Pursuit Minerals Limited (PUR) Earnings Call Transcript & Summary

Just to kick things off. Welcome to Pursuit's Investor Briefing this morning. Before I hand you over to Aaron, if I could just let you know, we will be taking Q&A throughout the presentation today. So if you have any questions, if you can submit them via the Q&A button on your screen, and we'll get to them at the conclusion. And just on that note, thank you to those that submitted questions at the registration. We've got those compiled, and we will get to those at the end of the presentation. So without further ado, I'll hand you over to Aaron, and he can kick off the presentation.

Thanks, Evy, and good morning, everyone, and welcome to this investor briefing. I'm Aaron Revelle, the Managing Director and CEO of Pursuit Minerals, and I'm very excited to be bringing this update and really taking our investors and shareholders on the journey where we are, where we've come from and where we're going. Just our disclaimer in the presentation. For those who are not familiar with the story, I will just recap where we are. Pursuit Minerals is a lithium developer focused on our Argentinian asset, which is the Rio Grande Sur project in the Rio Grande Salar in the Salta province of Argentina. The asset itself has become a significant way since we first acquired just over a year ago now with a few fundamentals that really underpin the project and set it apart from others in the space. First of all, the size is rather attractive. We have about 10,000 hectare -- just under 10,000 hectare position on the Rio Grande Salar with 2 distinct geological regions, one, is the traditional -- on Salar highlight areas, which you see prevalent throughout the Puna. And then some off Salar tenement, which has very similar geological features to companies like [indiscernible] Lithium who are drilling off the margins of the Salar and where the aquifer extends under the undersides and brushes and the [ eluvial ] plant extends out. So quite a decent land position. Importantly, we also have a pathway to production with our 250 tonne state run pilot plant. That was recently commissioned earlier this year, is currently in the process of producing a lithium carbonate product to both technical and battery grade. And that's located in the city of Salta. Argentina -- being located in Argentina is definitely becoming a strength of late. A significant change at the federal level of government has really shown Argentina's potential and also attracted a lot of foreign direct investment with majors such as Rio Tinto, Ganfeng and a host of ASX as the companies in the area. So for us, we're a very unique proposition where we have both our exploration and production potential and are currently trading at a significant discount compared to a lot of our peers who have reached those milestones. Where we are? We're currently in the process of 2 key areas, which is drilling our Stage 1 resource program. We do have a small JORC resource of about 250,000 tonnes. We're in the process of completing DDH-1, drill hole 1. And we are also the part of bringing on our plants into production and producing our first lithium carbonate. So I just want to recap, where are we going? What have we done? Where is the future holding for Pursuit. So for us, we have a whole bunch of near-term milestones that really underpin where we're going towards the end of this year. We're expecting the completion of DDH-1 at the end of June. The first drill hole yielded some significant results, which were above that 600 MGL (sic) [ mg/Li ] lithium content, which is on the higher end of the scale. For comparison, you are seeing projects such as Solaroz, which was recently acquired by a Chinese group from ASX listed LEl, Lithium energy. They had a high-grade core 400 mg/Li. So with 600 mg/Li at a shallow depth and more results coming as we've drilled out to depths of 500 to 600 meters, we're expecting some very good results to come out of this hole and also continue into our other Salar tenements where we're about to start drilling. DDH-2 is set to commence at the start of July, so in the next couple of weeks. So over the next few weeks, we're expecting completion of Hole 1. Announcement of that drill core and announcement of those results as we move the rig over now to DDH-2 which will commence on our Sal Rio II tenement. And I'll get into a bit more in detail on that. Post the completion of DDH-2, which we expect around the start of September, and we'll release some of the interim results prior as we -- especially if they are of the level that we saw at DDH-1, we'll bring those out earlier as soon as we can for shareholders. And that's expected to complete around the start of September. The resource upgrade we're currently targeting is post completion of DDH-3, which should be around the start of November, which also coincides with some of our production milestones. So the first target -- first production of lithium carbonate, we're looking towards that mid to end of November and the initial feasibility study released towards the end of November, start of December. So over the next 6 months, quite a few critical and crucial rerating milestones that we believe are on the horizon, namely the completion of those drill holes, which should allow for a JORC resource upgrade. And then on top of that, the production of lithium carbonate, of which we have already received quite a few expressions of interest and requests for samples of that product and those will be shipping out towards the end of the year, and we're in negotiations with offtakers for agreements around that and also around the 250 tonne capacity and continuous supply from the 250-tonne plant once that's moved up to the site at Rio Grande Sur. Covering off our strategy, it's what we're going to -- sorry, covering off the strategy, really, I want to focus on what are our key points of difference and really what underpins the value proposition of Pursuit Minerals and the Rio Grande Sur project. For us, as mentioned, it's lithium production. We are -- we actually have a lithium plant that has a 250 tonne capacity. And you can see that in the photo there on the slide. This plant, the intention is to eventually move this from Salta in the warehouse where it is currently and move that up to Rio Grande Sur and have a continuous 250-tonne operation producing lithium carbonate to technical and battery grade. That is a key milestone where you have a company actually meeting supply side response, albeit at a smaller level. However, it is a small, stage 1 plant, which will allow us to then look at larger production scenarios. Our resource upgrade, as mentioned, we're targeting that with our Stage 1 drilling campaign. The drilling has already yielded some significant results out of Hole 1. The Rio Grande Salar in itself has actually yielded some exceptionally high grades of 900 mg/Li. That was in the northern section, rightly adjacent to the Mito tenement. So the Mito tenement in itself, we're quite excited at the prospect of drilling that in the future, but also our current high grades that are being achieved on Salar 600 mg/Li which is nearly double the 351 mg/Li of our current JORC resource. In turn, we're also bringing that together with a feasibility study looking at the 15,000 tonne to 25,000 tonne scenario is those initial productions. And we're looking at completing that before the end of this year. They are -- bringing all of this together is really about encapturing and putting together what is a Tier 1 metric project. Tier 1 projects are often compared for the old -- if you've ever worked at a major mine T1 equal size, scale and grade. So for Rio Grande, we're achieving significant size in terms of our tenement position, we are also achieving size in terms of potential resource, which I'll cover there. We already have a 250,000-tonne resource, which we're looking at a significant upgrade of this. And then on top of which the scale of the project and the grade are really becoming evident for us. The scale of a 250 tonne plant that can then be moved into a 15,000 to 25,000 tonne per annum operation, which we're currently doing the initial work that's looking quite positive on those scenarios. In the lithium world, especially in the brine operations, a lot of the more recent projects that have come online are all in that space of 15,000 to 25,000 tonnes. We do have, obviously, companies coming out with larger projects, but the projects, especially in Argentina are within that range of meeting that new supply. And then on top of which the grade, the grades that we're currently getting 600 mg/Li at drill hole 1 and then obviously, the Rio Grande Salar has a whole, capturing up to 900 mg/Li. These are some of the highest grades across the entire lithium triangle region, Chile, Argentina, Bolivia. So for us, when we add all these and combine these together and execute on these work streams, it's really about delivering a Tier 1S project in terms of size, scale and grade. Who is Pursuit? Just a bit of our corporate overview. Obviously, myself as Managing Director. I'm still joined by Mr. Peter Wall, who's our Non-Executive Chairman, Peter is on various ASX-listed companies and also a very well-known corporate lawyer in the space. And then also Mr. Tom Eadie, my other Non-Executive Director. For those who don't know Tom, he's most famous for his time at Southern Cross Gold, currently developing its Australian gold projects and also very well known for the graphite [ player ] Syrah Resources. For us, as mentioned, just reencapsulating the Rio Grande Sur project. I've covered a lot of this material, but it's really about looking at our projects as a whole and just repeating that previous information of size, scale and grade. We have a major JORC resource, 251,000 tonnes LCE, which was actually very similar to Argosy Minerals, who were covered -- who I've mentioned in this slide, when they first came out in production before they did their upgrades. For a long time, they had a resource on this level. For us, we do have a significant exploration target, and I'll cover off why we believe that is over the coming slides. And on top of that, some very significant intercepts as mentioned from our Drill hole 1. Drill hole 1 did go to around 560 meters in depth and across 117 to 130 meters. We -- few intercepts around 607 mg/Li and 620 mg/Li, which are quite especially for shallow brines. We were expecting those sorts of grades as we went deeper down into the Salar. But the project in itself has a lot of the good hallmarks of a project that can really get into production and also be really significantly economically viable, especially even at these depressed lithium prices. Just a few photos from our Maiden resource program. There you can see the SRK team, our rig and some of those initial samples down the bottom as we progress, we've had quite a bit of coverage of that. And also we released the updates on our Twitter platform or X as now is. So for those who are following us, keep an eye on our X platform, as we do upload these photos, the videos, especially when we capture something significant. Just covering again, we already do have a mineral -- maiden JORC resource. Sometimes I feel this is a bit loss that we do actually have this resource. We released this at the end of last year in October. Again, however, as you can see, the intercept on grade that we're currently drilling is the [ 351 mg/Li ] on the resource. However, we're already 620 mg/Li, 607 mg/Li on some of the grades. So the average Li grade we expect to increase as we expect the tonnage to increase as we continue drilling in depth, and we're quite excited by the results of DDH-1 and then also looking to DDH-2 at Sal Rio II. So we're quite excited to get that rig moving and get going there. Just really covering off our drill program to put a bit more meat on the bone for this. The drill program is currently finalizing DDH-1, which is the Maria Magdalena tenement on the left of the screen there. We are intending to move the rig to Sal Rio II and then follow on Sal Rio Isabel Segunda, and then obviously, the Stage 2 holes at Mito. For us, Argentina is very much dictated by environmental permitting. And if we are successful in getting permit applications sooner than expected, we will obviously alter this program for, what we believe, isn't going to generate the maximum resource upgrade or maximum yield that we can target. This program is quite straightforward. The drilling programs in themselves are very much dictated by the environmental conditions and also environmental permitting. We did face delays with DDH-1, and that was just due to freak weather. We had snow, we had gale, force winds of over 100 kilometers up in the Puna and everybody was shut down, not just us. So with drilling, it's always important to remember that this isn't regional Western Australia. This isn't some of the most favorable drilling conditions that you can achieve. So for us, we are making good progress. We are continuing. We have a phenomenal crew that are up there drilling for us, and we're continuing that program with DDH-1 set for completion. Just a little bit of context behind it in terms of where we're drilling again. We are drilling into the low resistivity areas. And you can see on the TEM and CSMT survey that we completed at the end of last year, we are drilling into those favorable spaces. On this map on the left of the screen, we've just completed Maria Magdalena, as mentioned into those red low resistivity areas. The Mito tenement on the right is actually deeper. CSAMT goes deeper than TEM surveys. However, having said that, it does have that massive low-resistivity area. You can see that spans some -- several kilometers south easterly trend along that border. So we're quite excited to get into that and really to put a bit more meat on the bone again, I wanted to highlight a resource coverage comparison, so you can kind of tie where we're going. As mentioned, we're doing the 4 holes at the southern tenements and then also looking at holes at Mito. I've actually put together a geological resource comparison from a company that [indiscernible] released. This is on SEDAR in the public domain, also drilling on the Rio Grande Salar. This company drilled off the Salar mostly. And having said that, there's a lot of comparables for where we're going. They drilled about 2,500 meters. We're drilling 2,500 meters as well, if not more, actually, across the 2 stages, of which the resource comparison of these salars should really see us get an upgrade above that 250,000 tonne level, especially with the results that we're already yielding again, off the salar and this resource was in the target of -- I think they've upgraded it now to about 3.3 million tonnes at about 600 mg/Li. So quite a significant resource, especially when you compare that to something such as Alpha Lithium, which was taken out at the end of last year for USD 230 million. Alpha had around 3.3 million tonne resource at about 400 to 300 mg/Li profile. So for us, the resource upgrade is a very key milestone for us that we're working towards. The geology favors, especially with the intercepts we're getting, what we're seeing around the Salar. We're expecting quite a significant upgrade once we complete those programs in the near term and with the first 3 holes expected before the end of the year. Moving back into where we're also going again, near-term production from the pilot plant. The plant in itself is actually quite impressive of what it can be doing. This is some of the photos that were from our announcement there. So for us, the plant is a key piece of differentiator from everyone else. Not many companies actually have these plants all the chemical engineering flow sheets behind them that show a direct route from the resource into production. So for us, again, the plant is currently commissioned. It's currently in operation, and we're working through the flow sheet to deliver that first lithium carbonate samples that will go to the end users. We have included, again, some of that chemical engineering, and you can see that purity that 99.95% technical grade battery grade purity that's there. And for us, this again is a key differentiator. We're not working with DLE. We're not working with any new technologies. We're going back to the conventional method of evaporation, which is used by SQM, Albemarle -- sorry, now it's Arcadium with the Olaroz project and also LAC, pit Olaroz as well. So for us, it's really underpinning those fundamentals of resource, generating size in the resource and then converting that into production. For us, really putting this together. Again, the plant's intention is not to stay in Salta. We are looking and going through the environmental permitting processes mentioned to relocate that plant up to site in the future. Really, what that does is creates a project that is in production, continuous production at 250 tonnes, which is considered by some technical derisking of which then it's about scaling the project. We are not looking -- can you produce, you are producing with the customer purchasing market acceptance. The lithium market in itself is often misunderstood in terms that spot has this massive bearing, it doesn't. Majority of lithium sales are on long-term contracts. The shelf life of lithium carbonate and lithium hydroxide is not extended. It is actually quite short. We're talking several months before you get quality denigration and the quality obviously drops. So from that perspective, for us, customer qualification is a key part, which we're currently doing, and that's why you're sending samples after customers to ensure they can use your product at the end. However, we are seeing numerous companies like ourselves and other [indiscernible] producers with lots of inquiries for demand. At PDAC, there was a lot of demand and a lot of companies walking around looking for significant tonnage, 10,000, 15,000, 20,000 tonnes upwards. So for us, bringing together -- having these tonnes up at site, relocating the plant, and then you're tying that with a JORC upgrade and then obviously, the feasibility study really positions the project and gets us ahead of many others in the space and also points us towards hopefully some good rerates in our share price and obviously the market cap. So tying together where are we going, what are we looking at doing? Really, it's the box on the left there. We're looking completing for the drill holes 2 and 3, targeting a JORC resource upgrade that we hope to be substantial. We're currently in the process of the test work and building up of the circuit inventory for our first production of lithium carbonate, which we're targeting before the end of the year and then working towards that initial feasibility study for the full-scale larger lithium carbonate operation. Towards the end of 2025 -- sorry, towards the start of 2025, again, looking at really building out the plant, further drilling for further resource definition and then also the commencement, hopefully, of the pilot plant up to Rio Grande after we've produced those initial lithium carbonate samples for testing by end users. From there, obviously, a more further detailed DFS at the end -- back end of next year, and that will be followed on the completion of drilling from the maiden campaign and then hopefully, the commencement of evaporation pond construction. So from there, we have a really succinct focused pipeline and strategy on how we intend to grow the projects. The milestones are achievable. Naturally, as Joe Lowry says, no lithium project is ever on time or on budget. We're exactly the same. You are operating in foreign jurisdictions and you're operating in some tough conditions, very much dependent on, frankly, environmental permitting availability of skilled labor. However, we've operated in Argentina for quite a few years. So we have a good understanding of how to succeed to move forward. Just touching on the lithium market, I think that this is something that is very well misunderstood in terms of where the market is actually going. It's important to note when you look at the sales of NEVs in China over May, that was up 36% year-on-year. So electric vehicle demand is actually growing despite the negative calls. A lot of investment banks will look at trades in the spot market as a barometer of the lithium market, which arguably isn't correct. The real barometer is the long-term pricing contracts and the ability of producers to meet those demands and expansion of those contracts. While spot does have a place to play in the market, we are seeing the demand of end users getting quite aggressive, especially on the expansion of the supply chains that we're working, naturally, BD -- sorry, BYD, Build Your Dreams, are very vocal about their expansion outside of China into markets like Brazil, into India, quite a few gigafactories being built, which really does have this new supply required to meet these expansions. We have seen a lot of supply drop out of the market, especially that higher cost supply. However, this perfectly positions brine projects. The rule of thumb is a brine project will produce anywhere between [ 3000 to 4,500 ] per tonne that is at a [ 20,000 tonne level ] which is still very generous on a spot sale price of around $15,000 per tonne. You still have a very clear USD 10,000 per tonne margin, which faces Pursuit quite nicely in that lowest-cost quartile which as we've seen across various commodity cycles, generally, the companies that sit within that lowest-cost quartile are the ones that survive through the downturns and benefit when the cycle comes back. So in conclusion, strategically located in Argentina, we're operating in a very attractive jurisdiction that's seeing a lot of foreign direct investment. The asset, highly prospective. We already have a great base with a main JORC source. We're currently bringing our pilot plant online, and we have a very significant growth potential, especially in the next 6 months with the completion of DDH-1, the next 2 drill holes and, obviously, the first production of lithium carbonate from our plant. There's also a longer-term growth potential as we move that plan towards a continuous operation, release feasibility studies and move the project up the project development cycle. So that's really pursuit in a nutshell, and we have a great team behind us in country that are helping us achieve those goals. So thank you. Evy do you want to move to Q&A.

Yes. Thanks, Aaron. Sorry about that. Yes, a few questions came through. I might actually start with the ones that were submitted during the presentation. So one's come through from Keith asking how much drilling will be needed to get sufficient reserves for FID?

So for the drilling -- well, the foreign direct investment for attaching is quite -- it's a difficult answer on that one because at the end of the day, you do see smaller projects with smaller reserves, 400,000 and less tonnes and less attractive investment. Right now, we're seeing companies that have 1 million tonnes plus are the ones that are attractive for M&A. However, we're expecting to be able to do a resource upgrade off the back of 3 drill holes from that. Obviously, I can't answer what we expect -- what the resource will be. We have to drill the holes. However, the grades are continuous and in line with expectation from what we've seen around the Salar. So we believe that we will get in the region of our exploration target and hopefully, above that 7-figure JORC resource when we upgraded off the back of those 3 holes. Naturally, the more you drill, the more resource you'll gain. Brine is a dynamic resource. So it's a little bit different than, for example, a gold or silver or copper deposit. We are working on a [ strike link ]. However, having said that, for us, we feel that the resource size of what we -- even what we have now, 250,000 tonnes. If you go back a few years, that was what Argosy commissioned its first plant off, I think, which was about 100 tonnes. So arguably, you can attract foreign investment on a resource of 250,000 tonnes, especially when you're focused on the production side. So for us, however, our focus is [ 250 tonnes ] of initial capacity and the resource is hopefully above that certain figures off the back of the drill holes that we're currently drilling. And again, for comparison, a neighboring company drilled 4 drill holes. They drilled around 2,500 meters or just under, and they were able to achieve [ 2.7 million tonnes ] initially that was upgraded to 3.3 million tonnes at an NI 43-101. So we have a very good target and obviously key comparisons to be working towards for those figures.

Yes. Okay. That's great. I think that also answers Michael's question as well what you expect or hope to show as resource upgrade by the end of the year. So I think that covers that one-off too. There was another one that came through. I don't really understand it, but you probably do is 2M LCE possible?

Yes, 2 million tonnes LCE is possible. We are seeing that, again, a neighboring company drilled on, what I believe, is less prospective grand as ours and was able to achieve 3.3 million tonnes by drilling mostly off on the margins of the Salar. If you look at that company's strike on what would be the Northwest, we're on the Northeast, they had a 5.6 or -- 5 to 6 kilometer strike in terms of that size of their tenement site ground. Mito covers around 6.5 kilometers on the other side. So from that perspective, you're comparing apples-to-apples, again, brine is a dynamic resource. So yes, 2 million tonnes, we believe is possible just by looking at the existing data from NI 43-101 on SEDAR and also the bigger company, [ Litica ] or plus control, what their results that we know about. They're a private company, so it's not public. But looking around the resource of what Rio Grande has, that had an initial 2.1 million tonne LCE from an NI 43-101 done back in 2018, and that was only to a depth of 500 to 100 meters across the drilling. So we're drilling down to 500, 600 meters across all of our holes, very similar meterage that another company above 2 million tonnes in their results is achieved. So yes, we do believe that's possible.

Okay. Just a few more that have just popped up as well. I might pull this one together as one question. Is this enough? Is the capital raise that you're doing now is that enough -- is that going to be enough to drill the 3 holes as discussed? Or is the plan to move into production as a preference? Or is M&A more realistic given other transactions that have occurred in the area?

I think Pursue personally is too early for M&A. I'm not sure why anyone would rationalize us given that we -- the capital is enough. We already have completed Hole 1 We'll complete Holes 2 and 3. From there, simultaneously, we'll be producing lithium carbonate. And just to bring it into perspective, we're not producing mass tonnes of carbonate. You're producing 250 to 500 kilos on a first run over time. The first run is probably about 20 kilos. So what's a kilo hold up a water bottle, a 1 liter water bottle, and that's about the size of a kilo of lithium carbonate. So from that perspective, yes, the capital raise will -- we expect that to deliver the milestones as outlined on that third slide, the milestones to the end of the year which these milestones are quite critical in terms of if you look in my belief, there aren't many companies that are actually in a position to have continuous production on new supply coming online. There are obviously companies like LAC, Arcadium who have brought on bigger plants. We have Ganfeng and Mariana, who are bringing on a bigger size project. But -- and obviously, with its 2,000-tonne plant, these projects have been announced for quite a few years. There aren't many companies with new supply. And a lot of the M&A activity in Argentina recently has been on companies that don't have production. So for us, we wouldn't see -- it would be taking our chips down a bit early if we were to entertain M&A until we've completed these milestones, given that the milestones that we're contemplating have and theoretically have a significant opportunity to rerate the [ stock ].

That's great. So just a couple more that came in on the registration that I really -- this one I wanted to raise with you after all the high about your prospects for tenements in WA, tell us what is happening. There's been no news, no information, was it -- was that a [ dug ]? Is Argentina also just a big overheight [ dug ].

There's 3 clear things there. With respect to the previous management who I worked with, I didn't actually work on the WA projects. Obviously, I have them under my remittance, but those projects were implemented at a time where shareholders were interested in those projects. And to that extent, we're not actively pursuing them. Our focus is the lithium project. I've worked in lithium for the better part of 10, 15 years now. I'm not on that level. We are actively entertaining -- interested in those projects, and we have to get an outcome from them that's in the benefit of shareholders and some interest. Having said that, with Rio Grande Sur, no, I mean, we look at this, and I personally look at this as one of the other companies I founded that went through the exact same process. It was drilled. It went through the lithium cycles. It was sold at the bottom and then sold at the top. And the sale at the top was a $340 million exit. The market is showing a resurgence in those M&A values. We are seeing interest in M&A. And again LEL selling their project for near $100 million. And then Alpha Lithium that was sold for $240 million, again, this is recent within the past 9 months. Lithium is in a process of supply is coming out of the market, high-cost supply, which again positions us in the lower quartile. So from that perspective, we do expect prices to recover and increase. A lot of commentary is around the price heading back towards the 25,000, 30,000 per tonne level, which is -- we're seeing indications of that with Chinese NEV sales up 36% year-on-year. So from that perspective, no -- we believe in the projects -- the current capital raise, I'm putting my own cash into the project as well. We believe in the long-term fundamentals. We're at 2024, 2030 lithium demand is expected to be quite significant. So from that perspective, we don't agree with any of that sort of analysis. With the past, the previous directors did a job that they thought was best in case at that point. And now we're on the point of we've moved away from those projects. Obviously, with myself coming in, Tom Eadie coming in, and we believe that value can be achieved with the lithium, especially given that some of our peers, even in the downturn, are still in the $100 million to $150 million market cap range, having done some of the things that we're contemplating doing over the next 6 months.

Okay. So just there's a couple more that have been coming in as you've been talking as well, but I just want to get to this one. This is from an investor's point of view. So many mining companies -- so many mining companies currently out there, supply and reports and charts and wanting more and more investors with little or no return for years already have lost over 50% of your stock value in several months, why should I invest more and not sell?

There's -- so there's a couple of things there that is important to pull out. Firstly, majority of lithium companies are down 80% to 90%. From the deal entry point, we're at the more shallow end of that 60%, 70% range. But having said that, Pursuit isn't alone in a market downturn. In markets the lithium price went from $80,000 at the spot to now around that $15,000, $14,000 per tonne mark, where it sat and actually dropped even lower. And there's a direct correlation between share price and the lithium spot market or for whatever reason, even though my personal view is they're not directly correlated they seem to be. The reality of projects, mining projects always take time and they always take more capital. We're outlining a vision of where we can go to with capital over the next 6 months. And when you get to that level, there's again a looking around of, okay, where can we maximize value. We don't -- for me, it's why would you sell at the bottom of the market. The market is in a downturn, specifically the lithium market where you've seen the spot price call off. For us, we're positioning ourselves to take advantage of the market upturn, be that in 6 months, 12 months, 18 months, 2 years. If you go back over the past 5 to 10 years, you can see the cycles. It's like a rollercoaster goes up and down. So for us, the fundamentals of lithium are still solid. The fundamentals are there in terms of long-term demand. And you're seeing, again, go back to those Chinese NEV statistics, they are quite promising in terms of Chinese demand, global demand, again, Europe is starting to be more adaptive for EVs in terms of government policy. There's -- so there's a couple of things there that is important to pull out. Firstly, majority of lithium companies are down 80% to 90%. From the deal entry point, we're at the more shallow end of that 60%, 70% range. But having said that, Pursuit isn't alone in a market downturn. In markets -- the lithium price went from 80,000 at the spot to now around that 15,000, $14,000 per tonne mark, where it's staff, it actually dropped even lower. And there's a direct correlation between share price and the lithium spot market or for whatever reason, even then my personal view is they're not directly correlated. They seem to be. The reality of projects, mining projects always take time and they always take more capital. We're outlining a vision of where we can go to with capital over the next 6 months. And when you get to that level, there's again a looking around of, okay, where can we maximize value. we don't -- for me, it's why would you sell at the bottom of the market. The market is in a downturn, specifically the lithium market where you've seen the spot price call off. For us, we're positioning ourselves to take advantage of the market upturn, be that in 6 months, 12 months, 18 months, 2 years. If you go back over the past 5 to 10 years, you can see the cycles, it's like a roller coaster goes up and down. So for us, the fundamentals of lithium are still solid. The fundamentals are there in terms of long-term demand. And you're seeing, again, go back to those Chinese NEV statistics, they are quite promising in terms of Chinese demand, global demand, again, Europe is starting to be more adaptive for EVs in terms of government policy. You're seeing the U.S. IRA where there's talk of 2 lithium spot prices, one in America, one in China. So from that perspective, again, whilst at the bottom, it's important to continue the work, build the fundamentals of the project and again, be ready and take advantage when the market turns. So that's my personal view on that question. I wouldn't sell at the bottom. For us, the lithium project, again, has the hallmarks of several [indiscernible] one that I found it back a few years ago that was taken out for significant exit by LAC and then others that were seeing lithium energy having sold Solaroz. They had a 3 million tonne resource, no production, and yet it was still sold for nearly $100 million. So from that perspective, we are drilling. The drill rig is on site and going. So from my perspective, I wouldn't see sense in selling out at the bottom.

Yes, I agree. Just -- last question, just with relation to cash spend and how much like -- how much is the company spent on the pilot plant commissioning. And do you know what the cash burn rate is in-house that compared for years?

Cash burn is one of those things that when you're producing and exploring, it's higher than peers. So potentially having just finished exploration or on care and maintenance, the cash burn is higher. Why we have a drill rig with 50 guys up in the Puna in camps, drilling, collecting core as we have a team a lithium carbonate plant producing or looking to produce the first lithium carbonate. So in terms of our peers, however, we are significantly lower in drilling cost per meter rig. We know that from internals, we're about 30% to 40% cheaper than some of our peers who are using probably more well-known drilling companies. We have guys on the ground who are organizing that for us. So we're very efficient with our cash management. However, we're deploying capital for value creation. Now companies can conserve their cash and no value is created. However, we believe that with the drilling, with the production and the plant in itself was purchased at a significant discount to what that would actually cost in terms of total works. We were talking to some of our engineering experts who believe the plant on its own was worth several million U.S. dollars, nearly USD 10 million with the chemical engineering, the cost of building and all the rest. And we've spent hundreds of thousands [ not millions ] to put that plant together. So from that perspective, the company is being very frugal in terms of its capital allocation. We are putting dollars into the ground to generate value. That's the key message there. So for us, the cash burn will continue. We have a plotted out to achieve our milestones at which point the Board will look at where to next. And as some say, you never know what's going to come out of the woodwork in 6 months with Lithium -- with the market where lithium is going. So for us, the focus is really on putting that capital allocation towards the value creation, which is drilling and production of the plan, which are being run simultaneously. We're not running one or the other. They're both going at the same time.

Yes. And here's one, I don't know if you can answer this on this platform, and maybe you can get back to Jason Lam by e-mail. He's just asking on the placement the options are priced at $0.007, which is 100% from issued price. Wondering what the thinking valuation method behind this strike.

I'll have to go back to Jason on that one in terms of -- on the e-mail. We probably can't answer that on the platform. But having said that, that was something that [indiscernible] we discussed with our brokers who are currently running the placement and everyone was in agreement with that. So Jason, I'll come back to you on e-mail with a response on that question.

That's it. That's right.

Excellent. Thanks, everyone, for joining. If you have any questions of us, feel free to get in contact by our e-mail. We have all of our social media channels as well. Stay tuned on those for updates, and we're always available for anyone who has any further questions to get in touch.

Thanks, Aaron.