Q3 2022 Aqua Metals Inc Earnings Call
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Hello, and welcome to the Aqua metals third quarter Investor call. At this time, all participants are in a listen only mode.
And answer session will follow the formal presentation you may ask a question at any time by typing into the ask a question for you chunk of that side of your screen. If anyone should require operator assistance. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded its now my pleasure to turn the call over to Bob Myers of F. N K Investor Relations. Please.
Go ahead Sir.
Thank you operator, and thank you everybody for joining earlier today Aqua metals issued a press release, providing an operational update and discussing financial results for the third quarter ended September 32022.
This release is available on the Investor Relations section of the company's web site Www Dot Aqua metals Dot com.
Hosting the call today are Steve Cotton, President and Chief Executive Officer, Judd Merrill Chief Financial Officer.
Before we begin I would like to remind participants that during the call management will be making forward looking statements.
Please refer to the Companys report on Form 10-Q filed today November three for a summary of forward looking statements and the risks uncertainties and other factors that could cause actual results to differ materially from those forward looking statements.
Aqua metals cautions investors not to place undue reliance on any forward looking statements.
The company does not undertake and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events.
As they occur except as required by law.
As a reminder, after the formal remarks management will be taking questions.
Questions will be accepted over the phone from analysts and investors can submit a question using the online webcast portal provided in todays in last week's press release we.
We will take as many questions as we can.
In our available time slot.
And with that I would now like to turn the call over to Steve Cotton CEO of Aqua metals, Steve the call is yours.
It's improving our solution, we are already producing ultra pure led metal in Taiwan and over the next few months are now well trained partner in licensee Acme metal will regularly operate the phase one system in Taiwan as a showcase for industry partners to witness firsthand Acme and offer metals are currently in discussions for what.
He's two and beyond could look like and we will have further updates to share on next steps by later this quarter or Q1 R.
Our state of the art lithium operator, finding pilot plant and our innovation center at the Tahoe Reno Industrial Center is nearly completed and we expect to commence operations. This month, giving us the ability to demonstrate our lithium recycling capabilities to several potential suppliers partners and customers. The rest of this year and into 2023.
This is clearly a very exciting time for off with medals.
The demand for a clean sustainable and affordable recycling solution for lithium ion batteries grows each day.
Batteries are everywhere and all sorts of technologies from Wearables in phones to electric vehicles buses and forklifts. The current processes for recycling batteries are inherently dirty and economically inefficient.
Melting does not recovered many of the rare materials that are needed for making new lithium ion batteries.
Posed chemical based alternatives many based on an older mining lychee technique.
Not been successfully demonstrated at scale with acceptable environmental and economic outcomes and in several cases are not yet successful at all.
Better solution is needed and we believe that operate finding is the answer today lithium are providing is the only solution that has recovered high grade purely team hydroxide, cobalt and peered that'll form nickel in pure metal form copper interior mental form and manganese dioxide and we do it cost effect.
<unk> with a close look sustainable process that is inherently clean.
Using renewable energy.
Turning now to our strategic initiatives and progress in Libya.
To date, we have successfully recovered all the high value metals and minerals from us with the million batteries, including I hear Ya lithium hydroxide copper metal nickel metal cobalt metal and manganese dioxide. Our technology is proven bench scale, our first lithium ion recycling plant operation, which is located at our innovation Center.
In Tahoe Reno Industrial center continues to be on schedule to begin operations later this month.
Interest in our lithium occupying process has been extremely strong.
Having the pilot plant up and running to showcase our technology is a critical next step can in fact, it's really of critical inflection point for the company, we have prioritized and schedule a visit for tier one potential partners and customers beginning next week through December in Q1.
We are also looking forward to welcoming investors and analysts we more broadly open the innovation center pilot after the new year.
In the slide deck a company in this call and also in our current investor deck on our website, we have a slide that shows the black mask that we've taken into our innovation center and the metals compounds recovered from awkward refining process.
Starting with a lithium hydroxide, which we make natively with our unique process.
We believe that will be one of the if not the first U S producers of lithium hydroxide from recycling versus a binding source, that's a double benefit for being critical U S produced minimal requirements and for a totally sustainable production when compared to mining with Ya.
The medals reproduced are extremely appear making them highly valuable.
To customers and to a revenue model, we can sell leads directly into the general metals Super alloys markets to a large array of customers that are looking for these metals right now of course into the battery materials market with a shorter qualification process to other recycling methods do to uniquely being able to start with pure metal with cobalt Nicholas.
Copper.
You have already produced P. Kim meaning pre cathode active materials and we'll have more to say soon about taking these metals to Tam, meaning capital to act of material.
We have already signed the letter of intent with Dragonfly Energy Corporation, a lithium ion battery producer based right near in Tahoe, Reno to provide awkward medals lithium ion cells and manufacturing scrap.
As well as for the purchase of commercial quantities of lithium hydroxide from Aqua metals, we plan for dragonfly to use our sustainably produced lithium hydroxide in their next generation solid state lithium ion battery technologies and future manufacturing activities and in addition to samples already provided we will be sending them production.
Representative samples from our pilot operation very soon.
Today, just five per cent of lithium ion batteries are recycled while the other 95% end up in landfills lithium mockery fighting recovers the high value lithium that's currently lost in the smelting process today.
In fact, today's commercial method for lithium battery recycling smelting recovers zero percent of lithium and only a fractional percentage of the other minerals, while lithium Ark refinery covers over 96% of the lithium.
Add up to $82000 per metric ton. Just this year. This is an important achievement not only for our environment, but for our business model.
Demand for lithium is growing rapidly and industry analysts projected deficits in the lithia market as soon as 2025 due to the electrification of transportation and the rapid deployment for energy storage system, such as those produced by Dragonfly there will be significant demand for recovered lithium in the future, especially for North American.
Companies is China dominates lithium reminding today.
With a goal of rapidly building our partnership Eco network. We are in active discussions with cell manufacturers black mass providers.
Component manufacturers and can manufacturers.
Pilot plant comes online and potential partners, who have already reviewed our process flow sheets and mass balances under nondisclosure agreements.
Our innovation center and witnessed this process and the materials will be recover from black mask, we expect it towards additional partnerships interest in our technology is increasing in this provides significant confidence or should we look towards 2023.
Finally, let me speak to our progress with grants and specifically the department of Energy recently announced over $2 billion in grants for the first round of critical battery materials. Many of these grants went to parties and the general critical battery materials space as Aqua medals completes our pilot up plant operation and identify.
<unk> location, where we intend to scale beyond our initial pilot plant in the coming months, along with our strong environmental advantages. We believe we will be in a great position to receive one or more branch of 2023 earmark, particularly for sustainable battery recycling, we have our CFO and chief business officer, and a top tier.
K Street, Washington D. C firm working hard on these efforts in conjunction with partnerships. We are cultivating and we expect will have more to say about these efforts in the coming months and speaking of our CFO I'm now going to hand, it over to judge barrel for the financial review.
<unk>, let me start my comments with our balance sheet.
We ended the quarter with total cash of approximately $9.3 million and we had working capital of approximately $15.5 million.
This means that were well funded through to when we expect to begin generating revenue.
Turning the corner, where we locked in a 6 million dollar secured note with Alvin mortgage, giving that's additional non dilutive path to expand our cash position and ensure sufficient resources to reach revenue generation.
It was closed on September 30th 2022.
With a 24 month term and interest at a fixed rate of 8.5%.
Monthly payments or interest only commencing on November 1st 2022, and all unpaid principal and remaining accrued unpaid interest or do 24 months from the closing.
And this loan is secured by a commercial property.
Subsequent to the end of the quarter, we received the second nonrefundable deposits from Winco. This.
2 million dollar deposit further bolsters, our cash position as a reminder, we expect to collect the remaining balance of approximately $12 million in a few months.
Part of the proceeds from this cash collected will be used to retire the note without them.
There are no other significant changes on our balance sheet. So I'll move to the income statement during.
During the third quarter of 2022, <unk> continued to focus on the research and development activities related to the lithium ion battery recycling.
No commercial production during the quarter of 2022 and as a result, no significant revenues are generated during the quarter.
Cost of product sales decreased by approximately 50% during the quarter point $8 million.
Compared to $1.7 million Q3 2021.
Decrease in this quarter was due to wrapping up the plants cleanup projects.
Research and development costs, which included expenditures related to improving lithium ion battery after refining technology. During the three months ended September 30th 2022 increased by approximately 80% compared to the three months ended September 30th 2021.
Our ongoing investment and R&D is crucial and part of our business strategy, enabling the further advancement of the development of Oct refining.
These costs included expenditures made towards building our pilot facility.
Which we said is expected to be commissioned later this year.
General and administrative expenses decreased approximately 3% for the three months and it's September 30th 2022 compared to the three months ended.
September 30th 2021, but increased approximately 70% for the nine months ended September 30th 2022 compared to the nine months ended September 30th 2021.
<unk> increase in this category included changes in stock based comp and increase in professional fees non.
Non cash charges, including a G&A, including Stock-based comp, where approximately $1.8 million.
For the third quarter of 2022, we had an operating loss of $3.9 million compared to an operating loss of four $6 million for the third quarter of 2021.
Net loss for the third quarter of 2022 was $3.9 million or a negative five per basic and diluted share compared to a net loss of $1.4 million or a negative <unk> ads for basic and diluted share from third quarter of 2021.
<unk> 2021 was lower due to an offset of insurance proceeds receive in the third quarter of 2021 of approximately.
Four $3 million.
We continue to manage our cash utilization.
Cash used in trading.
Reading activities for the nine months and is September 30th 2022 was $9.3 million.
Q3 cash needs were approximately 800 to 850000 per month as expected and largely due to the addition of more employees and consultants as we invest more in our lithium ion battery recycling technology.
Net cash used in investing activities for the nine months ended September 30th 2022 was $1.7 million.
This consisted mainly of $2.3 million utilized towards the purchase of property and equipment.
Offset by $1.4 million.
Proceeds from the sale of equipment and point 5 million utilize towards the additional investment income.
Net cash provided by financing activities with $12 $1 million for the nine months and the September 30th 2022.
This consisted of $5.6 million in net proceeds from the sale of Aqua mental shares pursuant to the a T M and $5.9 million in net proceeds from the bridge loan.
So we maintain a healthy balance sheet and we have sufficient resources as we head into 2023.
And with that that concludes my remarks on the financial then we'll now turn it back over to the moderator for Q&A.
Thank you and that will be conducting a Q&A session, if you'd like to be placed in the question queue and you're over the phone. Please press star 100 telephone keypad for those on the web you have the ability to type a question to ask a question feature.
Side of your screen once again to ask a question verbally over the phone. Please press star one at this time or over the web you could type of question to be asked a question feature on the left side of your screen. One moment. Please while we poll for questions are.
Our first question today is coming from Samir Yoshi from Ht Wainwright. Your line is now alive.
Hey, guys.
Thanks for taking my questions and congratulations on the progress being made.
The the <unk> facility.
Going to be commission.
Soon.
Will it be up for.
Or will it be generating commercial revenue beginning next quarter or should we expect these visits to materialize into all of those.
Eventually in the second quarter revenues from that.
Yes, Samir this is Steve Yeah, good question fee.
Pilot plant will actually be operating in producing materials. This quarter Q for very soon and we expect to be able to get some revenue that we may not report until the next quarter.
Just because of the sales cycle, but it will begin producing revenue producing material. This quarter and then beginning a scale as we go into the new year.
Okay, and then just fall.
Part two of the question of the pilot for you then.
Is planned to be all for around 840 <unk>.
<unk> what are your.
And that's the only complete.
Complete by December .
Of 2023.
This.
Ramp up do you expect to continue production at this.
Plan.
<unk> facility or like how should we look at that as a revenue generating.
So.
Yeah, so by nature, it'll continue to produce revenue, but the interest in our part is obviously to get that scaling to happen as we get towards the end of 23, and then to 24 and that will require a additional facility and that's what we're looking at now is where that will be and the timing of that.
At an inner laying that in however, the innovation center will continue to operate.
Updates and continued improvements in the technology that we expect that will be it from our learnings of operating while we then take the demonstration <unk>.
Commercial facility is the next step.
Forward. So really we would have the summation of the innovation center cost that demonstration commercial facility as we get into 2024 and beyond.
Oh, Okay, and then just the phone call.
Cost.
The costs are pretty controlled.
At the moment, but as you <unk>.
Start building this is killing.
Start to scale next year should we expect do you use to increase your your relating to what they are.
Currently.
Around $2 for the 2.6.
<unk> per quarter is what you're predicting.
Guiding.
Yeah. This is just the initial kind of part of the ramp up we don't get costs increased too much to significantly.
It starts out small and then gets bigger.
And so we probably will see some increases in the later half next year.
Get into more full ramp up.
The pilot facility.
That we have now it's not huge so they're gonna require.
A lot of Capex in terms of like buildings and things like that but there will be some people.
To help run it and operate it but still it's a pilot operation. So it's not a ton of people and so will be evaluating those costume and we can give a little more clarity kind of on the next call or even in the first part of the year, but.
For for Q4, Q1, and probably in the queue to will be pretty much stable like we have been in the last few years.
Oh, okay.
Just.
Vacation on the.
Of your cobalt nickel copper and manganese dioxide.
Operations.
That.
Really happened at the same time, when you strike lithium colored.
Covered with him or are these other units that needs to be set up and tested.
Similar to what you have done for lithium.
Just wanted to go see at home does look.
Yeah. So all of those materials will be extracted as a part of the connected and and pilot system. So it will at the same time be producing all those various materials. So the lithium hydroxide will end up in one place, whereas the metallic copper and of course cobalt nickel will end up in another place.
On the plating cells.
And then the magazines dioxide will end up in another place, but that's all people will be able to see with a connected system of the pilot.
Input feedstock, which is a black mask comes in the front and in those materials come out on the back end.
This is what.
We would see.
Data plan to visit.
Early next year.
Mmm.
You will see all these operational.
The pilots or added absolutely absolutely yeah, and that's what we're very excited to have people come and see particularly in prioritizing industry potential partners from the feedstock partnership and I'll take side.
They'd have we've shared our nda's under NDA with our process flows and things they Wanna see it operate and that's what will be happening in November and December and then as we get towards January we will be bringing in more investors analysts et cetera, but all the people that does it will be able to see these disconnected processes.
Grilled salmon here, that's that's really a club and that to me.
Congress once again and.
Good luck. Thank you thanks for taking up thank you.
Thank you and next question today is coming from common rush from Oppenheimer. Your line is now alive.
Mmm. Thanks, so much guys can you talk a little bit about the pieplant of essential and current licensees portal that process.
That's the most mature technology here and I'm curious how quickly you might be able to add another customer.
Yeah, Thanks for calling and we're really excited about our progress in the awkward refining for lead that we've deployed in Taiwan, and we've already produced materials, there with our partner and we've got the equipment to the point, where it start stop.
Function and capability is all integrated with the automatic logic control et cetera. So now that is a showcase facility.
And one of the hottest battery markets in the world in the Asia Pac region. So Acme is evaluating what it would look like for them to expand that facility and get it more into a 24 by seven type of an operation.
But in the meantime, using that as a demonstration plant to show off that facility and the technology to their partners that they've brought to the table as well as some additional parties that are quite interested in coming to see that technology in that process. So we're excited about that showcase taking place there. It was just in the.
News today that Europeans smelters are getting idled or wound down or shut down.
Due to the extraordinarily high energy costs that are happening in the EU. So we're also seeing what we view even.
It's late breaking news is more of a sales subtle opportunity for the European market and a lot of these energy costs now gas versus electricity, but once you start to wind down in turn off the smelter you might not be as inclined to turn it back up and that can create sales funnel opportunities for us in addition to what.
See in the Asia Pac region as well as a couple of U S partners are taking a look as well.
Great and then with the relationship with Lineker can you talk about how mature the conversations are around he was putting you know what.
Capital in some of the the the collaboration forward you know I'm just curious about your underlying cash needs and how how much time, you're going to really need to clarify all of that.
Yeah sure. So there's a few dimensions that one dimension is the acquisition of the building, which they paid us all of the rent payments on time and we've received.
Recent payment of the $2 million towards the final payment there'll be coming by March of next year.
And in the meantime, we have our pilot.
Turning onto operate at the innovation Center and we of course talked to let it go all the time and Tom stock is really the owner to primary owner when it go and we could potentially still take the Ark refining technologies and deploy that right within that facility and work with them as they make their decisions on how they are going forward and scaling there.
Operation that got some recent permits and things like that so there's a partnering opportunity that's associated with that relationship, but that's separate from our own opportunity that is under our own control, which is our pilot demonstration plant that gets turned on in a matter of a couple of weeks.
Great and then I guess staffing other key higher so you guys need to make in the next six to nine months.
We've really stepped up pretty.
Pretty well to get to the pilot and the operation of the pilot there'll be a few net ads in terms of technicians and operators.
Some key commercial.
Type roles et cetera, but.
Nothing terribly material to the burn rate is Jed was answering a question about earlier. So we feel that we are pretty well staffed up for the for the time being to get through this this next phase.
Of our efforts, we did receive a a little bit of a rebate now that our team has returned from Taiwan parts of our technicians and installers et cetera.
For that installation that will be helping to work with the lithium off refining pilot and getting that operation where it needs to be so.
Net we should even out pretty well.
Great. Thanks, so much.
Thank you as a reminder, that verbally ask a question. Please press star one on your telephone keypad and you also have the option to type a question if you're participating over the web at this point I'm Gonna turn it back over to management for any web questions.
[noise].
Yes. Thank you operator, we certainly have some questions from the line and I'll help provide these to Stephen Judd.
Maybe a few for you can you discuss how you think about led assets versus lithium in terms of priority what does the marketplace look like.
The word asset technology since electric cars use asset batteries as well.
Yeah, though we see both markets is still a tremendous opportunity for Aqua metals on the lead market is.
Exciting time for us to have gotten to the third generation of the technology.
Technology and a product form.
Now out there with its first licensee in that showcase and as I mentioned earlier, we see great upside and opportunities with with the development of that product as a license and equipment supplied product in the market that we know could really use that upgrade to the technology. So we're very excited about that and continue to.
Hope that we can continue to get more partners and penetrate that market in the meantime, as we develop our lithium efforts, we see a great opportunity as we've communicated before to be an operator and to be a recycler of the lithium recycling technologies and that is starting with us the pilot.
System, and then going on through the step functions of getting to the demonstration commercial plants et cetera. So that's a different business model for the lithium business from a primary perspective, which is to be an operator as compared to the lead business, which has to be a supplier to lead business is much more mature all of those smelters that are out there are already operating in owned by others.
So it makes sense to partner in license and provide equipment and lithium business and the financial opportunity in particular, because now we're dealing with critical minerals that are worth upwards of $70000 a ton.
Compared to 1700 to $2000 a ton of millet space, we see that opportunity is being recycled to really accelerate our revenue one line as we continued to scale that the lithium efforts and so the company does have the organizational capability to handle both of those businesses as demonstrated by building a plant that will turn onto the lithium.
Processing and getting.
Another continent, the off refining technology deployed celeb. So that's why this is really good inflection point for the company and argue for the coming year.
Great. That's that's great we have a couple more.
Around customers potential customers and the question here is why is winter Cove, primarily moving forward with green lithium ion technology versus Aqua.
And related to that or what are the additional strategic partnerships you are seeking.
So so let it go.
Aqua metals have a relationship where aqua metals would provide plated metals with I think you are speaking of the Green Lion technology that clinical is spoken of in the past, which is an opportunity for them to consider some direct recycling capabilities for some of that material. So they are totally separate parts of the process for what their vision of of what that plant would look like.
Partnership opportunity that we have particularly as a part owner of the company.
<unk> of other partnership opportunities in addition to our own build plant and run plant business model, which can generate by 2425 100 millions of dollars of revenue. There's also the partnership opportunities with black mass providers to us that are interested in verticalizing their businesses, where we can partner with them there.
Also a partnership opportunities with.
The actual edie and sell and sell pack manufacturers that are out there that are trying to close the loop and provide for the return of materials in exchange for providing feedstock and things along those lines. So there's a lot of partnering opportunities Lucy the lithium business developing not only a primary recycler, but as a partner.
Joint venture partner.
And potentially working with other parties and other structures.
Which could even include licensing because we we have the capability to license technologies, we've demonstrated with the lead off refining business. So.
So we see lots of Optionality in the way that we work with various players the ecosystem. So we don't really do any one frankly is a competitor review every player in the lithium space.
Is really a partner potential.
Great. Thank you and related to that.
The question from the line is why sell your current plan <unk>, if you're already looking for another facility.
Mr ramping up in the pilot.
Yeah, so that that sale commenced back in 2019 into 2020 of the lead off refining plant and that that plan is.
Being.
We've agreed to and have worked with let it go to work that deal out in the meantime, we've really prioritized and stepped up our lithium off refining capabilities at our innovation Center and that's really where the focus is on our operate funding for lithium development today, which is inclusive of us extend.
Adding that towards a demonstration plant of our own and we would be putting that in place effectively to suit for our efforts.
Specifically, while we look at <unk> and other parties as partnership opportunities.
And licensing opportunities like I mentioned.
Earlier question.
Okay.
Great. Thank you and I guess this was touched on upon as well, but <unk>.
You with related to the black mass.
How are you thinking about access to black Max mass as you ramp.
2024.
Yeah, So we've already announced that week secured quite a bit of black mass for our operations in 2023, and we physically received quite a quite a bit of it that we just treated some photos out about I believe in the past week that people can see and it's on our latest corporate deck as well. So we have a lot of the black mass here.
<unk>, we got the supplier partners and diversity in that side of it. So we see that is a great opportunity and also.
Because our process is so environmentally favorable too.
All the other processes that are out there we were able to get cells and work with black mass providers to work out deals for them to effectively crushed those cells and delivered to us the black mass. So we're bringing value to the table with these black mass providers and we see that as a continued way to continue to be able to scale our efforts and all.
That said, we obviously have a lot of battery breaking and crushing capabilities from our history as a company in the longer run we see opportunities for us to also be able to generate black mass from the cells directly ourselves.
In addition to partnering.
Okay perfect.
There's one that's a little bit more technical maybe.
Maybe I'll ask this and it will take a pause how it adaptable is C.
Lithium ion battery recycling technology to various compositions of batteries.
I don't know, which type require recalibration or can you group any type of black mass and separate the elements.
Yeah. So so are the technology is quite flexible in the composition of that material that comes into our process and it really comes down to how you optimize how many lithium nickel cobalt cells.
Put in there as compared to the production of the lithium hydroxide material itself. So we try to work with the black mass suppliers to get it to weigh spec range is actually quite wide that includes multiple battery chemistries.
We also through our process because it's really the most economical process. In addition to orders of magnitude improve environmental processes. It affords us the ability to process LLP or lithium iron phosphate batteries that are cobalt and nickel free and work to produce that lithium hydroxide. That's one of the reasons that we saw a great opportunity to partner.
With dragonfly that makes that type of battery chemistry is safer battery chemistry.
For a stationary in particular applications are so we think that we have the most flexibility, including being able to process LSP type batteries that really nobody wants.
The other recyclers based on the <unk>.
A mystery of those batteries not having those materials in their process not having the economics capabilities to recover them. We can so that's one of the real strength of lithium op refining is the ability for us to work with all these various chemistries and players in the ecosystem that have these various chemistries.
Okay. Thank you.
A couple more here and they relate to strategy and I know you touched on some of this but.
At what at what stage of the <unk>.
Business lifecycle do you think Aqua mantles is that.
At the end of the year of Q3 2022.
So I would say that through our licensing business. We're in a stage of of launch in commercial launch of the licensing business for the lead off refining as evidenced by what we have in Acme in Taiwan and that continued desire to develop that as a license they can.
Let's apply business with now a mature product with.
A technology risks level.
It's very commercialized when you look at the the lead I'm sorry, the lithium operating finding business we.
Have a higher technology risks level.
Then the ledge side, but we're rapidly progressing that forward, particularly with the inflection point of opening up the one of the world if not the U S is first and and black mass full production facility.
To produce all these various minerals and that will take us to the point, where we can then begin to commercialize for ourselves as well as partnerships the lithium occupying technology in our revenue producing mode.
E as early as this quarter and getting into the.
Next year so.
That is a.
A very exciting things were aqua metals to be able to have that with you mark refining to the point, where it can start to generate revenue as we continue to be risks and then scale the technology to 23 in 2004 and beyond to the <unk>.
Where we can generate hundreds of millions of dollars of revenue per plan.
Alright, Thank you and are you seeing multiple companies.
Customers potential partners, making arrangements or becoming interested in visiting a plant.
Operational in the coming months and what is your competitive leverage around that.
So we've definitely been very active with our commercial team working with the various players in the ecosystem and that's why we're Prioritising November or December those that we've shared our process flow sheets and capabilities under nondisclosure agreements and talk to and details about how it would look.
We partnered together, whether it be supply of black mass ranging to an off take partner to anything in between looking at things like joint ventures, and how we get from pre can decamp materials from so those players you can count on.
You need more than two hands to count them that we'd like to come and see the facility as soon as possible and that should facilitate further discussions with some if not all of them on what the partnership opportunities could look like and that's really what we're focused on in really the remainder of this year and as we get into a a Q1, but it's also very <unk>.
<unk> for people in the investment community and analysts to come and see the facility as well we're trying to balance.
So it doesn't become a showcase visitation facility, but it's actually an operational facility for that from time to time, we're able to host visitors and not disrupt our engineers and operations team. So that's how and why we're prioritising and becoming.
Coming weeks and months and we're really excited as everybody. There look forward to welcoming everyone here to Tahoe Arena.
Great. Thank you I want to bring the operator back in because that's what I understand there's a another question on the line is that accurate.
Certainly our next question is coming from Steve Krueger from Foresighted investing your line is now alive.
Hi, Thanks for taking my question.
I'm still trying to get my head around the relationship between your plans for operating the pilot plant for recycling lithium and.
Then a scaling it up with your own facilities and the relationship of that enterprise with what clinical there's going to be doing it I thought <unk> was going to be doing the same thing.
Are they are they are going to be doing something different they not recycling lithium.
The relationship between what you are going to be doing and what they're going to be doing.
Yeah. So so <unk> is focused on acquiring battery cells, and crushing and producing black mass material.
As in we're focused on taking black mass materials and input to our process and creating the minerals that we've talked about earlier in the call. Today. So really we're focused on a different part in stage of the process and that is a very complimentary thing for what Lynn. It goes up planned operation is to look like as well as.
Our own operation, which starts with black mass not the cells and takes it through to the end result, and so there.
They are.
Complimentary with them.
Them as a partner and it's slowly and operation that we can operate ourselves as we operate that lithium ark refining pilot and get that scale to a demonstration plants and beyond.
So.
Actually litteken plant will be supplier of black mass and that's going to be there.
Principal business.
I understand Steve.
Could be greatly enhanced by in that same plant taking that black mass produced forward to all those critical minerals just like we're doing in our pilot plant.
So we're gonna go could be.
[noise] evolving into.
Into a competitor essentially.
No not at all because they would be incorporating in working with our technology to take the black mass that they produce forward to peer Nicole pure cobalt lithium hydroxide and other materials.
Materials that that we would work with them to complement their technologies with ours noncompetitive.
Complementary.
Okay.
And add it to our business.
I guess I'm confused you both the recycling lithium.
Am I on batteries to produce high value pure metals, cobalt nickel and so forth.
In both be doing that same thing right.
Lineker would be taking and battery cells storing battery cells crushing battery cells separating the materials, creating the black mass material.
Aqua metals would be taken the black mass material and creating nickel in cobalt.
Copper and other minerals from the black mass that lenticle produces and the noncompetitive complimentary fashion, Okay, and everytime Aqua metals will operate his own facility that will take black mask from Linda go potentially as well as others that we've already taken black mass from and take our part of the process forward.
Okay got it so have you done any kind of initial planning is too.
And what kind of size of plant.
Two would be.
Building.
You start to scale up your own recycling process.
Yeah of course, so the 840 tons plus for the.
Plant that is the pilot plant is step one and then the demonstration plant will have to be in a different location and that commercial demonstration plan to something that we have not announced what the location or configuration and tonnage of what that plant will look like lately. It will be a lot more than the 840 tons and that will.
Us into tens if not towards $100 million plus of revenue.
In the next stage in the development of the plan and then you go to the the larger plant from there and so on depending upon who you partner with.
Organically build facilities right at the current prices at 840.
The size of the pilot plant capacity.
How much is that price out 2% on.
Blended basis of the metal she'll be producing.
We have said before that.
The pilot plant can generate up to $20 million in revenue.
Okay got it thanks very much safe.
Thank you <unk> of our question and answer session I'd like to turn the floor back over to Steve for any further or closing comments.
Thank you all again for your time and attention today, we are positioned for an exciting end to 2022 and a transformative 2023.
Several important initiatives are ready to deliver meaningful benefits and we are growing our base of partners and customers. We look forward to providing updates to our shareholders and stakeholders and interested parties.
In the near term I will be attending conferences and meetings with investors in New York in late November early December and will also have more information on the pilot plant tours for investors to begin in January if anybody has questions in the meantime, please feel free to contact us or F. L. K I R and we look forward to our next quarterly update call. Thanks.
Yet.
Thank you that does conclude today's teleconference. A webcast should we disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.