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VIDEO: Neo Lithium CEO Waldo A. Perez on Positive Results and Lithium

— James West

Neo Lithium Corp. (TSX-V:NLC) (OTCMKTS:NTTHF) (FRA:NE2) recently released a press release announcing positive preliminary economic assessment results on its 3Q Project. President and CEO Waldo A. Perez talks to James about what’s next for the Tres Quebradas lithium brine project. 

TRANSCRIPT:

James West:     Waldo, thanks for joining us today.

Waldo Perez:     Thank you very much.

James West:     Waldo, you guys put out a press release this week which is really impressive; a PEA with $1.13 billion NPV at 8 percent discount rate. How long did that take to come together, and what are the key metrics driving that?

Waldo Perez:     Well, our plan to move into the future is to convert this preliminary economic assessment into a full feasibility study by the end of the next year.

James West:     Okay.

Waldo Perez:     We still have work to do. We have to move resources into reserves; we have for that, further drilling. Remember that this PEA is coming only after one season of drilling. So in one season of drilling, we did find what is today the eighth largest lithium brine resource in the world. However, we strongly believe that more drilling should come with more resources, and eventually convert those resources into reserve.

James West:     Okay. So what kind of grades are we talking across the deposit? How homogenous is it, and I’d also be curious to hear about the impurities and how you’re dealing with those.

Waldo Perez:     Well, the project is, as most lithium projects have very homogeneous. Our rates range around 800 milligrams per litre down to 400 milligrams per litre, and as a matter of fact, the average is somewhere around 700 milligrams per litre.

The impurities are very low. This is one of the projects with the lowest impurities worldwide; it basically contains no magnesium and no sulphites, or at least, the lowest magnesium sulphite content of any other known brine project. So in terms of impurities, the project is excellent; in terms of grade, it’s a very good grade, about four of the fifth highest grade brine projects worldwide. And very importantly, it’s a very recent discovery. I mean, we discovered this less than two years ago. So in less than two years, we went from discovery, creating a company, financing it, drilling, establishing a resource, and now establishing a value of $1.1 billion, and these are US, by the way.

So it’s a very significant achievement. It’s value creation to the shareholders in a very short period of time.

James West:     You bet. Okay, so now let’s talk a bit about some of the infrastructure logistics issues with the area you’re operating in. it’s not exactly downtown Buenos Aires, but so, what are the challenges there, and how do you plan to overcome those?

Waldo Perez:     Fortunately, it’s not downtown Buenos Aires.

James West:     A lot of lithium would be gone.

Waldo Perez:     But actually, the project is located 60 kilometres from the highway. This is a challenge, because the road, the current road that we have, has to be improved. Still, we operate the road all year round. So it is good enough to operate the whole winter; it’s obviously not good enough for a mine operation, okay? On that road, we already got our easement agreement. So we have a government basically warrant that we can use the road for mine construction, and we can use the surface for mine construction, through an easement agreement. So that is very important.

But in terms of a challenge, definitively, as other projects – by the way, I’m coming from other companies like Barrick, and I remember when Veladero was built in the former company I worked for, that was perceived as a big challenge. And it was. And it wasn’t. We built the road and it has been operating ever since.

James West:     Right.

Waldo Perez:     So anybody that is seasoned in mining knows that a 60 km dirt road is not a big deal. However, it is one of the challenges that we need to complete and improve.

James West:     But you’ve got a plan for that.

Waldo Perez:     Absolutely.

James West:     Okay. Now what about water and power? That’s going to be a big issue, I guess, out there. Is there a plan for developing that?

Waldo Perez:     Yes. In terms of water itself, we don’t consume much; we have very little. But in terms of energy, we have a dual plan, meaning at the site, we will do the evaporation process. We will concentrate brine up to 6 percent, and we will track the brine down into the city of Fiambala, which is a city of 5,000 people, and that’s a city that contains water, energy, and more important, people that will be working on this project.

So basically Fiambala will be our hub. And just to have an idea, about 90 percent of the energy and about 95 percent of the personnel is actually working in Fiambala, not in the project. We are designing the project in such a way that we minimize the human presence at the site and also, of course, the energy consumption, because we will be consuming basically solar energy, evaporating the brine.

James West:     Right. Of course. So then, what are the next milestones for the next 6, 12 months going out?

Waldo Perez:     Well, we will complete a second round of drilling. The second round of drilling is infill drilling, as long as advanced geophysics, seismic, and that will basically be oriented at converting or upgrading our inferred resource into measured and indicated, and hopefully increasing the overall resource on its own. Still is a big project, but it’s very important to actually complete the exploration phase to understand the whole potential of the project, that I strongly believe is going to increase significantly the resource. We are already drilling and the rig is onsite.

James West:     Great.

Waldo Perez:     And results are going to come soon.

James West:     Okay, great. Well, let’s leave it there. We’ll come back to you in a quarter’s time and see how you’re making out. Thanks for joining me.

Waldo Perez:     Thank you very much. Excellent.

James West

James West

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I employ a Capital Efficiency Model that dictates money should never be exposed for longer than is absolutely necessary to the possibility of being lost. Thus, I routinely sell half my position when a stock doubles from my entry price, and I sell stocks that lose 20%, unless there are...
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