clayton valley, nevada - amazon web services · 2019-02-04 · financial officer of cypress...

Clayton Valley, NevadaFrom Drilling to PEA in under 2 Years

Basic SharesOutstanding:

72.5 m

FD SharesOutstanding:

98.3 m

MarketCapitalization:

C$16.7 m

CYP (TSX-V) | CYDVF (OTCQB) | C1Z1 (Frankfurt)February 2019

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 |

http://www.sedar.com/

3

Cypress Capital Structure


TSX Venture Symbol CYP

US OTCQB Market CYDVF

Frankfurt Exchange Symbol C1Z1

Basic Shares Outstanding 72.5 Million

FD Shares Outstanding 98.3 Million

Market Capitalization C$16.7 Million

Cash Position C$1.8 Million

4

Investment Highlights


Large Scale Lithium asset strategically located in United States (located in Nevada – top USA mining jurisdiction)

Management team key capabilities across mine development and capital markets

Project is fully financed through key derisking catalysts: Drilling, Metallurgical Study, and Prefeasibility Study (Q2 2019)

Project has advanced rapidly from first drill hole to PEA in 18 months

1 2

3 4

5

Key Management & Directors


William Willoughby, PhD, PE DIRECTOR, CHIEF EXECUTIVE OFFICER

Dr. 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, PLLC. Prior to that, he was President and COO of International Enexco Ltd., which was acquired by Denison Mines in 2014. He previously held various positions with Teck (Cominco). Dr. Willoughby has been a Professional Engineer since 1985 and received his Doctorate in Mining Engineering & Metallurgy from the University of Idaho in 1989.

Donald C. Huston CHAIRMAN, PRESIDENT

Don Huston serves as Chairman of the Board and President of Cypress Development Corp. Mr. Huston has been associated with the mineral exploration industry for over 30 years and has extensive experience as a financier and in-field manager of numerous mineral exploration projects in North America. He was born and raised in Red Lake, Ontario and spent 15 years as a geophysical contractor with C.D. Huston & Sons Ltd. as mineral exploration consultants in northern Ontario, Manitoba and Saskatchewan. Mr. Huston serves as a director of four Canadian public resource companies.

James G. Pettit DIRECTOR, CHIEF FINANCIAL OFFICER

Jim Pettit serves as a Director and acting Chief Financial Officer of Cypress Development Corp. Mr. Pettit is currently serving on the board of directors of five publicly traded companies and offers over 25 years of experience within the industry specializing in finance, corporate governance, executive management and compliance. Jim was previously Chairman and C.E.O. of Bayfield Ventures Corp. which was bought by New Gold Inc. in January 2015.

6

Lithium Deposit Types


Sedimentary Brine Hardrock

Mine Product Lithium Carbonate(Li2C03)

Lithium Carbonate(Li2C03)

Spodumene Concentrate(6% Li20)

Typical Grade 1000-3000ppm Li 500-1000ppm Li 4500-7000ppm Li

Production Steps

MiningAcid LeachingEvaporation Crystallization

Pumping of BrineEvaporationCrystallization

MiningCrushing and GrindingRoasting Acidification

Estimated Cash Costs($/tonne Li2CO3 )

~4000* *Clayton Valley PEA 2500 – 4000 +6000

7

Lithium: US “Critical Mineral”


• 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

Clayton Valley Highlights


Major lithium resources, multi-million tonneLCE

Size

Next to Albamarle’s Silver Peak brine operation

Location

First hole February 2017Rapidly advancing, PFS by Q2 2019

New

MiningFlat deposit, no overburden Soft clay, no drill & blast

Leachable clay, low acid consumptionPotential by-products, including REEs

Metallurgy

9

Clayton Valley Project Preliminary Economic Assessment


32.7%

Internal Rate of Return (IRR)$1.45-billion

Net present value (NPV 8%)

2.7 years

Payback Period15,000 tpd for 40 years

Operating Rate

$482-million over 2 years

Capital Cost Estimate81.5%

Net Lithium Recovery

$13,000/tonne

Base case price for lithium carbonate

24,042 tonnes

Average production lithium carbonate

$3,983/tonne

Operating Cost for Lithium

After-Tax Cash Flow Analysis

10

Sedimentary Hosted Lithium Comparable Projects


Project Clayton Valley (TSXV:CYP)

Operating Cost ~4000 / tonne LCE

Development Stage PEA –> PFS

Market Cap (C$) < 20 MM

Project Thacker Pass (TSX:LAC)


Development Stage PFS

Market Cap (C$) 385 MM*Argentina + Nevada Assets

Project Rhyolite Ridge (ASX:INR)

Operating Cost 3500 - 4000/ tonne LCE

Development Stage PFS

Market Cap (C$) 262 MM

Project Sonora(AIM:BCN)


Development Stage FS

Market Cap (C$) 51 MM

385

262

51

17

0

50

100

150

200

250

300

350

400

450

Lithium Americas(TSX:LAC)

Ioneer Ltd (ASX:INR) Bacanora Lithium(AIM:BCN)

Cypress Development(TSXV:CYP)

Market Capitalization (CAD)

11

Key Events


Albemarle Corporation (NYSE: ALB) acquires Rockwood Holdings for $6.2B. Purchase includes Silver Peak Lithium Mine located in Clayton Valley

2014 2016 Sept 2017 Sept 2018

2015 March 2017 June 2018

Tesla Motors breaks ground on USD $5 billion, 35 GWh factory near Reno

Cypress acquires Clayton Valley claims. Reports 3,070 ppm Li in a surface sample of claystone

Drilling commences on Dean property

Begins leach testing on drill core

Maiden 43-101 Resource Estimate announced

Preliminary Economic Assessment completed

12

Project Location


Option to Earn 100% Held Property

5700 Acres Placer and Lode Claims

3% NSR Buy-down to 1% NSR for $2 million

CLAYTON VALLEY LITHIUM PROJECT

Nevada

13

Clay Deposit


Drill Hole ID Depth (m) Length (m) Average Li (ppm)

DCH-01 4.4 31.5 1,140

DCH-02 0.5 53.8 1,036

DCH-03 8.5 27.4 999

DCH-04 1.5 49.7 1,127

DCH-05 8.5 67.1 1,129

DCH-06 14.6 16.8 1,013

DCH-07 32.2 19.0 974

DCH-09 11.3 58.2 1,093

DCH-10 8.5 55.8 1,108

DCH-11 8.2 55.2 1,209

DCH-13 23.8 82.3 1,221

DCH-15 20.1 104.2 1,106

DCH-16 14.6 107.9 1,199

DCH-17 14.6 94.5 1,050

GCH-04 3.7 26.2 1,077

GCH-05 84.7 25.0 1,018

GCH-06 3.0 96.9 1,142

• Extensive volcanic-derived claystone east and south of brine field and Angel Island

• Lithium in illite and montmorillonite clays to depth of at least 120 m below surface

• Fault bounded to east and west and east

• Shallow redox boundary.

14

Resources


Indicated Inferred

Cut-offGrade Li ppm Tonnes (million) Li ppm Tonnes LCE (million) Tonnes (million) Li ppm Tonnes LCE (million)

300 365.3 942 1.832 160.5 992 0.847

600 361.3 946 1.820 158.5 997 0.841

900 198.0 1,105 1,164 106.8 1,119 0.626

Initial Pit Shell

Indicated Inferred

Cut-offGrade Li ppm Tonnes (Million) Li ppm Tonnes LCE (million) Tonnes (million) Li ppm Tonnes LCE (million)

300 831.0 867 3.834 1,120.3 860 5.125

Property Wide (pit constrained)

15

Mining


• Soft material, no drilling and blasting

• Pit to 120m depth, 30⁰ pit slope

• 15,000 tpd

• <0.1 waste to feed

• Production with loader, feeder breaker

• Slurry pipeline to mill

16

Lithium Extraction


• Acid leachable clays, not hectorite

• 4 to 8 hours agitated leach

• 50-80C solution of 5% H2SO4

• 81.5% extraction

• Acid consumption 125 kg/t

17

Lithium Recovery


Brine PH Li Mg K Ca Na Mn Fe

1 173 4225 1087 593 1997 98 183

6 157 3172 984 473 1807 5 0

10 172 16 1063 756 1978 ND ND

12 193 2 1223 2 7097 ND ND

VALUES IN PPM

• Standard treatment by evaporation, purification and crystallization

• Low reagent consumptions

• Recovery to battery grade product on-site

INCREASING PH

18

Process Flow Sheet


• Leach circuit

• Agitated tank leach

• pH and temp control

• Heat with steam from acid plant

19

Capital Cost Estimate


USD (Millions)

Mine Development and Equipment 35

Plant feed prep, leaching, purification and lithium recovery 163

Acid plant 105

Tailings 25

Site utilities 17

Infrastructure and G&A capital 38

Direct Capital Costs 383

Working capital 24

Contingency (20% of Direct Costs) 76

Indirect Capital Costs 99

TOTAL CAPEX 482

20

Operating Cost Estimate


Operating Cost $ Per Tonne Of Mill Feed $ Per Tonne of LCE

Mining 1.73 395

Plant Labor 1.45 330

Reagents & supplies 12.70 2,893

Power 0.94 210

G&A 0.68 155

TOTAL OPEX 17.50 3,983

21

Upcoming Catalysts & News Flow


Drill core to provide material for further metallurgical study

Q1 2019 Infill Drill Program

Q2 2019Prefeasibility Study

Q1 2019 Metallurgical Study

2019Additional Potential Catalysts

Ongoing bench tests to refine production and cost parameters

Incorporating results of Metallurgical Study and Infill drill program

Updates related to water sources, permitting milestones

22

Timeline


2019 Milestones 2018 January February March April May June

Preliminary Economic Assessment

Drilling & Metallurgical Sample

Bench Tests & Engineering

Preliminary Feasibility Study

23

Appendix: Lithium Market Fundamentals


Current Lithium Supply and Breakdown by End-Use24

8,58

3

122,

068

126,

515

BatteryDemand

OtherDemand

24


LithiumCarbonate(54%)

LithiumHydroxide(46%)

NCA(14%)

NCM (29%)

LCO(30%)

OtherLTO (1%)

LFP (22%)LMNO LMO (3%)

Stationary grid storage (3%)

ElectricVehicles (61%)

Other (36%)

Metallurgy (9%) Lubricant &Grease (17%)

Class &Ceramics (37%)

Medical (5%)

Air Treatment (7%)

Other (25%)

Tota

l Lith

ium

Dem

and

in 2

018

(LC

E to

nnes

)

SOURCE: BENCHMARK MINERAL INTELLIGENCE – CYPRESS DEVELOPMENT CORP – AUGUST 2018

Lithium-ion Battery Demand by End Use Sector

25


The chart below outlines the key drivers of demand for lithium-ion batteries over the forecast period. As can be seen the major growth area is for EVs, followed by stationary (grid) applications. In our base case scenario we expect that demand will be approximately 135,000 MWH in 2018, reaching 760,000 MWH by 2025, and 4M MWH by 2035.


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

85,000125,000 125,000 125,000

30,000

31,500 31,500 31,50028,000

28,000 28,000 28,000

184,500

2030

184,500

2018

184,500

20352023

143,000

Talison

Galaxy Resource

Neometals

26

Brownfield Lithium Capacity Forecast to 2035


Albemarle SQM

2018 2023

94,000

2030

155,000155,000

2035

125,000

55,000 70,000 85,000 85,000

39,00055,000

70,000 70,000

FMC Orocabre

14,00030,000 35,000 35,000

18,000

27,00030,000 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

6,00010,000 10,000 10,000

4,000

6,000 6,000 6,0003,000

3,000 3,000 3,0003,000

3,000 3,000 3,000

23,000

2018

17,000

23,000

20352023 2030

23,000

Jiangxi Special ElectricYichun Tani

Fozhao Lanke

Tibet Mineral Development

Qinghai Lithium

Brine

Hardrock

Brine and Hardrock


‘000 LCE tonnes

Greenfield Lithium Capacity Forecast to 2035


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

30,00040,000 40,000

30,00030,000 30,000

12,000

30,00030,000 30,000

20,00020,000 20,000185,000

203520302018

200,000

2023

200,000

32,000

China Minmetals (Pos)Chinese Producers (Pos)Chinese Producers (Prob)

15,00025,000 25,000

20,000

20,000 20,00010,000

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 20,00012,000

18,000

9,000

9,000

9,000

9,000

84,000

2018 2023 2030 2035

48,00058,000

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 25,00025,000

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)

45,00060,000

27,00027,000

10,000

17,00017,000

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 2035203020235,000

25,000 25,000 25,000

20,00035,000 35,000

Bacanora Minerals Ltd (Pos)AMG (HP)


‘000 LCE tonnes

HP – Highly probableProb – ProbablePos – Possible

27

Lithium Capacity Forecast to 2035

28



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

Lithium Demand-Supply Balance, 2015-2035

29



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 - UpsideDemand - Base

Possible additonal tonnes

Demand - DownsideUnplanned necessary capacity - Base Case

Probable additonal tonnes

Operational supplyHighly 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

Contact

William Willoughby, PhD, PE DIRECTOR, CHIEF EXECUTIVE OFFICER

Donald C. HustonCHAIRMAIN, PRESIDENT

Don MyersCORPORATE COMMUNICATION

[email protected]

Suite 1610, 777 Dunsmuir StreetVancouver, BC, V7Y 1K4, CANADATel: (604) 687-3376Fax: (604) 687-3119

mailto:[email protected]

http://www.cypressdevelopmentcorp.com/

clayton valley, nevada - amazon web services · 2019-02-04 · financial officer of cypress...

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