20-F: Lifezone Metals Limited Files 20-F Annual Report for Fiscal Year Ended December 31, 2024

Lifezone Metals Limited reports its financial results and operational activities for the year ended December 31, 2024, highlighting progress in the Kabanga Nickel Project and PGM recycling partnership.

Summary

• Lifezone Metals Limited has filed its 20-F annual report, detailing the company's performance for the fiscal year ended December 31, 2024.
• The report highlights the company's focus on cleaner and more sustainable metals production, primarily through the Kabanga Nickel Project in Tanzania and a PGM recycling project.
• Key dates include the announcement of a new staging plan for the Kabanga Nickel Project in April 2025 and the expected release of the Definitive Feasibility Study in mid-2025.
• In January 2024, the company discovered additional high-grade nickel mineralization at the Safari Link Area of the Kabanga Nickel Project.
• A recycling subscription agreement was signed with Glencore in January 2024 for a PGM recycling project utilizing Hydromet Technology.
• The Kahama Hydromet Refinery received its Environmental Impact Assessment Certificate in February 2024.
• Lifezone closed a $50 million non-brokered private placement of unsecured convertible debentures in March 2024.
• The company produced its first nickel, copper, and cobalt from the Kabanga Nickel Project at Lifezone's Simulus laboratory in July 2024.
• Lifezone initiated a process for risk insurance with the United States International Development Finance Corporation for the Kabanga Nickel Project in August 2024.
• A Memorandum of Understanding was signed with the Japan Organization for Metals and Energy Security in October 2024 for a strategic partnership.
• Lifezone upgraded nickel, copper, and cobalt Mineral Resources at the Kabanga Nickel Project in December 2024.
• The company reported a net loss of $47.1 million for the year ended December 31, 2024.
• The company's management has identified a material weakness in its internal control over financial reporting.
• The company's management has concluded that its disclosure controls and procedures were not effective at a reasonable assurance level as of December 31, 2024.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While there are positive developments in project advancements and strategic partnerships, the financial results indicate a net loss and the identification of a material weakness in internal controls raises concerns. The sentiment is neutral, reflecting both progress and challenges.

Positives

• Discovery of additional high-grade nickel mineralization at the Safari Link Area of the Kabanga Nickel Project.
• Signing of the Recycling Subscription Agreement and completion of funding for Phase 1 of the partnership with Glencore for the PGM recycling project utilizing Hydromet Technology.
• Kahama Hydromet Refinery received its Environmental Impact Assessment Certificate.
• Lifezone produced its first nickel, copper, and cobalt from the Kabanga Nickel Project at Lifezone's Simulus laboratory.
• Lifezone upgraded nickel, copper, and cobalt Mineral Resources at the Kabanga Nickel Project.
• Signed Memorandum of Understanding with Japan Organization for Metals and Energy Security for a strategic partnership to secure cleaner nickel, copper and cobalt from the Kabanga Nickel Project for the Japanese battery industry.

Negatives

• The company reported a net loss of $47.1 million for the year ended December 31, 2024.
• The company's management has identified a material weakness in its internal control over financial reporting.
• The company's management has concluded that its disclosure controls and procedures were not effective at a reasonable assurance level as of December 31, 2024.
• Full impairment of goodwill of $9,020,813 associated with the Simulus acquisition.
• Provision of $3,434,062 for withholding tax payable.

Risks

• The company will require significant additional capital to fund its business.
• Geopolitical conditions and regulatory changes, including in Tanzania, could impact the company's development and growth.
• The company has no operating history on which to base an evaluation of its business and prospects.
• The company is subject to significant governmental regulations that affect its operations and costs.
• The company's ability to obtain, maintain, protect or enforce its intellectual property rights is uncertain.
• The company's technology has not been deployed at a commercial scale and may encounter operational difficulties.
• Changes in consumer demand and preference for metals relevant to the company could have a material adverse effect.
• The impact of inflation and/or escalating cost of capital could have a material adverse effect on the company's business.
• The company may be involved in litigation, and unfavorable decisions may be entered against the company.
• The company's operations may be subject to litigation or other claims in relation to tax regulations and challenges by tax authorities.
• The company may be subject to community unrest or in-migration risk which could result in pressure on the infrastructure at site, communicable diseases, higher crime, competition for jobs in the area, additional compensation, conflict with project affected people and/or potential delays.
• The company's operations are subject to water use regulations, which could impose significant costs and burdens.
• The company's business and operations may be negatively impacted by laws and regulations applicable to foreign owned companies and barriers to foreign investment in Tanzania.
• The potential impact of the control of currency conversion, restrictions on dividends or the ability to transfer funds out of Tanzania may negatively impact the company's business.
• The potential risk of the downgrading of Tanzania's debt rating by an international rating agency, or an increase in interest rates in Tanzania, impacting the company's ability to issue or use letters of credit.
• The ability of Lifezone Metals to continue to list its securities on the NYSE and comply with the NYSEs continued listing standards.
• The potential dilution of shareholders from Lifezone Metals issuing additional equity in the future.
• The company may be classified as an inadvertent investment company for the purposes of the United States Investment Company Act of 1940, as amended (the ICA ).
• The company is increasingly expected to operate in a responsible, transparent and sustainable manner and to provide benefits and mitigate adverse impacts to affected communities.
• Regulations and pending legislation governing issues involving climate change could result in increased operating costs, delays in project execution or lack of funding.
• The company may be subject to global resource nationalism trends which encompass a range of measures, such as seeking the greater participation of historically disadvantaged or indigenous people, expropriation or taxation, whereby governments seek to increase the economic benefits derived by their countries from their natural resources.
• Unexpected operational accidents, health and safety incidents and natural disasters, public health or political crises or other catastrophic events may adversely affect the company's operations.
• The company uses information, communication and technology systems, which record personal data and critical corporate and financial information. Failure of or damage to these systems, cyber threats, disruption or the failure to protect corporate and personal data, could significantly impact the company's business and operations.
• Lifezone Metals believes it was likely a passive foreign investment company (PFIC) for its taxable year ending December 31, 2024 and may be a PFIC for future taxable years, in which case United States investors will generally be subject to adverse United States federal income tax consequences.
• If a United States person is treated as owning at least 10% of Lifezone Ordinary Shares for United States federal income tax purposes, such holder may be subject to adverse United States federal income tax consequences.

Future Outlook

Lifezone expects to release the Definitive Feasibility Study for the Kabanga Nickel Project in mid-year 2025. The company will need additional capital in the future to fund its operations and project developments.

Industry Context

The report highlights Lifezone's commitment to cleaner and more sustainable metals production, aligning with the growing global focus on environmental, social, and governance (ESG) factors in the mining and metals industry.

Comparison to Industry Standards

• The report mentions that Lifezone is working to unlock a new source of London Metal Exchange (LME) grade nickel, copper and cobalt for the global battery metals markets.
• The report mentions that Lifezone is evaluating the design and construction of a commercial-scale hydromet PGM recycling facility in the United States to recycle PGMs from Autocats.
• The report mentions that Lifezone is working to unlock a new source of London Metal Exchange (LME) grade nickel, copper and cobalt for the global battery metals markets, to empower Tanzania to achieve full in-country value creation and become the next premier source of Class 1 nickel.

Legal Proceedings

• KNCL is in dispute with the TRA on a claim in relation to withholding tax of TZS 8,426,336,706 and interest for late payment of TZS 12,357,974,405.
• In February 2024 Lifezone Metals received a complaint from Alta Partners, LLC ( Alta ).

Related Party Transactions

• Lifezone had a commercial agreement with Keshel Consult Limited for the engagement of Keith Liddell as a technical consultant of LZL. This commercial agreement between LZL and Keshel Consult Limited was terminated on June 30, 2023, and replaced with a commercial agreement between LZL and Keith Liddell directly with effect from July 1, 2023.
• Mr. Charles Liddell (stepson of Mr. Keith Liddell) is the owner / partner in the Australian firm Integrated Finance Limited for the provision of IT services to LZL as well as to KNL. The commercial agreement between LZL and Integrated Finance Limited was terminated on December 31, 2023.
• Natasha Liddell (the daughter of Mr. Keith Liddell) was a paid employee of LZAP until February 16, 2024.
• Mr. Simon Liddell (the son of Mr. Keith Liddell) is a paid employee of LZAP.
• LZL had a commercial agreement with Southern Prospecting (UK) Limited for the engagement of Chris von Christierson as a consultant of LZL, in respect of mining projects and management. This commercial agreement with Southern Prospecting (UK) Limited was terminated on August 31, 2023.
• LZL had a commercial agreement with Transition Resources Limited for the engagement of Anthony von Christierson as a consultant of LZL. This commercial agreement with Transition Resources Limited was terminated on July 31, 2023.
• As of August 1, 2023, Anthony von Christierson is an employee of LZSL, as Senior Vice President: Commercial and Business Development.
• Lifezone had a commercial agreement with Fugue Pte Limited for the engagement of Mike Adams as a technical consultant of LZL. This commercial agreement between Lifezone and Fugue Pte Limited was terminated on June 30, 2023.
• Lifezone has a commercial agreement with Airvolution Co., an entity controlled by Mike Adams, with effect from July 1, 2022.
• Mr. Jonathan Adams (the son of Mike Adams) is a Senior Metallurgist at Lifezone.

Stakeholder Impact

• The report highlights the company's commitment to creating value for shareholders, employees, and the communities in which it operates.
• The report also mentions the company's efforts to minimize its environmental impact and promote sustainable development.

Next Steps

• Release results of the Definitive Feasibility Study for the Kabanga Nickel Project in mid-year 2025.
• Continue development of the Kabanga Nickel Project.
• Continue development of the PGM recycling project with Glencore.
• Continue to explore arrangements with potential customers for the eventual offtake of the metals produced in the future.

Key Dates

Keywords

Kabanga Nickel Project, Hydromet Technology, PGM Recycling, Financial Results, Lifezone Metals, Exploration, Mining, Nickel, Glencore, BHP