Lithium DLE GoldmanSachs
Lithium DLE GoldmanSachs
Lithium DLE GoldmanSachs
Li+
Li+
Hugo Nicolaci
Li+
Li+ +61(2)9321-8323
Li+ Li+
Li+ Li+
[email protected]
Goldman Sachs Australia Pty Ltd
Paul Young
+61(2)9321-8302
Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this
report. Investors should consider this report as only a single factor in making their investment decision. For
Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to
www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as
research analysts with FINRA in the U.S.
The Goldman Sachs Group, Inc.
Goldman Sachs Global Metals & Mining
Table of Contents
The Benefits & Economics: How DLE compares to traditional brine ponds 3
Disclosure Appendix 26
27 April 2023 2
Goldman Sachs Global Metals & Mining
The Benefits & Economics: How DLE compares to traditional brine ponds
Direct Lithium Extraction (DLE) has the potential to significantly impact the lithium
industry, with implementation on the extraction of lithium brines potentially
revolutionary to production/capacity, timing, and environmental impacts/permitting.
Much like shale did for oil, DLE has the potential to significantly increase the supply of
lithium from brine projects, nearly doubling lithium production/yield (taking recoveries
from 40-60% to 70-90%+) and improving project returns, though with the added bonus
of offering sustainability benefits and ESG credentials for its implementors (land usage
from lack of ponds declines >20x, water usage and metrics improve on potential brine
reinjection), while also widening (rather than steepening) the lithium cost curve.
A number of proven DLE technologies are emerging and being tested at scale, with a
handful of projects already in commercial scale construction (some China projects in
production). Though the application of technologies used in DLE processes may be fairly
new to the lithium industry, many are already utilised across other commodities.
While there may still be key challenges around scalability, water consumption, and brine
reinjection, with the ongoing efforts, DLE could be implemented between 2025-2030 in
both Chile and Argentina, in our view, both as greenfield projects and brownfield
expansions, or to enhance recoveries of existing pond operations. Chile’s recent
National Lithium Policy (NLP) also pushes for new lithium projects to implement DLE for
water/environmental concerns, further supporting an accelerating implementation of
DLE technologies. This compares with market skepticism around commercial
development of DLE by the end of the decade (from discussions with investors).
We set out a summary of the processes for traditional brine ponds and key DLE
technologies below, with a more detailed comparison of the variations in a later section.
Generalised; IX often already utilised in sorption and pond proceses for impurity removal; Brine capital intensity and opex based on GSe modeled scenarios outlined below.
Source: Company data, Data compiled by Goldman Sachs Global Investment Research
27 April 2023 3
Goldman Sachs Global Metals & Mining
Exhibit 2: Traditional process of Brine Extraction vs. DLE, and timing of each stage
27 April 2023 4
Goldman Sachs Global Metals & Mining
Company Project Country DLE Project stage DLE technology provider Lithium extraction technology Tech Origin Geothermal Resource (Mt LCE) Start date Capacity (ktpa LCE)
List not exhaustive; Technology developers listed separately where not developing own resource; Geothermal category for project/tech that is specifically geothermal - technologies may be applicable across resource types; Quoted resource/start date may apply to whole
project rather than planned expansion.
Source: Company data, Data compiled by Goldman Sachs Global Investment Research
27 April 2023 5
Goldman Sachs Global Metals & Mining
These scenarios assume a hypothetical brine resource is extracted at the same grade
and volume at ~25ktpa contained LCE over a 20-yr production life to produce and sell
the same quality of lithium carbonate product, both as a DLE (which ramps up 18mths
faster vs. traditional ponds though with higher nominal capex/opex) and a traditional
evaporation pond project.
Exhibit 4: DLE can increase lithium recoveries to 70-90%, from Exhibit 5: Plant and processing infrastructure are likely the bulk of
40-60% for traditional ponds higher DLE capex
Annual lithium carbonate production (ktpa LCE) on modeled scenario Pond vs. DLE project indicative capex split for mid-point of scenario
lithium recoveries modeling (US$mn)
30 800
ktpa LCE US$mn
700
25 600
90%+ recovery
600
20 500
70-90% recovery
60-80% recovery
400 350
15
50-60% recovery
40-60% recovery 300
10
30-40% recovery 200
5 100
0
0 Pond DLE
Pond DLE
Wellfields & Brine Distribution Evaporation Ponds Plant & Reagents
Utilities Infrastructure Indirect Costs
Estimate range Possible Contained in extracted brine
Total other costs
Source: Company data, Goldman Sachs Global Investment Research SdV Stage 1 & 2 technical study (2022) split for pond capex, apportioned to mid-point of capex
scenario estimates; DLE plant capex taken as balancing item of capital items (as no pond capex)
for illustrative purposes.
27 April 2023 6
Goldman Sachs Global Metals & Mining
Though there remains a range of outcomes subject to capital and opex requirements of
a DLE project, ultimately the improvement in the achieved lithium recovery and resulting
increase in annual production is the key driver of economic outcomes, in our view,
supporting the implementation of DLE over traditional brine ponds. Therefore our
scenarios predominantly test input assumptions (capex/opex/price etc) against achieved
recovery.
The charts below outline the required lithium price of a mid-range DLE project (80%
recovery/~20ktpa LCE) vs. pond the recovery range (40-60%/~10-15ktpa LCE). We see
NPV breakeven for a DLE project with a mid-point 80% recovery vs. a traditional
pond with a bottom end 40% recovery on our mid case capex estimates (capital
intensity ~US$30,000/tpa LCE), and GSe lithium pricing, requiring an opex unit
cost of <US$7,500/t. When compared with a pond at the top end of the recovery
range at 60%, this opex unit cost requirement for break even would fall to
<US$4,000/t (though we expect most pond-only projects are unlikely to consistently
achieve overall lithium recoveries as high as 60%). Compared to a mid-point 50%
recovery pond, the breakeven opex unit cost would be <US$5,700/t.
We note these economic outcomes only reflect the 18 month faster production ramp
up, and don’t consider any possible benefits from product grade variation, or lower land
usage and water loss that may accelerate environmental permitting and hence the
project timeline of new projects (also benefiting NPV). The application of the technology
for selective removal of by-products (such as potassium) into their own saleable
products may also improve the economics of DLE projects.
Exhibit 6: DLE project (80% recovery) NPV breakeven vs. pond Exhibit 7: DLE project (80% recovery) NPV breakeven vs. pond
project (40% recovery) at varying lithium prices project (60% recovery) at varying lithium prices
Opex unit cost (US$/t LCE; FOB, pre-royalty) vs. capital intensity (US$/tpa Opex unit cost (US$/t LCE; FOB, pre-royalty) vs. capital intensity (US$/tpa
LCE) LCE)
25,000 14,000
Opex Opex
US$/t LCE 12,000 US$/t LCE
20,000
10,000
15,000
8,000
6,000
10,000
4,000
5,000
2,000
Capital intensity Capital intensity
US$/tpa LCE US$/tpa LCE
0 0
980 1,307 1,634 1,961 2,288 2,614 2,941 980 1,307 1,634 1,961 2,288 2,614 2,941
10,000 GSe 20,000 30,000 40,000 10,000 GSe 20,000 30,000 40,000
DLE capex range US$300-900mn in US$100mn increments for resulting capital intensity on an DLE capex range US$300-900mn in US$100mn increments for resulting capital intensity on an
80% recovery DLE project (~20ktpa LCE) vs. a pond project at 40% recovery (~10ktpa LCE). 80% recovery DLE project (~20ktpa LCE) vs. a pond project at 60% recovery (~15ktpa LCE).
Source: Goldman Sachs Global Investment Research Source: Goldman Sachs Global Investment Research
27 April 2023 7
Goldman Sachs Global Metals & Mining
At our mid-case scenarios outlined above, and on GSe lithium prices, we model a NPV
range for a DLE project of ~US$0.6-1.1bn on a 70-90% recovery range for an IRR of
c. 20-30%, while a traditional brine pond has a NPV of US$0.3-0.7bn on a 40-60%
recovery range for an IRR of c. 20-25%. Put another way, a DLE project with bottom
end recovery (70%) achieves a higher NPV than a mid-upper end recovery (50-60%)
pond project.
Exhibit 8: Pond vs. DLE project NPV on production recovery at price Exhibit 9: Pond vs. DLE project IRR on production recovery at price
scenarios scenarios
NPV (US$mn) vs. production recovery (%) IRR (%) vs. production recovery (%)
5,000 100%
US$mn IRR
90%
4,000 80%
70%
3,000 60%
50%
2,000 40%
30%
1,000 20%
10%
0
Lithium recovery 0%
Lithium recovery
30% 40% 50% 60% 70% 80% 90% 100% 30% 40% 50% 60% 70% 80% 90% 100%
Pond DLE Pond (GSe pricing) DLE (GSe pricing) Pond DLE Pond (GSe pricing) DLE (GSe pricing)
Pricing scenarios US$10,000-40,000/t carbonate, with GSe pricing scenario shown as line. Pricing scenarios US$10,000-40,000/t carbonate, with GSe pricing scenario shown as line.
Dotted lines equate base DLE recovery range at 70-90% to pond scenarios. Dotted lines equate base DLE recovery range at 70-90% to pond scenarios.
Source: Company data, Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research
As outlined in the charts below, we estimate the capital intensity range of DLE is
comparable with a traditional pond project after adjusting for higher recoveries,
with a capital intensity range of DLE at ~US$26-34,000/tpa LCE at a 70-90%
recovery rate on upfront capex of US$600mn (mid-point of US$300-900mn estimate
range), and a traditional pond range of ~US$23-34,000/tpa LCE at a lower 40-60%
recovery range on upfront capex of US$350mn (US$200-500mn estimated range). DLE
at commercial production levels may also be more incrementally/rapidly scalable without
the need for new brine ponds.
However, we expect the risk of a higher upfront capital intensity of DLE vs.
evaporation ponds is offset by lower unit costs resulting from higher production
on improved lithium recovery. We estimate an opex unit cost (FOB, pre-royalty)
range of DLE at ~US$2,800-3,600/t LCE at an 70-90% recovery rate on annual opex
of US$65mn (mid-point of US$35-95mn estimate range), compared with a traditional
pond range of ~US$3,300-4,900/t at a lower 40-60% recovery range on opex of
US$50mn (US$20-80mn estimated range for ponds at this scale). These ranges will
likely be subject to the grade of the resource and the availability & cost of reagents,
though we note the possibility of more unique regagents/eluents being used in DLE
may also reduce opex variability (less used by other markets/accessibility to site of acids
vs. soda ash), while we note traditional pond unit costs may reduce more at scale
(though with increased permitting challenges for the ponds/land required). We further
highlight that, like with most new technologies, the capex and opex intensity may
improve as DLE technology and implementation advances beyond the first wave of
implementation.
27 April 2023 8
Goldman Sachs Global Metals & Mining
As a sense check of our hypothetical resource modeling, in the range charts below we
also benchmark a selection of existing real world green and brownfield lithium brine
projects on both capital & opex intensity. In this context we highlight that Eramet’s
Centenario-Ratones project is a commercial scale DLE (sorbent) project with Phase 1
already in construction (~24ktpa LCE commissioning targeted 1Q24 and full ramp up
mid-2025) following on site pilot testing since 2019, with FID on a Phase 2 targeted by
year-end 2023 (additional ~50ktpa LCE). Livent’s Fenix Expansions 1 & 2 are both
utilising their DLE technology, while Expansion 3 uses convential brine ponds to utilise
the already existing pond infrastructure from earlier stages to achieve a lower capital
intensity on spent capital (rather than implying their DLE technology has been less
effective than planned).
Exhibit 10: Pond vs. DLE project capital intensity vs. production Exhibit 11: Pond vs. DLE project unit cost vs. production recovery at
recovery at varied capex scenarios varied opex scenarios
Capital intensity (US$/tpa LCE capacity; FOB, pre-royalty) vs. production Opex unit cost (US$/t LCE; FOB, pre-royalty) vs. production recovery (%)
recovery (%)
70,000 9,000
US$/tpa LCE DLE US$/t LCE DLE
Pond 8,000 Pond
60,000
7,000
50,000
6,000
40,000 5,000
30,000 4,000
3,000
20,000
2,000
10,000
1,000
Lithium recovery Lithium recovery
0 0
30% 40% 50% 60% 70% 80% 90% 100% 30% 40% 50% 60% 70% 80% 90% 100%
Pond DLE Olaroz S1 Fenix Pond DLE Olaroz S1 Fenix
Olaroz S2 Cauchari S1 Sal de Vida S1 Sal de Vida S2 Olaroz S2 Cauchari S1 Sal de Vida S1 Sal de Vida S2
Atacama SQM ex Fenix Exp. 1 Fenix Exp. 2 Fenix Exp. 3 Atacama (SQM) Fenix Exp. 1 Fenix Exp. 2 Fenix Exp. 3
Centenario P1 Centenario P2 Angeles Phase 1 Kachi Centenario P1 Centenario P2 Angeles Phase 1 Kachi
Capex/opex ranges on GSe modeled outcomes as described above (with shorter DLE build Production/recovery numbers as per previous Exhibit notes unless noted; SQM shown on 2022
time/ramp up), and assumes an Argentinian fiscal regime on a constant FX rate; Capex excludes costs and estimated recovery; Angeles quoted costs from partner may not be like for like;
VAT as may be partially reimbursed, consistent with company estimates; Recoveries rounded to Centenario Phase 2 unit costs esimtated on assumption ~40% Phase 1 costs are fixed, which
nearest 10% and are resource recovery (project technical studies may quote plant recovery); increase 1.5x on Phase 2, while variable costs increase proportionally to volume; Growth projects
Centenario Phase 1 (~24ktpa) based on Eramet Mar-23 release and includes supporting are life of mine (LOM) real unit costs, while operating assets are 2022 reported unit costs; Fenix
infrastructure not replicated in Phase 2 (~50ktpa) or other included comparable brownfield taken at Woodmac unit cost estimate for 2022, and first year of full production for expansions;
projects, Phase 2 GSe on recent industry inflation; Fenix expansions (1: 20ktpa; 2: 30ktpa; 3: up to Cauchari-Olaroz operating costs on Oct-20 DFS. Dotted lines equate base DLE recovery range at
30ktpa) based on Livent Feb-23 presentation (mid-point where ranges given), with Exp. 3 70-90% to pond scenarios.
capex/recovery a GSe on repurposed pond infrastructure; Angeles (SunResin tech) estimated on
PLASA parent co, Tibet Summit’s funding partner, Honbridge Holdings’ reported (Apr-23) capex of
~US$700mn combined with ~US$100mn spend on Phase 1 (~25ktpa) DLE equipment from Source: Company data, Goldman Sachs Global Investment Research
SunResin, with recovery taken at mid-range of our DLE estimates of 80% (though early work has
been reported at >90%); Olaroz S1 (17.5ktpa) reported 2014 completion capex (intensity of
~US$13,000/tpa) inflated to comparable real $; Fenix initial project recovery/capex estimated and
inflated to comparable real $; Cauchari-Olaroz capital intensity Stage 1 (~40ktpa) as of Mar-23,
with planning for Stage 2 expansion (at least 20ktpa) continuing to progress to align with
completion of Stage 1; Atacama (SQM) feeding Antofagasta Carmen 2024 plant capacity
extension on Mar-23 capex (30ktpa); SQM/ALB DLE projects not shown pending cost updates;
Olaroz Stage 2 (25ktpa) and Sal de Vida Stage 1 & 2 (15ktpa & 30ktpa) costs based on Allkem
2022 technical reports; Kachi (Lilac tech) estimates based on Lake’s 2021 FS at (25ktpa), though
updated DFS due mid-2023 (~50ktpa) following pilot/demo completion. Dotted lines equate base
DLE recovery range at 70-90% to pond scenarios.
27 April 2023 9
Goldman Sachs Global Metals & Mining
Much like shale did for oil, Direct Lithium Extraction (DLE) has the potential to
significantly increase the supply of lithium from brine projects - although unlike shale,
which typically sits toward the top of the oil cost curve, the cost analysis set out above
suggests that DLE will widen, rather than steepen, the lithium brine cost curve
with an average project likely sitting in the second or third cost quartile.
DLE in contrast to shale also offers lower perceived environmental risk and significant
environmental benefits vs. traditional brine ponds, nearly doubling lithium
production/yield (taking recoveries from 40-60% to 70-90%+) and improving project
returns, offering sustainability benefits and ESG credentials for its implementors (land
usage from lack of ponds declines >20x, water usage and metrics improve on potential
brine reinjection), while also widening (rather than steepening) the lithium cost curve.
These benefits may also support improved timelines for community and permitting
approval, while enhanced production on higher recoveries could also improve/bring
forward government take from projects.
While the impact of DLE on market dynamics will be linked to the pace and scale at
which it is adopted, as we highlight (Exhibit 3), there are a significant number of
resources business and technology providers that have been incentivised to find
technological improvements to lithium resource extraction as a result of record lithium
prices that are well above the marginal cost of existing and proposed lithium supply (and
thus more than offset the upfront R&D costs). Policy changes, such as Chile’s recent
NLP, may further support an accelerating implementation of DLE technologies.
DLE offers a potential game changing technology for lithium supply, and while there may
still be key challenges around scalability and water consumption, with the ongoing
efforts, DLE could be implemented between 2025-2030 in both Chile and Argentina, in
our view. This compares with market skepticism (based on discussions with investors)
around commercial development of DLE technology by the end of the decade.
Following on from the project economic analysis above, we set out below an
indicative impact to both the LatAm lithium brine cost curve vs. industry
estimates, and lithium market supply/demand dynamics vs. the GSe base case.
While implementation at this scale may be unlikely on a five-year view, and is not
included in our supply/demand base case, the analysis gives an indicative guide as to
the potential cost curve and supply/demand impacts of the implementation of DLE.
Cost curve
Our cost analysis above suggests that DLE will widen, rather than steepen, the LatAm
lithium brine cost curve with an average project likely sitting in the second/third cost
quartile, with an estimated opex range of US$2,800-3,600/t. The chart below sets out
the potential DLE impact to a five-year forward (2028) LatAm lithium brine industry cost
curve (Woodmac), under an indicative only scenario if ~30% of LatAm lithium brine
projects (GSe) implemented DLE in some form and took average extracted brine lithium
recoveries from ~50% to 80% (mid-point DLE scenario recovery range), with an ~18
27 April 2023 10
Goldman Sachs Global Metals & Mining
month timing benefit on faster ramp up than traditional ponds. We highlight this level of
accelerated ramp up of DLE-linked projects in five years is unlikely, in our view, with the
curve only illustrating the potential cost curve impact from DLE implementation.
Exhibit 12: We estimate that DLE implementation will widen, rather than steepen, the lithium brine cost curve
2028 LatAm lithium brine cost curve with impact of DLE additions (US$/t LCE FOB; pre-royalty)
5,000
US$/t LCE
4,500
4,000
DLE additons to ~30%
of GSe add ~110kt
3,500
DLE estimated opex range
~US$2,800-3,600/t
3,000
2,500
2,000
1,500
1,000
500
0
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900
Atacama-SQM Rincon-RIO Tres Quebradas-Zijin Mining Group kt LCE
Centenario-Ratones-Eramet Olaroz-AKE DLE addition (30%)
Atacama-ALB Cauchari Olaroz-Minera Exar Sal de Vida-AKE
Hombre Muerto-Livent Hombre Muerto North-POSCO Cauchari-AKE (acq. Advantage Lithium)
Maricunga-Minera Salar Blanco Pastos Grandes-LAC Kachi-Lake Resources
All volume and costs estimates are Woodmac (may differ vs. GSe supply forecasts) and don’t include small scale projects proposed or already in production, Centenario Phase 2 added at WM Phase 1
costs; DLE indicative ranges on GSe. Indicative scenario if 30% of LatAm projects (GSe) implemented DLE in some form and took recoveries from an average 50% extracted brine lithium recovery to
80% recovery (mid-point DLE scenario recovery range), with an ~18 month timing benefit on faster ramp up than traditional ponds.
The charts beneath show the 2022 and industry 2028 cost curves.
Exhibit 13: While only a handful of projects produced in 2022... Exhibit 14: ...several projects of scale will be in production by 2028
2022 LatAm lithium brine cost curve (US$/t LCE FOB; pre-royalty) 2028 LatAm lithium brine cost curve (US$/t LCE FOB; pre-royalty)
5,000 5,000
US$/t LCE US$/t LCE GSe base case
4,500
4,000
LatAm 2028 LCE
4,000 supply ~540kt
3,500 3,000
3,000
2,000
2,500
2,000 1,000
1,500
1,000 0
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800
500 Atacama-SQM Rincon-RIO kt LCE
Tres Quebradas-Zijin Mining Group Centenario-Ratones-Eramet
0 Olaroz-AKE Atacama-ALB
0 20 40 60 80 100 120 140 160 180 200 220 240 260 Cauchari Olaroz-Minera Exar Sal de Vida-AKE
kt LCE Hombre Muerto-Livent Hombre Muerto North-POSCO
Cauchari-AKE (acq. Advantage Lithium) Maricunga-Minera Salar Blanco
Atacama-SQM Atacama-ALB Olaroz-AKE Hombre Muerto-Livent Pastos Grandes-LAC Kachi-Lake Resources
Indicative; Combination of reported 2022 volumes and costs (approximated from accounts where All volume and costs estimates are Woodmac (may differ vs. GSe supply forecasts) and don’t
not specified) include small scale projects proposed or already in production, Centenario Phase 2 added at WM
Phase 1 costs
Source: Company data, Goldman Sachs Global Investment Research
Source: Woodmac, Data compiled by Goldman Sachs Global Investment Research
27 April 2023 11
Goldman Sachs Global Metals & Mining
Supply/demand
Globally brine makes up nearly two thirds of lithium resources, though only c.40% of
production (2022), where production from the Lithium Triangle (Bolivia, Chile, Argentina)
has lagged that from spodumene sources like Australia. While our base case lithium
supply forecast has this share of production continuing to decline, the implementation
of DLE may increase brine’s share of output, where new brine projects or those with
expansions planned are likely able to implement components of DLE technology, which
could also bring project ramp ups forward ~18 months. Policy changes, such as Chile’s
recent National Lithium Policy (NLP), may further support an accelerating
implementation of DLE technologies.
The DLE impact to supply/demand, simplistically, if ~20-40% of our base case LatAm
brine projects implemented DLE in some form, increasing their recoveries from ~50%
to ~80% (mid-points of above project economic analysis) and accelerating supply by
~18 months, this could add ~70-140ktpa of LCE from 2028+ (GSe LatAm brine supply
~540kt; Woodmac ~800kt), which on GSe supply numbers would increase LatAm brine
supply c.35% (average 2026-2030E) and our global raw supply by c.8%.
These impacts are in addition to Eramet’s Centenario Phase 1 (ramped up by 2025), and
Livent’s proposed expansions at Fenix, where we note this excludes the impact of
newly economic projects that work with DLE, any DLE supply linked to brine projects in
China, or DLE implementation on European/North American geothermal brines, where
all may increase the lithium supply impact of DLE.
Put another way, DLE implementation could extend the size and duration of
lithium market surpluses/reduce deficits vs. our base case (without a pull forward of
demand with new supply).
Exhibit 15: GSe base case Global raw lithium supply with the Exhibit 16: Global lithium balance under DLE scenarios
addition of 30% of LatAm brine projects adopting DLE Global lithium supply surplus/(deficit) (kt LCE)
Global lithium raw supply (kt LCE)
3,000 500
kt LCE kt LCE
400
2,500
300
200
2,000
100
1,500 0
(100)
1,000
(200)
(300)
500
(400)
0 (500)
2021 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2021 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Base case Global raw supply DLE increase GSe Global Balance +10% of brine projects using DLE +30% +50%
Source: Goldman Sachs Global Investment Research SD balance reflects recently updated demand estimates
27 April 2023 12
Goldman Sachs Global Metals & Mining
Exhibit 17: Brine makes up only c.40% of global lithium supply Exhibit 18: ...where implementation of DLE may increase brine’s
(2022) though nearly two thirds of global lithium resources... share of output
Global lithium supply composition (kt LCE) Global lithium supply composition (%)
3,000 100%
kt LCE
90%
2,500
80%
70%
2,000
60%
1,500 50%
40%
1,000
30%
20%
500
10%
0 0%
2020 2021 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2020 2021 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Source: Goldman Sachs Global Investment Research Source: Goldman Sachs Global Investment Research
Exhibit 19: With brine a significant portion of China supply... Exhibit 20: ...supprting development/implementation of SunResin
China lithium supply composition (kt LCE) and other DLE technologies
China lithium supply composition (%)
800 100%
kt LCE
700 90%
80%
600
70%
500 60%
400 50%
300 40%
30%
200
20%
100 10%
0 0%
2020 2021 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2020 2021 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Source: Goldman Sachs Global Investment Research Source: Goldman Sachs Global Investment Research
27 April 2023 13
Goldman Sachs Global Metals & Mining
As recently commented by Lithium Power International, in their view the new policy
does not constitute a nationalisation of the lithium industry in Chile, rather its objective,
as clarified by the Mining Minister, is to set the conditions and parameters for the
country to have a more active involvement and higher financial returns in a strategic
industry, particularly where those lithium resources are located on concessions already
owned by the Chilean State on the Atacama Salar (Chilean output is currently restricted
to SQM and Albemarle from Atacama, with their contracts expiring in 2030 and 2043
respectively). Essentially the policy sets to move toward a more public-private model,
with the government expecting to start conversations with operators this half and
hosting talks with local and Indigenous communities in the Atacama salt flat early on in
the process.
The NLP also seeks to accelerate the development of new projects in the country, with
a push for new projects to implement DLE for water/environmental concerns (SQM has
already committed to cutting its brine extraction in half over the course of a decade via
its DLE implementation and expansions), further supporting an accelerating
implementation of DLE technologies.
27 April 2023 14
Goldman Sachs Global Metals & Mining
27 April 2023 15
Goldman Sachs Global Metals & Mining
1,750 mg/L
Salar de Atacama
(SQM)
1,500
Salar de Atacama
(ALB)
1,250
Hombre Muerto Norte
1,000 Maricunga
Hombre Muerto Oeste
Uyuni
Sal de Oro (HM North)
Sal de Vida
750 Cauchari-Olaroz
Candelas Tres Quebradas Fenix
Olaroz (Allkem)
Maria Victoria Olaroz (SdJ)
500 Sal de la Puna Cauchari PPG
Sal de… Salar de Rincon
Source: Company data, Data compiled by Goldman Sachs Global Investment Research
As impurity ratios will impact the ultimate recovery of projects, including in DLE
implementation, we outline the impurity ratios of key projects vs. lithium concentration
and resource size in the chart below, where typically in a traditional brine pond high
impurities are more expensive to process.
20 Mg/Li ratio
Uyuni
18
16
14
Missing pieces of impurity data have been approximated where possible on neighbouring projects sharing a salar
Source: Company data, Data compiled by Goldman Sachs Global Investment Research
27 April 2023 17
Goldman Sachs Global Metals & Mining
Pros: (i) Conventional/established technology potentially offers lower risk deployment, (ii)
Lower energy consumption (free solar evaporation can raise lithium concentration in
brine from ~0.2% to ~6%), (iii) smaller variety of chemicals used in reagents.
Cons: (i) Environmental concerns (diversion of sometimes limited water can impact on
the surrounding area and communities, waste build up from impurities at each pond/
plant stage can’t be reinjected), (ii) Slow time to market (likely longer build time and
lengthy evaporation process), (iii) Only relevant in certain regions of the world, where
deposits and right weather conditions exist, (iv) As lithium has a very low concentration
in brine, a larger volume is often required to achieve high production values.
27 April 2023 18
Goldman Sachs Global Metals & Mining
Exhibit 25: Traditional process of Brine Extraction vs. DLE, and timing of each stage
27 April 2023 19
Goldman Sachs Global Metals & Mining
Though the application of technologies used in emerging DLE processes may be fairly
new to the lithium industry, adsorption (AD), ion exchange (IX), and solvent extraction
(SX) technologies are already utilised across other commodities at commercial scale
(and we note IX is already utilised in some conventional lithium brine processing to
manage impurities). Other DLE technologies in early stage development, including
membranes and precipitants, may also offer potential DLE solutions.
While the impact of DLE on market dynamics will be linked to the pace and scale at
which it is adopted, as we highlight (Exhibit 3), there are a significant number of
resources business and technology providers that have been incentivised to find
technological improvements to lithium resource extraction as a result of record lithium
prices that are well above the marginal cost of existing and proposed lithium supply (and
thus more than offset the upfront R&D costs). Policy changes, such as Chile’s recent
NLP, may further support an accelerating implementation of DLE technologies.
While each salar/brine resource is different (varying concentrations of lithium and other
elements/impurity ratios), and variations between salars mean there is unlikely a one
size fits all solution, we would expect a degree of transferability of successful DLE
technologies between resources (though likely requiring optimisation/subject to impurity
ratios), with differing applications and end products (lithium carbonate or chloride)
depending on the project/available finishing capacity/end market optimisation.
DLE offers a potential game changing technology for lithium supply, and while there may
still be key challenges around scalability and water consumption (though modular
designs and water recycling may assist with these issues, though could require energy
intensive mechanical evaporation), and brine reinjection may be slightly dilutive to the
resource (though proponents don’t expect material impacts over proposed project lives),
with the ongoing efforts, DLE could be implemented between 2025-2030 in both Chile
and Argentina, in our view. DLE projects could also be implemented both as greenfield
projects and brownfield expansions, or to enhance recoveries of existing pond
operations. This compares with market skepticism around commercial development of
DLE technology by the end of the decade.
27 April 2023 20
Goldman Sachs Global Metals & Mining
27 April 2023 21
Goldman Sachs Global Metals & Mining
Adsorption
Adsorption is increasingly the most developed DLE technology globally, with the
majority of DLE projects utilising it to some degree (Exhibit 3).
In adsorption’s use in DLE, lithium chloride (LiCl) molecules from the brine infiltrate
within the atomic layers of an adsorbent. Once LiCl fills the interstitial layers of the
adsorbent, it is removed with a strip solution, typically warm-hot water. After the
sorbent is loaded with the LiCl, it’s washed with a diluted lithium chloride stream to
remove unwanted ions, and then washed a second time to unload the lithium chloride.
Some sorbents developed can recover >90% of the lithium present, with this method
not requiring an acid wash or other chemicals, adding to its environmental credentials.
Other variations may include a recently tested lithium aluminum layered double
hydroxide chloride sorbent (LDH), which is still being tested (though researchers
consider them promising).
Pros: (i) Does not require reagents like ion exchange or solvent extraction, instead water
is used to recover the lithium chloride, with soda ash to convert to carbonate (which is
more readily available and easier to get to site vs. some acids for IX), (ii) Less impacted
by brine composition, or by weather conditions, with lower waste generation, (iii)
potentially >90% lithium extraction efficiency, (iv) Typically produces high quality lithium
chloride/carbonate, and can be suitable for low lithium concentration brines.
Cons: (i) Usually requires temperatures >40 C, (ii) Lower eluate LiCl concentration than
IX, and may require further steps to purify product and recycle water, (iii) Some
implementation may find it difficult to prevent contamination with the brine,
compromised by lower lithium uptake and carry-over of more impurities into the
product, (iv) The adsorption equipment can be expensive (potentially high upfront costs)
and complicated, with the cost of the adsorbent potentially higher if increasingly
tailored.
27 April 2023 22
Goldman Sachs Global Metals & Mining
Exhibit 28: Livent’s DLE implementation at Fenix supports both enhanced recoveries of ponds and DLE-based expansions
Project Fenix facility first expansion process flow diagram
Expansion 1 of 3 shown
Pros: (i) Simple process, (ii) High selectivity for lithium and reduced risk of impurity
contamination in the product stream, (iii) High capacity and therefore high concentration
of Li in the strip solution, and can be suitable for low lithium concentration brines, (iv)
Low energy/water consumption and unaffected by weather conditions, (v) continuous
operation potential.
Cons: (i) Potentially high upfront costs, and may require further steps to purify product,
(ii) High opex resulting from large amounts of base and acid inputs, and risk around acid
supply to site, (iii) Some IX material have the potential to degrade in acidic conditions.
27 April 2023 23
Goldman Sachs Global Metals & Mining
Pros: (i) High concentration of lithium can be produced from the brine with a high
recovery rate, and is also unaffected by weather conditions, (ii) Low opex costs, (iii)
Lithium solvent extraction is essentially a stand-alone process, whereas the other two
DLE processes typically require an additional concentration step, either through smaller
solar evaporation ponds, forced (artificial) evaporation, before the purified solution can
be converted to the final product.
Cons: (i) Potentially less applicable with higher impurity ratios (lower concentrations of
Ca and Mg usually required which may require pre-treatment of brine), (ii) Organic
solvents are environmentally challenging, and are potentially more difficult to get to site,
(iii) Fire risk with high temperature brines, (iv) Expensive relative to other technologies,
potentially larger capex for the first fill and can cause costly equipment corrosion, (v) The
residual brine that remains after lithium extraction may require post-treatment to remove
the leached solvent before it can safely be sent for disposal.
27 April 2023 24
Goldman Sachs Global Metals & Mining
Exhibit 29: Variations between salars mean there is unlikely a one size fits all solution (though solutions may still offer some transferability)
Comparison of different lithium brine extraction methods
Time consuming
Limit to brine with low Na/K content
Weather-dependent Corrosion to equipment High upfront cost High upfront cost
Disadvantages Water-intensive process
Requires additional processing steps Environmental impact Requires additional processing steps Requires additional processing steps
High upfront and operating cost
Environmental impact
Disclosure Appendix
Reg AC
We, Hugo Nicolaci, Paul Young, Trina Chen, Joy Zhang, Yan Lin, Elise Bailey, Roy Shi and Nick Zheng, CFA, hereby certify that all of the views expressed
in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of
our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
We, Nicholas Snowdon and Aditi Rai, hereby certify that all of the views expressed in this report accurately reflect our personal views, which have not
been influenced by considerations of the firm’s business or client relationships.
Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division.
GS Factor Profile
The Goldman Sachs Factor Profile provides investment context for a stock by comparing key attributes to the market (i.e. our coverage universe) and its
sector peers. The four key attributes depicted are: Growth, Financial Returns, Multiple (e.g. valuation) and Integrated (a composite of Growth, Financial
Returns and Multiple). Growth, Financial Returns and Multiple are calculated by using normalized ranks for specific metrics for each stock. The
normalized ranks for the metrics are then averaged and converted into percentiles for the relevant attribute. The precise calculation of each metric may
vary depending on the fiscal year, industry and region, but the standard approach is as follows:
Growth is based on a stock’s forward-looking sales growth, EBITDA growth and EPS growth (for financial stocks, only EPS and sales growth), with a
higher percentile indicating a higher growth company. Financial Returns is based on a stock’s forward-looking ROE, ROCE and CROCI (for financial
stocks, only ROE), with a higher percentile indicating a company with higher financial returns. Multiple is based on a stock’s forward-looking P/E, P/B,
price/dividend (P/D), EV/EBITDA, EV/FCF and EV/Debt Adjusted Cash Flow (DACF) (for financial stocks, only P/E, P/B and P/D), with a higher percentile
indicating a stock trading at a higher multiple. The Integrated percentile is calculated as the average of the Growth percentile, Financial Returns
percentile and (100% - Multiple percentile).
Financial Returns and Multiple use the Goldman Sachs analyst forecasts at the fiscal year-end at least three quarters in the future. Growth uses inputs
for the fiscal year at least seven quarters in the future compared with the year at least three quarters in the future (on a per-share basis for all metrics).
For a more detailed description of how we calculate the GS Factor Profile, please contact your GS representative.
M&A Rank
Across our global coverage, we examine stocks using an M&A framework, considering both qualitative factors and quantitative factors (which may vary
across sectors and regions) to incorporate the potential that certain companies could be acquired. We then assign a M&A rank as a means of scoring
companies under our rated coverage from 1 to 3, with 1 representing high (30%-50%) probability of the company becoming an acquisition target, 2
representing medium (15%-30%) probability and 3 representing low (0%-15%) probability. For companies ranked 1 or 2, in line with our standard
departmental guidelines we incorporate an M&A component into our target price. M&A rank of 3 is considered immaterial and therefore does not
factor into our price target, and may or may not be discussed in research.
Quantum
Quantum is Goldman Sachs’ proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for
in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets.
Disclosures
Regulatory disclosures
Disclosures required by United States laws and regulations
See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager
or co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co-
managed public offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs trades or may
trade as a principal in debt securities (or in related derivatives) of issuers discussed in this report.
The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts,
professionals reporting to analysts and members of their households from owning securities of any company in the analyst’s area of coverage.
Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues.
Analyst as officer or director: Goldman Sachs policy generally prohibits its analysts, persons reporting to analysts or members of their households
from serving as an officer, director or advisor of any company in the analyst’s area of coverage. Non-U.S. Analysts: Non-U.S. analysts may not be
associated persons of Goldman Sachs & Co. LLC and therefore may not be subject to FINRA Rule 2241 or FINRA Rule 2242 restrictions on
27 April 2023 26
Goldman Sachs Global Metals & Mining
communications with subject company, public appearances and trading securities held by the analysts.
Distribution of ratings: See the distribution of ratings disclosure above. Price chart: See the price chart, with changes of ratings and price targets in
prior periods, above, or, if electronic format or if with respect to multiple companies which are the subject of this report, on the Goldman Sachs
website at https://www.gs.com/research/hedge.html.
Additional disclosures required under the laws and regulations of jurisdictions other than the United States
The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws and
regulations. Australia: Goldman Sachs Australia Pty Ltd and its affiliates are not authorised deposit-taking institutions (as that term is defined in the
Banking Act 1959 (Cth)) in Australia and do not provide banking services, nor carry on a banking business, in Australia. This research, and any access to
it, is intended only for “wholesale clients” within the meaning of the Australian Corporations Act, unless otherwise agreed by Goldman Sachs. In
producing research reports, members of Global Investment Research of Goldman Sachs Australia may attend site visits and other meetings hosted by
the companies and other entities which are the subject of its research reports. In some instances the costs of such site visits or meetings may be met
in part or in whole by the issuers concerned if Goldman Sachs Australia considers it is appropriate and reasonable in the specific circumstances relating
to the site visit or meeting. To the extent that the contents of this document contains any financial product advice, it is general advice only and has
been prepared by Goldman Sachs without taking into account a client’s objectives, financial situation or needs. A client should, before acting on any
such advice, consider the appropriateness of the advice having regard to the client’s own objectives, financial situation and needs. A copy of certain
Goldman Sachs Australia and New Zealand disclosure of interests and a copy of Goldman Sachs’ Australian Sell-Side Research Independence Policy
Statement are available at: https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html. Brazil: Disclosure information in relation to
CVM Resolution n. 20 is available at https://www.gs.com/worldwide/brazil/area/gir/index.html. Where applicable, the Brazil-registered analyst primarily
responsible for the content of this research report, as defined in Article 20 of CVM Resolution n. 20, is the first author named at the beginning of this
report, unless indicated otherwise at the end of the text. Canada: This information is being provided to you for information purposes only and is not,
and under no circumstances should be construed as, an advertisement, offering or solicitation by Goldman Sachs & Co. LLC for purchasers of
securities in Canada to trade in any Canadian security. Goldman Sachs & Co. LLC is not registered as a dealer in any jurisdiction in Canada under
applicable Canadian securities laws and generally is not permitted to trade in Canadian securities and may be prohibited from selling certain securities
and products in certain jurisdictions in Canada. If you wish to trade in any Canadian securities or other products in Canada please contact Goldman
Sachs Canada Inc., an affiliate of The Goldman Sachs Group Inc., or another registered Canadian dealer. Hong Kong: Further information on the
securities of covered companies referred to in this research may be obtained on request from Goldman Sachs (Asia) L.L.C. India: Further information
on the subject company or companies referred to in this research may be obtained from Goldman Sachs (India) Securities Private Limited, Research
Analyst - SEBI Registration Number INH000001493, 951-A, Rational House, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, India, Corporate
Identity Number U74140MH2006FTC160634, Phone +91 22 6616 9000, Fax +91 22 6616 9001. Goldman Sachs may beneficially own 1% or more of
the securities (as such term is defined in clause 2 (h) the Indian Securities Contracts (Regulation) Act, 1956) of the subject company or companies
referred to in this research report. Japan: See below. Korea: This research, and any access to it, is intended only for “professional investors” within
the meaning of the Financial Services and Capital Markets Act, unless otherwise agreed by Goldman Sachs. Further information on the subject
company or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. New Zealand: Goldman Sachs
New Zealand Limited and its affiliates are neither “registered banks” nor “deposit takers” (as defined in the Reserve Bank of New Zealand Act 1989) in
New Zealand. This research, and any access to it, is intended for “wholesale clients” (as defined in the Financial Advisers Act 2008) unless otherwise
agreed by Goldman Sachs. A copy of certain Goldman Sachs Australia and New Zealand disclosure of interests is available at:
https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html. Russia: Research reports distributed in the Russian Federation are not
advertising as defined in the Russian legislation, but are information and analysis not having product promotion as their main purpose and do not
provide appraisal within the meaning of the Russian legislation on appraisal activity. Research reports do not constitute a personalized investment
recommendation as defined in Russian laws and regulations, are not addressed to a specific client, and are prepared without analyzing the financial
circumstances, investment profiles or risk profiles of clients. Goldman Sachs assumes no responsibility for any investment decisions that may be taken
by a client or any other person based on this research report. Singapore: Goldman Sachs (Singapore) Pte. (Company Number: 198602165W), which is
regulated by the Monetary Authority of Singapore, accepts legal responsibility for this research, and should be contacted with respect to any matters
arising from, or in connection with, this research. Taiwan: This material is for reference only and must not be reprinted without permission. Investors
should carefully consider their own investment risk. Investment results are the responsibility of the individual investor. United Kingdom: Persons who
would be categorized as retail clients in the United Kingdom, as such term is defined in the rules of the Financial Conduct Authority, should read this
research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have
been sent to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are
available from Goldman Sachs International on request.
European Union and United Kingdom: Disclosure information in relation to Article 6 (2) of the European Commission Delegated Regulation (EU)
(2016/958) supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council (including as that Delegated Regulation is
implemented into United Kingdom domestic law and regulation following the United Kingdom’s departure from the European Union and the European
Economic Area) with regard to regulatory technical standards for the technical arrangements for objective presentation of investment
recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of
conflicts of interest is available at https://www.gs.com/disclosures/europeanpolicy.html which states the European Policy for Managing Conflicts of
Interest in Connection with Investment Research.
Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer registered with the Kanto Financial Bureau under registration number Kinsho
69, and a member of Japan Securities Dealers Association, Financial Futures Association of Japan Type II Financial Instruments Firms Association, The
Investment Trusts Association, Japan, and Japan Investment Advisers Association. Sales and purchase of equities are subject to commission
pre-determined with clients plus consumption tax. See company-specific disclosures as to any applicable disclosures required by Japanese stock
exchanges, the Japanese Securities Dealers Association or the Japanese Securities Finance Company.
27 April 2023 27
Goldman Sachs Global Metals & Mining
Not Rated (NR). The investment rating, target price and earnings estimates (where relevant) have been suspended pursuant to Goldman Sachs policy
when Goldman Sachs is acting in an advisory capacity in a merger or in a strategic transaction involving this company, when there are legal, regulatory
or policy constraints due to Goldman Sachs’ involvement in a transaction, and in certain other circumstances. Rating Suspended (RS). Goldman
Sachs Research has suspended the investment rating and price target for this stock, because there is not a sufficient fundamental basis for
determining an investment rating or target price. The previous investment rating and target price, if any, are no longer in effect for this stock and should
not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspended coverage of this company. Not Covered (NC). Goldman Sachs does
not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful
(NM). The information is not meaningful and is therefore excluded.
General disclosures
This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we
consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates and
forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as
appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority
of reports are published at irregular intervals as appropriate in the analyst’s judgment.
Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment
banking and other business relationships with a substantial percentage of the companies covered by Global Investment Research. Goldman Sachs &
Co. LLC, the United States broker dealer, is a member of SIPC (https://www.sipc.org).
Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and principal
trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, principal trading desks and
investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research.
The analysts named in this report may have from time to time discussed with our clients, including Goldman Sachs salespersons and traders, or may
discuss in this report, trading strategies that reference catalysts or events that may have a near-term impact on the market price of the equity securities
discussed in this report, which impact may be directionally counter to the analyst’s published price target expectations for such stocks. Any such
trading strategies are distinct from and do not affect the analyst’s fundamental equity rating for such stocks, which rating reflects a stock’s return
potential relative to its coverage universe as described herein.
We and our affiliates, officers, directors, and employees will from time to time have long or short positions in, act as principal in, and buy or sell, the
securities or derivatives, if any, referred to in this research, unless otherwise prohibited by regulation or Goldman Sachs policy.
The views attributed to third party presenters at Goldman Sachs arranged conferences, including individuals from other parts of Goldman Sachs, do not
necessarily reflect those of Global Investment Research and are not an official view of Goldman Sachs.
Any third party referenced herein, including any salespeople, traders and other professionals or members of their household, may have positions in the
products mentioned that are inconsistent with the views expressed by analysts named in this report.
This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be
illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of
individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if
appropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income from them
may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.
Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.
Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.
27 April 2023 28
Goldman Sachs Global Metals & Mining
Investors should review current options and futures disclosure documents which are available from Goldman Sachs sales representatives or at
https://www.theocc.com/about/publications/character-risks.jsp and
https://www.fiadocumentation.org/fia/regulatory-disclosures_1/fia-uniform-futures-and-options-on-futures-risk-disclosures-booklet-pdf-version-2018.
Transaction costs may be significant in option strategies calling for multiple purchase and sales of options such as spreads. Supporting documentation
will be supplied upon request.
Differing Levels of Service provided by Global Investment Research: The level and types of services provided to you by Goldman Sachs Global
Investment Research may vary as compared to that provided to internal and other external clients of GS, depending on various factors including your
individual preferences as to the frequency and manner of receiving communication, your risk profile and investment focus and perspective (e.g.,
marketwide, sector specific, long term, short term), the size and scope of your overall client relationship with GS, and legal and regulatory constraints.
As an example, certain clients may request to receive notifications when research on specific securities is published, and certain clients may request
that specific data underlying analysts’ fundamental analysis available on our internal client websites be delivered to them electronically through data
feeds or otherwise. No change to an analyst’s fundamental research views (e.g., ratings, price targets, or material changes to earnings estimates for
equity securities), will be communicated to any client prior to inclusion of such information in a research report broadly disseminated through electronic
publication to our internal client websites or through other means, as necessary, to all clients who are entitled to receive such reports.
All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not all
research content is redistributed to our clients or available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of our
research by third party aggregators. For research, models or other data related to one or more securities, markets or asset classes (including related
services) that may be available to you, please contact your GS representative or go to https://research.gs.com.
Disclosure information is also available at https://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY
10282.
© 2023 Goldman Sachs.
No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written
consent of The Goldman Sachs Group, Inc.
27 April 2023 29