UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 31, 2022

PIEDMONT LITHIUM INC.
(Exact name of registrant as specified in its charter)

Delaware
 
001-38427
 
36-4996461
(State or Other Jurisdiction of Incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
   

32 North Main Street, Suite 100
Belmont, North Carolina
 
28012
(Address of Principal Executive Offices)
 
(Zip Code)

Registrant’s Telephone Number, Including Area Code: (704) 461-8000

(Former Name or Former Address, if Changed Since Last Report): Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol
Name of exchange on which registered
Common Stock, $0.0001 par value per share
PLL
The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 8.01  Other Events.

On January 31, 2022, Piedmont Lithium Inc. (the “Company”) issued a Technical Report Summary with respect to its proposed integrated lithium hydroxide business in Gaston County, North Carolina.  A copy of the Technical Report Summary is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01  Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.
 
Description
     
 
Consent of Qualified Person (Leon McGarry)
     
 
Consent of Qualified Person (Chris Scott, Marshall, Miller & Associates)
     
 
Consent of Qualified Person (Dr. Steven Keim, Marshall, Miller & Associates)
     
 
Consent of Qualified Person (Dr. Jarrett Quinn, Primero Americas Inc.)
     
 
Consent of Qualified Person (Andrew Siemon, Primero Americas Inc.)
     
 
Consent of Qualified Person (Stephane Normandin, Primero Americas Inc.)
     
 
Technical Report Summary
     
104
 
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
PIEDMONT LITHIUM INC.
     
Date: January 31, 2022
 
/s/ Keith Phillips
 
Name:
Keith Phillips
 
Title:
President and Chief Executive Officer



Exhibit 23.1


Consent of Qualified Person

In accordance with the requirements of Regulation S-K 1300 Modernization of Property Disclosures §229.1302(b)(4)(iv)


Report Description

Report titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina”
(“Report”)

Piedmont Lithium Inc.
(“Company”)

Carolina Lithium Project
(“Deposit”)

January 25, 2022
(“Date of Report”)

Statement

I, Leon McGarry, P. Geo., of McGarry Geoconsulting Corp. confirm that:

In connection with any Securities Act filings or Exchange Act report and any amendment, supplement, or exhibit thereto, McGarry Geoconsulting Corp. consents to:

o
The filing and use of the Technical Report Summary titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina” (“TRS – Definitive Feasibility Study”) with an effective date of January 25, 2022; and,

o
The use of the McGarry Geoconsulting name, including our status as an expert or Qualified Person (as defined in Subpart 1300 of Regulation S-K promulgated by the Securities and Exchange Commission) in connection with the TRS – Definitive Feasibility Study; and,

o
The information derived, summarized, quoted or reference from the TRS – Definitive Feasibility Study, or portions thereof, that were prepared by us, that we supervised the preparation of and/or that was reviewed or approved by us, that is reported or incorporated by reference into a Security Act filing.

I have read and understood the requirements of the Regulation S-K 1300 Modernization of Property Disclosures.

I am a Qualified Person as defined by Regulation S-K, and to the activity for which I am accepting responsibility.

I have reviewed the Technical Report Summary to which this Consent Statement applies.

I am a full time employee of McGarry Geoconsulting Corp. and have been engaged by Piedmont Lithium Inc. to prepare the documentation for the Carolina Lithium Project on which the Report is based, for the period ended on 25 January 2022.

I verify that the Report is based on and fairly and accurately reflects in the form and context in which it appears, the information in my supporting documentation relating to:

Section 1 – Executive Summary
Section 2 – Introduction
Section 3 – Property Description
Section 4 – Accessibility, Climate, Local Resources, Infrastructure, Physiography
Section 5 – History
Section 6 – Geological Setting, Mineralization, and Deposit
Section 9 – Data Verification
Section 10 – Mineral Processing and Metallurgical Testing
Section 11 – Mineral Resource Estimates
Section 22 – Interpretation and Conclusions
Section 23 – Recommendations
Section 24 – References
Section 25 – Reliance on Information Provided by the Registrant



CONSENT

I consent to the filing of the Technical Report Summary by Piedmont Lithium Inc. (“Reporting Company”)

Additional Reports related to the Deposits for which the Qualified Person signing this form is accepting responsibility:

The Reporting Company’s Quarterly Reports for the next 12 months;

The Reporting Company’s Investor Presentations for the next 12 months;

The Reporting Company’s future press releases for the next 12 months, until such time that the Report is superseded or this consent is otherwise withdrawn;

The Reporting Company’s exhibition booths at any conferences for the next 12 months; and

Any other releases, presentations and promotional material made by the Reporting Company during the next 12 months, until such time that the exploration target included in the Report is superseded or this consent is otherwise withdrawn.

 

/s/ Leon McGarry
 
 

Jan. 25, 2022
Signature of Competent Person
 
Professional Geoscientists Ontario
 
Date
 
2348
Professional Membership
 
/s/ Amy Davies
 
Membership Number
 
Amy Davies, Toronto
Signature of Witness
 
Print Witness Name




Exhibit 23.2


Consent of Qualified Person

In accordance with the requirements of Regulation S-K 1300 Modernization of Property Disclosures §229.1302(b)(4)(iv)


Report Description

Report titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina”
(“Report”)

Piedmont Lithium Inc.
(“Company”)

Carolina Lithium Project
(“Deposit”)

January 25, 2022
(“Date of Report”)

Statement

I, Kevin Andrews, CPG, of Marshall Miller and Associates confirm that:

In connection with any Securities Act filings or Exchange Act report and any amendment, supplement, or exhibit thereto, I consent to:

o
The filing and use of the Technical Report Summary titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina” (“TRS – Definitive Feasibility Study”) with an effective date of January 25, 2022; and,

o
The use of the Marshall Miller and Associates name, including our status as an expert or Qualified Person (as defined in Subpart 1300 of Regulation S-K promulgated by the Securities and Exchange Commission) in connection with the TRS – Definitive Feasibility Study; and,

o
The information derived, summarized, quoted or reference from the TRS – Definitive Feasibility Study, or portions thereof, that were prepared by us, that we supervised the preparation of and/or that was reviewed or approved by us, that is reported or incorporated by reference into a Security Act filing.

I have read and understood the requirements of the Regulation S-K 1300 Modernization of Property Disclosures.

I am a Qualified Person as defined by Regulation S-K, and to the activity for which I am accepting responsibility.

I have reviewed the Technical Report Summary to which this Consent Statement applies.

I am a full time employee of Marshall Miller & Associates. and have been engaged by Piedmont Lithium Inc. to prepare the documentation for the Carolina Lithium Project on which the Report is based, for the period ended on 25 January 2022.

I verify that the Report is based on and fairly and accurately reflects in the form and context in which it appears, the information in my supporting documentation relating to the Geotechnical Aspects of Mine Design and Geochemical Aspects of Waste Rock Management as they appear in:

Section 1 – Executive Summary
Section 2 – Introduction
Section 6 – Geological Setting, Mineralization, and Deposit
Section 12 – Ore Reserve Estimates
Section 13 – Mining Methods
Section 17 – Environmental Studies and Permitting
Section 22 – Interpretation and Conclusions
Section 23 – Recommendations
Section 24 – References
Section 25 – Reliance on Information Provided by the Registrant



CONSENT

I consent to the filing of the Technical Report Summary by Piedmont Lithium Inc. (“Reporting Company”)

Additional Reports related to the Deposits for which the Qualified Person signing this form is accepting responsibility:

The Reporting Company’s Quarterly Reports for the next 12 months;

The Reporting Company’s Investor Presentations for the next 12 months;

The Reporting Company’s future press releases for the next 12 months, until such time that the Report is superseded or this consent is otherwise withdrawn;

The Reporting Company’s exhibition booths at any conferences for the next 12 months; and

Any other releases, presentations and promotional material made by the Reporting Company during the next 12 months, until such time that the exploration target included in the Report is superseded or this consent is otherwise withdrawn.


 

/s/ Kevin M. Andrews
 
 

January 25, 2022
Signature of Competent Person
 
American Institute of Professional Geologists (CPG)
 
Date
 
CPG-11575
Professional Membership
 
/s/ Steven A. Kiem
 
Membership Number
 
Steven A. Kiem Blacksburg, VA (USA)
Signature of Witness
 
Print Witness Name




Exhibit 23.3


Consent of Qualified Person

In accordance with the requirements of Regulation S-K 1300 Modernization of Property Disclosures §229.1302(b)(4)(iv)


Report Description

Report titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina”
(“Report”)

Piedmont Lithium Inc.
(“Company”)

Carolina Lithium Project
(“Deposit”)

January 25, 2022
(“Date of Report”)

Statement

I, Dr. Steven Keim, PE, of Marshall Miller and Associates confirm that:

In connection with any Securities Act filings or Exchange Act report and any amendment, supplement, or exhibit thereto, I consent to:

o
The filing and use of the Technical Report Summary titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina” (“TRS – Definitive Feasibility Study”) with an effective date of January 25, 2022; and,

o
The use of the Marshall Miller and Associates name, including our status as an expert or Qualified Person (as defined in Subpart 1300 of Regulation S-K promulgated by the Securities and Exchange Commission) in connection with the TRS – Definitive Feasibility Study; and,

o
The information derived, summarized, quoted or reference from the TRS – Definitive Feasibility Study, or portions thereof, that were prepared by us, that we supervised the preparation of and/or that was reviewed or approved by us, that is reported or incorporated by reference into a Security Act filing.

I have read and understood the requirements of the Regulation S-K 1300 Modernization of Property Disclosures.

I am a Qualified Person as defined by Regulation S-K, and to the activity for which I am accepting responsibility.

I have reviewed the Technical Report Summary to which this Consent Statement applies.

I am a full time employee of Marshall Miller & Associates. and have been engaged by Piedmont Lithium Inc. to prepare the documentation for the Carolina Lithium Project on which the Report is based, for the period ended on 25 January 2022.

I verify that the Report is based on and fairly and accurately reflects in the form and context in which it appears, the information in my supporting documentation relating to:

Section 1 – Executive Summary
Section 2 – Introduction
Section 3 – Property Description
Section 4 – Accessibility, Climate, Local Resources, Infrastructure, Physiography
Section 5 – History
Section 6 – Geological Setting, Mineralization, and Deposit
Section 12 – Ore Reserve Estimates
Section 13 – Mining Methods
Section 15 – Infrastructure
Section 17 – Environmental Studies and Permitting
Section 18 – Capital and Operating Costs
Section 20 – Adjacent Properties
Section 22 – Interpretation and Conclusions
Section 23 – Recommendations
Section 24 – References
Section 25 – Reliance on Information Provided by the Registrant



CONSENT

I consent to the filing of the Technical Report Summary by Piedmont Lithium Inc. (“Reporting Company”)

Additional Reports related to the Deposits for which the Qualified Person signing this form is accepting responsibility:

The Reporting Company’s Quarterly Reports for the next 12 months;

The Reporting Company’s Investor Presentations for the next 12 months;

The Reporting Company’s future press releases for the next 12 months, until such time that the Report is superseded or this consent is otherwise withdrawn;

The Reporting Company’s exhibition booths at any conferences for the next 12 months; and

Any other releases, presentations and promotional material made by the Reporting Company during the next 12 months, until such time that the exploration target included in the Report is superseded or this consent is otherwise withdrawn.


 

/s/ Steven A. Kiem
 
 

January 25, 2022
Signature of Competent Person
 
Society for Mining, Metallurgy & Exploration, Inc.
 
Date
 
4151568RM
Professional Membership
 
/s/ Kevin M. Andrews
 
Membership Number
 
Kevin M. Andrews Blacksburg, VA (USA)
Signature of Witness
 
Print Witness Name





Exhibit 23.4


Consent of Qualified Person

In accordance with the requirements of Regulation S-K 1300 Modernization of Property Disclosures §229.1302(b)(4)(iv)


Report Description

Report titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina”
(“Report”)

Piedmont Lithium Inc.
(“Company”)

Carolina Lithium Project
(“Deposit”)

January 25, 2022
(“Date of Report”)

Statement

I, Dr. Jarrett Quinn, P.Eng., a consultant to Primero Group Americas Inc. confirm that:

In connection with any Securities Act filings or Exchange Act report and any amendment, supplement, or exhibit thereto, I consent to:

o
The filing and use of the Technical Report Summary titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina” (“TRS – Definitive Feasibility Study”) with an effective date of January 25, 2022; and,

o
The use of my name, including my status as an expert or Qualified Person (as defined in Subpart 1300 of Regulation S-K promulgated by the Securities and Exchange Commission) in connection with the TRS – Definitive Feasibility Study; and,

o
The information derived, summarized, quoted or reference from the TRS – Definitive Feasibility Study, or portions thereof, that were prepared by us, that we supervised the preparation of and/or that was reviewed or approved by me, that is reported or incorporated by reference into a Security Act filing.

I have read and understood the requirements of the Regulation S-K 1300 Modernization of Property Disclosures.

I am a Qualified Person as defined by Regulation S-K, and to the activity for which I am accepting responsibility.

I have reviewed the Technical Report Summary to which this Consent Statement applies.

I am a consultant to Primero Group Americas Inc. and have been engaged by Piedmont Lithium Inc. to prepare the documentation for the Carolina Lithium Project on which the Report is based, for the period ended on 25 January 2022.

I verify that the Report is based on and fairly and accurately reflects in the form and context in which it appears, the information in my supporting documentation relating to:

Section 1 – Executive Summary
Section 2 – Introduction
Section 10 – Mineral Processing and Metallurgical Testing
Section 14 – Processing and Recovery Methods
Section 22 – Interpretation and Conclusions
Section 23 – Recommendations
Section 24 – References
Section 25 – Reliance on Information Provided by the Registrant



CONSENT

I consent to the filing of the Technical Report Summary by Piedmont Lithium Inc. (“Reporting Company”)

Additional Reports related to the Deposits for which the Qualified Person signing this form is accepting responsibility:

The Reporting Company’s Quarterly Reports for the next 12 months;

The Reporting Company’s Investor Presentations for the next 12 months;

The Reporting Company’s future press releases for the next 12 months, until such time that the Report is superseded or this consent is otherwise withdrawn;

The Reporting Company’s exhibition booths at any conferences for the next 12 months; and

Any other releases, presentations and promotional material made by the Reporting Company during the next 12 months, until such time that the exploration target included in the Report is superseded or this consent is otherwise withdrawn.


 

/s/ Jarrett Quinn
  25-Jan-2022
Signature of Competent Person
 
Ordre des ingenieurs de Quebec
 
Date
 
5018119
Professional Membership
 
/s/ V. Gella
 
Membership Number
 
Vera Gella
Signature of Witness
 
Print Witness Name





Exhibit 23.5


Consent of Qualified Person

In accordance with the requirements of Regulation S-K 1300 Modernization of Property Disclosures §229.1302(b)(4)(iv)


Report Description

Report titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina”
(“Report”)

Piedmont Lithium Inc.
(“Company”)

Carolina Lithium Project
(“Deposit”)

January 25, 2022
(“Date of Report”)

Statement

I, Andrew Siemon, P.Eng., a full time employee of Primero Group Americas Inc. confirm that:

In connection with any Securities Act filings or Exchange Act report and any amendment, supplement, or exhibit thereto, I consent to:

o
The filing and use of the Technical Report Summary titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina” (“TRS – Definitive Feasibility Study”) with an effective date of January 25, 2022; and,

o
The use of my name, including my status as an expert or Qualified Person (as defined in Subpart 1300 of Regulation S-K promulgated by the Securities and Exchange Commission) in connection with the TRS – Definitive Feasibility Study; and,

o
The information derived, summarized, quoted or reference from the TRS – Definitive Feasibility Study, or portions thereof, that were prepared by us, that we supervised the preparation of and/or that was reviewed or approved by me, that is reported or incorporated by reference into a Security Act filing.

I have read and understood the requirements of the Regulation S-K 1300 Modernization of Property Disclosures.

I am a Qualified Person as defined by Regulation S-K, and to the activity for which I am accepting responsibility.

I have reviewed the Technical Report Summary to which this Consent Statement applies.

I am a full time employee of Primero Group Americas Inc. and have been engaged by Piedmont Lithium Inc. to prepare the documentation for the Carolina Lithium Project on which the Report is based, for the period ended on 25 January 2022.

I verify that the Report is based on and fairly and accurately reflects in the form and context in which it appears, the information in my supporting documentation relating to:

Section 1 – Executive Summary
Section 2 – Introduction
Section 18 – Capital and Operating Costs
Section 22 – Interpretation and Conclusions
Section 23 – Recommendations
Section 24 – References
Section 25 – Reliance on Information Provided by the Registrant



CONSENT

I consent to the filing of the Technical Report Summary by Piedmont Lithium Inc. (“Reporting Company”)

Additional Reports related to the Deposits for which the Qualified Person signing this form is accepting responsibility:

The Reporting Company’s Quarterly Reports for the next 12 months;

The Reporting Company’s Investor Presentations for the next 12 months;

The Reporting Company’s future press releases for the next 12 months, until such time that the Report is superseded or this consent is otherwise withdrawn;

The Reporting Company’s exhibition booths at any conferences for the next 12 months; and

Any other releases, presentations and promotional material made by the Reporting Company during the next 12 months, until such time that the exploration target included in the Report is superseded or this consent is otherwise withdrawn.


 

/s/ Andrew Siemon
  25th Jan 2022
Signature of Competent Person
 
AUSIMM
 
Date
 
222571
Professional Membership
 
/s/ Yong Xin Du
 
Membership Number
 
Yong Xin Du
Signature of Witness
 
Print Witness Name




Exhibit 23.6


Consent of Qualified Person

In accordance with the requirements of Regulation S-K 1300 Modernization of Property Disclosures §229.1302(b)(4)(iv)


Report Description

Report titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina”
(“Report”)

Piedmont Lithium Inc.
(“Company”)

Carolina Lithium Project
(“Deposit”)

January 25, 2022
(“Date of Report”)

Statement

I, Stephane Normandin, P.Eng., a full time employee of Primero Group Americas Inc. confirm that:

In connection with any Securities Act filings or Exchange Act report and any amendment, supplement, or exhibit thereto, I consent to:

o
The filing and use of the Technical Report Summary titled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina” (“TRS – Definitive Feasibility Study”) with an effective date of January 25, 2022; and,

o
The use of the Primero Group Americas Inc. name, including our status as an expert or Qualified Person (as defined in Subpart 1300 of Regulation S-K promulgated by the Securities and Exchange Commission) in connection with the TRS – Definitive Feasibility Study; and,

o
The information derived, summarized, quoted or reference from the TRS – Definitive Feasibility Study, or portions thereof, that were prepared by us, that we supervised the preparation of and/or that was reviewed or approved by me, that is reported or incorporated by reference into a Security Act filing.

I have read and understood the requirements of the Regulation S-K 1300 Modernization of Property Disclosures.

I am a Qualified Person as defined by Regulation S-K, and to the activity for which I am accepting responsibility.

I have reviewed the Technical Report Summary to which this Consent Statement applies.

I am a full time employee of Primero Group Americas Inc. and have been engaged by Piedmont Lithium Inc. to prepare the documentation for the Carolina Lithium Project on which the Report is based, for the period ended on 25 January 2022.

I verify that the Report is based on and fairly and accurately reflects in the form and context in which it appears, the information in my supporting documentation relating to:

Section 1 – Executive Summary
Section 2 – Introduction
Section 18 – Capital and Operating Costs
Section 19 – Economic Model and Sensitivity Analysis
Section 22 – Interpretation and Conclusions
Section 23 – Recommendations
Section 24 – References
Section 25 – Reliance on Information Provided by the Registrant



CONSENT

I consent to the filing of the Technical Report Summary by Piedmont Lithium Inc. (“Reporting Company”)

Additional Reports related to the Deposits for which the Qualified Person signing this form is accepting responsibility:

The Reporting Company’s Quarterly Reports for the next 12 months;

The Reporting Company’s Investor Presentations for the next 12 months;

The Reporting Company’s future press releases for the next 12 months, until such time that the Report is superseded or this consent is otherwise withdrawn;

The Reporting Company’s exhibition booths at any conferences for the next 12 months; and

Any other releases, presentations and promotional material made by the Reporting Company during the next 12 months, until such time that the exploration target included in the Report is superseded or this consent is otherwise withdrawn.


 

/s/ Stephane Normandin
  01/25/2022
Signature of Competent Person
 
Ordre des ingenieurs de Quebec
 
Date
 
106771
Professional Membership
 
/s/ Andrew Siemon
 
Membership Number
 
Andrew Siemon
Signature of Witness
 
Print Witness Name



 

 

Exhibit 96.1

 

 

 

 

 

Date Revision Status Prepared Reviewed Approved
13-Jan-2022 A Draft S. Normandin    
19-Jan-2022 B Issued for review S. Normandin P. Grigsby P. Grigsby
25-Jan-2022 C Issued for Study S. Normandin P. Grigsby P. Grigsby
25-Jan-2022 D Issued for Study S. Normandin P. Grigsby P. Grigsby

 

     

 

 

TECHNICAL REPORT SUMMARY

CAROLINA LITHIUM PROJECT

 

 

 

Date and Signature

 

This Report entitled “Technical Report Summary of a Definitive Feasibility Study of the Carolina Lithium Project in North Carolina”, issue date January 25, 2022 was prepared and signed by the following Authors:

 

 

 

 

Leon McGarry, P. Geo.

 

January 25, 2022

 

McGarry Geoconsulting Corp.

 

 

 

 

 

Kevin Andrews, CPG

 

January 25, 2022

 

Marshall, Miller & Associates.

 

 

 

 

Dr. Steven Keim,

 

January 25, 2022

 

Marshall, Miller & Associates.

 

 

 

Dr. Jarrett Quinn, P.Eng.

 

January 25, 2022

 

18605-REP-GE-002

Page | 2
 

 

TECHNICAL REPORT SUMMARY

CAROLINA LITHIUM PROJECT

 

 

 

Primero Americas Inc.

 

  

 

 

Andrew Siemon,

 

January 25, 2022

 

Primero Americas Inc.

 

 

 

 

Stephane Normandin, P. Eng

 

January 25, 2022

 

Primero Americas Inc.

 

18605-REP-GE-002

Page | 3
 

 

TECHNICAL REPORT SUMMARY

CAROLINA LITHIUM PROJECT

 

 

 

Table of Contents

 

1   Executive Summary 14
1.1      Property Description 14
1.2      Accessibility, Climate, Local Resources, Infrastructure and Physiography 14
1.3      History 15
1.4      Geological Settings, Mineralization and Deposit 15
1.5       Exploration 15
1.6      Sample Preparation, Analysis and Security 16
1.7      Data Verification 16
1.8      Metallurgical Testing and Mineral Processing 16
1.9      Mineral Resources Estimates 19
1.10   ore Reserve Estimates 19
1.11   Mining Methods 20
1.12   Processing and Recovery Methods 21
1.13   Infrastructure 22
1.14   Market Analysis 23
1.15   Environmental Studies and Permitting 24
1.16   Capital and Operating Costs 25
1.17   Economic Model and Sensitivity Analysis 27
1.18   Interpretation and Conclusions 29
1.19   Recommendations 30
2   Introduction 32
2.1     Declaration 32
2.2     Study Participants and Responsibilities 33
2.3     Abbreviations, Acronyms and Units of measure 34
2.4     Background 35
2.5     Scope of Work 35
3   Property Description 39
3.1     Location 39
3.2     Titles, Claims or Leases 39
3.3     Mineral Rights 41
3.4     Encumbrances 41
3.5     Other Risks 42
4   Accessibility, Climate, Local Resources, Infrastructure and Physiography 42
4.1     Topography, Elevation, and Vegetation 42

 

18605-REP-GE-002

Page | 4
 

 

TECHNICAL REPORT SUMMARY

CAROLINA LITHIUM PROJECT

 

 

 

4.2       Access and Transport 42
4.3       Proximity to Population Centers 42
4.4       Climate and Length of Operating Season 42
4.5       Infrastructure 42
5   History 43
5.1       Previous Lithium Mining in the Region 43
5.2       Previous Exploration 43
6   Geological Settings, Mineralization and Deposit 44
6.1       Regional, Local and Property Geology 44
6.2       Mineralization 46
6.3       Alteration 47
6.4       Deposits 48
7   Exploration 51
7.1       Nature and Extent of Exploration 51
7.2       Non-Drilling Procedures and Parameters 54
7.3       Drilling Procedures 54
7.4       Hydrology and Hydrogeology 55
7.5       Geotechnical Data 55
8   Sample Preparation, Analysis and Security 55
8.1       Sample Collection and Security 55
8.2       Sampling Technique and Sample Preparation 56
8.3       QA/QC Controls 57
9   Data Verification 59
9.1       Procedures of Qualified Person 59
9.2       Limitations 59
9.3       Opinion of Qualified Person 59
10   Mineral Processing and Metallurgical Testing 60
10.1     Sample Selection 60
10.2     Sample Characterization 62
10.4     Heavy Liquid Separation (HLS) 64
10.5     Reflux Classifier 68
10.6     Dense Media Separation (DMS) 69
10.7     Mica and Spodumene Flotation 73
10.8     Overall Spodumene Mass Balances (DMS and Flotation) 80
10.9     Feldspar and Quartz Concentration Testwork 84
10.10   Overview – Lithium Hydroxyde Pilot Plant 86

 

18605-REP-GE-002

Page | 5
 

 

TECHNICAL REPORT SUMMARY

CAROLINA LITHIUM PROJECT

 

 

 

10.11   Concentrate Calcination 86
10.12   Soda Ash Leaching 87
10.13   Cold Conversion 88
10.14   Secondary Conversion 89
10.15   Ion Exchange 89
10.16   Pre-Evaporation and First-Stage Lithium Hydroxide Crystallization 90
10.17   Mother Liquor Carbonation 91
10.18   Second-Stage Lithium Hydroxide Crystallization 91
11   Mineral Resource Estimates 92
11.1     Assumptions, Parameters and Methods 92
11.2     Block Model Validation 107
11.3     Classification 112
11.4     Reasonable Prospects for Economic Extraction 116
11.5     Qualified Person’s Mineral Resource Estimates 118
11.6     Qualified Person’s Opinion 119
12   Ore Reserve Estimates 119
12.1     Assumptions, Parameters and Methodology 119
12.2     Qualified Person’s Estimates 125
12.3     Qualified Person’s Opinion 125
13   Mining Methods 126
13.1     Pit Slope Geotechnical Assessment 126
13.2     Hydrogeological Assessment 129
13.3     Production Rates 129
13.4     Mining Related Requirements 131
13.5     Required Equipment and Personnel 131
13.6     Mine Infrastructure 133
13.7     Mine Plan 136
14   Processing and Recovery Methods 138
14.1     Concentrator 138
14.2     Lithium Hydroxide Conversion Plant Description 142
14.3     Concentrator 147
14.4     Lithium Hydroxyde Conversion Plant 155
14.5     Plant Layout 162
15   Infrastructure 168
15.1     Spodumene concentrator 168
15.2     Lithium Hydroxyde Conversion Plant 171

 

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15.3   Waste Disposal Area 173
16   Market Studies 176
16.1   Marketing 176
16.2   Marketing Strategy 176
16.3   Product Pricing 177
16.4   By-Products 180
17   Environmental Studies and Permitting 180
17.1   Environmental, Sustainability and Governance 180
17.2   Permitting 181
18   Capital and Operating Costs 182
18.1   Capex Basis of Estimates 182
18.2   Project Integrated Capex 189
18.3   Opex Basis of Estimate 190
18.4   Mining Opex 190
18.5   Concentrator Opex 190
18.6   Conversion Plant Opex 196
19   Economic Model And Sensitivity Analysis 200
19.1   Economic Model 200
19.2   Sensitivity Analysis 201
19.3   Technical Assumptions 202
19.4   Financial Model and Cashflow 203
19.5   Sensitivity Analysis 204
20   Adjacent Properties 206
21   Other Relevant Data and Information 207
21.1   Project Implementation 207
21.2   Organization 212
22   Interpretation and Conclusions 215
22.1   Mineral Resource 215
22.2   Mining 217
22.3   Metallurgy Testing 217
22.4   Recovery Methods 219
22.5   Risk & Opportuny Evaluation 220
23   Recommendations 222
23.1   Mineral Resource 222
23.2   Mining 222
23.3   Metallurgy Testing / Recovery Methods 223

 

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23.4   Project Infrastructure / Layout 223
24   References 224
24.1   Geology 224
24.2   Mining and geotechnical 226
24.3   Metallurgical Testwork 226
25   Reliance on Information Provided by the Registrant 226

 

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LIST OF TABLES

 

Table 1-1 - Project Main Production Values 14
Table 1-2 - Summary of Lithium Mineral Resources as of October 20, 2021 Based on US$15,239/t LiOH·H2O 19
Table 1-3 - Estimate of Ore Reserves (undiluted) 19
Table 1-4 - Mining Plan Summary (diluted) 21
Table 1-5 - Price Forecasts for Battery-Grade Lithium Hydroxide ($/tonne) 24
Table 1-6 – Project Capex Summary 25
Table 1-7 – Spodumene Processing Plant Opex Summary 26
Table 1-8 – By-Products Processing Plant Opex Summary 26
Table 1-9 – Conversion Plant Opex Summary 26
Table 1-10 - Project Economics Summary 27
Table 1-11 – Economic Indicator Summary 27
Table 2-1 - Report Contributors 33
Table 2-2 – Abbreviations, Acronyms and Units of Measure 34
Table 3-1 - Summary of land agreement type and acreage for all PLL properties 40
Table 6-1 - Average Compositional Mineral Proportions for Spodumene-bearing Pegmatites 46
Table 7-1:  Core Drilling Campaigns and Historical Data Included in the Core Property MRE 51
Table 7-2 - Core drilling campaigns and historical data included in the Central Property MRE 51
Table 7-3 - Core drilling campaigns and historical data included in the Huffstetler Property MRE 52
Table 10-1 - Variability Sample Description 60
Table 10-2 - Semi-quantitative mineralogy of the variability pegmatite samples 62
Table 10-3: Semi-quantitative mineralogy of the variability host rock samples 62
Table 10-4: Semi-quantitative mineralogy of the variability (composite) samples 63
Table 10-5: Dilution and estimated lithium content in spodumene for each variability samples 63
Table 10-6: Variability sample assays 63
Table 10-7 -Variability grindability results 64
Table 10-8 - Combined Stage HLS results with magnetic separation – Grades and recoveries 67
Table 10-9 - Combined Global HLS results with magnetic separation – Grades and recoveries 67
Table 10-10 - Reflux Classifier testwork results 68
Table 10-11: Example mineralogy from Reflux Classifier testing (EE_LG) 69
Table 10-12 - Combined global DMS mass and elemental balances (E_EF1, E_EF2, E_S, E_LF) 70
Table 10-13: Combined global combined DMS mass and elemental balances (E_LG, EE_HG, EE_LG, S_F) 71
Table 10-14: Global combined DMS Mass and elemental balances (Variability samples S_S) 72
Table 10-15 - Batch flotation test reagent dosages 73
Table 10-16 - Batch flotation test results (Variability samples E_EF1, E_EF2, E_S, and E_LF) 75
Table 10-17: Batch flotation test results (Variability samples E_LG, E_HG, and EE_LG) 76
Table 10-18: Batch flotation test results (Variability samples S_F, and S_S) 77
Table 10-19 - LCT reagent dosages 78
Table 10-20 - Projected LCT mass balances 79
Table 10-21 - Overall spodumene mass balances (DMS and flotation) for each variability sample 81
Table 10-22 - Batch feldspar flotation and quartz concentrate production test conditions 84
Table 10-23: Batch feldspar flotation and quartz concentrate production testwork results 85
Table 10-24: Calcined spodumene concentrate assays 87
Table 11-1 - Li2O Histograms and Statistics by Property Area 96
Table 11-2 - Quartz Histograms and Statistics by Property Area 97
Table 11-3 - Albite histograms and statistics by property area 98
Table 11-4 - K-spar Histograms and Statistics by Property Area 98
Table 11-5 - Muscovite histograms and statistics by property area 99

 

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Table 11-6:  MRE Dry Bulk Density Values (t/m3) 103
Table 11-7: Block Model Parameters 104
Table 11-8:  Search parameters 105
Table 11-9:  Search Ellipse Parameters 106
Table 11-10:  Comparison of Means for Major Core Property MRE Domains 108
Table 11-11:  Comparison of means for Central Property MRE domains 109
Table 11-12:  Comparison of means for Huffstetler Property MRE domains 109
Table 11-13:  Comparison of correlation coefficients for Core assay and block data 111
Table 11-14:  Comparison of correlation coefficients for Central assay and block data 111
Table 11-15:  Comparison of correlation coefficients for Huffstetler assay and block data 111
Table 11-16:  Sources of Uncertainty 112
Table 11-17:  Classification Criteria and Justification 113
Table 11-18  Market Forecasts and Basket Pricing for By-Products - US$/t (Piedmont, 2021a) 117
Table 11-19. Piedmont Whittle Resource Constraining Pit Shell Parameters 117
Table 11-20:  Summary of Lithium Mineral Resources at October 20, 2021 Based on US$15,239 /t LiOH·H2O 118
Table 11-21:  Summary of Quartz, Feldspar, and Mica Mineral Resources as of October 20, 2021 119
Table 12-1: Optimization Results-Annual Production Schedule 121
Table 12-2:  Optimization Parameters by Input Group 123
Table 12-3:  Carolina Lithium Project – Estimate of Ore Reserves (undiluted) 125
Table 13-1: Geotechnical Rock Lab Test Results 126
Table 13-2: General Pit Wall Orientations for Proposed Pits 127
Table 13-3 - Production Schedule 130
Table 13-4:  Mobile Equipment Fleet 132
Table 13-5:  Initial Site Development Cost Summary 133
Table 14-1 – Concentrate Key Design Criteria 148
Table 14-2 – Reagent and Consumables Summary 153
Table 14-3 – Chemical Plant Basis of Design 155
Table 15-1 - Non-Process Buildings 172
Table 15-2:  Parameters Utilized for Waste Disposal Stability Analysis 174
Table 16-1 – Market forecasts and basket pricing for by-products (US$/t) 179
Table 17-1 – List of Completed Environmental Background Studies for the Project 180
Table 18-1 - Capex Estimate Definition of Terms 182
Table 18-2 - Contingency Requirements 188
Table 18-3 - Currency Conversion 189
Table 18-4 – Integrated Project Capex 189
Table 18-5 – Mining and Geology Labor 190
Table 18-6 – Spodumene Processing Plant OPEX Summary 191
Table 18-7 – By-Products Processing Plant OPEX Summary 191
Table 18-8 – Concentrator Labor Breakdown 192
Table 18-9 – Concentrator Reagent Consumption and Annual Cost 193
Table 18-10 – Site-Wide General and Administration Costs 195
Table 18-11 – Chemical Conversion Plant OPEX Summary 196
Table 18-12 – Chemical Labor Breakdown 197
Table 18-13 Chemical Reagent Consumption and Annual Cost 198
Table 19-1 Project Economics Summary 200
Table 19-2 Project Cash Flow and Profitability Summary 200
Table 22-1 - Technical Risks – Number of risk items and ranking proportions 220
Table 22-2 - Project Risks – Number of risk items and ranking proportions 220
Table 22-3 - Operation Risks – Number of risk items and ranking proportions 220

 

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Table 22-4 - Geology Risks – Number of risk items and ranking proportions 221
Table 22-5 - Geology Risks – Number of risk items and ranking proportions 221
Table 22-6 - Environmental Risks – Number of risk items and ranking proportions 221
Table 22-7 – Summary of safeguards and recommendations for the risk elements ranked High 221

 

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LIST OF FIGURES

 

Figure 1-1 - Proposed Carolina Lithium Project block flow diagram 18
Figure 1-2 - Site plan for the Carolina Lithium Operations 22
Figure 1-3 - Spodumene and Byproducts Concentrator (LiOH Conversion Plant in background) 23
Figure 1-4 - 3D model of the Lithium Hydroxide Conversion Plant 23
Figure 1-5 - Sensitivity Chart - After Tax NPV8 28
Figure 1-6 - Sensitivity Chart - After Tax IRR 29
Figure 3-1 - Carolina Lithium Project Location 39
Figure 3-2 - PLL Total Land Package 40
Figure 6-1 - Plan View of Core Property Lithology and Mineralized Pegmatite Dikes 45
Figure 6-2 - Stratigraphic Column – Carolina Lithium Project 46
Figure 6-3 - Examples of Holmquistite 47
Figure 6-4 - Pegmatite showing Pseudomorphs of Muscovite after Spodumene 47
Figure 6-5 - Cross section of Steep Dikes at Core B-G Corridor and S Corridor Connected by a Sill 49
Figure 6-6 - Cross Section of Steep Dikes at Core F Corridor Interconnected by Sills 49
Figure 6-7 - Cross Section of Steep Dikes at the Central Property 50
Figure 6-8 - Cross Section at the Huffstetler Property 50
Figure 7-1 - Extent of drilling at the Core property 52
Figure 7-2 - Extent of drilling at the Central property 53
Figure 7-3 - Extent of drilling at the Huffstetler property 53
Figure 10-1 - Location of drill core sample from the East pit to produce Variability samples 61
Figure 10-2 - Coarse fraction cumulative sinks grade – stage recovery curves 64
Figure 10-3 - Fines fraction cumulative sinks grade – stage recovery curves 65
Figure 10-4 - Coarse fraction cumulative sinks - recovery curves with magnetic separation 65
Figure 10-5 - Fines fraction HLS cumulative sinks grade - recovery curves with magnetic separation 66
Figure 10-6 - Batch flotation test grade-recovery curves 74
Figure 10-7 - Locked-cycle flotation flowsheet 78
Figure 10-8: Pilot plant flowsheet 86
Figure 10-9: Soda leaching filtrate solution assays 88
Figure 10-10: Cold conversion (CC) filtrate analysis 88
Figure 10-11: Secondary conversion filtrate assays 89
Figure 10-12: IX product solution assays 90
Figure 11-1 - Li2O % Grades in Spodumene-bearing Pegmatites 93
Figure 11-2 - Piedmont Orientation Domains with Associated Search Ellipse for Core Resource 101
Figure 11-3 - Domains with Search Ellipse for Central Resource (left) and Huffstetler Resource (right). 102
Figure 11-4 - Validation Plots for the B_S_20 Domain 110
Figure 11-5 - Classified Block Distances from Drill Hole 114
Figure 11-6 - Carolina Lithium Property Mineral Resource Classification 115
Figure 12-1 - Optimization Scenario Total Process and Dump Production Tonnes 122
Figure 12-2 - Core Property Optimized Pits (orebody shown in yellow) 122
Figure 12-3 - Optimization Geometric Parameters 124
Figure 13-1 - General Pit Wall Orientations 127
Figure 13-2 - Stereonet Representing Discontinuity Patterns Identified in Project Area 128
Figure 13-3 - Plant Pad Design Including Concentrator and ROM pad 134
Figure 13-4 - Internal Haulage Road Network 135
Figure 13-5 - Explosives Magazine Grading Plan 136
Figure 13-6 - Mine Conveyor Profile 137
Figure 14-1 - Simplified Flow Sheet for Piedmont Carolinas Inc. (prepared by Primero, 2021) 138

 

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Figure 14-2 - Chemical Conversion Plant - High Level (M:O) Summary 143
Figure 14-3 – Crystallizer Circuit Summary Flowsheet 147
Figure 14-4 – Concentrator Global Mass Balance 151
Figure 14-5 – Concentrator Global Water Balance 152
Figure 14-6 - Conversion Plant Global Mass Balance 157
Figure 14-7 – Conversion Plant Global Water Balance 158
Figure 14-8 – Integrated Manufacturing Campus Site Plan 164
Figure 14-9 - Process Plant Layout 166
Figure 14-10 - Lithium Converter Plant Layout 167
Figure 16-1 - Lithium hydroxide supply demand forecast 176
Figure 16-2 - Battery Grade (“BG”) lithium hydroxide pricing 177
Figure 16-3 - Current Battery Plants Operating, Under Construction or Announced in the USA 178
Figure 16-4 - LiOH Demand for Select USA Giga-Factories 178
Figure 19-1 - After Tax Cash Flow Analysis 203
Figure 19-2 - Sensitivity Analysis After-Tax NPV8 204
Figure 19-3 - Sensitivity Analysis After-Tax IRR 205
Figure 21-1 - The IPMT organizational structure chart 207
Figure 21-2 - Project Schedule 210

 

Appendix

 

Qualified Person Consent Forms  

 

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1 Executive Summary

 

Piedmont Lithium Inc. (PLL) contracted with Primero Group Americas Inc. (Primero) to develop a Definitive Feasibility Study (DFS) for their Carolina Lithium Project (Project) near Charlotte, NC, including a spodumene mine, a spodumene concentrator and a lithium hydroxide (LiOH) conversion plant to convert the spodumene concentrate (SC6) into lithium hydroxide monohydrate (LiOH·H2O).

 

Since the Scoping Study Update report in September 2021 (internal ref no. 18602-REP-GE-001), the study scope has been adjusted and enhanced with the key production values presented in Table 1-1. Note, all references to mass within the report are metric units.

 

Table 1-1 - Project Main Production Values

 

Production Target Value Units
ROM (ore) 1.95 Mt/y
SC6 242,000 t/y
LiOH 30,000 t/y
Quartz by-product 252,000 t/y
Feldspar by-product 392,000 t/y
Mica by-product 28,000 t/y

 

With the assistance of Minviro, PLL conducted a Life Cycle Analysis (LCA) of the project with the following main recommendations that are included in the study:

 

LiOH Conversion Plant including an alkaline pressure leach technology;

By-Product (Quartz, Feldspar and Mica) plant recovery and handling facility for commercialization;

Electric powered conveyors eliminate mine trucks, reduce noise, dust and diesel-based CO2 emissions;

On-site solar complex to power concentrate operations.

 

These project enhancements are supported by the delineation and increase of the Mineral Resources made possible by additional exploration work and metallurgical testwork. The key highlights are listed below.

 

1.1 Property Description

 

The Project is located in a rural area of Gaston County, North Carolina, USA approximately 40 km northwest of the city of Charlotte. The Property is centered at approximately 35°23’20”N 81°17”20”W and is comprised of approximately 3,245 total acres, of which: 1,526 acres are claims on private property through option or deferred purchase agreements, 113 acres are under a long-term mineral leased agreement, 79 acres are under lease to own agreements, and 1,527 acres are owned by PLL. For the properties hosting the MREs in this report, PLL controls 100% of the surface and mineral rights per one or more of the agreement scenarios described above.

 

1.2 Accessibility, Climate, Local Resources, Infrastructure and Physiography

 

Topography of the area surrounding the Project is typical of the Piedmont Plateau characterized by relatively low, rolling hills. Several creeks bisect the property and are surrounded by flat, swampy floodplains that can extend up to 100 m away from the drainage channel. Surface elevations at the Project range from approximately 300 m above sea level in upland regions to approximately 220 m at stream level.

 

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The area surrounding the Property is considered rural with a mixture of cleared farmland and forest in the temperate broadleaf category. Vegetation, where present, is a combination of large trees with smaller underbrush and is easily traversable by foot.

 

General access to the Project is via a well-developed network of primary and secondary roads. Interstate highway I-85 lies 10 km to the south of the Project area and provides easy access to Charlotte Douglas International Airport 30 km to the east. A rail line borders the Property to the northwest. Transport links provide access to Charlotte, North Carolina’s largest city, within an hour’s drive from the Project. The Charlotte metropolitan region has a 2020 population of 2.66 million people.

 

1.3 History

 

The Project lies within the Carolina tin-spodumene belt. Mining in the belt began in the 1950’s with the Kings Mountain Mine, currently owned by Albemarle Corporation, and the Hallman-Beam mine near Bessemer City, currently owned by Martin Marietta Corporation. Both former mines are located within approximately 20 km of the Project to the south, near Bessemer City and Kings Mountain, respectively. Portions of the Project area were explored and excavated to shallow depths in the 1950’s as the Murphy-Houser mine, owned by the Lithium Corporation of America (predecessor to Livent) (Cooley, 2010).

 

In 2009, Vancouver based North Arrow Minerals Inc. (“North Arrow”) commenced exploration at the property. Extensive geological mapping outlined over 37 spodumene-bearing pegmatite dikes at the Core Property and confirmed localized historical trenching of these dikes by Lithium Corporation of America (Cooley, 2010). North Arrow completed 19 diamond drillholes in 2009/2010. North Arrow subsequently terminated all their property agreement soon thereafter.

 

In 2016, Piedmont (formerly WCP Resources Limited) began optioning surface and mineral rights at the property. Piedmont commenced a renewed exploration effort at the Project.

 

1.4 Geological Settings, Mineralization and Deposit

 

Within the Project, spodumene-bearing pegmatites are hosted in amphibolite and metasedimentary host rocks. Pegmatites range from fine-grained (aplite) to very coarse-grained with primary mineralogy consisting of spodumene, quartz, plagioclase, potassium-feldspar (K-spar) and muscovite. Bench-scale and pilot-plant scale metallurgical test work on pegmatites within the Mineral Resource model demonstrate that lithium occurs almost exclusively within spodumene and that concentrates of greater than 6.0% Li2O were achievable with an iron content less than 1.0% Fe2O3. Quartz, feldspar, and mica concentrates were produced as by-products of the spodumene concentrate. Initial results demonstrate commercial potential for each by-product.

 

1.5 Exploration

 

Between 2017 and 2021, PLL completed five phases of exploratory drilling that has defined the Mineral Resources presented in this report. The current Mineral Resource block models were prepared using all drilling data available on 3 August 2021.

 

A total of 542 core holes amounting to 80,029 meters (m) define the Core Property deposit. As of the cut-off date, 511 assayed drillholes intersect 76 interpreted mineralized pegmatite bodies. A total of 36 diamond core holes totaling 5,563 m define the Central Property deposit, with 31 holes intersecting 11 interpreted mineralized pegmatite bodies. A total of 14 diamond core holes totaling 2,151 m define the Huffstetler Property deposit, with 11 holes intersecting six interpreted mineralized pegmatite bodies.

 

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1.6 Sample Preparation, Analysis and Security

 

Diamond drill core was cut in half with a diamond saw. Standard sample intervals were a minimum of 0.35 m and a maximum of 1.5 m for both HQ and NQ drill core, taking into account lithological boundaries (i.e., sampled to, and not across, major contacts).

 

Samples were numbered sequentially with no duplicates and no missing numbers. Triple tag books using nine-digit numbers were used, with one tag inserted into the sample bag and one tag stapled or otherwise affixed into the core tray at the interval the sample was collected. Samples were placed inside pre-numbered sample bags with numbers coinciding to the sample tag.

 

Drill core samples and surface rock samples were shipped directly from the core shack by the project geologist in sealed rice bags or similar containers using a reputable transport company with shipment tracking capability to maintain chain of custody. Each bag was sealed with a security strap with a unique security number. The containers were locked in a shed if they were stored overnight at any point during transit, including at the drill site prior to shipping. The laboratory confirmed the integrity of the rice bag seals upon receipt.

 

1.7 Data Verification

 

MGG’s QP Leon McGarry visited the site on several occasions. Visual validation of mineralization against assay results was undertaken for several holes. Verification core samples were collected by Leon McGarry.

 

All drill hole data was imported into Micromine™ software version 15.08. Validation of the data was then completed which included checks for:

 

Logical integrity checks of drillhole deviation rates;

Presence of data beyond the hole depth maximum;

Overlapping from-to errors within interval data.

 

Visual validation checks were also made for obviously spurious collar coordinates or downhole survey values.

 

Sufficient data have been obtained through various exploration and sampling programs to support the geological interpretations at the Property. The data are of sufficient quantity and reliability to reasonably support the lithium resource estimates in this TRS.

 

1.8 Metallurgical Testing and Mineral Processing

 

1.8.1 Concentrate Metallurgy

 

In 2019, Piedmont engaged SGS Canada Inc. in Lakefield, Ontario to undertake testwork on variability and composite samples. Dense Medium Separation (“DMS”) and locked-cycle flotation tests produced high-quality spodumene concentrate with a grade above 6.0% Li2O, iron oxide below 1.0%, and low impurities from composite samples. The feed grade of the composite sample was 1.11% Li2O.

 

In 2020, a pilot plant testwork program was undertaken at SGS Canada Inc. A 54-t bulk outcrop sample from the Carolina Lithium Project was processed through a DMS and flotation pilot plant. Using the optimized results from the flotation pilot plant, the combined DMS and flotation concentrates graded >6% Li2O and <1% Fe2O3 with lithium recoveries >70%. Optimized testing on the master composite sample resulted in lithium recovery of 82% and concentrate grading 6.13% Li2O.

 

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In 2021, Piedmont engaged SGS Canada Inc. in Lakefield, Ontario to undertake testwork on nine variability samples. Samples were produced from drill core from the East and South pits and represented the early years of production (i.e., the first 10 years of operation). The samples generally contained elevated levels of host rock dilution (ranging from 9.4% to 17.3%) as compared to the mine plan average (10%). DMS and batch and locked-cycle flotation tests were undertaken. Based on the historical testwork and the 2021 variability program, the DFS assumes a spodumene recovery of 77.0% when targeting a 6.0% Li2O spodumene concentrate product.

 

1.8.2 By-Product Metallurgy

 

The production of bulk quartz and feldspar concentrates as by-products from the spodumene locked-cycle flotation tailings was investigated. Six individual batch tests were conducted with the quartz and feldspar concentrates being composited.

 

Piedmont engaged North Carolina State University’s Minerals Research Laboratory in 2018 to conduct bench-scale testwork on samples obtained from the Company’s MRE within the Core Property for by-products quartz, feldspar, and mica. The objective of the testwork program was to develop optimized conditions for spodumene flotation and magnetic separation for both grade and recovery.

 

Mica quality is measured by its physical properties including bulk density, grit, color/brightness, and particle size. The bulk density of mica by-product generated from Piedmont composite samples was in the range of 0.680 - 0.682 g/cm3.

 

The National Gypsum Grit test is used mostly for minus 100 mesh mica which issued as joint cement compound and textured mica paint. Piedmont sample grit results were in the range of 0.70 - 0.79%, well below the typical specification for total grit in mica of 1.0%. Color/brightness is usually determined on minus 100 mesh material. Several instruments are used for this determination including the Hunter meter, Technedyne and the Photovoltmeter. The green reflectance is often reported for micas and talcs. Piedmont Green Reflectance results were in the range of 11.2 - 11.6.

 

Quartz and feldspar concentrates were produced during the 2021 Variability program at SGS Canada Inc. Batch flotation tests were operated to produce feldspar concentrate with the flotation tailings were passed through wet high-intensity magnetic separation to produce quartz concentrate.

 

1.8.3 Conversion Metallurgy

 

In 2021, Piedmont engaged Metso:Outotec to undertake pilot plant testwork using their proprietary Lithium Hydroxide Process. The spodumene concentrate sample used was produced during concentrator pilot plant operation in 2020. The spodumene concentrate was calcined by Metso:Outotec at their laboratory in Oberursel, Germany. The calcined concentrate was then sent to Metso:Outotec Research Center in Pori, Finland for hydrometallurgical testing.

 

The pilot plant flowsheet tested included: soda leaching, cold conversion, secondary conversion, ion exchange, and lithium hydroxide crystallization. The pilot plant operated for approximately 10 days. Roughly 100 kg of calcined spodumene concentrate was fed to the pilot plant. The average total lithium extraction achieved in soda leaching and cold conversion was 89% during the first 136 h of operation. Process recycles were incorporated in the pilot plant with no significant accumulation of impurities in the process. First stage lithium hydroxide crystallization was operated continuously during the pilot plant. Second stage crystallization was operated in batches after the completion of the continuous pilot plant. Impurities levels in the final battery-quality lithium hydroxide monohydrate product were typically low with Al <10 ppm, Ca <10 ppm, Fe <20 ppm, K <10 ppm, and Si <40 ppm. All other metal impurities were below detection limits.

 

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1.8.4 Process Design

 

The concentrator process design is based on historical testwork including the 2021 variability testwork program. Lithium hydroxide manufacturing process design is based on pilot plant results and Metso:Outotec experience. The simplified process flow diagram for the Project is shown in Figure 1-1.

 

 

 

Figure 1-1 - Proposed Carolina Lithium Project block flow diagram

 

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1.9 Mineral Resources Estimates

 

MRE for the project, representing in-situ lithium-bearing pegmatites, are reported below in accordance with the U.S. Securities and Exchange Commission (SEC) Regulation S-K 1300 standards and are therefore suitable for public release. Global lithium MRE for the Project are reported by classification in Table 1-2.

 

Table 1-2 - Summary of Lithium Mineral Resources as of October 20, 2021 Based on US$15,239/t LiOH·H2O

 

Mineral Resource Category Tonnes (Mt) Grade (Li2O%) Li2O   (kt) LCE    (kt) LiOH·H2O (kt) Cut-Off Grade (% Li2O) Metallurgical Recovery1
Indicated 28.2 1.11 313,000 774,000 879,000 0.4 71.2
Inferred 15.9 1.02 162,000 401,000 455,000
Total 44.2 1.08 475,000 1,175,000 1,334,000
Note 1 – Overall metallurgical recovery from spodumene ore to lithium hydroxide monohydrate

 

Lithium MRE include tonnage estimates for lithium oxide (Li2O), Lithium Carbonate Equivalent (LCE) whereby one tonne of Li2O is equivalent to 2.473 tonnes LCE, and lithium hydroxide mono-hydrate (LiOH·H2O) tonnage whereby one tonne of Li2O is equivalent to 2.81 tonnes LiOH·H2O.

 

By-product MRE for the Project incorporates Indicated and Inferred category resources totaling 12.99 Mt of quartz, 20.00 Mt of feldspar and 1.82 Mt of mica. Lithium and by-product MRE are reported above a 0.4% Li2O cut-off grade and are current to October 20, 2021. MRE are based on appropriate recovery factors and a lithium hydroxide price of US$15,239 per metric tonne and by-product mineral basket price of US$79.50 for calendar year 2021.

 

1.10 ore Reserve Estimates

 

An estimate of Ore Reserves was made following detailed mine planning and based on the Indicated Mineral Resources contained within the Project’s Core Property. The Ore Reserves have been estimated in accordance with the requirements of S-K 1300 and the JORC Code. Table 1-3 show the Ore Reserve Classification.

 

Table 1-3 - Estimate of Ore Reserves (undiluted)

 

Ore Reserves Category

Tonnes

(Mt)

Grade 

(Li2O%)

Li2O 

(t)

LCE

(t)

LiOH·H2O

(t)

Cut-Off Grade (% Li2O)

Metallurgical Recovery

(%)1

Proven - - - - - 0.4 70.1
Probable 18.26 1.10 200,000 495,000 562,000
Total 18.26 1.10 200,000 495,000 562,000

Note 1 - The metallurgical recovery of ore reserves is based on 77% recovery of ore to spodumene concentrate, and 91% metallurgical recovery of SC6 to battery quality lithium hydroxide as reported in this announcement.

 

The Probable Ore Reserves have been estimated and based on the consideration of pertinent modifying factors, inclusive of geological, environmental, regulatory, and legal factors, in converting a portion of the Mineral Resources to Ore Reserves. All converted Mineral Resources were classified as Probable Ore Reserves. There were no Measured Mineral Resources defined that could be converted into Proven Ore Reserves and no Inferred Mineral Resources were included in the estimation of Ore Reserves. Cutoff grade of 0.4% Li2O was used in creation of the block model.

 

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TECHNICAL REPORT SUMMARY

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An open pit mining method was selected due to the ore body outcropping in several places along the surface. No other mining method was evaluated as part of the Ore Reserves estimation. Mine design parameters include overburden batter angle in unconsolidated material of 27 degrees, face batter angle of 75 degrees, inter-ramp slope of 57 degrees, overall slope of 51 degrees, berm width of 9.5 meters, berm height working 12 meters, berm height final wall of 24 meters, ramp width of 30 meters, ramp grade of 10%, mine dilution of 10%, process recovery for spodumene concentrate of 77%, and minimum mining width of 50 meters.

 

Operating costs were established using budget pricing from mining contractors based on a request for proposal issued by Marshall Miller and Associates combined with first principles estimates for utilities including electrical service from Duke Energy. Royalties of $1.00 per ROM tonne are based on the average land option agreement.

 

1.11 Mining Methods

 

Pit optimizations were completed by Marshall Miller & Associates in order to produce a production schedule on a quarterly basis for the first five years of operations and on an annual basis thereafter. This resulted in a total production target of approximately 2.56 Mt of 6.0% Li2O spodumene concentrate (“SC6”), averaging approximately 242,000 t/y of SC6 over the 11-year ore reserve life. This equates to a steady state average of 1.90 Mt/y of ore processed, totaling approximately 20.1 Mt of run-of-mine (“ROM”) ore at an average fully diluted ROM grade of 1.0% Li2O (diluted) over the 11-year ore reserve life.

 

The concentrate operations production life is 11 years (matching ore reserves) and chemical plant operations life is 30 years, commencing in year 1 of the Project. It is assumed that concentrate operations including by-products will commence about 90 days in advance of chemical plant start-up to build initial SC6 inventory. Produced SC6 which exceeds chemical plant capacities are assumed to be sold to third parties during the life of the Project. Of the total production target of 2.56 Mt of SC6, approximately 0.56 Mt will be sold to third parties during the operational life and approximately 2.0 Mt will be supplied to Piedmont’s chemical plant operations for conversion into lithium hydroxide.

 

The Study assumes production targets of 2.68 Mt of quartz concentrate, 4.17 Mt of feldspar concentrate, and 0.30 Mt of mica concentrate over the life of operations based on the potential recovery of these products from the concentrator flotation circuits and the Company’s analysis of domestic industrial minerals markets and engagement with prospective customers.

 

Two specialized programs, Maptek Vulcan and Evolution, were used to generate a series of economic pit shells using the updated Mineral Resource block model and input parameters as agreed by Piedmont. Overall slope angles in rock were estimated following a preliminary geotechnical analysis that utilized fracture orientation data from oriented core and downhole geophysics (Acoustic Televiewer), as well as laboratory analysis of intact rock strength. The preliminary geotechnical assessment involved both kinematic and overall slope analyses utilizing Rocscience™ modeling software.

 

Overall slope angles of 27 degrees were assumed for overburden and oxide material. Overall slope angles of 51 degrees were estimated for fresh material which includes a ramp width of 30 meters. Production schedules were prepared for the Project based on the following parameters:

 

A targeted run-of-mine production of 1.9 Mt/y targeting concentrator output of about 242,000 t/y of SC6

Mining dilution of 10%

Mine recovery of 100%

 

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TECHNICAL REPORT SUMMARY

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Concentrator processing recovery of 77%

Mine sequence targets utilized Proven and Probable reserves for the schedule

 

The results reported are based upon a scenario which utilizes extraction of Probable reserves. Table 1-4 shows the production target of the mining plan.

 

Table 1-4 - Mining Plan Summary (diluted)

 

Property

ROM Tonnes Processed

(Mt)

Waste Tonnes Mined

(Mt)

Stripping Ratio

(W:O t:t)

ROM Li2O Undiluted Grade (%) ROM Li2O Diluted Grade (%) Production Years

Tonnes of SC6

(Mt)

Core 20.09 232.52 11.58 1.10 0.996 1-11 2.57
Central 0 0 0 - - - 0
Huffstetler 0 0 0 - - - 0
Total 20.09 232.52 11.58 1.10 0.996 1-11 2.57
               
1.12 Processing and Recovery Methods

 

The processing operations are designed to produce saleable spodumene concentrate by Dense Media Separation (DMS) and flotation, at a concentration plant, and then to further refine the spodumene concentrate to produce a battery and technical grade lithium hydroxide monohydrate at a conversion facility. Additional saleable by-products are produced at the concentrator in unison with the spodumene concentrate; they include quartz, feldspar, and mica concentrates.

 

The concentrator circuit is supplied from an in-pit primary crush circuit, with the material being conveyed and stockpiled at the ROM pad. The ore is then upgraded through a series of dense media separation units, magnetic separation units and a flotation circuit, to separate the material of value (concentrates) from the various gangue minerals. The key process areas of the concentrator are listed as the following:

 

Secondary and tertiary crushing;

Dense Media Separation (DMS) circuit and magnetic separation;

Grinding and desliming;

Mica flotation;

Spodumene flotation;

Spodumene flotation concentrate dewatering and handling;

Flotation tailings dewatering and handling;

Feldspar flotation;

Spodumene concentrate dewatering and handling;

By-products (mica, feldspar, and quartz) concentrate dewatering and handling;

Process tailings dewatering and handling;

 

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TECHNICAL REPORT SUMMARY

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The lithium conversion plant, uses the Metso:Outotec proprietary technology, by converting the spodumene (LiAl(SiO3)2) into a lithium carbonate form and then into a soluble lithium hydroxide, to allow crystallization to the final lithium hydroxide monohydrate product. The solutions generated within the circuit are recirculated as much as possible to maintain lithium concentrations, recover as much lithium as possible, and reduce water requirements. The key process areas for the lithium conversion plant are listed as the following:

 

Spodumene Concentrate storage and transfer;

Calcination;

Grinding and Pulping;

Carbonate Leaching – High Pressure and Atmospheric;

Conversion (carbonate to hydroxide);

Lithium Hydroxide Crystallization and Product Drying;

Product Bagging Facility;

 

1.13 Infrastructure

 

A detailed site plan including mining operations, concentrate operations, lithium hydroxide manufacturing, overburden and waste rock disposal, by-product manufacturing and ancillary facilities was developed in connection with the Project’s mine permit application submitted in August 2021 (see Figure 1-2).

 

Navisworks models have been completed for the concentrate operations (see Figure 1-3) and conversion facility (see Figure 1-4) to a DFS level of detail.

 

IMG  

 

Figure 1-2 - Site plan for the Carolina Lithium Operations

 

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TECHNICAL REPORT SUMMARY

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IMG  

  

Figure 1-3 - Spodumene and Byproducts Concentrator (LiOH Conversion Plant in background)

 

 

IMG  

Figure 1-4 - 3D model of the Lithium Hydroxide Conversion Plant

 

1.14 Market Analysis

 

Benchmark Mineral Intelligence (“Benchmark”) reports that total battery demand will grow to 312 GWh in 2021 translating to 297kt of LCE demand in 2021, a growth of 41% over 2020 demand. Benchmark forecasts total demand in 2021 to be 430kt on an LCE basis.

 

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Benchmark further expects the market to remain in a structural deficit or the foreseeable future as demand gets a head-start on supply. In the near impossible scenario that all projects come online on time as planned and without any issues, the first surplus will not occur until 2025. Benchmark believes that in this extreme case, a surplus could only be expected to last a few years before demand forces the market into a large deficit without further new projects yet undiscovered or developed.

 

The Company analyzed Q4 2021 battery-grade lithium hydroxide and SC6 price forecasts from Benchmark, JPMorgan and Macquarie for the period 2022-2025 as well as price forecasts recently announced by other lithium project developers. Based on these and other data this Study assumes long-term pricing of $18,000/t for battery quality lithium hydroxide and $900/t for spodumene concentrate for the life of the project (see Table 1-5).

 

Table 1-5 - Price Forecasts for Battery-Grade Lithium Hydroxide ($/tonne)

 

Forecast 2022 2023 2024 2025
Benchmark Minerals $20,600 $26,200 $25,200 $20,900
JPMorgan $26,625 $22,500 $19,737 $18,420
Macquarie $21,275 $20,415 $18,545 $17,540

 

Piedmont is focused on establishing strategic partnerships with customers for battery grade lithium hydroxide with an emphasis on a customer base which is focused on EV demand growth in North America and Europe. Piedmont will concentrate this effort on these growing EV supply chains, particularly in light of the growing commitments of battery manufacturing by groups such as Ford, General Motors, Stellantis, Toyota, LGES, SK Innovation, Samsung SDI and others. Advanced discussions with prospective customers are ongoing.

 

1.15 Environmental Studies and Permitting

 

HDR Engineering has been retained by Piedmont to support permitting activities on the proposed Project.

 

In November 2019, the Company received a Clean Water Act Section 404 Standard Individual Permit from the US Army Corps of Engineers for the concentrate operations. The Company has also received a Section 401 Individual Water Quality Certification from the North Carolina Division of Water Resources. In connection with the 404 Permit an Environmental Assessment was completed for the Project which resulted in a Finding of No Significant Impact (“FONSI”).

 

The concentrate operations require a North Carolina State Mining Permit from the North Carolina Department of Environmental Quality (“NCDEQ”) Division of Energy, Mineral and Land Resources (“DEMLR”). The Company submitted a mine permit application to DEMLR on August 31, 2021. A public hearing in relation to the mine permit application was held on November 15, 2021. The Company has received additional information requests in connection with the mine permit application and responded to these information requests on December 15, 2021. The company expects to receive additional information requests in connection with its mine permit application and will respond to these requests in due course.

 

Piedmont previously received synthetic minor air permit from the NCDEQ Division of Air Quality (“DAQ”) for a proposed lithium hydroxide operation in Kings Mountain. The Company has held pre-application consultation meetings with Division of Air Quality in connection with the integrated Carolina Lithium Project. The Company plans to submit a determination letter to DAQ in January 2022 requesting concurrence with respect to the spodumene mining as the primary activity of the Carolina Lithium Project. The Company will proceed with an air permit application for the Carolina Lithium Project upon receipt of DAQ’s response to the determination letter request.

 

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TECHNICAL REPORT SUMMARY

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Carolina Lithium remains subject to local rezoning and permit requirements. Piedmont remains in pre-application consultation with Gaston County at this time. A rezoning application will follow receipt of a state mining permit. The Company will apply for a special use permit required under the Gaston County UDO upon completion of the rezoning process.

 

The list of background environmental studies undertaken in connection with the Project’s permit applications is listed in Section 17.1 of this report.

 

This Study assumes that the operations will be progressively reclaimed in accordance with the Company’s mine permit application submitted in August 2021. An estimate of $16.6 M in alkaline amendment costs and $19 M in closure costs have been included in the sustaining capital for mine reclamation expenses.

 

1.16 Capital and Operating Costs

 

Table 1-6 highlights the total estimated capital expenditures for the Project. Variable contingency is included and has been applied to project costs based on the level of engineering definition completed and the confidence level of supplier and contractor quotations. The capital cost estimate has a ±15% accuracy and is based on Q4 2021 costs.

 

Table 1-6 – Project Capex Summary

 

Capex (mm $)

Direct

Indirect

Grand Total

Area Sub-Area
Concentrator Operations      
  1100 - Mining 99.5   99.5
  1200 - Processing Plant 220.3   220.3
  1300 - Site Infrastructure 14.8   14.8
  1400 - Waste Rock 6.0   6.0
  Sub Total - Concentrator Operations 340.5   340.5
Lithium Hydroxide Operations      
  2200 - Overland Network 19.4   19.4
  2400 - LiOH Plant 431.3   431.3
  2900 - Site Infrastructure - LiOH Plant 13.7   13.7
  Sub Total - Lithium Hydroxide Operations 464.3   464.3
Indirect Costs      
  6100 - Concentrator Indirects   44.0 44.0
  6200 - Lithium Hydroxide Indirects   65.1 65.1
  Sub-Total - Indirect Costs   109.1 109.1
Owners Cost, Pre-production & Working Capital      
  8100 - Owners Cost   73.6 73.6
  Sub-Total - Owners Cost, Pre-production & Working Capital   73.6 73.6
Grand Total     987.6

  

The deferred, working and sustaining capital is estimated at $351 M.

 

The operating cost estimate was prepared in detail for the Spodumene and By-Product processing plants. They are presented in Table 1-7 and Table 1-8 respectively. The conversion plant opex is based on producing 30,000 t/y of lithium hydroxide monohydrate. Table 1-9 summarizes the estimated average operating costs for lithium hydroxide production over the life of mining operations and when using third-party spodumene concentrate.

 

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TECHNICAL REPORT SUMMARY

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Table 1-7 – Spodumene Processing Plant Opex Summary

 

Cost Center Total Cost
US$/year US$/t ore US$/t spod conc.
Labor (Process) $8,657,990 $4.56 $35.68
Operating Consumables and Reagents $8,951,905 $4.72 $36.89
Power $3,938,852 $2.08 $16.23
Maintenance Supplies $1,059,145 $0.56 $4.36
Mobile Equipment $593,367 $0.31 $2.45
Concentrate transport - - -
Laboratory $164,679 $0.09 $0.68
Water Treatment $790,986 $0.42 $3.26
General & Administration $507,349 $0.27 $2.09
Total $24,664,273 $13.00 $101.64

 

Table 1-8 – By-Products Processing Plant Opex Summary

 

Cost Center Total Cost
US$/year US$/t ore US$/t spod conc.
Labor (Process) $2,364,205 $1.25 $9.74
Operating Consumables and Reagents $5,388,051 $2.84 $22.20
Power $1,545,785 $0.81 $6.37
Maintenance Supplies $274,716 $0.14 $1.13
Mobile Equipment $249,718 $0.13 $1.03
Concentrate transport - - -
Laboratory $76,787 $0.04 $0.32
Water Treatment $1,186,479 $0.63 $4.89
General & Administration $206,837 $0.11 $0.85
Total $11,292,577 $5.95 $46.53

 

Table 1-9 – Conversion Plant Opex Summary

 

Cost Center Total Cost
US$/year US$/t feed US$/t final product
Labor (Process) $10,006,330 $51.31 $333.54
Operating Consumables $29,997,743 $153.83 $999.92
Power $6,428,614 $32.97 $214.29
Maintenance Supplies $3,211,137 $16.47 $107.04
Mobile Equipment $304,276 $1.56 $10.14
Laboratory $2,099,846 $10.77 $69.99
General & Administration $762,865 $3.91 $25.43
Total $52,810,810 $270.82 $1,760.36

 

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TECHNICAL REPORT SUMMARY

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1.17 Economic Model and Sensitivity Analysis

 

A detailed financial model and discounted monthly cash flow (DCF) has been developed to complete the economic assessment of the project and is based on current (Q4 2021) price projections and cost estimates in U.S. dollars. No provision was made for the effects of future inflation, but cost estimates incorporate recent 2021 inflationary price increases. The evaluation was carried out on a 100%-equity basis using an 8% discount factor. Current US federal and North Carolina state tax regulations were applied to assess the corporate tax liabilities.

 

The pricing information for battery-grade lithium hydroxide sales and spodumene concentrate supply were estimated in Q4 2021 and are based on a fixed price of $18,000/t for battery quality lithium hydroxide and $900/t for 6.0% Li2O spodumene concentrate. The tax rates utilized in the financial model are based on current federal and state tax laws. The current federal tax rate is 21% and the current North Carolina Tax rate is 2.5% but it reduces to 0% between 2024-2028. A depletion allowance for tax purposes is applied across the Spodumene, Quartz, Feldspar and Mica sales with an amount of 22% applied to Spodumene and Mica and 14% applied to Feldspar and Quartz.

 

Table 1-10 show the summary of the project economics. The main project economic indicators are presented in Table 1-11. The economic study shows a net profit after tax (NPAT) of $7,317 M. The net present value of the 30-year based project is $2,041 M at an 8% discount rate and after applicable taxes. The after-tax internal rate of return (IRR) is 27.2%.

 

Table 1-10 - Project Economics Summary

 

Base Case Financial Results Unit of Measure Value
Pre-Tax NPV @ 8% $ M 2,561
After-Tax NPV @ 8% $ M 2,041
Pre-Tax IRR % 29.7
After-Tax IRR % 27.2
Pre-Tax Payback Period Years 5.51
After-Tax Payback Period Years 5.53

 

Table 1-11 – Economic Indicator Summary

 

Income Statement Project
$ million
Gross revenues (LiOH, SC6 and by-products) 16,905
Net revenues after royalties 16,884
Operating cost cash flow (6,530)
EBITDA 10,375
Capital expenditure (pre-production) (988)
Sustaining and deferred capital (305)
Gross profit before tax (EBT) 9,109
Tax (1,792)
Net Profit After Tax (NPAT) 7,317

 

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TECHNICAL REPORT SUMMARY

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Primero has studied the economical models’ sensitivity of the NPV8 and IRR regarding a variation of:

 

Capital cost;

Operating cost

Spodumene Recovery;

Lithium Hydroxide Recovery

Product Pricing.

 

The results are summarized in Figure 1-5 and Figure 1-6 respectively.

 

IMG  

 

Figure 1-5 - Sensitivity Chart - After Tax NPV8

 

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TECHNICAL REPORT SUMMARY

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IMG  

 

Figure 1-6 - Sensitivity Chart - After Tax IRR

 

The results are showing that the NPV and the IRR are:

 

Sensitive to Lithium Hydroxide selling price and the IRR is sensitive to variability in CAPEX costs

Less sensitive to variations in OPEX and process recovery

 

1.18 Interpretation and Conclusions

 

The following main interpretation and conclusions are summarized below:

 

Sufficient data have been obtained through various exploration and sampling programs to support the geological interpretations of the lithium-bearing pegmatite deposit on the Property. The data are of sufficient quantity and reliability to reasonably support the resource estimates in this TRS.

 

The Carolina Lithium project supports conventional and proven mining and spodumene concentration technology.

 

The open pit, concentrator and converter plants have been designed and positioned to minimize the footprint.

 

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The concentrator includes a processing circuit to recover and stockpile as much as possible by-products (quartz, feldspar and mica) with the quality standards to be sold on the market. This also minimizes the amount of material to be placed in a waste disposal area.

 

The spodumene bearing ore will be extracted from open pits with in-pit crushing and conveying. Similarly, the open pit waste rock and the concentrator rejects will be co-disposed in dry state (after filtering of the concentrator rejects) with the usage of crushing and conveying equipment.

 

The spodumene conversion to lithium hydroxide finish product is based on the technology developed and proposed by M:O.

 

PLL is committed to execute all phases of the project in a socially responsible and environmentally manner.

 

The processing plants will recover water for re-use in processing to minimize the use of surface/underground water and reduce treated water discharge.

 

1.19 Recommendations

 

The following recommendations are summarized below by project areas:

 

Mineral Resources:

 

Conduct infill drilling to increase data density and support the upgrading of Mineral Resources from Inferred to Indicated throughout the Project.

Investigate shallow portions of Core Property deposits deemed amenable to early-stage mining through infill drilling and appropriate surface methods, at 20 m to 40 m spacings.

Model the extent of major metavolcanic and metasedimentary host rock units to support mine planning at the Core property.

Undertake a targeting study to identify new exploration targets and prioritize step-out drill targets that expand defined resource pegmatites.

To support exploration targeting across its properties, and to direct future property acquisitions, Piedmont should continue to synthesize a mineral system model for spodumene bearing pegmatites along the Tin Spodumene Belt.

 

Ore Reserve and Mining Method:

 

Additional property for waste storage should be considered with the capacity to hold approximately 79 million tonnes.

Some adjoining properties will need to be purchased to remove regulated offsets to obtain the tonnages shown in this feasibility study. It is believed that this is achievable before operations starts and costs have been included in the Mining Cost Model of this study.

Continue to develop markets and cost analyses for ballast production from waste material.

Further examine the long-range possibilities of using waste material for off-site projects.

Evaluate permitting requirements and costs associated with mining through the northwest stream to combine Central Pit and North Pit.

Research acquisition possibilities along the northeast, east, and southwest project boundaries for additional resource development, as well as added waste disposal areas.

 

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Complete a drilling program to convert inferred and indicated classification of the current resource to measured, especially in shallower areas of the deposit. This additional exploration will help add measured and indicated resource in the early years of mine production.

Develop Central and Huffstetler Properties to an expanded level project site. Initial indications are that the Central Property may contain higher grade Li2O possibilities, as compared to Core Property.

Finalize the mine permit and the rezoning permit for Core Property site.

Refine cost estimates of contract mining services.

Update project estimates and costs as drilling progresses and property acquisitions develop.

 

Metallurgical Testing and Recovery Methods:

 

It is recommended to complete on-going testwork programs which will be completed during 2022:

 

By-products filtration testing.

Flotation process water treatment testing.

Ore sorting testwork.

 

It is also recommended to further explore:

 

Alternate mica, spodumene, and feldspar flotation reagents (chemistries and suppliers).

Potential for by-products production from DMS tailings.

Optical measurements on mica concentrates.

Calcination and leaching testwork on variability program concentrate samples.

 

PLL is continuing to work both internally and externally to continue to further define their selected process technologies.

 

Flotation testwork to eliminate kerosene and hydrofluoric acid.

Further evaluate the concentrate quality (i.e. contained hematite) on conversion plant recoveries.

 

Project Infrastructure & layout:

 

Evaluate the relocation of the concentrator closer to the conversion facility.

Given the concentrate and analcime are being conveyed via overland conveyor to minimize truck movement, then changes to the layout are considered necessary, predominantly at the concentrator.

Further evaluation of overland technologies and transfer methods should be undertaken.

Implementing an ore sorting circuit to reduce production quality risks, is recommended and would also lead to a layout re-evaluation.

Continue to optimize cost of construction of the project buildings (sizing and construction specifications).

 

Environment and Permitting:

 

Respond to additional requests for information from DEMLR and other state agencies and continue to advance mine permit approvals.

Complete and submit a new air permit application for the proposed 30,000 t/y Carolina Lithium Project.

Engage in further pre-application consultation with Gaston County in advance of rezoning and special use permit application submittals.

 

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2 Introduction

 

Piedmont Lithium Inc. (Nasdaq: PLL; ASX: PLL) holds a 100% interest in the Carolina Lithium Project (the Project) located within the Carolina tin-spodumene belt (TSB) and along trend to the Hallman Beam and Kings Mountain mines, which historically provided most of the western world’s lithium between the 1950s and the 1980s. The TSB, an area with easy access to infrastructure and power, has been described as one of the largest lithium regions in the world and is located approximately 25 miles (40 km) West of Charlotte, North Carolina. PLL is pursuing the goal of becoming a strategic domestic supplier of lithium to the increasing electric vehicle and battery storage markets in the USA.

 

PLL is currently in an advanced study phase of the development of the project, with a completed Phase 5 drilling at its flagship project site located North of Bessemer City, NC. This resulted in a mineral resource estimate updated (dated October 21st, 2021) performed by McGarry Geoconsulting which is integrated into this feasibility study.

 

Primero was requested by PLL to prepare a Definitive Feasibility Study (DFS) for the development of a mine operated with the in-pit crushing & conveying method, concentrator & by-product (quartz, feldspar & mica) plants along with a LiOH conversion plant to convert the spodumene concentrate (SC6) to lithium hydroxide (LiOH). The economics of the project was developed to an accuracy level of +/-15% with contingencies of less than 10%.

 

2.1 Declaration

 

DISCLAIMER

 

The following report was prepared for Piedmont Lithium Inc. (PLL) by Primero Group Americas Inc. (Primero) as an independent consultant and is part based on information provided by PLL and part on information not within the control of either PLL or Primero. While it is believed that the information, conclusions and recommendations will be reliable under the conditions and subject to the limitations set forth herein, Primero does not guarantee their accuracy. The use of this report and the information contained herein shall be at the user’s sole risk, regardless of any fault or negligence of Primero.

 

USE OF THIS INFORMATION

 

This document summarizes the scope of works Primero was engaged to undertake as an independent consultant, appointed by PLL to investigate the requirements associated with establishing the mineral processing and lithium hydroxide conversion facilities at the mine site, along with associated infrastructure in accordance with Primero’s proposals Doc No. 18605-PPL-BD-002.

 

Primero gives its permission to PLL to use the information if it reflects the findings and understanding that are presented in this report. Use of this document, for whatever purpose, by any third party must seek written prior approval by Primero.

 

Primero has relied on other experts for the study portions on mining (Marshall Miller & Associates), Resources (McGarry Geoconsulting), metallurgical testing (SGS), lithium hydroxide conversion (Metso:Outotec) and environmental (HDR).

 

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2.2 Study Participants and Responsibilities

 

The following individuals and organizations have contributed to this document:

 

Table 2-1 - Report Contributors

 

Section Description Prepared By
1 Executive Summary Primero
2 Introduction Primero
3 Property Description Primero
4 Accessibility, Climate, Local Resources, Infrastrucutre and Physiography Primero and McGarry Geoconsulting
5 History Primero
6 Geological Setting, Mineralization and Deposit McGarry Geoconsulting
7 Exploration McGarry Geoconsulting
8 Sample Preparation, Analyses, and Security McGarry Geoconsulting
9 Data Verification McGarry Geoconsulting
10 Mineral Processing and Metallurgical Testing Primero
11 Mineral Resource Estimates McGarry Geoconsulting
12 Mineral Reserve Estimates MM&A
13 Mining Methods MM&A
14 Processing and Recovery Methods Primero
15 Infrastructure Primero and MM&A
16 Market Studies Roskill and PLL
17 Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups HDR
18 Capital and Operating Costs Primero
19 Economic Model and Sensitivity Analysis Primero
20 Adjacent Properties Primero
21 Other Relevant Data and Information Primero
22 Interpretation and Conclusions Primero
23 Recommendations Primero
24 References Primero
25 Reliance on Information Provided by the Registrant Primero

 

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2.3 Abbreviations, Acronyms and Units of measure

 

Table 2-2 – Abbreviations, Acronyms and Units of Measure

 

Symbol Description
AREMA American Railway Engineering and Maintenance of Way
B Billion
BG Battery Grade
CAPEX Capital Expenditure
CSX Railroad CSX
DMS Dense Medium Separation
DMC Dense Medium Cyclone
DFS Definitive Feasibility Study
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization
EBT Earnings Before Taxes
IRR Internal Rate of Return
LiOH Lithium hydroxide monohydrate
ktpy thousand tonnes (metric) per year
M Million
MGG McGarry Geoconsulting Corp.
MM&A Marshall Miller & Associates, Inc.
MRE Mineral Resource Estimate
MRL North Carolina State University’s Mineral Research Laboratory
Mtpy Million tonnes (metric) per year
NCDEMLR North Carolina Department of Energy, Mineral and Land Resources
NPAT Net Profit After Tax
NPI Non-Process Infrastructure
NPV Net Present Value
OPEX Operational Expenditure
PFDs Process Flow Diagrams
PFS Pre-feasibility Study
PLL Piedmont Lithium Inc.
Primero Primero Group
SC6 Spodumene concentrate 6% Li2O
SMP Structural Mechanical and Piping
TG Total grade
tpy tonnes (metric) per year

 

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Symbol Description
TSB Tin Spodumene Belt
$ United States Dollars
   

 

2.4 Background

 

The PLL Carolina Lithium Project is located in one of the premier regions in the world for lithium exploration, with favorable geology and ideal location with easy access to infrastructure, power, research and development centers for lithium and battery storage and major high-tech population centers.

 

The Carolina Lithium Project is in a rural area of Gaston County in North Carolina, USA (see Figure 3-1) approximately 44 km northwest of Charlotte, 16 km northeast of the town of Kings Mountain and 11 km southwest of the town of Lincolnton. The project is centered at approximately 35º 23' 20" N 81º 17' 20" W.

 

The property parcels are easily accessible through a paved secondary road bisecting the project area. Several small gravel roads traversable by truck allow further access into the properties. Interstate highway I-85 lies 13 km to the South and provides easy access to the city of Charlotte and the Charlotte Douglas international airport 30 km to the East. Charlotte is North Carolina’s largest city.

 

As of October 31, 2021, the Project comprised approximately 3,245 total acres, of which 1,526 acres are claims on private property through option or deferred purchase agreements, 113 acres are under a long-term mineral leased agreement, 79 acres are under lease to own agreements, and 1,527 acres are owned by Piedmont. For the properties hosting the Mineral Resources in this report, Piedmont controls 100% of the surface and mineral rights per one or more agreement scenarios.

 

2.5 Scope of Work

 

The scope of work for the study was to deliver a CAPEX and OPEX estimate of ±15% accuracy, including an economic assessment and risk assessment.

 

The study considers the technical, engineering and cost elements of the project for the mine, concentrator, by-products, and conversion plant production facilities.

 

The mine scope of work and description are covered in section 13 of this report.

 

For the concentrator including the by-products facilities, process circuits were developed to a feasibility study level in terms of engineering deliverables.

 

2.5.1 Concentrator and by-product plants

 

For the concentrator and by-product plants, the study evaluated the following aspects of the project:

 

The recent metallurgy test results (described in Section 10.0)

The concentrator including:

Crushing (excluding the primary crusher) and screening;

Primary and secondary DMCs, screening and magnetic separation – coarse;

Primary and secondary DMCs, screening and magnetic separation – fines;

 

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Upflow and screw classifiers;

DMC tailings thickener and filter;

Grinding;

Mica flotation including iron removal flotation;

Mica stockpile;

Spodumene flotation;

Spodumene flotation concentrate thickener and filter;

Spodumene concentrate stockpile;

Flotation tails thickening and filter;

Reject stockpile;

Water (sources and distribution).

Reagents;

The by-product plant:

Feldspar flotation;

Feldspar stockpile;

Quartz recovery;

Quartz stockpile;

Magnetic separation;

Water (sources and distribution);

Reagents.

Infrastructure requirements consisting of:

Reagent’s facilities including unloading, storage and distribution to process;

Potable, fresh water and process water storage and distribution;

Fire pump set and reticulation;

Diesel storage and distribution;

Plant air services (compressed air facility);

24 MVA connected power (for the concentrator and by-product plant) and reaching 30MVA including the mine area;

Communications (assumed available, needs further studies to confirm).

The concentrator, by-product and conversion plant infrastructure is inclusive of:

All site preparation and earthworks including any construction laydown areas;

Electrical rooms and control rooms;

Non-process buildings;

Site roads and drainage within the processing plant;

Plant access and haul roads (by others);

 

The following inputs to the study have been provided by McGarry Geoconsulting group:

 

Geology and MRE (Including Central, Core and Huffstetler).

 

The following inputs to the study have been provided by MM&A:

 

Mining (including in-pit crushing, waste rock stockpiles, ROM pad and earthworks).

 

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The following inputs to the study have been provided by PLL or its subconsultants:

 

Environment and permitting;

Metallurgical test work;

Logistics;

Manning;

Marketing;

 

2.5.2 Lithium conversion plant

 

The conversion plant development assumes an EPC delivery model with a key technology partner providing the design and supply of the key process package. As such, Primero was provided with the estimated CAPEX and operational OPEX from Metso:Outotec for the key process -equipment package. Primero estimated the rest; earth works, foundation, SMP supply & installation, building and lab, power sub-station along with including owner’s costs, working & sustaining capital, pre-production and contingencies.

 

2.5.3 Methodology

 

The feasibility study was undertaken by Primero, Metso:Outotec, MM&A, McGarry Geoconsulting and PLL and input for PLL’s sub-consultants.

 

McGarry Geoconsulting were responsible for the geological development, update of the Core, Central and Huffstetler properties MRE and by-products MRE.

 

MM&A was responsible for the mining scope including the mine plan, optimization, mining CAPEX and OPEX.

 

SGS conducted the metallurgical test work program under guidance from PLL and assistance from Primero.

 

Metso:Outotec provided process design, capital, and operating cost figures for the lithium hydroxide conversion facilities.

 

Primero undertook the study management, process design and engineering, infrastructure requirements, capital and operating costs compilation, financial assessment, and report compilation.

 

2.5.4 Deliverables

 

The key deliverable is the DFS report that will enable the executive management of PLL to make decisions on advancing the project to the next level.

 

The definitive feasibility study update deliverables include:

 

Updated Mineral Resource Estimate for Core, Central and Huffstetler properties and for by-products property per JORC 2012 and SK-1300 requirements;

Mine plan and schedule;

PFDs, process design criteria and mass balance;

Mechanical equipment list;

Plant layouts;

Project schedule (preliminary plan and schedule of the execution phase);

CAPEX and OPEX;

Economic model;

Feasibility study update report (this document).

 

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2.5.5 Battery Limits

 

Primero’s battery limits for the study scope are as follows:

 

Concentrator and by-products:

 

Feed Coarse ore feed bin.
Tailings Tailing’s conveyor discharge.
SC6 Stockpiling and truck weighting.
Mica Stockpiling.
Quartz and Feldspar byproduct Drying, silo truck loading and weighting.  
Raw water Inlet to raw water tank (pit dewatering and bore water supply by others).
Potable water Connection at process plant fence.
Power Main substation near plant fence.
Reagents Resin, sodium carbonate, phosphate, hydrated lime, acid area, sodium hydroxide.
Communications    Communication panel in the main control room.
Utilities Air, nitrogen, CO2, natural gas, steam.

 

Conversion plant:

 

SC6 Feed Feed into bin (provided by Metso:Outotec).
Civil/structural Underside of baseplate and building.
Solid residues Filter cake, slurry, screen overs (storage bunker & transport to tailings).
Effluent, water and slurry Liquid effluent (outlet pipe flange), cooling water and condensate returns (single flanged connections).
Gaseous emissions Process gas off take (outlet pipe flange, top of stack).
Product (LiOH) Bagging, storage and shipping.
Water Potable, demineralized, fresh for process and colling. Single flanged connections).
Electrical energy Motors connected to equipment and grounding connectors in equipment.
Reagents Feed into preparation bins and distribution systems.
Instrumentation Connectors.
Utilities Steam (HP and MP) (single flanged connections). Plant air, air, CO2 and sealing gas (single flange connections).

 

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3 Property Description

 

3.1 Location

 

The Carolina Lithium Project is located in a rural area of Gaston County, North Carolina, USA (Figure 3-1), approximately 40 km northwest of Charlotte, North Carolina; 15 km northeast of the town of Kings Mountain, North Carolina; and 10 km southwest of the town of Lincolnton, North Carolina.

 

The Property is centered at approximately 35°23’20”N 81°17”20”W. The Project is located on United States Geological Survey (USGS) Quadrangles: Bessemer City, Lincolnton West and Lincolnton East. The coordinate system and datum for the modeling is UTM-17N, NAD-83.

 

IMG  

 

Figure 3-1 - Carolina Lithium Project Location

 

3.2 Titles, Claims or Leases

 

Piedmont Property that is the subject of this Report as of October 31, 2021 comprise approximately 3,245 total acres (Figure 3-2), of which: 1,526 acres are claims on private property through option or deferred purchase agreements, 113 acres are under a long-term mineral leased agreements, 79 acres are under lease to own agreements, and 1,527 acres are owned by PLL.

 

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Private option agreements between PLL and its subsidiaries and the respective landowners grant PLL the exclusive and irrevocable right to access, enter and occupy each property for the purpose of mineral exploration and, upon exercise of the option, to either purchase each property or enter into a long-term mining lease.

 

IMG  

 

Figure 3-2 - PLL Total Land Package

 

For the properties hosting the MRE’s in this report, PLL controls 100% of the surface and mineral rights per one or more of the agreement scenarios described above.

 

Table 3-1 below summarizes the surface and minerals rights per agreement type for all PLL properties.

 

Table 3-1 - Summary of land agreement type and acreage for all PLL properties

 

Agreement Type *

Total 

Acres 

Surface Rights Acres Mineral Rights Acres
Option or Deferred Option Agreements 1,526 1,526 1,473
Long Term Mineral Lease Agreements 113 113 113
Lease to Own Agreements 79 79 79
Owned Properties 1,527 1,527 1,393
Acres - Total 3,245 3,245 3,058
*As of October 2021      

 

Neither MGG nor MM&A has carried out a separate title verification for the property and neither company has verified leases, deeds, surveys, or other property control instruments pertinent to the subject resources. PLL has represented to MGG and MM&A that it controls the mining rights to the resources as shown on its property maps, and both MGG and MM&A have accepted these as being a true and accurate depiction of the mineral rights controlled by PLL. The TRS assumes the Property is developed under responsible and experienced management.

 

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3.3 Mineral Rights

 

PLL supplied property control maps to MGG and MM&A related to properties for which mineral and/or surface property are controlled by PLL. While MGG and MM&A accepted these representations as being true and accurate, MGG and MM&A have no knowledge of past property boundary disputes or other concerns that would signal concern over future mining operations or development potential.

 

The concentrate operations and chemical plant are located entirely within private lands. Piedmont engaged Johnston, Allison & Hord P.A. (“JAH”) to provide legal advice regarding the nature, scope and status of the Company’s land tenure and mineral tenement rights for the Project in considering the results of the DFS.

 

As of this report date, the Company’s properties comprised approximately 3,245 acres of surface property and associated mineral rights in North Carolina, of which approximately 1,527 acres (114 parcels) are owned by Gaston Land Company, LLC, a subsidiary of the Company.  Approximately 113 acres are subject to long-term lease (1 parcel; 1 individual landowner), approximately 79 acres are subject to lease-to-own agreements (2 parcels; 2 landowners), and approximately 1,526 acres are subject to exclusive option agreements (79 landowners; 124 land parcels). These exclusive option agreements, upon exercise, allow us to purchase or, in some cases, enter into long-term leases for the surface property and associated mineral rights.  The Company has made all required payments under each option agreement.

 

Piedmont has received a Memorandum of Option or Memorandum of Contract signed by each landowner and each Memorandum is recorded in the Gaston County Register of Deeds. These Memoranda were recorded between September 2016 and October 2021.

 

Title searches on all properties were completed prior to recording each Memorandum of Option.

 

All title searches have confirmed that landowners hold fee simple ownership of all land and mineral rights related to the land with the exception of real estate taxes, certain utility access and easements which do not materially impact Piedmont’s option or purchase rights or ability to extract minerals from the land, and mortgage liens to be paid by the private landowner or subordinated to Piedmont’s rights to the land and the minerals upon acquisition or long-term lease by Piedmont.

 

Legal mining rights may reflect a combination of fee or mineral ownership and fee or mineral leases through various surface and mineral lease agreements.

 

3.4 Encumbrances

 

No Title Encumbrances are known. By assignment, MGG and MM&A did not complete a query related to Title Encumbrances.

 

On August 31, 2021 PLL subsidiary Piedmont Lithium Carolinas, Inc. submitted a mining permit application to North Carolina’s Division of Energy, Mineral and Land Resources. The application is under review as of the publication date of this report.

 

In order to undertake mining activities within Gaston County, North Carolina, properties must be zoned I-3 under the Gaston County Unified Development Ordinances. Additionally, mining and quarrying operations within Gaston County require a Special Use Permit approved by the Gaston County Board of Commissioners. As of the date of this report PLL has not submitted applications for I-3 zoning or for a Special Use Permit.

 

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3.5 Other Risks

 

There is always risk involved in property control. PLL has had its legal teams examine the deeds and title control in order to minimize the risk.

 

4 Accessibility, Climate, Local Resources, Infrastructure and Physiography

 

4.1 Topography, Elevation, and Vegetation

 

Topography of the area surrounding the Project is typical of the Piedmont Plateau characterized by relatively low, rolling hills. Several creeks bisect the property and are surrounded by flat, swampy floodplains that can extend up to 100 m away from the drainage channel. Surface elevations at the Project range from approximately 300 m above sea level in upland regions to approximately 220 m at stream level.

 

The area surrounding the Property is considered rural with a mixture of cleared farmland and forest in the temperate broadleaf category. Vegetation, where present, is a combination of large trees with smaller underbrush and is easily traversable by foot.

 

4.2 Access and Transport

 

General access to the Project is via a well-developed network of primary and secondary roads. Interstate highway I-85 lies 10 km to the south of the Project area and provides easy access to Charlotte Douglas International Airport 30 km to the east. A CSX-owned rail line borders the Property to the northwest (Figure 3-1).

 

4.3 Proximity to Population Centers

 

Transport links provide access to Charlotte, North Carolina’s largest city, within an hour’s drive from the Project. The Charlotte metropolitan region has a 2020 population of 2.66 million people.

 

4.4 Climate and Length of Operating Season

 

North Carolina has a humid subtropical climate with short, mild winters and hot summers. The area around Lincolnton experiences summer temperatures ranging from approximately 20°C to 32°C, with July being the hottest month at an average maximum of 31.4°C. Winter temperatures tend to be close to freezing, with January being the coldest month at an average minimum temperature of –1.4°C. Average precipitation is around 120 cm and is evenly distributed throughout the year, with March being the wettest month with approximately 12 cm of rain. Average annual snowfall for the area totals less than 15 cm per year. The relatively mild climate allows for exploration year-round with little to no weather-related interruptions. Seasonal variations and weather events would be expected to have a small effect on the efficiency of surface mining and concentrator operations. Negative impacts would be on a limited basis and last less than a few days.

 

4.5 Infrastructure

 

There is a significant potential human resource available from towns in the vicinity of the Project, including skilled heavy machinery operators. The Charlotte metropolitan area is home to multiple universities providing for a highly skilled pool of talent.

 

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A rail line borders the Property to the northwest. An electrical power infrastructure is already in place feeding power to nearby residents and property owners. Water is also accessible with a shallow water table and two convergent creeks running through the middle of the property.

 

Major transmission lines run immediately south of the Project with 11.5 GW of large scale, low-cost power, within 50 km from the Project. The Transcontinental Gas Pipeline runs through Bessemer City.

 

5 History

 

5.1 Previous Lithium Mining in the Region

 

The Project lies within the Carolina tin-spodumene belt. Mining in the belt began in the 1950’s with the Kings Mountain Mine, currently owned by Albemarle Corporation, and the Hallman-Beam mine near Bessemer City, currently owned by Martin Marietta Corporation. Both former mines are located within approximately 20 km of the Project to the south, near Bessemer City and Kings Mountain, respectively (Figure 3-1). Portions of the Project area were explored and excavated to shallow depths in the 1950’s as the Murphy-Houser mine, owned by the Lithium Corporation of America (predecessor to Livent) (Cooley, 2010).

 

5.2 Previous Exploration

 

In 2009, Vancouver based North Arrow Minerals Inc. (“North Arrow”) commenced exploration at the property. North Arrow collected a total of 16 rock grab samples in the Core Property area, of which 14 returned above 1% Li2O (Cooley, 2010). Extensive geological mapping outlined over 37 spodumene-bearing pegmatite dikes at the Core Property and confirmed localized historical trenching of these dikes by Lithium Corporation of America (Cooley, 2010). Geological mapping, which captured the location and visual estimate for spodumene, were used for drill hole targeting. North Arrow completed 19 diamond drillholes in 2009/2010. North Arrow subsequently terminated all their property agreement soon thereafter.

 

In 2016, Piedmont (formerly WCP Resources Limited) began optioning surface and mineral rights at the property. Piedmont commenced a renewed exploration effort at the Project which is detailed in Section 7.0 of this report.

 

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6 Geological Settings, Mineralization and Deposit

 

6.1 Regional, Local and Property Geology

 

The Project is situated in the Inner Piedmont belt near the Kings Mountain shear zone (Figure 3-1). The Inner Piedmont belt is characterized by Cambrian or Neoproterozoic gneisses, amphibolites, and schists of varying metamorphic grade. These rocks typically lack primary structures and the relationships amongst the rock types are generally undetermined. Several major intrusions occur in the Inner Piedmont, including the nearby Mississippian-aged Cherryville granite. Concurrent dike events extend from the granite, mainly to the east, with a strike that is sub-parallel to the northeast-trending Kings Mountain shear zone. As the dikes progress further from their sources, they become increasingly enriched in incompatible elements including lithium. The enriched pegmatitic dikes are located within a 3.5 km wide zone extending from the town of Kings Mountain through Lincolnton. This zone is known as the Carolina Tin-Spodumene Belt (TSB). As shown in Figure 3-1, the Project lies within the TSB.

 

Spodumene pegmatites on the Property are hosted in a fine to medium grained, foliated biotite, hornblende, quartz feldspar gneiss commonly referred to as amphibolite, and metasedimentary rocks including shists and mudstones. The extent of major host rocks is shown in Figure 6-1. Massive to weakly foliated gabbro dikes are encountered over limited extents. Testing indicates that the metasedimentary rocks have the potential to generate acidic conditions.

 

Pegmatites at the Project include spodumene-bearing and spodumene-free dikes. Spodumene-bearing dikes host the lithium and by-product mineral deposits at the Project.

 

Spodumene-free pegmatite dikes have variable orientations. Some share the same trend as the spodumene-bearing dikes and in some instances, there is a gradational contact between them. Spodumene-free pegmatite dikes represent either: an early stage (pre-spodumene) fractionated magma; or a later barren pegmatite system. Intervals logged as barren pegmatite can also represent altered portions of the spodumene-bearing pegmatite.

 

On the Core Property, spodumene-bearing pegmatites are cut by steeply dipping west-northwest trending diabase dikes of 5 m to 10 m thickness at a coordinate northing of approximately 3,916,600 m (Figure 6-1).

 

A schematic stratigraphic column representing the geological setting of the Carolina Lithium Project is presented in Figure 6-2.

 

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(GRAPHIC)  

 

Figure 6-1 - Plan View of Core Property Lithology and Mineralized Pegmatite Dikes

 

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(GRAPHIC)  

 

Figure 6-2 - Stratigraphic Column – Carolina Lithium Project

 

6.2 Mineralization

 

The spodumene-bearing pegmatites are un-zoned having no apparent systematic variation in primary mineralogy and range from fine grained (aplite) to very coarse-grained. Primary mineralogy consists of spodumene, quartz, plagioclase, potassium-feldspar, and muscovite. Table 6-1 presents average compositional mineral proportions derived from normative minerology calculations on X-ray Fluorescence (XRF) drill core assay data.

 

Table 6-1 - Average Compositional Mineral Proportions for Spodumene-bearing Pegmatites

 

Mineral Compositional Average (%)
Core Central Huffstetler
Spodumene 13.6 16.7 11.8
Quartz 29.4 29.4 28.8
Albite 35.7 35.6 36.4
K-spar 9.7 8.9 12.2
Muscovite 4.3 3.7 3.2
Biotite 1.9 1.6 3.4
Residual 5.5 4.1 4.1

 

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6.3 Alteration

 

Several types of alteration are observed at the Project. Within the amphibolite and metasedimentary host rock, the most common types of alteration are chlorite, epidote, and potassic alteration.

 

Holmquistite alteration of the amphibolite occurs as a metasomatic replacement at the margins of lithium rich pegmatites. At the Project, holmquistite alteration is distinguished by a light blue color and acicular habit (Figure 6-3) and is observed as both small veinlets and massive zones that usually occur within 2 m of the contact between amphibolite and spodumene pegmatite (Piedmont Lithium, 2017).

 

Within the spodumene pegmatites, spodumene shows varying alteration intensity from fresh to complete replacement. Spodumene is typically altered to a greater degree than other compositional minerals. The most common types of spodumene alteration are clay, muscovite, and feldspar replacement (Piedmont Lithium, 2017). The distinguishing features of clay alteration of spodumene are the softness and lack of cleavage planes in the spodumene crystals. Muscovite alteration of spodumene results in pseudomorphs of muscovite after spodumene (Figure 6-4).

 

(GRAPHIC)

 

Left: Sample of massive holmquistite showing asbestiform habit (hole 17-BD-54, 94.73–94.90 m).

 

Right: Sample of amphibolite with vein of blue-colored holmquistite (hole 17-BD-82 94.49–94.59 m).

 

Figure 6-3 - Examples of Holmquistite

 

(GRAPHIC)

 

Note – Picture is from Hole 17-BD-121 72.24–72.44 m

 

Figure 6-4 - Pegmatite showing Pseudomorphs of Muscovite after Spodumene

 

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6.4 Deposits

 

6.4.1 Core

 

Spodumene-bearing pegmatites on the Core Property are assigned to three major corridors shown in Figure 6-1: the B-G corridor and S corridor (cross section view in Figure 6-5) and the F corridor (cross section view in Figure 6-6). Corridors extend over a strike length of up to 2 km and commonly have a set of thicker dikes of 10 m to 20 m true thickness at their core. These major dikes strike northeast and dip steep to moderately toward the southeast. Dikes are intersected by drilling to a depth of 300 m down dip. Dikes are curvi-planar in aspect.

 

At the Core property, dikes are commonly interconnected by flat to shallow-dipping sills and inclined sheets that are encountered over broad lateral extents but rarely outcrop at surface. These sills and sheets are tested by drilling over 600 m along strike and 500 m down dip where they remain open and can be projected between major corridors as shown in Figure 6-5 and Figure 6-6. The true thickness of individual sills and inclined sheets range from 1 m to 18 m. A representative closely spaced series of sills and inclined sheets typically has a cumulative thickness greater than 10 m.

 

Spodumene-bearing pegmatites, or a closely spaced series of such pegmatites, can be traced between drillhole intercepts and surface outcrops for over 1.7 km. Although individual units may pinch out, the deposit is open at depth. The Mineral Resource has a maximum vertical depth of 210 m from surface. Ninety-two (92) percent of the Mineral Resource is within 150 m of the topography surface.

 

6.4.2 Central

 

Spodumene-bearing pegmatites on the Central Property fall within a corridor that extends over a strike length of up to 0.6 km and contains a pair of 10 m to 20 m true thickness dikes (see inset plan map in Figure 6-7). These major dikes strike northeast and dip steeply to the southeast. Dikes are intersected by drilling to a depth of 225 m down dip (Figure 6-7). Although individual pegmatite bodies may pinch out, the deposit is open along strike and down dip and is primarily confined by the property boundary. The Central mineral resource has a maximum vertical depth of 275 m below surface. On average, the model extends to 200 m below surface. Seventy-five (75) percent of the Central Mineral Resource model is within 150 m of the topography surface.

 

6.4.3 Huffstetler

 

Spodumene-bearing pegmatites on the Huffstetler Property fall within a corridor that extends over a strike length of up to 0.4 km (see inset plan map in Figure 6-8) and form a stacked series of inclined sheets that range from 2 m to 18 m true thickness (Figure 6-8). Inclined sheets strike northeast and dip moderately to the northwest. Spodumene bearing pegmatites are intersected by drilling to a depth of 200 m down dip from surface; however, up-dip extents are limited by the southeastern edge of the permit boundary. Although individual units may pinch out, the deposit is open at depth and along strike. The Huffstetler Mineral Resource has a maximum vertical depth of 150 m below the ground surface.

 

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(GRAPHIC)

 

Figure 6-5 - Cross section of Steep Dikes at Core B-G Corridor and S Corridor Connected by a Sill

 

(GRAPHIC)

 

Figure 6-6 - Cross Section of Steep Dikes at Core F Corridor Interconnected by Sills

 

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(GRAPHIC)

 

Figure 6-7 - Cross Section of Steep Dikes at the Central Property

 

(GRAPHIC)

 

Figure 6-8 - Cross Section at the Huffstetler Property

 

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7 Exploration

 

7.1 Nature and Extent of Exploration

 

Extensive exploration supports this resource estimate and is comprised of surface mapping and extensive subsurface drilling carried out on the Property. Exploration has predominantly been carried out by PLL, with a small number of initial exploratory holes completed by North Arrow. PLL’s exploration of the Property has been carried out by professional geologists in adherence to established operating procedures that have been verified by the QP. To date, exploration has been concentrated on the Core, Central and Huffstetler deposit areas detailed below.

 

7.1.1 Core Property

 

As of the 3 August 2021 cut-off date, 542 core holes totaling 80,029 m had been drilled at the Core Property. Table 7-1 shows the breakdown of drilling about the historical drilling completed by North Arrow and the subsequent drilling programs completed by PLL which include 505 diamond core holes and 18 sonically drilled holes. The extent of drilling at the Core property is shown in Figure 7-1.

 

Table 7-1: Core Drilling Campaigns and Historical Data Included in the Core Property MRE

 

Year(s) Company Phase No. of holes Hole size* Meters Hole ID (from) Hole ID (to)
2009–2010 North Arrow Historical 19 HQ/NQ 2,544 09-BD-01 10-BD-19
2017 Piedmont Phase 1 12 HQ/NQ 1,667 17-BD-20 17-BD-31
2017 Piedmont Phase 2 93 HQ/NQ 12,408 17-BD-32 17-BD-124
2017–2018 Piedmont Phase 3 124 HQ/NQ 21,530 17-BD-125 18-BD-248
2018–2020 Piedmont Phase 4 90 HQ/NQ 14,766 17-BD-249 19-BD-338
2020-2021 Piedmont Phase 5 186 HQ/NQ 26,825 20-BD-339 21-BD-524
2020 Piedmont Phase 5 18 Sonic 289 20-SBD-001 20-SBD-0018
ALL Piedmont Total 542 HQ/NQ 80,029 09-BD-01 21-BD-524

 

At the cut-off date, lithology data were available for all holes up to and including drillhole 21-BD-524. Assay results were available up to and including drill hole 21-BD-491, drill hole 21-BD-494, and drillholes 21-BD-496 to 21-BD-502.

 

7.1.2 Central Property

 

At the cut-off date, 36 diamond core holes totaling 5,563 m had been drilled at the Central property as detailed in Table 7-2. The extent of drilling at the Central property is shown in Figure 7-2.

 

Table 7-2 - Core drilling campaigns and historical data included in the Central Property MRE

 

Year(s) Company Phase No. of holes Hole size* Meters Hole ID (from) Hole ID (to)
2018–2019 Piedmont Phase 4 30 HQ/NQ 4,675 18-CT-001 19-CT-030
2020-2021 Piedmont Phase 5 6 HQ/NQ 888 20-CT-031 20-CT-036
ALL Piedmont Total 36 HQ/NQ 5,563 18-CT-001 20-CT-036

 

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7.1.3 Huffstetler Property

 

At the cut-off date, 14 diamond core holes totaling 2,151 m had been drilled at the Huffstetler Property as detailed Table 7-3. The extent of drilling at the Huffstetler Property is shown in Figure 7-3.

 

Table 7-3 - Core drilling campaigns and historical data included in the Huffstetler Property MRE

 

Year(s) Company Phase No. of holes Hole size Meters Hole ID (from) Hole ID (to)
2020 Piedmont Phase 5 14 HQ/NQ 2,151 20-HF-001 20-HF-0014

 

(GRAPHIC)

 

Figure 7-1 - Extent of drilling at the Core property

 

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(GRAPHIC)

 

Figure 7-2 - Extent of drilling at the Central property

 

IMAGE OMITTED

 

Figure 7-3 - Extent of drilling at the Huffstetler property

 

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7.2 Non-Drilling Procedures and Parameters

 

Non-drilling exploration procedures included testing of soil samples and surface rock exposures, geologic mapping, and surface geophysics surveying. The soil sampling program, along with surface rock sampling and mapping, proved successful in identifying high priority drill targets for spodumene-bearing pegmatites. Soil and rock testing, as well as geologic mapping, results were only used as prospecting tools and are not included as data points for the resource estimate.

 

Soil testing to identify blind spodumene-bearing pegmatite dikes involved collection, documentation, and laboratory testing of 2,410 soil samples from numerous test lines across PLL’s properties. The soil sampling was initially calibrated in areas known to contain spodumene-bearing pegmatites, and then subsequently used as a guide for planning core drilling locations as exploration progressed. Soil samples were collected using a hand-operated soil auger from depths ranging from six to 36 inches below top of ground. Lithium assays ranged from below detection limit (BDL) to 2,306 ppm.

 

Rock collected and tested included float, subcrop and outcrop samples. These occurrences ranged in size from fist-size float to meter-scale subcrop blocks. Lithium values from the samples ranged from 0.01% Li2O to 4.37% Li2O. Locations of the samples were recorded with a handheld GPS unit. Outcrop was observed to exist predominantly associated with moderately southeast-dipping pegmatites. The presence of spodumene in surface exposures was found to be indicative of spodumene down-dip. Mapping and testing of the surface exposures were only used as prospecting tools and are not included as data points for the mineral resource estimate.

 

Geophysics, in the form of a ground magnetic survey, totaling 43.05 line-km, was conducted over Core and Central properties with a minimum of 40 m line spacing. The ground magnetic survey was marginal, at best, in Identifying pegmatites.

 

7.3 Drilling Procedures

 

7.3.1 North Arrow

 

North Arrow completed a total of 2,544 m of core drilling in 19 drillholes in programs conducted in the fall of 2009 and spring of 2010. Drill cores were recovered as HQ for weathered bedrock (saprolite) with high clay content and as NQ for deeper un-weathered bedrock. The dip of the drill hole at depth was measured with up to four acid tests per hole.

 

Descriptions of the drill core were logged and are stored digitally. The drill logs include notes on the lithological units, alteration, estimated amount of spodumene mineralization in pegmatite units, textures, grain size, and magnetic susceptibility.

 

7.3.2 Piedmont

 

PLL has completed a total of 85,199 m of core drilling in 574 drillholes at the Core, Central and Huffstetler properties. Drilling was conducted in five phases from 2017 to 2021.

 

All diamond drillholes were collared with HQ and were transitioned to NQ once non-weathered and unoxidized bedrock was encountered. Oriented core was collected by a qualified geologist at the drill rig from 103 drillholes using the Reflex ACT III tool. Orientated core measurements were collected for lithology contact, foliation, vein, fault, shear, and fold plane angles. Downhole surveying was performed on each hole using a Reflex EZ-Trac multi-shot instrument. Readings were taken approximately every 15 m that recorded depth, azimuth, and inclination. Drill collars were located with the differential global positioning system (GPS) with the Trimble Geo 7 unit which resulted in accuracies of less than 1 m.

 

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Geological data was collected in sufficient detail to aid in Mineral Resource estimation. Core logging consisted of marking the core, describing lithologies, geologic features, percentage of spodumene and structural features measured to core axis. The core was photographed wet before logging and again immediately before sampling with the sample numbers visible. All the core from the 574 holes reported was logged.

 

7.4 Hydrology and Hydrogeology

 

Hydrogeological assessment for the project was completed by HDR, Inc. (HDR). The tasks involved included surface water and groundwater quality monitoring; streamflow monitoring; pump testing; groundwater level monitoring; and creation of a groundwater model using MODFLOW. MM&A has received and reviewed memorandums and data summaries from HDR. HDR reports on the hydrogeology of the project area include “Technical Memorandum: Aquifer Test, Piedmont Lithium – Gaston County, North Carolina” (revised version submitted February 18, 2019) and “Technical Memorandum: Groundwater Model, Piedmont Lithium – Gaston County, North Carolina” (submitted June 28, 2019). An additional groundwater modeling report, titled “Technical Memorandum: Groundwater Model – Piedmont Lithium, Gaston County, North Carolina”, was also completed by HDR in August 2021.

 

HDR’s groundwater modeling results form a basis for selection of pit dewatering equipment and operating cost considerations. The project will involve pumping from two pits simultaneously at times throughout the mine life, with pumping rates varying depending on the stage of mining and pits being excavated. The predicted dewatering rates range from 575 gallons per minute (gpm) in the first year to maximum pumping rates of 2,300 gpm and 2,000 gpm in years 2 and 12, respectively. The estimated average for the mine life is on the order of 1,400 gpm.

 

7.5 Geotechnical Data

 

MM&A has completed geotechnical characterization and pit slope stability assessment tasks including basic laboratory rock strength testing, discontinuity orientation data collection, kinematic bench-scale stability assessment, and overall pit slope stability assessment. The pit slope stability assessment, initially completed in 2019 and supplemented in 2021, provides guidance with regard to bench, inter-ramp, and overall pit slope for pit design. In January 2021, MM&A conducted additional geotechnical drilling and data collection for specific areas of the planned pits. Results of the geotechnical assessment yielded recommendations for an overall pit wall angle of 51 degrees assuming a bench angle of 75 degrees, a final bench height of 24 m, a final berm width of 9.5 m, and a single 30 m haul road ramp width.

 

8 Sample Preparation, Analysis and Security

 

8.1 Sample Collection and Security

 

Diamond drill core was cut in half with a diamond saw. Standard sample intervals were a minimum of 0.35 m and a maximum of 1.5 m for both HQ and NQ drill core, taking into account lithological boundaries (i.e., sampled to, and not across, major contacts). Core was cut in half with a diamond saw.

 

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Samples were numbered sequentially with no duplicates and no missing numbers. Triple tag books using nine-digit numbers were used, with one tag inserted into the sample bag and one tag stapled or otherwise affixed into the core tray at the interval the sample was collected. Samples were placed inside pre-numbered sample bags with numbers coinciding to the sample tag.

 

Drill core samples and surface rock samples were shipped directly from the core shack by the project geologist in sealed rice bags or similar containers using a reputable transport company with shipment tracking capability to maintain chain of custody. Each bag was sealed with a security strap with a unique security number. The containers were locked in a shed if they were stored overnight at any point during transit, including at the drill site prior to shipping. The laboratory confirmed the integrity of the rice bag seals upon receipt.

 

8.2 Sampling Technique and Sample Preparation

 

8.2.1 North Arrow

 

Historical samples (holes 09-BD-01 through 10-BD-19) were submitted to the commercial independent laboratory Acme Analytical Laboratories (AcmeLabs) in Vancouver for analysis. AcmeLabs was accredited with ISO/IEC 17025 by the Standards Council of Canada (SCC) for the methods employed. Each sample was subjected to: a four-acid digestion and analysis for 40 elements (including lithium) using a combination of ICP-ES (inductively coupled plasma emission spectrometry) and ICP-MS (inductively coupled plasma mass spectrometry) methods (Acme method 7TX); or sodium peroxide fusion and lithium analysis by ICP-ES (Acme method 7PF-Li).

 

8.2.2 Piedmont Phase I Exploration

 

Piedmont Phase 1 samples were shipped to the independent commercial laboratory Bureau Veritas Minerals Laboratory (BV) in Reno, Nevada. BV is accredited with ISL-certification for the methods employed.

 

The preparation code was PRP70-250 (crush to 70% of sample <2 mm, pulverize 250 g to 85% <75 μm);

 

The analysis code was MA270 (multi-acid digestion with either an ICP-ES or ICP-MS finish), which has a range for Li of 0.5% to 10,000 ppm (1%) Li. This digestion provides only partial analyses for many elements in refractory minerals, including Ta and Nb. It does not include analyses for Cs;

 

The over-range method code for Li >10,000 ppm is PF370, which uses a peroxide fusion with an ICP-ES finish and has lower and upper detection limits of 0.001% and 50%, respectively. The laboratory was instructed to implement the over-range method in all samples that exceed 5,000 ppm Li to allow for poor data precision near the upper limit of detection using MA270.

 

8.2.3 Piedmont Phase 2 to Phase 5 Exploration

 

All surface and drill core rock samples were shipped to the independent commercial laboratory SGS Minerals - Lakefield (SGS), Ontario, Canada. SGS is accredited with ISO/IEC 17025 certification and has a Quality Management System that conforms to ISO 9001:

 

Prior to 2020, the preparation code was CRU21 (crush to 75% of sample <2mm). Starting in 2020 the code was changed to CRU16 (crush to 90% of sample <2 mm). The pulverization code remains PUL45 (pulverize 250g to 85% <75 μm);

 

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Prior to August 2017 the analysis code was GE ICM40B (multi-acid digestion with either an ICP-ES or ICP MS finish), which has a range for Li of 1 to 10,000 (1%) ppm Li;

 

Starting in August 2017, samples were analyzed using GE ICP91A Li only. The over-range method code for Li >5,000 ppm is GE ICP90A, which uses a peroxide fusion with an ICP finish, and has lower and upper detection limits of 0.001% and 5% respectively;

 

In 2020, the analysis code was changed to GE ICP92A50, which uses a peroxide fusion with an ICP finish, and has lower and upper detection limits of 0.001% and 5% respectively.

 

Soil samples

 

Soil samples were analyzed using GE_ICM40B (49 element ICP package) at SGS Laboratories in Lakefield, Ontario & Burnaby, British Columbia. Blanks and certified standard materials (CRM’s) were inserted at the recommended rate.

 

Bulk Density

 

Bulk density measurements for Phase 2 drilling were made on each drillhole (one host rock and one mineralized rock) at SGS using the immersion method analyses code GPHY04V. Saturated and dry bulk densities for Phase 3, Phase 4 and Phase 5 drill programs were collected by Piedmont geologists using a triple beam scale and the immersion method.

 

X-Ray Fluorescence

 

Upon completion of Phase 3 drill sample lithium analysis, sample intervals falling within the Core Property deposit model were identified for subsequent whole rock analysis by SGS using borate fusion followed with XRF (SGS analysis code GO XRF76V). The same analytical procedure was used for whole rock analysis of all Phase 4 and Phase 5 drill core containing spodumene-bearing pegmatite at the Core, Central and Huffstetler properties.

 

Normative Minerology Calculations

 

Normative mineralogy was calculated from total fusion XRF major element data using a least squares method (MINSQ – Herrmann, W. and Berry, R.F., 2002, Geochemistry: Exploration, Environment, Analysis, volume 2, pp. 361-368). The normative calculations were validated against and corrected where necessary using x-ray diffraction (XRD) Rietveld semi-quantitative mineralogical data from 38 sample pulps selected to represent a range of chemical compositions and mineralogy, as well as three QEMSCAN analyses of composite samples prepared for metallurgical test work.

 

8.3 QA/QC Controls

 

Examination of the QA/QC sample data obtained by PLL and North Arrow indicates satisfactory performance of field sampling protocols and assay laboratories providing acceptable levels of precision and accuracy.

 

Based on an assessment of the data, the Qualified Person considers the entire dataset to be acceptable for resource estimation with assaying posing minimal risk to the overall confidence level of the MRE.

 

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8.3.1 North Arrow

 

Data quality was monitored through the submission of coarse blank (marble) material and two company Standard Reference Materials (SRMs) produced from spodumene concentrates from the Tanco Li-Cs-Ta (LCT) pegmatite mine, Manitoba, Canada (Arne, 2016). Marble was used as coarse blank material submitted with the core samples (Arne, 2016). No duplicate were collected during the program.

 

A review undertaken by independent consulting geochemist Dennis Arne in 2016 found that “The standard reference materials used by North Arrow Minerals and AcmeLabs have returned acceptable results within their control limits. There is evidence for only slight possible cross contamination of Li between samples” but that “the cross-contamination has not been of a significant level”.

 

8.3.2 Piedmont

 

PLL has maintained QA/QC protocols and surveillance of CRM, blank and duplicate sample results during all exploration phases. PLL QA/QC data undergo regular independent review by consulting geochemist Dennis Arne. The following section contains a summary of information provided in Arne (2017, 2017a, 2018, 2018b, 2019, 2019b, 2021 and 2021a).

 

A CRM or coarse blank was included at the rate of one for every 20 drill core samples (i.e., 5%). The CRMs used for this program were supplied by Geostats Pty Ltd of Perth, Australia. A sequence of these CRMs covering a range in Li values and, including blanks, were submitted to the laboratory along with all dispatched samples so as to ensure each run of 100 samples contains the full range of control materials. The CRMs were submitted as “blind” control samples not identifiable by the laboratory. Marble was used as coarse blank material submitted with the core samples.

 

Sampling precision was monitored by selecting a sample interval likely to be mineralized and splitting the sample into two quarter-core duplicate samples over the same sample interval. These samples were consecutively numbered after the primary sample and recorded in the sample database as “field duplicates” and the primary sample number recorded. Field duplicates were collected at the rate of 1:20 samples when sampling mineralized drill core intervals.

 

Random sampling precision was monitored by splitting samples at the sample crushing stage (coarse crush duplicate) and at the final subsampling stage for analysis (pulp duplicates). The coarse jaw-crushed, reject material was split into two preparation duplicates, sometimes referred to as second cuts, crusher, or preparation duplicates, which were then pulverized and analyzed separately. These duplicate samples were selected randomly by the laboratory.

 

Analytical precision was also monitored using pulp duplicates, sometimes referred to as replicates or repeats. Data from all three types of duplicate analyses was used to constrain sampling variance at different stages of the sampling and preparation process.

 

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9 Data Verification

 

9.1 Procedures of Qualified Person

 

MGG’s QP Leon McGarry visited the site during 2017, 2018 and 2019 to review exploration sites, drill core and work practices. An initial site visit was made between 7 September and 8 September 2017. Visual validation of mineralization against assay results was undertaken for several holes. Verification core samples were collected by Leon McGarry.

 

9.1.1 Data Import and Validation

 

All drill hole data was imported into Micromine™ software version 15.08. Validation of the data was then completed which included checks for:

 

Logical integrity checks of drillhole deviation rates;

Presence of data beyond the hole depth maximum;

Overlapping from-to errors within interval data.

 

Visual validation checks were also made for obviously spurious collar coordinates or downhole survey values.

 

9.2 Limitations

 

Travel to the site was curtailed during 2020 and 2021 due to the impact of the COVID-19 pandemic which limited the QP’s ability to independently verify aspects of Phase 5 exploration that required personal inspection. This limitation was mitigated by remote monitoring of exploration activities via regular video conferencing and through review of core photography. The QP did undertake personal inspections from 2017 to 2019 to verify exploration phases 1 to 4.

 

As with any exploration program, localized anomalies cannot always be discovered. The greater the density of the samples taken, the less the risk. Once an area is identified as being of interest for inclusion in the mine plan, additional samples are taken to help reduce the risk in those specific areas.

 

9.3 Opinion of Qualified Person

 

Sufficient data have been obtained through various exploration and sampling programs to support the geological interpretations at the Property. The data are of sufficient quantity and reliability to reasonably support the lithium resource estimates in this TRS.

 

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10 Mineral Processing and Metallurgical Testing

 

The following metallurgical testwork programs have been undertaken for the Carolina Lithium Project:

 

Bench-scale beneficiation of spodumene and by-products (Minerals Research Laboratory (MRL), NC State University, 2018);

Concentrator Variability Testwork (SGS Canada Inc., 2019);

Concentrate Production (SGS Canada Inc., 2020);

Conversion Testwork (SGS Canada Inc., 2020);

Concentrator Pilot Plant (SGS Canada Inc., 2020);

Concentrator Variability Testwork (SGS Canada Inc., 2021);

Conversion Pilot Plant (Metso:Outotec 2021).

 

This report presents the details of the 2021 Metallurgical Testwork Program performed by SGS Canada Inc. and Metso:Outotec only. All previous testwork programs can be found in the Primero technical report entitled “Scoping Study Update Report – Ref 18605-REP-GE-001– Carolina Lithium Project” dated September 10, 2021.

 

10.1 Sample Selection

 

A metallurgical testwork program was undertaken at SGS Canada Inc. in Lakefield, Ontario during 2021 on nine variability samples from the Piedmont Lithium Project. The testwork program included sample characterization, heavy liquid separation (HLS), Reflux classifier testing, dense media separation (DMS), and batch and locked-cycle flotation testing.

 

The samples were produced from drill core. The samples were taken from the South and East pits and represented material that would be mined in the early years of operation (i.e., years 1 to 10). Each sample contained both pegmatite and host rock (dilution). The samples typically contained elevated proportions of host rock relative to the anticipated levels of dilution (10%) in the mine plan. Table 10-1 gives a description of each sample and the abbreviated sample name (short name). The samples generally contained amphibolite host rock dilution. Two samples from the East pit extension included meta-sediments host rock.

 

Table 10-1 - Variability Sample Description

 

Name Short Name Description

East Pit

Early Flat 1

 

E_EF1 Overall, it was estimated that the pegmatite portion of the sample   contained 17% spodumene mineralization where 95% occurs as coarse grain, white to light green spodumene and 5% occurs as fine grain, white spodumene. Strong oxidized zones were present along with weak muscovite alteration at upper and lower contacts. The waste rock consisted of amphibolite that had moderate biotite alteration which locally hosts millimeter-scale holmquistite veinlets at or near the pegmatite contacts, and red-orange clay saprolite.

East Pit

Early Flat 2

 

E_EF2 Overall, it was estimated that the pegmatite portion of the sample   contained 15% spodumene mineralization where 90% occurs as coarse grain, white to light green spodumene and 10% occurs as fine grain, white spodumene. Moderate muscovite alteration was present at upper and lower contacts. The waste rock, amphibolite had moderate biotite alteration which locally hosts millimeter-scale holmquistite veinlets at or near the pegmatite contacts.

East Pit

Early Steep

 

E_S Overall, it was estimated that the pegmatite portion of the sample   contained 18% spodumene mineralization where 60% occurs as coarse grain, light green spodumene and 40% occurs as fine grain, white to light green spodumene. Weak oxidized zones were present along with moderate muscovite alteration at upper and lower contacts. The waste rock, amphibolite had moderate biotite alteration.

 

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Name Short Name Description

East Pit

Late Flat

 

E_LF Overall, it was estimated that the pegmatite portion of the sample   contained 15% spodumene mineralization where 95% occurs as coarse grain, white to light green spodumene and 5% occurs as fine grain, white spodumene. Weak muscovite alteration wa