GLOBAL RESOURCESINVESTMENT CONFERENCE

STATIONERS’ HALL, CITY OF LONDON ● TUESDAY-WEDNESDAY, 27-28 SEP 2011

www.ObjectiveCapitalConferences.com

The changing face of lithium availability Gerry Clarke – International Lithium Institute

Other sponsors & participating organisations:

GLOBAL RESOURCESINVESTMENT CONFERENCE 2011

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@Objectivelive

The changing face of lithium availability

Gerry Clarke

International Lithium Institute

HEADLINES

USGS 2011 World Resources: 32.5m tonnes contained lithium

World Reserves: 12.6m tonnes contained lithium LAWM 2009 Broad Base World Reserve: 39.4m tonnes contained lithium USGS 2010 World Production: 134,672 tonnes LCE (circa 77% chemical)

Average (5) Forecast World Demand 2015: 190,500 tpa LCE Average (6) Forecast World Demand 2020: 254,300 tpa LCE

3 majors adding 80,900 tpa LCE capacity plus SQM yet to announce Four Major Producers 2015: 225,800 tpa LCE capacity Pipeline Projects 2015 add: 219,700 tpa LCE capacity Total supply capability 2015: 445,500 tpa LCE ex China!

Forecast excess capacity 2015: 255,000 tpa LCE

China’s lithium resources: Not satisfying domestic demand

Lithium Availability Wall Map 2011

Announced LCE Capacity Rises (‘000 tpa)

*SQM will also increase capacity but not yet announced

MAJOR 2011 %SHARE 2015 %SHARE %RISE

TALISON 47.0 32.4 110.0 48.7 134.0

SQM* 44.0 30.4 44.0 19.5 00.0

CHEMETALL

36.4 25.1 48.8 21.6 34.1

FMC 17.5 12.1 23.0 10.2 31.4

TOTAL 144.9 100.0 225.8 100.0 55.8

Near Projects in Development

Company Start Location Plan capacity*

Galaxy Resources 2011 Aus/China 17k

Orocobre 2012 Argentina 15k

Canada Lithium 2012 Quebec 19k

Western Lithium 2014 Nevada 27k

Lithium Americas 2014 Argentina 15k

Total 93k tpa LCE

*Company published LCE annual capacity

By 2012 Talison’s Greenbushes, WA capacity will equal 2010 world demand: 110k tpa LCE Reserves: 9.6m. te 3.9% Li20 (920k LCE) M&I Resources: 22.0m te 3.7% Li20 (2m LCE)Capacity: 315k tpa concentrates (47k LCE) going to 740k tpa (110k LCE) June 2012Li2CO3 plant: Undertaking engineering & location studies for Li2CO3 plant & targeting first stage 20ktpa fiscal 2015 with a second 20ktpa stage to follow. Total: 40,000 tpa Courtesy: Talison Lithium, Greenbushes, WA

Chemetall Lithium Salar de Atacama: 30k tpa LCE

SQM’s final LiCl evaporation pond In 2010 the brine volume (2,700 ppm Li) pumped to produce 1.5m tonnes of potash contained such a large volume of lithium in excess of the 44k tpa LCE capacity that 400k tonnes LCE were reinjected into the aquifer.

Emerging & Advanced Projects

Brines Mines

Rincon Lithium 2010 Galaxy Resources 2010

Orocobre 2012 Reed Resources 2011

Albemarle 2012 Canada Lithium 2012

Lithium Americas 2014 Nemaska Exploration 2013

Lithium One 2014 Western Lithium 2014

POSCO 2014

Rodinia 2015

International Li 2016 Rio Tinto 2016

Plus other projects further out------and------China?

Rincon Lithium Ltd Privately-owned

Salar del Rincon, Salta, Argentina: ADY Resources Initiated 1,200 tpa 99.5% Li2CO3 December 2010

Brine: 600 ppm Li, 2,500 ppm Mg Phased expansions up to 50k tpa Li2CO3

Reserves: 1.4m tonnes lithium: NI43-101 awaited Project initiated 2002 by Equity-1 Resources morphed

into Admiralty Resources 2004 and developed project to envisaged 17,000 tpa Li2CO3 2007 starting mid-2008.

Sold to Cayman-based The Sentient Group December 2008 for $22.17m.

Orocobre ASX:ORE TSX:ORLSalar de Olaroz, Jujuy, Argentina: Flagship project 2008 init. Strategic partner: Toyota Tsusho backed JOGMEC Brine: 690 Li, 5,730 K, 1,656 Mg, plus B NI43-101 M+I Reserve: 1.2m tonnes contained lithium FS 2011: 16,400 tpa Li2CO3: 2012 start

Capital cost: $206.7m. Op Cost: $1,512/t Li2CO3 or $1,230/t net including K2O

Sinclair Knight Merz project engineers Final stages approvals, financing, engineering progressing Also advancing Salar de Salinas Grandes, Salta; Salar de

Cauchari, Jujuy; Salar de Guayatoyac

Albemarle NYSE: ALB

Major corporation: Market Cap: $3,754,082,640 Magnolia, Arkansas: 148,000 tpa bromine Smackover Formation oilfield brine: 750kt Li 100-200 ppm lithium in bromine tailings April 2011: new proprietary tech for Li extraction Pilot plant now optimising process Commercial production as early as 2013 Capacity not announced: maybe 10-15kt Li2CO3

Other oilfield brines projects: Alberta, Canada nowhere close.

Lithium Americas TSX:LAC OTCQX:LHMAF

Salar de Cauchari-Olaroz, Jujuy, Argentina Strategic partners: Magna (13.3%), Mitsubishi (4.1%) Brine: 627 Li; 5,417 K; 1,470 Mg NI43-101 M+I Reserve: 997kt contained lithium Full FS expected Q1 2012 April 2011 PEA Op cost: $1,434/tonne Li2CO3

Engineers: ARA Worley Parsons Two phases: 20k tpa 2014; 20ktpa 2018 Capital cost: $217m phase 1; $399m phases 1 & 2 Expect 75% phase 1 production 2015: 16,000 tpa Li2CO3

Also in Incahuasi, Pocitas, Arizario: 82,200 ha total

Lithium One TSX-V:LI

Sal de Vida, Salar de Hombre Muerto, Salta, Argentina :39,200 ha Strategic partner: Kores/GS Caltex/LG Int’l consortium Brine: 695 Li, 7,590K, 1,520 Mg, plus B NI43-101 Inf Reserve: 1.0m tonnes contained lithium Expect PEA Q3/2011 and FS Q2/2012 Pilot plant operating since October 2010 ARA Worley Parsons project engineers Plan 20,000 tpa Li2CO3 2014

Cyr Property, James Bay, Quebec, Canada: 11,991 ha Galaxy Resources acquire 20% for C$3m in 2011 Earn-in up to 70%: Galaxy Resources/started DFS exp Q4/2012 Hard rock (Spodumene): average grade 1.25% Li2O; c/o 0.75% NI43-101 Ind Res: 70,900 tonnes Li & Inf Res: 58,300 tonnes Li

Rodinia Lithium TSXV: RM OTCQX: RDNAF

Salar de Diablillos, Salta, Argentina: 5,786 ha Strategic partner: Shanshan Enterprise (equity) Brine: 556 Li, 6,206 K, 2,057 Mg, plus B NI43-101 Inf Reserve: 932kt contained lithium PEA Q1 2012 for 10-15ktpa LCE start 2015

Esmeralda Co, Clayton Valley, Nevada, USA: 29,275 ha

Ratones & Centenario, Salta, Argentina: 1,282 ha

Salinas Grandes, Jujuy, Argentina: 4,500 ha

International Lithium TSX-V: ILC TNR Gold spin-off May 2011 (TNR retains 29%)

Salar de Mariana, Salta, Argentina 12,000 ha TNR Gold spin-off May 2011 (TNR retains 29%) Strategic Investor: Jiangxi Ganfeng Lithium 9.99% NI43-101 resource estimate Q4 2011: 2016 start

Runway, Fish Lake, Sarcobatus Flats, Nevada, USA: 4,800 ha

Moose, NWT, Canada: Li, Ta project mined 40s/50s Forgan Lake, Ontario, Canada: Li, Ta project Niemi, ON, Canada: Li, Ta project Mavis, ON, Canada: Li, TA, Cs, Rb project Blackfriars, Leinster, Ireland: Li (Ta-Nb) project

Galaxy Resources ASX: GXY

Mount Cattlin, WA: Dec 2010 start; 18 years mine life Strategic: Mitsubishi (30%)/13 Chinese Cathode Makers JORC M+I Reserve 2011: 70kt Li: Total 91kt Li; 1.08%

Li2O

Capacity: 137,000 tpa concentrates @ 6.1% Li2O (+Ta)

Zhangjiagang, Jiangsu, China: 17ktpa Li2CO3; 99.5% Li2CO3

Cap cost: US$100m, continuous process, starting 2011

Cyr Property, James Bay, QC, Canada: Initial 20% stake & up to 70% by earn-in Feasibility Study Also Lithium battery manufacturing plant Earn-in: any Li project General Mining, UVS Nuur, China

Galaxy Resources Lithium Carbonate plant nearing completion Zhangjiagang, Jiangsu: 17k tpa starting Q4 2011 NB: Continuous process production line

Reed Resources ASX: RDRMineral Resources Ltd 30%

Mt Marion, near Kalgoorlie, WA: 10 year mine life (plus)

JORC M+I Res July 2011: 44kt Li: Total 93 kt Li @ 1.3% Li2O and 0.3% cut-off grade

Capacity: 204,000 tpa concentrates @ 6.5% Li2O

Start: Plant commissioning expected December 2011

Canada Lithium TSX: CLQ

LaCorne, Val d’Or, QC, Canada: Updated reserves Marketing rights option agreement: Mitsui & Co Proven & Probable Reserve: 17,064kt @ 0.94% Li2O

Plus low grade P&P Reserve: 3,271kt @ 0.38% Li2O

Total P&P Reserve: 20,335kt @ 0.85% Li2O: 80.2kt Li

For a 20,000 tpa Li2CO3 plant 2013

Capital construction cost: US$202m. Operating cost: US$3,164 per tonne Li2CO3

Now under construction for commission Q4 2012 Full production expected Q4 2013 15 years life

Nemaska Exploration TSX-V: NMX

Whabouchi, James Bay, QC, Canada: 15 years mine life Strategic: Chengdu Tianqi Lithium Industry Gp (10%) NI43-101 M+I Res: 25.1kt @ 1.54% Li2O: 179.2 kt Li

Open pit Q2 2013: 202,000 tpa spodumene concs DFS for concentrate Q1 2012; Q2 2012 for Li2CO3

Plant for Li2CO3 & LiOH: construct 2013: 25ktpa LCE

Also Sirmac Property

Nemaska Exploration: Whabouchi, James Bay, QCM+I Resources: 25.1m tonnes @ 1.54% Li2O & 0.4% Li2O cut-off

Sichuan Tianqi Lithium Industry Co LtdSpodumene conversion plant, Shehong, Sichuan

Western Lithium USA TSX: WLCConcordia Resources Corp (formerly Western Uranium) 28.5%

Kings Valley, Humboldt Co, Nevada, USA Soft rock: hectorite; 5 stage lenses Stage 1 NI43-101 M+I Res: 37.3m tonnes @ 0.404% Li =

150.7kt lithium. Represents 7.3% of historic total Supports 25-year mine life Jan 2010: 27.7ktpa Li2CO3 & operating cost $1,967/tonne

Nov 2010 upgraded Stage 1 feedstock resource allowed lower initial capacity at 13,500 tpa Li2CO3 and overall reduced costs

Prefeasibility study expected now Detailed engineering/construction: mid-2012 Expect commission H2 2014

Rio Tinto

Jadar Valley, Serbia Jadarite: new Li & B mineral discovered by Rio 2007 Lower jadarite zone: 125.3m tonnes @ 1.8% Li2O

Decided to retain & develop project: $27m drill camp Free milling soft rock Off-the shelf conversion technology Envisaged commissioning 2016 earliest Now joined by Pan Global Resources/LithiumLi Holdings

and Ultra Lithium Corp

Lithium Resources in ChinaContinental Brines: One in Tibet, two in Qinghai: Remote west

Hard Rock: Four in Sichuan, two in Jiangxi, one in Hunan

Mineral Conversion: Ten companies 2011 capacity: 52.5k LCE

Sichuan Tianqi, Xinjiang Lithium Salt, Ganfeng Lithium, Sichuan Ni&Co Guorun are the majors now being joined by Galaxy Resources at Zhangjiagang, Shanghai (17k tpa LCE)

External reliance: Spodumene imports from Australia, partnering new resource development in Canada (Tianqi/Nemaska) & Argentina (Internat’l Lithium/Ganfeng)

High altitude, high magnesium, remoteness & robust growth in traditional lithium mineral uses especially glass/now battery

Other projects further out

Simbol Materials, S California KGRA, Geo brines

Bollore-Eramet: Minera Santa Rita, Argentina

Salares Lithium Inc, Salares 7, Atacama RIII

East Coast Minerals: Austria

Li3 Energy, Salar de Maricunga, Chile

American Lithium Minerals, Borate Hills, NV, USA

Perilya Canada, Moblan, QC, Canada (Globestar)

Rock Tech Lithium, Georgia Lake, ON, Canada

And many more: see LAWM June 2011

Considerations Location: infrastructure, market proximity, reagent supply Diversification: geopolitical, oligopoly Commissioning to full capacity: ramping period Strategic partnerships: financial support, off-takes Resource quality: operating cost, scale, by-products, losses End product markets: direct, CO3, OH, Cl, derivative

Government influences: CO2 reduction, supply security

Processing capability: conversion know-how Financial strength: patience for ROI, failure risk Project entry timing v market uptake: minimum capacity Major companies’ actions: price, capacity expansion Long term global resource capability: Ford Motor Co: 2100

need 40m tonnes Li up to 2100 for 50/50% losses/market compares with LAWM 2009 39.4m tonnes Li broad base identified global reserve.

Prognosis

Galaxy only significant emerging entrant today! Buyers support supply diversification allowing several

only to enter at low occupacity levels restraining prices and slowing project development

Market volume growth to 2020 too slow causes project delays, shelving, abandonment.

Market volume growth to 2100 requires all projects (except seawater) to meet cumulative demand of 20m. tonnes Li -- 50% of broad based reserves of over 39m. tonnes (LAWM 2009) just covers need for double demand levels to cover extraction losses (Miller, Ford Motor Co. 2011).

Timing and project capability are key

Survivors

Simple analysis: Is any new project essential?

Future market demand

What will be the truth?

Thank you