Cypress Development Clayton Valley Lithium Project Presentation
- 1. Clayton Valley Lithium Project Basic Shares Outstanding: 98.7 m FD Shares Outstanding: 115.4 m Market Capitalization: C$58 m CYP (TSX-V) | CYDVF (OTCQB) | C1Z1 (Frankfurt)December 2020
- 2. 2 Forward Looking Statements Some of the statements in this document may be deemed to be "forward-looking statements." All statements in this document, other than statements of historical facts, that address events or developments that management of the Company expects, are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward- looking statements. The Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change. Factors that could cause actual results to differ materially from those in forward-looking statements, include market prices, exploration and development successes, continued availability of capital and financing, and general economic, market or business conditions. Please see the public filings of the Company at www.sedar.com for further information. Qualified Person as defined by National Instrument 43-101 and supervised the preparation of the technical information in this presentation is William Willoughby, PhD, PE, Director and CEO of Cypress. CYPRESS DEVELOPMENT CORP
- 3. 3 Cypress Capital Structure CYPRESS DEVELOPMENT CORP Basic Shares Outstanding 98.7 million FD Shares Outstanding * 115.4 million Market Capitalization C $ 58 million Cash Position C $ 2.2 million YTD Growth in Market Cap 366 % 4 Year Growth in Market Cap (since start of drilling) 1585 % Trading Symbols TSX Venture Symbol CYP US OTCQB Market CYDVF Frankfurt Exchange Symbol C1Z1 * Warrants 9.9 million avg 0.267 * Options 6.8 million avg 0.177
- 4. 4 Management & Directors CYPRESS DEVELOPMENT CORP William Willoughby, PhD, PE CEO, DIRECTOR Doctorate in Mining Engineering & Metallurgy from University of Idaho (1989) Registered Professional Engineer (since 1985) SME Registered Member (since 2015) Cypress CEO (Since 2017) Founder & CEO Caliber Minerals (since 2017) Owner Willoughby & Associates (since 2015) International Enexco (2007-2014) Teck (Cominco) (1989-2007) Donald C. Huston PRESIDENT, CHAIRMAN Cypress Chairman and President, 35 years experience in financing and operating mineral exploration projects including 15 years in geophysical contracting, Director for four publicly traded Canadian companies. James G. Pettit CFO, DIRECTOR Cypress CFO, 30 years experience in corporate finance, executive management & compliance Present CEO of Aben Resources, Director for five publicly traded Canadian companies. Donald Myers DIRECTOR Non-executive Director, Audit Committee 35 years experience in management, communications and investor relations of Canadian and US listed resource and technology companies. Amanda Chow INDEPENDENT DIRECTOR Chartered Professional Accountant (CPA, CMA) Bachelor of Business Administration from Simon Fraser University, 21 years experience in corporate finance.
- 5. 5 Advisors & Consultants CYPRESS DEVELOPMENT CORP Corby Anderson, PhD, PE Technical Advisor, Metallurgy Doctorate in Mining Engineering & Metallurgy from University of Idaho (1989) Harrison Western Professor in the Kroll Institute for Extractive Metallurgy as part of the Mining and George S. Ansell Department of Metallurgical and Materials Engineering at the Colorado School of Mines Todd Fayram, MMSA-QP Consultant, QP Metallurgy Master of Science in Metallurgical Engineering from Montana Tech of the University of Montana Owner Continental Metallurgical Consultants Daniel Kalmbach, CPG Consultant, QP Geology Bachelor of Science in Geology from University of Idaho, Certified Professional Geologist American Institute of Professional Geologists. 22 years experience in exploration, mine geology and environmental management VP Exploration for Caliber Minerals Adam Knight, PE Consultant, Project Manager Bachelor of Science in Mining Engineering University of Nevada, Professional Engineer, Nevada, 26 years experiences in management and operations of mining companies VP Operations for EMC Metals William Breen, PGeo Consultant, Land Manager Bachelor of Science in Geology from University of Idaho, Registered Member SME Professional Geologist, Wyoming Licensed Geologist, Washington Donald Mosher Advisor, Corporate Development Simon Dyakowski, CFA, MBA Advisor, Capital Markets
- 6. 6 Investment Highlights CYPRESS DEVELOPMENT CORP A designated U.S. strategic mineral forecast for significant growth in demand In top 3 most favorable mining jurisdictions (Fraser Institute 2017-2019) 3 hours from the Tesla Gigafactory First Drill Hole - February 2017 Preliminary Economic Study - October 2018 Positive Prefeasibility Study - May 2020 Extensive surface deposit in unique setting adjoining Albemarle’s Silver Peak brine operation Lithium Nevada Claystone Advanced Project
- 7. 7 Lithium: US “Critical Mineral” CYPRESS DEVELOPMENT CORP • US Government designated Lithium as a “Critical Mineral” of strategic importance in December 2017. (Executive Order 13817 – A Federal Strategy to Ensure, Secure and Reliable Supplies of Critical Minerals) • “Critical Mineral” designation favours domestic sources of Lithium across the supply chain • Section 3 of the policy calls for identification of new sources of the minerals, increasing exploration mining and processing and streamlining permitting
- 8. Lithium-ion Battery Demand by End Use Sector 8 CYPRESS DEVELOPMENT CORP This chart outlines the key drivers of demand for lithium-ion batteries over the forecast period. The major growth area is EVs, followed by stationary (grid) applications. In our base case scenario we expect demand will be 135,000 MWH in 2018, reaching 760,000 MWH by 2025, and 4M MWH by 2035. SOURCE: BENCHMARK MINERAL INTELLIGENCE – CYPRESS DEVELOPMENT CORP – AUGUST 2018 0.0 1.0 2.0 3.0 4.0 5.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Stationary Other Electric Vehicles EV Downside EV Upside
- 9. 9 Nevada Location CYPRESS DEVELOPMENT CORP 100% owned Property 3% NSR royalty Option to buy-down to 1% for $2 million U.S. Federal BLM Lands Project Area covering 5,430 acres (formerly Dean and Glory Projects) North Geothermal Lease 640 acres Cypress Project Las Vegas Tesla Factory Cypress Geothermal Lease Cypress Claims Albemarle Silver Peak Brine Operation Cypress Project
- 10. 10 Lithium Deposit Types CYPRESS DEVELOPMENT CORP Sedimentary Brine Hardrock Mine Product Lithium Carbonate (Li2CO3) Lithium Carbonate (Li2CO3) Spodumene Concentrate (6% Li2O) Typical Grade 1,000-3,000 ppm Li 500-1,000 ppm Li 4,500-7,000 ppm Li Production Steps Mining Acid Leaching Evaporation Crystallization Pumping of Brine Evaporation Crystallization Mining Crushing and Grinding Roasting Acid Leaching Evaporation/Crystallization Estimated Cash Costs ($/tonne Li2CO3 ) $3,300* *Cypress 2020 PFS $2,500 – 4,000 ** +$6,000 ** ** Industry and company reports
- 11. 11 Prefeasibility Study Results (May 2020) CYPRESS DEVELOPMENT CORP 25.6% Internal Rate of Return (IRR) $1.05 billion Net present value (NPV 8%) 4.4 years Payback Period 15,000 tpd for 40 years Operating Rate $493 million over 2 years Capital Cost Estimate 83% Net Lithium Recovery $9,500/tonne Base case price for lithium carbonate 27,400 tonnes Average production lithium carbonate $3,329/tonne Operating Cost for Lithium After-Tax Cash Flow Analysis (US Dollars)
- 12. 12 Clayton Valley Highlights CYPRESS DEVELOPMENT CORP | Multi-million tonne LCE resources and reserves Large Size Next to Albemarle’s Silver Peak brine operation Accessible Location First drill hole February 2017 Rapidly advancing, PFS completed May 2020 New Discovery Easy Mining Flat deposit, no overburden Soft clay, no drill & blast Leachable clay, low acid consumption Potential by-products, including REEs Low-Cost Processing
- 13. 13 Sedimentary Hosted Lithium Projects CYPRESS DEVELOPMENT CORP | Project Clayton Valley (TSXV:CYP) Operating Cost ~$3,300 / tonne LCE Development Stage PFS Market Cap (C$) 60 MM Project Thacker Pass (TSX:LAC) Operating Cost ~$2,600 / tonne LCE Development Stage PFS Market Cap (C$) 1,190 MM *Argentina + Nevada Assets *Majority of MC due to Brine Project Rhyolite Ridge (ASX:INR) Operating Cost ~$2500 / tonne LCE Development Stage FS Market Cap (C$) 420 MM Project Sonora (AIM:BCN) Operating Cost ~$3,400 / tonne LCE Development Stage FS Market Cap (C$) 190 MM 0 200 400 600 800 1000 1200 1400 Lithium Americas (TSX:LAC) Ioneer Ltd (ASX:INR) Bacanora Lithium (AIM:BCN) Cypress Development (TSXV:CYP) Market Capitalization (CAD)
- 14. 14 History CYPRESS DEVELOPMENT CORP Albemarle Corporation (NYSE:ALB) acquires Rockwood Holdings and Silver Peak brine operation in Clayton Valley 2014 2016 2018 2020 2015 2017 2019 Tesla Motors breaks ground on $5 B Gigafactory in Sparks Nevada Cypress acquires claims in Clayton Valley, begins surface exploration Cypress begins drilling and metallurgical tests, identifies sulfuric acid leaching as means to extract lithium from Clayton Valley claystone Preliminary Economic Assessment shows positive results in leaching with sulfuric acid In-fill drilling, metallurgical and processing- related testing, permitting and due diligence studies with interested parties Prefeasibility Study completed Pilot plant recommended Elon Musk at Battery Day makes comments on leaching Nevada clay with salt
- 15. 15 Clay Deposit CYPRESS DEVELOPMENT CORP • Extensive volcanic-derived claystone east and south of brine field and Angel Island • Lithium in illite and montmorillonite clays to depth of at least 150 m below surface • Layer-cake-like geometry with lithium-bearing claystone outcropping at surface
- 16. 16 Resources CYPRESS DEVELOPMENT CORP Measured + Indicated Tonnes (Million) Li ppm Tonnes LCE (million) 593 1,073 3.387 1. The effective date of the Mineral Resource Estimate is May 19, 2020. The QP for the estimate is Ms. Terre Lane of Global Resource Engineering Ltd. and is independent of Cypress. 2. The Mineral Resource estimate was prepared with reference to the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards (2014 CIM Definition Standards) and the generally accepted Canadian Institute of Mining’s (CIM) “Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines. (November 29, 2019). 3. Cautionary statements regarding Mineral Resource estimates: Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserves. Inferred Mineral Resources are the part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. CVLP view northwest from near DCH-7
- 17. 17 Reserves CYPRESS DEVELOPMENT CORP Probable Reserve Tonnes (Million) Li ppm Tonnes LCE (Million) 223 1,141 1.354 1. The effective date of the Mineral Reserve Estimate is May 19, 2020. The QP for the estimate is Ms. Terre Lane of Global Resource Engineering Ltd. and is independent of Cypress. 2. The Mineral Reserve estimate was prepared with reference to the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards (2014 CIM Definition Standards) and the with generally accepted Canadian Institute of Mining’s (CIM) “Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (November 29, 2019). 3. Mineral Reserves are reported within the pit design at a mining cutoff of 900 ppm. 4. The cutoff of 900 ppm is an optimized cutoff selected for the mine production schedule. 5. The Mineral Reserves are derived from and not separate from the Mineral Resources. 6. Mineral Reserves are estimated based on delivery to the mill stockpile. 7. No Inferred Resources are included in the Mineral Reserves or given value in the economic analysis Silver Peak Highway with Angel Island in center looking west
- 18. 18 PFS Design Assumptions CYPRESS DEVELOPMENT CORP • Operating rate of 15,000 tpd • (5.5 million tpy claystone ) • Production of 27,300 tonnes LCE • Plant site on flank of Angel Island • Conveyor from pit to leach plant • 2,500 tpd sulfuric acid plant on site
- 19. 19 Mining CYPRESS DEVELOPMENT CORP • Soft material, no drilling and blasting • Mining by excavator to feeder breaker • Shallow long surface cut allows all- conveyor transport to mill • Negligible stripping, < 0.15 tonne of waste per tonne of mill feed • Mine plan for 15,000 tpd mill feed • 5.475 million tpy average 0.11% Li Processing • 2,500 tpd sulfuric acid plant on-site • Clay feed to attritor and agitated tank leaching, heated to 50-70°C • Solid-liquid separation in filtration plant • Leach solution treated in lithium recovery plant by proprietary process to remove Ca, Mg, Fe, and Al • Lithium concentrate solution treated by evaporation and electrolysis to produce lithium hydroxide on-site
- 20. 20 Process Flow Diagram CYPRESS DEVELOPMENT CORP Mining Feed Preparation Leaching Filtration Lithium Recovery Lithium Product Tailings Acid Plant Process Water Return to Process Water
- 22. 22 Capital Cost Estimate CYPRESS DEVELOPMENT CORP | Area $ x 1,000 Facilities 5,891 Mine 34,757 Plant 306,855 Infrastructure 25,907 Owners Costs 24,992 Contingency & Working Capital 94,883 Total Capital Cost 493,284 Area $ x 1000 Feed Preparation 10,731 Leaching 14,358 Filtration 32,211 Tailings Handling 3,589 Li Recovery 44,930 Acid Plant 102,585 Construction Directs 56,858 Total Direct 265,262 Indirect 41,593 Total Plant 306,855
- 23. 23 Operating Cost Estimate CYPRESS DEVELOPMENT CORP Area Avg Annual $ x 1000 Mill Feed $/t Mining 9,932 1.83 Processing 77,735 14.30 G&A 3,550 0.65 Total 91,218 16.78
- 25. 25 Path to Production CYPRESS DEVELOPMENT CORP H1 - 2021 Complete Study on Chloride Leach Conduct Pilot Plant Test Program - Basis for Feasibility Study - Demonstrate Customer Acceptance Produce minimum 1 tonne lithium product 2022 Submit Plan of Operations Begin Environmental Impact Statement H2 - 2021 Secure Water Source Complete Feasibility Study Prepare Plan of Operations 2023 Obtain Record of Decision Begin Project Construction
- 26. 26 Scoping Study Chloride Leaching Option CYPRESS DEVELOPMENT CORP Chronology 2017-2018 – Leaching tests on clay. Determined sulfuric acid as basis for project 2019-2020 – Tested to determine if Cypress process with sulfuric acid works with high chlorides levels likely present in possible water sources August 2020 – Revisited earlier tests using hydrochloric acid, but with high chloride levels present. Received positive results November 2020 - Scoping study initiated Potential Benefits of Chloride Leaching • Improved lithium recovery • Simpler, lower-cost processing • Higher extraction of REEs • Elimination of sulfur from supply chain Scoping Study in Progress • January 2021 target completion • Lab work 50% completed • No update of PFS technical report • Pilot plant plans unaffected
- 27. 27 Appendix: Lithium Market Fundamentals CYPRESS DEVELOPMENT CORP
- 28. Current Lithium Supply and Breakdown by End-Use 248,583 122,068126,515 Battery Demand Other Demand 28 CYPRESS DEVELOPMENT CORP Lithium Carbonate (54%) Lithium Hydroxide (46%) NCA (14%) NCM (29%) LCO (30%) Other LTO (1%) LFP (22%) LMNO LMO (3%) Stationary grid storage (3%) Electric Vehicles (61%) Other (36%) Metallurgy (9%)Lubricant & Grease (17%) Class & Ceramics (37%) Medical (5%) Air Treatment (7%) Other (25%) TotalLithiumDemandin2018(LCEtonnes) SOURCE: BENCHMARK MINERAL INTELLIGENCE – CYPRESS DEVELOPMENT CORP – AUGUST 2018
- 29. 85,000 125,000 125,000 125,000 30,000 31,500 31,500 31,500 28,000 28,000 28,000 28,000 184,500 2030 184,500 2018 184,500 20352023 143,000 Talison Galaxy Resource Neometals 29 Brownfield Lithium Capacity Forecast to 2035 CYPRESS DEVELOPMENT CORP Albemarle SQM 2018 2023 94,000 2030 155,000155,000 2035 125,000 55,000 70,000 85,000 85,000 39,000 55,000 70,000 70,000 FMC Orocabre 14,000 30,000 35,000 35,000 18,000 27,000 30,000 30,000 65,00065,000 203520232018 2030 57,000 32,000 3,000 3,000 3,000 3,000 Albemarle 20352018 2023 2030 2,000 2,000 2,000 2,000 1,000 1,000 1,000 1,000 203520232018 3,000 2030 3,0003,000 3,000 Arqueana de Minérios e Metals Ltda. Companhia Brasileira de Litio 5,000 5,000 5,000 5,000 2,000 2,000 2,000 2,000 20302018 7,000 2023 2035 7,0007,000 7,000 Sociedade Mineira de Pegmatites Bikita Minerals 6,000 10,000 10,000 10,000 4,000 6,000 6,000 6,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 23,000 2018 17,000 23,000 20352023 2030 23,000 Jiangxi Special Electric Yichun Tani Fozhao Lanke Tibet Mineral Development Qinghai Lithium Brine Hardrock Brine and Hardrock SOURCE: BENCHMARK MINERAL INTELLIGENCE – CYPRESS DEVELOPMENT CORP – AUGUST 2018 ‘000 LCE tonnes
- 30. Greenfield Lithium Capacity Forecast to 2035 CYPRESS DEVELOPMENT CORP Tawana Resources (Pos) Core Exploration Ltd (Pos) Kidman Resources SQM (Pos) Altura Mining (HP) Pilbara Minerals (HP) 20,000 75,000 80,000 80,000 30,000 40,000 40,000 30,000 30,000 30,000 12,000 30,000 30,000 30,000 20,000 20,000 20,000 185,000 203520302018 200,000 2023 200,000 32,000 China Minmetals (Pos) Chinese Producers (Pos) Chinese Producers (Prob) 15,000 25,000 25,000 20,000 20,000 20,000 10,000 10,000 10,000 5,000 2018 2023 55,000 2030 2035 45,000 55,000 2,000 25,000 25,00020,000 20,000 20,000 12,000 18,000 9,000 9,000 9,000 9,000 84,000 2018 2023 2030 2035 48,000 58,000 Rio Tinto - Serbia (Pos) Savannah - Portugal (Pos) Grupo Mota - Portugal (Pos) Keliber - Finland (Pos) Birimian Limited - Mali (Pos) Desert Lion Energy - Namibia (Prob) 25,000 25,000 25,000 25,000 25,000 20,000 20,000 15,000 20,000 20,000 8,000 10,000 10,000 2023 2030 2035 100,000 56,000 100,000 Argosy (Pos) Galaxy Resource (HP) LSC (Pos) Millennial Lithium (Pos) Lithium Americas (Pos) 45,000 60,000 27,000 27,000 10,000 17,000 17,000 20,000 30,000119,000 144,000 20352030 21,000 2023 Galaxy Resource (Pos) Pure Energy Minerals (Pos) Nemaska Lithium (HP) Piedmont Lithium (Pos) Global Geoscience (Pos) Lithium Americas (Pos) Brine Hardrock Brine and Hardrock 2018 203520302023 5,000 25,000 25,000 25,000 20,000 35,000 35,000 Bacanora Minerals Ltd (Pos) AMG (HP) SOURCE: BENCHMARK MINERAL INTELLIGENCE – CYPRESS DEVELOPMENT CORP – AUGUST 2018 ‘000 LCE tonnes HP – Highly probable Prob – Probable Pos – Possible 30
- 31. Lithium Capacity Forecast to 2035 31 CYPRESS DEVELOPMENT CORP | SOURCE: BENCHMARK MINERAL INTELLIGENCE – CYPRESS DEVELOPMENT CORP – AUGUST 2018 0.20 0.70 0.10 0.80 0.00 0.30 0.40 0.50 0.90 0.60 1.00 2030 2035202920192015 Million LCE tonnes 2016 2017 2018 2020 2021 2022 2023 20342024 2025 2026 2027 2028 2031 2032 2033 Operational supply Highly Probable additonal tonnes Possible additonal tonnes Probable additonal tonnes
- 32. Lithium Demand-Supply Balance, 2015-2035 32 CYPRESS DEVELOPMENT CORP SOURCE: BENCHMARK MINERAL INTELLIGENCE – CYPRESS DEVELOPMENT CORP – AUGUST 2018 0.0 4.0 5.0 2030 2035202920192015 Million LCE tonnes 2016 2017 2018 2020 2021 2022 2023 20342024 2025 2026 2027 2028 2031 2032 2033 For the supply forecast we have divided the forecast into three main phases, which reflect the development of the market over time, these are: Phase 1, 2015-2018: In this phase the supply-demand balance is very tight, with demand growing faster than new capacity expansions. New supply is largely from development of brownfield sites at operating producers Demand - Upside Demand - Base Possible additonal tonnes Demand - Downside Unplanned necessary capacity - Base Case Probable additonal tonnes Operational supply Highly Probable additonal tonnes Phase 2, 2019-2025: Phase two sees new supply start to come online from greenfield projects, as well as expansions at existing producers. The market moves into a period of relative oversupply by the end of the period Phase 3, 2026-2035: Towards the latter part of the forecast period there is a marked requirement for further as yet announced lithium capacity to come on-stream to meet rising demand. We expect that prices will remain in a range needed to stimulate this new investment, given that geological constraints are not an issue. 3.0 2.0 1.0
- 33. Contact William Willoughby, PhD, PE DIRECTOR, CHIEF EXECUTIVE OFFICER Donald C. Huston CHAIRMAN, PRESIDENT Don Myers CORPORATE COMMUNICATION info@cypressdevelopmentcorp.com www.cypressdevelopmentcorp.com Suite 1610, 777 Dunsmuir Street Vancouver, BC, V7Y 1K4, CANADA Tel: (604) 687-3376 Fax: (604) 687-3119