Timing the Takeover

The M&A timer is running fast… [Katusa Research] The M&A timer is running fast… Earlier this month, a mid-cap lithium company rejected a takeover bid from one of the largest lithium miners in the world, SQM. That means that other lithium companies are prized salmon in the major fishing derby… No stranger to M&A, the former founder and director of Millennial Lithium sat across the table from me in a critical meeting. Millennial was a company “Mr. Lithium” Andy Bowering co-founded and sold for about $400 million. So he has my full attention. Especially because I don’t like to make the same mistake twice. That’s a major score I missed out on. Suddenly, this was about to be a very long, very interesting meeting. As we talked, something became crystal clear about “Mr. Lithium”: He is one of the most tenacious operators on the planet and laser focused on the prize. I’ve met a lot of people in this business, but I’ve rarely met someone with such a sense of perseverance. Such an absolute dogged need to win. If you ever meet him, ask him about his life story and your respect for him will triple, on the spot. This guy ain’t no rounder. And just a year after his $400 million buyout, he’s stepped back into the ring for round two. Look, I haven’t put my name on a lithium company in almost seven years. I’ve been waiting like an alligator to publish on the right one. Not only does the founder have $400 million worth of proven management team on his record, his new company blows everything else in the industry out of the water. - First off, the company’s flagship project is based in Nevada—one of the most mining-friendly jurisdictions in the world. The governor of Nevada, Steve Sisolak, sees the state as becoming the hub for lithium production, similar to how Wall Street is to finance or Silicon Valley is to technology. The project is only 3 hours from Tesla’s Gigafactory, so getting lithium to where it’s used is cheap and fast. When Elon Musk said that lithium is “a license to print money,” this is the kind of project he was talking about. Now here’s the kicker: The company’s market cap is a tiny fraction of that single project’s NPV. And they have TWO other projects. The second one really has my attention. Located in Peru, it’s estimated to be one of the largest hard rock lithium deposit in the world. What gets exciting is that the company just announced a drill hole a few days ago that shows MORE lithium 400 meters AWAY from their current resource boundary. That means an updated resource report will come. It’s got all the ingredients necessary for strong lithium production: a major highway, a hydropower plant, abundant water access, and a strong local labor force. Again, the numbers are phenomenal: - Expected cash flow of $430M/yr - A 33-year mine life - An IRR of 20% Now, what would top the shopping lists of these major lithium producers? Simple. Companies with large, high-grade, low-impurity and low-cost deposits located in safe jurisdictions. LEGAL NOTE: Please read important disclaimers at the bottom. American Lithium Corp. (AMLI:US and LI:TSX) It has two top-tier lithium deposits that set the Company apart from the crowd. - The TLC Project is the 2nd largest measured & indicated (M&I) lithium resource in the USA - The Falchani Project is the 3rd largest hard rock lithium resource in the Americas Both projects showcase stellar economic metrics, such as IRRs of 27.5% and 19.7%, and payback periods of 3.8 and 4.7 years for TLC and Falchani, respectively. These projects exhibit their considerable profit potential and viability in the lithium market1,2. Nevada Knocking… One of the largest lithium deposits in the world by reserve size, TLC is American Lithium’s 100% owned flagship project. A near-surface deposit located just six miles outside the town of Tonopah in Nevada, TLC has all the right qualities going for it: As one of the largest lithium deposits in the Americas… - You’re looking at a 40-year mine life averaging 38,000 tons of battery-grade lithium a year – over a billion dollars a year in revenue at current lithium prices. With extremely high extraction rates, >99% lithium carb purity can be achieved after the first precipitation, with low amounts of impurities like mercury or arsenic. At USD$7,443/tonne, extraction costs aren’t as low as they would be in a spodumene-type deposit. However, the unique geology of the lithium claystone at TLC makes its projected operating costs similar to that of salar-type deposits, which are the next best thing. Know that I am fully biased in this opinion. This is as high-risk, high-reward as you will see me publish. Things may be quieting down for the moment in lithium… but don’t count on it to stay that way for long. All signs point towards a massive influx of lithium demand over the coming years, and the supply to keep up with it will have to come from somewhere. [Click here to get]( full breakdown and analysis](. Regards, Marin Katusa and the Special Situations Team IMPORTANT DISCLAIMER References: TLC Nevada: See American Lithium’s TLC Lithium Project PEA entitled “Tonopah Lithium Claims Project NI 43-101 Technical Report – Preliminary Economic Assessment” with an effective date of January 31, 2023 Falchani Peru: See American Lithium’s Falchani Lithium Project PEA entitled “Falchani Lithium Project N1 43-101 Technical Report – Preliminary Economic Assessment” with an effective date of February 4, 2020 (Originally Published by Plateau Energy Metals) Katusa Research, as a publisher, is not a broker, investment advisor, or financial advisor in any jurisdiction. Please do not rely on the information presented by Katusa Research as personal investment advice. If you need personal investment advice, kindly reach out to a qualified and registered broker, investment advisor, or financial advisor. The communications from Katusa Research should not form the basis of your investment decisions. Examples we provide regarding share price increases related to specific companies are based on randomly selected time periods and should not be taken as an indicator or predictor of future stock prices for those companies. American Lithium Corp has reviewed and sponsored this article. The information in this newsletter does not constitute an offer to sell or a solicitation of an offer to buy any securities of a corporation or entity, including U.S. Traded Securities or U.S. Quoted Securities, in the United States or to U.S. Persons. Securities may not be offered or sold in the United States except in compliance with the registration requirements of the Securities Act and applicable U.S. state securities laws or pursuant to an exemption therefrom. 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