Inside the Investment Case: Lithium Africa Corp.

(TSX-V: LAF | FSE: 6MQ | OTCQB: LTAFF)

Lithium Africa Corp. has rapidly emerged as one of the newest lithium explorers on the public markets, backed by a strategic partnership with global lithium leader Ganfeng Lithium. In this episode, current CEO Tyron Breytenbach, who is transitioning to a Capital Markets Advisor role, and incoming CEO Dr. Tom Benson discuss the company's growing, continent-scale African portfolio, anchored by its projects in South Africa and Côte d'Ivoire, its recent TSX-V listing and subsequent financing, and why management believes the company could play an important role in the future lithium supply chain.

Featuring:
Tyron Breytenbach, CEO of Lithium Africa Corp.
Dr. Tom Benson, Incoming CEO of Lithium Africa Corp.

Website: www.li-africa.com

Guest Host: Lyndsay Malchuk, Apaton Media

Recorded live at 121 Mining Investment New York.

Transcript

SPEAKER_03 0:00

You're listening to the AFSA Podcast, where mining meets capital, powered by one-to-one mining investment. Today we are coming live from our event in New York City. Please note this podcast is for information only and isn't financial advice or recommendation to invest. As always, the views you'll hear are those of the speakers.

SPEAKER_02 0:18

Welcome back to Inside the Investment Case. I'm your guest host, Lindsay Melchak, coming to you right from the one-to-one mining investment conference right here in New York. Everyone knows the world needs critical minerals. The real question is, where will the next meaningful discovery actually come from? Today's companies believe one of those answers may lie in South Africa's northern cape. Lithium Africa is advancing the Springbok Project, a district-scale land package that includes a historic lithium mine and a growing exploration story in a region that remains largely unexplored for battery metals. Joining me today is Tyron Breitenbach, CEO of Lithium Africa, and the incoming CEO Tom Benson. To both of you, thank you so much for joining me.

SPEAKER_00 1:01

Thanks for having us.

SPEAKER_02 1:02

So the show has been good. Some new faces.

SPEAKER_00 1:05

Definitely. As we were chatting before we started recording, uh we've definitely seen the demographic get younger. Um a lot of unrecognizable names on our on our schedule, but uh yeah, we've been pleasantly surprised.

SPEAKER_02 1:17

Oh my gosh. Okay, so I'm gonna kick this off right with you then. Why lithium? Like why Africa? Why now?

SPEAKER_01 1:24

Lithium is such an exciting uh uh chemical. Uh it's an exciting time to be in lithium as we're seeing uh accelerating growth in the battery space, both for energy storage as well as electric vehicles. Uh a lot of the people predict uh that know the market very well that the lithium demand is just going up and it's going up at a faster and faster rate every year. And so now's the time we need to meet this moment where we need to provide the supply that can meet this incoming demand. And there's a lot of resources globally, uh, but a lot of them are sort of tapped out. Uh people are developing them, and we need more than we know exist currently. And at lithium in Africa is the new frontier for that.

SPEAKER_02 2:08

Absolutely. We started we're starting to hear a lot more about lithium for sure. It's really starting to really step into the spotlight that is needed, definitely. I'm gonna throw this over to you, Tyrone. What macro trends are you seeing that give you conviction that this is the right opportunity right now?

SPEAKER_00 2:25

I think the whole AI uh revolution is gonna be a game changer. Okay. Um in China they can now produce power using solar at a lower cost than uh other forms of energy. Okay, but solar always needs a battery. So our uh biggest shareholder and joint venture partner is Gangfeng. I believe they're the second largest lithium producer on the planet. They're about a $20 billion market cap trade on the Hong Kong Exchange. So they're our guide to what's happening on the battery side of the market. And um, three years ago it was all electric vehicles, okay? Uh now it's these battery storage systems that are uh attached to these solar farms and definitely play into the AI theme. Um that's that's been a massive driver of this exponential growth.

SPEAKER_02 3:07

Well, there's a lot of innovation that's happening around the AI thing as well. I mean, I heard that in Germany they're building this um the you know, the data centers and stuff like that, they're building those, or even Bitcoin, down at the bottom of apartment buildings and all the heat that is they're accumulating the heat from that to heat the building. I mean, how innovative is that?

SPEAKER_00 3:27

Absolutely. I think we're just at the very early innings of this trend, right?

SPEAKER_02 3:31

Absolutely.

SPEAKER_00 3:32

And uh being able to store energy is gonna tie into all of this. And what's interesting about lithium is there isn't really a replacement just because of its place on the periodic table, you cannot substitute it. So there's different battery chemistries, and they'll play around with nickel and and and uh cobalt and some of these other elements, but but uh you know, lithium is gonna be part of this faster, cleaner, you know, more sophisticated future.

SPEAKER_02 3:52

Absolutely. Tom, I'm gonna challenge the narrative just a little bit here. Lithium prices have been volatile, investor sentiment has definitely cooled. Many companies have become more cautious about this. Why are you leaning into what others are stepping back with right now? Like what opportunity do you think the market just does not understand quite yet?

SPEAKER_01 4:10

As lithium explorers, I think it's our job to be counter-cyclical. Uh I've been involved in uh Lithium America's lithium Argentina, uh amazing projects at different points in the cost curve. And one of the things that uh will uh be true for in perpetuity is that uh if you're on the low end of the cost curve, you'll be safe from that volatility. Okay. And that's why here at Lithium Africa we're really focusing on low-cost spogamine throughout Africa. These are quick-to-permit low-cost projects that can survive any sort of volatility uh going future. So in the highest highs and the lowest lows will be great, but especially in the highest highs, like currently we're on the upswing in lithium. Prices of spogamine are going up, they're 5x what they were a year ago. And so being an African lithium play with a producing spodamine asset, we're well suited to take advantage of this upswing at this moment.

SPEAKER_02 5:06

Well, that makes total sense. And it's interesting because investors they are constantly trying to separate the short-term uh sentiment from the long-term value creation for sure. I'm gonna throw this back over to you. One thing investors rarely get insight into how management teams make their decisions. So every company you have opportunities that can pursue. What have you deliberately not done though? What projects, transactions, or opportunities have you walked away from?

SPEAKER_00 5:33

Uh it's a question we ask ourselves every day. And I would agree with you, most investors, I think, um, don't really understand what happens inside the boardroom. And I thought I did when I was an investment banker, but you know, switching over to the corporate side, it's uh it's a very different set of uh you know variables you have to think about. So we have a couple of core philosophies. Okay. And that is uh we're gonna go where the geology is best. Okay, so uh 80% of our employee base are geologists. It's uh a very stimulating place to work if you're a geologist. So we look for the best deposits: highest grade, lowest strip, largest crystal size, easiest to concentrate. Then we use other filters like safety, uh, social issues, infrastructure. But we start with the geology and work our way down a filtering mechanism, and we don't want to find tier two assets. We don't want to squint and squeeze a mediocre asset into production because it's all we got. Uh most companies in the TSX are single asset and it's kind of binary, right? It's either going to turn into a mine or it's not.

SPEAKER_03 6:31

That's true.

SPEAKER_00 6:32

We've taken a different approach where we're sort of a prospect generator, and if we think the asset has the potential to be tier one, we're gonna push it forward ourselves. So our job is to give our investors three or four shots on net every year. We're going to miss, that's the nature of the business, but we're going to be diversified and try and give asymmetric risk reward. And so that's kind of core core to DNA. And our partner, Gangfeng, is uh sort of an auditor for this decision uh making. So they're on our joint venture, they we make these decisions together. We're geologists and experts uh in doing deals in Africa, they're chemical experts, right? And so between the two of us, uh we we need consensus before we move forward on a project.

SPEAKER_02 7:12

And that's what partnership's all about, right? It almost takes a community for sure. Sometimes some of the things that, you know, for an on an investor side, some sometimes what you say no to tells more to an investor than what you say yes to. So, Tim, over to you. Let's talk capital allocation here, okay? Over the next we're just gonna say 18 to 24 months, what does each dollar create the most share value? I mean, where does it is it, is it the drilling, is it the resource definition, strategic partnerships? What is it?

SPEAKER_01 7:41

Great question. For us, it's all about exploration. We want to hit that first uh part of the Lason curve where we're maximizing re-rating during the discovery period. If you look at key lithium stocks after their discovery, like Lion Town, Q2, Patriot, we want to take advantage of that upswing, and how we do that is discovery through drilling. Okay. So what we want to do is maximize the amount of drill that drilling that we do, most of our capital will be going towards drill programs. We have two uh programs right now going on. And uh what's great about our model is not only is every dollar that we put in the ground uh going towards drilling and defining resources, it's matched by GanFang at the JB level. So one dollar that we spend is matched by one dollar by Ganfang. So one dollar goes a lot longer, uh uh a lot faster when when you when GanFang's by your side.

SPEAKER_02 8:34

Absolutely. So clearly there are some management shifts happening. Maybe you can give us a little highlight on what is happening on the management side.

SPEAKER_00 8:42

Sure things. So uh I co-founded the company uh three or four years ago. Um I've been the CEO while the company was private. Uh it was a very interesting time. We were in a lithium bear market, but we had this long-term support of shareholder in Gangfang, which really allows us to survive when there was carnage in the space. And so we accumulated our assets and and built our team. And uh, you know, Tom's a globally recognized lithium expert, and um, because of his relationship with Gangfang, he was sort of seconded to us to review our exploration programs, and and uh he just fell in love with our business model. And uh, you know, uh a year into this advisory role, he was kind of running the the meetings, and so uh we discussed uh the idea of him coming on as CEO, uh, and really he's the perfect fit because um he's an expirationist, he is a team player, uh, he's good at managing people, but he's also respected by Gangfen, and he's known to Gangfeng. I'm a bit of an outsider to the Gangfeng universe, and so you know I think Tom's a better fit for our specific business model. Uh I am a geologist as well, but it's been uh a decade since I've really been in the field kind of licking rocks, and so I'll support him on the capital market side as a former sell side analyst and investor banker.

SPEAKER_02 9:54

That's great. Well, it's been a great conversation. I'm sure that there's so much more that we could talk about, so definitely do come back soon and we'll we'll delve a little bit deeper.

SPEAKER_00 10:01

Thank you for having us.

SPEAKER_02 10:02

Absolutely.

SPEAKER_00 10:02

Thank you.

SPEAKER_02 10:03

I've been talking with Tyron and Tom from Lithium Africa. The company trades on the TSX Venture under the symbol LAF, on the Frankfurt under 6MQ, and on the OTCQB under the symbol LTAFF. To learn more, visit lithium africa or li-africa.com. And I'm gonna leave you with this thought. In a market where everyone is looking for the next major source of critical minerals, could some of the most compelling opportunities still be hiding in regions that remain largely overlooked? That's for the investors to decide. I'm your guest host, Lindsay Melchak, right here in New York City. We'll see you next time.

SPEAKER_03 10:38

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