Compass Minerals International Inc 8-K, filed Jul 13, 2021
Compass Minerals International Inc (CMP)
8-K
2021-07-13
For: 2021-07-13
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April 10, 2026
About this 8-K
Compass Minerals International Inc filed this 8-K on July 13, 2021.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 13, 2021
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices)
(913 ) 344-9200
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 7.01 Regulation FD Disclosure.
On July 13, 2021 , Compass Minerals International, Inc. issued a press release and presentation deck regarding lithium resources at its Ogden, Utah, site. A copy of the press release and presentation deck are attached as Exhibits 99.1 and 99.2, respectively, and incorporated by reference herein.
The information contained in this Item 7.01, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Exhibit Description | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
COMPASS MINERALS INTERNATIONAL, INC. | ||||||||
Date: | By: | /s/ James D. Standen | ||||||
Name: James D. Standen | ||||||||
Title: Chief Financial Officer | ||||||||
 | Exhibit 99.1 | ||||
FOR IMMEDIATE RELEASE
Compass Minerals Identifies Approximately 2.4 Million Metric Ton Sustainable Lithium Resource
Company Anticipates Development and Product Optionality with Minimal Environmental Impact
Company Undertaking a Strategic Resource Assessment Designed to Maximize Market Potential and Business Opportunity
OVERLAND PARK, Kan. (July 13, 2021) - Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, today announced that it has identified a lithium brine resource of approximately 2.4 million metric tons lithium carbonate equivalent (LCE) at its active Ogden, Utah, solar evaporation site, including an indicated lithium resource within the ambient brine of the Great Salt Lake.
For over 50 years, Compass Minerals’ Ogden facility has leveraged the high mineral concentrations within the ambient lake brine from the North Arm of the Great Salt Lake to produce sulfate of potash (SOP), salt and magnesium chloride products. The Ogden facility is the largest operation of its kind in the Western Hemisphere.
Compass Minerals is currently undertaking a strategic evaluation to assess development options available to service growing U.S. domestic lithium market demand while maximizing the long-term value of its lithium resource.
“We are aggressively evaluating multiple paths forward for this significant lithium brine resource to optimize shareholder value, in parallel with a reassessment of our current capital allocation strategy,” said Kevin S. Crutchfield, president and CEO. “In a market hungry for domestically sourced lithium produced with minimal environmental impact, we believe a sustainable and readily available lithium resource like we have defined at our operations on the Great Salt Lake could be a true differentiator for our company. We look forward to communicating the results of our strategic evaluation and the selection of an extraction technology partner as we identify the most advantageous path forward for Compass Minerals.”
Resource Assessment
The company has completed an initial assessment to define the lithium resource at Compass Minerals’ existing operations in accordance with applicable Securities and Exchange Commission (SEC) regulations, including subpart 1300 of Regulation S-K. The assessment estimates total combined indicated and inferred lithium resources of approximately 127,000 metric tons LCE within the interstitial brine (IB) held in the accumulated salt-mass reservoirs at Compass Minerals’ Ogden solar evaporation site. The assessment has also identified an additional indicated lithium resource of approximately 2.32 million metric tons LCE within the ambient brine of the Great Salt Lake, which can be accessed through the company’s existing infrastructure.
The company sustainably manages 160,000 acres of leasehold on the bed of the Great Salt Lake, together with held water rights, 55,000 acres of existing ponds and active mineral extraction permissions.
The company is evaluating the most efficient and sustainable means of extracting the lithium which accumulates through its current solar evaporation process and can be accessed through its existing leases and permits.
Business Opportunity
After an 18-month assessment of multiple direct lithium extraction (DLE) technology providers, including two separate and ongoing pilot projects to demonstrate successful lithium separation from the company’s existing brine resource, Compass Minerals is in the late stages of selecting a DLE technology partner.
The company is targeting an annual production capacity of approximately 20,000 to 25,000 metric tons LCE of battery-grade lithium, with up to 65% of the future production derived from brine that has already been extracted from the Great Salt Lake and in varying stages of concentration within the company’s existing ponds. Lithium concentrations within the ambient brine of the North Arm of the Great Salt Lake range from 55 to 60 parts per million (ppm), while concentrations in the company’s pond-derived magnesium chloride product reach up to 1,000 to 1,600 ppm after three years in the solar evaporation process. The lithium concentration in the IB ranges from 205 to 318 ppm. As such, the company anticipates being well-positioned to serve the widely forecasted increase in domestic market demand for lithium.
In addition, the company is actively engaged in third-party testing of conversion options to battery-grade lithium hydroxide. The company expects to share more information on a selected DLE technology partner and other milestones as the project progresses.
Ongoing Commitment to Environmental Stewardship
By leveraging existing operational infrastructure, permits and pond processes at its Ogden facility, the company believes it is uniquely positioned to capture the now-defined lithium resource with nominal incremental impact to the beds and waters of the Great Salt Lake. Compass Minerals has contracted with Minviro Ltd. to perform a formal life cycle assessment (LCA) of the company’s lithium development scenarios currently under consideration. Based on internationally recognized LCA standards, the Minviro assessment is expected to help quantify any environmental impacts associated with the development of this resource. Compass Minerals expects to leverage the findings of the LCA to identify ways to further minimize the project’s environmental footprint.
As a longstanding operator and engaged stakeholder on the Great Salt Lake, environmental stewardship is core to Compass Minerals’ culture and success. The company’s Ogden facility is the largest SOP production site in the Western Hemisphere, employing a solar evaporation process to harvest SOP, salt and magnesium chloride from the lake’s naturally occurring brine. This technique involves pumping mineral-rich brine from the Great Salt Lake into large open ponds where the sun and wind evaporate the water leaving beds of naturally occurring, crystallized minerals. By harnessing the power of the sun, the use of carbon-based energy sources is minimized, while also reducing costs and limiting greenhouse gas emissions.
Jointly serving as strategic advisors in the company’s assessment of how best to optimize its lithium resource value are J.P. Morgan and Perella Weinberg Partners. RK Equity Advisors has advised Compass Minerals on the development of the lithium resource.
A corporate presentation with information on Compass Minerals’ defined lithium resource is available at investors.compassminerals.com.
About Compass Minerals
Compass Minerals (NYSE: CMP) is a leading global provider of essential minerals focused on safely delivering where and when it matters to help solve nature’s challenges for customers and communities. Its salt products help keep roadways safe during winter weather and are used in numerous other consumer, industrial and agricultural applications. And its plant nutrition business manufactures products that improve the quality and yield of crops, while supporting sustainable agriculture. Additionally, its specialty chemical business serves the water treatment industry and other industrial processes. The company operates 16 production and packaging facilities with more than 2,000 employees throughout the U.S., Canada, Brazil and the U.K. Visit compassminerals.com for more information about the company and its products.
Forward-Looking Statements and Other Disclaimers
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about the anticipated development of the lithium resource at the company’s Ogden, Utah, site, including the indicated lithium resource within the ambient brine of the Great Salt Lake. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. We use words such as “may,” “would,” “could,” “should,” “will,” “likely,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “forecast,” “outlook,” “project,” “estimate,” “target,” and similar expressions suggesting future outcomes or events to identify forward-looking statements or forward-looking information. These statements are based on the company’s current expectations and involve risks and uncertainties that could cause the company’s actual results to differ materially. The differences could be caused by a number of factors, including without limitation (i) the company’s ability to convert all or any part of the lithium mineral resource identified by the initial assessment into an economically extractable mineral reserve, including the availability and cost of capital for related capital expenditures and the development of applicable process technologies; (ii) the overall environmental impact of the proposed extraction of the lithium mineral resource, as well as the company’s ability to receive or maintain required operating and environmental permits, approvals, modifications or other authorizations of, or from, governmental or regulatory authorities and costs related to implementing improvements to ensure compliance with regulatory requirements; (iii) the results of the company’s proposed strategic resource assessment regarding the lithium mineral resource; (iv) the company’s ultimate production capacity with respect to LCE; (v) potential weaknesses and uncertainties in global economic conditions, including adverse changes in the overall market for lithium and related products; and (vi) the risk that the company may not realize the expected financial or other benefits from the proposed development of the lithium mineral resource. For further information on these and other risks and uncertainties that may affect the company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed with the SEC, as well as the company’s other reports filed from time to time with the SEC. The company undertakes no obligation to update any forward-looking statements made in this press release to reflect future events or developments, except as required by law. Because it is not possible to predict or identify all such factors, this list cannot be considered a complete set of all potential risks or uncertainties.
The company has completed an initial assessment to define the lithium resource at Compass Minerals’ existing operations in accordance with applicable SEC regulations, including Subpart 1300. Pursuant to Subpart 1300, mineral resources are not mineral reserves and do not have demonstrated economic viability. The company’s mineral resource estimates, including estimates of the LCE mineral resource, are based on many factors, including assumptions regarding extraction rates and duration of mining operations, and the quality of in-place resources. For example, the process technology for commercial extraction of lithium from brines with low lithium and high impurity (primarily magnesium) is still developing. Accordingly, there is no certainty that all or any part of the LCE mineral resource identified by the initial assessment will be converted into an economically extractable mineral reserve.
| Media Contact | Investor Contact | ||||
| Rick Axthelm | Douglas Kris | ||||
| SVP and Chief Public Affairs Officer | Senior Director of Investor Relations | ||||
| +1.913.344.9198 | +1.917.797.4967 | ||||
| MediaRelations@compassminerals.com | krisd@compassminerals.com | ||||
LITHIUM RESOURCE DEFINED AND AVAILABLE JULY 13, 2021
This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about the company’s strategic priorities, including its ability to build sustainable culture, ability to deliver on commitments and its strategic assessment; ability to earn its social license to operate; and the anticipated development of the lithium resource at the company’s Ogden, Utah, site, including the indicated lithium resource within the ambient brine of the Great Salt Lake, ability to support U.S. standing on a global scale, address growing demand, ability to unlock new value stream with incremental investment and value of lithium in existing production, impact to current operations, commercial opportunities and ability to maximize resource value and optimize asset positions. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. We use words such as “may,” “would,” “could,” “should,” “will,” “likely,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “forecast,” “outlook,” “project,” “estimate,” “target,” and similar expressions suggesting future outcomes or events to identify forward-looking statements or forward-looking information. These statements are based on the company’s current expectations and involve risks and uncertainties that could cause the company’s actual results to differ materially. The differences could be caused by a number of factors, including without limitation: (i) the company’s ability to convert all or any part of the lithium mineral resource identified by the initial assessment into an economically extractable mineral reserve, including the availability and cost of capital for related capital expenditures and the development of applicable process technologies; (ii) the overall environmental impact of the proposed extraction of the lithium mineral resource, as well as the company’s ability to receive or maintain required operating and environmental permits, approvals, modifications or other authorizations of, or from, governmental or regulatory authorities and costs related to implementing improvements to ensure compliance with regulatory requirements; (iii) the results of the company’s proposed strategic resource assessment regarding the lithium mineral resource; (iv) the company’s ultimate production capacity with respect to lithium carbonate equivalent (“LCE”); (v) potential weaknesses and uncertainties in global economic conditions, including adverse changes in the overall market for lithium and related products; (vi) the risk that the company may not realize the expected financial or other benefits from the proposed development of the lithium mineral resource; (vii) impacts of the COVID-19 pandemic; (viii) weather conditions; (ix) pressure on prices and impact from competitive products; (x) foreign exchange rates and the cost and availability of transportation for the distribution of the company’s products; (xi) any inability by the company to successfully implement its strategic priorities or its cost-saving or enterprise optimization initiatives; and (vii) the timing and the outcome of the sale process for the company’s South America chemicals business. For further information on these and other risks and uncertainties that may affect the company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed with the SEC, as well as the company’s other reports filed from time to time with the SEC. The company undertakes no obligation to update any forward-looking statements made in this presentation to reflect future events or developments, except as required by law. Because it is not possible to predict or identify all such factors, this list cannot be considered a complete set of all potential risks or uncertainties. The company has completed an initial assessment to define the lithium resource at Compass Minerals’ existing operations in accordance with applicable SEC regulations, including Subpart 1300. Pursuant to Subpart 1300, mineral resources are not mineral reserves and do not have demonstrated economic viability. The company’s mineral resource estimates, including estimates of the LCE mineral resource, are based on many factors, including assumptions regarding extraction rates and duration of mining operations, and the quality of in-place resources. For example, the process technology for commercial extraction of lithium from brines with low lithium and high impurity (primarily magnesium) is still developing. Accordingly, there is no certainty that all or any part of the LCE mineral resource identified by the initial assessment will be converted into an economically extractable mineral reserve. 2 FORWARD-LOOKING STATEMENTS
2020 GROSS SALES BY MARKET Salt Plant Nutrition SALT We are a leading salt producer in North America and the U.K., supplying products used in highway deicing, water care, animal nutrition, food production and chemical, consumer and industrial processes. PLANT NUTRITION We are the largest producer in the Western Hemisphere of sulfate of potash (SOP), a premium, low-chloride potassium fertilizer. 22% 78% TOTAL REVENUE ~$1B 12 PACKAGING AND PRODUCTION FACILITIES ~2,000 EMPLOYEES 1 Reflects continuing operations of the company 2 Non-GAAP measure; includes pro forma estimates. See appendix for reconciliation ~$100M OPERATING EARNINGS ~$225M ADJUSTED EBITDA2 Compass Minerals is a leading provider of essential minerals focused on safely delivering where and when it matters to help solve nature’s challenges for customers and communities. Every day, Compass Minerals produces what’s essential through the responsible transformation of Earth’s natural resources to deliver products that help keep people safe, feed the world and enrich lives. FY 2020 AN ESSENTIAL MINERALS COMPANY1 3
ADVANTAGED ASSETS Goderich mine: world’s largest underground salt mine Winsford mine: U.K.’s largest dedicated rock salt mine Great Salt Lake solar evaporation facility: in operation for 50+ years near Ogden, is the largest production site of SOP in Western Hemisphere CORE STRENGTHS FINANCIAL STABILITY Strong cash flow from operations No near-term debt maturities OPERATIONAL APTITUDE Management team has decades of experience optimizing mining and manufacturing operations Logistics advantage and vast salt depot network ATTRACTIVE MARKETS Leading supplier of salt products in North America and the U.K. Protassium+® (SOP product) is market leader for high-value crops in North America Aligns with our core business attributes 4
BUILD SUSTAINABLE CULTURE Drive Zero Harm imperative for our people and environment Increase employee engagement and build execution muscle DELIVER ON COMMITMENTS Meet and then exceed customer and shareholder expectations Continue operational improvements at mines and plants Goderich mine production milestones and enhanced labor relations achieved Enterprise-wide optimization commitment STRATEGIC ASSESSMENT Evaluation of core strengths and opportunities to leverage advantaged assets Completed sale of South America plant nutrition business; sale process for South America chemicals business ongoing Completed North America micronutrient sale Lithium value proposition Enhance balance sheet flexibility These priorities support Compass Minerals’ Core Purpose to help keep people safe, feed the world and enrich lives, every day ENTERPRISE-WIDE STRATEGIC PRIORITIES 5
FOCUS ON SUSTAINABILITY AND SAFETY ENERGY INTENSITY DOWN 15% OF U.S. WORKFORCE IS DIVERSE: BLACK, ASIAN, HISPANIC, NATIVE AMERICAN, HAWAIIAN AND/OR TWO OR MORE RACES 20% SCOPE 1+2 GHG EMISSIONS INTENSITY DOWN 12% FRESH WATER INTENSITY USE DOWN 18% 6 Management of ESG impacts and improvements occur through multiple, integrated approaches. Our Core Values, Corporate Sustainability Principles, and Code of Ethics and Business Conduct provide a foundation that emphasizes shared responsibility for sustainability and our commitments to safety, growth, transparency and stewardship. Total Case Incident Rate* (12-Month Rolling) 1.39 *Number of injuries per 200,000 exposure hours 0.00 1.00 2.00 3.00 4.00 1Q17 1Q18 1Q19 1Q20 1Q21 HIGHLIGHTS FROM OUR 2019 ESG REPORT1 1 Environmental metrics represent year-over-year improvement from 2018 to 2019 Compass Minerals works to continually earn our social license to operate.
EVOLUTION OF OGDEN FACILITY 1960s 1962 – Lithium Corporation of America leased 55,000 acres of Great Salt Lake lakebed to prospect lithium for the Pentagon’s nuclear program 1970s 1970 – First ton of SOP produced 1990s 1993 – Compass Minerals acquired Ogden facility 1994 – First ponds constructed on west side of Great Salt Lake where salt accumulates to this day 1998 – First ton of magnesium chloride produced 2010s Salt accumulations in some ponds range from 5’ to 13’ thick and hold Interstitial Brine (IB) 2018 – Initiated comprehensive exploration and sampling campaign to define the lithium resource Present 2021 – Lithium resource defined, comprised of IB and Great Salt Lake resources Our facility is the largest solar production site of SOP in the Western Hemisphere 7
THE CASE FOR DEVELOPMENT OF THIS ESSENTIAL MINERAL WHY LITHIUM AND WHY NOW?
GLOBAL LITHIUM PRODUCTION AND RESOURCES1 1 USGS 2021; third party reports 9 When developed, our resource would materially support U.S. standing on a global scale (in metric tons Li)
CRITICAL MINERALS DEVELOPMENT Our resource would address the growing North American demand for battery-grade lithium THE POWERFUL POTENTIAL OF LITHIUM 10 “Advanced, lithium-based batteries play an integral role in 21st-century technologies such as electric vehicles, stationary grid storage, and defense applications that will be critical to securing America's clean energy future.” - Jennifer Granholm, Secretary of Energy, June 14, 2021 “More and more of our platforms, vehicles, and future capabilities rely on lithium-ion batteries. While the lithium-ion battery industry and its supply chain are experiencing tremendous growth, the United States is lagging competitors, including Beijing, in attracting investment.” - Kathleen Hicks, Deputy Secretary of Defense, May 24,2021 END-USER DEMAND “Alliance for Automotive Innovation (AAI), a organization representing 99% of the cars and trucks sold in the US, announced its members will invest US$250 billion in vehicle electrification by 2023.” - Robert Walton, Industry Drive, February 10, 2021 “The North American Lithium Ion Battery market accounts for 23.9% of global market value in 2020 and is forecast to reach US$21.2 billion in 2026, registering a growth rate (CAGR) of 13.82% between 2020 and 2026.” - Research and Markets, April 6, 2021
11 “Having dropped sharply from the peak in 2018, lithium prices have stabilized during the pandemic and are up ~50% in the past six months”2 . LITHIUM MARKET FUNDAMENTALS 0 300 600 900 1200 2020 2021 2022 2023 2024 2025 Demand Supply “Forecast lithium demand to triple by 2025 to ~1mt (LCE); 27% CAGR from 2020-2025”1 1 Deutsche Bank report May 2021; 2 Bank of America April 2021 k t L C E $ U S D
12 49.1 45.7 25.2 20.3 10.5 Livent Ganfeng Albermarle SQM Compass Minerals 2021 EV/EBITDA2 Average = ~35x 1 FactSet performance as of 6/12/21; Major Lithium Producers index consists of Albemarle, Gangfeng, Livent, SQM; Junior Miners index consists of Orocobre, Galaxy Resources, Lithium Americas, Mineral Resources, Piedmont Lithium, and Advanced Metallurgical Group 2 FactSet consensus estimates; Non-GAAP measure, see appendix for details RECENT PRICE PERFORMANCE1 LITHIUM COMPANY VALUATIONS 0 100 200 300 400 P e rc e n t In c re a s e Junior Miners +318% S&P 500 +53% Major Producers +217%
OUR RESOURCE ASSET ADVANTAGE AND OPPORTUNITY
~160K (acres) Leases on Great Salt Lake ~55K (acres) Existing Evaporation Ponds ~2.4M (metric tons LCE) Total Lithium Resource1 ~127K (metric tons LCE) Interstitial Brine Resource1 ~20-25K (metric tons LCE) Annual Target Production DEFINED LITHIUM RESOURCE 1 Technical Report Summary: Initial Assessment, Lithium Mineral Resource Estimate, Compass Minerals Ogden, Inc. GSL / Ogden Site; Report Date: July 13, 2021 estimate Assessing development and product optionality Minimal environmental impact anticipated Independent evaluation underway designed to maximize market potential and shareholder value 14
ESTABLISHED ASSET POSITION Dove Creek East Ponds Ogden Site West Ponds (Representative Cross-Section) Current CMP Ponds Current CMP Property Current CMP Leases1 Current CMP Right of Way Union Pacific Railroad 160,000 acres on the Great Salt Lake Strategic access to highly concentrated brine in North Arm Existing ponds, pumps and transportation infrastructure North Arm Great Salt Lake Compass Minerals (CMP) 15 1 Inclusive of areas subject to a Record of Decision to enter into a lakebed lease
STRATEGIC ADVANTAGES 16 1 Fraser Institute Annual Survey of Mining Companies 2020 2 Operational or to be completed gigafactories by 2023, CiC energiGUNE, 04/28/2021 Based near Ogden, Utah on the Great Salt Lake Utah ranked sixth-most attractive mineral extraction jurisdiction globally1 Significant rail and highway infrastructure Access to readily available power, natural gas and water Well-established local and federal regulatory and environmental relationships Active stakeholder and community engagement New value stream could be unlocked with incremental investment CURRENT OPERATING FACILITY G e o g ra p h y In fr a s tr u c tu re S o c ia l L ic e n s e to O p e ra te G ro w th GIGAFACTORY2 OGDEN PORT FACILITY
Solar Evaporation Crystallization F u tu re S ta te C u rr e n t P ro c e s s Solar Evaporation CrystallizationDLE Process Direct Lithium Extraction (DLE) technology has the potential to unlock the latent value of lithium in our existing brines used for SOP and magnesium chloride production while maintaining our low environmental footprint Minimal impact expected to our current operations with lithium as a naturally accumulated co-product ENHANCED TECHNOLOGY LITHIUM CHLORIDE FROM BRINE LITHIUM CARBONATE LITHIUM HYDROXIDE LITHIUM CHLORIDE FROM BRINE LITHIUM YDROXIDE 17 Life-cycle assessment (LCA) of development scenarios underway to evaluate our environmental footprint
Direct Lithium Extraction (DLE) technology has the potential to unlock the latent value of lithium in our existing brines used for SOP and Magnesium Chloride production while allowing us to maintain our already-low environmental footprint COMMERCIAL OPPORTUNITIES LITHIUM CHLORIDE FROM BRINE CONCENTRATED LITHIUM CHLORIDE LITHIUM CARBONATE LITHIUM HYDROXIDE LITHIUM METAL Completed two DLE pilot projects successfully Third-party testing underway for conversion to battery-grade hydroxide LITHIUM CHLORIDE FROM BRINE LITHIUM HYDROXIDE A sustainable brine-based material utilizing DLE technology provides end-product flexibility 18 FINAL PRODUCT EXAMPLES EV APPLICATION EXAMPLES LOW-RANGE VEHICLES MID to HIGH-RANGE VEHICLES NEXT GENERATION VECHILES
19 EXPECT TO OPTIMIZE POSITION AS A DOMESTIC AND SUSTAINABLE ASSET ASSESSING OPTIONS TO MAXIMIZE RESOURCE VALUE MAXIMIZE RESOURCE VALUE Project Development/Ownership Compass Minerals Ownership Third-Party Development Partnership Customer Focus Electric Vehicle Manufacturers Battery Manufacturers Cathode Manufacturers End-Product Flexibility Chloride Carbonate Hydroxide Capital Requirements Phased Production Full-Scale Production Reassessment of Capital Allocation Sales Contract Terms 100% Long-Term 100% Spot Market Hybrid Technology Selection Ion Exchange Ion Sorption
APPENDIX
21 RECONCILIATION OF NON-GAAP INFORMATION Note on Non-GAAP Financial Measures This document includes certain non-GAAP financial measures. These measures should be viewed in addition to, and not in lieu of, the company’s operating performance and financial measures as calculated in accordance with GAAP. Certain of these non-GAAP measures, such as estimated 2021 EBITDA are forward-looking. Historically, the company has excluded the impact of certain items impacting comparability from the non-GAAP financial measures it presents. Reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are not provided because the company is unable to provide such reconciliations without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and the financial impact of such items impacting comparability and the periods in which such items may be recognized. For the same reasons, the company is unable to address the probable significance of the unavailable information. RECONCILIATION OF NON-G AP INFORMATION
22 RECONCILIATION OF NON-GAAP INFORMATIONRECONCILIATION OF NON-G AP INFORMATION1 Reconciliation for EBITDA and Adjusted EBITDA (unaudited) (in millions) Twelve months ended December 30, 2020 Net earnings $ 44.5 Interest expense 56.4 Income tax expense 2.6 Depreciation, depletion and amortization 117.8 EBITDA $ 221.3 Adjustments to EBITDA Stock-based compensation – non cash 9.0 Gain on foreign exchange (4.6) Other, net 0.3 Adjusted EBITDA $ 226.0 1 Reflects pro forma estimates of the company’s continuing operations