Pursuit Minerals Limited (PUR) Earnings Call Transcript & Summary

Thanks, everyone, for joining, and thanks for hanging around to the tail in the afternoon. I am Aaron Revelle, and this is Pursuit Minerals. Talking about lithium, the naughty word in the room. We are a lithium developer in Argentina, focused on our Rio Grande Sur project, which is about a 10,000 hectare, good land position on the aptly named Rio Grande Salar. With lithium, we, Pursuit, has had a few iterations. However, we're only just about a year into being a lithium producer. We've made some significant headway, really focused on the project and our pathway to production. So for us, we have a small JORC resource, about 250,000 tonnes of lithium carbonate equivalent of 350 mg/Li, very similar to Argosy Minerals, where they were -- when they first started off. And as mentioned, we currently have our [ 2 rigs ] spinning, and you'll see some of that footage in the presentation. More importantly, we have a lithium carbonate plant to 250 tonne Stage 1 plant actually some of the people in the room have talked about commodities and the words of one of my early mentors Gordon Toll, who was the Chair of Fortescue Metals Group between '05, '07 to say. It doesn't matter what you have if you can't produce it, it is meaningless, which is a very apt and appropriate sort of foray into lithium and the development of supply-side response. We're in Argentina, an exciting jurisdiction, especially if you track the new Argentinian President despite his eccentrics and some very interesting personal decisions, Argentina is starting to have a reduction in inflation. Interest rates are being lowered. So becoming a very investment-friendly jurisdiction. Few familiar faces on our Board. I'm joined by our Chair, Peter Wall, from Steinepreis Paganin anywhere in Perth [indiscernible] also one of my mentors, Tom Eadie, quite well known in the Melbourne circles, especially if you follow Southern Cross Gold. We're sitting at about a $15 million market cap. We're currently drilling at the moment with a little overlay, noticing in the back. Really talking about Pursuit IOS put it into a couple of fundamental pillars. Where are we? What are we doing? Is really focused on those 2 points, a lithium producer. So for us, we have a 250 tonne plant. Where that is? Is that plant has recently been commissioned? And then you can see that on the left there. It doesn't look like much, but that's what actually produces lithium carbonate. So we're in the process of producing our first lithium carbonate to a technical and battery grade 99.95%. And the plant's going through that stage where the intention is to have our first run-off carbonate within the next couple of months. Of which we're currently drilling. So well we're drilling. We're currently harvesting brine through packer samples, putting those into small test ponds, where once you go through the evaporation process, we'll then truck that brine down to Salta, where the plant is and look to produce the first lithium carbonate from the evaporator brine through the plant. That's a real technical derisking of the process, showing that the supply chain action works. From there, the intention is to build our evaporation ponds and have a 250 tonne continuous operation built at site. The 250 tonne number was from the [indiscernible] increase that gets us to our 20,000 tonnes. So for us, we're on track with that plant has been commissioned and is in the process of our first production. We're currently in the process of upgrading the resource, which is through drilling, we're doing about 2,500 to 3,000 meters at the Rio Grande Salar. So when we first put the project together, we chose Rio Grande as it had an already existing Ni43-101 of 2.1 million tonnes. So unlike explorers potentially looking for lithium, we knew there was lithium there. It's now looking at how much is under the surface. For us, we have 2 neighbors. We have a larger, bigger state oil company called PlusPetrol, and we also have a junior TSX company that's in the region as well. The TSX company recently released a maiden Ni43-101 of 2.3 million tonnes, around 600 mg/Li from 2,500 meters of drilling. So for us, we have a blueprint to a significant resource upgrade where, at the moment, we're about to hit our first hole. For us, we always go back to -- and if you've ever worked at Rio Tinto in any of the M&A departments, in your initiation, they always have the equation T1 equals SSG, size, scale and grade. So for us, when we're looking at the resource, the grades of Rio Grande are some of the best in Argentina, the TSX competing company. They hit 950 mg/Li, 2 kilometers [indiscernible] from one of our tenements. For us, that 950 is some of the highest grades in Argentina, ahead of Hombre Muerto, which is highly in Lithium, ahead of Olaroz, ahead of some of the well-known and in production Salar's. So for us, looking at the sites, anything above the 1 million tonnes, you're gearing towards a 50-year mine life, you're starting to get to the point of a grade 900 mg/Li and also at the scale, 20,000 tonnes of a lithium operation is -- that's quite a large operation. There's not many of those around, and it's all to the established producers like SQM, Albemarle and Arcadium. So for us, working through our resource upgrade, working through the production that all ends up in a bankable feasibility study. At the end of the year, we're looking to hopefully have that where for us, we already have a good handle of the chemistry and understanding of the process to production. It's about leading supply-side response. Then on top of that, having our resource upgrade where for us, we've got a really solid exploration target. It's in the millions of tonnes. And for us, we have some neighbors who've already quantified and shown some of that exploration with deeper drilling, yields higher-grade brine and also more lithium than expected. So very focused on our strategy to really work towards that Tier 1 style project. We have size, scale and grade and a project that can come online into production. For us, we're ahead of many other junior lithium companies exploring TSX and [ ASX ] where they may be relying on unfocused or unproven technology. So it's always the naughty word in the room, but [ GLA ] whether you're for or against it, it doesn't have a commercial scale operation above 20,000 tonnes in existence, they don't exist. Now I'm not saying [ a watch ], not saying it can't. It potentially can, but for us, we're working on the established methodologies of evaporation, which is well known with Albemarle, SQM, Arcadium and a lot of the lithium carbonate coming out of the South American region. So that's a quick look at our plant, lovely and shinny, working there. We're expecting that to keep on working towards that first production of lithium carbonate over the coming months. And it's really about seeing that great. A key thing for lithium is it's very misunderstood in the market in that it isn't really a commodity and that it is end-user specific. So when you're actually dealing with a customer, they first test the product for their specification, the impurity profile is very important as different customers or may take, say a technical grade of 99.9% lithium carbonate, but the impurity profile can be different to different customers. So for us, we're working with a couple of groups, both in Asia and also Europe. The Europeans have a different appetite compared to the Asian customers. But fortunately for us, we have this plant that can meet most specs that we've had. We've got a few parties with us at the moment, and they are all specs that we can work towards. As mentioned, we intend to move the plant from that location up to site at Rio Grande. That's actually Rio Grande there. So a very amazing place if you ever have the fortunate, ability to go after these Salars, they are another world. For us, you can see our evaporation pond layout on the right there. So that's currently on the Salta Mining Secretary, the province were based, and we're going through the environmental approvals now to have that to go in construction where we hope to get a gone later in the year. As mentioned, our current drill program, so that's the -- what we're working through at the minute. It's been a nightmare getting this going. We had a flood of every proportions, snow and safety, which the latest a couple of weeks. But as you can see, causes stating to be harvested and brine samples are coming out of the packer. So we're anticipating results to be coming out of that over the coming weeks as we complete hole 1. It's a program where we're actually intending to go be [indiscernible] Stage 1, we will have our first [ spur ] holes. And then on top of that, we're looking to do some of the holes from Stage 2 and move the drill rig straight on to that program. We have a very unique land position in that north, which is very similar to the geology of Galan Lithium, for any of those who follow that, where the brine and the atmosphere actually extend out under the [indiscernible] you can pick up lithium from the side there. So as mentioned, that Northern Tenement is where one of the high-grade intercepts above 900 mg/Li was hit. So for us, very focused on completing that drill program and [indiscernible] moving up for a few additional holes as we target that resource upgrade. So where we are as we look at execution and if you actually look at where we've come in the last 12 months, we have to find a resource, we have a plant. We're moving towards first production. And we're operating in a jurisdiction that's now becoming quite favorable. The lithium market in itself, we're seeing a lot of resurgence. Everyone says it was created, but now it seems to say how it's up 20% year-on-year. We're looking at Chinese [ liquidate ] that's come out of the market. We're looking at an increased demand in terms of end-user product. I think it was one of the really panelist mentioned, PDAC. We would no shortage, and there was a running JORC along the lithium guys on the road where the guy from Ford was running around going, oh, can anyone get me 10,000 tonnes of lithium carbonate, everyone's answer is no. So it really shows that there's a lot of demand coming from end users, and that's where we start getting these price trends. The incumbents will invest on [indiscernible] EV supply chain be increased, and we're seeing that through programs like the IRA in America, especially where we still get a conference in Asia, there's a view, you'll start to have a separate pricing index where you get an American pricing index to an Asian pricing index. The market in itself has gone through multiple cycles. So people say, oh, it's $15,000 a tonne. It's horrible. No, it's not. It's great. For a lithium producer, a brine region, you're generally in the lowest cost quartile, which is $3,500 to $4,000 per tonne. So you're still making a clear $10,000 margin, which is very healthy. In 2020, the price was $6,800 per tonne, which is a very -- that's a bad market. That's where we're starting to get back to those historical levels of $5,000, $6,000, $4,000 per tonne where so for us, we're seeing that new price normality rise. If you're a fan of Joe Lowry, Joe is talking about how it's going to level out at $25,000 per tonne, which goes back to that size, scale and grade where most Tier 1 projects were in that lowest cost quartile, of which we fortunately are being a brine producer. So where are we going? We're about to -- as mentioned, we've got our initial drill program working. We're working towards that first buildup of inventory and the first couple of samples of lithium carbonate. Towards the end of the year, we're hoping to commence more -- sorry, commence that relocation of the plant through the evaporation pond construction. We're looking towards the bankable feasibility study, and we're looking towards solidifying offtake partners as we move that forward. The [ JORC ] resource upgrade, we're targeting quite a significant upgrade. And for us, it's really looking over the back fence and seeing what some of the numbers have been cheap around us and they're quite significant in themselves. So for us, really focused on the production, really focused on getting the first samples out and then that resource upgrade as well. Thanks.