Continuing from above, thoughts on management's consideration of...

Continuing from above, thoughts on management's consideration of Europe as a Phase 2 location, most recently mentioned in first position in our last quarterly report, under the section Phase 2 Plant Scoping Study:

Broad interest continues to be shown in large-scale lithium mica processing hubs in Europe, Namibia, the UAE, the UK and the US.

Of course, generally speaking, the EU is committed to developing local EV supply chains, but as "lithium mica processing hubs" pertain to Lepidico in particular, my interest stems from:

1) "Europe" being listed by management as distinct from "the UK," and therefore possibly from anything Cornish Lithium related and

2) a Phase 2 in Europe reawakens the possibility of Lepidico still working closely with BASF, who last year began commissioning Germany's first CAM plant in Schwarzheide. The facility is also "the first fully automated large-scale one in Europe."
https://www.energy-storage.news/basf-starts-commissioning-cathode-plant-in-germany-with-recycling-facility-coming-in-2024/

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Over the past several years, I have been open to the possibility that a relationship with BASF has remained in play, for reasons I will outline below. I've wanted to get this off my chest for a while, so spent some time this weekend skimming over ASX announcements to refresh my memory, as well as to confirm the accuracy of my recollection of LPD's timeline.

• Our 7 May 2019 ASX announcement Lepidico and Desert Lion to Merge to Create a Global Leader in theDevelopment of Lithium Chemicals from Lepidolite came with Desert Lion's "non-binding offtake agreement for lithium hydroxide with chemicals and materials multination corporation BASF SE." Page 3 of this announcement informs:

Memorandum of Understanding with BASF SE to supply up to 5,000 tonnes per year of lithium hydroxide for production of high nickel cathode for a term of up to 10 years with definitive agreements to be negotiated in good faith on or before December 31, 2019.

Lithium rich mica deposits occur world-wide, as evidenced by Lepidico's numerous JVs prior to our Desert Lion merger. This begs the question: how significant was the MOU with BASF to the deal? (One month prior to our merger announcement, a 210% increase in contained lithium at Alvarrões was announced. Both resources at the time were similar in size, with Alvarrões' being higher grade.)


• On 20 December 2019, Lepidico announced LOI with BASF extended to 31 December 2020. We were also told:

The novation and extension agreement follows a visit by BASF to Lepidico’s Pilot Plant in Perth and provides BASF and Lepidico sufficient time to work towards completion of a definitive qualification and offtake agreement.

Lepidico’s Managing Director, Joe Walsh said, "Lepidico looks forward to continuing discussions during 2020 with BASF for the potential supply of lithium chemicals from its planned Phase 1 PlantProject.”

Indeed, our 31 December 2019, 31 March 2020 and 30 June 2020 quarterly reports all mention BASF, three examples of which are:

1) Letter of Intent with BASF for the purchase of lithium hydroxide formally novated to Lepidico and extended to 31 December 2020.
2) Discussions with BASF SE (“BASF”) continued during the quarter.
3) Positive engagement with BASF continues.

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During this time, our QRs and other ASX announcements begin mentioning the US' Critical Minerals list, for example:

In May 2018, the U.S. Department of the Interior published a list of 35 critical minerals (83 FR23295) which included caesium, rubidium and lithium minerals. The list was developed to serve as an initial focus for “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals”.Lepidolite# is the only known mineral that contains all three of these metals in potentially economic concentrations. *Source: U.S. Geological Survey (QR 31 December 2019)

Also mentioned during this time were Lepidico's newly signed non-disclosure and confidentiality agreements, such as:

Caesium & Rubidium: non-disclosure agreements have been entered into with three prospective customers and the Company has engagement with several other consumers. One consumer that tested material from the pilot plant indicated that it could consume all Cs and Rb chemical production from the planned Phase 1 Plant. Further samples are being prepared for dispatch to other consumers. (QR 31 March 2020)

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Then, on 28 October 2020, LPD announced our Formal mandate signed with the U.S. InternationalDevelopment Finance Corporation, after which BASF is no longer discussed by name, even though our LOI extended till year end. After this point in time, potential lithium hydroxide customers are referred to anonymously:

Confidential discussions progressing with up to 6 lithium hydroxide consumers; analysis of one lithium hydroxide monohydrate sample provided in 2020 should be completed in early 2021 (QR 31 December 2020)

Information divulged in the Finance section of our quarterlies was also noticeably modified. Prior to the DFC mandate announcement, Europe was openly discussed as being one of many possibilities:

Lepidico has been working with finance advisor LHGP since December 2019. LHGP has specialist capabilities in the key areas for the Phase 1 Project, being Africa, the UAE, Europe and the UnitedStates.... Strategic investors are favoured for the equity finance component. The integrated Project will have operations across two jurisdictions: Namibia and Abu Dhabi; and potential offtake partners across further jurisdictions resulting in various regulatory and fiscal regimes. The structure of the integrated Project therefore requires separate legal entities to be established in each operating jurisdiction, which in turn has led to a split finance structure being contemplated. (QR 30 June 2020)

Compare the above to the following QR (for the period up to 30 September 2020), released on 30 October 2020, two days after the DFC ASX announcement:

The Phase 1 Project will have operations across two jurisdictions: Namibia and Abu Dhabi; and potential offtake partners across further jurisdictions resulting in various regulatory and fiscal regimes. The structure of the Phase 1 Project therefore requires separate legal entities to be established in each operating jurisdiction....

On 13 October 2021, Lepidico released its announcement on producing catalyst grade caesium compounds.

On 16 December 2021, LPD announced our Binding Offtake Signed with Traxys for 100% of our "key strategic products of lithium hydroxide and caesium sulfate," ensuring confidentiality to our customers.

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Given that:

• BASF began producing their new caesium-based sulphuric acid catalyst O4-115 Quattro in 2017 and that Lepidico will be selling catalyst grade caesium compounds, I frankly can't see why BASF would no longer be interested in LPD, especially given their and our green credentials, JIMHO.

• Two and a half years ago, after releasing our catalyst grade caesium compound announcement, a stock image was used in one of our presentations. It matched a photograph of a Dupont sulphuric acid catalyst. Someone emailed management and, from recollection, received an almost immediate response back, along the lines of "No, we are not in discussions with Dupont."

• JW has never said this about BASF. When queried, he refers to confidentiality agreements. I'm not sure the date of JW's email to @loisl1978, but my screen shot of what was shared on HC is dated 29 June 2021, a year and a half after the expiry of our LOI. The pertinent excerpt is as follows, the key word being, in my opinion, "existing."

Regards BASF, unfortunately we are not in a position to make a public statement under existing confidentiality obligations....The current situation is absolutely consistent with the behaviour of all the other arrangements that Lepidico has with third parties involved in the electric vehicle supply chain.

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Lastly, here are a few links to articles and announcements over the past few years which exemplify the symbiotic relationship between BASF and the US Department of Energy:

13 August 2020:
"BASF supports the U.S. Department of Energy by providing an energy efficient solution to re-side residential homes"
https://www.basf.com/us/en/media/news-releases/2020/08/basf-supports-the-u-s--department-of-energy-by-providing-an-ener.html

October 2020:
"The U.S. Department of Energy (DOE) awarded more than $4 million to spur innovations in plastic through projects with the BOTTLE consortium and its collaborators," BASF being a partner.
https://www.bottle.org/research/doe-funded-collaborations

5 March 2021:
"BASFSupporting DOEPrograms & Technologies"
https://www.eesi.org/files/030521_Zimmermann_EEIS_Final.pdf

9 April 2021:
"BASF secures funding from DOE for four plastics-recycling research projects" ($8.6 million)
https://www.basf.com/us/en/media/featured-articles/News/collaborating-for-a-circular-economy.html

31 August 2021:
"US DOE Funds NJIT/BASF 'Opportunistic Retrofitting' Sustainability Project" ($82.6 million)
https://news.njit.edu/us-doe-funds-njitbasf-opportunistic-retrofitting-sustainability-project

15 February 2022:
"U.S. Department of Energy Awards $5.7 Million for GE-Led Carbon Capture Technology Integration Project Targeting to Achieve 95% Reduction of Carbon Emissions." BASF is a collaborator.
https://www.ge.com/news/press-releases/us-department-of-energy-awards-57-million-for-ge-led-carbon-capture-technology

2018-2026:
"Large Pilot Testing of Linde-BASF Advanced Post-Combustion Carbon Dioxide Capture Technology at a Coal-Fired Power Plant" (DOE share $57.8 million)
https://www.netl.doe.gov/projects/project-information.aspx?k=FE0031581