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

Good morning, everyone. Thank you for joining us for our webinar today. If you are joining us from the West Coast, good morning to you and if you are joining us from the East Coast of Canada and the U.S., thank you for spending your lunch hour with us. My name is Robin Boschman, I'm E3's Director of Investor Relations, and I'm excited to take off this webinar today and to provide all of you an update on our company and the exciting things we have in store for 2024. So I'm going to start with just a little bit of housekeeping. And then, of course, I'm going to pass it over to Chris Doornbos, our President and CEO, who is going to run you through the presentation today. Chris is going to spend about 20 to 25 minutes talking through our plans for 2024, the things we're very excited about and share more context on some of the news that we've released this week. And just a note about questions before we get started. So you are able to submit questions as we go through the webinar today, simply submit them through the chat function. And then at the end, our intent is to get to as many questions as we possibly can. We have some that have been pre-submitted. So we're going to aim to answer those and then also aim to get to all of those that are submitted as we go. So don't feel the need to hold your questions back, please ask them as we go through after presentation today. Those come directly to me, and we'll be happy to get to a lot of them. So in terms of what we're going to be focusing on today, we're going to do a little bit of an introduction to E3 with [ you ], for all of those who might be joining us and are new to the story, we're going to tell you about the company and a little bit about our history and some of the exciting things we accomplished in 2023. We're then going to spend a bit of time on the market and the EV adoption outlook. There has been much information out there, and we want to share with you our perspectives based on the conversations that were privy to in the financial markets and win off-takers. We're then going to dive deeper and provide some context about the news release that we issued earlier this week on Tuesday about the technology solutions that we have outlined for our first commercial facility. And then, of course, we're going to talk quite a bit of our pre-feasibility study and the advanced engineering studies that are underway to get us to first commercial Lithium in Alberta. And then we're going to end on some of the other exciting things that investors and other interested parties can expect from the company in 2024, and we're going to close out with a Q&A. So with that, I will pass it over to Chris Doornbos to take us through the presentation.

Awesome. Thank you very much, Robin, and welcome to everybody to the first of 2024's Webinar Series of E3. There are probably some new people on the call as well as some of our long-term shareholders. So just in light of that, I'm going to start off with a bit of a broad stroke overview of who E3 is and where we sit into the market for lithium developers. So over the past couple of years, E3 has been advancing primarily our Clearwater Project. This is located in South-Central Alberta. And later in the presentation, we do have a map as well as it's on our website, outlining where the focus is geographically in Alberta. It is about an hour's drive north of Calgary and about 45 minutes from the Calgary International Airport. When you look at what the company has developed over the past couple of years, one of the biggest things that E3 holds, that I think really truly sets us apart is the resource space that has been developed. So we have a 16 million tonnes measured and indicated in the Bashaw District which is our primary focus. And within the Bashaw District, post the Clearwater Project in the southern part. That 16 million tonnes is 5x larger than the entire rest of Canada's M&I resources put together. So this is a very significant elephant of an opportunity to develop lithium here in the province. And when you look around in the global landscape of lithium resources, and we have slides on this in our corporate deck which you can go reference, where we sit, we are at the top end of global resources by single jurisdiction. And that puts Alberta as a whole and the Western Canadian Sedimentary Basin as probably one of the largest untapped sources of lithium on the planet today. So the opportunity to bring this resource to bear into a producing asset is an absolutely massive opportunity for Western Canada, for Canada itself, I think it's a really important part of the current geopolitical trends. And we're going to -- I'm going to talk briefly on this. We spend a lot of time in 2023 and late 2022, going -- participating in a bunch of international events hosted by our government and others to talk about what critical minerals are needed and where they're needed. And it does bring into context that this opportunity here in Alberta in a stable secure jurisdiction. The other piece of this that E3 holds is extraction technology. Since its inception, when we started this company in 2016 and we went public in 2017, the company has been -- while developing its resources, developing a direct extraction technology. In 2017, when we really started to ramp up that development, there were very few DLE technologies on the market. In fact, DLE wasn't even a term that had been coined at the time. And we started to develop a tech because we needed to because there was not another available -- process available to us at the time. And that landscape has significantly changed. And the announcement that we've put out, which I'm going to get more into detail later, outlines how much that has changed. But E3 has still developed our own technology. We still plan to continue that development but more on what that means for us is that we have one of the most experienced direct extraction technical teams on the planet. We have a fundamental understanding of how these processes and technologies work and that has been able to advance us very quickly through the research phase that we've gone through over the past 6 months in terms of trying to decide what the best path forward is for our technology. And that dovetails very, very closely with the downstream processing technology because one impacts the other. What you produce out of the back of the DLE technology has to then be refined into something you can sell on the market that what we would call a battery-grade or battery quality lithium product, either carbonate or hydroxide, which is what the market is demanding today. The last piece of this is that E3 has developed and continues to progress along a path to commercializing this project. That is our goal. Our goal is to bring this project into operations. And there's lots of ways that E3 can do that. There's also paths that can -- that we can take to get us to that point. The next big challenge once the engineering is done ease the project financing. We'll talk a little bit that as well later in the presentation and how we see that landscape but our goal right now is that the value creation for E3 is produced in lithium and that value for that product, while the press today is still expected to be extremely high into the next -- later part of this decade. And so all of these things are sort of setting the thematic for what we're going to talk about today. But I think it's important to understand that E3's has been developing this resource since 2017. We have a very strong technical team that has taken it forward to today, advancing it through the next stages and that set us apart as one of the leading lithium development companies in Canada in terms of where we're at in our project. And that puts us as one of the leading in the world because lithium is still fairly new as a mining producing mineral project globally. And that's really been backed on the electric vehicle and the developments that has happened there. So looking at what we did in 2023, a couple of [indiscernible] points, but you can read through this. The resource upgrade I've talked about, that happened in the first part of Q1, Q2 2023. That really set the tone. We needed to do that. That's an important piece for the pre-feasibility study. You need that M&I to book proven probable reserves. But the big thing that we accomplished last year and our biggest goal, I would say, one of the most important things E3 has done to date is the development and piloting of the Direct Extraction Technology. And that was successful. We talked just a couple of days ago, but sort of the final culmination of what ended up happening, which is 4 different external technologies that we ended up testing as well as our own. And there was also that demonstrated that every single 1 of those technologies can technically take the lithium out of this brine in a very efficient manner, which opens up the door to a significant amount of derisking because one of the biggest challenges for E3 in the past has been the technology risk. And I believe now that the company has significantly derisked that side of the business. And with the upcoming pre-feasibility study, which we started in June of last year, is going to demonstrate that it has the economic legs as well. And we're very excited to be able to show that when it's available. And I'll talk again about where we're at after that. We also acquired mines in Saskatchewan. We announced that. I think Saskatchewan is a very interesting jurisdiction. Our primary focus remains in Alberta, given the size of the opportunity, but we really like what we have in Saskatchewan, it has a very significant value creation opportunity. And then we've been successful continuing getting government funding, $3.5 million to fund the pilot on top of the SIF funding that was $27 million, et cetera. So a total of $32 million of government grants. And we also raised just under $30 million in the public markets last year, all well above our current share price. So some good value creation there. And that is going to be the one big thing that will set you through apart. If you look at the bank balance of our peers and you'll start to see their year-end financials coming out over the next couple of months, E3 does stand apart in terms of having a significant amount of capital to deploy both in terms of cash and we still have over $20 million to drawdown on the SIF funding, which enables us to continue our development during this cycle in the market. Just maybe to take a minute to look at our perspective on the battery demand. There's generally been a bunch of chatter driven mainly by the drop in the lithium price over the past while, about the sentiment for EVs and the slowdown. And I think it's really important to look at this from a perspective of facts. And what the facts are telling us in terms of our business plan and our model and how we're planning to move the project forward. Last year was still the biggest year on record for EV sales. And we are now producing a total -- or have a demand total and producing a total of about 1 terawatt of battery power per year. And you look at the scale-up that has happened since 2020, when we're at about 250,000 -- or sorry, 250 gigawatt, and now we're at 1,000, nearly 1,000 or 1 terawatt of power. It's a significant increase. But when you -- and that is now yearly that requires lithium to supply those batteries every year. But when you look at what's happening in the more local scene, a lot of this battery capacity exists in China and in Europe. North America still has yet to really grow its battery supply chain. And if you look around at the commitments both in Canada, which we've seen a bunch, everyone from Volkswagen and Northvolt so as is GM, POSCO, all of these companies building better components in Canada. But that still pales in comparison to the amount of capacity that's being built out in the rest of the world -- in the rest of North America, sorry. And so a lot of the demand that you're seeing here is yet to really turn on locally. And when we look at what's happening in terms of even this past month, there's a significant amount of growth even just in January. A Year-over-year growth of almost double the total sales from last year. And so I think we just wanted to point out -- take the time to point out that the business model and what E3 is developing is still very sound. And when we have conversations that we do with the industries, we spend a lot of time, myself and our commercial development team, spends a lot of time talking to the OEMs and the battery companies. They are still looking for lithium as hard as they were prior to the last couple of months. And the slowdown in the lithium price is not necessarily surprising. These commodities -- all commodities go through per cycles. But what we're seeing in the background is still strength in people looking for this and looking at the price metric that lithium is being predicted at. So we don't necessarily E3 predict what the price is going to be in the future for lithium. We rely on companies like Benchmark Mineral Intelligence and SaaS markets and others to tell us how they see demand coming on stream and what that means in terms of supply and that balance basically trying to predict what the price will be. And what we're seeing is that in the sort of 2026, 2027 and onward, that, that price is still predicted to be significantly higher, over triple what we are today and settles down at around sort of the $30,000 per tonne mark into long term. And simply right now, the market is very volatile. You bring in a bunch of supply to the market, the price drops. You stockpiling -- I think there's been a bunch of stockpiling that's happened in China. Those stockpiles have been depleting, which is they're using those stockpiles to continue to develop their batteries. So they haven't slowed down the development and the production, they're just using the stockpile, which has also had an impact on the price as of late. But the long term and the market for the product in the 5-year time frame, still has the demand profile as originally predicted. And so from us, again, looking at where we look to do -- what we look to do for 2024 and how we see the market evolving, I think it's really demonstrated by this graph. When you -- or is the map. When you look at where all these battery factories are being built. And I think an important thing to look at, and we will post this publicly, as well this webinar is being recorded, so you'll be able to review it. Just look at the dates of when these factories turn on. And the majority of them are in the future. Most of these have not actually -- are not actually up and running. And so what that means is that this is demand, this is lithium demand prediction coming out in the market in the next 2 to 3 years. You're going to see a lot of these batteries, either cell plants or cathode plants, which is where the lithium actually goes into the cathode and then gets assembled into a cell, all of that has yet to be built out in North America. And so when you look at the demand -- and this is not dissimilar to Europe. We saw the Stellantis JV company called ACC, announced that they plan to build 3 gigafactories in Europe in the coming years and they've secured funding to do that. All of that means that the demand for all of these minerals, lithium being just 1 of them, but the critical one because it's in all the battery chemistries, hasn't really come on stream yet. And it doesn't take that long to build a gigafactory. It's a couple of years to get this thing up and running. Mining just does not play in that same time frame. It generally is a lot longer to get a mine up and running. And from the DLE perspective, there's advantages there because they do turn on a bit quicker and permit generally a bit quicker, and we'll talk about permitting Alberta then an open pit hard rock mine. But we still -- there's still the time gap that doesn't line up, which means they're still predicting a significant amount of shortage of supply as the demand ramps up. And from that perspective, that's where the numbers come from. And from looking at how we will be valued and how the contracts that we will be looking to sign into the future -- and a catalyst for a lot of this and our PAT, if I can just look at more specifically E3. So E3 is looking at getting our pre-feasibility study out in the next, say, 1.5 quarters. And we announced that we're aiming for the end of Q2. And that fundamentally is a big step forward and a catalyst for these next opportunities. In terms of getting our supply agreement, the majority of the companies that we talk to want to see those technical details, understand the value of this because they want to know what they're investing into. And so from a catalyst perspective, that pre-feasibility study opens up a lot of doors for the strategic partner side of things whether that's offtake or development partners. And when you look at this map and you look at what those companies are, they're well known to everybody and they're well known in the industry because these are the companies that are building either the batteries or buying the batteries and they're securing supply. And there have been lots of examples of big investments in the past, GM into Thacker Pass was $650 million investment. Stellantis into Controlled Thermal which is a DLE project in California, it was $100 million and these are prepurchased and a combination of equity, depending on the deal and the company into the project or into the company to support the capital construction. And so when you look at where -- how project financing is going to work for a company like E3 and where we're going to get the capital to actually build this facility in part, it will likely come from agreements that we have with strategic partners. In other parts, it will likely come from government sources. There's been -- there's about $18 billion in Canada of available funding for processing of critical minerals. $1.5 billion from Natural Resources Canada which they just announced the first $300 million drawdown, and then another $1.5 billion from Strategic Innovation Fund, who I said that is more for the processing side of things, so making the battery products, which we will do also in Alberta at E3s facility. And then there's the Canada Growth Fund. And then there's a bunch of other smaller stuff that's still taking around for the development funding as well. So that landscape -- and then there's the United States as well funding projects and a lot of talk about that money coming internationally and specifically into Canada as well. So there's a couple of pieces of project financing that's generally not available for mining projects in Canada that is out there today because of the critical nature of this. And because of the geopolitical wins that are blowing right now, which is that a lot of companies are looking at their own secured supply, domestic supply and domestic, we think of North America, supply of their critical minerals to be able to have this ability to produce themselves and not thematic is why IRA existed, is why Canada is funding these battery factors that you've seen pop up in big dollars is to bring that capacity local. And the piece that is still to come is those critical minerals. And they are of the highest importance because we can't do the battery without them. And so having this secure supply in jurisdiction in Alberta, I think it's going to bode very well for the company and for the province in general. So that's how we see that. The big catalysts like I said, is the pre-feas, and then we move up by bunch of stuff forward. But these conversations continue and have continued. We -- our commercial development team talks to these companies on a regular basis. Just to take a bit of a pivot here to talk about the announcement we put out on Tuesday. The team has been very hard at work over the past 4 months since the pilot finished on sifting through all of the data to understand and make the big ultimate decision, which I would argue is the biggest decision E3 has yet to make as a company, which is what we're going to take forward as our first commercial processing technology. And so we did -- we ran a pilot, as you guys all know in the summer-fall. We continued development testing after that. And a large part of what we're going to talk about in a bit in terms of the pre-feasibility study and the timing of that was the result of taking the time to really understand the data that we had in front of us. And that is in 2 pieces. So we received all of the results in terms of the efficiency and the eluent quality from the direct extraction technologies that have been tested. And then they have to be looked at from a downstream conversion process. What is it going to take energy wise and cost wise to take that element and turn that into something that is a battery-grade product that we can sell to these companies. And the combination of that work has been a big, big lift and the company has now decided on what technology we plan to use. And we are still in negotiation, so we can't outline who that is at the moment, but we have selected our leading technology to -- and are progressing forward with that technology in terms of its engineering design so that we can get that into the pre-feasibility study out. But all of the technologies that we [ damped ] has been tested, demonstrated that they could work. And so what it came down to was more on the economics perspective. And so we were putting together a very robust financial model that each of the technology pieces that we were able to develop went into to understand the cost. And that is basically the starting point of the pre-feas because the technology options that we ended up choosing, we already have a pretty solid understanding of what the economics are of those. But we still need to do the engineering work so we're estimating 2 to 3 months to finish that engineering work to get the final, what we call PFDs, process flow diagrams, all the interactions of how the pieces work, all of the engineering pieces. And it's the plant itself sort of breaks into 2 pieces: the subsurface, which is where the brine comes from and then the surface. And the surface is a pre-treatment, a direct extraction and the processing. And then there's obviously all of the auxiliary stuff around that moving fluids around pumps and stuff like that, heat where we need to extract it or use it and all of those things culminate into a fulsome process design and then a facility design. And all of that has been the catalyst to get all of that going and finalize that because a lot of the engineering is already done, but we're not going to go engineer 4 options. We're only going to do the final engineering on 1. That has now commenced because we've made the decision, and so a lot of that engineering is now underway that we're holding back to the decisions made. But it is -- now that we've selected this and we have a path forward for commercial operation, it is, I think, from my perspective, have been working on this problem on what technology we're going to choose. Now that we've made that decision, it is a pretty fundamental path forward decision-making process that we've gone through. So I'm very excited to have that behind us now and to be able to move forward with confidence in the technology we've selected in the process we've selected. So what that looks like, and I've gone through this a little bit. This is a high level, how it's going to work. The well pads have pipeline network, that development is pretty well solidified. That work has been done for some time. It's a series of wells connecting some pipes that bring it to a central facility. We're currently looking for that central facility, and we'll have some information on the market where we're actually going to put this thing. It is going to be in South-Central Alberta, and that really does involve our regulatory process fundamentally. Then the brine comes into the facility. There's a preceding step, which is mainly a degassing and then we put it through the direct lithium extraction. It produces a eluent. That eluent is then refined into a lithium hydroxide through chemical conversion processes, which are sort of the stock standard way of making them. For example, you add -- so in carbonate, you can make lithium carbonate, you add calcium hydroxide, you can make lithium hydroxide. And it's all controlled through a certain amount of solution and crystallization processes that it goes through. Out of the back end of the DLE, we take the spent brine and we put it back down into the reservoir. This is going back into the Leduc. A lot of the engineering work we've done, reservoir engineering work we've done have demonstrated that this is the only path for any of these aquifers in the Western Canadian Sedimentary Basin. If you want to maintain your aquifer pressure, if you want to be able to produce this reservoir in this resource for a very long time, which we plan to. We plan to scale this to -- we think we can get it up to about 150,000 tonnes a year with a 25- to 35-year mine life in total capacity. To do that and to be able to maintain the aquifer and keep it in good health, you have to put the water back down. And that's not just the Leduc, that's across the board. And that's a fundamental piece of this story. So focusing a little bit on the pre-feasibility study and what it is. And I won't go through all of these points. We just want to highlight, there is sort of 2 things that end up being developed. We are designing a project that is -- that we look to take forward and build. And the detail that we're putting into this pre-feasibility study enables us -- once it's complete, we have a design that we don't have to change, and we move forward into feasibility as quickly as it possibly can. And we believe that this is important because I talked about before about the security of supply, the lack of supply that's going to be market given the demand and how important it is for our industry to have lithium available to it in the later part of this decade. And there are opportunities right now that are, as I mentioned, unparalleled for mining resource development company, in terms of funding available to build this project. And I believe that, that funding is a time factor. So at some point, that the concern of not having a lithium will go away. I think that's later part of the decade. But in the interim, for those companies like E3 that can get the project up and running in the shorter term, the opportunities are there. And that is one of the reasons that we are really taking the time to make sure that we do this right the first time because the biggest thing that would kill or in terms of moving this forward in terms of time frame, would be having to go back and reengineer something. So doing right the first time. And that's why we took the time now to do a fulsome deep dive into the assessment of what technology we need to choose because that will hopefully enable us to never have to look back on that decision and move quickly as fast as we can. And so what happens internally is we get a full engineering document that tells us exactly how this plant needs to be built. And that then gets handed over to the detailed design team, and they work with a couple of engineering firms as well as the vendors that we've chosen. The plant gets designed to a detailed level, which means every single valve, pipe and all of the pieces that we need to do get designed so that you can hand it off to a fabrication company and they can build it. And that is the next stage after pre-feasibility studies, that each of those pieces start to get engineered to that level. And so that document that we produce internally gets summarized. And that summarized document is what is released to the public as a pre-feasibility study NI 43-101. So it contains the same information. It just doesn't have all of the engineered drawings or stuff like that contain within it. It summarizes that into a compilation and it's also peer-reviewed by an independent qualified person. And that is fundamental to our shareholders because we want the shareholders to know that this isn't just E3's design, that's someone else, some qualified engineering firm, and we chose Fluor, they're one of the big ones, has worked on this with us, has reviewed the final results and agrees to them. So the progress of the pre-feas, I think I've gone through most of this now. We're at the point now where we've got the full sheet design. We have a lot of details already in that, but we need to complete the final engineering package. We're estimating another they're 2.5 to 3 months to have that in hand and then the rest of the pre-feas gets wrapped up. And then we're going to get it out to the market as quick as we possibly can. And we are aiming for the end of Q2, we do hope to be able to make that. There is a possibility that it's early part of Q3 but we are working very hard to get this done. Now that the decision has been made, there's nothing holding it back. Just the work that needs to get finished. And I should note that the results that we hold internally now are very exciting. I think that they're going to demonstrate for the first time at this level of confidence and accuracy that these Leduc brines can produce lithium economically and make a vital project here in the province. And I think that is fundamental because a lot of the challenge that direct extraction has had is that the technology is to be developed and that the local Western Canadian brines have had is that the grade is a bit lower and being able to demonstrate that we can do this still in terms of their durability of the aquifer and the processing technology and demonstrated a viable economic project, that makes the company money, which means that the shareholders make money, which means that it becomes a project that gets funded and built, is a very exciting set to be at, at this company. So we're all excited. And just going to turn, again, a small pivot here to talking about the sort of other things that we're going to do in 2014 -- sorry, 2024. So one of the big things that I talked about is that the pre-feasibility study is a catalyst going forward. So that enables us and opens up the door to a lot of discussions on the strategic side. The other thing that we're going to be working on is now that we've solidified a process path on the Clearwater Project, you can see here on the map, it's only a small portion of the total Bashaw District that we're going to be defining into the first project. So we can continually work on advancing some of these other projects in the Bashaw District including the Exshaw area in the north to have them coming right behind us in the Clearwater Project. Like I said, we have the ability to produce about 150,000 tonnes a year across the Bashaw District. So there's probably, say, 5 to 7 projects that can be developed in this area, and we're only going to outline in the first PFS 1, one of those projects. And so we can continue to develop those. And because the engineering is now complete, the brine consistency across aquifer is very similar. So we're able to not quite but almost push and stack those projects across it. So it does enable us to move the next ones a lot more quickly. We also are going to work on some resource development activities. We have land that we haven't really looked at that is currently being under development, so the Rocky area and Saskatchewan specifically. There's good value opportunities in those. They're not the core asset and that provides the opportunity to do some other stuff with them. And we're looking at some pretty cool opportunities but the first catalyst of those is updating the resources across both of them, and we're going to work on that in the short term. But I think one of the big things to really highlight here is that when you look at this from the perspective of 1 project is viable, and we're going to look to demonstrate that in the pre-feasibility study, and that document, therefore, becomes a proxy to the value that the rest of this project has. And that show -- that will demonstrate once that's out to the market, the value that this whole area can have and there's a substantial amount of lithium sitting in this aquifer. And so E3 is going -- we're not blind to that and we have some very exciting stuff in the back end that we're working on to create value for our shareholders. I think that would be very exciting. So just to wrap it up, I think a couple of key points, and then we'll get to Q&A. I'm probably about 10 minutes over. We have a very strong balance sheet going into 2024. And in our realm, one of the strongest, I think it's incredibly important because it allows us to continue working on what we're doing while we're in a down cycle. And this down cycle is temporary, they always are, we will come back. I have no crystal ball to say when lithium prices will come back, but they will definitively come back and the sort of sentiment to the market will come back. But E3 will be able to get through all of this without having to go to the market and solidify the price, which I think is a probably important piece. We have a very large resource area that we're looking to create value from just -- not just in the Clearwater Project and our pre-feas but in the rest of our area, given that we're going to demonstrate that the Leduc brines are economically viable and very exciting project. On the right [indiscernible], we've talked about a lot of this in the past. Bill 82 from our previous energy minister Sonya Savage brought regulatory authority to the AER. They have rewritten all the directives, so they're very transparent and clear path for permitting on this project, which cannot be said for a lot of projects out there. And the other side of this is that we are developing a project with an ESG conscious, and I think that is incredibly important for our customers. They need to see our ESG credentials and how we're going to build this project. And I think how we develop in Alberta, just by proxy, how oil and gas gets developed, conventionally in Alberta is a very small surface footprint, and we plan to use no fresh water in the process and have no interaction with the fresh water aquifers through things like open pit mines or evaporation ponds. And I think we ended therefore, standing a little bit above a traditional lithium operation that's out there today. So that wraps us up. And Robin, we can move into Q&A.

Thank you so much, Chris. So we've had a lot of questions come in and I've grouped them into about 4 categories, and we'll kind of tackle them in order. So there's questions about our resource and about the Nisku and we've got questions about DLE and our flow sheet. Some came in about partners and offtake. And then finally, we've got a few about the big -- bigger picture of the vision for E3 Lithium. Before I get into the first question, we did cover a lot of ground this morning. Lots of information we shared. Can you just take a couple of minutes for those who won't be able to stay for the entirety of the Q&A, just to summarize the key catalysts that E3 looks to deliver in 2024 that shareholders can expect to see.

Yes. I think the big things, obviously, we have the pre-feasibility study. I think there's a lot of anticipation of that coming. That is a catalyst for a lot of other things that we can do. That unlocks the ability to look at some of our other resources and develop those in the Bashaw District, it enables us to start looking at strategic agreements with various similar parties whether they be offtakers or development partners. And that's sort of like on a bend towards our project financing. Project financing kicks off, at least for the small heart beat at that time because we are already in discussion with the big banks about what the requirements are, which, again, was one of the main decisions for us to pivot to a third-party technology was the fundability of this project from a bank's perspective. There was -- it was just a much better requirement if you had a performance guarantee from one of these companies. You were at a much better chance to getting approved to financing. So a lot of the decisions E3 has been making has been gearing up to be able to get this perfectly going. And then obviously, there's a lot of development resource development work across our lands that we've gotten underway right now that I think is very exciting to see that come out through the year. And I think while permitting and that regulatory side is maybe is not sensational market news, it is an incredibly important piece. And I think it's going to demonstrate why Alberta stands out amongst the rest for developing those lithium projects. And I think that's going to bring a significant amount of validation from the broader industry into Alberta. And I think that's going to see other catalysts show up in terms of people investing in Alberta and Saskatchewan for these projects.

Perfect. Let's move on to some questions about the Nisku. So earlier in January, we outlined that has some sampling have been done in the Nisku and we had uncovered concentration is a little bit there than the Leduc at 87 milligrams per liter. Can you just talk about what that really means to E3? Could the same wells be used for the Nisku as the Leduc? And what are our plans to further develop that reservoir.

Yes. The Nisku is an interesting addition. So we've known about it for some time. Years ago, we announced that there was lithium in the Nisku. We've recently done some new sampling and found that it is on par with the Leduc in our area. It's a smaller aquifer. It's thinner. It has the same process permeability characteristics as the Leduc so it has the same production profile. It's just doesn't have as much volume. But when you look at it from what the oil and gas companies do, a lot of times, they'll produce oil from both the Nisku and the Leduc and combine the 2 from 1 well. And there's an opportunity for E3 to do something very similar to that. Is that -- and how we -- how this gets managed is the reservoir engineer's job, and we haven't actually gone through the pad. So a lot of this is sort of suggestion of what we think we can do. The reservoir engineering team has to do all the work at to demonstrate this. But one of the things that could be possible is that you could coproduce. The other thing that you could do is that you could -- once you produce out of Leduc and you've shut that well in for production of Leduc, you could open up the Nisku. And therefore, you don't have to drill another well, you could produce water out the Nisku for some time and the cost to that is significantly less in drilling new wells somewhere else. And then you already have the pipeline there, you already have all the surface infrastructure that you need. So you're just extending the lifespan of your -- our existing infrastructure, which will reduce the total capital burden. But I think one of the big things to really note here is that it's just we are going to look to do a resource at some point across the Nisku. What it really shows is that this devonian sequence of rocks in Alberta are just -- the gift they keeps giving as it relates to lithium. They are just such a prolific source of this critical mineral. And from my perspective, it just means that there's absolutely no doubt that we're to get a project operating that's going to prove lithium in this province because of this opportunity.

Wonderful. Okay. We've got a few questions on DLE technology, what that means for E3 technology and what it is for our first commercial facility. So you did talk about this in the presentation. But maybe if you can, one more time, just summarize some of those key criteria that led us to select third-party technology over our own for the first commercial facility.

Yes. So the technology that we developed is still under development. We're still working on it to commercialize it. The -- again, the initial impetus to switch from a developing our tech to looking -- even just looking at the availability of third-party technologies, this was over a year ago, 1.5 years ago. And we've talked about this publicly, was sort of 2 parts. One is that the project financers were telling us that they would -- it would be hard for us to get a financing package if it was our technology. Not impossible, but just hard. The other piece to this is the time frame to commercial. So the technologies that are out there today are being developed commercially. In fact, there are some that are operating commercially. And we're going to see a project built by [ Aeromat ] that's commissioned today turn on, first large-scale outside China DLE project to operate, which means we'll be able to see through that deal and understand the operating costs and all of those important things. And so a lot of these technologies are further advanced in the commercialization profile than E3 is. And that -- those 2 factors led us to go test. And those 2 things haven't changed. They're still the driving force for us to use not our technology. So it's -- we are still developing ours, but we can move faster with more confidence and be more fundable if we use a third party. And so that was the driver for the decision. And I think it's the right one. I still stand by 1.5 years later, I think that we're still making the right decision. We can move this project a lot faster than the technology we've chosen, we really, really like. It performed very, very well. We believe that it will commercialize, and I think that's fundamental that my team of engineers here believe in it and they believe that they can get this thing up and running and that's because of who the company is and the things that they've done already. So very exciting. But yes, in terms of our tech, we always sort of say we are technology agnostic because the value for us is a resource. So we stand by that. And -- but we have a lot of value in our technology. There are different models. I know one of the questions was on fees. There are different models of how companies are trying to get value from the technologies they've developed. There are some that charge very, very high fees and some that do not charge fees to use it. And so that factors into the economics. So when we look at what technology is out there and how much it's going to cost, part of it and the bigger part is how much the capital equipment is going to cost and how much it will cost to operate it. But there is that other factor, which is what are the fees. And so whatever technology we choose, that if there is a fee attached to it, it is, therefore, more expensive to use. So it is further down the line in terms of that piece of it. But yes, it is considered for sure. We obviously would prefer not to have to pay an ongoing licensing fee and that also, the economics drive the decision there.

Okay, great. Will you answer through the questions that came in, in one. So that's great. One another question about the flowsheet. Can you just talk about how much time it takes to process from brine to refine lithium? So brine production to lithium hydroxide monohydrate using DLE, which does E3 anticipate from that?

Yes, it's in the hours. I don't have like an exact time. But from the molecule gets pumped out of the -- molecule lithium gets pumped out of the aquifer, it probably takes half an hour to get to the plant from the well, depending on where the well is adjacent to the plant. And then it goes through a series of processes continuously flowing into the final phase. And so it is hours to get to it. And I don't have an exact number, but it's certainly significantly less than -- and this is through a final product. This is a battery-grade and hydroxide. So matter outside DLE, there's no other project that produces it that quickly. Even the hard rock mining, it's a 6% spodumene concentrate that gets shipped somewhere. Right now, it's -- most of it coming out of China, except for a small operation in Eastern Canada. And so it goes on a boat, it takes weeks to get to port in China and then it gets processed. And the salar evaporation ponds are -- let's say this is the last pond. So it goes through all -- the molecules go through all the other ponds first, and then it ends up in the lithium pond and that's usually an 18- to 24-month process, depending on the rains. And that's the other big factor is that in salars, if it rains, you reset the clock because you get water into the pond that you're trying to get the water out of. It doesn't happen very often, but it does. Those sort of weather events had a huge impact on our ability to produce. I think that's a big advantage. We don't really think about it because for us, hours is pretty much instantaneous, right? If you're pumping -- you're just continuing making lithium at all times.

Reduction in time intensity and land required contributes to the high ESG profile E3's projects and other DLE projects. Pivoting now to partners and offtake, let's start with a question about our strategic agreement with Imperial Oil. Can you elaborate on that agreement? So there's a few parts to this question and answer what you can and if you miss anything, I'll bring you back to it. Does Imperial Oil provide active consultation to the company on its commercialization plans? And can you comment on the significance of the part of the agreement in which E3 has an option to Imperial grant?

Okay. So the agreement that we signed in June of 2022 was a collaboration agreement above everything else. So there was a land component, which was the original reason we went to Imperial to get access to option, some of their land. In Alberta, that's not necessary. There are mechanisms by which you don't necessarily need the Freehold and Crown but we wanted to be the partners in there. We wanted to sort of preemptively go to them and talk about that. That was the impetus. That conversation started in 2019. So this has been a long running relationship with this company. In 2022, we signed an agreement that had them contribute some cash [ E3 ], about CAD 6.5 million and an option on the land. The agreement really truly though was a collaboration on some parts. And one of the big things that benefited E3 is that they used to own this aquifer back in the '90s. They sold it off once it sort of got below their economic threshold for oil. In areas that we're focusing, it's pretty much all shut in now. There's not a lot of oil left and -- but they have all this data, they have expertise. And so they brought that to bear for E3 and it was pretty pivotal in the development of our 16 million tonne M&I. They did support that with the reservoir engineers and provided that expertise. We do talk to them on a regular basis on technology developments. There are obviously owned mostly by Exxon, has recently got into the lithium space. And so the conversations continue with the Imperial crew on the things we're up to and supporting the company. Anything other than that, I can't really get into the details. In terms of the option land, there is an option land and agreement, there's a discussion on what we might do next as 2 companies together. And the catalyst for those conversations is really truly sort of mid to the end of this year as we finish the pre-feas and do some other work as well. So all of that is still ongoing.

Okay. A question about -- a couple of questions about financing and lithium pricing that will pivot us into some offtake questions. The first one is there's been a lot of bad press lately on projects being canceled or postponed due to financing. Given E3 will require significant funding in the next 18 to 24 months, what is the current lending or government funding moat?

I would say it's still very strong. I mean, Robin, you can probably provide some insight, Robin, does most of that coordination with the federal and provincial government on grant funding. Maybe you want to just give a update on how you're feeling about it.

Yes, for sure. I agree with Chris, that is still strong. There's a little bit of disconnect between the factors that are impacting the market and the current sentiment on lithium stock. Those primarily being lithium pricing, the spot pricing that we see and a little bit about that EV uptick [ malaise ] which Chris deboned significantly in this presentation. So that is a little bit disconnected and lithium stocks are depressed. It is disconnected from the other conversations that we're having with policy makers, with offtakers, with financial institutions, where that macro and that robustness of requiring lithium and the investment appetite into lithium company is still very strong. So that would be similar with government funding. So Chris talked a little bit about everything that's available. Natural Resources Canada, it's obviously one of the federal departments that is taking in lead with providing funding for critical minerals companies. There's several calls out right now that E3 Lithium believes we are eligible for and of course, we are always prioritizing finding sources of non-dilutive funding wherever possible. So we can't promise that we're going to get everyone, but we are very aggressive, I would say, in going for all of the grant funding that we possibly can. So the investment from my perspective, the investment landscape, the funding that's available to a company like E3 remains strong.

And I think that that's a good point, Robin. The sentiment with the sort of market -- investment market is depressed right now. But the broad industry that we -- we've done a lot of work with the federal government in Canada, we were in Korea with them a couple of times. We're in Japan, in Paris and London with their -- I was at the International Energy Agencies in [indiscernible] minerals with Minister Wilkinson, our Natural Resources Minister of Canada. So we spend a lot of time with that group over the past couple of years and continue to advance our relationship, but mainly because we are one of the leading DLE companies or lithium companies and DLE in Canada. And so we go to these events to be showcased, but the broad sentiment that is there for batteries for electric cars, for the lithium therefore, that needs to power all of these things has not changed. So from the automobile perspective, from the battery companies perspective, no one's shuttering battery factories, nobody is planning on slowing down the development. Even Ford who had some soft sales is still talking [ moat ]. The CEO was talking about how they're focusing now on the small team develop small cars to get into the more mass market and not these big expensive cars and how he's built a team to develop that platform. And so everyone is still progressing their plans towards the electrification of transport and that being the driver a lot of the ways for the batteries that they get sold. So I think that the sentiment is -- there is a disconnect. I think it's a good way to put it, Robin, there's a disconnect that we definitely see. But again, it's a cycle and the cycle -- the cycles for reason they come back. So I think the important thing for us is that we're to weather the storm because we've got capital to keep going.

I think we have time for about 2 more questions, so I'm going to get some of the ones that have been asked frequently, just one we get a lot. So can you -- the market is wondering can we expect announcements soon of E3's relationships with offtakers. Just comment a little bit on how those conversations are going? What you see the future to be.

Yes. It's hard to get into the specifics because we are talking to these companies, and some of them probably are tuning in today. So welcome. But I think that it's important for us to be building these relationships. No agreement that is this important to both companies. You just meet them and the next day you're talking about what the agreement is and a week later signing it. It's the relationships that get built on trust over time that they get to know you, they believe they see you hitting their milestones. We get to know them. We understand how they want the product. The qualification is something that's so important because at the end of the day, the way that lithium is sold on a long-term sales contract direct to your provider, quality is the #1 metric and you have to deliver that quality and there's a time period where they want to see you, especially for a first plant to -- before they start buying the product and you can minimize those time frames by being good partners and working together and ensuring that the product never leaves the facility unless it meets spec. And that involves some really close coordination. And we've talked about this before that you can visualize like a battery or OEM company, [ Lulu ] on your plant where they have a lab set up and they're doing their own testing. That sort of thing is pretty important. Even Tesla and Panasonic. I mean the Tesla giga factory is a Panasonic battery, but Tesla and Panasonic work very closely together to make sure that no battery that goes into one of those cars is a failure. And that's incredibly important for all electric cars and how these things are going. And that needs a good relationship. So we are -- we have been building those. That's the fundamental piece of what E3 has done for the past I'd say 12 months really, but longer for some companies than that as well. But for them, again, the catalyst is the next 4 months or so, they're going to start -- and there are -- most of these are under nondisclosure, so they can see some of this behind the scenes work and understand where we're at a bit better than the broad market because they are under nondisclosure and they get -- we are working with them towards this. So they necessarily will be waiting for the public document to come out. That helps us move the conversation along. In terms of what that's going to look like, every agreement is different. We've seen that in the market already. There's a general theme of funding these projects, but how that funding comes in and the structure is different for everybody, but the terms of the contract are different for everybody. And they're generally not announced, what the actual terms are in terms of like the price. But generally, what we're seeing is a floor and the ceiling is sort of the trend, protects both sides. We get a floor that protects our downside and they get a ceiling, protects downside and where that sits as part of the negotiation. But it's -- you never sign something like that doesn't make your project economic right? Because you're agreeing to that. So fundamentally, whatever that floor price is still will make E3's project economic. It has to. And they understand that because they ultimately need the lithium. And the worst thing for them is that we can't make money when we have to shut the project down. So there's that coordination. And I think that's -- when I talk to some of the executives at some of the OEMs, that's what they're saying to me, just as a general sweeping statement that they're looking for companies that they trust and get to know and want to work with. And then that on the ceiling is sort of solidifying that trust and relationship because it protects everybody.

Final question for the last few minutes here. 2023 was an exceptional for E3. You talked about that right off the bat, of things that you did that happened to coincide with a little bit of a down market. But regardless, huge year for E3 in 2023. Can you just talk about maybe pick out your top 1 to 3 learnings from that year from last year and how those are impacting how the company plans for the future.

Yes. I think the year -- it's hard to explain how for me personally important last year was. I think that -- we have been -- I founded this company in 2016, and we knew that the sort of big goal for the company to move and pivot this company was a successful demonstration of technology at a high scale. And went out, we built a pilot. And that wasn't just the DLE technology, but it was also the surface infrastructure. We have a well. We demonstrate that. We have the gas treatment, we demonstrated that. So we demonstrated a lot more of the process. And then we shift to concentrate to get converted into lithium hydroxide. So we've been able to demonstrate in pieces the full process. And I think that's just -- it's such a fundamental piece to where we need to go. But I think for the benefit of our investors and shareholders is that, that paradigm shift now moves us back to where would have been originally, which is a resource development company, right? We're no longer an R&D company trying to figure out a new technology, is the technology going to work? We're now engineering a plant, and we're going to demonstrate that at the pre-feas and then we're going to keep going and hopefully build something in the near to midterm. And so we get to be more of a resource system. We just sort of pivot back to that. But it's apparent shift in how E3 operates as well. And it gets us closer to revenue, which is ultimately how E3 will become a company of extremely high value is that we get rid of the hump, and we start making revenue. And like I've mentioned before, there's going to be a big capital bill, but there are so many opportunities to find that funding that I think this is actually possible. And it's not to say that we're not looking for all of the strategic side of things to help us get this first project up and running because the first project we build will be the hardest. So we're looking for that support and we're in conversations with that support. But I think that even than it's just getting it up and running has created so much value for us. And then we can look around and we can start advancing the next time, the next plant and turn this into something that has a lot of value. And I think when you look at it from a broader suite market too, it's like this is an elephant, so it attracts elephant hunters, which we bring the larger companies of interest to this because it's not a single project that's small, we're going to make some lithium and we sign an offtake deal, and then that's it, and we sort of get that running and we sit back and watch the world go by. This has the ability to be much bigger than that.

Okay. Thanks, Chris. With that, I think we're just 1 minute over time. So I want to thank everybody who took the time to join us today. And this recording will be available for re-watch later as well. Thanks, everyone.