Noram Lithium Corp: Zeus PEA shows 31% After-Tax IRR USD$1.299 Billion After-Tax NPV

Overview

Driven by increasing demand from the electric vehicle industry, the outlook for lithium is promising and forecasts are showing no signs of slowing down. On top of this rising demand, the US government has also deemed lithium a “critical material” and released a National Blueprint that outlines a goal to secure access to raw materials for lithium batteries and establish a program to increase domestic processing and production.

As the push to develop a domestic supply chain for lithium batteries in the US gets underway, one region in the country stands out among the rest. Nevada’s Clayton Valley is home to the only operating lithium brine mine in the US –– Albemarle’s (NYSE:ALB) Silver Peak Lithium Mine, which has produced lithium for more than 60 years. Nevada is ranked the top mining jurisdiction in the world based on investment attractiveness in 2020. Of note, Albemarle has indicated it is planning on doubling its Silver Peak’s lithium production by 2025.

One company focused on a project in Clayton Valley, Nevada, is Noram Lithium (TSXV:NRM; OTCQB:NRVTF; FRA:N7R). Noram Lithium’s flagship Zeus project is a high-grade lithium project that spans 2,800 acres, located adjacent to Albemarle’s Silver Peak Lithium Mine, with extensive infrastructure including power at site a paved highway directly to the project. It is also in the same state as Tesla’s (NASDAQ:TSLA) first Gigafactory.

A Preliminary Economic Assessment (“PEA”) on the Zeus project showed robust economics indicating a US$1.299 billion after-tax net present value (“NPV”) (8percent) with a 31 percent after-tax internal rate of return, spanning a mine life of 40 years. The existing resource has indicated resources for up to 200 years of operation.

Noram Lithium is fully funded with a strong cash position to advance and de-risk its Zeus project with an aggressive development plan set for 2022. Development plans include updating the project’s resource with a drill program in Q1/2022, completing additional metallurgical and prefeasibility studies (“PFS) to further enhance the project’s economics, and complete baseline environmental studies and green initiatives.

Company Highlights

• Noram Lithium’s flagship Zeus project has a preliminary economic assessment that indicates robust economics: a US$1.299 billion after-tax NPV (8percent), a 31percent IRR” and a mine life of 40 years.
• 100 percent owned with no underlying NSR.
• A significant mineral resource estimate at cut-off grades of 400 ppm, including a total measured and indicated resource of 1.8 million tonnes of lithium carbonate equivalent and a total inferred resource of 3.9 million tonnes of lithium carbonate equivalent.
• Zeus features a high-grade and shallow lithium deposit, which may result in a relatively low-cost operation supported by high lithium recoveries and low contamination.
• Situated near Albemarle’s Silver Peak, which is the only other US producer of lithium.
• Noram’s share structure remains tight with below 75M shares issued, with approximately 20percent controlled by management and insiders.

Key Projects

Zeus

The flagship Zeus project is a high-grade lithium project located in Clayton Valley in Nevada, near the only other US producer of lithium, Albemarle’s Silver Peak. The 2,800 acre property features access to a road, power and extensive infrastructure nearby. The Zeus project hosts a large-scale deposit located near the surface with minimum to nil overburden that is suitable for conventional mining methods and would be a relatively low-cost operation.

The preliminary resource estimate on the Zeus project showed robust economics. Highlights include (all $ are expressed in US$):

• $1.299 Billion NPV” (After-Tax) at 8percent discount rate with a 31percent IRR.
• Capital Costs (“CAPEX”) estimated at $528M with after-tax payback period of 3.23 years.
• Gross Revenue of $303.4 Million/year or $12.14 billion over its mine life.
• Low Operating Cost. Operating Cost (“OPEX”) of $3,355.30/tonne Lithium Carbonate Equivalent (“LCE”) with a break-even price of $4016.6/tonne LCE LOM. Operating cost per tonne places the Zeus projects amongst the lowest in the industry.
• Long Mine Life (“LOM). The mine production rate during full operation is set at 17,000 tpd. The production schedule uses ore from the first 11 phases, which results in 40-year mine life (“LOM”). The mine production schedule results in 245.4 million tonnes averaging 1,093 ppm Li.
• Very Low Strip Ratio. Mining strip ratios are very low, averaging 0.07:1 for LOM. Mining consists of a truck and shovel method, with blasting being unnecessary due to the ore softness.
• Low Environmental Impact. The leaching and filtration flowsheet includes dry stack tailings, thus, eliminating the environmental risk and long-term management issues associated with tailings ponds.
• LCE market Price. Base case market price of $9500/tonne LCE is well below long term forecasted rate of $14,000/tonne. Price Sensitivity. The after-tax NPV reaches $2.665 billion at $14,250/Tonne LCE (8percent discount rate). On January 13, 2022, LCE was currently selling for ~US$50,000/tonner

Noram Lithium President and COO Peter Ball shared in an interview with INN, "These numbers are spectacular for where we are. It's going to be an opportunity for shareholders."

Noram Lithium CEO and Director Sandy MacDougall said, “This study represents the most significant milestone to date for Noram and establishes us among limited peers as the newest low cost, high-grade, near-term lithium production story in North America."

In a research report, independent analyst Fundamental Research Corp. (on December 15, 2021) gave the company a peer-compared fair value of C$2.65 after reviewing Noram’s recent PEA announcement.

Noram Lithium plans to further upgrade the resource with additional infill drilling of 12 holes planned for the first quarter of 2022. The company also plans to complete an additional follow-up metallurgical study in the first half of 2022 and then complete a prefeasibility study (“PFS”) in the second half of 2022.

Management Team

Anita Algie - Chair & CFO

Anita Algie has over 15 years of experience in management, listings, compliance, corporate structure and development as well as mergers and acquisitions for exploration- and resource-based public companies. She is the former president and CEO of Unity Metals Corp. (TSXV:UTY). She is also the former president, CEO and director of American Lithium Corp. (TSXV:LI) and First Cobalt Corp. (TSXV:FCC). Algie has served on numerous boards during her career in the public markets and specializes in sourcing, acquiring and developing non-grass roots properties. Algie has also successfully completed several CPC Qualifying Transactions with the TSX Venture Exchange. She is an Honors Human Physiology graduate from the University of British Columbia.

Sandy MacDougall -
CEO & Director

Sandy MacDougall is an Economics graduate of the University of British Columbia. MacDougall has over 30 years of experience in the investment banking and finance industry. He was a former investment advisor at Canaccord Capital Corp. and was involved in numerous significant financings in Canada and abroad for a wide range of companies. His experience includes extensive exposure to precious and base metal projects throughout North and South America. He was previously Chairman of the Board from 2016 to 2021.

Peter A. Ball - President & COO

Peter Ball brings over 30 years of extensive experience as a mining professional at all levels of leadership. Throughout Ball’s career, he has held various senior management roles with international mining companies, including corporate finance, securities trading, mine engineering, business development, corporate communications, public relations and marketing functions. Balls’ management experience is throughout North and South America, Asia and Europe. Ball began his career in the late 1980s working as a mining engineer, a technical representative and in various management and senior executive roles. Ball held these roles at numerous companies, including NV Gold Redstar Gold , Columbus Gold , Hudson Bay Mining & Smelting, Echo Bay Mines Ltd., RBC Dominion Securities and Eldorado Gold Corp. Ball is a graduate of the Haileybury School of Mines, Georgian Business College and UBC’s Canadian Securities Course. Ball is also a member of CIMM. Ball has led and assisted in raising over $250M of capital in the resource sector.

Arthur Brown - Director

Arthur Brown brings 36 years of business experience to Noram’s board. He has served on the boards of eight other companies in sectors ranging from technology to oil and gas and mineral exploration. Brown has substantial knowledge and experience in corporate structure and development, financings and venture capital. Brown understands all the aspects and requirements that a public company must have to operate successfully. This knowledge and experience have been translated into many successful financings for the various companies that he has been involved with.

Adam Falkoff - Independent Director

Adam Falkoff has over 20 years of experience in public policy, international relations and business development. He has advised CEOs of the Fortune 100, presidents, prime ministers, cabinet ministers and ambassadors as the president of CapitalKeys. CapitalKeys is a bipartisan global public policy and strategic consulting firm based in Washington, D.C. with offices in London and Singapore. As the president of CapitalKeys, he has successfully helped clientele understand, anticipate and navigate the complex public policy environment as well as develop strategies for business development driving client revenues. He is also the interim president of RARE, The Association for Rare Earth. He is a 2018 recipient of the Ellis Island Medal of Honor for service to the USA. He was also named to the Washington, D.C. Power 100 which is a list of the 100 most influential non-elected people by Washington Life Magazine.

Falkoff received a Bachelor of Arts from Duke University. He also received an M.B.A. and M.I.M. (Master of International Management) from the Thunderbird School of Global Management on an academic scholarship. Falkoff also holds a Certificate in International Law from the University of Salzburg’s Institute on International Legal Studies. The coursework was instructed by Supreme Court Justices Anthony Kennedy and John Paul Stevens. He also participated in the Postgraduate Programme of the School of Mining Engineering at the University of Witwatersrand in Johannesburg, South Africa that is known as the world’s preeminent institution in the field of international mining and mining studies.

Cyrus Driver - Independent Director

Cyrus Driver is a chartered accountant and a founding partner in the firm of Driver Anderson since its inception in 1982. Driver is a retired partner in the firm of Davidson and Company LLP. Driver has a wide knowledge of the securities industry and its rules which has enabled him to give valuable advice to clients with respect to finance, taxation and other accounting-related matters. Whilst providing general public accounting services to a wide range of clients, he specializes in servicing TSX Venture-listed companies and members of the brokerage community. He currently serves as director and/or CFO of several TSX-V listed companies.

Brad Peek, CPG - Senior Consultant Geologist

Brad Peek has more than 40 years of experience in project management, mineral exploration and computer applications in the mining industry. Peek has 11 years of experience with a water engineering consultant firm. Peek received a Bachelor of Science degree in Geology from the University of Nebraska and a Master of Science degree in Geology from the University of Alaska. He is a member of the Society of Economic Geologists as well as the Society of Mining, Metallurgy and Exploration. Peek is also a Certified Professional Geologist, CPG11299 of the AIME American Institute of Professional.