Friends of CTR, 

The first quarter of 2023 was a very busy and productive time for CTR.

As the Inflation Reduction Act continues to generate positive activity and interest in critical mineral projects in the United States, the CTR team took every advantage to consolidate the company’s position through operational and management strategies, taking the Hell’s Kitchen project from a concept 10 years ago, to the world’s largest and most sustainable lithium and power development. 

Anyone looking at lithium market fundamentals will find that global demand for lithium batteries is expected to surge 5-fold by 2030, and demand for lithium batteries in the United States alone is expected to grow more than six times and translate into $55 billion per year by the end of the decade. 

Benchmark Mineral Intelligence (BMI) is tracking a global total of 363 battery gigafactories in the pipeline to 2031, with an estimated capacity of over 8,000 GWh and over 150 gigafactories producing batteries today. The U.S. is aggressively supporting the build-out of a domestic battery supply chain with 23 battery manufacturing facilities either built, announced, or under construction. 

BMI has also penciled out decades-long fundamental drivers for lithium demand, with a forecast of 11.2 million tonnes of lithium (LCE) needed to be produced in 2050, over 20 times the amount produced in 2021.

CTR’s strategy to commence early engineering design for multiple lithium and power stages last year was perfectly timed. Ongoing, timely development will be critical to the U.S.'s agenda to build a sustainable, domestic battery materials supply chain. 

Optimization Plant and Lithium Recovery

In early January, CTR announced its engineering team had improved several process stages through operation of its Optimization Plant to achieve highly efficient lithium recovery from the company's Salton Sea geothermal brine resource.  

The Optimization Plant has operated continuously since 4th quarter last year with excellent results. We will continue to operate this facility until the next phase of construction commences later this year.  At that time, the Optimization Plant will be disassembled until the Stage 1 plant is in commercial operation. We plan to reassemble next to our Stage 1 facility so it can be utilized for work on other critical materials. 

MOU signed with Fuji Electric for EPC contracts totaling $US 1.4 billion 

In addition to valuable meetings in Washinton DC and Sacramento, and contributing to several clean energy thinktank sessions, including the Atlantic Council’s Global Energy Forum in Abu Dhabi, I was honored to join California’s Lieutenant Governor Eleni Kounalakis, who expertly led this year’s California Trade Delegation to Japan. 

During the visit, we inspected our 50% completed 55MW steam turbine and generator set being built at Fuji Electric. Later in the week, CTR and Fuji were joined by the Lieutenant Governor Kounalakis, Senior Advisor to Governor Newsom and Director of GO-Biz Dee Dee Myers, and CEC Chair David Hochschild to witness the signing of a Memorandum of Understanding to complete multiple Equipment, Procurement, and Construction (EPC) contracts for CTR’s next phase of development of an additional five power plants totaling approximately $US 1.4 billion. 

Governor Newsom visits Hell’s Kitchen 

CTR was delighted to host California Governor Gavin Newsom at Hell's Kitchen, where the Governor held his final ‘State of the State’ media address and toured our facilities. 

After a tour of the operations and Optimization Plant, Governor Newsom applauded CTR's efforts. Also attending were local leaders, including Torres Martinez Chairman Thomas Tortez, Representative Dr. Raul Ruiz, Assemblymember Eduardo Garcia, Imperial County Supervisor Ryan Kelley, Lithium Valley Commission Chair Silvia Paz, and San Diego State University President Adela De La Torre. 

I was very pleased to speak with the Governor and briefly discuss our plans and several innovative solutions that may align with Salton Sea mitigation efforts. The whole team was extremely proud to hear the Governor's closing words while holding up a sample of our lithium hydroxide. 

“I just want to applaud your efforts. This is a remarkable project, what you’re doing is next level, and that’s what this State is all about, and we want to partner with folks like you. So, thank you as well for your incredible example.” 

Getting it done!

From a practical standpoint, CTR’s Board of Directors is highly encouraged by the progress this quarter as the CTR team diligently works on the company’s public readiness program. 

The first major step of course, was the successful redomiciling of the company from Australia to the State of Delaware in the United States in December last year. Many other actions such as SEC reporting requirements and governance frameworks are now underway, and as a result, I am pleased to report that CTR will be “U.S. Public Ready” in early 2024.

The County of Imperial is due to issue our Conditional Use Permit (CUP) this summer, and we plan to continue construction of our first power and lithium facilities, having started with the construction of Well Pad 1 and the drilling of our first two wells. 

On February 7, The County of Imperial announced a tax rebate and incentive package for Lithium Valley developers and future battery materials companies seeking to co-locate in the region. The rebates include a $50 per metric ton tax rebate to lithium producers and a $50 per metric ton tax rebate to future companies producing batteries or battery materials within the County.  
 
In addition, the County of Imperial Board of Supervisors also voted to opt into the State’s Capital Investment Incentive Program (CIIP), which would provide up to 10 years' worth of partial property tax reductions of up to 80%. For example, a U.S. $1 billion qualified capital investment could receive as much as an annual U.S. $8 million property tax rebate. CTR is currently reviewing this information and is encouraged by this progress with local and State government.

CTR’s team continues to grow, and I’d like to welcome Cesar, Marcela, Austin, and Armando to the team! As we ramp up our construction and engineering programs, we expect to increase staffing by an additional 60 people over the next 12 months. 

Thanks to our incredible CTR crew and extended project teams at Hargrove and Fuji for your outstanding efforts and to our shareholders for your continued support. I look forward to sharing more exciting news in our next quarterly update.
 
All the best, 
 
Rod Colwell
Chief Executive Officer

Introducing CTR’s newest team members!

CTR is delighted to welcome Cesar, Marcela, Austin, and Armando to the team. 

Cesar Flores
CTR welcomes Cesar to our operations team as Senior Process Chemist. Cesar brings extensive experience in chemistry, specializing in environmentally focused engineering and production processes. 
 
Marcela Tapia
Marcela joins CTR’s Finance team as Staff Accountant with 13 years of experience as a Finance Manager in the non-profit and private sectors. Marcela will manage CTR’s financial procedures with a heavy focus on compliance through financial reports and statements. 
 
Austin J Demski
Austin joins the CTR team as Senior Manager of Systems Integration and Process Optimization. Austin’s previous work history with various roles relating to strategic finance and procurement, compliance and analysis makes him a key asset in successfully delivering CTR's Procurement programs and system integrations.  
 
Armando Lopez
CTR welcomes Armando Lopez to the team as Drilling Engineer. Armando's key responsibilities at CTR include analysis, interpretation, and support for drilling design and wellbore trajectory. Armando has an impressive working history which boasts awards, scholarships, and a position as Chapter President for the American Association of Drilling Engineers. 

Note to Readers: 
This is a ‘General Information Only’ communication. It includes personal opinions and forward-looking statements and should not be considered as advice. This communication may contain links to external websites and other information platforms. CTR takes no responsibility for the quality or accuracy of these external links or reports, nor should any reader rely on any information provided. Please do your own research.