Lifezone Metals: Tanzania Nickel Developer Boosts Resource by 20% Amid EV Metals Push

• Lifezone Metals provided an update on a 20% increase in contained nickel in the measured and indicated resource at their Kabanga nickel project in Tanzania
• The updated resource demonstrates Kabanga is one of the highest grade nickel deposits globally with over 3 million tons added at 3%+ nickel
• Lifezone has laid out a clear financing plan involving strategic partners like BHP, the U.S. Development Finance Corporation, and Japanese groups
• Lifezone is also pursuing an automotive recycling opportunity in the U.S. in partnership with Glencore to recover critical metals like PGMs
• Lifezone has demonstrated the ability to refine Kabanga's nickel into battery-grade material and believes the timing is right to develop the project

As the electric vehicle revolution accelerates, securing reliable supplies of the critical battery metal nickel has become a top priority. Lifezone Metals has a world-class Kabanga nickel project in Tanzania and an emerging automotive recycling business in the United States.

With a resource update highlighting Kabanga as one of the highest grade undeveloped nickel projects globally, a clear financing pathway laid out, and demonstration of the ability to refine the nickel into battery-grade material, Lifezone is well-positioned to help meet the exponential growth in nickel demand from the EV battery sector.

Tier-1 Nickel Asset 

The flagship asset in Lifezone's portfolio is the Kabanga nickel project. Kabanga is a rare tier-1 large scale deposit distinguished by its combination of size and grade. A recently completed resource update resulted in a remarkable 20% increase in contained nickel in the measured and indicated categories to 46.8 million tons grading 2.09% nickel. This includes the addition of over 3 million tons grading above 3% nickel.

CEO Chris Showalter underscored the significance of this increase and Kabanga's world-class status:

"To increase [the resource] by 20% demonstrates that we are able to unlock the highest grade, most superior section of the deposit for the purposes of the (imminent) DFS."

The high grade will enable Lifezone to produce nickel at a lower cost and reduced environmental footprint compared to peers. Over $200 million has been invested in drilling the deposit so far, resulting in a well-defined resource with over 80% now classified in the higher confidence measured & indicated categories - a rarity for a development-stage project.

Financing Pathway Taking Shape 

Lifezone has systematically put in place the building blocks to finance the development of Kabanga. In a major vote of confidence, the company brought in mining giant BHP as a strategic partner in 2021.

Showalter highlighted how partnering with the world's largest mining company provides strong validation for the project:

"Very strong endorsement from the largest mining company in the world, which really resonates to the quality of the project and the Kabanga deposit."

In parallel, Lifezone has been engaging with government-backed financing agencies to secure funding for Kabanga. The company is in discussions with the U.S. International Development Finance Corporation (DFC) to potentially provide a political risk insurance wrapper. Bringing in the DFC would open the door for other financing partners to participate. With the US DFC anchoring [the debt], other very high quality financiers to round out that syndicated debt facility - another very strong endorsement.

On the off-take side, Lifezone recently signed an MOU with the Japan Oil, Gas and Metals National Corporation (JOGMEC) to act as a facilitator to market Kabanga's nickel production to Japanese end-users. Showalter hinted that this relationship could evolve into a strategic Japanese partnership:

"The ability to continue that theme, bringing in the Japanese, a whole 'Team Japan' kind of concept in a way to help fund it, that's a very powerful addition when you look at the potential to get this to be a fully funded project."

With BHP's backing, advanced discussions for U.S. DFC funding and a clear pathway to bring in Japanese and other strategic partners, Lifezone has laid out a credible roadmap to bring Kabanga into production. 

Interview with Chief Executive Officer, Chris Showalter

Demonstration of Processing Capability 

Given the unique nature of Kabanga's ore, which is hosted in sulfide minerals, determining the optimal processing flowsheet to maximize nickel recoveries is crucial. Lifezone has been intensely focused on metallurgical testing and refining the process design. 

"We were able to demonstrate taking that bulk sample material that's representative through a pilot plant and able to produce high-purity nickel and cobalt products that would go directly into the battery supply chain."

This is the first time that Kabanga's nickel has been processed to a final refined end-product. This significantly increases confidence in the ability to deliver battery grade nickel sulfate to customers. It further validates the hydromet processing technology that Lifezone has developed and expects to deploy at Kabanga.

Recycling Business Provides Second Avenue of Growth 

While Kabanga is Lifezone's primary focus, the company has a second avenue of growth through its battery metals recycling business. Lifezone has a 50/50 joint venture with diversified mining major Glencore to pursue an opportunity to recover PGMs, nickel, cobalt and copper from recycled batteries and end-of-life vehicles in North America.

The business will leverage Lifezone's proprietary hydromet technology to process the recycled materials containing these critical metals. Showalter sees a huge opportunity to reduce costs and increase margins by vertically integrating the currently highly fragmented battery recycling supply chain:

"There's a number of different parts of this chain and it hasn't really been broken down and consolidated in a way that you would expect. What we've identified is the ability to come in and do a more vertically integrated play. You deconstruct all these siloed components and then you capture margin - the more you break down, you're just consolidating more margin."

Lifezone plans to have its first recycling plant up and running soon and then rapidly replicate the model across other sites in North America. The company will be able to apply the knowledge gained from processing Kabanga's ore to the recycling business and vice versa.

If successful, the recycling business could provide Lifezone with a nearer-term source of cash flow as Kabanga is advanced through feasibility and construction. Glencore's involvement as an equal partner provides a strong endorsement of the business plan and adds credibility in the eyes of potential customers.

The Investment Thesis for Lifezone Metals

• Exposure to exponential growth in nickel demand from the EV revolution through ownership of the world-class Kabanga nickel project
• High grade of 2.09% nickel positions Kabanga as a potentially large, low-cost, long-life nickel operation
• Over $200 million invested in drilling to date has resulted in 80%+ of the current resource in the measured and indicated categories
• Clear financing pathway taking shape with strategic backing from BHP and potential funding from the U.S. DFC, project finance, and Japanese offtakers
• Secondary exposure to recycled critical metals through an automotive recycling joint venture with major miner Glencore
• Near-term share price catalysts include delivery of the definitive feasibility study for Kabanga, financing milestones, and updates on the recycling business rollout

Macro Thematic Analysis 

The outlook for nickel is being driven by the unstoppable rise of electric vehicles. With nickel a key input for the lithium-ion batteries powering EVs, demand for the metal is expected to surge in the coming years as auto manufacturers transition their fleets to electric and global governments support adoption with subsidies and growing charging station infrastructure. 

When combined with demand from nickel's traditional end-use markets such as stainless steel, this is expected to push the global nickel market into deficit, supporting strong nickel prices over the medium to long term. Showalter captured the essence of the opportunity for Kabanga within this context with the following quote:

"When you look at the nickel projects globally, when you look at how competitive the Indonesian market has made the entire sector, and you look at how these projects around the world going to compete - it's going to be these superior resources with this superior grade that are going to be best positioned."