Ann: Investor Presentation, page-30

SOME OBSERVATIONS FROM THE CR AND THE LATEST INVESTOR PRESENTATION.

There's lots to unpack here....

Sometimes, its what is omitted, or not said, that resonates the loudest.

It always irked me, that the studies into Moblan never stated downstream refining, only concentration.
Everything I have read, up until the last couple of days, has only ever mentioned concentrate, when downstream at Moblan is the logical path forward.

NAL, was obviously the easier prospect for refining, being a semi constructed brownfield site.

Now it seems that the focus, energy and capital, is being allocated to Moblan, with a view to refining. I mean it had been mentioned since the 2022 AGM where Brett first dropped the 100,000 tonne hydroxide figure, but has never been in official comms.

Moblan PFS announcement-



But now, there has been a shift in the narrative. Refining or downstream processing is now being officially stated in company comms for Moblan.

CR ANNOUNCEMENT-



So, as we are all anticipating, and tipped off by BL and Dougal, they have finally made the northern hydroxide refining ambition official. Having said that, if you have been following BL or Dougal from as far back as the AGM last year, you would have known this was coming.

And while we are on Moblan, there is another milestone, missing from the latest investor presentation, which has changed from just 2 weeks ago-

Current presso-

The Moblan PFS has dissapeared.
Could mean a few things, most probably-
1) Has it been removed, for further studies TO INCORPORATE INTEGRATED HYDROXIDE?
2 )It may be announced next week, as it is due anyway, and then should transition to the completed milestones. This may be the sweetener to help justify the CR...they have done this sort of thing before.
3) It is late, incorporating further details and we wont see it for months, like the NAL DFS.
It will just dissapear from comms like it never existed...then maybe pop up as a DFS.
Sayona sure do have a track record for this, and I know most investors, are absolutely sick to death of timelines that aren't met.
If you state a month that something is due, stick to it.
Or make it broader, say Q2 or H2 rather than nailing it down to a month. and If you can't stick to it, don't make the statement.

So, I think its safe to say, Brett wants Moblan to be a globally significant, tier 1 asset, that has the advantages of being located within proximity of the North American battery and EV manufacturing hubs, and will have the ESG credentials of using hydro. In terms of tier 1 assets, if they can prove up say 150MT at 1.3%+, it would probably trump anything in Africa, and even projects in WA. And when I say trump, it is taking ALL factors into consideration, not just size and grade. Location, jurisdiction, ESG power, proximity to market, sovereign risk, government support and legislation...
But, it will take time and money, and this CR is to keep this going at great speed and stick to around 2027 for mine/ concentrator and 2030 for refining.

Having said that, if they ever get funding from US/Canada/Quebec, as well as a chemical partner JV, they may be able to run the projects concurrently, and possibly have refining capacity ready, around the same time as the mine/concentrator coming online. The chemical conversion side, is a lot easier than building and permitting a mine/concentrator from scratch.

That's why the US is looking to strategically align themselves with Canada and Australia, signing joint critical mineral statements, and will concentrate on building refining capacity, and import most of their spod, as well as some lithium salts.. The permitting in the US is just too difficult, expensive and time consuming. For what its worth WA or Quebec/Ontario is where I would set up, and we are seeing that with the plethora of juniors in these jurisdictions.


Production, staff, power, utilities, studies, exploration, drilling cost money...
London, Singapore, Quebec, Brisbane, New York, investor pressos all over the place, cost money...
JV earn in commitments, expansion costs money....

Revenue generation...a big fat zero....not yet anyway...but it's coming.....soon....

AU$98M in the bank, with a 200M ATM facility.
The ATM is dilutive and slow. A measured trickle of shares coming onto the market/register, unless its done in tranches, then you may as well do it quickly via a CR.
Of the 98M, 50 odd was raised by the Canadian FTS.
This goes into the coffers, and is predominately for exploration/drilling and mine development activities.
However, the FTS is conditional on this money being used for its primary purpose, within 24 months. As long as that value is acquited in that time, it can be used for anything in the interim.
Some have debated that these FTS funds cant be touched or used for any other purpose.
We looked into this when it happened, and there is indeed a timeframe (24 months) in which you have to spend this money for the prescribed purpose.

To meet this obligation, qualifying expenditures must generally be incurred within 24 months after the end of the month in which the flow-through subscription agreement is made (the “General Rule”).
The Issuer must incur qualified expenditures in an amount at least equal to the subscription price of the FTS.
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This will be acquitted, between 12-18months, with major drilling campaigns and mine development.
Additionally, Authier mine/pit construction, which could kick off in as soon as 6-12 months, would also be a big drawer of FTS capital.

Maybe there's some background noise, nothing they can officially state, that Authier will be a goer soon, and once BAPE is approved, they are going to want to start straight away. We now have the cash for this.

I guess the point is, the money in the coffers is available for use NOW.
Yet a CR was still conducted, prior to any of the current raft of announcements that are currently due.

The BOD know the cash burn and are very aggressive in what they are trying to achieve. If they want the wheels to keep rapidly turning, capital has to be readily available and unhindered. I don't like dilution more than the next punter...its like our shareholdings have been devalued by 10% overnight....again.....but if it gets us to the desired destination?? The bigger picture??? I was angry Thursday night, but the emotions settled and logic is prevailing. Putting this all on paper has certainly helped balance the view. But I am not the gift that keeps giving...

The AGM is coming up. We need to be there in force and voice our concerns loud and clear.
Who bloody knows what will happen by July?
Brett will probably get the 1st shipment out before the AGM, the offtake partner will be revealed and we will be at 30c plus ....all happy...and thanking him! Who bloody knows!!! I guess I wont have to have a go at Crawf this time....goodbye and happy retirement.....$$$$$$$$$$$$$$$$$$$ Maybe our announcements will come out with the basic maths of addition and subtraction will be correct now...gee he had a crooked abacus, a few beads short!

With CR's, the general rule of thumb is the lead broker, Petra in this case (again), will have a feel for what the instos want to pay. Too high, and you risk running a CR which is undersubscribed, and hence very bad for investor confidence. Instos don't buy at a peak, they sell.
So trying to raise when the an SP is at ATH's is very risky. And that is why generally, it is offered to them at a discount to a low VWAP.
They will flip some, hold onto some and go long, and offer them out for shorting, if they feel the SP is overheated and will correct. They wont offer up the cash, usually hundreds of millions, for nothing...

This is not a unique situation.
CXO did a 100M CR on the 30/9/2022, just days before their first sale of DSO at a 13% discount of the 10 day VWAP.....this is familiar territory pre revenue.

For us, this could be the last CR.......particularly if the lithium prices stay robust.
Money in the bank to sustain us until revenue generation, then once the cashflows and economics are stabilised, credit becomes an option and the accountants will balance the correct debt/equity ratio for the company.
Not many company's operate without debt, and we can't do it forever.
As for future capex, it should be a combination of debt, free cash flow/self funding , partnerships/JV's, government grants, tax concessions, PLL's share and SOQUEM's share...that would get us most of the way there.

Please don't forget Soquem/IQ need to stump up 40% at Moblan...
If Moblan is a billion dollar proposition, we pay 600mill.
600 mill, 30% tax concession for mine development/refining, we in effect pay 400mill. 400 mill is around 1 years production FCF.
Then, Maybe a grant for 100M or a chemical JV partner-LG/Posco 50/50 on the chemical side....a little debt for the shortfall, if any......DONE....
without a CR.

BACK TO NAL

Some more clues to what is being planned at NAL, particularly downstream.
This CR was for working capital, as well as funding the new dry tailings facility, with the implementation of the Megadome and plans and studies to creating the NAL super pit.


For me the most exciting is going downstream.
We know it is inevitable, and to adhere to the Quebec mandate, needs to be competed by mid 2026, 5 years after the approval of the NAL sale.
We may actually see some big expenditure, in particularly the Crystallizer. If this happens, its a done deal.
Especially when the statement they make is-

'with further investment into PLANNED lithium carbonate production' supporting Quebec's ambitions to become an integrated producer of battery materials.

Since when was it Planned??? I thought it was still under study!
They haven't made this statement before.....


So what doe this mean for next week?

Will the Moblan PFS make a triumphant return, or will it be lost indefinitely?

(For the record) I don't mind things being late, but don't take us for fools and think we are goldfish, who will forget they even mentioned a study that suddenly that doesn't materialise. Just communicate to us the reason why it is late, which for one, would make me a lot more comfortable with the delay.
JUST BE BLOODY HONEST AND UPFRONT.
In this day and age, people generally respond a hell of a lot better to an honest approach, including the markets.

Will the carbonate PFS drop, to offset the bitterness of the CR?

Good chance of that happening.
Dougal has stated the Carbonate PFS is with the board for consideration.

So let's say, the carbonate numbers in the PFS, were as outstanding as we know they are, particularly due to the Volume waiver kicking in.
Hatch may have identified the Crystallizer, or another high capex, long lead item as a possible handbrake or bottleneck.
Dougal has mentioned the crystallizer before, with a 24 months lead time...and why would he know that??? unless they are already in the process of ordering it....
They may need to commit to a pre payment/deposit on this thing immediately, just to get it specified, designed and built.... and aim for delivery say in 18 months, making it early 2025. As with everything these days, there could be delays, so they want it started asap, as it could push beyond 18 months, maybe 24 months, as he stated, which takes us to mid 2025.
The deposit could be in the tens of millions, anywhere between 10-40 mill, straining the existing reserves remaining for opex, the reserves for drilling and exploration, the reserves for the Jourdan earn in, the reserves to build out Authier... etc..etc...
So,If I was Brett, I would raise money immediately, (as they have just done), and gone out following the raise with the carbonate PFS, stating that long lead items will be ordered asap, if not next week.
This would cement NAL's future, as a chemical refinery/ producer and more importantly, ensure Sayona is the first vertically integrated lithium producer in North America..and keeping everything else on track.
SYAQ, to benefit from billion dollar revenues, unhindered by sub par offtakes.

As a retail holder, It would have been nice to be included in this CR.. a little payback to your loyal holders, particularly the LTH's who have been supporting the company for years. I know they need cash fast, so keep the insto raiseas is, and hold a seperate SPP for us retailers for a little spending money...just to say thanks....

Shorts could close positions here, just like they did with Vulcan's CR last week. This was an extreme case...Check out shortman
And if you think we have been hard done by with this CR, they have had their SP/MC dessimated.
Interesting that last time they did an equity raise, it was at a premium. This time, as markets are weak and its harder to get funding, it was at a big discount...and the markets didnt like it, smashing them down further,,,,absolutely brutal. They are still a way off to production.

As for SYA, were ALL the shorts in the know here?

NO.

The exiting started in late Feb.


If there was inside info through the institutions that a CR was on the horizon, they probably would have loaded up at 22/23, to close out at the CR price of 18.
So if this has been planned for a while, it was very, very tight lipped.
I believe increased costs, particularly for the megadome, and possibly something in one of the PFS's tipped them over the edge and drove a quick CR. I am sure there was money allocated in the FTS Canadian raise for the Megadome as well. This structure is proving to be an expensive PITA, but necessary if they want to ramp tp 4500tpd-5500tpd, as has been mentioned.

It may have only been in the last week, since they actually made the decision for this additional funding.
Either way, I don't think it leaked to the shorts, otherwise they would have loaded up.

It will be interesting to see our T+4 short positions late next week or early the following week, and see how many took the opportunity to borrow or close. As per Monday the 22nd, they were still trending steadily lower. Lets see if any anomalies show up Tuesday, Wednesday or Thursday?
So, lets see how next week plays out. It will be very telling of who knew what....

We may trade again on Monday, if not Tuesday, unless they trigger another TH for an additional price sensitive announcement.
It would be prudent to keep the SP frozen with another TH, prevent any further decay and try and stem the drop with a dynamite carbonate PFS.

Having said that the Democrats and Republicans are rumoured to be close to crunching a deal on the debt ceiling.
The markets in the US responded and had a very strong Friday session, the S&P500 closing above 4200 for the first time since mid August 2022


Could this be the infancy of the next Bull Market?
If that happens and picks up the macro, along with the carbonate PFS, and shorters closing out at 18 in the CR, it may be enough to sustain the SP, and prevent a similar crash that just occurred with Vulcan.

Short term, we will be on a knife's edge next week..

Back to the CR price or below, or have the shorters bailed and the instos had their fill and are happy to let it run with the improving macro???

We will soon find out....

Good luck everyone...