Announcement • Sep 25

+ 2 more updates

Allkem Limited Announces Update to Olaroz Lithium Brine Operation Located in Jujuy Province in Argentina

Allkem Limited announced an update to the Olaroz lithium brine operation located in Jujuy Province in Argentina. Allkem has reviewed and updated the Mineral Resources and economics for the Olaroz Lithium Facility including Stage 1 and Stage 2. In April 2022, Allkem released a Technical Report updating key economic metrics for Olaroz Stage 2 and in March 2023, Allkem released a Technical Report updating Mineral Resources. Project Background: Allkem is the operator and majority owner of Olaroz, located in the Jujuy Province, in northwest Argentina. Allkem Limited holds 66.5% of Olaroz through its local subsidiary Sales de Jujuy S.A. (SDJ), with the remaining project ownership held by Toyota Tsusho (25%) and the Jujuy Energía y Minería Sociedad del Estado (JEMSE) (8.5%). This Joint Venture holds mineral properties that cover the majority of the Salar de Olaroz, including tenements covering 47,615 hectares and two exploration properties (cateos) consisting of 33 mining concessions. Olaroz is fully permitted by the provincial mining authorities and has provincial and federal permits, to allow operations for an initial 40 year mine life with renewable options to extend beyond 2053. Olaroz Stage 1 is the original project which commenced operation between 2013 and 2015 during the production ramp-up, with a maximum production capacity of 17,500 tpa of lithium carbonate. The Olaroz Stage 2 expansion, targeting an additional 25,000 tpa of lithium carbonate, produced first wet concentrate in July 2023, and is scheduled to commence production in the second half of the current year 2023. Olaroz Stage 1 and Stage 2’s cumulative site lithium carbonate production capacity is 42,500 tpa. Geology & Mineralisation: The Olaroz salar is located in the elevated Altiplano-Puna plateau of the Central Andes. The Puna plateau of north-western Argentina comprises a series of dominantly NNW to NNE trending reverse fault-bounded ranges up to 5,000-6,000 m high, with intervening internally drained basins at an average elevation of 3,700 m. High evaporation rates, together with reduced precipitation, have led to the deposition of evaporites in many of the Puna basins since 15 Ma, with borate deposition occurring for the past 8 Myr. Precipitation of salts and evaporites has occurred in the centre of basins where evaporation is the only means of water escaping from the hydrological system. Mineralization in the Olaroz salar consists of lithium dissolved in a hyper-saline brine, which is about eight times more concentrated than seawater. The lithium concentration is the product of the solar evaporation of brackish water which flows into the salar as groundwater and occasional surface water flows. The concentrated brine with lithium is distributed throughout the salar in pore spaces between grains of sediment. The brine also extends a considerable distance away from the salar, beneath alluvial gravel fans around the edges of the salar. These areas are largely unexplored by the company to date. In addition to lithium, there are other elements, such as sodium, magnesium, and boron, which constitute impurities that are removed in the ponds and processing plant. Mineral Resource Update: Olaroz wellfield update: Following installation of the Stage 1 production wellfield at Olaroz, several deeper wells were installed in 2014 below 200 m in depth and subsequently utilised for Stage 1 production. This deeper drilling intersected high porosity and permeability sand units, with flow rates of over 30 litres per second (l/s). This discovery initiated evaluation of the deeper resource potential of the basin. Since 2011, material amounts of new information have been obtained from exploration and production activities at Olaroz. This included geological and production data from Stage 1 production and monitoring holes generally drilled to 200m, with some to 350m and 450 m; and the Stage 2 expansion production and monitoring holes to depths of between 450 and 650 metres. Additional information has also come from drilling in Cauchari, a 1,408 m deep exploration hole north of the production holes in Olaroz and geophysical surveys over the whole basin. Olaroz Stage 2 involved an expansion of facilities and production capacity to reach a total production capacity of 42,500 tpa LCE. This involved the installation of additional wells for brine extraction and for industrial water extraction, pipelines for brine and fresh water, additional brine collection ponds, lime plants, significantly expanded evaporation ponds (adjacent to the existing ponds), a new plant facility, stores, power generation facilities, reverse osmosis plant, production plant and accommodation camp. The last of the 15 new wells for Stage 2 production was completed late in 2022. These production wells are now installed to depths between 450 m and 650 m (with one hole to 751 m), and most of the brine production comes from these deeper levels in the Salar on a 1 km grid spacing in the central to eastern area of the Salar, between the original Northern and Southern wellfields. In addition to the production wells, a number of diamond drill holes provide core and brine samples and allowed the installation of monitoring wells. The Stage 2 production wells are producing a combined flow of approximately 396 l/s, at an average per well of 28 l/s, since beginning operation. This is considerably higher than the Stage 1 wells, which have averaged 11 l/s per hole since the beginning of 2017. Samples from the wells were sent to external and internal laboratories for chemical analysis. This information and downhole geophysics (from a borehole magnetic resonance tool, part of a broader suite of geophysical tools) were used to update the geological model. The newly completed wells reached depths between 390 m and 751 m (E15). The lithium concentrations recorded an average lithium grade of 643 mg/L and varied from 544 mg/L to 789 mg/L. Further drilling information and analytical results are displayed in the Annexures. Wellfield operation started August 2013 with the ramp-up of stage 1 wells and then in current year 2021 wellfield production increased again with the ramp-up of stage 2 wells. The historical well production from start of wellfield operation to 30 June 30 2023, is approx. 291kt of LCE. 286kt thousand tonnes of LCE was depleted from measured resources and 5kt of LCE was depleted from indicated resource over this period.

Metals and Mining Industry Growth	29.18%
Revenue growth rate	69.05%
Return on equity	14.68%
Net Margin	36.84%
Last Earnings Update	30 Jun 2023

Date	Revenue	Earnings	G+A Expenses
30 Jun 23	1,208	445	136
31 Mar 23	1,165	458	129
31 Dec 22	1,147	473	125
30 Sep 22	958	389	110
30 Jun 22	745	303	91
31 Mar 22	487	139	62
31 Dec 21	229	-24	33
30 Sep 21	157	-42	27
30 Jun 21	85	-60	21
31 Mar 21	74	-58	19
31 Dec 20	64	-56	18
30 Sep 20	71	-54	19
30 Jun 20	77	-52	21
31 Mar 20	99	-18	23
31 Dec 19	121	16	26
30 Sep 19	101	35	22
30 Jun 19	81	55	19
31 Mar 19	50	36	17
31 Dec 18	19	18	15
30 Sep 18	18	10	16
30 Jun 18	17	2	17
31 Dec 17	17	5	13
30 Sep 17	17	5	12
30 Jun 17	17	5	10
31 Dec 16	15	6	13
30 Sep 16	15	-8	13
30 Jun 16	16	-22	13
31 Mar 16	17	-22	12
31 Dec 15	20	-23	12
30 Sep 15	20	-12	12
30 Jun 15	19	-1	11
31 Mar 15	17	-1	10
31 Dec 14	18	-2	9
30 Sep 14	20	-3	9
30 Jun 14	22	-5	9
31 Mar 14	21	-5	9
31 Dec 13	20	-4	10
30 Sep 13	20	89	11
30 Jun 13	16	88	10
31 Mar 13	13	101	9

Data	Last Updated (UTC time)
Company Analysis	2024/01/06 19:33
End of Day Share Price	2023/12/21 00:00
Earnings	2023/06/30
Annual Earnings	2023/06/30

Package	Data	Timeframe	Example US Source ^*
Company Financials	10 years	Income statement Cash flow statement Balance sheet	SEC Form 10-K SEC Form 10-Q
Analyst Consensus Estimates	+3 years	Forecast financials Analyst price targets	Analyst Research Reports Blue Matrix
Market Prices	30 years	Stock prices Dividends, Splits and Actions	ICE Market Data SEC Form S-1
Ownership	10 years	Top shareholders Insider trading	SEC Form 4 SEC Form 13D
Management	10 years	Leadership team Board of directors	SEC Form 10-K SEC Form DEF 14A
Key Developments	10 years	Company announcements	SEC Form 8-K

Analyst	Institution
Joel Jackson	BMO Capital Markets Equity Research
James Redfern	BofA Global Research
Reg Spencer	Canaccord Genuity

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Allkem Past Earnings Performance

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Recent past performance updates

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Full year 2022 earnings released: EPS: US$0.52 (vs US$0.18 loss in FY 2021)

First half 2022 earnings: Revenues miss analyst expectations

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Chair recently bought €126k worth of stock

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Key Executive recently bought €164k worth of stock

High number of new directors

Investor sentiment improved over the past week

Non-Executive Director recently sold €14m worth of stock

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Now 22% undervalued

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MD, CEO & Director recently sold €293k worth of stock

Non-Executive Director recently sold €4.9m worth of stock

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Independent Non-Executive Director John Gibson has left the company

Non-Executive Director Masaharu Katayama has left the company

Director Patricia Martinez has left the company

Revenue misses expectations

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New 90-day high: €3.65

Non-Executive Director recently bought €592k worth of stock

New 90-day high: €2.89

New 90-day high: €2.63

New 90-day high: €1.87

New 90-day low: €1.43

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