Cypress Development

Overview

Electric vehicles aren’t just the hottest trend in Silicon Valley anymore. With wider cultural acceptance of green power alternatives, more accessible technologies and increasingly supportive legislative action, analysts expect this market and the demand for metals that supply it to climb to exponential highs.

In the United States, the government has named lithium a vital component in electric vehicle batteries and a strategic metal of importance. In 2021, President Joe Biden announced a US$2.3 trillion Infrastructure Plan, which outlines the intent to bring electric cars fully to the mainstream with investments of US$174 billion to promote this technology and construct necessary charging stations. This significant spending demonstrates exciting early-mover investment opportunities for lithium production companies and electric industries alike.

Cypress Development (TSXV:CYP,OTCQX:CYDVF) is a Canadian based advanced-stage lithium company, focused on developing its 100-percent-owned Clayton Valley Lithium Project in Nevada. Cypress is in the pilot stage of testing material from its lithium-bearing claystone deposit and progressing towards completing a feasibility study and permitting, with the goal of becoming a domestic producer of lithium for the growing electric vehicle and battery storage market.

In June 2022, Cypress announced positive results from the DLE portion of its lithium extraction facility (pilot plant) in Amargosa Valley, Nevada. Assays received from samples collected during continuous operating cycles in 2022 revealed an average lithium recovery of 99.5 percent within the DLE portion of the pilot plant. These high lithium recoveries were accompanied by high levels of impurity rejection.

Cypress Development’s pilot plant reached a milestone in the delivery of about 4,000 liters of concentrated lithium chloride solution to two laboratories in Canada for further testing in the production of lithium products.

“Each laboratory is now working to further treat the solutions – one to produce lithium carbonate, and the other, lithium hydroxide, as the final end product,” commented Bill Willoughby, president and CEO of Cypress Development. “These results will then be used to determine what additional steps are needed, if any, to attain battery-grade standards and evaluate the alternatives for producing these products in the ongoing feasibility study.”

In May 2022, Cypress acquired Enertopia’s (OTCMKTS:ENRT) 160-acre lithium project, located adjacent to its Clayton Valley Lithium Project in Nevada. Willoughby said the strategic acquisition will potentially aid in optimization and production schedule development for the company’s upcoming feasibility study, which was announced in February 2022.

The feasibility study is being conducted by Wood PLC, which has completed numerous studies for mining projects in Nevada as well as relevant studies for various lithium projects globally. It was recently awarded a contract by Green Lithium, a mineral processing company, to build and operate the UK’s first large-scale commercial lithium refinery. Cypress also engaged thyssenkrupp nucera USA, Inc. to provide the design and engineering for the chlor-alkali plant as part of the ongoing feasibility study on the Clayton Valley Lithium project.

In 2021, Cypress reported a successful pilot plant for extraction testing of lithium-bearing claystone from the company’s Clayton Valley Lithium Project. The first full test was completed within 72 hours of continuous operation. “We have now completed three-, seven- and 14-day tests, achieving improvements in the operation and gaining important knowledge as we develop our unique lithium extraction process” stated Willoughby.

The pilot plant is operating at a rate of one tonne per day and is designed for correct interaction and testing of the major components within the extraction process and assessment of the resulting lithium products.

At the end of 2021, Cypress acquired a water rights permit from the state of Nevada, which allows for the appropriation of 1,770 acre-feet of groundwater per year for mining, milling and domestic applications. This amount represents the largest single volume of permitted water available in the Clayton Valley, which is a fully appropriated hydrogeographic basin. “Water resources in Nevada are limited, therefore the acquisition of this permit by Cypress represents a milestone which will secure a majority of the project’s future water requirements,” said Willoughby.

The company’s discovery of the massive resource made Clayton Valley a premium American source of lithium that has the potential to impact the supply of lithium for the fast-growing energy storage battery market.

“We’re in Nevada and we’re in a country that badly needs lithium. We would be the most environmentally friendly project and the lowest acid consumer. We’re able to eliminate sulfuric acid in our process and that would make us an extremely environmentally friendly, large, inexpensive low cost producer in the heart of the United States.” said Willoughby.

The company is using environment-friendly mining alternatives through saltwater and hydrochloric acid instead of the traditional freshwater and sulfuric acid method. This significant proposal could mean Cypress will no longer compete for Nevada’s scarce freshwater resources for project advancement when it comes time for mining.

In August 2020, Cypress released the results of its pre-feasibility report (PFS), which provided a positive snapshot of Clayton Valley’s prospective production scope using sulfuric acid(the feasibility study will use hydrochloric acid – a greener alternative to sulfuric acid). Probable reserves stand at 213 million tonnes at 1,129 ppm lithium, with an average annual production of 27,400 tonnes of lithium carbonate equivalent (LCE) and a mine life of over 40 years. Net present value (NPV 8 percent) was at US$1.03 billion, and the after-tax IRR stood at 25.8 percent, using a base case lithium carbonate price of US$9,500.

“This PFS is a major milestone for Cypress. These positive results take us closer to our goal of developing a potential world-class lithium deposit. Cypress’ land position and resources afford us the opportunity for a long-life project with low operating costs and potential to be a significant source of lithium for the United States,” Willoughby said.

Company Highlights

• Cypress Development is one of a handful of advanced-stage companies that are working at a feasibility study level with an active pilot plant, and advancing towards production.
• Direct lithium extraction (DLE) results from a portion of its pilot plant revealed an average lithium recovery of 99.5 percent, accompanied by high levels of impurity rejection.
• Cypress Development has a water rights permit in place, thus securing a majority of the project’s future water requirement. Something that very few companies hold.
• The Clayton Valley lithium project in Nevada has an extensive surface deposit adjacent to Albemarle’s Silver Peak brine operation.
• The company released strong economic standing with its pre-feasibility study, using $9,500 as a base price of lithium carbonate, including a probable reserve estimate of 213 million tonnes at 1,129 ppm lithium, internal rate of return (IRR) of 25.8 percent and capex of C$493 million. Lithium carbonate is now being contracted at $20,000 to $40,000/tonne.
• Cypress possesses very favourable economic and geographic positioning in leveraging current strong demand for lithium, world-class mining jurisdiction and an advanced-stage operation in their flagship Clayton Valley lithium project.
• 2021 included the commissioning of the Clayton Valley lithium, which completed three-, seven-, and 14-day continuous testing and has achieved positive interim results.
• The company is well positioned to become a long-term, low-cost lithium domestic producer for the growing electric vehicle and battery storage market.
• The company achieved a significant milestone with the production of 99.94 percent lithium carbonate (Li₂CO₃) made from lithium-bearing claystone from its 100-percent-owned Clayton Valley Lithium Project.
• The company recently engaged thyssenkrupp nucera to provide the design and engineering for the chlor-alkali plant as part of the ongoing Feasibility Study on the Company’s Clayton Valley Lithium Project. The chlor-alkali plant is an essential component which will allow the Project to self-generate two key reagents required for processing lithium-bearing claystone through to a Li2CO3 (lithium carbonate) product.

Key Project

Clayton Valley Lithium Project

The 100-percent-owned Clayton Valley lithium project spans 5,430 acres in southwest Nevada and sits immediately east of the Albemarle’s Silver Peak mine, North America’s only lithium brine operation. The asset hosts tremendous potential with Cypress’ discovery of a world-class resource of lithium-bearing claystone adjacent to the brine field to the east and south of Angel Island.

Lithium mineralization occurs on the property within montmorillonite clays throughout the sediments to a depth of at least 150 meters. Metallurgical testing has indicated low-cost processing possibilities through leaching with low acid consumption of 126 kg/t and high lithium recovery of over 85 percent lithium. This lithium claystone deposit’s unique large flat-lying nature allows for mining with a low strip ratio due to minimal overburden and no interbedded waste, which is hugely economically advantageous for Cypress.

The Clayton Valley lithium project’s pilot plant was commissioned in 2021, completing a seven-day continuous run in December of the same year, after which Cypress renewed the lease. The company intends to use the data from the pilot plant towards the completion of the project’s feasibility study. Cypress successfully received a permit for water rights for Clayton Valley, which pushed significant advancement in the 2022 season.

Management Team

Dr. William Willoughby - President, Chief Executive Officer & Director

Dr. William Willoughby is a mining engineer with 38 years of experience in all aspects of natural resources development. Since 2014, he has been principal and owner of consulting firm Willoughby & Associates. Prior to that, he was president and COO of International Enexco, which was acquired by Denison Mines in 2014. He previously held various positions with Teck. Willoughby has been a professional engineer since 1985 and received his doctorate in mining engineering and metallurgy from the University of Idaho in 1989.

Abraham (Braam) Jonker - Chief Financial Officer

Abraham Jonker is an accomplished financial leader in the mining industry with almost 30 years of experience. Jonker has played a pivotal role in several business recoveries and restructurings, was a key team member in management, and at the board level, in the strategic growth of a number of public companies. He has participated and overseen the raising of more than C$750 million in the form of equity and debt instruments in the mining industry. Jonker is a registered chartered accountant in British Columbia, England, Wales and South Africa. He is also a member of the Chartered Institute of Management Accountants in the United Kingdom and holds a master’s degree in South African and international tax from Rand Afrikaans University, South Africa.

Spiros Cacos - Vice President, Investor Relations

Spiros Cacos has over 20 years of investor relations experience, working with public mining companies, ranging from early-stage exploration and development to production. Most recently, Cacos served as vice president of investor relations for First Mining Gold, a Canadian gold development company listed on the TSX and OTCQX. It focused on the development and permitting of the Springpole Gold Project, one of the largest undeveloped gold projects in Canada. Cacos’ prior roles include serving as vice president, investor relations for Group Eleven Resources, a mineral exploration company focused on advanced-stage zinc exploration in Ireland, and as director of investor relations for Great Panther Mining, a primary silver mining company, listed on the TSX and the NYSE, with two mining operations in Mexico. Cacos holds a Master’s degree in international relations and diplomacy, from the Schiller International University in Paris and a Bachelor of Arts from Simon Fraser University in British Columbia.

Dr. Corby G. Anderson - Technical Advisor

Dr. Corby Anderson is a registered engineer with nearly 40 years of global experience in industrial operations, corporate level management, consulting, engineering design, research, and education. He is an expert in the fields of extractive metallurgy, mineral processing, waste minimization, and recycling. He holds a bachelor’s of science degree in chemical engineering from Montana State University and a master’s of science degree.

Adam Knight - Project Manager

Adam Knight is a professional mining engineer, active in the mining industry since 1994. Before joining Cypress, he worked as a consultant and project manager for Practical Mining, located in Elko, Nevada. He was vice-president of operations for EMC Metals until 2015. Prior to that, Knight worked in various operational capacities for Teranga Gold, Premier Magnesia, and AngloGold.

Daniel W. Kalmbach- Manager, Geology

Daniel Kalmbach has practiced geology for over 21 years and has held various positions with private and public companies in the field of geology. This experience includes greenfield and generative exploration, development, mining, and environmental science. He has supported and authored multiple technical reports on mineral properties.

Todd S. Fayram - Technical Advisor, Metallurgy

Todd Fayram brings over 30 years of metallurgical engineering experience to his role, which includes extensive diversified experience in the consulting and operating fields of various mining and milling operations across the globe. His industrial experience includes project and construction management. Fayram is experienced with planning, design, and engineering precious and base metal heap leach and milling operations, and with industrial mineral development and operations. Fayram has experience with project evaluation for prefeasibility, feasibility, bankable documents, metallurgical testing, and interpretation of numerous mineral deposits. He has also held positions in mine and process development, construction, expansion, start-up, and operation of numerous mines including Minefinders-Dolores, American Bonanza Copperstone, Americas Silver-Cosala, Middle Tennessee Zinc-Gordonsville, and Getty Copper Getty Project. Fayram is a MMSA Qualified Professional in Metallurgy and holds a Bachelor of Science in mineral processing engineering and a Master of Science in metallurgical engineering from Montana Tech of the University of Montana.