Q1 2024 Lifezone Metals Ltd Earnings Call
We're able to do this in an economically driven value alternative to smelting.
So we bring the combined benefit of.
This is a cleaner process. This is a better economic process, but then there's a third strategic advantage in that we do this locally to empower our local governments local communities. So these are the three pillars that really drive the.
The value of partnering with a limestone metals and alternative to doing a dirty smelting process. So it's a really it's we remove smelting.
We demonstrate more competitive economics, and we're empowering local people to benefit at the source of these metals, which is a critical part of how we view our partnerships, which we'll talk a little bit more as well going forward and this is something we're commercializing into not only mining, but also into the recycling space. So we so we establish other growth sectors for us as a key.
Yeah.
Okay.
And so it's been a big year for us It would be obviously, we debuted July of last year and really for US has been a number of key milestones that we've set for management and for the team to deliver and we've been able to deliver on those milestones and one of the key things for us going forward is to continue to deliver.
When you look at what we've done in a very short amount of time.
We've been able to successfully list on the NYSE, we have updated our resource statement to enable us to go to a larger mine size. We've brought in new strategic partners demonstrating that the technological capability of lifestyle and is applicable to other options.
About the industry.
And we've demonstrated our partnership with the Tanzanian government has resulted in not only our additional mining license, but also these steps into the special economic zone, which is critically important.
Been endorsed by additional investors with a $50 million placement, which will go a little bit more detail on that.
And obviously with our inaugural annual report one of very contracts. So we continue to focus on key milestones, but we've been able to deliver on time a lot of the key initiatives that we've embarked upon to be basically communicated that we're going to focus on going forward.
Okay.
So just a just quickly episodes, where we are the Canadian nickel projects. So.
The <unk> project. It is important to note that we are actually two projects. So we are a mine as well as a refinery location in Tanzania, and northwest Tanzania, and this is really.
Empowering East Africa to be a new mineral supply chain and that's that's something that's getting a tremendous amount of support from governments around the world. This is a critical policy initiatives for Tanzania. So we are developing a project that's going to enable tanzania to be at the forefront.
The mineral supply chain in East Africa, and this is enabled by a tremendous amount of infrastructure being laid down in Tanzania.
But then also when you look at the you know the the.
New sources of clean hydroelectric power Thats come in new standard gauge rail, there's a lot of enabling infrastructure that has been committed by the government of Tanzania.
To support this project so really a collaborative partnership that's behind this entire unlocking of this new source of clean nickel and cobalt coming out of Tanzania.
Okay.
Okay, I will turn it over here to our CFO Ingo hoffmeyer.
Ingo Hoffmeyer: Thank you Chris Good morning, and good afternoon, I'm going to provide you with an update on our Q1 highlights.
Ingo Hoffmeyer: And Lisa fundraising activities plus later in the presentation, a summary of our unaudited financial results.
Ingo Hoffmeyer: With regards to Glencore as announced in January we closed the partnership with Glencore to undertake confirmatory pilot work and the feasibility study in our seamless labor quotas in Perth, Australia.
Ingo Hoffmeyer: And we received $1 $5 million subscription perceived some tanker four 6% stake in our Westwood Socgen subsidiary.
Ingo Hoffmeyer: Just on budget stands at $3 million is fully funded and Bucharest matter for an expected completion in Q3 this year.
Ingo Hoffmeyer: With regards to the convertible as announced late March with close to $50 million Nonpareil cuts private placement of unsecured convertible debentures to coupe of North American investors, leaving us with a healthy cash balance.
Ingo Hoffmeyer: I will speak more about our financial results towards the end of the presentation and placement speak about the Sofia drilling a key Q1 highlights providing further evidence of the effectiveness and additional potential of Katanga has the highest weight of logical I believe unmatched among reproduction companies.
Page <unk>.
Ingo Hoffmeyer: Yeah, Nick this live ascribing the structural changes in 2023 in early 2024, leading to a reduction in earnings and valuations.
And we are therefore pleased to have concluded.
Ingo Hoffmeyer: Given the substantial fund plays with the group of marquee investors.
Ingo Hoffmeyer: A four year notes and our ability to pay interest in cash pick N shares provides us with flexibility.
Ingo Hoffmeyer: <unk> stands at Sofar currently around five 3% favorite quarterly with a sulfur floor of 3%. The first interest payment date will be June 30th.
Ingo Hoffmeyer: The holders of the Congress can converted $8 per share and the company can buyback the Congress and force conversion, if the share price blades, 50% above the $8 exercise price.
Ingo Hoffmeyer: In terms of net proceeds we include an issue discount of 1.5% and important for the Q1 figures we had only one trading in banks. They left post closing and therefore, we didn't receive all the funds you can see the net proceeds from one investor amounting to $4 9 billion on first of April and therefore not <unk>.
Ingo Hoffmeyer: We live in the Q1 cash balance.
With this I hand basically.
Thank you Inger.
Ingo Hoffmeyer:
Speaker Change: So one of the things that really is a paramount importance to our team and really.
Speaker Change: The company is delivering the definitive feasibility study on.
Speaker Change: On time and on budget and so what I'm happy to convey today on this call is that we continue to be on track for end of Q3 completion date and the enormity of work that's gone into this process has resulted in.
Speaker Change: Really what we've done is we've looked at a larger mine site, which we announced.
Speaker Change: Months ago, but.
That is driven by really the exceptional ore body and I'll show on the next slide but currently right now we have a two phase development plan $1 7 million ton per annum phase one with what we're looking at is potentially an accelerated phase two ramp up of $1 seven so a total combined.
Speaker Change: 4 million ton per annum operation.
Speaker Change: And what I would say about the feasibility study is this is this is a highly collaborative process with our partners and PHP, who are intimately involved in all aspects of the DFS with us as well as our independent engineering firm DRA.
Speaker Change: So really the amount of teamwork going into this project as exceptional so congrats to everyone who's been involved in this keeping this on time and look forward to a very positive conclusion, and we've been very very encouraged by by the results today, which will be in.
Speaker Change: Announcing obviously the conclusions and ended Q3.
Speaker Change: The next.
Speaker Change:
Speaker Change: As part of our our focus really sustainability has been a driving factor in and I've been I have to say I've been unbelievably impressed it not only into the standard we've committed to but also the standards that BHP has supported us and applying to the project I'm really across all aspects of the operations on the ground.
Speaker Change: And this is really driven us to to lead in.
Speaker Change: With a sustainably sustainability, driven philosophy and an enormous amount of work has gone into supporting the local community.
Speaker Change: Communicating having a very collaborative approach.
Speaker Change: And the benefits that will accrue to the local population.
Speaker Change: It's been really rewarding being part of this project seeing the excitement the support both from the local communities all the way up through to senior government.
Speaker Change: And it's something that it will continue to be a driving.
Speaker Change: Initiative for us going forward.
Speaker Change: Okay next.
Speaker Change: We met we mentioned a little bit earlier, one of the things we focused on was.
Speaker Change: Increasing some of the infill drilling and with Quebec.
Speaker Change: This is really a multi generational project.
Speaker Change: We have two very.
Speaker Change: Find resource bodies and in North and Tembo, there will be driving the initial production for the operation, but what we've done over the past last year as demonstrates some of the upside potential. So the Safari zone on the right. What we've done is we've done some initial.
Speaker Change: Drilling to establish this as a contiguous continuation of the timber zone, but also what we have identified as well as several potential.
Speaker Change: Target sites within our S amounts. So so not only is this an incredibly well established ore body that can match. The 3.4 target production rates. There are other additional ore bodies on just the special mining license that will feed into a much longer.
Speaker Change: Life mine, we anticipate in the future.
Speaker Change: The next.
Speaker Change: So what we have here some visits visual representation of some of the engineering design work, that's come out and I think what I'd like to do is to congratulate.
Technical teams have been working on this.
Speaker Change: I think having been the Perth over the past months seeing the integration of stimulus engineers, who we acquired last year and seeing that team fully.
Speaker Change: Integrated with our team at lifestyle.
That really demonstrates the power of what we'd be able to put together in terms of some of the best brightest people in the industry and the hydro metallurgical side and so seeing the delivery.
Speaker Change: And the the recoveries we've had.
Even on some of the initial press release distractions, we've had 98, 5% for nickel, we announced on some of the initial test results and even 98, 9% for cobalt. So so really hitting on all the key milestones in the study and I think this is a result of pulling together some of the teams that we had into one.
Speaker Change: Collaborative effort is really demonstrating an amazing amount of productivity.
Speaker Change: And next.
Speaker Change: Well, absolutely always emphasized.
Speaker Change: The sincere partnership we have with Tanzanian government they continue to deliver on their side.
Speaker Change: The project I was in Tanzania last month, receiving our refinery license. They have presented the special economic zone they have pulled.
Speaker Change: The regional power line into camp so really.
Speaker Change: So to bring that 33 kilowatt power line into the camp site is something that they they endeavor to do and have done on their on their own and that's a tremendous demonstration. It's a small thing, but I can tell you in the.
Speaker Change: Project of this magnitude having a connected power on site.
Speaker Change: To support that is provided to us from the government as a as a.
Speaker Change: Dramatic.
Speaker Change: Statement for.
Speaker Change: For the partnership.
Speaker Change: So I'll turn it back over to Ingo.
Speaker Change: Soccer.
Ingo Hoffmeyer: Thank you Chris.
Ingo Hoffmeyer: At the outset, I would like to mention that as a foreign private issuer. We are not required by the SEC to provide quarterly financial reports, our next set of financial financials will be unloaded at half year.
Statements as of June 30th.
Ingo Hoffmeyer: And last we want to continue with display.
Ingo Hoffmeyer: Of operational and financial summary, besides and leaving us on a quarterly basis. So that means for the tool and then for the September before we get to the year end after.
Ingo Hoffmeyer: For the first of December.
Ingo Hoffmeyer: At the end of Q1 left some metals had a cash balance of $79 6 million.
Ingo Hoffmeyer: Up $30 2 million as I mentioned before it reflects the proceeds of $44 3 million out of the $50 million.
Ingo Hoffmeyer: The debentures.
Ingo Hoffmeyer: Last month, one 5 million from a claim we are funding the other part the other 50% with a $3 million.
Ingo Hoffmeyer: Richard.
Ingo Hoffmeyer:
Ingo Hoffmeyer: In terms of.
Ingo Hoffmeyer: Spending for operational and investing cash flows a more conservative approach.
Ingo Hoffmeyer: The cash outflows of $15 4 million with $11 7 million gone two cabana really our focus is.
The completed a group wide Gordon Mcguire sizing, which are accountable included the reduction of 29% of our workforce, including conflict.
Ingo Hoffmeyer: And in housing of critical work streams earlier done by our consultants.
Ensuring the effective allocation of capital to the most critical work streams meant that we stopped exploration cooling and deferred various capex items like for instance, the construction of the estimate at Katanga.
Ingo Hoffmeyer: Which is fully permitted.
Ingo Hoffmeyer: The focus at the moment of the cash outflows and this will continue until Q3 is of course to deliberately off the feasibility study we had a net loss of $4 million basic and diluted loss being the same.
Ingo Hoffmeyer: Because it was a loss of 0.5.
Ingo Hoffmeyer: With a comparison of 10 cents.
Ingo Hoffmeyer: The quarter the year before.
Speaker Change: For more information. Please go to our 6K and the summary of the P&L. Thanks.
Speaker Change: Based on of G&A expenses, and our cash flow statement. Thank.
Speaker Change: Thank you.
Speaker Change: That's it from my side, a big order Chris.
Chris: Okay. Thanks Inger.
Chris: So just to conclude so really.
Chris: Where we are as management, we are absolutely focused on our key milestones.
Chris: And so really that is the.
Chris: Number one we.
Chris: We are fully engaged.
Chris: And our process that we announced publically, where we are looking to negotiate an off take agreement and that is still expected mid 2020 for us. So we are on target we are in final.
Chris: Negotiations with a shortlist and so that is on track and that is up.
Chris: A process, where we're very excited and we will be announcing.
Chris: In the near term.
Chris: Number two the <unk>.
Chris: DSS as we articulated on time to be concluded by the end of Q3 2024. This is the absolute focus of our teams.
Chris: In collaboration with BHP and DRA and so.
Chris: That is the really the trigger to start the process with BHP.
Chris: And.
Chris: Their ability to come in on their additional investment.
Option process. So so that's really coming to a head towards end of Q3.
Chris: And then in parallel to that the teams are busy on the PGM recycling project with Glencore, which is also expected to come into.
Chris: Around Q3 2024, so it's really these two core.
Chris: Projects are getting the bulk of the team's time and focus as well as management and this is really a demonstration of where we're going to be directionally going as a company. So demonstrating the commercialization of our capability with two of the top five mining companies in the World is it really just to start for us and so the pipeline of projects, we have going for in the back of this.
Chris: Pierre <unk>.
Chris: Very exciting are really happy to see the technical teams and their capability to produce these two projects and it's really a sign of things to come in terms of what we're going to be delivering to the market for clean processing solutions going forward.
Chris: So with that I'll, thank everyone for their time and I'll turn it back over to Evan in case, we have.
Evan: Any Q&A to follow up with.
Evan: Thank you, Chris and NGO and as a reminder, if you have a question. Please indicate.
Evan: Your interest in the Q&A box located at the top of your screen. When prompted your line will become active and please remember to on mute yourself.
Evan: Okay. Our first question that has been.
Evan: And then.
Evan: As it relates to the BHP and have their challenges in Western Australia had any impact on your relationship with them.
Evan: Mhm.
Speaker Change: Of course, thanks for the question.
This is a question we get quite a bit I.
Speaker Change: I think what we have seen from from BHP is really a continuation of their public comments, which is number one a commitment to future facing metals of which nickel was one they have consistently committed to the process, they're in with us and the government of Tanzania.
Speaker Change: To conclude the DFS so as far as we're concerned nothing has changed we continue to work with BHP in an incredibly collaborative.
Speaker Change: Goal oriented process to get to the DFS and get that done to ours aiman standards.
Speaker Change: So they can commence the process of.
Speaker Change: They are in their next investment options. So so really nothing nothing has changed in terms of our.
Speaker Change: Our relationship with BHP, and what they've communicated to both us and the government of Tanzania and said publicly that this is a.
Speaker Change: A operational specific assessment theyre going through.
Speaker Change: And that really does not affect us.
Speaker Change: Right now in terms of the a limestone keybank a project so.
Speaker Change: And if anything we continue to work at a very intensely collab.
Speaker Change: Collaborative pace and that's actually increasing as we get closer to the conclusion, so very happy with the relationship with BHP are named Bob maybe without a tremendous chemistry with them so far.
Speaker Change: Thanks, Chris It looks like we have a question from Ben Davis at Liberum, Ben Your line will be open if you can please on mute.
Ben Davis: Perfect Okay.
Ben Davis: Danny.
Speaker Change: Loud and clear.
Ben Davis: Great. Thanks, Thanks, guys for the presentation just a couple of questions for me firstly on the cash balance that you. You are finished with the OCI plus the additional proceeds post acute rent what exactly how it is that any came out specifically for <unk> or for PGM recycling of where that can be used for general.
Ben Davis: Usage is there any way that we should be thinking about how that that's comped up and then secondly, a given where we are in the cycle in a platinum mining.
Ben Davis: Where people that kind of cost cutting it do you see more opportunity on the recycling side, you've got obviously the relationship with tank or would you still think that there's a chance to see a combination with it with the mining etsy. Thanks.
Ben Davis: Mhm.
Speaker Change: Thanks, Ben I'll take the second question, maybe I'll have giving.
Speaker Change: Giving you a chance to answer the first one on the on the recycling project with Glencore I think really this is this is something that.
Speaker Change: This was an opportunity where we see the opportunity the ability to demonstrate with Glencore that this is not just.
Speaker Change: Small onetime project if anything this is a scalable.
An opportunity for us that we see the first plant being placed in North America as being one of.
Speaker Change: A number of plants that we can strategically place to capture market share in the PGM space I think that where we are in the cycle right now with Pjm's I think its acceptable point for us to be getting again, given the weakness in given some of the.
Speaker Change: Challenges in the market. So in terms of getting in the Parliament the cycle I think for us it's.
Speaker Change: It's the right time, so it's it's a demonstration of us getting into recycling, but this is just the beginning and this is something that on the R&D side, we'll be looking at a number of other types of projects and we continue to be doing so in our in our labs in Perth.
And I would say this is.
Speaker Change: In addition to recycling the pipeline of interest we have from other mining companies is quite robust. So we are absolutely focused on the two core priority projects being Cabana and then the auto cast of Glencore, but the amount of interest we're seeing from other mining companies wanting clean processing solutions to replace smelting.
Speaker Change:
Speaker Change: It's really that that's going be the future of our activity going forward. So we continue to do initial work with a number of companies.
Speaker Change: And we will continue to do so.
Speaker Change: Hum.
Speaker Change: Yeah, I think you have also given half the answer in terms of uses of funds. So technically days as it is top co investment.
Speaker Change: It includes it.
Speaker Change: Administrative and overhead expenses, but the focus is in our two.
Speaker Change: Key projects and within the two what was the lion's share of the funds close to <unk>, but there's no restriction as such.
Speaker Change: Thank you Robert.
Speaker Change: Okay for our next questions. We'll go to Greg Lewis at P. T. I G. Greg you will be.
Greg Lewis: Your line will be opened please on mute yourself.
Greg Lewis: Okay.
Greg Lewis: Hello.
Greg Lewis: Hi, Greg we can hear you are correct.
Greg Lewis: You can't get you can.
Greg Lewis: Yes, Sir Okay, Okay, Great Hey, guys. Thanks, Thanks for taking my call.
Greg Lewis: Just as we think about the opportunity with the PGM you know where we are in the process could you maybe talk a little bit about you know.
Greg Lewis: I guess this is I mean, we're and Marty.
Q2 this is expected.
Greg Lewis: I guess in the next few months.
Greg Lewis:
Greg Lewis: And as we think about the growth there.
Speaker Change: How far along beyond being up and running do we need to think about before we can kind of start rolling. This out you know more broadly yen and whether that's with claim core or are others abroad is this kind of like a chicken and egg where we you know it's going to be up and running but then there's going to be this incubate.
Speaker Change: <unk> period are we.
Speaker Change: We actually see this maybe.
Speaker Change: Grow little bit faster quicker.
Speaker Change: Quaker.
Speaker Change: Yeah. Thanks, Greg I think a really importantly for us and the way I think about this specifically.
Speaker Change: As we are really commercializing two flagship projects and there's going to be the catalyst for us to then go into a much more aggressive.
Speaker Change: Scale up of our capability across a number of other projects. So really this is us getting in to get into the game I think we're privileged to be doing that with the highest possible pedigree partners, but I think directly to your question.
Speaker Change: I would especially on the auto cats see us in a position to scale quite aggressively.
Speaker Change: These are small plants that can be.
Speaker Change: Replicated.
Speaker Change: And in the end there's a.
Speaker Change: There is an ability for us to to commission a number of plants on the back end of a successful first time running that'll be dictated by really discussions with with our partner partners of Glencore.
Speaker Change: Identifying additional geographic target locations and really getting in getting that first plant operational getting that optimized successfully delivering clean process metals from that first plant.
Speaker Change: That will that will really drive what I would expect would be a a pretty aggressive.
Growth of additional plants being commissioned on the backend. So so I would be I would.
Speaker Change: [noise] have quite bold expectations in terms of a.
Speaker Change: On a scale up strategy on the back of that first plant.
Speaker Change: And Greg in addition to this just in the very core of your question with blood gas. The timeline phase. One includes a feasibility study and part of the event visibility study is of course to understand the input costs in the U S or specific sites, but even given that most of the activities.
Speaker Change: Happening in Perth of course, we are all in <unk> and the polls as cliff has been visiting with some of our partners as well as.
Speaker Change: With our own team sites and to find the perfect type in the U S for the first.
Speaker Change: Altogether recycling refinery and so once we have phase one done and should include a feasibility study that is execution of any in phase two which is the execution is already read how it's being funded between us and claim quickly we still have to put the Franklin in place of the broad slots in there so that will be built.
Speaker Change: <unk> advanced this as we advance the technical feasibility study so ideally be then.
Speaker Change: Most of the execution when the feasibility study comes out so there's willing.
Speaker Change: A clear timeline here.
Speaker Change: Yeah, I'd say orders. So comment there is we we have the technical expertise to understand the processing of pjm's and being able to recover those metals.
Speaker Change: But also the market dynamics in the recycling space and then also the catalytic converter market.
Speaker Change: We brought in just in front of men, who who has an incredible amount of XP.
Speaker Change: Experience.
Speaker Change: And there are north American recycling market in the PGM market and so to really bringing Justin and has been really that perfect complementary piece.
Speaker Change: And so we're pretty excited to crack into the market and that's something where we're really on the verge of doing which is a which is very exciting.
Speaker Change: Okay.
Speaker Change: Okay for our next question will go to like the user from Roth M. K M.
Speaker Change: Mike you'll be muted. Please go ahead.
Speaker Change: Okay.
Mike: Mike I did not.
I can imagine muted on euro and yen.
Mike: Presenting.
Mike: What are the <unk>.
Mike: With the monetization of the Opco.
Mike: Okay.
Speaker Change: Yeah, No I heard you Mike.
Speaker Change: So I think so in terms of the offtake agreement. So we're as I indicated in some pretty advanced negotiations.
Speaker Change: Any additional funding from the.
Speaker Change: The monetization of an off take agreement give us two things number one it will give us the ability to assess any potential additional pre development work or pull forward any timeline on the <unk> projects.
Speaker Change: That would add value to brilinta lifestyle and the project timelines. So that's something we can assess at that point in time and specifically once we see the the.
Speaker Change: The feasibility study costs for conclusion, secondly, this will give us.
Speaker Change: Additional ability to look at other pipeline projects and so that's something.
Speaker Change: The optionality to have that and do additional R&D work look at additional projects is something that.
Speaker Change: Yeah, absolutely we will have the ability to to assess at that point in time, but the.
Speaker Change: The bulk of a lot of the funds will continue to be.
Speaker Change: Allocated and focused on ensuring that the Keybank a project is delivered.
Speaker Change: On time on the schedule that we're finalizing with the engineers and with BHP.
Speaker Change: Okay great.
Speaker Change: And I think we've pretty much covered all the questions today, So I will wrap up the webcast just.
Just a quick reminder, if you do have any outstanding questions. Pete Please feel free to follow up with me directly My E. Mail is Evan dot young at lifestyle metals Dot com and I'd be happy to answer that question offline.
Speaker Change: But this concludes the webcast I'd like to thank everyone for attending today's event and we look forward to speaking with you soon on the many exciting milestones coming up this year. Thank you for your time.
Speaker Change: Thank you everyone. Thank you very much.
Speaker Change: Yeah.