the presentation

The only advanced pre-production
lithium project in Chile
Corporate Presentation
February 2016
1
Disclaimer
Any statements contained herein which are not statements of historical fact may be
deemed to be forward-looking statements, including, without limitation, statements
identified by or containing words like "believes,” “expects,” “anticipates,” “intends,”
“estimates,” “projects,” “potential,” “target,” “goal,” “plans,” “objective,” “should”, or similar
expressions. The Company gives no assurances the assumptions upon which such
forward-looking statements are based will prove correct. Forward-looking statements
involve risks, uncertainties and assumptions, and are based on information currently
available to us. Actual results may differ materially from those expressed herein due to
many factors, including, without limitation: validation of the POSCO technology; obtaining
and the issuance of necessary government consents; confirmation of initial exploration
results; the Company's ability to raise additional capital for exploration; development and
commercialization of the Company's projects; future findings and economic assessment
reports; issuance of necessary government consents; the Company's ability to identify
appropriate corporate acquisition or joint venture opportunities in the lithium mining sector
and to establish appropriate technical and managerial infrastructure; political stability in
countries in which we operate; and lithium prices. For further information about risks faced
by the Company, and its Maricunga Project, see the “Risk Factors” section of the
Company’s Form 10K, filed with the SEC. The Company undertakes no obligation to
update any forward-looking statement contained herein to reflect events or circumstances
which arise after the date of this release.
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Transaction Highlights
CAD$3M Equity
Financing
Timely investment in an
emerging commodity.
This time the world is
ready for lithium.
US$0.2M
Consideration
Maricunga Lithium Project
Wealth Minerals
Shareholders
55 million shares
Li3 Energy
Shareholders
485 million shares
50%
50%
Post-Transaction WEALTH MINERALS
110 million shares
Ongoing exposure to stalwart
precious metals in
Central and South America
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Li3 Energy
Investment Highlights
Lithium
– Significant growth potential in the medium and long term
– Brine projects significantly lower operational costs compared with hard rock
Chile
– The best lithium resources in the world
– Recent announcements by the Chilean government provide positive steps for the lithium industry
and show commitment to provide mechanisms for advancement of new projects
– Chilean President directly instructed Codelco to move forward with its Maricunga and Pedernales
lithium claims to promote new lithium production
Maricunga
– Located in the 2nd largest lithium bearing brine deposit in Chile with exceptional grades
– 4th top brine lithium project in the world out of 37 other brine salars
– NI 43-101 Measured Resource for minimum 20-year life with significant upside potential
POSCO
– 21% cornerstone shareholder with $18mm invested to date
– POSCO owns proprietary Technology, pilot tested on Maricunga and potential to significantly change
the Lithium industry through faster recovery and lower cost structure
Management
– Chile-based with top level technical team and significant experience in mining and financing
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Maricunga Lithium Project
Top tier project, advanced exploration
Located in the northeast section of the Salar de
Maricunga in Region III of Atacama in northern Chile
– Previous studies (CORFO) indicates Maricunga would have a
production cost lower than Salar de Hombre Muerto
signumBOX, a leading, independent
ranked Li3’s Maricunga Project
–
–
–
–
research firm,
4th top brine lithium project in the world
Highest ranked undeveloped lithium project in Chile
2nd highest quality deposit of Li in Chile (after Atacama)
Better than Argentinean brines which have lower Li and K
concentrations
Maricunga
Project
Lithium (g/l)
Potassium (g/l)
Magnesium (g/l)
Mg/Li
K/Li
K/Mg
1.25
8.97
8.28
6.63
7.18
1.08
(1)
Salar de
(2)
Salar de
Hombre
Salar de
(2)
(2)
Atacama
Muerto
Olaroz
1.84
22.63
11.74
6.40
12.33
1.93
0.74
7.40
1.02
1.40
9.95
7.26
0.69
5.73
1.66
2.40
8.30
3.46
Salar de
Cauchari(3)
0.59
4.85
1.42
2.43
8.30
3.58
(1) NI 43-101 report prepared for Li3 Energy Inc. dated April 17, 2012
(2) NI 43-101 report prepared for Orocobre Ltd. dated May 13, 2011
(3) NI 43-101 report prepared for Lithium Americas Corp. dated July 11, 2012
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Maricunga Lithium Project
1,888 hectares in the Salar de Maricunga
Li3 Energy Inc.
(POSCO = 21%
Shareholder)
Minera Salar
Blanco SpA
(“MSB”)
49%
51%
Minera Li Energy SpA
100%
60%
Grandfathered project
Other
32%
8%
Litio Property
Cocina Property
Li3 Energy Inc
MSB
51%
MSB
49%
Li3 Energy Inc
MSB
63%
Other
8%
29%
NI 43-101 resource
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Maricunga Lithium Project
1,888 hectares in the Salar de Maricunga
Litio 1-6: 1438 hectares
– NI 43-101 Measured Report shows 630,432 t
lithium carbonate and 1,628,409 t KCl
– Average concentration (g/l): Li:1.25, K:8.97
– Supports 15,000 tpa Li2CO3 @ 20 years
– 60% owned via Chilean entity Minera Li Energy
SpA (another 32% owned by our local partner)
Cocina: 450 hectares
–
–
–
–
Adjacent to Litio 1-6
Expected similar concentration than Litio 1-6
Grandfathered right to exploit lithium
100% owned by Chilean entity Minera Li Energy
SpA
– $500k work program to provide NI 43-101
Inferred Resource within 6 months
Li3 owns 49% of Minera Li Energy SpA with strong
local partner
Strong potential for further consolidation and growth
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Maricunga Project Resource
NI 43-101 compliant
In April 2012, Hains Technology & Associates completed a NI 43-101 Compliant Measured
Resource Report with the following lithium and potassium resources (as compounds) estimated at:
Lithium Carbonate (tonnes)
Measured
Inferred
603,960
59,304
K
8.97
Li
1.25
Potash (tonnes)
Total
Measured
Inferred
663,264
1,482,638 145,771
Average Concentration (g/L)
Mg
8.28
Ca
12.42
SO4
0.72
B
0.61
Mg/Li
6.63
Total
1,628,409
K/Li
7.18
(SO4+2B)/
(Cs+Mg)
0.184
The April 2012 NI 43-101 Compliant Measured Resource Report includes the following conclusions
and recommendations:
– “Results of airlift testing during the RC exploration drilling program and pumping tests on test
trenches indicate that future brine production can be achieved through a combination of
production wells and open trenches”
– “The analyses of brine chemistry indicate that the brine is amenable to lithium and potash
recovery through conventional technology”
– “It is believed that through the application of proprietary technology developed by Li3’s strategic
partners, lithium recovery from the Maricunga brine can be significantly enhanced and may range
from 45 percent to more than 70 percent”
– “It is the recommendation of the authors that a full feasibility study be completed for the
Project”
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Maricunga Exploration 2011/2012:
Site map and camp
Legend:
1 – 58: 2007 Campaign Drill Holes
S1 – S6: Seismic Lines
C1 – C6: Sonic Core Boreholes
P1 – P2: Production Wells
Camp is located 4km northeast from
the Project
Rock Drilling / Boart Longyear Camp
Trucks
Dormitories
Lab
Restrooms
Office
Storage
Core Samples
Showers
Kitchen & Dining
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Maricunga Exploration 2011/2012:
Sonic drilling (C-1 to C-6) and core samples
Sonic Drilling Truck
at C-3
Sonic Drilling Truck
at C-3
C-3 Core Samples
Lab Samples
Core Sample
C-3 Core Samples
Sonic Drill Hole
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Maricunga Exploration 2011/2012:
P-1 and P-2 production wells
Production Well Pump,
Located at P-1 and P-2
Monitoring Well
(Total of 4 per
Production Well)
P-2 and
Monitoring Well
Well Pump
Trench
Brine
Pumping
Well Drilling Truck
P-2 Samples
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Partnership with POSCO
Strategic Korean partner
A blue chip multinational company based in South Korea
Strategic partner and largest individual shareholder of Li3
–
–
–
–
Signed strategic partnership with Li3 in 2011
Invested $18m in two equity tranches: $8m in 2011 ($0.21/sh) and $10m in 2012 ($0.16/sh)
Represented on Li3’s Board of Directors
Owns 21% of Li3’s outstanding shares
Built and tested a pilot plant for new technology in Chile
– Located near the Salar de Maricunga; constructed and operated at POSCO’s sole expense in
2013
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New Lithium Extraction Technology
Increases efficiency
Conventional lithium extraction from salt brines using natural solar evaporation
– Currently used by market leaders SQM, Rockwood, FMC and Orocobre and hasn’t seen any
technological advances in the last 20 years
– Typical processing time of 12-18 months (depending on evaporation rates) for extraction of lithium
with typical recoveries of 40-50%
– Evaporation ponds require a large land footprint and represent one of the largest capital
expenditures for the project
– Evaporation and production rates are sensitive to elevation and climate conditions
POSCO’s proprietary technology (1)
– Proven at lab scale and in three separate pilot plants (Korea, Chile and Argentina).
– Currently evaluating alternatives for industrial-scale production.
– Higher lithium recoveries (typically 70-80%), thereby enabling faster and greater recovery of lithium
from the same brine resource
– Significantly reduces the use of evaporation ponds, thereby reducing capital requirements, time to
market, required land footprint, and variability of production rates and quality
– Lowers processing times (to under 8 hours), thereby reducing working capital requirements and
time to market
– Paradigm shift in production methods that will revolutionize the lithium industry
(1)
Li3 management, POSCO, BN Americas article dated March 12, 2013
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Li3 Energy Vision and Way Forward
A significant player in the lithium industry
Maricunga Project Advancement
– Li3 and local partner MSB will advance the Maricunga project starting with the Cocina claims
which are grandfathered and not subject to new legislation
–
Initial work will include water and drilling permits as well as a plan to obtain an NR 43-101 Resource and
Reserve Report for all of the Li3/MSB claims which will include Cocina and complement the previous report.
$500k work program envisioned over 6 months
– Pursue further growth opportunities within the Salar de Maricunga (Codelco and others)
– Continue negotiations with Chilean government re permitting for exploitation of Lithium
Pursue Opportunities for Future Growth
– Several opportunities identified by the Li3 team
– Li3 is uniquely positioned through
•
•
•
POSCO relationship and access to POSCO technology
Successful execution with Maricunga and regional/market knowledge
Focus will be on brine projects in South/North America
Other Growth Opportunities
– Potential to enter into other related markets from Lithium by-products (potassium nitrates)
– Opportunities exist in Chile for niche markets (similar to SQM model)
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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 nonconcessible substance.
Only mining exploitation concessions initiated before 1979 are authorized for the exploitation of
lithium. The Cocina mining concessions fall under this category
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
Government strategy fits well with Li3/MSB plan to advance Cocina claims as a "starter" project.
Government initiatives bring Chile to the forefront to advance lithium production in one of the best
jurisdictions worldwide, attracting world class strategic partners
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Management Team
Knowledgeable, Experienced, Local
Luis Saenz – Chief Executive Officer, President, and Director
Former head of Standard’s Bank PLC. mining and metals team, Americas
Joined Standard Bank Plc’s investment banking unit in New York (1997) and relocated to Peru
(1998) to establish Standard’s local Rep office to lead its mining and metals organization in Latin
America
– Standard Bank (JSE:SBK) is South Africa’s largest bank, conducting operations worldwide with a
focus on emerging markets
Previously worked for Pechiney World Trade in base metals trading before joining Merrill Lynch as
VP Commodities (Latin America)
Currently Director of Atico Mining and CEO of Compañia Minera Quiruvilca
Over 25 years of experience in mining finance and metals trading
Luis Santillana – Chief Financial Officer
Over 15 years mining industry experience in finance and fund raising, debt facilities, deal negotiation
and execution, strategic and financial planning, treasury management, and financial and
management reporting
Former Strategic Planning Manager for ENRC PLC, a $7bn revenue diversified mining company
listed on the LSE (FTSE 100)
Former member of the core management team at Hochschild Mining plc, a Peruvian gold and silver
producer, that led Hochschild’s successful IPO and listing on the LSE (FTSE 250). Financial
Manager for the Peruvian subsidiaries
MBA from IESE Business School (Spain) and a Bachelor’s Degree in Industrial Engineering from 16
Universidad de Lima (Peru)
Technical Advisors
Vast experience in lithium brine deposits in
South America
Don Hains, P.Geo – Qualified Person under TSX NI
43-101 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 43101 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
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)
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Board of Directors
Active and supportive board with a wealth of
experience
Patrick Cussen – Chairman of the Board
35+ years minerals and mining experience; President of Celta,
a mining consulting company based in Chile ;Former Managing
Director of Chile Copper Ltd., subsidiary of Codelco, in
London; Chairman of the Board of Cesco, the Chilean thinktank on mining
Luis Saenz – CEO, President, and Director
Gi-Chen Eom – Director
Mr. Eom is a designee of POSCO Canada, Ltd. (“POSCO”). Mr.
Eom has worked for POSCO since December 1990, starting his
career as a steelworks engineer. Mr. Eom joined the steel
business division of POSCO in 2001 and has served as the Vice
President of PosLX Business Planning Team in its New Business
Development Group, Finance and Investment Division since
September 2015. Mr. Eom received his B.A. in Mechanical
Engineering from Sungkyunkwan University (SKKU) in 1991.
Patricio Campos – Director
40 years minerals and mining experience in project exploration,
evaluation, technical and economic preparation; Consultant to
Anglo American and SQM (Salar de Atacama project), Falcon
Mines, MAGSA, ACF Minera S.A., Former Professor of Mining
Economy and due diligence at the Mining Department,
Universidad de Chile and Instituto de Ingenieros de Minas de
Chile
David Wahl – Director
Current Chairman of Southampton Associates, a Geological and
Engineering Consulting firm, specializing in mining and technical
issues for corporate clients, financial institutions and governments
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Contact Information
Luis Saenz
Chief Executive Officer
[email protected]
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