10-K 1 brhc10028369_10k.htm 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-38427

PIEDMONT LITHIUM INC.

(Exact name of Registrant as specified in its Charter)

Delaware		36-4996461
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

32 North Main Street, Suite 100 Belmont, North Carolina		28012
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (704) 461-8000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.0001 per share		PLL		The Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☒ NO ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ NO ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant as of December 31, 2020, the last business day of the most recently completed second fiscal quarter of Registrant’s predecessor, was approximately $339,661,709, based on the closing price on The Nasdaq Capital Market reported for such date. Ordinary shares of the Registrant’s predecessor held by each officer and director and by each person who is known to own 10% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates of the Registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of September 16, 2021, there were 15,869,395 shares of the Registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Table of Contents

			Page
PART I
	Item 1.	Business	5
	Item 1A.	Risk Factors	18
	Item 1B.	Unresolved Staff Comments	30
	Item 2.	Properties	30
	Item 3.	Legal Proceedings	30
	Item 4.	Mine Safety Disclosures	31

PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	32
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	38
	Item 8.	Financial Statements and Supplementary Data	39
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	64
	Item 9A.	Controls and Procedures	64
	Item 9B.	Other Information	65

PART III
	Item 10.	Directors, Executive Officers and Corporate Governance	66
	Item 11.	Executive Compensation	69
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	77
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	79
	Item 14.	Principal Accounting Fees and Services	80

PART IV
	Item 15.	Exhibits, Financial Statement Schedules	81
	Item 16.	Form 10-K Summary	82

SIGNATURES			83

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K contains forward-looking statements that involve risks and uncertainties and includes statistical data, market data and other industry data and forecasts, which we obtained from market research, publicly available information and independent industry publications and reports that we believe to be reliable sources.

Certain information included or incorporated by reference in this annual report on Form 10-K may be deemed to be “forward-looking statements” within the meaning of applicable securities laws. Such forward-looking statements concern our anticipated results and progress of our operations in future periods, planned exploration and, if warranted, development of our properties and plans related to our business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. All statements contained herein that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “expect,” “estimate,” “may,” “might,” “will,” “could,” “can,” “shall,” “should,” “would,” “leading,” “objective,” “intend,” “contemplate,” “design,” “predict,” “potential,” “plan,” “target” and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements. Forward-looking statements in this annual report on Form 10-K include, but are not limited to, statements with respect to risks related to:

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our operations being further disrupted and our financial results being adversely affected by public health threats, including the novel coronavirus (“COVID-19”) pandemic;

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our limited operating history in the lithium industry;

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our status as an exploration stage company, including our ability to identify lithium mineralization and achieve commercial lithium mining;

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mining, exploration and mine construction, if warranted, on our properties, including timing and uncertainties related to acquiring and maintaining mining, exploration, environmental and other licenses, permits, access rights or approvals in Gaston County, North Carolina, the Province of Quebec, Canada and Ghana as well as properties that we may acquire or obtain an equity interest in the future;

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completing required permitting, zoning and re-zoning activities required to commence mining and processing operations for the Carolina Lithium Project (as defined below);

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our ability to achieve and maintain profitability and to develop positive cash flows from our mining and processing activities;

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our estimates of mineral resources and whether mineral resources will ever be developed into mineral reserves;

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investment risk and operational costs associated with our exploration activities;

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our ability to develop and achieve production on our properties;

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our ability to enter into and deliver products under supply agreements;

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the pace of adoption and cost of developing electric transportation and storage technologies dependent upon lithium batteries;

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our ability to access capital and the financial markets;

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recruiting, training and developing employees;

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possible defects in title of our properties;

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compliance with government regulations;

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environmental liabilities and reclamation costs;

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estimates of and volatility in lithium prices or demand for lithium;

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our common stock price and trading volume volatility;

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the development of an active trading market for our common stock;

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our status as an emerging growth company; and

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our failure to successfully execute our growth strategy, including any delays in our planned future growth.

All forward-looking statements reflect our beliefs and assumptions based on information available at the time the assumption was made. These forward-looking statements are not based on historical facts but rather on management’s expectations regarding future activities, results of operations, performance, future capital and other expenditures, including the amount, nature and sources of funding thereof, competitive advantages, business prospects and opportunities. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, known and unknown, that contribute to the possibility that the predictions, forecasts, projections or other forward-looking statements will not occur. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated, or expected. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the securities laws of the United States, we disclaim any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify all the forward-looking statements contained in this annual report on Form 10-K by the foregoing cautionary statements.

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CAUTIONARY NOTE REGARDING DISCLOSURE OF MINERAL PROPERTIES

Reserves, Resources and Mineralized Material

We are subject to the reporting requirements of the applicable U.S. and Australian securities laws, and as a result we report our mineral reserves and mineral resources according to two different standards. U.S. reporting requirements currently applicable to us are governed by the Securities Act of 1933, as amended (“Securities Act”), and the Exchange Act of 1934, as amended (“Exchange Act”), including Industry Guide 7 (“Guide 7”) and Regulation S-K, Subpart 1300 (“S-K 1300”). Australian reporting requirements for disclosure of mineral properties are governed by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”). Both sets of reporting standards have similar goals in terms of conveying an appropriate level of confidence in the disclosures being reported but embody different approaches and definitions.

Under Guide 7, mineralization may not be classified as a reserve unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. We are an exploration stage mining company, and we have no reserves as defined by Guide 7.

Beginning with our annual report on Form 10-K for the fiscal year ended June 30, 2022, we will need to comply with S-K 1300 in lieu of Guide 7. While the guidelines for reporting mineral resources, including subcategories of measured, indicated and inferred resources, are largely similar for JORC Code and S-K 1300 standards, documentation is ongoing with respect to the S-K 1300 Technical Report Summary to formally categorize our mineral holdings as both JORC Code and SK 1300 compatible.

The terms “mineral resource,” “measured mineral resource,” “indicated mineral resource” and “inferred mineral resource” are Australian mining terms defined in accordance with the JORC Code. Comparable terms are now also defined by the U.S. Securities and Exchange Commission (“SEC”) in its newly adopted Modernization of Property Disclosures for Mining Registrants as promogulated in its S-K 1300 standards. While guidelines for reporting mineral resources, including subcategories of measured, indicated and inferred resources, are largely similar for JORC Code and S-K 1300 standards, information contained herein that describes our mineral deposits may not be comparable to similar information made public by other U.S. companies subject to reporting and disclosure requirements under the U.S. federal securities laws and the rules and regulations thereunder.

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PART I

Item 1.

Business

Overview

Piedmont Lithium Inc. is an exploration stage company developing a multi-asset, integrated lithium business contributing to the transition to a net zero carbon world and the creation of a clean energy economy in North America. Through this endeavor, we are focused on developing and manufacturing battery quality lithium hydroxide for the fast-growing electric vehicle industry. The centerpiece of our operations, our wholly-owned Carolina Lithium Project (“Carolina Lithium Project”), is located in the renowned Carolina Tin-Spodumene Belt of North Carolina. We are geographically diversified with equity investments in strategic partnerships that own lithium resource assets in Canada and Ghana. Collectively, these resource assets and the location of these assets in the United States, Canada and Ghana, strategically position us to be a large, low-cost, sustainable producer of lithium products, serving the North American and European electric vehicle and battery supply chains. The geology, geography and proximity of our resources, planned production operations and customer base, should allow us to deliver a valuable supply of high-quality, sustainably produced lithium hydroxide from spodumene concentrate, which is preferred by most electric vehicle manufacturers. Our diversified operations should enable us to play a pivotal role in supporting the move toward decarbonization and the electrification of transportation and energy storage.

Unless the context otherwise indicates, the terms “we,” “us,” “our,” the “Company,” or “Piedmont Lithium” all refer to Piedmont Lithium Inc. and its consolidated subsidiaries at all times on and after the effective date of the Redomiciliation (as defined below) and refers to Piedmont Lithium Limited (“Piedmont Australia”) and its consolidated subsidiaries at all times prior to the effective date of the Redomiciliation.

Piedmont Lithium Inc. is incorporated in the State of Delaware. We maintain executive offices at 32 North Main Street, Suite 100, Belmont, NC 28012, and our telephone number is (704) 461-8000. Our website address is www.piedmontlithium.com. Shares of our common stock, par value $0.0001 per share, are traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol “PLL” and our Chess Depository Interests (“CDIs”), each representing 1/100th of a share of our common stock, are traded on the Australian Securities Exchange (“ASX”), also under the symbol “PLL.”

Unless otherwise indicated, all references to “$” are to United States dollars, all references to “AUD” are to Australian dollars and all references to “CAD” are to Canadian dollars. Our reporting currency is U.S. dollars.

Our fiscal year ends on June 30 of each calendar year. All references to years 2020, 2021, 2022, 2023 and 2024 in this Form 10-K refer to fiscal years ended June 30, 2020, 2021, 2022, 2023 and 2024, respectively, unless otherwise stated.

Redomiciliation

Piedmont Lithium Inc. acquired all of the issued and outstanding ordinary shares of Piedmont Australia, our Australian predecessor and a wholly owned subsidiary, pursuant to a Scheme of Arrangement under Australian law, which was approved by Piedmont Australia’s shareholders on February 26, 2021, and the Federal Court of Australia on May 5, 2021 (collectively referred to as “Redomiciliation”). As part of the Redomiciliation, the Company changed its place of domicile from Australia to the State of Delaware in the United States, effective May 17, 2021.

Piedmont Australia’s ordinary shares were listed on the ASX, and Piedmont Australia’s American Depositary Shares (“ADSs”), each representing 100 of Piedmont Australia’s ordinary shares, were traded on Nasdaq. Following the approval of the Redomiciliation, the Company moved its primary listing from the ASX to Nasdaq and retained an ASX listing via CDIs, each representing 1/100th of a share of common stock of Piedmont Lithium Inc.

Pursuant to the Redomiciliation, holders of Piedmont Australia’s ordinary shares received one (1) CDI in Piedmont Lithium Inc. for each ordinary share held in Piedmont Australia on the Redomiciliation record date; and holders of ADSs in Piedmont Australia, each of which represented 100 Piedmont Australia ordinary shares, received one (1) share of common stock of Piedmont Lithium Inc. for each ADS held in Piedmont Australia on the Redomiciliation record date.

All issued and outstanding shares of our common stock have been retroactively adjusted in these consolidated financial statements to reflect the 100:1 ratio and share consolidation as if these events had occurred on July 1, 2019.

Our Segment

We have one operating segment which is also our reportable segment. Our chief operating decision maker, who is also our Chief Executive Officer, manages our operations on a consolidated basis for purposes of allocating resources.

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Our Strategy

Our strategy is to become a highly strategic, fully-integrated North American producer of lithium hydroxide using spodumene concentrate sourced from multiple global mineral deposits in which we hold both economic interests and long-term supply agreements. The centerpiece of our business will be our wholly-owned Carolina Lithium Project in North Carolina. We also hold economic interests and long-term supply agreement rights in an existing spodumene mine in Canada and pre-production spodumene deposits in Canada and Ghana.

Our strategy involves developing a low cost, highly sustainable, North American source of lithium hydroxide manufactured from both domestic and imported spodumene concentrate, giving North American battery and electric vehicle manufacturers better continuity of supply while also helping them meet their environmental commitments. A key component of our strategy is to become an “integrated” supplier with access to premier global mineral resources, spodumene concentrate facilities and lithium hydroxide processing facilities. This approach should allow us to become one of the most sustainable, cost-effective suppliers in the world, and further help potential customers achieve their important environmental, social and governance (“ESG”) goals required by shareholders and regulatory agencies.

Complementary to our lithium-based strategy is our plan to maximize the utilization of the Carolina Lithium Project’s mineral resources, including marketable byproducts quartz, feldspar and mica. The existence of these minerals in the Carolina Lithium Project’s ore body creates additional revenue streams while lowering production costs related to our primary extraction and processing of lithium hydroxide. The availability and marketability of quartz, feldspar, and mica will significantly reduce waste associated with the manufacturing of lithium hydroxide, thereby contributing to our sustainability goals within our ESG strategy.

Our equity investments in Quebec, Canada, which include an existing North American Lithium (“North American Lithium” or “NAL”) mine near Val-d’Or, Canada, position us for potential future production of spodumene concentrate in the Province of Quebec, while taking advantage of low-cost, zero-carbon hydroelectricity. We believe our equity investment and earn-in agreement in Ghana will provide us access to hard rock lithium assets including a future long-term supply of spodumene concentrate through our existing spodumene concentrate supply agreement.

Our strategy is to continue to evaluate strategic partnership opportunities with lithium projects globally that are located in favorable jurisdictions, have the potential for scale, low-cost, sustainable production practices, and are logistically-advantaged relative to our proposed lithium hydroxide manufacturing sites.

Our business plan is subject to market conditions and the ability to define an economically viable project. We intend to implement our business plan by:

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completing additional drilling programs on our properties to expand current mineral resource estimates and increase geological confidence of our mineral resource estimates;

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continuing to secure additional properties within the Carolina Tin-Spodumene Belt to undertake additional exploration;

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undertaking further technical studies to assess the economic potential of the Carolina Lithium Project and defining a lithium reserve base, including further metallurgical studies and feasibility studies;

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undertaking discussions with potential lithium offtake parties for future sale of lithium products;

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completing permitting and zoning activities required to commence mining and processing operations for the Carolina Lithium Project;

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evaluating the potential restart of operations at North American Lithium in Quebec, Canada;

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advancing our earn-in interests allowing for increased equity investment in Ghana;

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completing required financing activities;

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completing construction for our lithium mining and processing activities, globally;

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commencing lithium mining and processing activities to supply electric vehicle and battery storage markets; and

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commencing byproduct manufacturing and sales operations for our Carolina Lithium Projects.

Ownership Interests

Through our parent entity, Piedmont Lithium Inc., and our wholly-owned subsidiary, Piedmont Lithium Limited, we hold an equity interest of approximately 19% in Sayona Mining Limited (“Sayona”), an Australian company publicly listed on the ASX and based in Australia, for the purpose of forming a strategic partnership to explore, evaluate, mine, develop and ultimately produce spodumene concentrate in Quebec, Canada.

Through our subsidiary, Piedmont Lithium Quebec Holdings, Inc., we hold a 25% equity interest in Sayona Quebec Inc. (“Sayona Quebec”) for the purpose of furthering our investment and strategic partnership in Quebec, Canada with Sayona. The remaining 75% equity interest is held by Sayona. Sayona Quebec holds a 100% interest in the existing lithium mining operations of North American Lithium.

Through our subsidiary, Piedmont Lithium Ghana Holdings, Inc., we hold an equity interest of approximately 10% in IronRidge Resources Limited (“IRR”), an Australian company publicly listed on the Alternative Investment Market of the London Stock Exchange, for the purpose of forming a strategic partnership to explore, evaluate, mine, develop and ultimately produce spodumene concentrate in Ghana. This investment was made subsequent to the year ended June 30, 2021.We have the right to acquire up to a 50% equity interest in the Ghanaian entities, which are currently wholly-owned subsidiaries of IRR, through expected future staged investments of up to $87 million. See Note 17 to the consolidated financial statements in this Form 10-K.

Through our subsidiary, Piedmont Lithium Carolinas, Inc., we hold a 33% equity interest in Pronto Minerals, LLC (“Pronto Minerals”), a North Carolina limited liability company, for the purpose of marketing and selling byproducts, specifically quartz, feldspar and mica, produced by Piedmont Lithium Inc. The remaining 67% equity interest is held by Ion Carbon Minerals, LLC (“Ion”), a North Carolina limited liability company.

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Our Lithium Projects

Carolina Lithium Project

Overview

Piedmont Lithium holds a 100% interest in the Carolina Lithium Project located within the Carolina Tin-Spodumene Belt, which historically provided most of the western world’s lithium between the 1950s and 1980s. The Carolina Tin-Spodumene Belt is located approximately 25 miles west of Charlotte, North Carolina in the United States.

As of June 30, 2021, the Carolina Lithium Project comprised approximately 3,116 acres of surface property and associated mineral rights, of which approximately 1,329 acres were owned, approximately 113 acres were subject to long-term leases, approximately 79 acres were subject to lease-to-own agreements, and approximately 1,595 acres were subject to exclusive option agreements. These exclusive option agreements, upon exercise, allow us to purchase or, in some cases, enter into long-term lease agreements for the surface property and associated mineral rights. Our option agreements provide for annual option payments, bonus payments during periods when we conduct drilling, and royalty payments during periods when we conduct mining. Our option agreements generally provide us with an option to purchase the optioned property at a specified premium over fair market value. Our obligation to make annual option payments and drilling payments will terminate with respect to a property if we exercise our purchase option. We also own a 61-acre property in Kings Mountain, North Carolina.

We have reported mineral resource estimates as part of our exploration and evaluation activities, which include completion of 582 drill holes totaling 85,592 meters and spanning five drilling campaigns as of June 30, 2021. As of the date of this annual report on Form 10-K, we have completed 599 exploration drill holes totaling 88,185 meters and spanning five drill campaigns.

Since securing the exploration rights and initial land position in 2016, we have focused on proving the potential of mineral resources for the Carolina Lithium Project. As of June 30, 2021, resource drilling has defined over 100 spodumene-bearing pegmatite bodies within areas of our properties with most of the spodumene-bearing mineralization on our properties occurring within 150 meters of the surface. The Carolina Tin-Spodumene Belt is one of the premier locations in the world for exploration of lithium pegmatites given its favorable geology and easy access to infrastructure, power, research and development centers for lithium and battery storage, major high-technology population centers and downstream lithium processing facilities.

Piedmont Lithium Location in the Carolina Tin-Spodumene Belt

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Spodumene Concentrate Operation

The integrated Scoping Study update for the Carolina Lithium Project is based on a 20-year project life, with an estimated average annual production of 248,000 metric tons of spodumene concentrate (“SC6”) at steady-state.

Lithium Hydroxide Conversion Operation

The integrated Scoping Study update for the Carolina Lithium Project assumes a lithium hydroxide conversion plant, also referred to as a chemical plant, will operate for 20 years, with production commencing approximately 90 days after the start of the spodumene concentrator. The lithium hydroxide chemical plant has an estimated production rate of 30,000 metric tons of lithium hydroxide per year.

Byproducts

Our forecasted production of byproducts is based on the current process design of the concentrator and the demand estimates we have received from potential customers for these minerals. We have assumed that approximately 252,000 metric tons per year of quartz concentrate, approximately 392,000 metric tons per year of feldspar concentrate, and approximately 70,000 metric tons per year of mica concentrate will be produced at steady-state production on an annual basis.

Operating and Capital Costs

The integrated Carolina Lithium Project is projected to have an average life of project cash operating cost of approximately $2,943 per metric ton of lithium hydroxide, including royalties and net of byproduct credits, potentially positioning Piedmont Lithium as one of the industry’s lowest-cost producers. The Scoping Study estimates total development capital costs to construct the integrated Carolina Lithium Project to be approximately $840 million, which includes land expenses, owner’s costs, and approximately $128 million in contingency.

Quebec Projects

Overview

The Quebec Projects are located in the Abitibi region of Quebec, Canada, and are jointly owned by Piedmont Lithium and Sayona through a strategic partnership in Sayona Quebec. Piedmont Lithium and Sayona have equity interests of 25% and 75%, respectively, in Sayona Quebec.

Sayona Quebec’s assets are comprised of three projects: (i) the Authier Project, (ii) the Tansim Project and (iii) North American Lithium, which was acquired by Sayona Quebec in August 2021 subsequent to the year ended June 30, 2021. Sayona Quebec is reviewing the potential consolidation of spodumene resources for these projects located in Quebec.

The Authier Project is a feasibility-stage project located approximately 28 miles northwest of the city of Val-d’Or, a major mining center in Quebec. Val-d’Or is located approximately 290 miles northwest of the city of Montreal. The Authier Project is easily accessible by a rural road network connecting to a national highway a few miles east of the project site.

NAL is an existing spodumene mine and concentrator currently in care and maintenance and is fully permitted with over $400 million previously invested in mining, spodumene concentrate and refining capacity. NAL is located approximately 20 miles from the Authier Project near Val-d’Or. NAL was operational and ramping toward nameplate production in 2018, when it was placed on care and maintenance due to weak lithium markets and poor capital structure.

The Tansim Project is an exploration stage project located approximately 51 miles southwest of the Authier Project.

Technical studies will contemplate the integration of Sayona Quebec’s Authier Project with Sayona Quebec’s operations at NAL, including restart requirements, technical improvements, and optimization of NAL’s operations in order to fully utilize this competitive set of assets. Through the strategic partnership, Sayona and Sayona Quebec are prioritizing the manufacturing of lithium products in Quebec and capitalizing on Quebec’s competitive advantages, which include access to skilled labor, strong infrastructure, governmental mining support, and zero-carbon, low-cost hydropower.

Technical studies are currently underway for the planned restart of spodumene concentrate operations for NAL. A definitive feasibility study integrating production from NAL and the Authier Project is expected in the first half of 2022.

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Supply Agreement

We entered into a long-term supply agreement with Sayona in January 2021. Under the terms of the supply agreement, Sayona Quebec will supply Piedmont Lithium the greater of 113,000 metric tons per year or 50% of Sayona Quebec’s planned spodumene concentrate production from the combination of NAL and the Authier Project. Under the agreement, spodumene concentrate is priced on an equivalent cost, insurance and freight, or CIF, China market price basis on a delivered at price, or DAP, (Incoterms 2020) basis to Cherryville, North Carolina.

Investments

We have invested a total of $16.1 million, net of acquisition costs, as of June 30, 2021, in the Quebec Projects through our equity investments in Sayona and Sayona Quebec. Our total investment of $16.1 million as of June 30, 2021 was comprised of the following investments:

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between January and June 2021, we made payments totaling $11.1 million to Sayona as part of an agreement to acquire an equity interest of approximately 19% in Sayona; and

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on June 7, 2021, we paid $5.0 million to Sayona for a 25% equity interest in Sayona Quebec. The remaining 75% equity interest in Sayona Quebec is held by Sayona.

Subsequent to the year ended June 30, 2021, we made additional equity investments in Sayona and Sayona Quebec as follows:

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on August 20, 2021, we invested AUD 9.8 million ($7.0 million) in equity offerings by Sayona. Our equity interest in Sayona was approximately 19% as of June 30, 2021 and as of the date of this annual report on Form 10-K; and

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on August 30, 2021, Sayona Quebec acquired substantially all of the assets of NAL for CAD 97.9 million ($77.8 million). The assets acquired primarily consisted of an existing mine and related mining assets in the Abitibi region near Val d’Or, Quebec, Canada. We paid CAD 24.5 million ($19.5 million) to Sayona Quebec, representing our 25% equity interest contribution, and Sayona paid CAD 73.4 million ($58.3 million), representing Sayona’s 75% equity interest contribution, which collectively gave Sayona Quebec the ability to fund the purchase of NAL’s assets.

See Note 17 to the consolidated financial statements in this Form 10-K.

Ghana Project

On August 31, 2021, subsequent to the year ended June 30, 2021, we invested $15.9 million to acquire an equity interest of approximately 10% in IRR and to form a strategic partnership with IRR for the production of spodumene concentrate in Ghana. See Note 17 to the consolidated financial statements in this Form 10-K.

Overview

The Ghana Project is a strategic partnership between Piedmont Lithium and IRR through our purchase of an equity interest in IRR, our expected staged investments over a period of three to four years to acquire a 50% equity interest in IRR’s Ghanaian-based Cape Coast Lithium Portfolio (“IRR Ghana”), and a long-term supply agreement for 50% of IRR Ghana’s planned spodumene concentrate production. The Ghana Project is an exploration stage project located on the south coast of the Ghana and covering an area of approximately 425 square miles.

The Ewoyaa Project, which is the flagship deposit of the Ghana Project, is located on the south coast of Ghana less than one mile from the Takoradi-Accra National Highway with a relatively short transport distance of approximately 68 miles to the port of Takoradi. The project site is adjacent to high voltage power and is expected to have a low environmental impact due to reliance on solar and hydroelectric generating capacity to power operations.

Supply Agreement

On July 1, 2021, we entered into a long-term supply agreement with IRR giving Piedmont Lithium 50% of IRR Ghana’s life of mine production of spodumene concentrate. Pricing for the offtake supply of spodumene concentrate will be at market rates at the time of purchase. Under the agreement, spodumene concentrate is priced on a CIF, China market price basis less ocean freight and insurance on a net back basis to first on board vessel (Incoterms 2020) at the Port of Takoradi, Ghana.

Investments

On August 31, 2021, subsequent to the year ended June 30, 2021, we paid GBP 11.5 million ($15.9 million) to IRR as part of an agreement:

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to acquire to an equity interest of approximately 10% in IRR;

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with the ability to acquire a 22.5% equity interest in IRR Ghana by funding $17.0 million in the Ewoyaa Project for all of the exploration and definitive feasibility study expenses over the next 24 months; and

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with the ability to acquire an additional 27.5% of IRR’s operations in Ghana, by solely funding an additional $70.0 million in capital costs for the Ewoyaa Project.

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Strengths

We believe that we are well-positioned to successfully execute our business strategies primarily due to our following competitive strengths:

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Located in a historical major lithium mining and manufacturing district in the United States—The integrated Carolina Lithium Project is located within the Carolina Tin-Spodumene Belt and along trend to the Hallman Beam and Kings Mountain mines, which historically provided much of the western world’s lithium between the 1950s and 1980s. The Carolina Tin-Spodumene Belt extends over 40 miles in length and reaches a maximum width of approximately one mile.

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Significant existing infrastructure—We believe the Carolina Lithium Project is well situated in a historical lithium district, with access to road and rail infrastructure, a highly skilled labor force, low-cost and low carbon sources of baseload grid power, research and development centers for lithium and battery storage, and access to major high technology population centers.

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Diversification of resources—During 2021, we made investments in and established strategic partnerships with Sayona and IRR. We continue to pursue opportunities to complement our business through additional acquisitions, joint ventures, strategic alliances, and/or investments.

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Acquisition of past-producing assets—Subsequent to fiscal year 2021 and through our equity investment in Sayona Quebec, we successfully acquired the past producing mining assets of NAL located in the Abitibi region, near Val d’Or, Quebec, Canada.

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Technology selection—During 2021, we partnered with Metso Outotec on lithium hydroxide conversion technology. We believe that the selection of Metso Outotec’s innovative alkaline pressure leach technology for the conversion of spodumene concentrate to lithium hydroxide should provide us with a relative advantage in capital and operating costs as well as our environmental profile, including carbon intensity, compared to other hard rock lithium conversion methods.

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Highly experienced management team with a long history of developing and operating mining, energy, and lithium manufacturing projects—During 2021, we expanded our management team and increased our core skills with people experienced in the management, operations, sales and marketing of lithium manufacturing operations. Our management team has significant experience in acquiring, developing, and financing mining and chemical projects. We have increased our corporate capabilities in areas of finance, accounting, legal, and human resources.

Marketing, Sales, Contracts and Principal Markets

On September 28, 2020, we entered into a sales agreement with a vehicle manufacturer (“Buyer”) to provide spodumene concentrate to the Buyer. The agreement commits us to sell, at a fixed maximum price, a number of tons of spodumene concentrate equal to approximately one-third of our estimated average annual production. The agreement has an initial five-year term running from the first delivery date and may be extended by mutual agreement for a second five-year term. The agreement contemplates a number of areas where the parties must come to a mutual agreement. For example, the agreement is conditional upon the Buyer and our mutual agreement, based on the development schedules of both parties, to a start date for deliveries and to the parties agreeing in good faith to an allocation of certain material costs.

On July 31, 2020, we entered into a strategic partnership with Ion to form Pronto Minerals for the purpose of marketing and selling byproducts, specifically quartz, feldspar and mica, produced by our Carolina Lithium Project.

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We continue to develop a marketing and sales strategy that includes production from the Carolina Lithium Project, as well as our other lithium projects. Based on historical and current production in the Carolina Tin-Spodumene Belt and other demand by producers in North Carolina, we anticipate producing battery-grade lithium hydroxide, spodumene concentrate, and certain other byproducts including quartz, feldspar and mica, all of which may be used by the global electric vehicle, energy storage and construction materials markets.

Specialized Skills and Knowledge

We rely on specialized skills and knowledge to gather, interpret and process geological and geophysical data, successfully permit and then design, build and operate extraction facilities and engage in numerous additional activities required as part of the mine-to-lithium hydroxide process. We have employed, and expect to continue to employ, a strategy of contracting consultants and other service providers with specialized skills and knowledge to supplement the skills and knowledge of our permanent staff to undertake our lithium operations effectively.

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Competition

We compete with other mineral and chemical processing companies, many of which possess greater financial resources and technical facilities than we do, in connection with the acquisition of suitable exploration properties and the engagement of qualified personnel. Although we aspire to be a leading lithium hydroxide producer in North America, the lithium mining and chemical industry is fragmented, and we are one of many participants in this sector. Many of our competitors have been in business longer and have established more strategic partnerships and relationships and have greater financial accessibility than we have.

While we compete with other exploration companies in acquiring suitable properties, we believe there will be readily available purchasers of lithium chemical products or other industrial minerals if they were to be produced from any of our leased properties. The price of our planned products can be affected by a number of factors beyond our control, including fluctuations in the market prices for lithium, supplies of lithium, demand for lithium as well as mining activities of others.

If we identify lithium mineralization that is determined to be of economic grade and in sufficient quantity to justify production, additional capital would be required to develop, mine and sell our production.

Government Regulations

Overview

Our exploration activities for the Carolina Lithium Project and our other projects are subject to extensive laws and regulations, which are overseen and enforced by multiple U.S. federal, state, and local authorities, as well as foreign jurisdictions. These applicable laws govern exploration, development, production, exports, various taxes, labor standards, occupational health and safety, waste disposal, protection and remediation of the environment, protection of endangered and protected species and other matters. Mineral exploration activities are also subject to applicable U.S. federal and state laws, as well as foreign jurisdictions and regulations that seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted, and we cannot assure you such permits will be received. Environmental laws and regulations may also, among other things:

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require notice to stakeholders of proposed and ongoing exploration, drilling, environmental studies, mining or production activities;

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require the installation of pollution control equipment;

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restrict the types, quantities and concentrations of various substances that can be released into the environment in connection with exploration, drilling, mining, lithium hydroxide manufacturing or other production activities;

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limit or prohibit drilling, mining, lithium manufacturing or other production activities on lands located within wetlands, areas inhabited by endangered species and other protected areas, or otherwise restrict or prohibit activities that could impact the environment, including water resources;

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impose substantial liabilities for pollution resulting from current or former operations on or for any preexisting environmental impacts our projects;

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require significant reclamation obligations in the future as a result of our mining and chemical operations; and

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require preparation of an environmental assessment or an environmental impact statement.

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Compliance with environmental laws and regulations may impose substantial costs on us, subject us to significant potential liabilities, and have an adverse effect upon our capital expenditures, results of operations and/or competitive position. Violations and liabilities with respect to these laws and regulations could result in significant administrative, civil, or criminal penalties, remedial clean-ups, natural resource damages, permit modifications and/or revocations, operational interruptions and/or shutdowns and other liabilities. The costs of remedying such conditions may be significant, and remediation obligations could adversely affect our business, results of operations and financial condition. Additionally, federal, state and local legislative bodies and agencies frequently revise environmental laws and regulations, and any changes in these regulations, or the interpretations thereof, could require us to expend significant resources to comply with new laws or regulations or changes to current requirements and could have a material adverse effect on our business operations. As of the date of this annual report on Form 10-K, other than with respect to the permitting activities of the Carolina Lithium Project, we have not been required to spend material amounts on compliance regarding environmental regulations.

Permits

In November 2019, we were granted a Clean Water Act Section 404 Standard Individual Permit from the U.S. Army Corps of Engineers (“USACE”) for our planned concentrate operations. The USACE completed an Environmental Assessment of the project in conjunction with other state and federal agencies based on our December 2018 permit application and our responses to agency and public comments.

In 2019, we received a Clean Water Act Section 401 Individual Water Quality Certificate from the North Carolina Department of Environmental Quality’s (“NCDEQ”) Division of Water Resources.

We hold a Synthetic Minor Construction and Operation Permit issued by the NCDEQ’s Division of Air Quality for our property in Kings Mountain, North Carolina. However, we are not pursuing development of this property at this time.

Our exploration and evaluation activities for the Carolina Lithium Project include drilling, which is authorized under a general permit initially approved in 2017 by the NCDEQ and updated in April 2019, October 2019 and June 2021. We have reclamation obligations under this permit, pursuant to which we will be obligated to reclaim all disturbed drill pads and temporary roads to the approximate original contours and will seed with grass and straw to stabilize any disturbances. Generally, we are required to affect such reclamation within 14 days following drilling. We have concluded that these reclamation obligations are immaterial.

In addition to the permits that we have been issued to date, we will require other permits before construction or operations of the integrated business including mining, mineral concentration, or chemical manufacturing may commence. Other permits that are required for the Carolina Lithium Project include, but are not limited to, a state mining permit issued by the North Carolina Division of Energy, Mineral and Land Resources (“DEMLR”), a new air permit issued by the NCDEQ Division of Air Quality, and rezoning approved by the Gaston County Board of Commissioners.

We may require additional permits for the Carolina Lithium Project including, but not limited to, an NCG01 General Stormwater Permit for stormwater discharges from construction activities issued by DEMLR, an NCG02 General Stormwater Permit for mine dewatering issued by DEMLR, a road abandonment approved by the North Carolina Department of Transportation (“NCDOT”) and Gaston County under North Carolina General Statute 136-63, an Encroachment Permit for an at-grade rail crossing issued by NCDOT, various driveway permits issued by NCDOT, a Gaston County Watershed Permit approved by Gaston County Planning, various building permits approved by Gaston County Planning, explosives permits approved by the Bureau of Alcohol, Tobacco, and Firearms, and Hazardous Chemical Permits issued by Gaston County Fire Officials.

Subsequent to fiscal year 2021, we submitted an application for a mining permit for the Carolina Lithium Project to DEMLR on August 31, 2021. We have not yet applied for other additional required permits described above.

Prior to developing or mining any mineralization that we discover, we will be required to obtain new governmental permits authorizing, among other things, any mining development activities and mining operating activities. Obtaining and renewing governmental permits is a complex and time-consuming process and involves numerous jurisdictions, public hearings, and possibly costly undertakings. The timeliness and success of permitting efforts are contingent upon many variables not within our control, including the interpretation of permit approval requirements administered by the applicable permitting authority. We may not be able to obtain or renew permits that are necessary to our planned operations, or the cost and time required to obtain or renew such permits may exceed our expectations. Any unexpected delays or costs associated with the permitting process could delay the exploration, development and/or operation of our properties. See “Risk Factors—We will be required to obtain governmental permits in order to conduct development and mining operations, a process which is often costly and time-consuming, and there is no certainty that all necessary permits for our operations will be granted.”

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U.S. Federal Legal Framework

The Carolina Lithium Project will be required to comply with applicable environmental protection laws and regulations and licensing and permitting requirements. The material environmental, health and safety laws and regulations that we must comply with include, among others, the following U.S. federal laws and regulations:

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National Environmental Protection Act (“NEPA”), which requires careful evaluation of the environmental impacts of mining and lithium manufacturing operations that require federal approvals;

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Clean Air Act (“CAA”) and its amendments, which governs air emissions;

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Clean Water Act (“CWA”), which governs discharges to and excavations within the waters of the United States;

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Resource Conservation and Recovery Act (“RCRA”), which governs the management of solid waste;

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Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), which imposes liability where hazardous substances have been released into the environment (commonly known as Superfund); and

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Federal Mine Safety and Health Act, which established the primary safety and health standards regarding working conditions of employees engaged in mining, related operations, and preparation and milling of the minerals extracted, as well as the Occupation Safety and Health Act, which regulates the protection of the health and safety of workers in lithium manufacturing operations and to the extent such protection is not already addressed by the Federal Mine Safety and Health Act.

Our operations may also be subject to state environmental law and regulations, including but not limited to laws and regulations related to the reclamation of mined lands, which may require reclamation permits to be acquired prior to the commencement of mining operations and may require substantial financial guarantees to cover the cost of future reclamation activities.

Solid and Hazardous Waste

RCRA, and comparable state statutes, affect our operations by imposing regulations on the generation, transportation, treatment, storage, disposal and cleanup of hazardous wastes and on the disposal of non-hazardous wastes. Under the auspices of the United States Environmental Protection Agency (“EPA”), the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements.

In addition, CERCLA can impose joint and several liability without regard to fault or legality of conduct on classes of persons who are statutorily responsible for the release of a hazardous substance into the environment. These persons can include the current and former owners, lessees or operators of a site where a release occurs, and anyone who disposes or arranges for the disposal of a hazardous substance. Under CERCLA, such persons may be subject to strict, joint and several liability for the entire cost of cleaning up hazardous substances that have been released into the environment and for other costs, including response costs, alternative water supplies, damage to natural resources and for the costs of certain health studies. Moreover, it is not uncommon for neighboring landowners, workers and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the indoor or outdoor environment. Each state also has environmental cleanup laws analogous to CERCLA. Hazardous wastes may have been previously handled, disposed of, or released on or under properties currently or formerly owned or leased by us or on or under other locations to which we sent waste for disposal. These properties and any materials disposed or released on them may subject us to liability under CERCLA, RCRA and analogous state laws. Under such laws, we could be required to remove or remediate disposed wastes or property contamination, to contribute to remediation costs, or to perform remedial activities to prevent future environmental harm.

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Air Emissions

The federal CAA and comparable state laws restrict the emission of air pollutants from numerous sources through the issuance of permits and the imposition of other requirements. Major sources of air pollutants are subject to more stringent, federally imposed permitting requirements. Air pollution regulations may require us to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce or significantly increase air emissions, obtain air permits and comply with stringent permit requirements or utilize specific equipment or technologies to control emissions of certain pollutants. The need to obtain permits has the potential to delay our operations, and we may be required to incur capital expenditures for air pollution control equipment or other air emissions related obligations. Administrative enforcement actions for failure to comply strictly with air pollution regulations or permits are generally resolved by payment of monetary fines and correction of any identified deficiencies. Alternatively, regulatory agencies could require us to forego construction, modification or operation of certain air emission sources.

Clean Water Act

The CWA imposes restrictions and strict controls regarding the discharge of wastes, including mineral processing wastes, into waters of the United States, a term broadly defined to include, among other things, certain wetlands. Permits must be obtained to discharge pollutants into federal waters. The CWA provides for civil, criminal and administrative penalties for unauthorized discharges, both routine and accidental, of pollutants. It imposes substantial potential liability for the costs of removal or remediation associated with discharges of oil or hazardous substances. State laws governing discharges to water also provide varying civil, criminal and administrative penalties, and impose liabilities in the case of a discharge of petroleum or its derivatives, or other hazardous substances, into state waters. In addition, the EPA has promulgated regulations that require permits to discharge storm water runoff, including discharges associated with construction activities. In the event of an unauthorized discharge of wastes, we may be liable for penalties and costs.

Pursuant to these laws and regulations, we may also be required to develop and implement spill prevention, control and countermeasure plans, also referred to as “SPCC plans,” in connection with on-site storage of significant quantities of oil. Some states also maintain groundwater protection programs that require permits for discharges or operations that may impact groundwater conditions. The CWA also prohibits the discharge of fill materials to regulated waters including wetlands without a permit from the USACE.

In May 2015, the EPA issued a final rule that attempted to clarify the federal jurisdictional reach over waters of the United States, but the agency repealed this rule in September 2019 and replaced it with the Navigable Water Protection Rule in April 2020, which narrowed federal jurisdictional reach relative to the 2015 rule. The repeal and replacement of the 2015 rule is currently subject to litigation, and the scope of the jurisdictional reach of the CWA may, therefore, remain uncertain for several years, with a patchwork of legal guidelines applicable to various states potentially developing. We could incur increased costs and delays with respect to obtaining permits for dredge and fill activities in wetland areas to the extent they are required.

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NEPA

NEPA requires federal agencies to evaluate major agency actions having the potential to significantly impact the environment. The NEPA process involves public input through comments which can alter the nature of a proposed project either by limiting the scope of the project or requiring resource-specific mitigation. NEPA decisions can be appealed through the court system by process participants. This process may result in delaying the permitting and development of projects or increase the costs of permitting and developing some facilities.

Endangered Species Act

The federal Endangered Species Act (“ESA”) restricts activities that may affect endangered and threatened species or their habitats. Some of our operations may be located in areas that are designated as habitats for endangered or threatened species. A critical habitat designation could result in further material restrictions to federal and private land use and could delay or prohibit land access or development. The United States Fish and Wildlife Service continues its effort to make listing decisions and critical habitat designations where necessary. The ESA has not previously had a significant impact on our operations. However, the designation of previously unprotected species as being endangered or threatened could cause us to incur additional costs or become subject to operating restrictions in areas where the species are known to exist.

Foreign Legal Framework

Our proposed projects with Sayona and IRR will be required to comply with all environmental laws and regulations in Quebec, Canada and Ghana, respectively.

Human Capital Management

Piedmont Lithium’s core values exhibited by its employees are Care for its people, Humility in the way we operate, Creativity in the way we innovate, Respect for the communities we operate in, and Integrity in how we conduct business. Our team has a fearless accountability to deliver results, agility to turn ideas into realistic, executable plans, take bold action on what we believe is right and lead by example, and finally empower, develop, and set high expectations to achieve success.

The operating model and guiding principles for our company is to live our Core Values each day, deliver best-in-class HSE Performance, operate sustainably and in compliance, focus on customers in all we do, empower our teams and enable “lean decision making,” deliver Operational Excellence that exceeds customer expectations, drive Process Technology Excellence and continuous improvement, and create a culture of learning and development.

Employees

As of June 30, 2021, we had 20 employees. All of our employees are located in the United States and engaged through direct employment agreements. None of our employees are subject to any union or collective bargaining agreement. We believe that we generally have a good relationship with our employees.

Other Resources

We use third party contractors to perform drilling services as part of our exploration and evaluation activities for the Carolina Lithium Project.

Safety

Health, safety and environment (“HSE”) are the cornerstone of our Company. Our commitment to the health and welfare of every person involved in our projects is built into every aspect of our organization and are engrained in our Company’s culture. For example, we implement safety programs and develop a risk management process covering all of our project activities to promote a behavior-based safety culture, ensure compliance with applicable environmental regulations and international standards and raise environmental awareness among our employees and partners. Our HSE vision is to fully integrate health, safety and environment into our business, where our culture is recognized as a model by the industry and stakeholders, and to create a healthy workplace free of incidents.

Diversity and Inclusion

Diversity and inclusion are embedded in our values and integrated into our strategies. Our Code of Business Conduct and Ethics (“Code of Conduct”) commits us to fair treatment and non-discrimination. The Company’s policy is to treat each employee and job applicant without regard to race, color, age, sex, religion, national origin, sexual orientation, ancestry, veteran status, or any other category protected by law. We believe we will become better and achieve growth by intentionally creating a culture through acquiring and retaining a diverse workforce. We recognize it takes unique gifts, talents, varied perspectives, backgrounds and experiences to deliver innovative, high-quality products and services. In order to provide a diverse and inclusive workplace, we focus our efforts on making diversity a part of our culture.

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Compensation and Benefits

Our compensation program is designed to attract and retain talented employees in the industry by offering competitive compensation and benefits. We use a combination of fixed and variable compensation that includes base salary, incentive bonuses with a pay for performance element and merit increases. As part of our long-term incentive plan for executives and certain key employees, we provide long-term equity awards tied to the value of our stock price, some of which are performance-based. Additionally, all employees are eligible for an annual discretionary cash bonus and long-term equity bonus, both of which are tied to the Company’s performance and the individual’s performance in the period. We are also focused on the health and wellness of our employees. As such, we offer eligible employees medical plans, dental and vision coverage, short-term and long-term disability insurance, term life insurance, flexible work schedules, remote work options, paid time off and a 401(k) plan.

Commitment to Values and Ethics

In connection with our core values, we act in accordance with our Code of Conduct. Our Code of Conduct requires a commitment from employees, officers and directors of Piedmont Lithium to conduct business honestly and ethically. Our Code of Conduct discusses the responsibility team members have to each other, the Company and its stockholders, our customers, and communities and governments. Piedmont Lithium has a confidential hotline that an employee can call anonymously in the event he or she has ethical concerns or suspects instances of misconduct.

Implications of Being an Emerging Growth Company

We are an “emerging growth company” under the U.S. Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) and will continue to qualify as an “emerging growth company” until the earliest to occur of:

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the last day of the fiscal year during which we have total annual gross revenues of $1,070,000,000 (as such amount is indexed for inflation every five years by the SEC) or more;

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the last day of our fiscal year following the fifth anniversary of the completion of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act, which we expect to be June 30, 2024;

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the date on which we have, during the previous three-year period, issued more than $1,070,000,000 in non-convertible debt; or

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the date on which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 of the Exchange Act, which would occur if the market value of shares of our common stock that are held by non-affiliates exceeds $700,000,000 as of the last day of our most recently completed second fiscal quarter.

An emerging growth company may take advantage of specified exemptions from various requirements that are otherwise applicable to public companies in the United States. Generally, a company that registers any class of its securities under Section 12 of the Exchange Act is required to include in the second and all subsequent annual reports filed by it under the Exchange Act, a management report on internal control over financial reporting and, subject to an exemption available to companies that meet the definition of a “smaller reporting company” in Rule 12b-2 under the Exchange Act, an auditor attestation report on management’s assessment of the company’s internal control over financial reporting. However, for so long as we continue to qualify as an emerging growth company, we will be exempt from the requirement to include an auditor attestation report in our annual reports filed under the Exchange Act, even if we do not qualify as a “smaller reporting company.” In addition, Section 103(a)(3) of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) has been amended by the JOBS Act, to provide that, among other things, auditors of an emerging growth company are exempt from any rules of the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the consolidated financial statements of the company.

Pursuant to Section 107(b) of the JOBS Act, an emerging growth company may elect to utilize an extended transition period for complying with new or revised accounting standards for public companies until such standards apply to private companies. We have elected to utilize this extended transition period. This election is irrevocable.

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Available Information

We file electronically with the SEC our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. We make available on our website at www.piedmontlithium.com, under “Investors,” free of charge, copies of these reports as soon as reasonably practicable after filing or furnishing these reports with the SEC.

Item 1A.

Risk Factors.

You should carefully consider the risks described below, together with all of the other information in this annual report on Form 10-K. If any of the following risks occur, our business, financial condition and results of operations could be seriously harmed and you could lose all or part of your investment. Further, if we fail to meet the expectations of the public market in any given period, the market price of our common stock could decline. We operate in a competitive environment that involves significant risks and uncertainties, some of which are outside of our control. If any of these risks actually occurs, our business and financial condition could suffer and the price of our stock could decline. We caution you that the risks, uncertainties and other factors referred to below and elsewhere in this annual report on Form 10-K may not contain all of the risks, uncertainties and other factors that may affect our future results and operations. Our future results and operations could also be affected by factors, events or uncertainties that are not presently known to us or that we currently do not consider to present a material risk. It is not possible for our management to predict all risks.

Business Risks

Our operations may be further disrupted, and our financial results may be adversely affected by the novel coronavirus pandemic.

The calendar year 2019 novel strain of coronavirus causing a contagious respiratory disease known as COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, poses a material risk to our business and operations. If a significant portion of our workforce or the consultants we have engaged to perform certain studies regarding our proposed operations becomes unable to work or travel to our operations due to illness or state or federal government restrictions (including travel restrictions and “shelter-in-place” and similar orders restricting certain activities that may be issued or extended by authorities), we may be forced to reduce or suspend our exploration and development activities. We continue to monitor legislative initiatives in the U.S. to provide relief to businesses impacted by COVID-19, such as the U.S. Coronavirus Aid Relief and Economic Security (CARES) Act, to determine their potential impacts or benefits (if any) to our business.

The spread of COVID-19 pandemic, which has caused a broad impact globally, may materially affect us economically. While the potential economic impact brought by COVID-19, and the duration of such impact, may be difficult to assess or predict, the COVID-19 pandemic and mitigation measures have negatively impacted global economic conditions, which, in turn, could adversely affect our business, results of operations and financial condition. In addition, a recession or market correction resulting from the spread of COVID-19 and related government orders and restrictions could materially affect our business and the value of our common stock.

The COVID-19 pandemic continues to evolve rapidly. It is not possible at this time to estimate the ultimate impact that the COVID-19 pandemic, the continued spread of COVID-19, and any additional measures taken by governments, health officials or by us in response to such spread, could have on our business, results of operations and financial condition. The extent to which the COVID-19 outbreak continues to impact our financial condition will depend on future developments that are highly uncertain and cannot be predicted, including new government actions or restrictions, new information that may emerge concerning the severity, longevity and impact of the COVID-19 pandemic on economic activity.

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To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section. As of June 30, 2021, these impacts have not had a significant effect on our financial results or operations. However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.

Our future performance is difficult to evaluate because we have a limited operating history in the lithium industry.

We began to implement our current business strategy in the lithium industry in 2016. We have not realized any revenues to date from the sale of lithium, and our operating cash flow needs have been financed primarily through issuances of common stock and not through cash flows derived from our operations. As a result, we have little historical financial and operating information available to help you evaluate our performance.

We are an exploration stage company, and there is no guarantee that our properties will result in the commercial extraction of mineral deposits.

We are engaged in the business of exploring and developing mineral properties with the intention of locating economic deposits of minerals. Our property interests are at the exploration stage. Accordingly, it is unlikely that we will realize profits in the short term, and we cannot assure you that we will realize profits in the medium to long term. Any profitability in the future from our business will be dependent upon development of an economic deposit of minerals and further exploration and development of other economic deposits of minerals, each of which is subject to numerous risk factors. Further, we cannot assure you that, even if an economic deposit of minerals is located, any of our property interests can be commercially mined. The exploration and development of mineral deposits involves a high degree of financial risk over a significant period of time which a combination of careful evaluation, experience and knowledge of management may not eliminate. While discovery of additional ore-bearing deposits may result in substantial rewards, few properties which are explored are ultimately developed into producing mines. Major expenses may be required to establish reserves by drilling and to construct mining and processing facilities at a particular site. It is impossible to ensure that our current exploration programs will result in profitable commercial mining operations. The profitability of our operations will be, in part, directly related to the cost and success of its exploration and development programs which may be affected by a number of factors. Additional expenditures are required to establish reserves which are sufficient to commercially mine and to construct, complete and install mining and processing facilities in those properties that are actually mined and developed.

In addition, exploration projects like ours have no operating history upon which to base estimates of future operating costs and capital requirements. Exploration project items, such as any future estimates of reserves, metal recoveries or cash operating costs will to a large extent be based upon the interpretation of geologic data, obtained from a limited number of drill holes and other sampling techniques, and future feasibility studies. Actual operating costs and economic returns of any and all exploration projects may materially differ from the costs and returns estimated, and accordingly our financial condition, results of operations, and cash flows may be negatively affected.

Because the probability of an individual prospect ever having reserves is not known, our properties may not contain any reserves, and any funds spent on exploration and evaluation may be lost.

We are an exploration stage mining company, and we have no reserves as defined by Guide 7 or S-K 1300. We cannot assure you about the existence of economically extractable mineralization at this time, nor about the quantity or grade of any mineralization we may have found. Because the probability of an individual prospect ever having reserves is uncertain, our properties may not contain any reserves and any funds spent on evaluation and exploration may be lost. Even if we confirm reserves on our properties, any quantity or grade of reserves we indicate must be considered as estimates only until such reserves are actually mined. We do not know with certainty that economically recoverable lithium exists on our properties. In addition, the quantity of any reserves may vary depending on commodity prices. Any material change in the quantity or grade of reserves may affect the economic viability of our properties. Further, our lack of established reserves means that we are uncertain about our ability to generate revenue from our operations.

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We face risks related to mining, exploration and mine construction, if warranted, on our properties.

Our level of profitability, if any, in future years will depend to a great degree on lithium prices and whether our exploration-stage properties can be brought into production. It is impossible to ensure that the current and future exploration programs and/or feasibility studies on our existing properties will establish reserves. Whether it will be economically feasible to extract lithium depends on a number of factors, including, but not limited to: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; lithium prices; mining, processing and transportation costs; the willingness of lenders and investors to provide project financing; labor costs and possible labor strikes; and governmental regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting materials, foreign exchange, environmental protection, employment, worker safety, transportation, and reclamation and closure obligations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us receiving an inadequate return on invested capital. In addition, we are subject to the risks normally encountered in the mining industry, such as:

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the discovery of unusual or unexpected geological formations;

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accidental fires, floods, earthquakes or other natural disasters;

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unplanned power outages and water shortages;

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construction delays and higher than expected capital costs;

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controlling water and other similar mining hazards;

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operating labor disruptions and labor disputes;

SEC Form 10-K filed by Piedmont Lithium Limited