[KR Special Situations] Alert: China’s Heaviest Weapon and The Next U.S. Manhattan Project

China doesn’t want you to be able to drive an EV... [Katusa Research] Katusa Special Situations Company Alert: **PLEASE READ THE ENTIRE ALERT** Dear Reader, China doesn’t want you to be able to drive an EV. And they’re very close to ensuring that you never do. You see, China has identified the linchpin for manufacturing EVs: Lithium. The lightweight metal is required for the battery of nearly every EV produced. And for the past decade, China has fought fiercely to capture the entire global lithium supply. China itself produces only 17% of the world’s lithium. But it has managed to reach its tentacles nearly everywhere there’s lithium. For example, Australia produces about half of the world’s lithium—but it’s almost all owned by China: - Greenbushes, the Australian lithium reserve that is the largest in the world, is majority-owned by a Chinese lithium company. - The second-largest lithium reserve in the world, also in Australia, is underwritten by Ganfeng Lithium... a Chinese company. That same company paid $4 billion to become the second-largest shareholder in SQM, the largest lithium producer in Chile. And in 2021, Chinese companies bought three major lithium mines in Argentina in deals worth $1.3 billion. Meanwhile, the U.S. has lost major ground—declining from 37% of lithium production thirty years ago to less than 2% today. There’s hope, though, because the United States is home to Thacker Pass, located in Nevada. It’s one of the largest identified lithium deposits in the world. Any guesses as to the largest shareholder in Thacker Pass? The Chinese company Ganfeng Lithium. Even lithium on U.S. soil isn’t American anymore. Suddenly, that poses a huge national security risk. Because China is just waiting for the opportune moment to exercise its domination over the world’s lithium supply. “Right now, if China decided to cut off the U.S... we’re in trouble.” – Ben Steinberg, former Obama administration official A Monopoly Market for White Metal China has already begun testing its monopoly power in the metals markets. In July 2023, China instituted strict export controls on gallium and germanium to punish the U.S. for its semiconductor moves. It’s only a matter of time before China cuts off lithium supply—and the U.S. knows that presents a severe risk to the entire country. But there are just two things that China doesn’t seem to understand: - The U.S. has huge domestic lithium reserves—the fourth-largest in the world. - The U.S. always fights for independence, regardless of the cost. That’s why, in 2022, Congress invoked the Defense Production Act—originally intended to help the U.S. win wars—to help achieve lithium independence. With the Act, Congress provided huge tax incentives and subsidies—worth $10,000 or more per EV—for mineral miners and battery manufacturers. Tesla alone estimates the credits are worth $1 billion+ per year. But there’s a catch: To qualify, at least 40% of battery components must be extracted or processed either in the United States or in one of twenty free-trade countries. That ramps up to 100% by 2029. So U.S. EV manufacturers have an ultimatum: identify a source of lithium in the United States and be showered with subsidies and incentives… or face extinction. In short order, the U.S. government has effectively established a new, premium lithium market: American Free Trade Lithium. - And American Free Trade Lithium will be much more valuable than Nationalized Chinese Lithium. It’s not hard to see why. - Ford forecasts production of two million EVs by 2026. - GM’s target is one million by 2025. - Tesla is already producing one million a year. But the single-producing lithium mine in the U.S., Silver Lake, produces enough lithium for only 80,000 EVs annually. - In just three years, U.S. EV manufacturers will need 50 Silver Lakes up and running. Competition for American Free Trade Lithium is already ramping up. In January 2023, more than fifty bidders competed for a slice of a single U.S. lithium project—forcing GM to pay $650 million for its stake. But the second-largest lithium resource in the U.S. is still up for grabs. And the company that owns it is strategically positioned to be the provider of American Free Trade Lithium in the U.S. Born in the U.S.A. That company is American Lithium Corp. (NASDAQ: AMLI). LEGAL NOTE: Please read the important disclaimers at the bottom. **KR SPECIAL SITUATIONS ALERT** American Lithium Corp (AMLI:US and LI:TSX) And that resource is the TLC project, located in the heart of Nevada. With its TLC project, American Lithium has cleared a path toward low-cost, high-purity lithium carbonate production while systematically de-risking the project. For example, lithium mining requires more than half a million gallons of water per ton of lithium. Lack of water access can kill a lithium project before it even gets started. So American Lithium secured private water rights by buying neighboring ranches. U.S. lithium mines also face intense regulatory scrutiny that can turn a gold mine into a rock pile overnight. Days before drilling was supposed to start at another lithium project in southern Nevada, federal land managers barred any mining. Their reason? It posed an illegal risk to several fish, snail, and plant species. TLC is situated above the water table and not home to any endangered plants or animal species, making it more attractive as a buyout opportunity. American Lithium Corp. (NASDAQ: AMLI) also owns the sixth-largest hard-rock lithium deposit in the world, Falchani. (That estimate is based on only one-third of the target area. Imagine how big it could really be.) Falchani is located in Peru, which has a free trade agreement with the U.S. But here’s the really important part: - Falchani’s hard-rock deposit is so pure that it can be made into battery-grade lithium carbonate on-site. That means it doesn’t have to be shipped to China for processing… and that American Lithium can achieve ultra-low production costs. In fact, at less than $4,000/tonne, Falchani is one of the lowest-cost projects on the cost curve for lithium production on the planet. The Price Tag of Energy Security TLC has the capacity to produce more than 50,000 tons annually—10% of current demand—and is expected to begin production in 2028. Falchani could be producing over 85,000 tons of lithium a year—one-fifth of global demand—by late 2026. Combined, that’s nearly one-third of current global demand. The NPV across all two lithium projects at $20k/tonne lithium is $4.7B. American Lithium’s market cap? $268M. That alone makes this a 20-bagger waiting to happen. Only lithium is actually at $30k. You can do the math. And remember: This is all American Free Trade Lithium, which will be far more valuable in the coming years as EV manufacturers fight for it. American Lithium has zero debt and a large war chest of cash for drilling and permitting. It has zero royalty or streaming agreements. And its two major lithium assets are in highly attractive, mining-friendly jurisdictions. All of this makes American Lithium the prime takeover candidate in their industry. And if they don’t get taken over, their coming production will make them insanely valuable. These two projects are only gaining in value, and you can profit from them directly. The Katusa Special Situations Team has put together an in-depth report on American Lithium, which you can [read here](. This opportunity won’t be around for very long. Once word gets out—or there’s a big buyout—American Lithium will be out of reach. [Take a moment to read the report now.]( Regards, Marin Katusa and the Special Situations Team Copyright © 2023, Katusa Research, All rights reserved. [PLEASE READ: RETURNS AND TESTIMONIAL DISCLOSURE]( [Contact Us]( | [Privacy]( | [Terms & Conditions]( Reference: [Link to PEA]( AMERICAN LITHIUM PEA DISCLAIMER 1. TLC: 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 2. Falchani: 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) 3. Macusani: See American Lithium’s Macusani Uranium Project PEA entitled “Macusani Project, Macusani, Peru, N1 43-101 Report – Preliminary Economic Assessment” with an effective date of January 12, 2016 (Originally Published by Plateau Energy Metals) IMPORTANT DISCLAIMER 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. 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