Grid Metals - Powering the Future of Critical Minerals by Advancing Lithium & Nickel Projects in Manitoba

• Grid Metals is focused on developing lithium and nickel-copper projects in Manitoba, Canada. Their key lithium project, Donner Lake, has a 6.81Mt resource with potential to expand.
• For Donner Lake, Grid aims to leverage existing nearby processing infrastructure through toll milling agreements rather than building their own facilities. This lowers capex and speeds up the development timeline. Permitting is underway with the goal of having permits in hand by H1 2025 to be positioned for a lithium price recovery.
• Grid's MM Project includes 317 million pounds of copper (Mayville), 263 million pounds of nickel (Makwa) and 452,000 ounces of combined palladium, platinum and gold, with $4B of in-pit contained metal value. The focus is growing the resource from 47.7 Mt to 80-100Mt to reach critical mass.
• Upcoming catalysts include exploration results from the nickel-copper project in late summer/fall 2024 aimed at expanding the resource and making new high-grade discoveries. Securing a strategic partner is another potential catalyst.
• Grid believes the unique combination of its two battery metal projects in a top mining jurisdiction is a competitive advantage. The company aims to steadily derisk and add value to become a key North American critical minerals player.

Advancing Lithium & Nickel-Copper Projects in Manitoba

Grid Metals Corp. (TSXV:GRDM) is a Canadian exploration and development company focused on advancing a portfolio of critical mineral projects in Manitoba. The company's flagship assets are the Donner Lake lithium project and the MM Project, a copper-rich (Mayville) and a nickel-rich (Makwa) disseminated magmatic sulfide deposit, both located in southeastern Manitoba. Grid Metals aims to become a key source of battery metals in North America by advancing these projects through resource expansion, derisking and ultimately production in the coming years.

Interview with President & CEO, Robin Dunbar

The Opportunity in Lithium

The Donner Lake lithium project is Grid's most advanced asset and the current priority for the company. Donner Lake hosts a 6.81 million tonne spodumene inferred resource which was delineated in a short amount of time. While modest in size, the deposit boasts strong grade consistency and favorable mineralogy based on metallurgical testing.

What sets Donner Lake apart is its proximity to existing processing infrastructure. Grid Metals is pursuing toll milling agreements with the nearby Tanco and True North processing facilities as an alternative to constructing a concentrator on site. According to CEO Robin Dunbar, this could cut years off the development timeline and save hundreds of millions in upfront capital. He elaborated on the opportunity in the interview:

"The value proposition for our project, Donner lithium, is we are looking to use somebody else's processing facilities to process. We would mine but not have to build a concentrator and tailings, which take 3 to 5 years to permit. We would just get the mine permitted, so that the timeline for permitting just your mine is much shorter, and then we would truck the ore to an existing facility and process it there."

Permitting is a key near-term catalyst for the project. Grid expects to secure an advanced exploration permit imminently, allowing for road construction, bulk sampling and other development activities. The company is also working towards a full mining permit, targeting receipt in the first half of 2025. This would position Donner Lake to move quickly into production in a recovering lithium price environment.

Dunbar sees potential to expand the resource and production scale over time through exploration on Grid's land package:

"We have 7 million tons, we can definitely grow that to depth. We think there's other opportunities in our area to find other deposits... If we have dibs on the processing, we have the opportunity to go and acquire new deposits, double the production. Say we can get to 150,000 tons per annum - that's starting to be the scale that can support a chemical plant. It's not one of the larger projects, but it's a significant project."

The investment thesis is that Grid can steadily add value to Donner Lake by achieving permitting milestones and strategically expanding the resource, putting the company in a strong position to benefit from the next lithium upcycle.

Base Metal Optionality

While Donner Lake is the near-term focus, Grid's MM nickel-copper project offers significant upside optionality. A 2014 PEA on the project outlined a 7.2Mt resource, but Grid has since grown it to 47.7Mt grading 0.31% Cu and 0.25% Ni (indicated + inferred), approximately with 317 million pounds of copper, 263 million pounds of nickel and 452,000 ounces of combined palladium, platinum and gold. The in-pit resource contains an estimated $4 billion worth of metals at current prices.

Grid sees strong potential to further expand the resource to a target of 80-100Mt, which would be a conceptual threshold for a major mining company to get involved. Dunbar explained:

"If you've got a scale that's going to attract interest from the mining industry, ideally a major but it could be a mid-tier, that's going to be roughly a 5 million ton per annum rate of production. So if your NSR value is $75 or $80 a ton and you're doing 5 million tons, that's $400 million in revenue, and you want to get as close to 100% margin on that as you can."

To get there, Grid plans to deploy exploration dollars in late summer and fall 2024 to drill untested targets and potential extensions of known zones. The company will also look to bring in a strategic partner once it reaches critical mass. Upcoming catalysts for MM include exploration results and a resource update.

The Bigger Picture

Grid Metals offers investors exposure to two future-facing critical mineral projects in a world-class mining jurisdiction. The company's strategy is to steadily derisk and add value to its assets to attract larger players over time. In doing so, Grid aims to be part of the solution in localizing critical mineral supply chains in North America.

Dunbar summed up the opportunity:

"Very few projects like this around. Most of the massive, more higher grade deposits are too small. There's nickel projects in particular which are giant but low grade and will require billions of dollars. We're kind of in this middle category - conventional processing, decent grade, good infrastructure and access. There's not many in that peer group."

By combining the security of supply of a top jurisdiction with quality assets and a pragmatic development approach, Grid Metals presents a compelling investment case in the critical minerals space. Upcoming catalysts around exploration and permitting could put the company on the radars of investors and strategic partners alike in the near future.

Conclusion

Grid Metals provides investors with a unique combination of battery metal exposure, asset quality, exploration upside and jurisdiction safety. The company is well positioned to benefit from the growing focus on securing critical minerals supply in North America. Near-term catalysts around permitting at Donner Lake and exploration at the MM Project could drive a re-rating of the stock. With a market cap of just C$15 million, Grid appears undervalued based on the potential of its assets and offers significant upside in a rising commodity price environment.

The Investment Thesis for Grid Metals

• Exposure to in-demand battery metals (lithium, nickel, copper) needed for the EV revolution
• Two advanced-stage projects in a top mining jurisdiction (Manitoba, Canada)
• Fast-track to production potential at Donner Lake lithium through toll milling strategy
• Near-term permitting catalysts at Donner Lake in H2 2024/H1 2025
• Significant exploration upside and resource expansion potential at MM nickel-copper project
• Opportunity to attract a strategic/major partner to develop MM
• Experienced management team with track record of advancing projects
• Attractive valuation with just a C$15M market cap

Macro Thematic Analysis

The global transition to clean energy is driving unprecedented demand for critical minerals like lithium, nickel and copper. Electric vehicle adoption is growing exponentially, but the raw materials supply needed to fuel this growth is lagging. Localizing supply chains has become a top priority for western governments and automakers.

This macro backdrop is highly favorable for companies like Grid Metals that are developing critical mineral projects in stable jurisdictions. Grid CEO Robin Dunbar spoke to the opportunity in the interview:

"The intangibles like the Inflation Reduction Act - car companies want to buy nickel, cobalt, copper, lithium in North America to feed the plants, because then they get the tax credit for the consumer. There's very few projects like this around."

Canada in particular is well positioned to become a key supplier of critical minerals to the U.S. auto sector. The country has a wealth of untapped mineral resources, a long history of mining, and shares an integrated auto supply chain with its southern neighbor. Manitoba, where Grid Metals' projects are located, is especially prospective with a number of past-producing mines and significant untapped potential.

Grid aims to be part of the build-out of this North American battery metals supply chain. The company's fast-track strategy at Donner Lake gives it a pathway to potentially being one of the next lithium producers on the continent. And the scale potential at MM is the type of large, long-life resource that automakers are looking to secure. As Dunbar put it:

"The industry and market are going to wake up to this. There's a huge potential re-rating for us."