologyanddepth;assignedaconservative6%tothemodel

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CLAYTONVALLEYPROJECT:HOSTAQUIFERS

Porosity10– 20%

Porosity4– 10%

PorosityHighlyVariable

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Magnesium*toLithiumRatio:2.9

Avg CalciumContent(mg/L)*:1,536

Sulfate*toLithiumRatio:18.2

WORLD-CLASSCHEMISTRY

RESOURCES&KEYTECHNICALPARAMETERS

NOTE:Mineralresourcesthatarenotmineralreservesdonothaveanydemonstratedeconomicviability.Inferredresourcesaretheleastreliableresourcecategoryandaresubjecttothemostvariability.PleaseseetheCompany’sfulltechnicalreportatwww.sedar.comorwww.pureenergyminerals.com fordetailsonhowtheresourcewasderivedandforthereportingdetailsintermsoflithiummetal(Li)andlithiumhydroxidemonohydrate(LiOH�H2O).

HIGHERCONFIDENCE,BETTERUNDERSTOODIN3D,POISEDFORGROWTHINFY2018

Lithium Resource LCE

(metric tonnes)Average Lithium Grade

(mg/L)

816,000

TOTAL INFERRED SOURCES

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TOTALINFERREDRESOURCES

218,000 123

*Chemistryderivedfromglobalaveragecalculationsfromdatabase,June2017

LiP™ LiSX™ LiEL™

NoEvaporation

Ponds

RealTimeRecovery

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THEREISABETTERWAY:PRELIMINARYFLOWSHEETFORNEWLITHIUMPROCESS

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THEREISABETTERWAY:MAKINGITAREALITYWITHAPILOTPLANT

Preliminary3DPerspectiveDrawingofClaytonValleyPilotPlant

CLAYTONVALLEYEXECUTIONSCHEDULE

ClaytonValleySouthExecutionSchedule 2017 2018 2019 2020 2021 2022

ProjectActivity Duration Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4EnvironmentalBaselineStudies 12monthsPermittingforPilotPlant 12monthsDesignofPilotPlant 9monthsProcurementofPilotPlant 9monthsConstructionofPilotPlant 6monthsOperationofPilotPlant 6monthsEnvironmentalImpactAssessmentorStudy 12monthsPermittingforProjectExecution 12monthsFeasibilityStudy- BasinActivities 15monthsFeasibilityStudy- PlantActivities&FeasibilityReport 9monthsProjectFinancing 3monthsDesign&Engineering- ProjectExecution 9monthsProcurement&Delivery- ProjectExecution 12monthsConstruction 15monthsCommissioning 6monthsRamp-Up 9months

RealisticandAggressive - It’sallaboutthePilotPlant

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FÉNIXMINE

SALARDEATACAMA

LITHIUMTRIANGLE

TERRACOTTAPROJECT,ARGENTINA

LITHIUMTRIANGLE

TERRACOTTAPROJECT,ARGENTINA– WORLDCLASSDISCOVERYPOTENTIAL

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Pocitos Salar

Largeanddeepclosedstructuralbasinwithmultipleaquifers

Majorstructures– faultsandfolds

Recentvolcanismandactivehydrothermalsystems

Complexmetasedimentary andvolcanicrocksinbasin

Lithiumindicatedinnear-surfacebrinesanddeepergeophysicaltargets

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TERRACOTTAPROJECT– FAVORABLEGEOLOGYANDNEWGEOPHYSICALTARGETS

TERRACOTTAPROJECT– VESRESULTS:“THERE’SSALTWATERDOWNTHERE”

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Interpretedconductivematerial(red)istheprimedrilltarget

NEXTSTEPS

SurfaceSamplingUnderway:Lithiumanomalies

ZonationofbrinechemistryGeologicalmapping

EnvironmentalImpactReportUnderway

Planningfor5to10drillholes:Mixtureofcoreandrotary

SchedulingwithDrillingCompanies

DrillingExpectedtoCommenceinQ12018

TERRACOTTAPROJECT– THEANOMALYHASHUGESCALE

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www.PureEnergyMinerals.com

PatrickHighsmith,President&[email protected]

303.317-6857

OTCQB:PEMIFTSXV:PE

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Pure Energy - Corp Presentation 120117 Compressed · Chief Financial Officer Paul has more than 35...

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