Hello, and welcome to the Aqua Metals third quarter investor call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may ask a question anytime by typing it into the ask a question feature on the left side of your screen. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Bob Meyers of FNK Investor Relations. Please go ahead, sir.
Thank you, operator, and thank you everybody for joining. Earlier today, Aqua Metals issued a press release providing an operational update and discussing financial results for the third quarter ended September 30, 2022. This release is available on the investor relations section of the company's website, www.aquametals.com. Hosting the call today are Steve Cotton, President and Chief Executive Officer, and Judd Merrill, Chief Financial Officer. Before we begin, I would like to remind participants that during the call, management will be making forward-looking statements. Please refer to the company's report on Form 10-Q, filed today, November 3, for a summary of forward-looking statements and the risks, uncertainties and other factors that could cause actual results to differ materially from those forward-looking statements. Aqua Metals cautions investors not to place undue reliance on any forward-looking statements.
The company does not undertake and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by law. As a reminder, after the formal remarks, management will be taking questions. Questions will be accepted over the phone from analysts, and investors can submit a question using the online webcast portal provided in today's and last week's press release. We will take as many questions as we can in our available time slot. With that, I would now like to turn the call over to Steve Cotton, CEO of Aqua Metals. Steve, the call is yours.
Thank you, Bob, and thank you to everyone who joined us today. This was an important quarter for Aqua Metals, laying the groundwork for key milestones as we move rapidly towards revenue generation. We are making progress on several fronts and on two continents. As we have deployed both our lithium and lead AquaRefining equipment this quarter, our confidence that AquaRefining represents a game changer for the industry has only increased. We continue to advance our technology, recovering high purity, critical battery minerals, improving our solution. We are already producing ultra-pure lead metal in Taiwan, and over the next few months, our now well-trained partner and licensee, ACME Metal, will regularly operate the phase one system in Taiwan as a showcase for industry partners to witness firsthand.
ACME and Aqua Metals are currently in discussions for what phase two and beyond could look like, and we will have further updates to share on next steps by later this quarter or Q1. Our state-of-the-art lithium AquaRefining pilot plant in our innovation center at the Tahoe Reno Industrial Center is nearly completed, and we expect to commence operations this month, giving us the ability to demonstrate our lithium recycling capabilities to several potential suppliers, partners and customers the rest of this year and into 2023. This is clearly a very exciting time for Aqua Metals. The demand for a clean, sustainable and affordable recycling solution for lithium-ion batteries grows each day. Batteries are everywhere in all sorts of technologies, from wearables and phones to electric vehicles, buses and forklifts. The current processes for recycling batteries are inherently dirty and economically inefficient.
Smelting does not recover many of the rare materials that are needed for making new lithium-ion batteries. Proposed chemical-based alternatives, many based on an older mining leaching technique, have not been successfully demonstrated at scale with acceptable environmental and economic outcomes, and in several cases are not yet successful at all. A better solution is needed, and we believe that AquaRefining is the answer. To date, lithium AquaRefining is the only solution that has recovered high-grade pure lithium hydroxide, cobalt in pure metal form, nickel in pure metal form, copper in pure metal form, and manganese dioxide. We do it cost-effectively with a closed-loop, sustainable process that is inherently clean using renewable energy. Turning now to our strategic initiatives and progress in lithium.
To date, we have successfully recovered all the high-value metals and minerals from used lithium-ion batteries, including high-purity lithium hydroxide, copper metal, nickel metal, cobalt metal, and manganese dioxide. Our technology is proven at bench scale. Our first lithium-ion recycling plant operation, which is located at our innovation center in Tahoe Reno Industrial Center, continues to be on schedule to begin operations later this month. Interest in our lithium AquaRefining process has been extremely strong, and having the pilot plant up and running to showcase our technology is a critical next step. In fact, it's really a critical inflection point for the company. We have prioritized and scheduled visits for tier one potential partners and customers beginning next week through December and Q1. We are also looking forward to welcoming investors and analysts as we more broadly open the innovation center and pilot after the new year.
In the slide deck accompanying this call, and also in our current investor deck on our website, we have a slide that shows the black mass that we've taken into our innovation center and the metals and compounds recovered from our AquaRefining process. Starting with the lithium hydroxide, which we make natively with our unique process. We believe that we'll be one of the, if not the first U.S. producers of lithium hydroxide from a recycling versus a mining source. That's a double benefit for meeting critical U.S.-produced mineral requirements and for a totally sustainable production when compared to mining lithium. The metals we produce are extremely pure, making them highly valuable both to customers and to our revenue model.
We can sell these directly into the general metals and super alloys markets to a large array of customers that are looking for these metals right now, or of course, into the battery materials market with a shorter qualification process to other recycling methods due to uniquely being able to start with pure metal with cobalt, nickel, and copper. We have already produced PCAM, meaning precursor cathode active material, and we'll have more to say soon about taking these metals to CAM, meaning cathode active material. We have already signed the letter of intent with Dragonfly Energy Holdings Corp., a lithium-ion battery producer based right here in Tahoe, Reno, to provide Aqua Metals spent lithium-ion cells and manufacturing scrap, as well as for the purchase of commercial quantities of lithium hydroxide from Aqua Metals.
We plan for Dragonfly to use our sustainably produced lithium hydroxide in their next generation solid-state lithium-ion battery technologies and future manufacturing activities. In addition to samples already provided, we will be sending them production representative samples from our pilot operation very soon. Today, just 5% of lithium-ion batteries are recycled, while the other 95% end up in landfills. Lithium AquaRefining recovers the high-value lithium that's currently lost in the smelting process today. In fact, today's commercial method for lithium battery recycling smelting recovers 0% of lithium and only a fractional percentage of the other minerals, while lithium AquaRefining recovers over 96% of the lithium. At up to $82,000 per metric ton just this year, this is an important achievement not only for our environment, but for our business model.
Demand for lithium is growing rapidly, and industry analysts project a deficit in the lithium market as soon as 2025 due to the electrification of transportation and the rapid deployment for energy storage systems such as those produced by Dragonfly. There will be significant demand for recovered lithium in the future, especially for North American companies, as China dominates lithium refining today. With the goal of rapidly building our partnership eco-network, we are in active discussions with cell manufacturers, black mass providers, cell component manufacturers, and CAM manufacturers. As our pilot plant comes online and potential partners who have already reviewed our process flow sheets and mass balances under non-disclosure agreements visit our innovation center and witness this process and the materials we recover from black mass, we expect to forge additional partnerships.
Interest in our technology is increasing, and this provides significant confidence as we look towards 2023. Finally, let me speak to our progress with grants and specifically the Department of Energy. Recently, the DOE announced over $2.8 billion in grants for the first round of critical battery materials. Many of these grants went to parties in the general critical battery material space. As Aqua Metals completes our pilot plant operation and identifies the location where we intend to scale beyond our initial pilot plant in the coming months, along with our strong environmental advantages, we believe we will be at a great position to receive one or more grants in 2023 earmarked particularly for sustainable battery recycling. We have our CFO and chief business officer and a top-tier K Street, Washington, D.C.
firm working hard on these efforts in conjunction with partnerships we are cultivating, and we expect we'll have more to say about these efforts in the coming months. Speaking of our CFO, I'm now gonna hand it over to Judd Merrill for the financial overview.
Thanks, Steve. Let me start my comments with our balance sheet. We ended the quarter with total cash of approximately $9.3 million, and we had working capital of approximately $15.5 million. This means that we are well funded through to when we expect to begin generating revenue. During the quarter, we locked in a $6 million secured note with Alpen Mortgage, giving us additional non-dilutive path to expand our cash position and ensure sufficient resources to reach revenue generation. The note was closed on September 30, 2022, with a 24-month term and interest at a fixed rate of 8.5%. Monthly payments are interest only, commencing on November 1, 2022, and all unpaid principal and remaining accrued unpaid interest are due 24 months from the close date. This loan is secured by our commercial property.
Subsequent to the end of the quarter, we received the second non-refundable deposit from LiNiCo. This $2 million deposit further bolsters our cash position. As a reminder, we expect to collect the remaining balance of approximately $12 million in a few months. Part of the proceeds from this cash collected will be used to retire the note with Alban. There are no other significant changes on our balance sheet, so I'll move to the income statement. During the third quarter of 2022, Aqua Metals continued to focus on the research and development activities related to the lithium-ion battery recycling. We had no commercial production during the quarter of 2022, and as a result, no significant revenues were generated during the quarter.
Cost of product sales decreased by approximately 50% during the quarter to $0.8 million, compared to $1.7 million in Q3 2021. The decrease in this quarter was due to wrapping up the plant's cleanup projects. Research and development costs, which included expenditures related to improving lithium-ion battery AquaRefining technology during the three months ended September 30, 2022, increased by approximately 80% compared to the three months ended September 30, 2021. Our ongoing investment in R&D is crucial and part of our business strategy, enabling the further advancement of the development of AquaRefining. These costs included expenditures made towards building our pilot facility, which we said is expected to be commissioned later this year.
General and administrative expenses decreased approximately 3% for the three months ended September 30, 2022, compared to the three months ended September 30, 2021. Increased approximately 7% for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021. The year-to-date increase in this category included changes in stock-based comp and increase in professional fees. Non-cash charges included in G&A, including stock-based comp, were approximately $1.8 million. For the third quarter of 2022, we had an operating loss of $3.9 million, compared to an operating loss of $4.6 million for the third quarter of 2021.
Our net loss for the third quarter of 2022 was $3.9 million or -$0.05 per basic and diluted share, compared to a net loss of $1.4 million or -$0.02 per basic and diluted share for the third quarter of 2021. The net loss in 2021 was lower due to an offset of insurance proceeds received in the third quarter of 2021 of approximately $4.3 million. We continue to manage our cash utilization. Cash used in operating activities for the nine months ended September 30, 2022 was $9.3 million.
Q3 cash needs were approximately $800-$850 thousand per month as expected, largely due to the addition of more employees and consultants as we invest more in our lithium ion battery recycling technology. Net cash used in investing activities for the nine months ended September 30, 2022 was $1.7 million. This consisted mainly of $2.3 million utilized toward the purchase of property and equipment, offset by $1.4 million proceeds from the sale of equipment and $0.5 million utilized toward the additional investment in LiNiCo.
Net cash provided by financing activities was $12.1 million for the nine months ended September 30, 2022, and this consisted of $5.6 million in net proceeds from the sale of Aqua Metals shares pursuant to the ATM and $5.9 million in net proceeds from the bridge loan. We maintain a healthy balance sheet, and we have sufficient resources as we head into 2023. With that concludes my remarks on the financials, and I will now turn it back over to the moderator for Q&A.
Thank you. We'll now be conducting a Q&A session. If you'd like to be placed into question queue when you're over the phone, please press Star one on your telephone keypad. For those on the web, you have the ability to type your question into the Ask a Question feature on the left side of your screen. Once again, to ask a question verbally over the phone, please press Star one at this time, or over the web, you can type your question into the Ask a Question feature on the left side of your screen. One moment, please, while we poll for questions. Our first question today is coming from Sameer Joshi from H.C. Wainwright & Co. Your line is now live.
Hey, guys. Thanks for taking my questions, and congratulations on the progress being made. The Tahoe, you know, facility that is going to be commissioned soon, will it be up for, or will it be generating commercial revenue beginning next quarter? Should we expect these visits to materialize into orders and then eventually, in the second or third quarter, some revenues from that?
Yes, Sameer. This is Steve. Yeah, good question. The pilot plant will actually be operating and producing materials this quarter, Q4, very soon. We expect to be able to get some revenue that we may not report until next quarter, just because of the sales cycle. It will begin producing, you know, revenue producing material this quarter and then beginning to scale as we go into the new year.
Okay. Then just for part two of that question, the pilot phase then is planned to be of around 840 metric tons per year. That only completes by December 2023. During this ramp up, do you expect to continue production at this plant demonstration facility? Or like, how should we look at it as a revenue generating source?
Yeah. By its nature, it'll continue to produce revenue, but the interest on our part is obviously to get that scaling to happen as we get towards the end of 2023 and into 2024. That will require an additional facility, and that's what we're looking at now is where that will be and the timing of that and interlaying that in. However, the Innovation Center will continue to operate.
With you know updates and continued improvements in the technology that we expect that we'll get from our learnings of operating while we then take the demonstration commercial facility as the next step, forward. Really, we would have the summation of the innovation center plus that demonstration commercial facility as we get into 2024 and beyond.
Oh, okay. Then, just on costs. The costs, it seems, are pretty controlled at the moment. As you start to scale next year, should we expect these to increase year-over-year related to what they are currently? I think you are around $2.4-$2.6 of cash burn per quarter is what you're projecting or guiding.
Yeah. Sameer, this is Judd. The initial kind of part of the ramp up, you know, we don't expect costs to increase too much, too significantly. It starts out small and then gets bigger. We probably will see some increases, you know, in the later half of next year as we, you know, get into more full ramp up. The pilot facility that we have now is. It's not huge, so it doesn't require a lot of CapEx in terms of, like, buildings and things like that. There will be some people, you know, to help run it and operate it. Still, it's a pilot operation, so it's not a ton of people.
We'll be evaluating those costs, and we can give a little more clarity, you know, kind of on the next call or even in the first part of the year. You know, for Q4, Q1, and probably into Q2, we'll be pretty much stable like we have been the last two years.
Oh, okay. Just a clarification on the recovery of your cobalt, nickel, copper and manganese dioxide operations. Will it happen at the same time when you extract the lithium or recover the lithium? Or are these other units that need to be set up and tested, similar to what you have done for lithium? Just wanted to see how that works.
Yeah. All of those materials will be extracted as a part of a connected end-to-end pilot system. It will, at the same time, be producing all those various materials. The lithium hydroxide will end up in one place, whereas the metallic copper and of course, cobalt and nickel will end up in another place on the plating cells. The manganese dioxide will end up in another place. That's all what people will be able to see with the connected system of the pilot as the input feedstock, which is the black mass, comes in on the front end and those materials come out on the back end.
This is what we would see if there is a plant visit in early next year. We will see all these operational at the pilot.
Absolutely. Yeah, that's what we're very excited to have people come and see, particularly, we're prioritizing industry potential partners from the feedstock partnership and offtake side that we've shared our NDAs under NDA with our process flows and things. They wanna see it operate, and that's what will be happening in November and December. Then as we get towards January, we'll be bringing in more investors, analysts, et cetera. All the people that visit will be able to see these connected processes.
Great.
Materials.
That's really exciting, actually.
It is.
Congrats once again, and good luck. Thank you. Thanks for taking our questions.
Thank you.
Thank you. Our next question today is coming from Colin Rusch from Oppenheimer. Your line is now live.
Thanks so much, guys. Can you talk a little bit about the pipeline of potential incremental licensees for the lead process? Obviously, that's the most mature technology here. Curious how quickly you might be able to add another customer there.
Yeah. Thanks, Colin. We're really excited about our progress in the AquaRefining for lead that we've deployed in Taiwan. We've already produced materials there with our partner. We've got the equipment to the point where it's start, stop, the function and capability is all integrated with the automatic logic control, et cetera. Now that is a showcase facility sitting in one of the hottest battery markets in the world in the Asia PAC region. ACME is evaluating what it would look like for them to expand that facility and get it more into a 24/7 type of an operation.
In the meantime, using that as a demonstration plant to show off that facility and the technology to their partners that they've brought to the table, as well as some additional parties that are quite interested in coming to see that technology and that process. We're excited about that showcase taking place there. It was just in the news today that European smelters are getting idled or wound down or shut down due to the extraordinarily high energy costs that are happening in the EU. We're also seeing what we view even as late-breaking news is more of a sales funnel opportunity for the European market.
A lot of these energy costs, there's gas versus electricity, but once you start to wind down and turn off a smelter, you might not be as inclined to turn it back up. That can create sales funnel opportunities for us in addition to what we see in the Asia PAC region, as well as a couple of U.S. partners who are taking a look as well.
Great. Then with the relationship with LiNiCo, can you talk about how mature the conversations are around who's putting, you know, what capital in to move the collaboration forward? You know, I'm just curious about your underlying cash needs and how much time you're gonna really need to clarify all of that.
Yes, sure. There's a few dimensions to that. One dimension is the acquisition of the building, which they've paid us all of the rent payments on time. We've received a recent payment of $2 million towards the final payment that will be coming by March of next year. In the meantime, we have our pilot turning on to operate at the innovation center. We of course talk to LiNiCo all the time, and Michael Vogel is really the owner, the primary owner of LiNiCo. We could potentially still take the AquaRefining technologies and deploy that right within that facility and work with them as they make their decisions on how they're going forward and scaling their operation. They've got some recent permits and things like that.
There's a partnering opportunity that's associated with that relationship, but that's separate from our own opportunity that is under our own control, which is our pilot demonstration plant that gets turned on in a matter of a couple of weeks.
Great. I guess in terms of staffing, are there key hires you guys need to make in the next six to nine months?
We've really staffed up, pretty well to get to the pilot and the operation of the pilot. There'll be a few net adds in terms of, technicians and operators and, some key commercial, type roles, et cetera. Nothing terribly material to the burn rate as Judd was, answering a question about earlier. We feel that we're pretty well staffed up for the, for the time being to get through this next phase, of our efforts. We did receive a little bit of a rebate now that our team has returned from Taiwan, parts of our technicians and installers, et cetera, for that installation that will be helping to, work with, the lithium AquaRefining pilot and getting that operation where it needs to be.
net-net, we should even out pretty well.
Great. Thanks so much.
Thank you. As a reminder, to verbally ask a question, please press star one on your telephone keypad, and you also have the option to type your question in if you're participating over the web. At this point, I'm gonna turn the floor back over to management for any web questions.
Yes, thank you, operator. We certainly have some questions from the line, and I'll help provide these to Steve and Judd. Steve, maybe a few for you. Can you discuss how you think about lead-acid versus lithium in terms of priority? What does the marketplace look like, the lead-acid technology, since electric cars use lead-acid batteries as well?
We see both markets as still a tremendous opportunity for Aqua Metals. The lead market is an exciting time for us to have gotten to the third generation of the technology in a product form that's now out there with its first licensee in that showcase. As I mentioned earlier, we see great upside and opportunities with the development of that product as a licensed and equipment supply product in a market that we know could really use an upgrade to the technology. We're very excited about that and continue to hope that we can continue to get more partners and penetrate that market.
In the meantime, as we develop our lithium efforts, we see a great opportunity as we've communicated before, to be an operator and to be a recycler of the lithium recycling technologies. That is starting with the pilot system and then going on through the step functions of getting to the demonstration commercial plant, et cetera. That's a different business model for the lithium business from a primary perspective, which is to be an operator as compared to the lead business, which is to be a supplier. The lead business is much more mature. All those smelters that are out there are already operating and owned by others, and so it makes sense to partner and license and provide equipment in the lithium business.
The financial opportunity in particular, because now we're dealing with critical minerals that are worth upwards of $70,000 a ton, and as compared to $1,700-$2,000 a ton in the lead space, we see that opportunity as being a recycler to really accelerate our revenue run rate as we continue to scale the lithium efforts. The company does have the organizational capability to handle both of those businesses, as demonstrated by building a plant that we're about to turn on for the lithium processing and by getting on another continent the AquaRefining technology deployed for lead. That's why this is really a good inflection point for the company, in our view, for the coming year.
Great. That's great. We have a couple more around customers, potential customers. The question here is why is LiNiCo primarily moving forward with Green Li-ion technology versus Aqua? Related to that, what are the additional strategic partnerships you're seeking?
LiNiCo and Aqua Metals have a relationship where Aqua Metals would provide plated metals with the. I think you're speaking of the Green Li-ion technology that LiNiCo has spoken of in the past, which is an opportunity for them to consider some direct recycling capabilities for some of that material. They're totally separate parts of the process for what their vision about what that plant would look like. That's a partnership opportunity that we have, and particularly as a part owner of the company. In terms of other partnership opportunities, in addition to our own build plant and run plant business model, which can generate, you know, by 2024 and 2025, you know, hundreds of million dollars of revenue.
There's also the partnership opportunities with black mass providers to us that are interested in verticalizing their businesses, where we can partner with them. There's also partnership opportunities with the actual EV and cell and cell pack manufacturers that are out there that are trying to close the loop and provide for the return of materials in exchange for providing feedstock and things along those lines. There's a lot of partnering opportunities, and we see the lithium business developing not only as a primary recycler, but as a partner, a joint venture partner, and potentially working with other parties in other structures, which could even include licensing, because we have the capability to license technology as we've demonstrated with the lead AquaRefining business.
We see lots of optionality in the way that we work with various players in the ecosystem. We don't really view anyone, frankly, as a competitor. We view every player in the lithium space as really a partner potential.
Great. Thank you. Related to that, the question from the line is why sell your current plant to LiNiCo if you're already looking for another facility that's ramping up in the pilot?
That sale commenced back in 2019 into 2020 of the lead AquaRefining plant. That plant is being you know, we've agreed to and have worked with LiNiCo to work that deal out. In the meantime, we've really prioritized and stepped up our lithium AquaRefining capabilities at our innovation center, and that's really where the focus is on our AquaRefining for lithium development today, which is inclusive of us extending that towards a demonstration plant of our own. We would be putting that in place effectively to support our efforts specifically while we look at LiNiCo and other parties as partnership opportunities and licensing opportunities, like I mentioned to the earlier question.
Great. Thank you. I guess this was touched upon as well. With related to the black mass, how are you thinking about access to black mass as you ramp through 2024?
Yeah. We've already announced that we've secured quite a bit of black mass for our operations in 2023. We physically received quite a bit of it that we just tweeted some photos out about, I believe, in the past week that people can see, and it is on our latest corporate deck as well. We have a lot of the black mass here. We've got supplier partners and diversity in that side of it. We see that as a great opportunity. Also, because our process is so environmentally favorable to a lot, really all the other processes that are out there, we're able to get cells in and work with black mass providers to work out deals for them to effectively crush those cells and deliver to us the black mass.
We're bringing value to the table with these black mass providers, and we see that as a continued way to continue to be able to scale our efforts. All that said, we obviously have a lot of battery breaking and crushing capabilities from our history as a company. In the longer run, we see opportunities for us to also be able to generate black mass from the cells directly ourselves in addition to partnering.
Okay, perfect. There's one that's a little bit more technical. Maybe I'll ask this and then we'll take a pause. How adaptable is the lithium-ion battery recycling technology to various compositions of batteries? I.e., does
So-
Each type require recalibration, or can you group any type of black mass and separate the elements?
Yeah. Our technology is quite flexible in the composition of that material that comes into our process. It really comes down to how you optimize how many lithium nickel cobalt cells you put in there as compared to the production of the lithium hydroxide material itself. We try to work with the black mass suppliers to get it to a spec range that's actually quite wide, that includes multiple battery chemistries. We also, through our process, because it's really the most economical process in addition to orders of magnitude improved environmental processes, it affords us the ability to process LFP or lithium iron phosphate batteries that are cobalt and nickel free and work to produce that lithium hydroxide.
That's one of the reasons that we saw a great opportunity to partner with Dragonfly that makes that type of battery chemistry. There's a safer battery chemistry for stationary, in particular applications. We think that we have the most flexibility, including being able to process LFP type batteries that really nobody wants, that other recyclers based upon the chemistry of those batteries not having those other materials and their process not having the economic capabilities to recover them, whereas we can. That's one of the real strengths of lithium AquaRefining, is the ability for us to work with all these various chemistries and players in the ecosystem that have these various chemistries.
Okay, thank you. A couple more here, and they relate to strategy, and I know you touched on some of this. At what stage of the, you know, business life cycle do you think Aqua Metals is at the end here of Q3 2022?
I would say that through our licensing business, we're in a stage of launch and commercial launch of the licensing business for the lead AquaRefining, as evidenced by what we have in ACME in Taiwan, and the continued desire to develop that as a licensing and equipment supply business with now a mature product, with a technology risk level that's very commercialized. When you look at the lithium AquaRefining business, we have a higher technology risk level than the lead side, but we're rapidly progressing that forward, particularly with the inflection point of opening up the one of the world's, if not, the U.S.' first end-to-end black mass full production facility to produce all these various minerals.
That will take us to the point where we can then begin to commercialize for ourselves, as well as partnerships, the lithium AquaRefining technology in a revenue producing mode, as early as this quarter, and getting into the next year. That is a very exciting thing for Aqua Metals to be able to have that lithium AquaRefining to the point where it can start to generate revenue as we continue to de-risk and then scale the technology through 2023 and 2024 and beyond, to the point where we can generate hundreds of millions of dollars of revenue per plant.
Right. Thank you. Are you seeing multiple companies, customers, potential partners making arrangements or becoming interested in visiting the plant to see it operational in the coming months? What is your competitive leverage around that?
We've definitely been very active with our commercial team, working with the various players in the ecosystem, and that's why we're prioritizing November, December, those that we've shared our process flow sheets and capabilities under non-disclosure agreements and talked in details about how it would look if we partnered together, whether it be supply of black mass ranging to an offtake partner, to anything in between, looking at things like joint ventures and how we get from pCAM to CAM materials. Those players you can count on, you need more than two hands to count them that would like to come and see the facility as soon as possible. That should facilitate further discussions with some, if not all of them, on what the partnership opportunities could look like.
That's really what we're focused on in really the remainder of this year and as we get into Q1. It's also very important for people in the investment community and analysts to come and see the facility as well. We're trying to balance the visitors so it doesn't become a showcase visitation facility, but it's actually an operational facility because from time to time, we're able to host visitors and not disrupt our engineers and operations teams. That's how and why we're prioritizing in the coming weeks and months. We're really excited to have everybody there and look forward to welcoming everyone here to Tahoe Reno.
Great. Thank you. I wanna bring the operator back in because as I understand there's another, question on the line. Is that accurate?
Certainly. Our next question is coming from Steven Kruger from Foresight Investing. Your line is now live.
Well, hi. Thanks for taking my question. I'm still trying to get my head around the relationship between your plans for operating the pilot plant for recycling lithium and then scaling that up with your own facilities and the relationship of that enterprise with what LiNiCo is gonna be doing. I thought LiNiCo was gonna be doing the same thing. Are they gonna be doing something different? Are they not recycling lithium? What's the relationship between what you're gonna be doing and what they're gonna be doing?
Yeah. Linico is focused on acquiring battery cells and crushing and producing black mass material, and we're focused on taking black mass materials as input to our process and creating the minerals that we've talked about earlier in the call today. Really, we're focused on a different part and stage of the process, and that is a very complementary thing for what LiNiCo's planned operation is to look like, as well as our own operation, which starts with black mass, not the cells, and takes it through to the end result. They're complementary with that them as a partner, and it's solely an operation that we can operate ourselves as we operate that lithium AquaRefining pilot and get that scaled to a demonstration plant and beyond.
Essentially, the LiNiCo plant will be a supplier of black mass, and that's gonna be their principal business. Is that what I understand, Steve?
Which could be greatly enhanced by, in that same plant, taking that black mass that's produced forward to all those critical minerals, just like we're doing in our pilot plant.
LiNiCo could be evolving into a competitor, essentially.
No, not at all, because they would be incorporating and working with our technology to take the black mass that they produce forward to pure nickel, pure cobalt, lithium hydroxide, and other materials that that we would work with them to complement their technologies with ours. Not competitive, complementary and additive to our business.
I guess I'm confused. You'd both be recycling lithium-ion batteries to produce high value, pure metals, cobalt, nickel, so forth. You'd both be doing that same thing, right?
LiNiCo would be taking in battery cells, storing battery cells, crushing battery cells, separating the materials, creating the black mass material. Aqua Metals would be taking the black mass material and creating nickel and cobalt and copper and other minerals from the black mass that LiNiCo produces in a non-competitive complementary fashion.
Okay, got it.
In the meantime, Aqua Metals will operate its own facility that will take black mass from LiNiCo potentially, as well as others that we've already been taking black mass from, and take our part of the process forward.
Okay, got it. Have you done any kind of initial planning as to what kind of size of plant you would be you know building as you start to scale up your own recycling process?
Yeah, of course. The 840 tons plus for these plant that is the pilot plant is step one, and then the demonstration plant will have to be in a different location. That commercial demonstration plant is something that we have not announced what the location or configuration and tonnage of what that plant will look like, but it will be a lot more than the 840 tons. That would get us into tens if not towards $100 million plus of revenue in the next stage of the development of the plant. You go to the larger plant from there and so on, depending upon who you partner with and or organically built facilities.
Right. At current prices at $840, you know, the size of the pilot plant capacity, you know, how much does that price out to per ton on a blended basis of the metals you'll be producing?
We've said before that the pilot plant can generate up to $20 million of revenue.
Okay, got it. Thanks very much, Steve.
Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Steve for any further or closing comments.
Thank you all again for your time and attention today. We are positioned for an exciting end to 2022 and a transformative 2023. Several important initiatives are ready to deliver meaningful benefits, and we are growing our base of partners and customers. We look forward to providing updates to our shareholders and stakeholders and interested parties. In the near term, I will be attending conferences and meetings with investors in New York in late November and early December, and we'll also have more information on the pilot plant tours for investors to begin in January. If anybody has questions in the meantime, please feel free to contact us or FNK IR, and we look forward to our next quarterly update call. Thanks again.
Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.