E3 Lithium Limited (ETL.V) Earnings Call Transcript & Summary

Good afternoon, everybody. We're just getting the last few people starting up on the call today. But I will get started. I appreciate everybody joining today's call to talk about our pilot plant update. I'll start off today with just a general introduction for anyone new to the story. So E3 is -- E3 Lithium is a lithium development company here in Alberta, developing a substantial resource base in the Leduc Aquifer. We are developing one of the 4 most lithium projects looking to be in commercial operations by 2026. So just a high level about E3. Looking to be a global leader in responsibly sourced lithium. And really what that means to us is that we have the opportunity to create a new industry in Alberta and to grow that industry to become a world-leading jurisdiction for lithium. And we can do [indiscernible] than our peers. Looking at sort of the pillars of what E3 is, we have both the proprietary technology that we have developed in the direct extraction space and ion-exchange process that enables us to extract lithium from the brines. We also have a very substantial resource recently announced 16 million tonnes Measured and Indicated, this is one of the largest resources on the planet and certainly one of the largest measured as well. It is 5x larger than the rest of Canada's Measured and Indicated lithium resources combined. So it is a substantial opportunity to develop lithium into this growing electrification world and doing it right here in Alberta. We are well-funded. We've got a very strong cash going into the rest of this year. I think that's really important for us as we go through the pilot, as we look to advance towards the future and potentially a larger raise sometime in the fall or early new year, to be -- to have a very strong starting position in terms of our cash balance. We also have $33 million -- it's about $32 million in federal and provincial grant funding. A large portion of that is funding the pilot plant, which is about to kick off and the purpose of today's call. One of the other big advantages to E3 is that we plan to go all the way to battery-grade products, very rare in the industry today do you see the refining step into a battery-grade lithium hydroxide or lithium carbonate happening at basically the mine site asset facility, where we're extracting the mineral. So we will look to be able to sell directly to battery customers or OEMs and to their battery customers. So very excited to be able to bring that all the way through to both stages of the extraction and the purification into the battery products. Operating in Alberta is a substantial advantage for the company because we operate just like oil and gas. What we do out in Central Alberta looks just like you would if you're oil and gas development. We produce the fluid from an aquifer, we bring it to a facility where we extract the commodity value for us is lithium, and then we put that water back into the same aquifer. That is happening today across Alberta for oil and gas extraction and so we can deploy the same people and the same workforce, the same experience to that, including the regulatory system that we have here in Alberta. The Alberta Energy Regulator has recently been tasked to regulate brine-hosted minerals, which is what we are. And that is a huge advantage for us because that regulatory framework is well established has a long history of short permitting time frames. We're really excited about that because I think it's an advantage for us. Obviously, there's still a permitting process that we need to go through to get to commercial operations, and we'll be talking a little bit more about that today. We've got -- we boast a very small footprint and a very strong ESG story and also a very strong experienced team. On this slide here are the key people at E3 that are driving us forward to success. I won't go through each of them individually. There's more information on our website about our senior management team. So I thought today, really, what we have set up today is a bit of a Q&A. We've received a lot of questions over the past couple of months about various different aspects of the project. We've recently put out today announcement talking about the KPIs, key performance indicators, that we expect to see for our pilot, which is a pretty rare thing for a company like us to do because you have to hold yourself accountable to what those are and the industry generally doesn't do that. So we're very excited to feel the strength of our results we've had to date in terms of our development and the direct extraction that we've tested and how that will look in terms of a pilot and the results of the pilot that will lead us to a commercial design. So I'm just going to switch screens here. I'm going to look at that announcement in a bit more detail. And I thought we could start off here, and then we're going to go into a list of questions that we've received over the past while the Q&A panel is also open. So you can also -- if you have any other questions, you can also jump into that and type in your questions if we don't get to them. We'll try to save some time at the end for those questions as well. So just a little bit today on our KPI announcement. I think this was really important for us because it sets the stage for what success is going to look like for our pilot coming up that is set to start operating here in the next 1.5 months. And I just wanted to explain maybe some of these metrics and why they're important. So just going through them in order. So lithium recovery. Lithium recovery is important because it really -- and it's like any mineral recovery. It really denotes the value that you can get on a per unit of extraction basis. So as you -- as we bring the brine out, the higher the recovery, the more lithium we get out for that brine that we bring to the surface, and therefore, the more value we can extract for no additional cost. So recovery is very important. What we want to see here is greater than 80%. And what that means for us is that we're recovering a good portion of what's in Aquifer. Industry standard seems to hover around 80% or higher. I think for us, 80% -- will be definitely well above the 80%, but it is sort of the accepted industry standard that you want to be above 80%. For us, I think we'll see it much higher than that as we go and we produce the results. But that's what we need to see. The next one, lithium grade in the product stream. This is really talking about that product stream that comes out of the back of the DLE. And we call that often in use and in our presentation the concentrate. So it is what -- we have the lithium brine that's flowing through the system. We use an ion-exchange medium to extract. It's basically the lithium is absorbed onto that material. And then after a while that material fills up lithium, it reaches its carrying capacity and you strip it off and that strip creates the concentrate or the product stream. And that's really important for us because that's what we use to refine into battery-grade products. And it's pretty industry standard, you either make a lithium chloride or a lithium sulfate. And we can make both in different processes downstream, have different uses for the 2 products. And I think that it's important that E3 can be able to produce both as we look to technologies that are currently available for making lithium hydroxide and the new technologies that are coming out as well that are more advanced technology that can make the same products, but doing it in a different way. An example of that is electrical methods. A newer technology out there is using electrolysis or electrodialysis to make a lithium hydroxide, and they lend themselves better to a sulfate, for example. So looking at the product quality that we get out of this, we want to see a grade higher than 600 milligrams per liter. And what that really refers to is the amount of lithium that we have that we can then refine into battery grade because every step along the process path is effectively cleaning the concentrate and increasing the lithium grade until we get to something that is 99.5% pure or better. So that brings us to the other part, which is the 25% lithium. So what that means is that in the product stream, in the concentrate stream, 25% of it should be lithium or higher. Now generally, E3 sees somewhere between 40% and 70%. And the value of that is really relative to the flow rates that we're looking at this and the rinse. And so for those 2 metrics, they actually combined into a product. So you want higher than 600 milligrams per liter, but you also want -- basically what this is saying is the purity. Greater than 25% lithium means you have more lithium than other individual elements like calcium, magnesium and sodium. And those things, you have to remove out after the process because you take your lithium concentrate and you put it through a further concentration step and then you put it through a polishing step and then you feed it into the conversion process to make the battery products, carbonate or hydroxide. And so the higher purity lithium and the higher grade, the easier that is. And that's really what that's referring to. And those are the minimums we want to see from this process to enable a low-cost simplified downstream processing plant that we would have to build to make the lithium battery products. And the flow rate is really a metric of -- the flow rate ratio is really a metric looking at the size of the plant that's required because the faster you can flow the brine through the ion-exchange medium and still get that 80% or higher recovery, the smaller your equipment needs to be, which means the smaller capital is required to build it. And that's really what that is. So 3 is the minimum -- it's really meaningless as a number, it's unit less. It's just really talking about that ratio. And when we report the results, we will report the results against that 3, that number. So we want to see higher than that to see the flow rates to the size of a facility that we think is reasonable in terms of the capital requirement. So that's what we're looking for. These are all minimums. So what we're looking to see when we present the results that are expected once the pilot is complete, is higher numbers than all of these, and we'll present them against these to be able to see that happening. One of the other things we talked about in this announcement, which is not new and we've talked about this several times both in announcements and in webinars that we plan to test our third-party technology. And really, what this is for us is that it's a backup, we have an opportunity to look at other technologies that are emerging in the space, and we've identified ones that we think have a high likelihood of technical success, but also ones that are advanced commercially. And when it comes down to why E3 would choose for its first plant, we're only looking at this right now for the first plant and we plan to build, which is what we're developing the Pre-Feasibility Study upon is that it would get us to commercial operations faster because it might be more commercially-designed than our system. And that would enable us to capture some of the market. Right now, what you're going to see is that the real lithium supply crunch that's going to happen is somewhere around mid-next year to 2028 in that range. And more of that range you have making product and selling that product, the higher price you're going to get. And really, what it comes down to is that if you look around the landscape of the battery factories, they're all slotted to come online in that time frame. Almost every single one of them that have been announced. And so all of that battery production is going to require the raw materials and mining or production that E3 works on just simply doesn't scale as fast as you can build a battery plant. So there's just a time differential between when the product is needed to go into batteries because the plants are ready and when the mineral supply can match that. And that means that prices are likely to go up. And likely, you'll see them the highest paid prices through the sort of time frame of the next decade. And so for us, being able to capture that higher value, it reduces our overall project risk. And that's where this is coming from. And we talked about this at the end of February, we put out an announcement talking about our corporate update and really the strategy the company is deploying. And that strategy was as fast as you can get to market is what we need to chase. There's also opportunity for grant funding that is going to be available both from the federal government in Canada but also the federal government in United States, which is all about trying curb that lithium supply deficit that's going to happen and supporting companies through that -- those years. So that funding is available in a window. That window is, can you get your product onstream sooner. So for all of those reasons, we would consider potentially looking at a third-party tech if it had the results we like and enabled us to move a bit quicker. So that sort of finalizes this announcement. We announced the departure of one of our VPs. This is sort of standard. He's been around for a couple of years. He's a great guy. We really appreciate having him around the company. But we have set up a strong redundancy here at E3 to make sure that this is covered. We brought in Kevin Carroll as our Chief Development Officer. And he's going to be taking on this role and the staff that was reporting to Chris and driving towards the Pre-Feasibility Study. [ Jody ] at our office is the project manager on the pre-feas that we're just about to get kicked off, and she will be driving that forward through the end of the year. Another part that we talked about is that we've completed a financing recently. Looking at the financing metrics. I think the one big piece of that story and one of the things that's really important for me is to reduce the overall overhang and dilution of this company. We raised the capital to ensure that we have a very strong financial position going into fall or winter raise and you get us through -- remember that a lot of our brands are reimbursable. So you want to have a good, strong cash position going into those because it takes a bit of time to get the cash back. For those reasons we did the raise, I think that the big note of this is that there's no warrant attached to it. It was a fundamental thing for me because warrant overhang can keep the stock price down to a sort of a hurdle that you can't get over. A good example of that, if you look back at our stock trading in October of 2021, we traded up into the [ $3s ] very strongly. And then we had about $6 million worth of warrants get exercised, that were exercised at $1.40 and $1.65. We actually announced that exercise because it dropped its share price down to the low [ $2s ]. And for us, that was a good outcome because we brought a bunch of cash and enabled us to not have to raise for another time further. But if you look at the converse of that, if we did have those warrants, we may have been able to go out to the market and raise capital at a $3 share price rather than $1.40, $1.61 exercise price. And so for that reason, having -- doing a raise [ above $1 ] is fundamentally important for the long-term value of the company. It's something that we want to see continue as E3 develops its project going forward. So that sort of wraps up the announcement. I'm going to go back to the presentation now and look at some of these questions that we've received from our shareholders. And I'll just be using the presentation more as a guide than anything.

So one of the questions we got that I thought was really important is talking about the flow rate observed from our production test. And that was talked about in the Bashaw District report that came out in March -- announced in March and came out in April. And I think fundamentally, it's important to understand that we did a production test on 1 well and that well had a specific design, a certain diameter of wells, some diameter casing, a certain pump that was down in that well. And I think when we announced the results, we talked about 400 meters cube per day was the rate. That was the rate that we did the actual production test at. That wasn't the rate that the well could support. But the rate that you get out of a well, any particular well, is a function of a lot of different things. It's a function of the casing size. It's a function of the pump size. It's a function of the processing permeability, the aquifer, the function of the pressure of the aquifer. And it's a function of the intersection of that well through the aquifer. And so when we look at what that means from that well versus what it's going to mean for the whole project, the Leduc Aquifer has extremely high deliverability. And so from the perspective of the ability for us to produce the brine, the reservoir production, the ability to get the brine out of the reservoir is one of the lower-risk aspects of this project. So we continue to develop that right now, the team, the, reservoir team that we have here, which is a group of geologists and reservoir engineers and production engineers are working through the design of the production network, so the wells and the pipelines that will connect them to get us the brine production, to meet the capacity at the plant that we want to see, and that is being worked through right now to deliver for the Pre-Feasibility Study, and that will also help us deliver a reserve. So all of that work is ongoing. We're updating it all. We have a lot stronger understanding of the aquifer since we did the PEA back in 2020 because we've actually had a significant amount of reservoir work since then as well. So all of those numbers will be updated in the Pre-Feasibility Study that will come out in the future, and we'll have the production rates for each well and what that means for the total number of wells through the project. We're still seeing a very strong economic case obviously for this project and we're continuing with it. So there's no real concern from our perspective on the production rates for any of these wells. So the flow rate of the pilot was another question. So when we looked at the KPIs, we talked about that we want to see the ratio of greater than 3. And what that's really talking about -- maybe I'll go to the pilot slide here. So what we're really talking about here is in ion-exchange processing or a column design, solid liquid separation processing, how they scale is really about the measure of that metric, which is the total capacity of the system and a ratio of that to the flow rate through the system. So basically a velocity against the total capacity. So how fast you can move the volume through the system and get the recovery you need because recovery is actually a factor of time. The longer you leave the brine connected with the sorbent material, the higher your recovery. But if you want to maximize your flow rate against the capital that you need to deploy to make the system economic to build. And so that's where that number 3 comes from. And so what the pilot is testing is that exact thing. It's testing your recovery against your flow rate to make sure that those are in line with what you need. And we outlined that in the KPI announcement. And so when we report the results, we expect to see that number greater than 3 to see that the flow rate is basically 3x the capacity of the total system on a per hour basis or per minute basis, whatever it is. Another question we got that was interesting, I think, is are we uplisting? And we have talked about in the past of E3 uplisting. And there's 2 paths that E3 can uplist to. We get uplists to something in Canada, which NASDAQ, Toronto Stock Exchange, the Main Board. We're currently on Venture Exchange. Or we can go into the United States and we can uplist to either the NASDAQ or the NYSE, and then there's 2 tiers of the New York Stock Exchange, the main board and the American. And I think for us, we -- looking around the landscape, I think, and what the TSX wants from us, the TSX is looking for us to get through a pilot and then into sort of completion of the pre-feas, and that may be a hurdle that they might see us move to the Big Board and obviously, there's an application process. That a lot of our peers have moved into the United States because when you go to one of the -- either the NASDAQ or NYSE, there's a liquidity bump that companies like us get, especially on a story that is sort of in the news, which lithium certainly is gain traction again with an increase in the price and a lot of calls saying there's still a shortage to be predicted in the future. But the challenge with that is that you want to have a robust technical report out before you consider it. And the reason for that is that you've seen our peers also get hit with a short selling report. And those are generally -- happens to smaller companies that don't have the robust technical report to back up the claims that they make on news announcements. And so for us, the reason that we would wait is to get the Pre-Feasibility Study out and have that technical report that books that reserve that talks intimately about the project at a much more detailed level than the PEA currently does, which is at the level we currently have right now internally but we obviously have to go through the process of writing that report and doing the design and getting that out to market before we can look at uplisting. So that's sort of what the company is waiting for. So we'd look at that probably more closely in sort of the first half of 2024, if we were to uplist. Another good question I got was on the Imperial Oil relationship. And there's a bit a bunch of questions on this and what's going to happen with that relationship? We announced it almost a year ago today. And while the inner workings of that is confidential, I think, from a high level, it is important to note that we keep a razor communication with Imperial. And to the point we're -- and they've committed through the deal we did to provide technical assistance on various different aspects of the project. And one that I can speak of that is topical is the Measured and Indicated report. We did have a lot of support from the reservoir team and some of the data that they had in their data banks for the uplist -- the upgrade, sorry, of our resources in the Bashaw District from inferred to Measured and Indicated that came out in March. So they did have a hand in working through some of the technical aspects. Obviously, they weren't responsible for the report in any way, shape or form, that was done by a third-party qualified person. But working through the details of the company, like E3 does a lot of that work in-house first before it goes to the QP for review and sign off. So they assisted on the in-house work that E3 did. So that relationship continues to evolve. We're very excited to work with them. Either way, I think both Imperial and E3 feel we have a partnership into the future because we have an option on the freehold land that they hold, which means that we are a partner with them regardless because at the end of the day, no matter what happens, they are a royalty taker for this project. And that enables -- that means that they are a partner as long as we are producing in the Clearwater area. And so they have a vested interest in seeing us succeed because at the very least, they will be taking home a royalty. So very excited to have them work with us and they continue to be active on that front. So looking at the bought deal and looking at our financing strategy, it was another question. So fundamentally, I think where E3 is coming from in terms of the risk of capital and the risk of ensuring that the company can continue to operate the raise that we did, the bought deal financing that we did satisfied a couple of critical pieces. One is that internally to E3 minimum threshold of $3 million cash balance in the bank. And that's to protect the company and to protect our shareholders that we don't go below that balance. And as I mentioned a bit earlier, the grant funding that we have is reimbursable. And so as the grants come in, it's usually, say, a 45- to 60-day delay from when the money is spent. So what we saw when we did the cash flow projection that our team, Ray, and our Controller, Gina was working on, is that as the money was going out the door for the pilot, there was a potential point in time where we drop below that $3 million threshold. Not a lot, but enough that we wanted to make sure that, that didn't happen. So that was one impetus. The other is that we've talked about doing a raise in the future to fund the company through the next stages of the project, to get to the point of construction where we would have like a project financing deal that would be looking to finance the construction of this facility. And when you go into one of those large raise, you want to come in from a position strength. And one of the ways to do that is to have a strong cash balance where you can -- where you're not looking to raise capital because you need it that day, and that gives you flexibility of timing, and it gives you a really strong position to go in to negotiate those -- that larger raise. So that's -- those are the 2 main reasons that we completed the raise. As I mentioned earlier also, it was fundamental to me that, that raise didn't come with warrant. And we probably could have raised significantly more money if we had warrant attached, but then it would have been more shares out the door through the raise and also would have been more shares out through the warrant and would have kept that overhang on the stock, which we didn't really want. So that was sort of our justification for the raise. Ultimately, the decision is to ensure that this company stays a going concern, and we get to the point where we're making revenue, which is the #1 goal for this company. We got a question about regulatory and the permitting process. Just to give some context to that question. In December of 2021, our energy minister at that time, Sonya Savage brought a bill to the floor ability to give regulatory authority to the Alberta Energy Regulator, who most of you know if you're in Alberta, regulates oil and gas operations. The AER then went away and did their thing, which is look at their regulations, what they call directives and look at what they need to change to enable the regulatory environment for brine-hosted minerals which is what E3 classifies under. We were part of that review. We participated in some Q&A with the AER looking at what we had -- what we believed we needed to do. A lot of that came down to don't do much, just in terms of the directives, you don't need new directives, just modify these ones here and there to enable this. And that's what they've ended up doing. Most of those are not published. So you can actually go to AER website, you can see these new directives like Directive 056, and you'll see the brine-hosted mineral language listed in it. And so we now have a very clear and transparent regulatory pathway for E3 to process through. One of the big time-determining steps for regulatory is power in Alberta and for those in the power industry, you'll know that, that can take some time. So that is one of the things that we are looking to get started here this year. So we'll start that process to make sure that we have all of those pieces in place by the time we need them, which is when we start wanting to operate this facility and we need that power connected. The other 3 major licenses in groups that we need outside the power is a group of well licenses, group of pipeline licenses and the facility license. And those 3 groups come together and likely will apply for them in 1 big application because they all sort of connect together to 1 facility. And so we'll be looking to work with the AER through that process. They've been very, very helpful to us in terms of setting the stage of what we need and they work with us to understand how we need to apply for all of those. And that whole process for us, the pathway towards it kicks off this year. And that kick off really what that is, is stakeholder engagement because nothing happens in Alberta without working with your local stakeholders. In the area we're working on is mostly farmers who own the land in this area that we would want to drill well on or put a pipeline on. And that's pretty standard in Alberta. There's a very streamlined process by which you engage stakeholders and we will use the same oil and gas systems and processes and even companies that are out there that work with us, work with companies like us to go through the stakeholder engagement process. And then once that's complete, then you start the actual application process for these licenses. So that really does kick off here. And you'll see us, if you're local [ south of ] Red Deer, you'll see us active in the area through the next 12 months doing town halls and giving people updates on what we're at and what we're doing, where we're at, and that's going to be led by Robin Boschman and Leigh Clarke, at our office. So looking at the sort of the power requirements, there's a lot of very technical questions that have come in. And I wanted to touch on this one just because I think that it gets to the heart of what E3 is doing here, which is that we're really growing this project to build a commercial facility. And all of the questions that are being asked right now, including this, talking about where is nearby 3-phase power line was the question. Well, the reality is that there are 3 major power lines that run through this area. And those are really sort of supplying a lot of Southern Alberta with its power and there's available capacity on those power lines. So from that perspective, we can interconnect with that and we can get the power. But there's a whole process around that, that we have to go through that any company would have to go through to get access to that power. So the answer is there is. But the details behind that is really what we're doing right now, and I think it's really important to understand and what E3's -- the 30 staff at E3 and what we sort of turn at every day. And the majority of the staff are working on the design of the facility. So we are looking at a Phase 1 plant, hopefully, in construction late 2025. We want to have it operating hopefully, by late 2026 or so. And all of that will be finalized in terms of time frame and the design through the rest of this year and into early 2024 as we go through what we call a Pre-Feasibility Study, which is the engineered study. A lot of it happens in the background and then it gets all summarized into a national instrument. 43-101 report becomes a public document that all shareholders can read. And so it's hard for us under compliance to talk too much about the economics or the capital costs or anything like that in specific detail until the technical report is published, and then we can talk about it more publicly. So -- but that detail is coming. And it is what we are working on every day. And we have 30 professionals, mostly engineers, geologists, technicians that are here developing this for the company and for the shareholders. So I think that sort of just looking at the questions I have, that sort of wraps up the main questions. Maybe what we can do is we can look at some of the questions that have come in from the group here. So just give me a second while I grab those up. So a question about how long will the pilot plant run until full production? So the pilot plant is designed to look at the operating environment of the direct extraction process because that is the technology that we are developing that is somewhat new. That is the piece that you would say is a high risk for the whole process flow sheet is -- does the direct technology -- direct extraction technology work. And so that is the focus of the pilot. There's also other things that we end up testing like the pretreatment gets tested, we have to pretreat the brine, the production gets tested because we have to produce the brine. So there's all these other ancillary things that also get tested. We'll also be taking that concentrate and turning it into lithium hydroxide, not on-site, but down at our partners' facilities. So that also gets tested. So we do, in aggregate, total test the whole process flow sheet. But at -- on-site, we only go to the DLE concentrate produced. So what we're looking at right now is producing through a greater part of the fall of this year to test operating conditions of the DLE to look at what the design will be for the commercial plant at the Pre-Feasibility Study level. So we're looking at a Class IV estimate for those in the engineer world or about a plus/minus 20% to 25% cost estimate. And so the work that we do on the pilot will give enough information for the engineers who will be looking at Pre-Feasibility Study to design that system. And a lot of this information on the pre-feas is -- will be out once we finalize the last pieces here, and it's not going to take that long for us to get that information out to the market on the time frame and what we're doing for the Pre-Feasibility Study. So there'll be more information in that as attuned to what we're actually doing with the data. But that is the purpose of the pilot is to really get that design basis for the pre-feas. And then that's sort of leads us to feasibility in detailed design. Testing must continue after the main pilot run. Sometimes that's in the lab, sometimes we go back out to the pilot and run some additional tests. Sometimes we'll do those tests at a facility off-site. So all of those things and we -- will continue to happen. We are also going to make a significant amount of concentrate. And that will be stored and that will enable us to continue to develop that process, making more and more lithium hydroxide through the rest of 2023 and into 2024 to design the full plant. We'll have that available and at our fingertips in storage when we need it. Are we working with battery manufacturers as part of samples from the pilot? The details of what we're doing on that sort of strategic partner offtake relationship, it's -- is pretty confidential, strictly confidential for E3 because it's part of our strategy to not necessarily release every time we have maybe a softer agreement or some conversational relationship with any of these battery manufacturers or OEMs to -- because we want to ensure that we keep a competitive nature until we look to find those partners that are going to sign off the agreements with us or strategic offtaker agreement is 1 of the 2. And you're seeing those in the marketplace today. A lot of them happen around Pre-Feasibility Study time frame. Generally, I think for us, the pilot is a big milestone for them to see the results of and probably even for some come out and visit and tour. So there will be very active enough, most can be generated. And we will have some and we will release the results of the stuff that we produce for the design of the downstream processing. We will be making lithium hydroxide through that design and test work, and then we will publish the results of that, and we'll have some sample. And if requested, we'll be able to send that sample to any potential offtakers. The biggest risk current outstanding for the commercial scale. I think E3 is looking at it from the perspective of 2023 is the year to derisk all of these. And what I mean by that is that the pilot, obviously, as everybody here on the call probably is fully aware, is the next big milestone that we need to accomplish to really move this project and this company forward. We need to see the success in this pilot. There is a lot of confidence, obviously, because we've been gearing up for this for a long time. We've been very strong in our communication about it. We've put up KPIs today, which are a measure of our success, which is -- can be risky to do and we did it anyway because we have a high level of confidence that we'll be able to achieve those. And they are industry standards. So if you look around at some of the other DLE results, you'll see similar sort of conversations around them. So once this -- the pilot is done, get the pre-feas out and we're pretty confident in the results of that as well, the risk from there is really scaling that all up. And I think the engineering piece of this becomes the lower risk. So the facility design is even in the ion-exchange DLE portion, the facility itself, the processing equipment is pretty stock standard in the industry. A lot of companies out there in the world build ion exchange columns for lots of different applications. So that -- the process side of things is not really that big of a risk. Obviously, it's a very important thing to derisk. But when you look at the full commercial design, it's an engineering challenge to grow a project to the capacity that you want to produce. And we'll be talking more about the capacity as well when we talk about the pre-feas and what that first plant is going to look like in terms of its size. But to get from here to there after the pre-feas is done. So I think this year really is the derisking year. So -- and when you go through a big derisking year, we hope to see that the value appreciation towards our peers have also gone through the same derisking year and been successful, and you've seen those market values somewhere between a 7x and 10x value increase over E3. So we hope to see that as well as we go through some of these and see success as we go. After that, it's really about just the design and the scale and then the project financing. And I'd say that those pieces come together with things like offtake partners, good relationships with the EPC contractor, good relationships with the banks. And those all come together to a project finance and an engineering design and an offtake relationship at sale, basically, your customer, to be able to then build the plant and have the certainty that you're going to have success. So that's all underway. And then really the big first step of that is the Pre-Feasibility Study because it is the first time you sat down and done a cost estimate with an engineered design to the level that is accepted by banks in terms of their ability to review it. That's why you don't book reserves until you do pre-feasibility study because you need that level of engineering, both subsurface. So how you're going to produce the brine, what the wells look like, how many they are, the pipelines look like and then the facility itself, how you're extracting lithium and how you're making the battery quality products to sell to market. So do our wells produce [ machine ] solids? No, they don't. We -- this is a highly lithified dolomitic limestone reef that is 400 million years old. It's 2.5 kilometers down. We don't get a lot of solids that come out. Usually, if we do, it's little precipitants that form as the brines coming out of the reservoirs are really coming from the reservoir itself. And this is 200,000 TDS. So it is salty, it's 20% solid. So sometimes you get some precipitants that do form, and there's a small filtration system that sits on the front end part of the pretreatment that filters those out. Generally, there are things like calcium or magnesium that you're seeing precipitating out. So those will be collected and put back into the brine stream and back into reservoir or collected. When will E3 provide an updated CapEx for the commercial facility? So looking at that from the perspective of the PEA outlining a $600 million NPV and you've seen LithiumBank put a PEA recently and don't call me, but I think it was $2.1 billion for a slightly bigger plant, but certainly not 4x bigger. And I think that there's a couple of things that play. I'm not an expert in the LithiumBank PEA, I have read through the highlights and understand sort of what they're doing. And one of the big differences is they had a power plant. But I haven't seen the tech report. I don't know how that plays into the capital and how much of that it was, if any. I think from our perspective, you will see a capital increase from our PEA simply because of 3 years of pretty high inflation. When we do our current economics, we account for that inflation. And when Pre-Feasibility Study comes out, it will be on today's prices, so they'll be accounting for that. So I expect to see a capital cost increase from our PEA simply because of that. But we can't really talk about the specifics, again, until the technical report is out. That's just a requirement for a company such as ours. For public disclosure of technical information, we have to only disclose under the National Instrument 43-101, which is what the Pre-Feasibility Study will be reported under. So unfortunately, I can't really give you any more details on that until that report comes out. But know that we are working on it. We all have a vested interest in making sure this project is economic and from the work we've done to date, which is pretty detailed, we're seeing very positive indications that we're going to see some good numbers come out from the Pre-Feasibility Study. A question here. If the third-party DLE technology is successful, what would be the next steps with that particular group? Honestly, all of those conversations happen in lockstep. So we wouldn't go into this without that sort of understanding. I can't give you any details, unfortunately, but we are in conversations to ensure that there's also an economic sort of reality to this and there's a time frame that could be met in all of those sorts of conversations that need to happen to make sure that we can actually implement the technology if we decided to use it. So at a high level there and just to keep it to what we can talk about is something that those conversations are underway have been since the very beginning. We have done some testing, obviously, with them to make sure that from a laboratory basis, there was good results. The real impetus is pilot, third party is simply that we have the facility available. So keep in mind that we've done a lot of the work to put the well in. We drilled that last year. We put the tankage and the pump and all the piping and we're going to have a tent out there that's going to house everything and oil and gravel to make sure that that's on -- it's a lease path. We've had to make a substrate for that to operate on. All that cost is sunk for us, and then we operate our DLE pilot. And so considering that we have access to the brine in real time, we have access to all of the other facility that's needed, and we can do all of the testing. We thought it was important to -- we might as well just pilot also the technology while we're doing ours because then we have some real data that's one-to-one comparable. And I think that was fundamentally important for us to have that available to us. And it provides an option -- price optionality for the company, which is, I think, important for the shareholders because we're not locked into only 1 tech and a pass/fail. We have options in front of us. And I will say that those options are very viable. We wouldn't be bothering bringing this on pilot if it wasn't a viable potential for us to look at. Another question. I understand that production would be around 20,000 tonnes, which would be the final trigger for production as the project develops 40,000 or 80,000 ? I think our philosophy right now is we just need to get revenue, right? We need to grow this company to get revenue. The first plant is going to be the path that enables us to do that quickest without skipping any fundamental critical steps. So the way -- and we've talked about this again in our corporate update. You don't do that by skipping steps. You don't move faster by skipping steps. You go faster by finding designs of processes that are already implemented and ready to go. So using traditional chemical conversion is a process that's been out in the market for a long time. It's well understood. It's easily implemented. More than one company can design it, for example. And so you have an optionality. You also have people who have recently just designed something for somebody else, and they have the knowledge of understanding the team ready to go for you. So that's how you move things faster. And that -- what that really means is using sort of available technology. And that's again, fundamentally why you look at a third-party DLE. So we do the first plant. Once it's up and running, our philosophy then is to design to build many. And in the engineering world, you hear people say, design one build many, it never really works because things are always changed from one production to the next, always learning stuff. So our philosophy is design 2. So the first one, get up and running with simple technology. The second one, we can look at things like electrolysis or electrodialysis for making lithium hydroxide, which allows us to control our coverage footprint much better and reduce our carbon -- potentially reduce our carbon footprint overall on the project. And that would be really important, I think, for our long-term customers. It also simplifies the process flow sheet dramatically because you can recycle your streams, which means your [ agent ] consumption is less. So there's a lot of really big advantages but the technology isn't ready today to commercialize. So looking at that from that perspective, we want to make sure that we have something available. So the second plant will likely be a bit more bold or probably go a little bit bigger than the first plant. And then from there, it's just systematic as revenue is generated, as we have the capital to continue to expand, combined with the market. If the market continues to grow as is expected, there's going to be a big enough market for us to continually expand and find customers and find contracts and offtake agreements that's going to allow us to continue to grow. And you look at the OEMs in the space, and it's evident in what type it is. For example, General Motors has announced they want to be fully electric by 2035. The amount of lithium they need to go fully electric by 2035 is enormous. And you've seen them do a deal with Lithium Americas Corp's Thacker Pass and it was substantial. And when you look at it from that perspective, there is a very strong long-term market for lithium as for electrified transport. And when you can do it the way we can in Alberta with the small footprint and high-quality ESG and we think the scale to the size that E3 can scale and make Alberta truly a lithium jurisdiction globally, it's the real advantage that we hold. And not just for E3 but also for our peers as they're developing projects. I think we've pioneered this industry certainly in Alberta but we're not going to be the only one producing lithium in the future, and that makes it truly a global jurisdiction for lithium. So our cash position for -- after our bought deal. So a question is how much cash do we have on hand? Currently, $19.1 million is the cash on hand plus obviously, the grant funding, there's $3.5 million to coming from CMRDD, which is fully on the pilot. Keep in mind, the pilot plant itself through CMRDD, Alberta Innovates and Strategic Innovation Fund is 75% covered by government grants. So a large portion of that capital. But again, that's all reimbursable, so it comes in after we complete the work, but it's at least $5.5 million to $6 million, 75% of that. So $19.1 is what we've in the bank today. So just a clarification question. Other oil and gas or underground lithium brines have higher starting lithium concentrations than E3 does. Will it matter greatly? It does have an impact on the economics because you have to produce more brine to get the same amount on lithium. And that's where the real key is. In terms of recovery rates, from the DLE at these grades, there's no challenges with higher recovery. In fact, I think we're going to get a higher recovery than some of our higher-grade peers, which means that, that sort of starts to offset it. But when you look at it from the perspective of grade, it's also about the cost. It's really about the cost. It's not so much about the actual number. And so the cost comes down to, obviously, the grade. It's 1 portion of it because you have to produce a bit more brine to get the same amount of lithium, but also the cost to produce that brine in terms of the number of wells, the producibility of the aquifer all those factors. I think what you're going to see is that when we get the pre-feas out that is fundamentally well within a very strong economic case to be developing a lithium project in Alberta. And you can look at our PEA in 2020 versus other PEAs in 2020 because that preinflation and you can see that the economics are strong. And I think you're going to see that same relativeness in our economics as we grow and get the pre-feas out. So that's really what it comes down to. The real advantage that Leduc has is that it's bigger than most. And that scalability, that continual operations, the favorable permitting environment, all of those things really, in my mind, overweight the grade that we have because it is -- it's not that big of an impact on the overall economics, and that's the only impact it really has. We don't have any information on -- we've got a question about the pre-feas. I don't have any information about the pre-feas today. We've talked about the fact that we're going to do one. There will be announcement in the near future on the details of that. So I'm not going to give in to too much, but expect to see some details on that, on who's going to be working on it and on the time frame that it will be completed on. So are we looking into any partnerships for plant development or cost sharing? I think E3 is philosophy. I'm going to pull up a slide here, I've been sitting on this one for a while. I do go back to the reservoir because I think this really tells the story. The Bashaw District is 16 million tonnes. This is a global scale resource, bigger than most that 16 million tonnes. There's enough resource here to go around. And what I mean by that is that we have opportunities to look at potential joint ventures in the space on portions of the ground that enable us to develop and have partners come in and not necessarily have to give away the whole ship to do that. And so we do contemplate our sharing especially for Plant 1, as everyone would know, a small company to raise that sort of capital is more of a challenge. I think when you look at the environment right now, I think we're bullish on being able to raise the financing because of the availability of federal funds for these projects, both Canada and the U.S. as well as support from potential offtakers and you've seen that in the space very recently with big numbers coming out from some of these battery companies and OEMs to support partnerships, not just offtakes, but they're real partnerships and E3 would be very open to a real partnership that brought in financing, that enabled us to grow this project, especially Plant 1 to become a reality. So we do have conversations about that sort of stuff. We are open to it on a big scale for Plant 1, but also the smaller scale to look at some other ways to be creative to create value from this massive resource that we have. And so we work on those in the background. And obviously, specifics, we can't discuss but the market will be made where if anything progresses to a point where it's material and executed. But we are open and we are looking at those and in active conversations at various different times. So I think this is the last couple of questions and then we'll wrap it up. There's a question here about battery alternatives. At the present time, I have 0 concern about an alternative than lithium battery of some sort. We work closely with a company that makes lithium metal and looking to advance lithium metal batteries. That's seemingly the future of batteries and you look at the energy density and some of the cost metrics, those make a lot of sense. We also look at the fact that every single OEM or battery companies building right now on the backbone of the lithium-ion battery. And that cathode active material like NCM or LFP, they've taken decades to perfect that. And it's going to take the same amount of time to perfect a non-lithium battery if something even becomes available. And there has been talk of sodium batteries. They simply don't have the energy density. And again, they're not commercial. They don't have a commercial viable battery as of yet. Whereas the lithium-ion battery is commercially viable. So all of the big OEMs and all of the people who are buying these batteries are all committed to the lithium-ion battery platform. And it's going to take a very long time and a significant amount of money to retool that into some other platform. There is a chance that, that happens, but I think that the time frame of some new battery tech coming on and then it getting commercialized and then actually being ending up in a car is probably greater than the life that E3 needs it to be. So I think that for E3 itself and our ability to get to market with our product and scale that -- I think that it is a very, very low risk that that's not going to be -- that we're going to lose the lithium-ion batteries to the platform in which this is going to happen. So I think we're pretty secure right now in developing lithium project. It's the 1 element in the batteries that's ubiquitous. It's in every single battery that you're seeing commercialized. They're all based on the lithium platform. And it is because lithium sits in the spot in the period of cable that makes it perfect for what it does in a battery. And there's no other element that is as good as lithium to do the work. So I think that's the end of the questions. Yes, I'm getting thumbs up. That's the end of the questions. So I think there's a bunch where that came in, but we're just getting out of time. I want to thank everybody for joining today. We try to keep a very transparent and open conversation and dialogue with our shareholders. We have a lot of work to happen in 2023. We keep a checklist of those things on our slide deck that gets updated monthly, so you can have a look at our details here. The pilot plant is moving along very nicely. We're still expecting it to turn on in early Q3 and then be running sort of mid-Q3 and run through the fall. A lot of that work has already started next week. I think you're going to start to see real construction start for some of the support equipment for the piping and stuff like that. So it's -- every week, the site changes, gets more advanced. So we're getting there. The deal skids that are being manufactured are coming in from off-site and they're on schedule as well. So everything seems to be coming up. We're expecting a lithium hydroxide in the fall and the pre-feas in around the end of this year. we should have that out. And again, more details on all of these things over the next little while as we grow. So thank you very much for your time today. Feel free to reach out again to the Investor Relations department. And Greg will be getting back to you if you have any further questions. And we'll try to get some of these answered as well that we didn't get to you today. So thank you very much, and everybody, have a great day.