Li-FT Power - Charging Up to Be a Key North American Lithium Supplier

• Li-FT Power, an exploration company focused on large-scale lithium pegmatite projects in Canada, expects to release an NI 43-101 resource report by end of summer 2024 after completing over 50,000 meters of drilling.
• The company believes it has one of the largest lithium projects in Canada, if not the world. It is working to de-risk it through metallurgical studies, environmental baseline work, and community engagement.
• Li-FT Power sees a major squeeze in the lithium market, with only 10-20 major mines likely to be in production. Speed to market is essential.
• The company has evolved its board to transition from a pure exploration company to a development company, bringing in key skills in areas like M&A and Indigenous community engagement.
• Li-FT Power's presence in Canada provides opportunities to supply the North American EV market under the U.S. Inflation Reduction Act. The company believes it can attract U.S., Canadian, and foreign investment outside China.

Li-FT Power, a Canadian exploration and development company, is positioning itself to be a key supplier to the rapidly growing North American electric vehicle market. With one of Canada's largest hard rock lithium projects, the company is moving aggressively to define the resource and advance the project towards production.

Largest Hard Rock Lithium Resource in Canada

Over the past 12 months, Li-FT Power has completed over 50,000 meters of diamond drilling at its project near Yellowknife. This extensive program has outlined a spodumene pegmatite system that ranks as one of the largest in Canada, if not the world. The company expects to release a maiden NI 43-101 compliant resource report by the end of the summer. Li-FT Power President & Director Alex Langer believes this will be a major catalyst for the company:

"The next major catalyst is the NI 43-101 resource report, which should be due towards the end of the summer."

The resource report will provide the first indication of the size and scale of the lithium deposit. Langer is confident it will demonstrate the project is "absolutely major" in size. Analysts and investors will keenly await this report to assess the economic potential.

Interview with President & Director Alex Langer

De-Risking the Project

With the resource report pending, Li-FT Power is taking steps to de-risk the project on multiple fronts systematically. Metallurgical test work has begun determining the optimal process to extract the lithium from the rock. Environmental baseline studies are underway. The company is also heavily focused on early engagement with local indigenous communities.

Langer elaborated on the de-risking process:

"As you can knock all of these things off - that project becomes much more attractive. It is more attractive for possible M&A and more attractive for a strategic investor as well. So it's a relatively simple game plan - the right project, the right people..."

By checking off each box - resource, metallurgy, permitting, community support - Li-FT Power is making the project increasingly appealing to larger investors and strategic partners. The company follows a clear blueprint to advance the project quickly.

Preparing for Development

As a sign that Li-FT Power is transitioning from pure exploration to development, the company has restructured its board to bring key skill sets for the next phase. New board members include Paul Gruner, who has deep experience with Indigenous engagement in the Northwest Territories, and Eva Bellissimo, a top M&A lawyer in Canada. This board makeover signals Li-FT Power is laying the groundwork for the larger capital requirements of developing a mine. By putting experienced professionals in place now, the company can attract strategic investors or potential acquirers once the resource is proven.

Lithium Market Dynamics

The global lithium market is expected to face a major supply squeeze as demand from electric vehicles far outstrips currently planned production. Langer sees only 10-20 major lithium mines being realistically able to enter production to serve this demand. Speed is, therefore, critical to capture market share. While lithium prices have retreated from their peak of $80,000 per tonne, Langer believes the long-term price will settle between $20,000-$30,000. This is still highly economic for hard rock projects like Li-FT Power's. As the lithium market matures and deepens, price volatility should dampen.

Opportunity for North America

The U.S. Inflation Reduction Act (IRA) is reshaping the global lithium landscape. Requiring eligibility for EV tax credits essentially creates a two-tier market between "IRA-compliant" and "non-IRA-compliant" lithium. Supply from China and Chinese-owned resources will not qualify. This creates a huge opportunity for Li-FT Power. As a Canadian project close to the U.S. auto sector, it can be a preferred supplier for "IRA-compliant" lithium. The company is already seeing strong interest from Korean and Japanese battery makers seeking to preserve access to the U.S. market.

Langer summed up the opportunity:

"A project within North America, if it's processed here or even in Korea or Japan, anywhere outside of China, that'll be fungible... [into] the IRA. So it will eventually become a two-prong, two-tiered pricing system - IRA compliant lithium and non-IRA compliant lithium."

Situated in a stable jurisdiction with clear permitting processes, Li-FT Power is well-placed to capitalize on the need for a secure, domestic lithium supply in North America. The Canadian government will likely support accelerating projects that boost critical mineral supply chains.

Li-FT Power presents a compelling investment case in the lithium sector. With one of Canada's largest hard rock resources, the company is taking systematic steps to prove the size of the deposit and advance it towards development. A restructured board brings key skills for the next phase. Proximity to the U.S. auto market creates a ready demand for Li-FT Power's potential lithium production, especially considering the IRA requirements. As a near-term source of "IRA-compliant" supply, the company is attracting strong interest from battery makers and OEMs.

The Investment Thesis for Li-FT Power

• Large, high-quality hard rock lithium resource in a stable jurisdiction
• Potential to be one of the biggest lithium projects in Canada
• On track to define 43-101 resource by the end of summer 2024
• Systematically de-risking project through metallurgy, permitting, community engagement
• Restructured board brings key development skills like M&A and Indigenous relations
• Ideally situated to supply "IRA-compliant" lithium to U.S. EV market
• Attracting interest from U.S., Canadian, and Asian strategics outside China
• Upcoming resource report and met results are key catalysts
• Well-funded to keep advancing aggressively
• Skilled management team with a track record of project delivery

Li-FT Power stands out as a potential near-term source of new production in a lithium market facing long-term structural supply deficits. With one of the largest resources in Canada and a clear development path, the company is positioning itself as a key building block in the North American EV supply chain. The upcoming resource report is the major catalyst that could drive a re-rating of the stock. Positive results would signal the project is one of the biggest new lithium developments on the continent. Li-FT Power's location and scale make it a highly strategic asset for players seeking secure supply. The company appears to have the resources, the expertise, and the macro tailwinds to deliver a major new lithium mine.

Macro Thematic Analysis

The global transition to electric vehicles is unleashing unprecedented demand for lithium. S&P Global estimates lithium demand could grow 40x by 2040. But supply is struggling to keep pace. Lithium production and development projects will likely fall far short of the looming demand wave.

This is creating a scramble to secure new sources of supply. Nowhere is this more acute than in North America. The U.S. Inflation Reduction Act has turbocharged the race to localize EV supply chains. The IRA requires EVs to have an increasing proportion of battery metals sourced from the U.S. or its free trade partners. This effectively cuts off supply from China, which currently dominates the lithium market. The result is a two-tier market for "IRA-compliant" and "non-IRA-compliant" lithium. There is a huge opportunity for North American projects that can fill this gap. Car companies and battery makers are rushing to lock in supply deals. Given the structural imbalance, lithium prices are likely to remain elevated.

As Alex Langer of Li-FT Power sums it up: "The Koreans and Japanese are happy, you know, they get their material, they get it processed, they get the batteries, put in cars. But for, the American government, it's not going to work. So much of that material will not be fungible into this new U.S. North American system."

The big winners will be the companies that can deliver large, scalable, "IRA-compliant" lithium resources. The race is to secure the best projects in the most favorable locations. The M&A activity is already heating up. The few major mines that make it into production stand to be tremendously profitable.