Lifezone Metals (NYSE:LZM) - Powering the EV Revolution with Clean Nickel Technology in Tanzania

Nov 11, 2024

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Interview with Chris Showalter, Director & CEO of Lifezone Metals Ltd.

Recording date: 7th November 2024

Lifezone Metals is an emerging battery metals company offering investors unique exposure to the electric vehicle (EV) supply chain. The company's key asset is the Kabanga nickel-cobalt project in Tanzania, which ranks as one of the largest and highest-grade undeveloped nickel sulphide deposits globally (25.8 Mt measured and indicated resources at 2.63% Ni, 0.35% Cu and 0.2% Co with additional 14.6 Mt Inferred resources) and would become a globally significant source of responsibly produced battery metals.

What sets Lifezone apart is its proprietary hydrometallurgical technology, which allows the company to optimally process ore and unlock value from complex deposits. Lifezone's ability to design bespoke process flow sheets positions it to become a "solution provider" to the industry. The company aims to not only develop Kabanga but also deploy its technology to other projects via partnerships, generating a royalty stream.

Lifezone's strategy is significantly de-risked through its partnerships with two mining majors. BHP has invested $100 million for the Kabanga project, with an option to increase to 60% and a floor valuation of 7x the project's post-DFS NPV. This provides downside protection and validates the project's world-class potential. Separately, Lifezone has a 50/50 joint venture with Glencore to apply its hydromet technology to recycling PGMs from autocatalysts in the US.

Completion of the Kabanga DFS in H2 2024 is a major near-term catalyst. This will firm up project economics and trigger BHP's option to increase its stake. Concurrently, Lifezone is negotiating offtake agreements with parties like Japan's JOGMEC, which will underpin project financing. The company has a clear pathway to a fully funded Final Investment Decision by leveraging BHP's investment, debt financing, and its offtake rights.

The investment opportunity is buoyed by Kabanga's potential to supply the lowest carbon intensity nickel to Western EV makers. With a projected CO2 footprint of 3-5t per tonne of nickel vs. the much higher levels of Indonesian producers, Lifezone is well-positioned to earn a "green premium". This is increasingly important as EV makers look to reduce their Scope 3 emissions and diversify from Chinese-controlled supply chains.

Lifezone's assets are located in Tanzania, which is highly prospective for nickel but previously considered high-risk. However, the government has taken significant steps to improve the investment climate, including launching a mining tax review and committing to infrastructure development. Tanzania's progress, combined with BHP's backing, substantially mitigates jurisdictional risk.

In summary, Lifezone presents a differentiated battery metals investment leveraged to the EV revolution. The company's large, high-grade resource base, clean processing technology, and top-tier partnerships create a compelling risk-reward proposition. With a value-accretive pathway to production and multiple near-term catalysts on the horizon, Lifezone is well-positioned to deliver shareholder returns as the world electrifies.

View Lifezone Metals' company profile: https://www.cruxinvestor.com/companies/lifezone-metals