re: Diving deeper on Standard Lithium?

When Mintak was asked about offtakes on the DWW podcast he said that SLI will be very careful with how they choose partners. It was something like the chemistry may change across the Smackover so they want to maintain the flexibility to provide chloride, hydroxide, and carbonate.

Most offtake agreements I've seen with other lithium cos and auto manufacturers lock the producer into supplying x tons of lithium carbonate.

Maybe aerospace provides more flexibility somehow?

Livent says they supply lithium alloys for aerospace use fwiw.

Looking forward to the curtain being pulled just a little more.

me too. im about to GTFO of this thing

quote:

---

I feel like they really are just posturing for a buy-out

---

agreed. so why doesnt anyone want to buy them...like the largest O&G company in the world thats decided to get into lithium and bought the house next door

this gets to my point about leadership mattering. is Mintak any good at posturing for a buyout?

Also, why cant they provide any real, technical updates? But have the balls to make pitches to aerospace? how fricking pragmatic is that right now?

Mintak has some potentially shady background (Could be he was just in the wrong places at the wrong time, though) but I have confidence in him.

I am a really active investor when it comes to my pre-revenue speculative plays. I will not invest in a company if I can't get an exec on the phone and have a conversation with them, so I talk to these folks often. With a lot of these guys/gals, I can get them stuttering and fumbling responses. Mintak has always been on point with me, even a step ahead. I've never caught him off guard or lacking for a response. It also surprises me just how much he has educated himself on the technical side of the company. He can really speak knowledgeably to the technology which is impressive for someone with his background.

I could be wrong, I probably don't have more than 3 hours total of conversation time with him, but it's not a stretch to say he's the most impressive pre-rev CEO I've ever been in contact with.

You're welcome.

I get on the phone for one hour to talk to these people and the stock runs. There's magic in these pipes, I tell ya'.

Also, it's amazing they still get on the phone with me considering I have definitely doxed myself with these posts and there is no way they don't know who I am on this board.

quote:

---

You're welcome.

I get on the phone for one hour to talk to these people and the stock runs. There's magic in these pipes, I tell ya'.

---

Call them back

This action is really just me doing a lot of buying cause I was so jacked up after the conversation. Stacks on stacks. They're gonna see this and charter me a flight up to El Do-ray-doe for the VIP tour.

Any major news or info covered that we can get excited about?

Alrighty so back to business, I did speak with the company for about an hour today. Very open and accessible, answered a ton of questions in more depth than I thought I would get. As usual I’m not going to give quotes because I don’t want to misquote as I was scribbling notes fast (in that vein, hope I didn’t misunderstand something either), but here is my summary of the discussion:

DFS

Started off with the elephant. I’m using DFS and FEED interchangeably – they are not interchangeable, but it makes discussion easier as they are all coming in one lump package. The main delay with the DFS (meaning why it didn’t happen ‘early Q3’) was related to clarifying with Canadian regulatory authorities what they would be allowed to speak to in a press release. The engineering package is applicable only to Phase 1 of the Lanxess project. The DFS looks at the economics of the entire Lanxess project, but the engineering/cost estimate is only ‘official’ for Phase 1. SLI needed to confirm whether they could speak to the project economics as a whole in conjunction with the DFS, or if they could only comment on Phase 1. I don’t know what the resulting decision was, but this issue is now settled and RA’s have approved SLI’s press release content. The other delay is working with Lanxess to approve the release. Both companies have to review, edit, comment, and ultimately approve the PR. This is currently happening. The DFS package itself is complete.

They did comment that as of now they don’t anticipate the delay in the publication of the NI 43-101 report to impact the timeline to commercial production. Another quick note, the press release will come first, and the report will be officially published with the RA’s within 45 days of the PR by regulation standards. Once it is officially published, that is when the 90 day timeline for FID starts. So once the DFS PR hits, don’t walk out 90 days for your FID max. We have to monitor when the actual NI 43-101 is filed. I didn’t get the impression that there would actually be a 45 day gap, though; it could be immediate, I’m pretty sure the PEA press release had a link to the filed report. Unfortunately I didn’t get a great feel for when the DFS would be ready for press release. A lot of that is completely in Lanxess’ hands now and even Standard doesn’t have great visibility. I’d say end of Q3 comfortably. Sure hope sooner, and wouldn’t be shocked.

Lanxess Project Phase 1

This is what the FEED will give an actionable quote on, guaranteed for 90 days. Again, the DFS covers the economics for the entire project, but the engineering package is only a quote for Phase 1. Found out some not great news, not terrible news, about this. Lanx Phase 1 was previously reported at 9,000 TPA volume. Unfortunately, Lanxess is unable to supply brine at these rates in the current market. The DFS will cover a case for 5-6k TPA from Phase 1. While this is lower volume, it should also reduce capex and maybe improve the timeline. Lanxess is contractually obligated to supply this rate at a minimum, so further reduction is not a concern. This doesn’t impact volume for the other phases at the other Lanx plants. Lanx project will also be using Koch’s LSS technology (more on that later).

Lanxess Phase 1 Capital

Things get fairly interesting here, a lot of little details and things to speculate about. First, to get the ‘bad news’ out of the way, Standard is not counting on Lanxess to participate in the Lanxess project. This does not mean Lanxess is out, or even close to out. Standard is simply strategically operating as though Lanxess will not participate in order to have a seamless transition into other capital sources/partners if Lanxess does indeed opt out. Lanxess is having a bad year, they are in a bad cash position, and I imagine they are very non-committal at this point. If Standard funds 100% of the project, which they are ready to do, they are primarily targeting non-dilutive cash sources (debt). They want 60-70% of the capital to be debt funded. The balance would be equity and prepayments. Koch has first right of refusal on any equity sale, and my impression is that Koch is very interested in a larger stake, so a public offering would be unlikely. There are other companies interested in partnering as well, but again, Koch has ROFO so I’m not sure we see another partner come into play. There are several companies interested in prepaying for offtake, and those funds could be used wherever SLI would like to appropriate them. On that note, not sure if they got this talking point from reading this board, but they commented that all these conferences Mintak has been attending (almost jokingly, implying its comical how many conferences he's been to recently) have primarily served as a venue for offtake agreement meetings (90% of time spent). Thought that was humorous. I find these alternative funding sources with SLI owning 100% of the project more attractive than a full Lanxess partnership.

DLE Technology

I didn’t get a lot of details on the nature of this agreement/relationship, but the decision to go with Koch DLE tech on both projects was three pronged. First, Koch tech is marginally more economical. With Koch’s partnership, it is cheaper and easier to engineer/scale/etc. Second, Koch’s tech has marginally better recovery. Both techs are more than capable of economic production, Koch’s is just a bit better. Third, Koch guarantees recovery rate on their tech. If SLI uses their own tech (LiSTR) and for whatever reason it doesn’t scale right and fails, SLI is up a creek. If they use Koch’s tech (LSS) the performance is guaranteed under contract. It is largely a matter of risk reduction. I want to enforce that, SLI’s tech works – it’s just added risk. Why race in and potentially crash your own car if someone is going to let you borrow their exact same car? No idea what the added Opex (if any) will be of using Koch tech vs their own.

My thoughts, did not discuss this - Not sure what this means for competitors in the area (can Exxon just grab themselves a handful of Koch tech and start up? Hopefully not)

Royalties
Standard is working with the other players in the area (Exxon, Albemarle, Tetra, etc) to bring a royalties plan to the Ark O&G commission. Meeting will likely take place sometime Q4. The royalties will not look like O&G traditional royalties and are not expected to impact the economics at all. Seriously, miniscule royalty payouts. Landowners’ wine mixer: on [off]

All in all, really good and encouraging discussion. It still sounds like they are going about everything in the right way, albeit slow. Primary, secondary, tertiary options for getting that first revenue stream in. Could even have actual revenue way earlier than we thought with prepaid offtake (does that go under revenue in accounting? Not a finance major). They anticipate they will be the first player to bring the first new US lithium source to market since…..whenever the last one was, 1960’s or 70's I think. Said they are still year(s) ahead of the new guys that just entered the chat. Whispered all those sweet nothings.

TLDR:

DFS by end of Q3
Lanx phase 1 volume smaller than initially anticipated (still economically significant)
Might be funding Lanx Phase 1 by themselves (with debt and Koch money)
FID late Q4/early Q1 ‘24
Wine mixer [on] off

quote:

---

I do not like to buy at market so yesterday when it was just a little under 3.50 I set a limit order at 3.49 that did not fill. Now I wish I had done market but too late.

---

I've made that mistake before. Just remind yourself that we are chasing dollars, not pennies.