About this transcript: This is a full AI-generated transcript of FREE Virtual Copper Conference - June 6 at 8am ET from Jimmy Connor , published June 9, 2026. The transcript contains 37,546 words with timestamps and was generated using Whisper AI.
"Hi I'm James Connor and welcome to our virtual copper conference. Copper is central in electrification. It's used in power grids, transmission lines, EVs, wind turbines, solar panels and increasingly data centers which power AI. One of the most exciting new sources of copper demand is AI..."
[00:00:00] James Connor: Hi I'm James Connor and welcome to our virtual copper conference. Copper is central in electrification. It's used in power grids, transmission lines, EVs, wind turbines, solar panels and increasingly data centers which power AI. One of the most exciting new sources of copper demand is AI infrastructure. Goldman Sachs estimates that AI CapEx will be 765 billion dollars this year growing to 1.6 trillion dollars by 2031 and these data centers are very copper intensive because they require power cables, transformers and grid upgrades. Another major demand driver are electric vehicles. A traditional gas car uses 50 pounds of copper versus 150 pounds of copper for an EV. Renewable energy is also a copper intensive sector. Onshore wind farms can require 3 metric tons of copper per megawatt while solar power systems require 2.8 tons of copper per megawatt. But the big question is, is there enough copper supply to meet this growing demand? The world's largest copper producer, Chile, is responsible for 25% of global copper production but Chile's production peaked in 2018 and it's been declining ever since due to declining grades and higher costs associated with mining. UBS is projecting a 520,000 ton deficit in 2027 and is also projecting a higher copper price of $15,000 a ton by March of 2027. So the question becomes how can investors take advantage of this potential upward move in copper? To help answer that we've assembled an incredible group of speakers who will share their thoughts on the copper market, the mining sector and opportunities ahead. Our conference begins with expert speakers which include John Chapalia and Steve Shovstal of Sprott Asset Management followed by Ross Beattie. Company presenters include Amerigo Resources, Atex Resources, Evolved Royalties, Verde Copper, Island Copper, Luminum Metals, Next Metals Mining, followed by Pecoy Copper. If you can't watch the conference in its entirety, you can check it out anytime on our YouTube channel, Blur Street Capital, or you can listen to us on Spotify or Apple Podcasts. I want to thank our corporate sponsor, Sprott Inc., a global leader in precious metals and critical materials investments. I hope you enjoy the conference. John, thank you very much for joining us today. Quite often when you and I speak, we are discussing critical materials and one of which is copper. And copper has been very resilient this year. It's trading at or near all-time highs. And you and your team have done a lot of work on both the supply and demand fundamentals for copper. What is driving the copper price this year?
[00:03:04] John Chapalia: Yeah, I think what's really driving it is growing recognition that copper is really a critical material for a number of very important industries that are related to national security and energy security. And those are everything from AI data centers, which are very copper intensive, to energy infrastructure systems, electric vehicles, other technologies. If you think about anything that has to move an electron through cable or wire, it involves copper. So it's very important. And what is really, I think, becoming more understood that we've been mining copper for over 5,000 years and all of the easy stuff has been found. And now we're being forced to find greater deposits of copper in either geopolitically parts, geopolitically risky parts of the world. You know, these would be places like the DRC, the Democratic Republic of Congo, for example, or places with more challenging environments, challenging environments in the Andes where these deposits are at very high elevation, sometimes 15,000 feet or more above sea level. There are challenges with water as well at those elevations. So the copper's in the ground is just going to take more work and become more expensive to actually extract it. And I think that's one of the key signals why copper has been very resilient and also has kind of really decoupled from other more historically industrial metals. If you think about copper and say iron ore, you know, historically, those things were always very well correlated together. And you notice in the last couple of years, they have decoupled, meaning the price of iron ore has been quite soft, whereas the price of copper is almost at all-time highs. So it's really behaving differently because of its importance in electrification,
[00:05:11] James Connor: energy systems, national defense, and whatnot. Yes, and you touched on Chile, the world's largest copper producer. They produce around 24% of global production, give or take. And that number peaked in 2018, and it's been declining ever since. And the other very interesting point you made is that the fact that they have to go higher and higher to find these copper deposits now. Can you imagine if you
[00:05:36] John Chapalia: had to work at 15,000 feet? Yeah, I have once in my life been at over 15,000 feet and I can tell you it really taxes your body because the amount of oxygen in the atmosphere is substantially lower. So yeah, you need to be superhuman and conditioned to be able to operate at those high elevations and local people obviously are well conditioned to do that. But yeah, these are some of the challenges. And if you just take a step back and you think about, you know, the last hundred years or so, what you see is about every 25 years, the demand for copper doubles. And that's because of growing wealth effects, as we become more industrialized, as more and more people consume, let's call them white goods, which are things like washers and dryers and dishwashers and air conditioners. These are all very, you know, copper intensive. People get very excited about electric vehicles, you know, the copper intensity of those AI data centers. But it's a lot of just very basic, you know, things that we take for granted every day, where, you know, hundreds of millions of people in the world want to enjoy the privileges of having a washer dryer or air conditioner. Those are all very copper intensive. So this, this, this long history of doubling demand every about 25 years or so, we think is well underway. The other thing about copper, you know, people call it Dr. Copper, and they use that, they use that expression to describe copper as a barometer for the health of the global economy. So if the global economy wasn't feeling well, for whatever reason, recessions, you know, the price of copper would, would fall. What you're starting to see is copper kind of beating to its own drum and decoupling from softer economic growth around the world. And that's because copper is becoming less important as a traditional industrial metal, and more important for these kind of new technologies and new sectors of the economy. So that that old relationship, I think, is starting to fade away.
[00:07:39] James Connor: Robert Freeland quite often throws out a very interesting stat. He says since the beginning of time, 700 million tons of copper has been mined, and we're going to need a similar amount of copper in the next 18 to 22 years. Robert Freeland: So that really speaks to this demand or growth for copper.
[00:08:00] John Chapalia: Robert Freeland: Yeah, absolutely. And I think the the second part of that story is that the lead times to develop really big copper mines are long. Not just the lead times, we're talking about 15 or 20 years to bring these big projects, but also the capital expenditure to build these projects. It's not a one or two billion dollar endeavor. Some of these projects are 15 to 20 billion dollars to build. And you can imagine, as stewards of shareholder capital, you know, management teams at these copper companies are being very disciplined and careful not to bring on capacity unless they believe demand is going to be there. And obviously, the pricing is going to be durable in order to justify these big, big investments. Robert Freeland: And that math is starting to happen. You know, people talk about copper being at an all time high. That's great. But think about it in inflation adjusted terms. Obviously, the copper price is higher than the last cycle. But in inflation adjusted terms, we're still, you know, at much lower level. So we think there's more room to incentivize the new production that we ultimately will need to bring on in order
[00:09:08] James Connor: to rebalance the market. So we discussed all the reasons why copper has been moving higher. Now Sprott has created a number of products for investors, allowing them to invest in various physical metals, such as gold, silver and uranium. And they also have a copper product. Can you just speak to this product?
[00:09:26] John Chapalia: Robert Freeland: Yeah, we're really proud of this product because it's the first physical copper vehicle listed on exchange in the world. And at the beginning of May, we were able to list it on the New York Stock Exchange. And this is the first ever listed in the United States. And really, what the vehicle is designed to do is allow investors to play the physical commodity, invest in the physical commodity and commodity through our listed trust. And so what the vehicle does is it raises capital when it trades above its net asset value. And with the proceeds, we go out and buy copper cathodes, which are these sheets of copper that are about one meter by one meter in size. And we store them in LME approved warehouses, London metal exchange. Right now, the trust owns about 14,600 metric tons of copper that's worth just a little over 200 million US dollars. And what we really want to do is provide a way for investors to just play the commodity itself. And why would an investor choose to invest in the commodity versus the miners? Well, I think it's, it's not an either or we find often it's both of them together. Most investors we talked to have some exposure in the mining stocks because the mining stocks are really well positioned right now because they're making really good profits given, you know, the current cost structure and obviously that the price of copper is quite robust. But we find that, you know, holding them together is a nice compliment. It's has different risk characteristics. If you think about what you own sheets of copper in a warehouse, it's very different than a mine that, as we just talked about, could have a flood, could have a slide, could have a cave in or some kind of a, you know, increased mineral extraction tax or royalty regime that comes in. So there are different risks between owning the physical versus investing in the mining equities, which have more operating leverage, but also have more production and geopolitical risks associated with them. So it's a unique vehicle. As I said, the vehicle is about 200 million US dollars. It's been growing really nicely this year. And our goal is to obviously keep growing it so more and more institutional
[00:11:48] James Connor: investors can get involved in it. And many of our viewers are familiar with the Sprott Physical Uranium Trust. It sounds like a very similar product in the way it operates. Yeah, there's one key difference
[00:12:00] John Chapalia: between the two. And that is the Copper Trust as of the beginning of May of this year has implemented a monthly redemption option, which can either be in the form of cash or physical. Now to in order for you to take title to physical Copper, you need to have a minimum number of units that's equivalent to at least 100 metric tons. So we're talking about about a million four US dollars. So not obviously eligible for all investors. And you need to take title at the warehouse. So again, not all eligible investors. But the more important fact is that this redemption mechanism will incentivize different market participants to come in to buy the trust if it trades too far away from its net asset value. And this is a very powerful incentive. And what we've noticed is that the trust over the last few months in anticipation of this structural change with the vehicle has indeed traded much closer to its net asset value, and which has allowed us to raise a good chunk of capital in the vehicle this year. So that's another important structural enhancement that we implemented along with the New York Stock Exchange listing in the
[00:13:20] James Connor: beginning of May. And since you started trading on the New York Stock Exchange, how has it been received?
[00:13:28] John Chapalia: Yeah, we're definitely seeing the volume of trading slowly migrate to New York, there is still healthy trading in Toronto. So you can buy the the trust on the Toronto Stock Exchange in Canadian dollars and US dollars if you like. And but we're what we're seeing is the volume in US dollars is clearly migrating to the New York Stock Exchange, which is the pattern we see with most of our other trusts as well.
[00:13:55] James Connor: And John, quite often I read about trading futures on the COMEX or the LME. What are the advantages of owning the Sprott Physical Copper Trust as opposed to trading copper futures?
[00:14:06] John Chapalia: Yeah, I mean, the copper market is big in total size. And obviously, the futures market is a big part of that for hedging and speculation purposes. I think for for many investors, you know, investing in futures is just way beyond I think their level of comfort. Many institutional investors, even though they're sophisticated investors are not allowed to invest in derivative markets and futures. There is one negative aspect relative to owning physical and that is negative role yield. So every time you need to roll a contract as it comes closer to maturity, there's a negative role because the the shape of the curve is upward sloping. So there's this negative kind of yield negative role yield that kind of erodes your returns. If you're owning physical copper, there is no negative role yield. Yes, there's a cost to store the material. So there's a bit of a trade off. But right now that that role yield is pretty material. So So again, not all investors can dabble or or are willing to invest in futures. And we avoid that negative role yield associated with any futures market that's in a contango position, which copper is
[00:15:19] James Connor: right now. And John, since this product was created in 2024, the shareholder base has changed significantly.
[00:15:26] John Chapalia: Can you just just speak to that? Yeah, we had an IPO back in June of 2024. That was about a hundred million US dollars. It was fairly concentrated in a small number of institutional investors. Since that time, we've seen a broadening of investor interest. We've seen new institutions come in. Some of the existing shares have turned over, which is really important because I think one of the early knocks on the vehicle was it doesn't seem to trade much. And that's because, you know, institutions bought the shares at an IPO. They weren't trying to day trade this thing or market time copper. They had a longer term positive view on copper. Now that some of the shares are starting to change hands and we're issuing new ones, we're seeing a bigger float of investors, obviously across a greater number of institutions, advisors and individual investors. So that's obviously very healthy to have more float, more liquidity. And ultimately we believe the New York Stock Exchange listing will make the shares more accessible to a much larger capital pool because previously we only had it listed on the OTC
[00:16:30] James Connor: market in the United States. Well, John, this has been a great discussion. I want to thank you very much for spending time with us today and sharing your thoughts on what's happening within the copper sector. If somebody would like to learn more about Sprott and its various products, where can they go?
[00:16:45] John Chapalia: Yeah, please visit us at sprock.com. There you can learn about the physical copper trust. You can also learn about our various copper mining mining ETFs, which again, we find are often a nice complement to the physical copper itself. And also check out our education center. We have a lot of really good content that we put out and market analysis and coverage to talk about all of these metals. And then investor education is really, really important to us. And I will include links below in the show notes.
[00:17:18] James Connor: John, once again, thank you. Thanks for having me. Hi, I hope you're enjoying the conference. Did you know that 80% of our viewers are not subscribers to our channel, Bloor Street Capital? So please hit the subscribe button and also hit that thumbs up button and hit that thumbs up button. Thank you for your support. Aurora, thank you very much for joining us today. Amerigo Resources is a very unique company in that it's not a copper producer per se, but it processes copper from the tailings from Codelco's flagship copper mine in Chile. And before we examine Amerigo in more detail, why don't we first touch on Codelco for those who might not be familiar with the company? Sure, that's a good place to start.
[00:18:11] Speaker 3: Well, Codelco is Chile's state-owned copper company, and it sits at the very center of the country's economic identity. Codelco has seven divisions or seven mines and El Teniente is their most important operation. Codelco is currently the second largest global copper producer. It has more than six percent of global copper output. And just to give you some numbers, I think in 2025 Codelco produced around 1.4 million tons of copper. Now speaking about Chile, just to put everything in context, Chile is the top global copper producer. It has a 23 percent of global copper share and Codelco is Chile's top copper producer and operator. But beyond the significant numbers that I just gave you, I think it's important for your listeners to understand Codelco a little bit more. It was formed in the 1970s after the nationalization of Chile's copper industry. And it is one of the primary engines for Chile's modern growth and economic development. In Chile, there is a very strong national pride and identity attached to Codelco. Copper is called often Chile's salary and Codelco is seen as the steward of that resource for for the people of Chile. So its operations are just not about the mining assets. It's also a very important symbol of Chile's technical capability and mining expertise. And for us at Amerigo, that context is very important because it means that we are aligned with a partner that is not only globally significant, but also very embedded in the country's long-term economic and social priorities. That's very important
[00:20:17] James Connor: for us. That's a great overview. And maybe you can just explain this relationship between Amerigo and Codelco
[00:20:24] Speaker 3: and how long has this relationship been in place? Sure. The relationship with Codelco, as you can gather, is foundational to Amerigo's business. And it is both a very long-standing relationship and also a highly aligned relationship with the community. America operates through a company in Chile called Minera Valle Central, or MVC, that has been processing the tailings from the El Tiniente mine uninterruptedly since 1992. The relationship between MVC and El Tiniente is governed by long-term agreements under which El Tiniente delivers its tailings to MVC delivers its tailings to MVC. We reprocess those tailings to recover additional copper and molybdenum that would otherwise remain unrecovered. We pay an economic compensation to El Tiniente for letting us work with their tailings, and then we return the tailings to El Tiniente after processing them. So this is a true partnership model. Codelco, you could say, focuses on mining and the primary processing of that material, and we add value by improving overall resource recovery from the material that has already been mined and milled by El Tiniente. From a systems perspective, this is very efficient. It's also environmentally responsible, and it's economically beneficial to both parties. For MVC, the tailings represent our resource equivalent and MVC pays royalties to El Tiniente based on production levels and copper prices. So there is an economic compensation that's also important and significant to El Tiniente. One other aspect to consider here is that this relationship has contractually been reinforced over time with multiple contract extensions that have provided us with more than three decades of continuous operations. Today, our agreements with Codelco continue well into the next decade, but we have this long-term alignment with El Tiniente that goes beyond that. So this is not a transactional relationship. It's integrated, it's long-term, it's mutually beneficial, and it is built around one of the world's most important mining complexes. So it underpins the stability of Amerigo's business model.
[00:23:03] James Connor: And why doesn't Codelco process the tailings themselves?
[00:23:08] Speaker 3: Well, Codelco's core mandate is to operate and develop large-scale mining assets. That means underground development, block caving, processing plants, and sustaining production at enormous operations like El Tiniente. Those are all capital-intensive, complex priorities that require very significant levels of investment. Tailings reprocessing, which is what we do, sits outside of that core focus. While there is still valuable copper and lived in the tailings stream, it's just too little for them. It requires a very different operating model as well. So for them, it just wouldn't align with their capital return requirements. It would be a project that falls outside of their investment thresholds. For Amerigo, coming in makes a lot of sense because we offer a dedicated role, technical expertise to recover that residual value where every party is focusing on what they do the best. So it's just a very efficient way for Codelco to extract additional value without being distracted in a significantly smaller operation than anything that they have. So it's not that they couldn't do it. I think that the way of looking at it is that the partnership model that we have delivers a better outcome both operationally and economically for both parties.
[00:24:45] James Connor: Arora, let's look at El Teniente in a little more detail. How long has it been in production and what's the current mine life?
[00:24:53] Speaker 3: Well, El Teniente is a multi-decade asset. It has been in operation for more than 100 years. Based on Codelco's current mine plans and its structural growth projects, it has a remaining expected life of mine of more than 50 years. It is a cornerstone generational asset in global copper. Our current agreements with Codelco provide us with contractual security into 2037, but the volumes contemplated under those agreements give us more than that decade of highly feasible production because there is a significant upside beyond that as El Teniente continues to operate. There are two layers to that visibility that are important for us to talk about. One is that we have a layer coming from the fresh tailings. These are the tailings that are generated every day by El Teniente's ongoing operations and they provide a stable continuous feed source tied directly to that long life of mine. But we also work with historic tailings which provide an inventory that can be sequenced and optimized over time adding an additional level of control and longevity to our operation. Just to recap, we're not relying on a finite ore body in the traditional sense. We are essentially attached to one of the world's longest live copper systems which gives our business a very strong foundation and long-term optionality. I'm glad you brought up the point about the tailings. Once again,
[00:26:38] James Connor: you process historical tailings and also fresh tailings. What's the difference between the two just in terms
[00:26:45] Speaker 3: of grade? Sure. Well, the fresh tailings, as I mentioned, are tailings that are coming directly from El Teniente's current operations. They are recently processed ore and they tend to have a more consistent grade and mineralogy than historic tailings. Historic tailings were deposited decades ago and we work with them in a deposit called Cauquenes, which has undergone significant natural changes such as oxidation. So, there will be a significant variance between the grade of one and the other. When we're talking about the grade in the fresh tailings, they are in 2025, we were working with grades of around 0.17% copper, whereas the historic tailings grade was around 0.24% copper. So, the older tailings obviously have a higher grade because operations were not as efficient decades ago as they are now. So, this is all showing that we work with very low grades by definition. You would not expect tailings to have grades comparable to what you would find in the head grades of a mine. But for us, it's still a significant metal content when you consider the volumes that are involved. And that's the key point. Just to provide some additional context, in an operation with a 0.1 to 0.2% grade, you wouldn't have an economic support for that operation. But you have to consider that our material, the tailings that we work with, have already been mined and ground. There is an existing tailings transportation infrastructure, and we're processing very large volumes. So, those combinations that are what economically allows us to work with this low grade material in an economic way.
[00:28:56] James Connor: And how many pounds of copper did Amerigo produce in 2025 and what was the cash cost per pound?
[00:29:03] Speaker 3: In 2025, we produced north of 62 million pounds of copper, 62.2 million pounds of copper, and we had a normalized cash cost of $1.87 per pound. That's US dollars. Our production profile tends to be very stable year on year, and our cost performance reflects that model. So, we are, as I was saying before, we're not incurring mining, stripping, or developing costs. And that allows us to operate in a very tight and predictable cost range, more so than any conventional mining producer. So, the takeaway when we're talking about production and cash costs are not just the absolute numbers, but also how stable and predictable those production and cost numbers are, which is a defining aspect of how we can generate
[00:30:04] James Connor: cash flow at Amerigo. So, now that you just touched on cash flow, why don't we move on and speak to your balance sheet? How much cash do you currently have on hand and how will you allocate that cash in the coming
[00:30:15] Speaker 3: year? Sure. Well, one comment before giving you the figure. Our goal regarding cash is to maintain a healthy cash balance of around 30 million US at any given time and to return everything else to our shareholders, provided that the board of directors sees a clear short-term outlook on copper prices. So, for example, March 31st, 2026, which is our most reporting date, our most recent reporting date, we had cash of 57.2 million dollars, which automatically led to the Amerigo board declaring our highest performance dividend to date. That was a dividend of 16 cents Canadian, which is equal to four of our quarterly dividends. And when you put together that performance dividend and the June quarterly dividend, that represented around 23 million dollars or give or take all of the excess that we had at the end of the quarter over 30 million dollars. So, that's, I thought it was just important to provide that explanation so that people can see that we're not about accumulating extraordinarily high cash balances at Amerigo. We're more focused on having the ability of returning that cash back to
[00:31:40] James Connor: shareholders as fast as possible. And when you say as fast as possible, that's in the form of dividends
[00:31:48] Speaker 3: and/or buybacks? We do both. We have a quarterly dividend and that is our fundamental commitment to our shareholders. We started this dividend policy in October of 2021. We've paid 19 consecutive quarters of dividends now. We started at 2 cents Canadian per share per quarter and we have doubled that over time to 4 cents, which is what we're paying right now. So, that is the basic commitment. But on top of that, when there is additional cash flow generation in response to strong copper prices, as we've seen in recent years, we have two additional layers of or mechanisms to return flexibly that capital back to shareholders. And one of them are share buybacks. We've been very active on our buyback programs in the last five years. And the other ones are special dividends. We call them performance dividends.
[00:32:50] James Connor: And when you look out into the future, Amerigo is a one asset company. And so, I guess I wonder where does the growth come from? Would you increase the size of this processing plant or would you build
[00:33:02] Speaker 3: another processing plant at another mine? Well, it's a good question. And at Amerigo, we are not defining growth by producing more copper but on growing value per share for our shareholders. We have a long live, well understood asset at MVC that we have already expanded to ensure that we can process all of the fresh tailings that are coming from El Tigniente and that we have additional capacity at the plant to process historic tailings to the extent of maximizing or utilizing in full the existing tailings infrastructure that connects the mine to our plant and our plant to the tailings deposit. So, the growth at MVC has already been achieved to the top of the circuit that we have there. When we're talking about expanding, for example, beyond MVC, that's a different discussion and that's a different consideration. But I think it's important for us to fully explain that the growth at MVC has been achieved. We expanded that plant 10 years ago to have full capacity to process all of the material that was available to us through the contracts and we have been able to work on that basis for 10 consecutive years with very consistently high production numbers. So, the growth has been achieved and we are the beneficiaries of having reached that profile through as much growth as we could obtain at MVC from 10 years ago to now.
[00:34:55] James Connor: And Amerigo stock has had a massive move here in the last couple of quarters. Is this due to operating efficiencies or the move in copper?
[00:35:02] Speaker 3: Well, I think that there have been a series of reasons for that stock appreciation which we started seeing in Q4 of 2025. First of all, our copper prices. Copper prices have strengthened meaningfully and that flows directly through our business. As I mentioned before, we have a relatively stable cost structure. So, higher copper prices translate directly into an increase in free cash flow. So, part of the move is simply the market recognizing that our cash flow and our returns expand quickly with strong copper price environments. Another aspect is the growing appreciation for the uniqueness of the Amerigo model. Investors are better understanding now that Amerigo offers a very unique value proposition which we've just discussed before and also people are recognizing that we have very clear rules regarding capital allocation. We've been very clear and consistent in returning cash back to shareholders through the capital return strategy. So, as the track record has built, investors have started applying a higher quality multiple to those cash flows and it's not just what we generate but how reliably we return it to shareholders. So, I think that those are some of the factors that have contributed to the stock appreciation you mentioned.
[00:36:36] James Connor: And now that your market cap is over a billion dollars, are you becoming more attractive to larger funds? Are you getting more inbound calls?
[00:36:45] Speaker 3: Well, crossing the billion threshold is important because it has moved us into a very different investability category. Some larger institutional investors, whether they are generalist funds, resource funds or index linked investors, they all have minimum market cap and liquidity requirements and when you move past the one billion level, you become eligible for a broader pool of capital. So, we have been on the radar of larger, longer term institutional investors that may not have been able to participate with us before. As the ownership has broadened and trading volumes have increased, the stock has become easier to enter and exit at scale and that also reinforces institutional interest. And we've also seen that inclusion in indices and ETFs has further increased our visibility. So, all of those aspects have become more visible. And it's not that we're managing the business to reach a significant or a specific market cap. We're focused on delivering consistent cash flow, maintaining our balance sheet discipline and returning the capital to shareholders. But as we do that, the market cap and investors base have tended to fallow.
[00:38:09] James Connor: Well, congratulations on the success that you've achieved in the past year. And I want to thank you very much for spending time with us today and telling us the Amerigo story. And as we wrap up, maybe you can just express to the shareholders what they can expect in terms of news flow in the coming months from Amerigo Resources.
[00:38:27] Speaker 3: Yes. So, we don't produce a news flow. We want to state that we are focused on our operational and financial results. So, if anybody wants to check whether Amerigo continues to perform well over the next 12 months, I would tell them to focus on three clear indicators. One of them is operational consistency, follow how our production is trending with our guidance, that we have stable recoveries, that we have smooth operations. So, our MVC asset is a mature operation. So, that should give us the ability to deliver on our promises quarter after quarter. The second aspect is check out our cost controls. Our business depends on us continuing to operate with discipline. We have known costs and that allows us to convert production into actual cash. And the third one is capital allocation. Continue to monitor our discipline in using our surplus cash in the way we have stated we would be doing that through very clear and defined returns to shareholders. So, if those three things hold stable operations, control cost, and disciplined capital allocation, Amerigo will continue to execute well. So, I hope that that is the case and that you follow us as we continue to move on on this path. All right, great overview. Once again, thank you.
[00:40:06] James Connor: Thank you so much. That was good. Thank you. Hi, it's Jimmy and I hope all is well with you. Before we get on with the interview, one small request. Please follow me on Spotify and Apple Podcasts, leave a rating, leave a comment. And if you have any suggestions on who you would like to see interviewed on the channel, let us know in the comments section. Thank you for your support. Now, let's get on with that interview. Chris, thank you very much for joining us today. For those who aren't familiar with ATEX resources, why don't we just start with a brief overview of the company?
[00:40:43] Speaker 4: Thanks, Jimmy. Thanks for having me and inviting ATEX today. Yes, ATEX has been around for four or five years now and has had tremendous growth both in, you know, in the share price performance and in advancing our project and really moving the needle forward from, you know, we didn't have a resource initially in 2022. But in 23, we came up with an initial resource in the fall of 23 of 1.4 billion tons at 0.67. And then in the fall of 25, we followed up with a resource of 2 billion tons at 0.8% copper equivalent. And you were hoping after this season's record drilling, likely late in the fall of 27 to update the resource yet again on just on Villariano. One target we have, which has a lot of exploration potential around it. And certainly there are a few other copper gold porphyries
[00:41:43] James Connor: immediately adjacent to it. And before we move on, I should also point out that before you moved over to the corporate side and started working with ATEX, you are a portfolio manager for Royal Bank. And I'm kind of curious, how do you enjoy working for a corporate as opposed to being a portfolio manager?
[00:42:04] Speaker 4: Yeah, it's quite interesting. I started my career as a exploration geologist with Naranda and then worked as a mining analyst for five years and then 25 years as a portfolio manager. So after 25 years of suggesting to management targets they should look at, it's on the corporate side, it is quite, there's a lot of fun being involved in a new brand new discovery. And, you know, ATEX has been able to consolidate this district and we have, you know, at least four, four more targets to test over the oncoming years and fully funded to do that. Well, let's move on now and discuss that. So ATEX is
[00:42:47] James Connor: located in the part of Chile, which is known as the porphyry superhighway. So very rich in copper, but what are their minds? Are there any minds producing in the area or what other developers are operating in the area?
[00:42:59] Speaker 4: Well, that's the opportunity for ATEX. It's been known for some time that this area is in the copper superhighway, if you will. You know, Chile's 5,000 kilometers long north-south, and it's really 1,500 meters from Colawassee in the north, Escondida, Tuque Camada, these world, you know, Chile produces 25% of the world's copper. And then all the way south, you know, El Teniente is just south of Santiago. And so where we are, this district is about 100 kilometers south of the Vicuña district. And so the Vicuña district was really, you know, pioneered obviously by the Lundin group of companies with Philo and now NGX. And so we're 80 kilometers to the south. It's been known for years that where Valeriano is, is quite prospective, perhaps a little deeper, but the whole copper gold system has been fully preserved where we are. So around us, there's, there's no mining for about 200 meters to the 200 kilometers to the north. And then you have to go 150 kilometers to the south to El Teniente, you know, which is basically almost half a half a million, 500,000 tons of copper a year.
[00:44:24] James Connor: And Chris, Atex has discovered one of the largest copper discoveries in Chile in over a decade. And this has been reflected in the stock price. And in early January of 2022, before drilling really started in earnest, the market cap was $35 million, give or take, and now it's well over a billion dollars. But maybe you can provide a little bit of context for our viewers to give us a sense of what's happened in the last few years that's really driven this market cap.
[00:44:51] Speaker 4: Yeah, thanks. Thanks, Jimmy. What's happened is, you know, in 22, there was a gold surface, a gold showing at surface oxide gold, and that was what prior operators had focused on for some time. And so where we are, we have a lot of alteration like copper, copper gold porphyry style alteration at surface, you know, we can get into it in detail. But basically, in our district, there's five or six of these, they call hyperspectral alteration patterns. So basically, you can see the clays, the alteration minerals that are associated with copper and gold. So that's why I say it's been known for a long time that this series is very prospective. But the initial drilling just focused on shallow copper, or sorry, shallow gold. And then in 22 and 23, the drilling started to go deeper, they hit the big intrusion that shaped, you know, many intrusions are shaped like a fist, these granite intrusions that come to within a two or three kilometers of surface. And so when we were drilling deeper, we hit this porphyry system, which was high grade, and that in 23, that came out with our MRE, that was sort of a billion and a half tons of 0.67. And then what really got the stock going was on top of this porphyry system that we found this breccia. So these breccias form on top of a porphyry generally. And it was, you know, the first hole was I think 174 meters at two and a half percent. So that's really what ignited the share price and investors got really excited because we it is a deeper system, as I mentioned. And it's high grade, we have a high grade portion of the porphyry that's probably four or 500 million tons of 1% equivalent, which is basically the size of red Chris. But immediately 500 meters above that, we have this really high grade breccia. The grade is to be determined, you know, in our MRE, we had 32 million tons of 1.4%. And we'll go into it, we've had some interesting drilling this year that's really expanded this high grade B2B zone.
[00:47:14] James Connor: And so, well, let's look at this asset in more detail, the two elements needed for a copper mine, especially one at elevation, size and grade. And a resource was completed on Valeriano in 2025. Why don't you just take us that, give us the highlights. How many tons of copper does Valeriano have?
[00:47:31] Speaker 4: Uh, right now it's 20, uh, 20 million tons of copper equivalent or with 15 million ounces of gold in situ. And that's the thing, as I mentioned about the, um, Valeriano district, it is new. And, uh, we have Antofagasta, you know, one of the world's largest mining, uh, copper mining companies, just four kilometers through the north and they have a project called El Anciero. And it too is around 2 billion tons of, um, of similar grade. And they've carved off a resource of 600 million tons of, of 0.7. But the, the reason I'm saying that is, is because the, it's, it's still quite open where we are and, uh, you know, the drilling in the next, uh, this season and next season will really expand on that.
[00:48:19] James Connor: And Chris, the other element I got to ask you about is the, the grade, and this is something else that makes Valeriano so special. Can you speak to that? Yeah. Thanks Jimmy. Um, what's special about the
[00:48:32] Speaker 4: grade is, well, firstly, this is a brand new district. And so when you look at any district from whatever mineral potential you have, when you first go in there, you're really interested on the tenor of the, of the grade of the copper and the gold. And so, um, you know, what we've seen, seen right now, this is a high grade, uh, gold system in a copper gold system. And so right now we're 0.8% copper equivalent on the 2 billion tons, but basically 65% of the value or 65% of the mineralization is copper. And it's essentially the rest is gold, silver, mostly gold, then some silver and molybdenum. So that's, what's kind of unique. This is a brand new district. We're trying to understand the tenor of the, of the grade. Uh, we see a similar grade to the north in our, uh, colleagues at, uh, Antofagasta. And then we have several more targets we want to test just to see how this gold and this copper gold
[00:49:31] James Connor: target progresses. And this grade is very high for a porphyry, but can you just put this into perspective for us? Uh, if we look at phyllo, for example, or NGX, how does the grade at Valeriano compare to those deposits?
[00:49:48] Speaker 4: Well, they're, they're two very different deposits. And phyllo is, uh, I think 13 billion tons of 0.5, 5% copper equivalent. Uh, they have some high grade copper gold, uh, breccia systems as well. Um, and, uh, NGX right now is more of a high sulfidation system, really high grade copper and gold. And I think they've had some hits that there's likely a copper porphyry below that, but at Valeriano, the 0.8% copper equivalent, you know, the grade, the gold is, uh, as I mentioned, like 25% of the grade. And, um, as you mentioned, like the, uh, globally, the average grade for copper gold porphyry is about 0.4%. So, you know, we're twice the global grade and, um, and, and still finding a lot more tons. And, um, there are certainly high grade areas to be found. And as you mentioned, it's open in all directions. So this can grow significantly. Yeah. Like, I mean, the, the Valeriano district, um, you know, just North of us is, um, is the LN 0 Antofagasta. And so there's a main North South structural control, uh, on the mineralization, especially on the breccia, you have this, uh, porphyry system and then on, which is driven by this North South structure and the, the B2B breccia is in this North South structure. And we've defined it right now. Um, 500 meters, uh, in strike is about 500 meters in dip length and about 150 meters wide. Now we've just put out a hole last week, hole 19A where we, there's only partial results. Uh, we hit, um, 70 meters of 1%, but I think what's more important is we stepped out 200, 200 meters to the south. So basically a 50% increase in the strike length, just in one hole. And the 19A, as I mentioned, hit that grade. Uh, we went another 250, 250 meters to the end of the hole in 19A and we, we were still in, uh, porphyry mineralization. And then we extend, we put in another hole, a daughter hole, uh, 19B, and that went an additional 250 meters beyond 19A. So this, this step out hole really expanded the, the B2B breccia. Like now we're probably 700 meters long. And, uh, so certainly next year we want to go in and, uh, and see if that extends to the south cause it's still open to the south. And what's happened with this north south structure. Um, and the other thing with the B2B breccia is that it's at a higher elevation. And so it's 500 meters above the main porphyry system. And, uh, you know, so that would allow an eventual, you know, a very efficient, eventual mining, uh, scenario, but along this north south structure, we've also found what we're calling this B2B mineralized corridor where mineralization came up. This likely came up this north south structure and migrated along a, like a sponge type rock called rhyolite. And we hit in hole 34. Um, and this was a test we wanted to do all year was test for additional, uh, breccia targets. And so as we stepped to the east to test these additional breccia targets, what we found were not discrete breccias. We found in hole 34, we drilled, uh, basically one kilometer, 1100 meters of 0.72% copper equivalent. So, you know, that in, in, in, and in rhyolite. So it's what that means for the generalist investor is, you know, the, the wall rock around the porphyry is intensely mineralized. And so to the east of the breccia zone next year, we really have, we put another hole in a hole 35 and that's similarly replicated, uh, 400 meters of 0.54 copper equivalent. And so next year the, the B2B mineralized horizon at least a couple of hundred meters to the east is wide open. And we really want to get in
[00:54:09] James Connor: and, and understand what that means. And so when we look out to 2027, the, the next drilling season is still quite a few months away, but have you identified targets? Are you going to continue to focus on this B2B zone or are you going to go after new targets? Yeah. I mean, we, we have to get all the results in,
[00:54:30] Speaker 4: of course, but, um, as I mentioned, the main, the main thing that's we think is appealing as the, to investors. And we're glad we have Agnico as a 15%, uh, partner, uh, peerless on this 10% and, uh, institutional investors are 50, 50%. So we have a strong, uh, shareholder base. We don't take that for granted for granted, of course. And what we want to deliver on is, um, we know this porphyry is here and it's high grade, but it is deeper. So the, the real value for future, whoever comes into mind, this project is to find a higher in the system. This high grade copper system can really accelerate the development of, of, of the high grade porphyry below it. So we have a lot of targets for next year. And one of the main one is really this B2B breccia. As I say, we stepped out to the south and it's now, you know, that's almost, we have about a kilometer and a half of the underlying high grade porphyry. And as I mentioned now with hole 19, the breccia is 700 meters in strike and this breccia or the B2B mineralized horizon is wide open to the east and the southeast. And as I mentioned, that's a kilometer of mineralization. And then we haven't really got into it, but, uh, um, we're having our sustainability team look at our newly acquired Nuevo Horizonte property. Right now we have 25,000 hectares. So we acquired, uh, through auction, 10,000 hectares in, in January. And I mentioned that in this district, uh, including Antofagasta and north of Antofagasta is Cadelco in fact, and all of these porphyries have the, this mineralized, uh, uh, these clay mineralized minerals directly above the porphyry. And so they really stick out in when you analyze, analyze it with, uh, these hyperspectral images. And so basically, uh, Nuevo Horizonte to the southwest is seven kilometers from Valeriano. It's been sitting, it was previously worked by, uh, another operator back in 2014 timeframe, but they just drilled shallow holes. We don't have really any of the data, but it was, again, it has copper gold porphyry alteration right at surface. And so we want to take our learnings from, uh, Valeriano, both the geochemistry, the geophysics has been very important for, for us. I won't go into the nitty gritty, but the, the magnetics and, uh, a passive seismic survey have really, uh, corroborated the exploration results. And so we want to take those signatures, get our sustainability team. We do own on, um, basically in the fall of 2025, we acquired the surface rights, um, about 14,000 hectares of surface rights. And so you've been seeing in mining companies globally acquire the surface rights around the mineral claims, because it really helps on, um, you know, access to the property. And, you know, generally you, you do have a right to access the mineral claims, but if you don't own the surface rights, you have to annually or biannually negotiate the rights. So this, these surface rights, which include Codelco and Antofagasta, uh, we, we think it helps, uh, in the district become, um, you know, a focus. We're not, uh, it allows us to get in. It allows others to get in. And, um, yeah, we're hopeful that we can just be a player in this district.
[00:58:17] James Connor: And just to clarify, Chris, this Nuevo Horizonte, you and your team have not done any work there yet. Is that correct?
[00:58:26] Speaker 4: No, we, it was just acquired January 22nd. Um, as I say, first, the first work in the hopper is to go in and, uh, just after the winter in September and do some environmental characterizations, uh, even though, you know, a large part of it is on our own ground. And then that'll be followed by geophysics, uh, geochemistry. And then in, in 2027, we're hoping to get in and start once we have all the results from the geophysics, geochemistry, uh, get in and put some drill holes in.
[00:59:01] James Connor: And the last resource was done in 2025. A lot is, a lot of drilling has been done since then. Uh, when do you plan on completing another updated resource?
[00:59:14] Speaker 4: Well, the 23 was the fall of 23, fall of 25. We're hoping for the fall of 27. Uh, but the folk, the, the resource is mainly an outcome of, uh, of the drilling. We're not as focused on just getting the resource out because we have so many fresh targets. And so we think shareholders would be better rewarded by expanding the size of the prize rather than just characterizing the prize right now. So the outcome of the resource likely in the fall of 27. And we're hoping to have a couple of, uh, holes in the Nuevo Horizonte ground so that, you know, if people look at a map of our property, they can see basically six big for free clusters. And we, we have four on our properties and only one tested. So that's, that's why I say this was interesting about this area. It's brand new. People are just, uh, and it's a very high, high grade copper, gold, uh, poor freight, twice a global grade, and it has a lot of gold in it as well. So one thing we haven't talked about is, is the, the metallurgy, which is, you know, another strong feature when you, when you go into new districts or any district, um, right now we're seeing, you know, we've done two rounds of, of metallurgy. We've, we've only got one composite into the breccia and even that, you know, we're seeing recoveries of 94, 95%. So again, on a global composite perspective, we're getting a 33% copper concentrate. And that compares to globally, the average is around 24%. We're getting 14 grams, basically half an ounce of gold in the, in the concentrate and globally, you get two or three grams. And then as importantly, we're getting no deleterious elements like arsenic in the porphyry, in the concentrate. So that the high grade, uh, new district just being drilled and the clean metallurgy is, uh, you know, it's ringing bells for not just investors, but, uh, mining companies, if you will.
[01:01:31] James Connor: So Chris, let's move on now and discuss your balance sheet because you are operating in the Andes. Uh, drilling costs are very expensive. Uh, how much cash do you have on hand and how will you allocate that
[01:01:43] Speaker 4: cash in the coming year? Thanks, Jimmy? Like it is expensive operating the Andes, but we, we calculate we're probably one of, if not the cheapest, uh, at around $1,100 a meter us. And that's everything drilling the camp divided by the, like in our case, 28,000 meters this year. Uh, that said, we, right now we have 150 million in cash. Um, the stocks, you know, approximately $3 at $4. We could bring in another $140 million in, in warrants. Um, and as, as I mentioned with the strong support we have from some larger mining, well-known mining share shareholders and Agneco and Piero Zonde. We don't take that for granted, but we, we think we have two more years of exploration funds in front of us.
[01:02:35] James Connor: And Chris, it's not often I speak with an ExploreCo or a developer who has $150 million in cash. Maybe you can just take us through that and how did you get so much?
[01:02:47] Speaker 4: Well, I think the, the breccia, the B2B breccia, when we, I joined as a director in, uh, June of 24. And as I was joining, they were, they just started to hit the breccia. I think I mentioned, uh, um, 170 meters or two and a half percent. And so I think that ignited interest in, in, in ATEX resources. And so then in the fall of 24, we were able to do, I think a $60 million, uh, financing with a warrant and that warrant got accelerated, uh, just this past January, February. And then in the fall of, uh, 25 with the support of our large shareholders, we were able to do a hundred million dollar financing. So the treasury is, um, it stands at about 150 and, uh, looking forward to, uh, deploying that in, in next year's program and the, and in phase eight. Well, Chris, this has been a great
[01:03:45] James Connor: overview of ATEX resources, and I want to thank you very much for spending time with us today. And as we wrap up, what can investors expect in terms of news flow from ATEX in the coming
[01:03:55] Speaker 4: months? Uh, Jimmy, thanks for having us again. Well, with only 44% of the assays out, I mean, basically this is a phenomenon, not just in Chile, but everywhere. And even in Canada, you're looking at 30 days to get assays. So we'll be reporting assays out till July. Um, then we'll be coming out with a summary of our findings and then an announcement of our next season. We expect to get in early in September. Um, we'll start drilling the expansion of the, the B2B breccia to the south, to the east. And then in the, in the new year, we really want to get in and test the Nuevo Horizonte targets to, to really see if they are, if they replicate what the success that Anto has had to the north and what we're experiencing at Valeriano.
[01:04:47] James Connor: Um, and we should also mention that you are an interim CEO. How is the search going for a new CEO?
[01:04:55] Speaker 4: Well, clearly I'm not on the, um, the, uh, special committee, but as you mentioned with 150 million cash, strong shareholder base and, and a drill program successfully delivered, uh, it truly is an interim position. Uh, I'm transition CEO. And I think, uh, given what we're seeing in the market, there's a lot of very good potential candidates that are, are, are sitting there and, uh, yeah, I'm sure there'll be news on that in the next, uh, you know, in the next, uh, three to five months.
[01:05:28] James Connor: Well, Chris, this has been a great update. And once again, I want to thank you for spending
[01:05:32] Speaker 4: time with us today. Thanks, Jimmy. Thanks for having us. I'm looking forward to the next interview.
[01:05:45] James Connor: Joseph, thank you very much for joining us. Many of our viewers might remember you from your previous company, which was Nomad Royalty, and that was acquired in 2022. And now you and your team have started a new company evolve royalties, but this one's a little bit different that you're focused on copper. And for those who aren't familiar with evolve royalties, why don't you provide us with
[01:06:07] Speaker 5: a brief background on the company? Yeah. Thanks very much, Jimmy, for having us, uh, into your copper conference. Um, yeah. So evolve royalties, we're a new copper focused royalty business. We listed the company in December last year. Um, so it's really a company that's been around for less than six months, uh, you know, in our public format. Um, we have put together a portfolio of producing royalties on some Canadian copper mines. And generally we're looking to build out what we think is going to be a really exciting new platform in the royalty space focused on copper, base metals, and critical minerals. We're about $120 million market cap. Uh, we expect revenues this year between five and 7 million growing to over 10 million next year. So we're off to a great start. And as you know, our team, we've been in the royalty space for a long time with our previous company, know my royalty, um, having been acquired by sandstorm in 2022. So this is our next platform, uh, a business that we know well, a playbook that we know well, um, but focusing on a different commodity and really what I think is a huge opportunity in the royalty sector to apply this really well-known business model, but into a different, um, you know, different commodity set and, and what we see being a really great opportunity in the market over the next few years.
[01:07:26] James Connor: So why don't we take a look at your assets? As you mentioned, you have 14 assets, 11 are royalties, and I want to focus on the ones that are going to be driving growth here in the coming year. And why don't we start with your flagship assets? Uh, that is Highland Valley copper, which is Canada's largest producing copper mine. It's tech resources is the operator. Tell us about this asset and what's it going to mean for future cash flows going forward.
[01:07:51] Speaker 5: Yeah. I mean, we're, we're very fortunate as a new royalty company to have at our, at the core of our portfolio, three royalties on Canadian copper mines, and we've considered Highland Valley copper or flagship royalty until now. Um, Highland Valley is a mine that's been producing since the 1960s. It's a very mature asset. Um, it's owned by tech resources. So from our point of view, what we look for in royalty assets are assets that have a long, long mine life and, and big operators that have deep pockets. Um, and the reason we look for those, uh, you know, the reason we look for that when the, our counterparties on the royalties are big companies that are well capitalized, what we see over time is a lot of investment into the royalties, whether it's from exploration or expanding the mines. And it's that capital investment that adds value to our, our royalties over time. So Highland Valley, uh, as I mentioned, has been producing for decades. Um, it's, um, it's gone already through three mine life extensions over that period of time. They've now sanctioned and begun construction on the fourth mine life extension, which is going to take the life beyond 2045. So we have a long life ahead on, uh, the largest copper mine in Canada. Um, the royalty generates to evolve between two and 3 million per year in, in cashflow. And so it's a wonderful asset to have exposure to we think beyond this existing my life extension, there is a significant resource base still to add to that mine life. So I predict that this is a royalty that's going to be paying to evolve well beyond 2045. And because it is, uh, in a key jurisdiction, really tier one jurisdiction, uh, being Canada, um, we think this type of asset gets more investment still from the operator as the copper sector continues to expand. So, um, again, wonderful asset for us and, um, and, and will be the backbone of our portfolio, uh, for the foreseeable future.
[01:09:57] James Connor: And this is one of the great things about these copper deposits is that they have such long mine lives. Unlike a gold company that might have 10 years, these copper assets might be 25, 50, 75 years.
[01:10:11] Speaker 5: Yeah. And that's huge. What that provides to us in terms of optionality, because as we know, these commodities can be cyclical. There can be periods of really high prices and periods of lower prices. So if you have exposure to many cycles through one asset, um, what you typically see is one, uh, a few years of much higher returns where you can really recoup the capital on the, on the, on the, on what you've invested into these assets. Um, but then you get that exposure, uh, over many, many cycles. And, and that's why I think copper royalties are a really unique thing, because as you mentioned, these copper mines tend to have really, really long life assets. Um, so we think that the royalty model applies really well to this part of, uh, of the space.
[01:10:59] James Connor: So the next asset I want to touch on is McElvana Bay, which was recently acquired by Eldorado Gold. It's currently under construction, but it's very close to going into production. Give us an update on this asset.
[01:11:13] Speaker 5: Yeah. So McElvana Bay is a royalty, uh, that we acquired late last year. Um, the mine up until now has been in construction. Um, so it's been, uh, essentially advanced by foreign mining over the past few years, foreign raised the capital and, and got through all the studies in permanent to put this mine into production. We acquired the royalty at a really key moment in the mine's evolution, just as they were nearing completion on the main parts of the construction. Also, as it happens, um, you know, the, the mine got a lot of visibility in Canada with the Canadian government designating it as, as a major nation building project earlier this year. Um, so it's become really a, a, a marquee asset in the copper space. Um, the, the, the company was acquired by Eldorado Gold, um, essentially a few months ago. So once again, now we've come into a situation where we have a much bigger company, uh, taking on this, uh, taking on this mine and what typically happens in these types of situations is, you know, the company building the mine has a really big focus on managing the balance sheet, getting the construction to completion. And typically what we see once that project starts producing, um, the operator begins now thinking about the ways in which you can optimize it and increase the value of that mine. And so now with Eldorado as the owner, we're seeing all of these, uh, things, um, being put into play. So there's a new emphasis on exploration regionally. Um, there's discussion around, uh, the, the initial resource at Tesla, which is a new zone that's been drilled over the past, uh, year and a half. We may see a median resource on that new zone later this year. And then most importantly, they're talking about expansions, uh, which is a really new, exciting thing for us. Um, something that foreign had been projecting perhaps in a couple of years or three, four years, uh, these expansion plans have now been brought forward and we're going to start seeing studies come out of Eldorado on potentially doubling the throughput of the plant. So any one of these things will increase the value of our royalty because it's going to have an impact on the duration of, of, of the deposit, uh, through exploration success, but also the magnitude of the payments that we received because of that increase in the throughput. So it's a really exciting time to be holding this royalty. Um, you know, essentially what we, what we saw when we acquired this asset has played out really quickly in our thesis. And, um, what I think is going to happen is fast forward three, four or five years, this royalty in our portfolio is going to be a major royalty. And with all of these different incremental value drivers, adding value over time. And the, the, the really interesting thing about the property in our royalty is that the royalty covers a really large piece of ground. That's very, very prospective. And we get paid on the main deposits there in the near term, but also we have exposure to all that exploration upside, whether it's to the north or south on this main, um, Aquarena Bay trend, and which we're now seeing Eldorado move into, to more serious exploration on this, this property.
[01:14:38] James Connor: And so right now the mine life is 20 years, but five years down the road, this could be a totally different mine. The mine life might be significantly longer because of the expansions
[01:14:48] Speaker 5: and also the exploration. Yeah, exactly. And these VMS deposits, they're known to be company makers for exactly that reason, because what you see on day one is not necessarily the full extent of, of what's there. And if you recall, Agnico was a big shareholder of foreign, um, you know, very smart capital has positioned themselves behind this deposit. And we think it's for a really good reason because the exploration potential is huge. Uh, so it's exciting for us to have exposure to it. And obviously we're
[01:15:19] James Connor: keenly following, uh, the exploration happening there. So evolve recently acquired a new asset and that is called West 10 and that's in the country of Namibia. Why don't you tell us about this asset and why you
[01:15:33] Speaker 5: acquired it? Yeah. So again, going back to the, the principles behind how we're building the portfolio, we like to focus on assets that are cash flowing or that have a really defined timeline to when they may start cash flowing. Um, and, and so across, we, we look at royalties across many different countries, many different commodities that copper is the main focus within the portfolio, but commodities like tin are really unique. Uh, tin is a small market. Um, we see lots of, of the similar potential that we see in copper. We see in tin, um, as the world continues to need semiconductors and electronics, all of those, uh, demand drivers require a lot of tin. Um, and we see a unique asset that's in Namibia, which is a wonderful mine and jurisdiction. The mine was, um, was acquired and put back into production. Um, in 2022, we followed it closely over that period of time. And recently they've now hit, you know, their, their full design, um, uh, design capacity at the mine and, and recoveries are trending well. And so we thought it was a good time to be acquiring this royalty. The royalty will pay between four and five million per year at current tin prices. So it's a substantial amount of cashflow. And similarly to McElvain Bay, the property is huge and there's this very significant resource base that's going to provide, um, 40, 50, 60 years of mine life, just based on what we see currently. And so not only is the company continuing to explore and define the resources on the property, um, but it also provides the potential for expansions down the road. Um, they're producing about a thousand tons of contained tin per year. That's what generates that 4 to 5 million in royalty payments that I, that I mentioned earlier. Naturally, if they expand the mine, um, then, you know, those payments can, can increase over time. But going back to my main point, we're really, what we're really trying to do is provide to our shareholders royalties that give us exposure to the deposits in terms of the long-term growth of the resources, but also give exposure to the commodity prices in the near term. And the only way to do that is with cashflow. And so when our, when our royalties are cash flowing, it gives you that potential to crystallize those increases in the price, um, in the, in the near term. And so this royalty gives us exactly that for 10, 10 fits really well with copper in the portfolio. And as a business, this acquisition allows us to continue to move forward with our, uh, with our next acquisitions. And we can talk about the strategy, um, uh, on how we finance our, our, our acquisitions, but it'll open up the ability for us to go and get credit, um, credit facilities, uh, which is a really big tool for royalty companies in terms of how they finance their growth. Um, with the, with the cashflow that we have in the portfolio, as a result of these acquisitions, uh, we have now reached that point where it's opening up lots of opportunities for us to get new financing for the next acquisitions.
[01:18:44] James Connor: So let's bring it back to Canada. I want to look at this, uh, another asset called Copper Mountain. It's in production. It's owned by HUD Bay. Uh, they're advancing an optimization plan. Tell us how this optimization plan is going.
[01:19:00] Speaker 5: Yeah. So they acquired Copper Mountain a few years ago. Copper Mountain is another significant Canadian copper mine, also located in British Columbia. Um, so how they acquired it a few years ago. They've been, um, a little bit quieter in terms of bringing, bringing that mine, I guess, into the HUD Bay family and they've been working on optimizing the plant, uh, so that it can finally reach its design, uh, design thresholds. They've been working on stripping parts of the pit. Um, and, and all of that is leading to this point now where, so we own a royalty on not the entire deposit, but on the North pit area of the mine. Uh, it's a royalty that's been paying, uh, pretty healthfully over the past few years. When we acquired the royalty, there was a carve out of the first 10 million, which remained with the company that sold the royalty to us. So in our models, we see that royalty coming to us or paying to us and by Q4 this year or Q1 next year. So we're, we're almost there. And, and it's a 5% NSR on those zones. So when the, the company is mining on those areas, the cash flows to us are, are substantial. We estimate between three and 4 million per year. Um, so copper amount will be a great addition to our portfolio. Once it starts cash flowing, um, again, likely before the
[01:20:25] James Connor: end of the year or in Q1. Joseph, the last asset I want to touch on it's once again, it's not a copper asset. It's lithium. It's located in the country of Argentina. Tell us about this asset and when
[01:20:39] Speaker 5: will it start contributing to cash flow? Yeah. So lithium is, um, it's a really interesting commodity. Our team has spent a lot of time looking across many jurisdictions at, at lithium projects and, and lithium royalties in general. Um, what we've decided to focus on were lithium brines. Um, so we acquired this 2% NSR on a project called Salda Los Angeles is located in Salta in Argentina. Um, so this is a wonderful mining jurisdiction. Our team had the chance to visit the mine a couple months ago. Um, really this is the heart of, of lithium production for the world. Um, a lot of the big lithium brine operations are in this province in Argentina. Um, Salda Los Angeles is a permitted shovel ready project. Um, and so there's been about a hundred million dollars invested by the operator so far to get the site to this point. The production wells, uh, have been drilled. Um, the equipment for the first line, uh, in the plant is sitting there on site and the lithium market has been quite volatile as well over the past few years. We've seen significant increase and decrease in price. And so the operators waiting for some price stability before going ahead with construction. Um, but at these lithium prices, uh, the, this royalty would pay to us about 15 million us per year. And this is a royalty we acquired for 5 million, um, back in 2024. So the way we think about lithium in our portfolio, it's not a significant part of our strategy. We want to be opportunistic on these types of, of royalties when they come our way. And it's really about evaluation, how we can get these into the portfolio at a price that makes sense for our investors, for the risk that we're taking on, but that have the potential for that outsized return. And also keeping with the thematic of investing in assets that we have an understanding of when they may start cash flowing to us. So if the company were to start construction this year, we would start getting our payments within two and three years from now. So, you know, from our point of view, that's, that's near term and, and the potential cashflow coming to us is very significant versus the size of our company today. So, um, uh, a really interesting asset that brings a lot of optionality into our portfolio and where, you know, once we see construction decision from the operator, there's material value in this royalty. And that currently is not being reflected by the market. Uh, so it's, uh, it's a sleeper in our portfolio, but, but I think, uh, we're going to see lots of positive things over the next couple of years.
[01:23:27] James Connor: Joseph, why don't we talk about your balance sheet now and your ability to fund acquisitions? Um, maybe you can just speak to that and also how are things looking within the pipeline?
[01:23:38] Speaker 5: Yeah. So when we listed the company in December, we completed a 37 and a half million financing. Um, the bulk of which went with, uh, which came from institutional shareholders. Um, so that those funds were used, uh, in the acquisition of the weas royalty. So we're sitting today with, um, just under 10 million between our cash and our, our liquid investments. Um, so we're in a good spot from a company point of view in the sense that we have a decent amount of cash on the balance sheet. We have cashflow coming in every quarter. Um, and as I mentioned, when we were talking about weas, we're in the process now of setting up credit facilities, uh, which we expect will, will be, uh, a near-term announcement for us. And we'll provide, uh, an ability for our team to be, um, looking at assets in the 25 to 50 million dollar, uh, size bracket. Um, so we don't have any debt currently on the balance sheet. So this is a, uh, a revolving credit facility that would be available to draw from your acquisitions. Um, and really that's how, you know, if you look at the royalty model, that's how companies grow because, you know, with, with access to these credit facilities, you can then credibly pursue transactions of an order of magnitude that have a significant impact on the portfolio. So our approach here in this, in the sector is going to be with those facilities, we can open the door into new transactions that we're, that we're chasing and, um, secure the transactions using that credit capacity and then look to refinance that over time when, when the timing is right in the market. Um, so the main thing is we're about $120 million market cap today. We didn't start this company with the intention of staying, uh, small. We want to grow quickly. And so, as you can imagine, we're very active. Uh, the pipeline is, um, extremely busy. Uh, there's, there's lots of great opportunities. Um, and there's more and more opportunities coming our way because of what we're seeing in the copper price. The copper price has been very strong. It's incentivizing lots of new companies to be bringing projects forward in their pipeline. Um, whether it's just defining new exploration campaigns or, um, advancing studies and thinking about bringing assets into production earlier. So the nature of the transaction changes as the commodity price changes. And I think that's the main opportunity for us as a company is we want to position ourselves to be the provider of capital to new copper, uh, teams advancing copper assets, um, and generally companies, uh, looking to develop
[01:26:24] James Connor: new projects in this kind of environment. Well, Joseph, this has been a great overview of, uh, your new company evolve royalties. And I want to thank you very much for spending time with us today. And maybe you can just summarize for our viewers on what they can expect in terms of news flow here
[01:26:42] Speaker 5: from evolve in the coming months. Yeah. Well, thanks very much, uh, Jimmy. And it's an exciting time for evolve. As I mentioned, it's really just the beginning, uh, we listed the company less than six months ago. So I think what you can expect as, as shareholders or prospective shareholders is we have a really high quality portfolio of royalties, um, already under our belt, um, that all have significant potential for positive developments, whether it's exploration expansions. Um, so all of that is what will organically drive the growth of our business over the next six, 12, 18 months, but also as a team, we're building the company and we're building our financial capacity to go out and source new, new acquisitions and grow the portfolio, uh, acquisitions. And that's what makes the royalty model. So powerful is you get the organic growth, um, but also the ability for the team to deliver on top of that. Um, so we, we do expect to be active. Um, and, and, you know, we certainly hope that within a two, three, four year timeframe, we can significantly grow the size of the business, grow the cashflow, um, and, and do so in a way that benefits all of our shareholders.
[01:28:00] James Connor: Well, Joseph, this has been a great overview and I want to thank you very much for spending time with us today. Paul, thank you very much for joining us today. So much has changed, uh, Faraday Copper since we last spoke. And earlier this year, Faraday entered into a non-binding agreement with BHP to acquire the San Manuel project in Arizona. And this will enable you to consolidate the San Manuel mining district, which will be one of the largest undeveloped copper mining projects in the U S. And why don't we just start by walking us through the rationale behind acquiring in this BHP asset? What was your vision?
[01:28:44] Speaker 6: Yeah. Hi, James. As always great to be talking to you today. And really this story goes back five years when we first took over the running of Faraday Copper and we stood on the Copper Creek project, looked across the valley and there's a legacy asset of BHP. So our vision was always to consolidate this this district. I think all too often in the industry, you know, we see duplication of infrastructure, you know, on, with projects next to each other, but also on the same deposit. And so here was a golden opportunity to consolidate this district with a vision that we could have a single set of infrastructure to pull copper ore from two deposits.
[01:29:23] James Connor: And what is the distance between Copper Creek and San Manuel?
[01:29:29] Speaker 6: So we have, you know, connecting land packages or adjacent to each other between the deposits themselves is approximately 15 kilometers.
[01:29:39] James Connor: And ultimately you want to connect these two assets. Is that correct?
[01:29:44] Speaker 6: Yeah. What we want to do is, is build out a single set of infrastructure that, as I say, will feed all from both of the projects. So we'll have a, you know, single milling operation and then bring the ore, the ore, the ore into and produce copper.
[01:29:59] James Connor: Yeah. And when will the deal close?
[01:30:02] Speaker 6: So at the moment, you know, we're finalizing the agreements. We've got board meetings coming up. And then where there's, you know, issuing 30% equity for this acquisition, we'll go for a shareholder vote, which we're sort of expecting July, August, and then the deal closing in September.
[01:30:20] James Connor: And so now you have two strategic shareholders. Before it was just one in Lundin, but now it's Lundin and BHP. Can you just speak to that? And maybe you can speak to the support you're getting from these two shareholders?
[01:30:33] Speaker 6: Yeah. Look, you can't get better blue chip names in the copper industry than Lundin and BHP. So to have those on your register, incredibly valuable, incredibly supportive, and certainly also opens doors in the administration in Washington as well. But obviously they're, you know, great partners to have long, long term, also strong sources of capital to help fund us as we advance the combination of these projects.
[01:31:06] James Connor: So Paul, let's move on now and look at your flagship asset, which is called Copper Creek. And I always like to frame this so we can see how large these copper assets or deposits can be. How many pounds of copper does Copper Creek have? And what's the grade?
[01:31:20] Speaker 6: Yeah. So obviously Copper Creek has been our flagship property that we've been working on for the last five years and advancing that. They're currently, and you know, this is a little old now, sort of back in 23, where the resource measured and indicated category was 4.2 billion pounds of copper. And then in all categories we've got just over 5 billion pounds. But since then we've done a significant amount of drilling, you know, upwards between, you know, 60 and 70,000 meters of drilling. So, you know, looking to, you know, significantly expand that when we do an updated resource estimate.
[01:31:59] James Connor: And when do you anticipate an updated resource?
[01:32:03] Speaker 6: Yeah. So we're currently drilling on the project, James. We've got three rigs busy. We'll be drilling to the end of this month and then taking a pause once, you know, the extremely hot weather and monsoonal rains come. And then, but the focus of that drilling has been on drilling out the open pits to measure an indicated category so that then we can feed that into an updated resource and really a combination with the San Manuel property. So we'll have a combined resource estimate sort of middle of next year.
[01:32:35] James Connor: I didn't realize there was monsoons moving through Arizona. How long does that last for?
[01:32:40] Speaker 6: Yeah, it's usually sort of July through to September, but you get the flash floods. And, you know, if you remember the news from last year, you know, even down in Texas, Mexico, you can get some extreme weather. And I guess with this Super El Nino they're talking about, there's some warnings about some extensive storms coming through that part of the U.S.
[01:33:02] James Connor: Now there's two styles of mineralization at Copper Creek. Can you just speak to those and the significance of them?
[01:33:08] Speaker 6: Yeah, certainly. Firstly, we have these breccia pipes, a broken class of rock that have been re-cemented together. In our case, the cement is the copper mineralization. These breccia pipes outcrop at surface and are amenable to open pit mining. And then the breccias transition down into porphyries and then you've got more classic porphyry style mineralization with a stock work of veins and they'll be mined by underground mining methods. I think the unique feature about Copper Creek is the the number of breccias that we have. We've got over 300 that have been mapped at surface and only 15% of them have been drill tested. So still, you know, a lot of exploration upside as we go forward.
[01:33:50] James Connor: And Paul, will you start with the open pit and then go underground or will they both be going on at
[01:33:56] Speaker 6: the same time? No, I think, look, this is the exciting opportunity with the acquisition of San Manuel that it really gives us a lot of optionality in terms of, you know, mining methods, scale, you know, how we deploy capital. And so once we've completed the acquisition, you know, got the updated resource that will provide the platform in which to really optimize, you know, this, this combined project, but certainly looking at, you know, open pit startup, you know, low initial capital and then that really funding your, your underground development in the future. But obviously,
[01:34:36] James Connor: it's a lot of work to do to get to that point. Now you touched on your land package and Copper Creek has a very large land package. Maybe you can just touch on that. What plans do you have in terms
[01:34:47] Speaker 6: of exploration? Yeah, no, look, yeah, we do have a large land package. And as I mentioned earlier, you know, significant upside through not only these breaches, but additional porphyries at surface, we've got these two big structures, one called the Holy Joe Fault in the east of the property, that's the main conduit that brought in the breaches and porphyries associated with the resource. And along that structure, you know, we've got numerous other breaches and porphyries exposed with copper mineralization that provide us a continual pipeline of near surface targets for testing. And then we've got the Western belt of breaches and porphyries that hasn't been drill tested to date. That appears to be, we're a little higher up in the system. And so we're sort of theorized that that's more of an underground target area. Whereas at the moment, you know, we're very much focused on their surface mineralization to drive value in the early years of a mine life. So let's move on to San Manuel,
[01:35:45] James Connor: San Manuel. And at one time, this was a producing mine back, I believe it started in the 1950s. Is
[01:35:51] Speaker 6: that correct? Yeah, no, long history of mining, nearly 50 years, it was initially opened by magma copper in the mid 1950s. And amazing to think it was a block cave as well. So they were using that technology, you know, back in the 50s. And yeah, it was the biggest underground mine at one point, you know, in its, in its, you know, former life as an operation, it produced 4,500 kilotons of copper. And BHP acquired the magma copper in the mid 90s. But then sort of, you know, the copper market crashed, and BHP made the decision to close the mine in the in the late 90s. Not and importantly, not through resource depletion, but through lower copper prices. And then during the early 2000s, they deconstructed, rehabbed, reclaimed the area. So it's like having now a blank canvas. But at the time of closing, there was somewhere between 12 and 14 billion pounds of contained copper, you know, still in the ground. So you know, when you combine that with Copper Creek, then we're going to have one of the most significant resources for copper in the US, we're sort of estimating in the top four.
[01:37:04] James Connor: So no work has been done on this project for for many years, but I'm sure there's a lot of historical
[01:37:09] Speaker 6: data that you can go through. Yeah, no, certainly. And James also to think, you know, the last time a resource was calculated on this, on that project, the copper price was 80 cents. So very different environment to what we are today. So you know, the mineral system hasn't been drilled out, it's still wide open, you know, one of the last holes drilled at depth came back at 0.9% copper. So yeah, an incredible amount of historical data. I think one of the challenges though, is during that reclamation and deconstructing the, the historical core was discarded as well. But, you know, not only do we either have that digital data for the drill holes and the assay certificates, we also have all the reconciliation data. So, you know, it's not like this is a resource without any information. So, you know, we're comfortable with, with what we're taking on, and then it's going to require some confirmation drilling before we can put out a 43-101 compliant resource.
[01:38:07] James Connor: So once the deal closes in September, then you're going to get right to work and start doing some confirmation drilling.
[01:38:14] Speaker 6: Yeah, no, we've already got consultants sort of engaged on, on the project as part of our due diligence. And one group obviously is, is SRK on the resource side. And, you know, we're busy finalizing how much confirmation drilling needs to be done, but, you know, getting drill quotes and looking to be able to mobilize drill rigs, you know, September, October, and start that drilling. So we can meet our target of a combined resource for Copper Creek and San Manuel by mid next year. And then that really forms a platform for, for studies.
[01:38:45] James Connor: And the other interesting component of San Manuel is that the fact that it came with 27,000 acres of private land. Can you just speak to the significance of this?
[01:38:56] Speaker 6: Yeah. I mean, like having private land in the US is as valuable as gold and oil, right? It's, you know, you just can't underestimate the value of that in terms of your ability to then advance the project. But not only that, James, we've also got a lot of utilities coming onto the project, you know, so while the mine buildings were deconstructed, those utilities still exist. So, you know, there's a highway coming past the project, there's, there's a transformer on the side, there's, you know, other new electrical installations that are bringing power into Arizona. And we'll, we can talk about that, you know, how Arizona is booming in due course. But there's also the natural gas pipelines that are part of the US national grid coming through there. And there's an active rail line that comes down to San Manuel as well. So, you know, we're blessed by amazing infrastructure, all the utilities are in place. So that really, you know, help and that private land really puts us on the front foot. And so, you know, the vision is that we can use that private land to build out future mine infrastructure and buildings.
[01:40:07] James Connor: So Paul, now that we've discussed these two assets, I just want to make sure I just want to clarify and make sure I understand it correctly. But Copper Creek is going to be a combination of open pit and underground. San Manuel will just be underground?
[01:40:20] Speaker 6: No, no, there's, you know, there's still, you know, a significant oxide resource near surface. And, and so, you know, there's the ability with that private land to get into production relatively quickly through, you know, production of copper cathode from the oxide, and then moving up to Copper Creek to, to, for the open pits. And then you've got two big bulk underground mines, you know, one at Copper Creek, and then the Kalamazoo deposit at San Manuel, which is actually the offset portion of San Manuel.
[01:40:54] James Connor: And you touched on this earlier, but as we know, Copper is very important in the US. It was considered a critical material in 2025 by the US government. Maybe you can just speak to the support that you're getting from the federal government for this project.
[01:41:11] Speaker 6: Yeah, look, look, it's incredible. You know, I was in Washington a couple of weeks ago. And previously, I've been there just after the inauguration of President Trump. And, you know, well, well, back then, it was very positive, very pro wanting to kickstart the mining industry. Again, you know, whenever you went to, you know, agencies or regulators, they were very siloed. But this time around, you know, all those silos are broken down, the interconnection talking, you know, from the White House, right, whether it's Department of War, Department of Energy, you know, is incredibly positive. And, you know, on the back of, you know, having Lundin and BHP as supporters, and they really pay attention. And then there's also now the Executive Permitting Council, which is really driving, you know, not only federal permitting, but they're bringing in sort of simultaneous state permitting as well. So, you know, really, things are moving forward rapidly. And, and, you know, when when we look at Arizona as well, and that's booming, I mean, for the first time in, you know, several decades, you've got projects that are being permitted and in construction, but not only, you know, mining projects that are being constructed, there's, you know, a lot of data centers, chip manufacturers, warehousing. So, as I say, Arizona's really booming.
[01:42:30] James Connor: That's good to hear. So, let's talk about your balance sheet now. And earlier this year, you closed on $100 million deal, both Lundin and BHP participated on that deal. Maybe you can just speak to the demand.
[01:42:44] Speaker 6: Yeah, look, I mean, that's one of the great things about where we are as a company now, and also with this transaction is that our liquidity has essentially gone through the roof, you know, I think just over 12 months ago, we were trading 200,000 shares a day, we're now averaging 2 million, I think, earlier this week, there was $17 million of stock traded in one day. And, and, you know, that's been great. So the demand, you know, we're really attracting blue, blue chip institutions, you know, on on the back of that raise, we've got, you know, just over $130 million, you know, on the balance sheet, you know, which is that will support us right the way through to, you know, going into 28. And it will enable us to put that resource together and come out with a phase one project study as well.
[01:43:34] James Connor: And Paul, just because you said you're so active now in terms of trading, I know you trade on the TSX, but do you have any plans on trading on the NASDAQ or the New York Stock Exchange?
[01:43:44] Speaker 6: Look, I think it's something to consider, particularly as we're a US focused project, you know, we've got no other projects outside of the US. So I think it's something to consider. And, you know, there's very few pure copper plays with a 100% stake in the US listed, you know, in New York.
[01:44:04] James Connor: And Paul, I want to get your thoughts on M&A now. We've seen a lot of activity in the copper market. El Dorado acquired 4RAN earlier this year, and in your part of the country, we saw Hud Bay acquire Arizona Sonora. Maybe you can just speak to that. And do you think this theme is going to continue on?
[01:44:23] Speaker 6: Yeah, no, James, great question. You know, I think firstly, you know, it started a few years ago with buying production, right, whether it was gold, copper, or silver, you know, and people wanted, you know, cash flow upfront. And there was still that risk around development projects and permitting. And I think that the operators were happy to see the juniors advance them and de-risk them, you know, hence, like the 4RAN deal into production. But then more recently, you know, particularly in the US, with the climate there, then we've started to see development projects being acquired. Obviously, the case in point is Arizona Sonora. And, you know, with a lack of discoveries, you know, with a lack of quality development projects, that's really exciting for Friday. Because, you know, if you think about the US, what other big development projects are there in the hands of juniors, I think very little. So, you know, we're going to be one of the go to companies for copper in the US.
[01:45:24] James Connor: Well, Paul, this has been a great update. And I want to thank you very much for spending time with us today. And as we wrap up, you've already provided a lot of detail on what you and your team will be working on here in the coming months. It sounds like you're going to be very busy. But maybe you can just summarize for investors what they can expect in terms of news flow in the coming months from Faraday Copper.
[01:45:42] Speaker 6: Yeah, no, certainly, James. And I mean, you know, when you think about it, we've got this transformational acquisition, you know, about to finalize, you know, we're supported by two of the industry heavyweights in London, BHP, we're well funded to deliver on our key catalysts. You know, we've got the ability to build out this, you know, one of the largest US copper mines there is. And, you know, we're currently drilling at Copper Creek, so you can expect more drill results in the short term, closing of the transaction, the starting of drilling at San Manuel, you know, a combined resource midway through next year, and then looking at a phase one project study by the end of next year. So yeah, a lot of exciting news to come.
[01:46:33] James Connor: You have a lot on the go. Well, once again, congratulations on the acquisition, and I look forward to the updates. Once again, thank you.
[01:46:39] Speaker 6: It's a pleasure talking to you, James. Goodbye.
[01:46:42] James Connor: Hi, it's Jimmy, and I hope all is well with you. Before we get on with the interview, I have one small request. Follow me on Spotify and Apple podcast, leave a rating and leave a comment. And if you have any suggestions on who you would like to see interviewed on the channel, let us know in the comments section. Thanks for your support. Steve, thank you very much for joining us today. You head up ETFs at Sprott, and you and your team have created two ETFs, which allow investors to focus on copper miners. And before we examine these products in more detail, why don't we first start with the investment thesis behind copper? Why should investors care about copper? Yeah, copper is one of those metals that
[01:47:28] Speaker 7: touches every aspect of our everyday lives. It really is imperative to the overall way that we've structured the global economy, whether it's electrical infrastructure, energy generation, technology, defense, real estate. These are all aspects of the economy that rely heavily on copper. And basically, any time that you see that electricity is being moved or stored, you'll generally find that copper is in the middle of making all of that possible. So from that standpoint, it's, you know, one of those metals that has a very profound impact on just how our society functions. And one of the stats I always
[01:48:06] James Connor: love to talk about is the fact that in a traditional car, there are 50 pounds of copper, give or take, depending on the car. But in your typical EV, there's 150 pounds of copper. So the demand for it just keeps
[01:48:19] Speaker 7: going up. Yeah, that's right. That's part of the, you know, if you were to look at the different areas of the economy, you know, when you start looking at the energy transition electrification, these are two aspects of the economy that use significant amounts of copper, so much more than we see out of their fossil fuel counterparts. When you start looking at, you know, even outside of EVs, you start looking at how the energy is generated. Things like solar and wind can, depending on the type of application, can use anywhere between two and a half and seven times the amount of copper relative to their fossil fuel counterparts. So as we're looking to improve our electrical infrastructure and also look for renewable forms of energy, copper is becoming increasingly important. So copper is trading at or near all
[01:49:06] James Connor: time highs and it's doing so at a time when other metals such as gold and silver are under pressure. But what's driving this demand? You touched on a couple of things, but maybe you can just speak to
[01:49:16] Speaker 7: this in more detail. Yeah, I think one of the biggest things is that the demand for copper is changing. And because of that, we're seeing a lot of copper demand coming from data centers and artificial intelligence, defense, energy transition, electrification. If you were to look at those three categories, they currently make up around 32% of copper demand. By the time we get to 2040, it's expected to be about 45%. And just to put it in context, those three structural demand drivers have over $5.5 trillion of spending just last year alone. So very significant amounts of structural demand that didn't really exist a decade ago as electrical grids were not expanding at the rate in which they
[01:50:01] James Connor: are now to meet these power-hungry applications. And the other issue we must discuss is the supply side of the equation. And copper supply has been hampered in recent years. We've seen many mine disruptions throughout the world, but can you speak to this?
[01:50:16] Speaker 7: Yeah, disruptions are nothing new to copper mining and mining in general. When you think about the overall rate of disruption for copper miners, it's somewhere around 5% per year on average. Several large mines have seen some disruptions here in the last, you know, 12 to 24 months. We think of the Cobre Panama mine in Panama. This was a mine that was set to produce about one and a half percent of global copper output. That mine's been closed for a dispute that they've had with the Panamanian government. The Grasberg mine in Indonesia suffered a mudslide last year. This was the second largest producing copper mine in the globe. The expectations are that it should get back up to full capacity by 2027 or 2028. So very significant amount of copper coming offline. The Kamoa Kakula mine is another mine. This one in Congo had some seismic activity. It's really impacted the amount of copper being produced. And we're seeing those projections continuing to come lower, you know, below what was expected for how fast it was going to get back up and running. That's the number five mine in the world. So these large copper mines are having these supply disruptions. At the same time, we're seeing this increase for copper demand.
[01:51:34] James Connor: It makes you realize how fragile the entire system is.
[01:51:38] Speaker 7: It is. And what's really compounded this issue is not only the disruptions that we see, but also when you start to look at how difficult it really is to increase new supply. We're not having the same level of what we would call significant copper mines being discovered. Also, the time to get a new copper mine from discovery to production, depending on jurisdiction, can take 15 years or longer. In some cases, we've seen it out to 30 years to get some of these mines up and running. So not only do we have demand factoring into this, supply disruptions, we also have these declining ore grades and lack of major discoveries. All of these are setting up a longer term supply and demand imbalance, which we think will benefit the copper miners over the longer term.
[01:52:24] James Connor: So why don't we move on now and discuss Sprott's copper ETFs, beginning with the copper miners ETF?
[01:52:31] Speaker 7: Sure. So we launched the Sprott copper miners ETF, ticker COPP, a few years ago now. This is significantly different than what we're seeing from other offerings in the market. Perhaps the biggest difference is its focus on pure play copper miners. We call a pure play company that would be any company that has at least 50% of its revenue tied to mining copper. This pure play aspect to COPP is unique to this product. And another unique feature of COPP is its dedicated allocation to physical copper. It's going to be a little less than 5% that we'll see allocated to physical copper. And the significance of pure play is that it really reduces the unintended exposures that you might get from some other competing strategies. And because of that, we've seen investors really start to gravitate to COPP.
[01:53:23] James Connor: And how many mines globally would fall under this category of pure play?
[01:53:30] Speaker 7: Yeah. So when we look at the number of miners, we're right around 60, give or take a few. So it's got a nice diversified base. You'll see of that about 75% would be considered large cap, although it does have some mid and small cap exposure and that physical exposure we discussed. So you really do have an all cap exposure in one ticker.
[01:53:50] James Connor: And the second product that you and your team have created is the Junior Copper Miners ETF. Tell us about this product and how it's different from the other product you just mentioned.
[01:54:00] Speaker 7: Yeah, the Sprott Junior Copper Miners ETF is ticker COPJ. Again, this has a pure play strategy. We really believe in that in our product development process at Sprott. This is going to focus on those smaller junior and development exploration type companies. It has about 50 different securities in the portfolio. The main difference you're going to see is because it is a junior mining ETF, you're going to have a focus on those small cap names. So it's going to be about 75% on small cap. The rest of that will fit in mid cap names. So no large cap exposure here and also no physical copper exposure in COPJ.
[01:54:39] James Connor: Well, this has been a great overview, Steve, and I want to thank you very much for spending time with us today and sharing your insights. And as we wrap up, if investors would like to learn more about Sprott and its various products, where can they go?
[01:54:52] Speaker 7: They can go to sprottetfs.com. There you can learn about each one of the funds that we talked about today or other critical materials ETFs or precious metals ETFs. And I would also have investors check out our insights section. There you can access all of our research. It's not behind a paywall. You don't have to put in your email address. We produce our monthly commentaries. We have webcasts that we do as well as our podcasts that we create in-house as well. So lots of information available to investors on copper and other critical materials and precious metals markets as well. Steve, once again, thank you. Thank you. Great to be here.
[01:55:39] James Connor: Barry, thank you very much for joining us today. For those who are not familiar with Highland Copper, why don't we just start with a brief overview of the company?
[01:55:50] Speaker 8: Yeah, Jimmy, it's very nice to be here, and thank you for hosting. Yeah, Highland Copper has the Copperwood project. You know, it's one of those very rare, fully permitted projects in the United States and arguably at the right place in the right time. And, you know, maybe just what distinguishes it is that advanced nature. It's what the U.S. needs right now. They need projects from a critical mineral perspective to be built. Copperwood has a full feasibility study. It's permitted, actually stepping forward on early site work and detailed engineering and looking to build in the relatively near term and maybe just also a really nice scale resource. So all the right fundamental pieces in place to build a mine.
[01:56:33] James Connor: And you're right. It's all about timing. And copper was designated a critical mineral by the U.S. government in 2025. And because of this, the government has implemented several programs to accelerate domestic copper production. Maybe you can just speak to that.
[01:56:49] Speaker 8: You know, it's particularly relevant to us. And you'll notice junior companies need access to capital. It's not always easiest. And over the past many years, it's been a challenge. I think the U.S. is in large part going to help us solve that problem. There are there's considerable pools of capital available at a host of federal agencies and quite creatively. So across debt, equity and grants, you will see those different types of product going into different companies in recent times. You know, most specific to us, we've received a $250 million letter of interest in project financing from the United States Export Import Bank. You know, that's an important number. That's about 60% of the total capital that we need for the project. So as well as some other grant opportunities that we have that we're quite well advanced on, and I think our project has good recognition in D.C., I think it's going to put us in a path to 75% of the capital sourced from federal and state funds, you know, with real visibility to building the project.
[01:57:49] James Connor: And we should also mention the fact that the White House recently acknowledged Highland Copper in a press release.
[01:57:56] Speaker 8: Yeah, listen, that was very important. And I think a good indication, not just of the work that we've done on the ground in D.C., making ourselves known. And I'll say as well, certainly from Michigan, our federal politicians have been playing a real role in getting us recognition. But that endorsement is important. So we were recognized in a White House publication in and around, you know, both Copper tariffs, but importantly, the importance of moving domestic production forward. And we were listed alongside a few other real key players as companies and projects that are important to domestic production. And in the near term, you know, the U.S. isn't looking for, in my view, early stage projects right now. They're looking for projects that are permitted, ready to be built and actually put
[01:58:42] James Connor: into this near term supply demand imbalance. And when we think about copper production in the U.S., we think about Arizona. We don't think about Michigan. But yeah, at one time, Michigan had a very
[01:58:53] Speaker 8: robust copper industry. Maybe you can just touch on that. Yeah, it's funny. I do say Highland Copper actually is a company that's a little bit overlooked. And that's fine. That creates some opportunities for us. And candidly, Michigan has been quite an overlooked state. You're right. People's minds go directly to Arizona and Nevada when they think about domestic copper production. But Michigan has been producing copper, you know, from the early 1800s for a couple of centuries. The region where we operate, it's the western side of the Upper Peninsula. When you're there, the locals there call it copper country. So it kind of tells you enough. The last fully operated mining in that particular area was the White Pine Project and it operated 50 years up until the late 90s. Mining came back on the eastern side of the Upper Peninsula with Talon's now Eagle Mine project that came in through Lundin Mining. So just one of those regions that I think is going to be made increasingly relevant as the U.S. looks to ramp up
[01:59:52] James Connor: copper production again in the near term. So let's move on now and discuss your primary asset, which is copper wood. How many pounds of copper are in the resource and what is the grade?
[02:00:02] Speaker 8: Yeah, of course. And it's interesting. Sometimes I hear people refer to the copper project as relatively small. I guess I would beg to differ. There's 3.7 billion pounds of copper defined across all categories. Importantly, about 1.9 billion pounds of those sit in the measured and indicated category. So that's 54 million tons at a really nice 1.5% grade. And you'll know that that's what gives rise to that initial 11-year mine life as we're sitting at reserve status. Importantly, though, you know, the balance of that resource, about 79 million tons, which is also at a nice grade at 1.1%, of course, is not in the current mine plan. Naturally, a strategy of ours to continue to convert that over time. We certainly don't see this as an 11-year mine life, arguably 15 to 20 years. And what will be the capex? Yeah, that's another nice element to the project. So this is not a $1 to $2 billion-plus project. And candidly, if it was, it would be difficult to see a company of our scale building it. You know, our feasibility study says it's a $400 million capex. That's a manageable amount of capital, even from our perspective, particularly when you look at the context of the US federal government looking to underwrite debt. $250 million that we have as a letter of interest from USXM is a good 60% of that total capital. We certainly think that there is 300 million in debt capacity as we think about the project. So as we think about the balance of capital that we need, you know, arguably another 50 million in debt, perhaps that comes from one of the refiners who are naturally looking to secure offtake. We think there's visibility to some grants from both state and federal agencies. And of course, at the tail end, something in the 75 million range as we think about equity that the project would need as the last capital in. But, you know, increasingly I'm feeling strong in terms of our capacity to finance the project. And, you know, often when you see companies like ours, we sit at discounts to our values if there isn't a belief that the company has the wherewithal to finance. I think that's changing.
[02:02:12] James Connor: And Barry, when copperwood is up and running and producing, what will be the annual production and
[02:02:18] Speaker 8: will what will be the cash cost? So it will produce 30,000 tons of copper annually. That's about 70 million pounds. You know, I think that that's a very meaningful number. First of all, it represents the best part of five to 10% of the current shortfall from domestic production perspective, supply demand. So it's really quite meaningful from the US perspective. I think it's also a really meaningful addition to an intermediate producers production profile. To be clear, it's not necessarily a plan to be acquired. Obviously, plan A has always got to be to finance, engineer and build your own project. But certainly we've seen that there may be interest along the way. And the cash cost for the project is about $2 per pound. It's about 250 to 275 on an all and sustaining cost basis. So call it slightly higher on the cost curve. And it's nothing really against the project. It's a US project that is underground. So it just tells you, you know, from an attribute perspective, it's slightly higher on the cost range. But nicely, it really works at a $4 copper price. That's what we did our feasibility study at. I don't think we're going back to $4 copper. But when you look at five and six plus, you know, what you'll start to see is that that leverage that that torque to changes in copper prices is quite meaningful. And that's often the case when you have a lower margin project at $4, adding that one to $3 is the
[02:03:44] James Connor: returns are really nonlinear. And I'm glad you brought that up because we have copper trading at all time highs now. But as you mentioned, you used $4 in the feasibility study. But let's just say if we move it to $5 a pound, what does that do to the economics?
[02:03:59] Speaker 8: Yeah, so you know, at $4, the NPV of the project at a feasibility study level is about $170 million. At $5, it triples to $507 million. At $6, it nearly doubles again to about $850 million. I mean, at Spot, candidly, it's a billion-dollar-plus net asset valuation. And, you know, we're stepping quickly through engineering at the moment, we have some really nice optimization opportunities, some that have already been bedded down. And we've proven that we can increase our copper recoveries by about two percentage points by incorporating the Jameson cell. We're working now on the mine planning side. So when we look to update our feasibility study tail-ender this year into early next year, arguably at a $5 copper price, and incorporating some of our opportunities, I think it's going to, you know, give us a very robust updated feasibility study.
[02:04:49] James Connor: And so the big catalyst this year is going to be when you announce that you're moving ahead with construction. When do you think that'll be?
[02:04:59] Speaker 8: Yeah, so it's the tail end of this year into early next year, certainly in combination with that updated feasibility study. You know, there are two things that you need, of course, to break ground, you need to be complete from a financial, from a, excuse me, from a technical perspective, and of course, have board and management agreeing that you're pressing forward with the project. We see that happening into early 2027. In advance of that, we will parallel our debt financing such that through into mid 2027, we have broad visibility to the capital. And in a good scenario, are you looking to construct the project in 2027 or early 2028?
[02:05:35] James Connor: So let's talk about finances in more detail now and take a look at your balance sheet. How much cash do you have on hand? How will you allocate that cash in the coming year?
[02:05:44] Speaker 8: So last report, we had about 22 million US Treasury, and maybe I'll back up just a small bit. Just two or three months ago, we sold a non-core asset that allowed us to eliminate all of our debt and bring that capital into the company. So really just recapitalizing the company to make us have the look and feel of a company that has the capacity to finance and build a project, to clean capital structure and a singular focus on our fully permitted copperwood project. You know, that capital very cleanly brings us to a full investment decision. That means, of course, driving our run rate cost through this year and next. All of the capital needed to get ourselves to a 40% engineered and an updated feasibility study into early 2027. And the capital to initiate that broad debt financing process and leaving us, of course, runway into 2027 as we conclude on that project financing. So feeling quite comfortable from a financing perspective, just a structural perspective in terms of how the company is set up to move
[02:06:48] James Connor: forward as a builder. And Barry, we should also highlight your shareholder base. You have a very strong shareholder base, which will help you raise this capital that you need. Maybe you can just speak to that.
[02:06:59] Speaker 8: Yeah, and you'll know this as you step through the more challenging parts of the development cycle on that Lausanne curve. And that even goes back over the last five to 10 years when you're going through multi-year resource definition and feasibility studies and permitting. You need good, long-term, loyal shareholders. And we've certainly had the benefit of that. Orion Mine Finance owns 28% of our company, one of the largest debt providers from a financing perspective, amongst other things. And Condear, who are a natural resource fund based out of Texas, sitting just at sub 20% of the company. So having those large patient types of capital in the company through the development cycle has been really important. They've always seen the benefit of domestic US copper. And I think as we're seeing the cycle playing out now, and candidly the macro story in terms of the US need for domestic production, I think our shareholders are going to be really rewarded here in the next year or two.
[02:08:00] James Connor: And Barry, earlier you mentioned that you have a letter of interest for $250 million, but it's not binding. What will it take to make that binding?
[02:08:10] Speaker 8: Yeah. So, I mean, you consider it like any other bank, a traditional bank that goes through technical and financial due diligence. So naturally, what we need to do is ensure that when we step into that formal process, which we anticipate to happen at some point in 2026, that we are prepared. And that's why that critical path is through engineering. All of our detailed engineering packages are now awarded. Engineers are working quickly towards getting ourselves to that 40% engineered range. You know, there's relevance to that number. That's the amount of engineering that we see. And then in discussion with key financing partners, particularly USXM, is the amount of engineering that gives you very good visibility to the full design criteria of the project, all the technical aspects that need to be de-risked. And of course, the current view of both capital and operating costs. And when you have that in hand, alongside a feasibility study, which I would truly characterize as a bankable feasibility study, you're ready to withstand that technical diligence into the tail end of this year, with visibility to getting that across the line through a standard process in 2027.
[02:09:17] James Connor: And best case scenario, when do you see this in production?
[02:09:22] Speaker 8: So I think the best case scenario is the second half of 2029. That's if all goes, let's say, perfectly to plan. It doesn't always in mining. You know, alternatively, it's into 2028, excuse me, into 2030. And, you know, that also in the context, and you'll know those time cycles, first drill hole to production in the US is the best part of 15 to 20 years. I feel very comfortable that, you know, we are in one instance or the other, one of the most near dated copper developers here in the US.
[02:09:52] James Connor: And we should also make mention of the fact that you've made a couple of key hires here recently. Can you speak to that?
[02:09:58] Speaker 8: Yeah, thanks for that reminder. You know, when you're looking to step forward, you have to do a whole host of things to demonstrate both commitment and conviction around your project and structurally getting yourself in a good place. I mentioned, obviously, selling a non-core asset, but the company from a structural perspective in a good place. We have strong shareholders. And now we're demonstrating conviction in terms of putting true development team in place. So just recently, we hired Peter Hempstead as our CFO. You know, he has considerable experience. He was one of the founding executives at Capstone Copper in the very early days, you know, driving that company from a pre-production company, you know, through both development as well as acquisition to becoming, you know, a wonderful intermediate copper producer. So having his level of maturity and understanding of both the capital markets and concentrate marketing, et cetera, is going to really prepare us as we step through 2026 and 2027. And then, you know, at the project director, we hired Trace Arlo. And I really do say she's world-class, trusted by some of the largest companies in the world. Her most recent full-time role was the as the execution director for Rio Tinto's Resolution Copper. So a very high-end trusted resource. We happened to have a couple of board members who knew her personally. One of whom is John Cherry, who interestingly at Perpetua just converted a US Exim loan to a binding debt product from nearly two to three billion dollars. He actually worked with Trace going back, you know, maybe 10 to 15 years on the Upper Peninsula at the Eagle Mine. So from a board to management perspective, we're feeling, you know, incredibly comfortable about our capacity to execute. And remind me again, is the Eagle Mine still in operation? Yeah, it most certainly is. It's changed hands on one or two occasions. And most recently, actually, Lundin sold it to Tallinn. So it's become the, you know, the key asset for Tallinn as they look to establish themselves, or I should say further establish themselves in the region. And I think that does speak, speak to the region itself, like investment is coming back in. And with good reason, there's a whole host of past producers. And a considerable amount of copper in the ground there.
[02:12:08] James Connor: So that's a great overview of what's happening at Highland Copper. Now I want to talk about your share price and Highland is trading at a discount to its comps. Maybe you can just discuss why you think that is and what you and your team will do in the coming months to close that valuation gap.
[02:12:25] Speaker 8: You know, to me, it's to some degree, you know, capital flowing to arguably some of the more unloved areas and sectors. Obviously, capital is nicely flown back into mining over the last one to two years. But pure junior developers are higher on the risk scale, potentially higher on the reward scale as well. But it's one of the areas where capital flows to last. Really what it is now for us, it's about demonstrating ongoing execution, demonstrating capacity to finance and capacity to build this project. You know, you often see these disconnects from a price to net asset value if there isn't belief in the market that you can build. Candidly, I think that we can. We've engineered, we've done some early site work, we've really built our team around the project at this point. There's often discounts if the market doesn't believe you can finance. I really believe that we have the wherewithal. At this point in time, we are well known, a well known entity in DC. We're advancing some of the federal capital opportunities. And of course, we have a strong shareholder base to assist as we look to develop. So I think, you know, we just happened to be one of those companies that has not quite re-rated. There's often opportunity in those overlooked companies. And I think we remain a value
[02:13:40] James Connor: pick in a very good industry. Well, Barry, this has been a great overview. I want to thank you very much for sharing the story with us. And as we wrap up, you've already provided a lot of detail on what you and your team will be working on in the coming months. But maybe you can just summarize for our viewers on what they can expect in terms of news flow here in the back half of the year.
[02:14:01] Speaker 8: Yeah, of course. I mean, I think we nicely offer some catalysts over varying time horizons. In the next three to six months, I'm hoping we have visibility to some of the federal and state grant opportunities. Of course, to take those in, of course, as an NPV boost, but also a nice endorsement. In the next three to six months, we'll look to conclude on our integrated mine plan. You know, I mentioned we made some really nice process plant updates from an engineering perspective at the tail end of last year. We're looking to make some really nice strong improvements on the mining side and from a resource perspective in particular over the coming months. And then as you step into early 2027, you know, putting out our updated feasibility study, as I mentioned, at long-term consensus nearing $5 copper price, incorporating some of our really nice updates, and ideally just putting us on a really strong, robust path to continue the project financing. You know, at the tail end of this year and into next year, we will parallel the financing process. And certainly I've seen it's again a demonstration of conviction that you're putting capital into that, that you're pushing those paths forward. And of course, into 2027, when you have visibility to a binding debt product, USXM, and then of course, stepping through to building the mine. And in the next two to three years, being a producer and the cash flower, you know, again, catalysts across a whole host of timeframes and putting us on a path there for two to three years down the road to be being looked at as a company that's, you know, valued on price to cash flow multiples, as opposed to price to that asset value discounts. And we'll look forward to that.
[02:15:35] James Connor: Well, it sounds like you and your team are going to be very busy here in the back half of the year. So once again, thank you and good luck. Thanks very much, Jenny. Good seeing you. Did you know that 80% of our viewers are not subscribers to our channel? So be sure to subscribe to our channel, BloorStreetCapital, and also hit that thumbs up button and leave a comment below. Thank you for your support. Jordan, thank you very much for joining us today. You are the CEO of Canada's newest copper company, aluminum metals. And the company is headquartered in Canada, but the actual mine is in the country of Poland. And for those who might not be aware of aluminum metals, just because it is so new, please provide us with a brief history of the company and how did you acquire this asset and
[02:16:24] Speaker 9: what sort of work has been done on it? Well, thanks, Jimmy, for having us. So the first thing I always say to everyone is this asset was not acquired. First of all, we have three projects and these are all true grassroots discoveries starting back in 2011 when Ross Beattie and a team of Polish geologists went and staked a big area of ground near the existing copper mining region and they acquired 400,000 meters of historical drilling and they reinterpreted all of this data and ultimately over a period of 12 years sunk over $125 million U.S. drilling holes and ultimately making three discoveries that we have today. And our three discoveries over those years have amounted to over 15 million tons of copper and 1.2 billion ounces of silver. So I joined the company about a year ago from Glencore where I was 10 years looking after business development across the world and I joined Ross mid last year and we just completed a preliminary economic assessment on our flagship project called Nova Sewell, which is 9 million tons of copper and nearly 900 million ounces of silver. So that PEA, which I'm sure we'll talk about today, was the document on which we went public. We completed initial public offering on April the 30th on the Toronto Stock Exchange raising over 400 million Canadian dollars and we are just now, as we've announced, approved to be listed on the Warsaw Stock Exchange. So we will be listing on Warsaw in June and this is a major milestone for us to be listing in Warsaw given this is a Polish asset. It's in Poland. All of the drilling, all of the work we've done historically is only with Polish companies and Polish contractors and ultimately we want to be owned by Polish investors. And because you just went public here in the last
[02:18:21] James Connor: couple of months, maybe you can just speak to the demand. And where did the demand come from? Did it
[02:18:26] Speaker 9: come from Canada, the US or Europe? Yeah. So as I said, this is a unique deal. This is the second largest mining development IPO in global history. There's not a lot of mining development IPOs. As I said, and this has been a very successful one. We had over four times the amount of orders relative to our IPO size. Most of the demand, kind of half the demand for the order book came from the United States and the rest from Europe and Canada. Ultimately, when we chose our shareholders, because this was an IPO, we got to choose who we wanted to be along with us over this next five year journey. We focused on European investors, high quality, long-only European institutions that are very well known, given this is a European critical minerals asset and is strategic to the region. But then we also had a number of large US institutions and Canadian institutions as well. And we really focused on only the highest quality institutional investors. We only allocated about 10% of the IPO to retail investors. And so one of the things we're going to talk about today is our focus going forward on building our retail investor community and our retail investor marketing to get the story out there, given this is a a newly public company where we've entirely been focused on only the highest quality institutional investors.
[02:19:51] James Connor: And Jordan, when we think about copper, we think about Chile. And when it comes to silver, of course, we think about Mexico. But maybe you can just speak to Poland as a country and especially when it comes to the mining industry and also speak to the government and if they're friendly toward mining.
[02:20:09] Speaker 9: No, it's a great question. And one of the reasons why I left Glencore and I took this job was when I went and I did my own due diligence before I joined Ross and went in country and looked at what Poland has to offer geologically. I was completely amazed. And two things I'll tell you now that I think a lot of people, including the biggest institutions didn't know is Poland ranks sixth in the world of copper resource endowment. So they have more copper in the ground in Poland and any other NATO country. There's more copper in the ground in Poland and then the United States and silver. There is more silver in the ground in Poland than any other country on this planet, more than Mexico, more than Peru. And so the resource endowment of this of this country is absolutely incredible. The geological system in Poland is what's called the Kupfer Schieffer, which in German literally means copper in shale. And this Kupfer Schieffer system is a geological anomaly that exists nowhere else on this planet and is characterized by three specific things. So the first is the Kupfer Schieffer deposits, which are sedimentary deposits that they're big. These are some of the world's largest deposits. And as I said, there's more mineral inventory in the ground in Poland than a number of other countries. The second thing that makes the Kupfer Schieffer unique relative to just large copper deposits that exist all over the world is they're very high grade. So the grades in Poland are plus or minus two percent copper equivalent and the metal split and what makes the Kupfer Schieffer so unique is the split between copper and silver. There's more silver in inventory than any other country, as I mentioned. And the revenue ratio or the ratio of copper to silver in the Kupfer Schieffer has been typically about 70% copper, 30% silver. At today's prices, that ratio is almost 50/50 copper, silver. And that's what's so unique. You do not find large copper deposits alongside large silver deposits. And the third thing that makes the Kupfer Schieffer a geological anomaly is it's surrounded by world-class infrastructure: roads, rail, power, ports, smelters, 70 years of underground mining, 100,000 underground mining, 100,000 underground miners in the country. So when you think about big copper deposits and you compare to things in the Andes, in Africa, in the Middle East, where there is no water, there's no power and there's no infrastructure, Western Poland has everything. And they have a 65 year history, as I said, and they already produce today over 400,000 tons of copper and over 40 million ounces of silver.
[02:22:46] James Connor: So I want to ask you more about the infrastructure. But before we do that, why don't we just focus on this primary asset, which is called NOAA salt? Do I have that correct? Yes, which in Polish means new salt. And so you, I believe you mentioned this earlier, but maybe you can just clarify or summarize again, how many tons of copper is there and how many ounces of silver in the resource?
[02:23:09] Speaker 9: So in the resource today, we have 9 million tons of copper contained. That's metal. That's not ore. Sometimes I have to explain that's actual metal and almost 900 million ounces of silver. So the resource base is almost 700 million tons of ore at 2% copper equivalent.
[02:23:28] James Connor: And when the mine goes into operation, how many tons of copper will be produced annually and how many ounces of silver will be produced?
[02:23:41] Speaker 9: Yeah. So over the first 10 years average, our PEA, which we put out publicly, has about an average copper production of 290,000 tons of copper and 28 million ounces of silver. So on a copper equivalent basis at that historical 70% copper, 30% silver ratio, that's 390,000 tons of copper equivalent. But as I said, today's silver price, the ratio of copper to silver is closer to 50, 50. It's about 55, 45 or 60, 60, 40. That means the copper equivalent production using today's silver price is nearly 500,000 tons of copper equivalent. So when we speak about the cup of silver and when we talk about Nova Sewell, we have to be very cognizant of the silver price assumptions in our model. And we always have to be cognizant of the amount of silver that comes out of the ground in Poland. And what's the mine life or what will be the mine life? So our current mine life in our PEA is over 20 years. But to just give you a data point on the existing copper industry in Poland, in 1974, KGHM, which is the state controlled copper mining company, had 20 million tons of copper metal in reserve. Since 1974, they've mined over 20 million tons of copper in reserve. Since 1974, they've mined over 20 million tons of copper in reserve. And today they still have 20 million tons of copper in reserve. So these deposits in Western Poland are multi-decade, multi-generational. And so our initial mine life in our PEA of over 20 years is only going to be the starting point.
[02:25:26] James Connor: And I'm glad you brought that point up because when we talk, when we look at a gold mine, you're typically looking at 10 years, give or take. But when it comes to a copper mine, you can look at 25, 50, 75 years. They go on for quite a long time. One other point I want to bring up too. Once again, we should stress this is the primary metals going to be copper, but silver is a byproduct. So when you look at the all in sustaining cost, what will that be?
[02:25:53] Speaker 9: Yeah, so the all in sustaining cost based on the numbers we had in our PEA and our PEA had a base case silver price of $37.50. And 50 cents per ounce. The all in sustaining cost over the first 10 year average is about a dollar and 17 cents per pound of copper. However, if you take $90 silver or, you know, closer to spot, the byproduct all in sustaining costs are negative $1 and 12 cents per pound. The silver price assumption is single handedly one of the biggest value drivers of this project and something that always needs to be considered.
[02:26:34] James Connor: So great economics. And you mentioned the mining company KGHM. We should also note that's one of the world's largest copper producers and also one of the world's largest silver producers. I believe you just released a press release where you're going to have some sort of sharing agreement with KGHM.
[02:26:55] Speaker 9: So we released an announcement a couple of weeks ago that we have entered into a letter of intent for a cooperation agreement with KGHM group around a few things. The first is providing copper concentrate to their smelter, their smelter is 25 kilometers from our deposit. So over the next number of years, as we're advancing on our pre feasibility study and all of our permitting, we'll be working with them to refine the aspects of the concentrate that would go to their smelter as well as a broader technical support to figure out the best way to mine this deposit to send the input material that they need for their smelter, which is very important. The other thing, you know, we're broadly working with with the entire copper industry in Poland on is around copper tax reform. And ultimately, our focus is to reform and reduce the taxes in Poland, which is going to be important for our project to be developed. But it's also going to be very beneficial to KGHM as well. If we can reduce the fiscal tax rate in Poland, we'll have a major impact on their on their bottom line.
[02:28:02] James Connor: And just going back to this smelter that's owned by KGHM, how large is it? How many tons can it produce?
[02:28:10] Speaker 9: So the smelter right now can produce nearly 600,000 tons of metal. And historically, the smelter and the broader smelter network within KGHM, which includes another smelter, was entirely fed with Polish mine production. So the smelters were always fed entirely with mine production in Poland, and they never needed to acquire concentrate feed from around the world to be shipped into Poland to feed their smelters. But over the last number of years, as copper production has declined in Poland as a result of this copper tax that I'm sure we'll speak about as the production has declined and that production base has declined. The smelter network in Poland has now been feeding up to up to 30 percent of the feed from all over the world. And so that's much more challenging from an import perspective, from a transport, not least the silver in the copper concentrate in Poland is over 1000 grams per ton of silver. So the grade of silver within that copper concentrate is so high and is very beneficial to the Polish smelter network. And so, as I said, our focus is to build the Novosul mine under the right tax regime to be able to send that copper concentrate to the local smelter.
[02:29:25] James Connor: Jordan, you touched on the tax regime within Poland, and there are many advantages within operating in Poland. But one of the disadvantages is this tax regime. Maybe you can just speak to that.
[02:29:37] Speaker 9: Sure. Now, Polish copper tax was introduced back in 2012. Before 2012, a Polish copper tax did not exist. The government introduced it in 2012 as a means to take more cash out of the existing copper industry and into the state budget. And as I mentioned, the copper industry today consists of one state controlled company. And so really, this was cash that was being coming out of the state resources into the state budget. But today that copper tax with a total effective tax rate of 70% is uncompetitive relative to the rest of the world. And it's the single biggest factor for us to be able to advance and develop this mine. And we will be focused entirely over the next few years as we advance through pre-feasibility study in our permitting to be working with the government of Poland to get a tax regime that is competitive to any other large copper mining country, whether it's Chile or Canada or the US or Australia. You know, these are the world's largest mining countries and they all have a tax regime in and around the 30 to 40% total rate. So and there's a number of ways that we will drive the tax reform in Poland. The government recognizes that this is the single largest foreign direct investment in the company's history. And so all of the jobs, the GDP and ultimately all of the tax revenues that would be created from an investment of the size and scale of Novosul is recognized at the highest level in the country. And we've had many discussions with the government over the last number of years and they've always said to us as we advance and we're ready to start building this mine, we will have the fiscal framework in place that will incentivize its development.
[02:31:21] James Connor: And so why don't we talk about the timeline associated with production? When do you anticipate construction and then eventually production?
[02:31:29] Speaker 9: So we just started our pre-feasibility study right now, as we've announced a few days ago, led by Floor Corporation based in the United States. We will have that pre-feasibility study completed by the end of 2027. That will be the document on which we will be able to have a very detailed discussion with the government around the fiscal framework that is required to build this mine. Alongside that, we will also be doing all of our environmental impact assessment and all of our environmental permitting that will take us through 2028. And we expect to receive the mining concession before the end of this decade and then begin the full construction thereafter with first production of metal coming out of the ground kind of mid next decade.
[02:32:14] James Connor: So why don't we move on now and discuss your valuation? Lumina is trading at a discount to its comps. So maybe you can just speak to this valuation gap and what you and your team will do in the coming months to try to close that gap.
[02:32:28] Speaker 9: Yeah, for sure. And we are a new company and the deal, our IPO was very much targeted and focused towards the world's largest institutional investors, as I mentioned. And we did very little retail marketing and we did very little education with other investors outside of the largest institutions. As I mentioned, the IPO was over four times oversubscribed. So we didn't have to do much further marketing beyond that point. But being a new company and now being listed on the Toronto Stock Exchange and we will be listed on the Warsaw Stock Exchange, as I mentioned in June, we will be doing a much broader investor marketing base, including the retail networks in North America. And for us, you know, given that we are predominantly a copper company, the silver that we have in our inventory and the amount of silver that we will produce is just way too big to ignore. So in full production, Nova Sewell would be and ourselves as Lumina Metals would be the world's third largest silver mining company. And that's just a co-product to our copper. So one of the big things for us around value is to be able to showcase that we are not just a copper company. We are a silver company and a precious metals company as well. And the multiples and the valuations associated with the silver component are very important. Another thing for us as well to attract those silver investors is next year we'll be listing on the New York Stock Exchange and we'll be doing a lot of work around getting our company's name out in the US to US silver retail investors. And there'll be a big marketing push in that regard. We also have, as I mentioned, three projects within our portfolio. Nova Sewell is our flagship when we talked about the PEA of our flagship project. We also have a second project which sits about 150 kilometers from Nova Sewell and is a little bit smaller, but has the potential to grow materially through resource growth. Next year we'll most likely look to spin that asset out into a new public company and a resource growth company altogether. So there's going to be lots of catalysts over the next 12 months here to really drive a re-rating in the stock.
[02:34:45] James Connor: It's going to be very interesting to see where the silver price is trading when you are in production.
[02:34:50] Speaker 9: Yeah. And just to give you an example of the economics of our PEA under the $90 silver case, which we put out publicly, the NPV is nearly $10 billion on a $90 silver case. You know, our base case PEA was focused on $37 silver price, but the leverage to silver price in our deposit and the amount of silver we will produce is quite astounding. The other thing I would mention, though, is the silver component within our deposit obviously has value with respect to the movement of the silver price. But typically, sometimes copper investors might not pay a higher silver price for the silver that's inside of a copper deposit. But we know that the streaming companies who are focused on that silver product will always pay a much higher price than the market. And we saw Wheaton Precious Metals acquire a silver stream from BHP a few months ago at a much higher silver price than where we are today. And ultimately, if we were able to stream a component of our silver, we could fund a big chunk or most of the copper mining CapEx.
[02:36:04] James Connor: And so just because we're talking about CapEx now, why don't we move on and talk about your balance sheet? You just went public, as you have already mentioned. So how much cash do you have on hand and how will you allocate that cash in the coming year?
[02:36:17] Speaker 9: Yeah, great question. So today on hand after the IPO, we have about 235 million US dollars of cash on hand. One of the big selling features of this IPO to institutional investors was we told them this IPO is going to take us all the way to the mining concession later in this decade for Novasul. So we don't need to come back to the market to do more drilling and more studies. We have all the capital we need to get to the mining concession and ultimately constructing and building a mine thereafter will will require more capital. But for now, with over 235 million US dollars in the bank, we are very well funded. And not only just to advance Novasul, our flagship asset, when it comes to our pre-feasibility study and our permitting and all of the drilling associated with our pre-feasibility study. I mentioned we have a second asset called Sul Mirjitsa, which is about 150 kilometers from Novasul. And we will be allocating a portion of the proceeds on our balance sheet to drilling out that asset, growing that resource base to the scale of potentially Novasul the second. So we have more than enough capital to move us over the next the next four years, all the way to our mining concession. And we look forward to advancing.
[02:37:30] James Connor: Well, Jordan, this has been a great discussion, and I want to thank you very much for spending time with us today. And as we wrap up, you've already provided a lot of detail on what you and your team will be working on in the coming months. But maybe you can just summarize for our viewers on what they can expect in terms of news flow here in the coming months from aluminum metals.
[02:37:48] Speaker 9: Yes, no, thanks. Thanks, Jimmy. So as we've spoken about today, Poland has a world class geology and a world class potential. You know, it has a 65 year track record of mining nearly 400,000 tons of copper and over 40 million ounce a year of silver. And so we're operating in a country that has a long history and a deep history of copper and silver mining. And it sits within a geological system we talked about called the Cooper Schieffer, which is this geological anomaly. And for us over the next number of years, our focus is really around advancing our flagship Novosul project through all of the studies and the permitting, as well as the resource growth options within Novosul. And ultimately, we have a second project that we will be looking to spin out next year as part of a New York Stock Exchange listing and ultimately growing our mineral inventory of that company through the drill bit.
[02:38:43] James Connor: Great overview. Jordan, once again, thank you.
[02:38:46] Speaker 9: Thanks, Jimmy.
[02:38:55] James Connor: Sean, thank you very much for joining us today. So why don't we start our conversation with a brief overview of Next Metals Mining? Where are the assets and what metals are you mining?
[02:39:04] Speaker 10: Sure. Thanks for having me, Jimmy. Our assets, we have two assets in the great country of Botswana. I'm just a southern part of Africa. Botswana, these are past producing assets, both copper, nickel. And one of our assets also has palladium and platinum and other precious metals. Mine in the 1980s. And went through a smelter complex in Salibi Peakway, which is the town we operate out of. That smelter broke down in 2015. They tried to fix it. They weren't successful. So they closed the mines and put them up for sale. And we came in, our founding group came in 2021, roughly, and got a deal to acquire the resources without any environmental liability, without a broken smelter, for example. And we've been working on them since 2022 when we went public to expand the resources and look to accelerate them to production again.
[02:40:14] James Connor: So I have not had the pleasure of visiting Botswana. But I've always heard great things about the place. And Botswana has also been ranked as the top mining jurisdiction in Africa by the Fraser Institute. Why is it so highly ranked?
[02:40:29] Speaker 10: Yeah, it's a great question. So it is a small country and population wise. It's landlocked. But it has a great history of democracy and a long mining history as well. They mine diamonds. Two of the world's largest diamond mines are in Botswana. Juaning and Orapa. They are owned by a consortium between De Beers and the Botswana government. Botswana also has copper mines in the northwest and coal mines as well. So long mining history. Great people. Very friendly people. Very safe jurisdiction. And we really enjoy working there.
[02:41:12] James Connor: So why don't we move on now and discuss your primary asset, which is Salibi. And it was a past producer, as you mentioned. It was shut down in 2016. Next Metals acquired the asset in 2022. And you and your team have done a number of upgrades, including a new resource, which came out in 2024. And you have a clear path to production. And why don't we just start right here? What does that path to production look like?
[02:41:39] Speaker 10: Sure. For Salibi, we're expanding the resource. So what we'll have to do in a startup scenario is build a concentrator and build a tailing storage facility. So what we're trying to do right now is get on a path to engineering studies, which will start this year with a PEA near the end of the year. And that requires drilling. So what we've been doing for the last two and a half years is expanding the resource. And we've done that very effectively and we continue to do so. So that is the first stage on the path to reopening.
[02:42:15] James Connor: So let's talk about some of this drilling and some of the results that you've got. So there's two deposits. There's Salibi, Maine and also Salibi North. What sort of drilling is going on there right now? How many rigs do you have on the go and how many meters or how many holes do you have planned?
[02:42:33] Speaker 10: Right. So we started drilling on the surface in 2022, and then we quickly went underground at Salibi North. We bought three drills that can drill underground or drill on the surface, and we own and operate those drills. Salibi North has the advantage of we have really good access. They put in infrastructure in place underground where you can drill off and drill down deeper. We basically have a good angle which to drill the deposit. We don't have that at Salibi, Maine. We have to drill from surface. So we are drilling from surface now at Salibi, Maine, expanding the resource there. We have five drills in total that are all drilling at Salibi, Maine.
[02:43:21] James Connor: And Sean, I'm sorry. Why are you drilling on the surface at Salibi, Maine?
[02:43:27] Speaker 10: So the underground infrastructure is in place at Salibi, Maine, but the angle which you can drill the resource. It's basically the following the resource where Salibi North had an expiration drift put in, not by us, by the previous operators, where we had a better angle to drill down and explore for us. We don't have that at Salibi, Maine. So the alternative is to drill from surface. We can do that very effectively as well.
[02:43:52] James Connor: And I'm sorry, what's the distance between the two deposits?
[02:43:55] Speaker 10: Between the two headframes, the Salibi North and Salibi, Maine headframes, almost eight kilometers, seven and a half kilometers or so. Between the two resources, the wireframes is about a kilometer and a half still. That is virtually unexplored, but we think it is highly perspective still as well.
[02:44:16] James Connor: And is your intent to or hoping, are you hoping to connect these two deposits?
[02:44:22] Speaker 10: Well, what we see at the moment is Salibi, Maine just continues towards Salibi North. And it's just an extension of that deposit. Salibi North wraps around and is folded and it continues down dip. We have traced it down dip another 315 meters and it's still open. So both the deposits are open in a lot of directions.
[02:44:46] James Connor: And I don't want to get too technical here because I'm a capital markets guy. So I don't know much too much about geology, but the deposits at Salibi are ortho magmatic nickel copper sulfide deposits. What exactly does that mean? And as an investor, why should I care about that?
[02:45:07] Speaker 10: Yeah, it's like, it's a good question. So these are, yeah, they are exactly what have you said. They're ortho magmatic copper nickel deposits. They're just a, Boise's Bay is like that. Sudbury is like that. Norilsk is like that. They have various ages, various styles of deformation. So we're, we're the similar to that. They are higher grade. And when you get massive sulfides in these types of deposits, they're, they're really good grade. And we're no exception there. Um, the other advantage we have because they are massive sulfides is, is exploring for them. So, uh, we use geophysics. And if you just think of a massive sulfides is metal in the ground, we use electric electromagnetic, uh, geophysical survey that lights up the metal. Um, and we use that to explore and we use that to target for a drilling. And it's a huge advantage for us because the geophysics points to where the massive sulfides are. We, we still don't know the thickness and grade until you drill it. You have to drill it, but we know there's a lot more massive sulfides left on the deposit.
[02:46:18] James Connor: And Sean, when you say the grades are higher, can you put that into context for me? And how would it compare to, uh, poor free?
[02:46:25] Speaker ?: Yeah.
[02:46:26] Speaker 10: So, uh, we, you know, massive sulfides vary. Uh, you can get, uh, copper rich zones or five, six, 7%. Um, and you can get nickel rich zones that are, uh, two to 3%, uh, and sometimes higher in various deposits as well. So we, we average 3.5% copper equivalent through the deposit for Sulebe main and just over 3% combined. So a poor free will be, uh, right now the ones that are mining are in the 0.6 to 1% copper equivalent. So we're three times plus the grade, not the tonnage like a porphyry has. Um, but the grade is, is, is certainly spectacular that way.
[02:47:10] James Connor: Sean, let's discuss the MET results now. It's Sulebe mines. What are the copper and nickel recoveries? Sure.
[02:47:16] Speaker 10: That was a key for us. Uh, it was working on the metallurgy. Uh, so, uh, to go back to how we would restart these deposits. So you have, you have a couple of choices. You could build another smelter, um, or an alternative that is a hydromet plant. That's what was built for Boises Bay at Long Harbor in, uh, Newfoundland. So, but they're very capital intensive. Uh, you're in the billions of capital. Uh, and billions for capital there. So the alternative to that is to, to sell a saleable copper and saleable nickel concentrate, separate concentrates. Uh, to do that, that hadn't been done on the property yet. So we set out to do that at Sulebe. And we did it for Selkirk as well. We can talk about that later. Um, and we get a really good copper grades or 27%. Uh, and great recoveries are at 85, 87% recovery. So, and nickel, uh, really good grades, 10 and a half percent nickel nickels harder to concentrate. Um, and, uh, we were on the 56% and we're working to get that up hopefully up into the sixties. So, so those, those are, those are major milestones for the company.
[02:48:26] James Connor: And because you're going to be mining both copper and nickel, you're going to create two different concentrates.
[02:48:31] Speaker 10: Right. Yeah, you would. Uh, and so you'd sell the copper globally. Um, you'd send it to port more likely in South Africa at Durban. And then the nickel is saying you'd sell it globally. The nickel as well as having nickel in it has 0.6% cobalt. So it's, uh, you know, we have three, uh, elements there that we'll, we'll be selling.
[02:48:52] James Connor: And as I mentioned earlier, you, there was a resource completed in 2024, but you are working on a new one. And when do you anticipate that's going to be released?
[02:49:03] Speaker 10: Right. So we've done a lot of expansion work on Salimay north and we finished with that for now. And now we're focusing on Salimay main. We have a new area we're calling the flexure zone, uh, which we didn't have six months ago. That's the nature of exploration. You drill a hole, you, you do down hole geophysical work, you find something new. And that's what we've done with the flexure zone. Flexure just means a change of direction. Uh, so the, the, the resource mineralization has changed direction on us. And it's also giving us, uh, on the geophysical side of things, it's a, we call our geophysicist, Sharon Taylor calls it a superconductor. Um, so it's the most conductive target we've had on the property since we started. And it's bearing really good fruit. Uh, we're hitting thick sequences of high grade, massive sulfides or multiple sequences, mixed sulfides with, uh, great grades and, and really good thicknesses as well. So that's where we're concentrating now. Uh, and we'll be, uh, up until we get the, uh, mineral resource estimated update. And that will be in Q3 of this year. And then you're going to follow that up with the PEA. Correct. But, uh, six, six weeks or so later after the MRE comes out, the MRE update will produce the, uh, the PEA for the deposit. And that'll be Q3, uh, late Q3, early Q4 of this year.
[02:50:28] James Connor: And then after that, what are the next steps?
[02:50:31] Speaker 10: Well, we'd like to move right to pre-feasibility study. So that requires more drilling. Um, and then, uh, and more in further engineering, especially on the metallurgical side as well. So that's, that's, that's our goal there.
[02:50:44] James Connor: Thus far, we have been discussing Salibi, but you have another asset called Silkirk. How far away is that from Salibi?
[02:50:52] Speaker 10: Yeah, it's 70 to 80 kilometers away. Uh, it's right outside of the town. The second largest city in Botswana called Francistown. Uh, it's had three or four different owners throughout the last 30 years. Uh, Taddy Nickel, Norilsk, uh, and BCL. Uh, so it's had a lot of drilling. Uh, it's had a much higher density of drilling than Salibi is, for example. Um, and the plan for, for Selkirk was always to go to the smelter complex. That was, that's why BCL bought it. Uh, of course that smelter no longer exists. So we have to approach that similar to we did for Salibi is, can we produce a separate concentrate, uh, separate concentrates for Selkirk? And that's what we, uh, we proved that we could do, uh, roughly a month ago. We put out a press release that we could do that. And now we're working on the mineral resource estimate update for Selkirk as well. Um, a couple of key aspects that, uh, we produced one in 2024. It was 44 million tons of 0.81% copper equivalent. We want that to grow. Uh, and there's, uh, there's good reasons why we, we think it will grow. We have to do the work, but we think it will grow. The 2024 mineral resource estimate was based on drill holes, historic drill holes that most of them were missing palladium, platinum, and another precious metal, silver, gold, and then cobalt. So they're missing that data. And when we looked at the data and we looked at the resource, about a third of the value per ton comes from the PGEs themselves. Uh, so that data was missing. Um, so we went back re assayed, the old core, uh, 51 holes, I believe filled in that data. Uh, so that will go into the MRE update. Then we drilled another 12 holes across the deposit for resource purposes, for twinning purposes, and then collected a, a representative sample for, uh, for metallurgy for flow sheet development. And that's the results that we, we renounced, uh, about a month ago. Uh, on the, uh, metallurgy were based on those 12 holes. Well, they're very good results.
[02:53:13] James Connor: And you're also working on a resource or an updated resource here. When is that anticipated? Right.
[02:53:20] Speaker 10: We, uh, uh, in the coming weeks, we'll have that. We're working on it now. Um, the key from the, uh, the metallurgical work that we did, uh, we increased, and this was going into the MRE. Um, which is why, again, why we think it will grow as we increase the copper recovery from 70%, which is what we used in 2024 to 88% payable. And we increased the palladium recovery from 59%. And we have appreciable palladium in these deposits from 59% to, to, uh, 78%. So appreciable, uh, increases in recoveries. And then we added in a little bit of gold, silver, and cobalt as well. So all those things go into the updated mineral resource estimate.
[02:54:09] James Connor: And Sean, sell side analysts are giving very little value to Selkirk. Why is that?
[02:54:15] Speaker 10: Yeah, we, well, since we started in 2022, we haven't really done a lot of work on Selkirk until the last eight months, basically. So it's hard to attribute value to it. It's a smaller deposit and it's an open pitable, but it's a smaller deposit at 44 million tons. Again, we expect that to grow. Uh, and we had to prove up the metallurgy. Uh, that was key when, you know, we just released those results about a month ago. So I think analysts, once we update the MRE, we'll have another look at it and attribute more value to it.
[02:54:48] James Connor: Let's move on now and discuss your balance sheet. How much cash do you have on hand and how will you allocate that cash in the coming year?
[02:54:56] Speaker ?: Sure.
[02:54:57] Speaker 10: We have roughly 20, 26 million Canadian, uh, in our treasury. Um, all the things I've talked about the drilling that continues on the five drills that are turning at Slibe. Uh, we keep our shafts dewatered, uh, and good care and maintenance that way. Um, we have the MRE coming up for Selkirk. Uh, we have the MRE coming up for Slibe and then the PEA, all that treasury, it goes towards all those, uh, things I've mentioned.
[02:55:24] James Connor: I want to ask you about valuation. Now next metals has been significantly de-risk, but it's trading at a deep discount. ATB core mark has a $12 and 50 cent target price, but the stock is significantly below that trading in the $3 range. Why the disconnect here? What is the market missing?
[02:55:44] Speaker 10: Yeah, that's the question I get the most. Uh, so yeah, we have core mark, uh, and SCP, uh, over $12 for us. Uh, and then we have, uh, Raymond James, uh, just started covering us this year. Uh, they were on site in February. So it was SCP. They went underground and they came out at eight 50, uh, to start with us. So we're at, uh, uh, just under $4. Uh, so we have, yeah, we see the undervalue nature of it. Um, and, uh, we're working diligently on proving, uh, the analysts, right. Uh, we keep on de-risking the asset. As you said, we have a really strong balance sheet now. Uh, and we have 100% ownership of the, of the assets. Uh, we paid that payment, the second payment last December, which gave us that. Uh, and we're getting the story up to more people. Uh, and that's, that's critical, uh, getting into Europe who understand investing in Africa a little bit better than, than our North American counterparts. And then getting it into the U S the U S as well as key for us. Uh, there's a lot of people that still don't know about what we're doing in Botswam.
[02:56:57] James Connor: I'm sorry. When you say getting into the U S you mean marketing or getting listed on an exchange in the U S.
[02:57:03] Speaker 10: Well, we're on the NASDAQ. We started on the NASDAQ July last year. Uh, so we, yeah, it's getting the story out. Uh, it's getting marketing into the U S. Uh, and, uh, you know, we've been doing that last few months as well.
[02:57:16] James Connor: And in terms of any marketing that's coming up here in the back half of the year, are you going to any conferences that our viewers might be able to meet you at?
[02:57:26] Speaker 10: Yeah. So I'll be on, I'll be in, uh, Washington the next couple of weeks. There's two, two, uh, conferences there for critical minerals. One's Africa, U S critical minerals, uh, uh, forum. And then, uh, GIGA as benchmarks a week after. And then Nisha, our, uh, our investor relations, uh, VP is keeping me busy for the rest of the year at various conferences as well. So we have a lot going on, yeah.
[02:57:51] James Connor: Well, this has been a great overview, Sean, and I want to thank you very much for spending time with us today. And as we wrap up, we've already discussed a lot of what you and your team are going to be doing here in the coming months, but maybe you can just summarize for our viewers what they can expect in terms of new slow here in the back half of the year from next metals.
[02:58:09] Speaker 10: We're constantly drilling. Uh, so we have, as I said, five drills turning. So you will get visual results we've released and that was this morning, the showing the, the continuity of the deposit. And we step out 200 meters or so, and we still hit the same minimization, uh, which is very exciting for us. That adds tons quickly. And that's what we're working to do. So we have drill results going, as I mentioned, we have the Selkirk MRE update in the coming weeks as well. Uh, and then through the summer, more drill results, assays will coming out. Then, then the MRE for Cilibe in Q3 and then the PEA, uh, for, for Cilibe, uh, late Q3, early Q4. So lots of new slow coming up.
[02:58:53] James Connor: Well, it sounds like you and your team are going to be very busy. And once again, Sean, thank you. Thank you, Jimmy. Thanks for having me. Vincent. Thank you very much for joining us today. Picoy copper is a relatively new company and it's focused on copper in Southern Peru. And just for the benefit of those who might not be familiar with the company. Why don't we just start with a very brief overview?
[02:59:20] Speaker ?: Yes.
[02:59:21] Speaker 11: Well, thank you very much for having us today. Um, yeah, as you mentioned, picoy is a very new company, uh, in the copper space. The asset per se is not, but you know, it was held in private hands for over 15 years. Um, but what's great for picoy today is that we were able to consolidate the various claims that were held by different owners over the years. And then with that now, uh, being completed, we're going to be a very active, uh, company this year, we're planning for 40,000 meters of drilling on the deposit. Um, but really the main thing here is that when you look at picoy, we're all already very relevant because we're, we've got a inferred resource of around 860,000, 60 million tons of a 0.34 copper or 0.43, uh, copper equivalent. Um, and we're low elevation in Southern Peru and great mining culture. Uh, we're in an area where there's actually an existing mining culture and on top of it. And most importantly is we see a tremendous amount of exploration upside. Uh, so the next couple of years here, uh, we're going to see a lot of, you know, resource growth, uh, and most certainly, uh, some discovery at picoy and at our second asset called Torumi.
[03:00:35] James Connor: And picoy is also located in a very rich copper province. Uh, maybe you can just speak to that and what other producing mines are close by or within that province. Yes.
[03:00:46] Speaker 11: And, you know, obviously in the copper sector and the base metal sector, or I would say the, in general bulk commodity sectors, um, logistics are very, very important. And obviously being in a province where you have, you know, tremendous amounts of high quality, uh, operations, uh, notably Cerro Verde, which is, you know, top three, top four, uh, copper operation in the world. Um, you do already have an benefit from, you know, existing ports, existing highways, um, existing expertise, and also even from a labor point of view and from a supplier point of view, whether it's for trucks, whether it's for, you know, any type of equipment required to build. Uh, a, a project and a significant project, you know, the region of Arequipa in which we're in has all of that. So that's going to be a tremendous, um, you know, benefit to the project as we advance it to, uh, you know, a construction in this, in, in, in production, uh, stage and, you know, Arequipa, as I mentioned, it's, it's, it's, it's, it's, it's here. And it's as big as it is now because of the existing mine. So I mentioned Cerro Verde, but you have Tia Maria right now, that's getting built by Southern copper. You have, uh, Qualaveco that's, uh, an Anglo American mine. So, you know, and then I could go on and on and on, but obviously a very significant, uh, region for the copper space.
[03:02:12] James Connor: So you have a lot of good company.
[03:02:14] Speaker 11: Absolutely.
[03:02:15] James Connor: So one of the components that will determine if a deposit can become a mine is scale or the ability to grow significantly. And the second component is gray. Can you just speak to these two elements as they pertain to Picoy?
[03:02:30] Speaker ?: Yes, for sure.
[03:02:30] Speaker 11: So as I mentioned, we're at 865 million tons at the moment in terms of size, but what's important to understand is, as I mentioned before, these are the, this deposit was actually separated in two different companies in the past. So it was never explored as one deposit. You had two operators with two different visions. Um, and it goes to what you just mentioned in terms of grade one operator to the south, really just wanted to skim the surface. See what was high grade and perhaps, you know, down the road, put a small operation and really just go after the heap leachable, uh, material. Whereas the group to the north, they were looking at a much bigger target, pore free target. Um, and what's important here is that now that we've put everything together from a geological model point of view, when we first started drilling back in December is we already knew that there was a lot of gaps in that model. Now what we've been doing is we're going in and filling those gaps. And importantly is within the picoy deposit, you have some high grade breccias that are carrying, you know, north of 0.4, 0.5% copper. But importantly, and if I point to the south breccia in particular, that one has a very high grade or, you know, higher grade component on the gold front, which is between 0.15 and 0.25, uh, grams per ton gold. So those are going to be very important components components for us to test. Uh, we really strongly believe that as we go through our drilling program this year, we're going to be able to upgrade those grades. And also most importantly is prove out higher grade areas within the resource, um, that will become, you know, perhaps starter pit areas or higher or body areas within the overall, uh, you know, footprint of picoy.
[03:04:22] James Connor: And so just because you touched on the drilling program or this year's program, why don't we talk about that right now? How many rigs, how many meters do you have planned and where will the targets be?
[03:04:32] Speaker ?: Yeah.
[03:04:32] Speaker 11: So as we speak, uh, we currently have three drill rigs on the picoy deposit. The plan is to go up to five in total within picoy, which means four at the picoy deposit. And then one at the Torume asset, which is located eight kilometers north of picoy. The plan is to drill 40,000 meters in total, which means 35,000 meters at picoy and 5,000 meters of drilling at, uh, Torume. And, you know, really the, the, the, the plan for picoy, the question we want to answer is how big is picoy? What's the extent of picoy? What's the extent of picoy? Because that's one of the things that historically the old operators, they were always working on, you know, relatively small budgets. Um, and you know, they never really tested this thing. Historically, only 48,000 meters of drilling were, were done combined between the two operators. We're doing 35 this year. We're doing 35 this year. So we're going to see new stuff. We're going to find out new, new areas. Um, so that's really what we want to prove for 2026 is how big is picoy. And then at Torume, that 5,000 meters, which historically they only drilled 4,000 meters. That's to, you know, we strongly believe we're going to be able to confirm a discovery type area. Uh, so that's the idea here there, we're going to be putting one drill there for the remainder of the year. Uh, and to really go and attack what we believe is, you know, a potential discovery at Torume.
[03:06:00] James Connor: And so you're drilling right now, picoy. Uh, when does the drilling season end?
[03:06:04] Speaker 11: Well, that's one of the great things about being where we're at. Uh, we don't really have a drilling season and, and, and a winter season or, or, or rainy season. We have a slight, you know, rain, you know, rain or wetter season, if you want to say between, um, February and March. So we've just gone through that. And that's why we started our drilling program back in December with one rig. We brought a second one in January. Uh, and we maintain two drills, um, at, uh, during that wet season. Uh, now that we're out of that wet season, we've now added our third and we're going to be going up to, to five rigs in total. Uh, but really that's one of the main things and positives for picoy is that we're going to be, we're going to have a sustained, you know, momentum on releasing results. And, uh, that's obviously to, to the benefit benefit investors. Um, because we're not, we're not stopping basically.
[03:06:59] James Connor: Yeah, that's a very good point. And once again, I want to highlight the fact you mentioned this a couple of times, but it's low elevation, 1,645 meters, which is like 5,400 feet. And so the cost to drill is also going to be a lot cheaper. Maybe you can touch on that also. Yeah.
[03:07:17] Speaker 11: Well, right now, you know, our, our budget and we're right on budget. As we speak, we're around $400 a meter us all in. Um, so, you know, and that's a function of, you know, not necessarily being, you know, better than anybody else, but really maximizing the fact that we're able to, to, to, to maximizing the cost efficiencies. Meaning we have only one, one camp, you know, from our camp to our drill rigs is basically a 15 minute drive. 15 minute drive. So, you know, we don't need multiple camps because we're at high elevation. Uh, we don't need multiple rotations. So from that point of view, it helps a lot. We have trucks going back and forth from the camp to our keep every year, every day. So if we need some type of, you know, equipment, or if we need some tool that we don't have at camp, typically the next day it's there. So that obviously helps us keep the costs low. Um, so, you know, that's, that's, that's going to be a big benefit again, to the investors and to us, because we're able to do a lot more, you know, because our cost per meter is low. And that also impacts, you know, with regards to assay turnaround, we've got three, we've got access to three different labs in Arequipa. So we typically get two to three weeks turnaround on those assays. So that's what, you know, it's a benefit of being in a, a mining area and that has that mining culture and that mining knowledge.
[03:08:38] James Connor: And just to put this into perspective, because, uh, uh, there's a lot of projects or a lot of mines in the Andes that are operating at like 10, 12,000 feet. So what would be the cost to drill at that elevation versus where you are?
[03:08:55] Speaker 11: Well, if I could talk to maybe Philo that's been sold, if you go in there, you know, their financials, I believe they were mining, uh, exploring for between a thousand and $1,500 a meter. So that's, you know, it's a, it's a significant difference. And again, and you know, as I said before, it's not that we're necessarily smart and everyone is just, it's a benefit of where the project is located. Uh, and we also have competent rock. So, um, you know, our drill bits are not necessarily, uh, we don't, our, our, our, the rock is fairly easy to drill. So, which means we're able to keep, uh, you know, uh, as long as we, we, we, we run the equipment properly, we don't have, uh, you know, early usage of, uh, certain parts and components.
[03:09:39] James Connor: So there's been some network done. Why don't we discuss that? How were the recoveries for both copper and gold?
[03:09:46] Speaker 11: Yeah. So that's something that we just came out with, uh, this week, uh, with regards to metallurgy. So there was some historical metallurgy, what that was done, uh, as part of that internal PA back in 2016 and 2017. Um, one of the things is, as we all know today, the copper market has changed a lot. And back 10, 15 years ago, it was very important to show a very high quality copper concentrate, um, you know, as with, as less deleterious, uh, elements as possible and really, you know, capture that high grade concentrate. And, you know, there was a big demand for that in today's context, when you talk to traders, that high grade component is a lot less important than actual feed. What we mean by that is back in 2016, they were looking at a concentrate grade of around 27% with a recovery around 88% on the copper. With the recent analysis that we, we came out with, uh, this week by lowering the concentrate grade to, you know, in a range between say 22 and 24%, which would actually mean we have, we end up with more concentrate. One of the main things in one of the main benefits from doing that was that we're able to potentially move our gold constant or gold recoveries from 40% up to 73%. So yes, we end up with more product, but the precious metal contact, uh, content of that product goes up by 33%. And in today's gold environment, being able to get more ounces from the ground is going to be a tremendous, um, you know, advantage, uh, because at $4,500 gold, if you're looking at a 1600, uh, 160,000 ton per day operation, uh, you know, that's significant credits in terms of on the by-product front. So that was something that was very important for us to come out with because it's there. It was just the way you optimize the process, depending on where you are in the world and where's the commodity prices. Um, obviously it makes a big difference.
[03:11:59] James Connor: Okay, Vincent, I want to move on to your second project and that's called Torirume. And it's not a deposit yet because there has not been a resource done on it, but there, you did allude to this. There has been a little bit of drilling. Tell me what you're going to do there in the coming months.
[03:12:14] Speaker 11: Yeah. I mean, the way, the way we like Torirume is, is the blue sky asset. So it's the asset that takes Picoi from a one deposit company to a district scale type company. Um, as you mentioned, it's only eight kilometers north of Picoi. What's really intriguing here is when you look at the geophysics, when you look at the geo chem, the footprint of Torirume is three times the size of Picoi, but it only has nine holes that were ever drilled on it. So, but in all nine holes, none of them were dusters. They all hit mineralization. So we know there's a system, you know, between the first fence that they did in 2019 and the second one they did in 2023 between like the, the furthest holes are around two and a half kilometers away from each other. So there's a tremendous amount of potential. There's very good values of, of, of copper on surface. We've been able to map breccias on surface, very similar to what we see at Picoi, but they've never been drilled. So really at Torirume, what we like is it's a very similar system. It's a different system than Picoi, but it has all the same attributes. So if we start hitting an error, what's not to say that maybe we end up with 2 billion tons at, at Picoi and maybe we end up with another 2 billion tons at, at Torirume. Obviously there's a lot of work to be done in between. Uh, but really we, it's, it's a, it's a very compelling target. It's already been drilled. There's been a semi discovery. I mean, one of the holes that we drilled there to a room is seven. Um, that's 500 meters top to bottom, fully mineralized 0.31 copper and 0.01 molly. So there is a system. There is a discovery. Now we need, he need to go and find the actual center of that discovery and really confirm, you know, the, the, the, that there's something.
[03:14:04] James Connor: And just to clarify, you're going to do 35,000 meters at Picoi, 5,000 meters at Torirume. Correct.
[03:14:14] Speaker 11: With four drills on one and one drill on Torirume.
[03:14:17] James Connor: And so this could be a potential satellite deposit. Yeah.
[03:14:22] Speaker 11: Well, when you look at it, so Torirume sits just a bit higher than, uh, than Picoi at 2,700 meters. And there's a big ridge in the middle. So typically what you would see is like you see in some of the other operations where you would build a plant near Picoi. And then either you would do a conveyor belt that goes over that ridge. And from a gravity point of view, you bring down your, or to your plant site or, you know, miners being miners. You, uh, you put a tunnel across that, uh, that ridge.
[03:14:52] James Connor: So why don't we move on now and discuss your balance sheet, because you're going to be very active this year. And in cash is the lifeblood to explore codes and also developers. And so how much cash do you have on hand and how will you allocate that cash in the coming year?
[03:15:05] Speaker 11: Yeah, no, so we had a very successful RTO raise. So we raised $63 million last year, uh, when we were putting the company together. Once the transaction was fully completed, uh, you know, these were existing companies that had some liabilities and some payments that were due. Um, so once we started our operation back in September, when we first started trading, we started with around $49 million in the bank Canadian. Uh, we have now been drilling since December. So we're around $38 million or so as we speak. Um, and I would say we're planning to end the year around 15 to $20 million in the bank. Um, so very well capitalized for now. I would say, you know, as we speak, we're fully funded to at least mid, uh, 20, 20. Seven. Uh, but you know, the share prices reacted very well. So we first, we did our first, uh, raise at 60 cents as we speak here, we're on a dollar 80. So we've been able to attract very long-term shareholders. We've been able to, you know, through the initial raise, but since then we've also been able to bring in new shareholders to the registry. Uh, we have a very healthy, uh, you know, I'd say, uh, balance sheet in the sense that everything's going into the ground. Um, I've talked about some of the costs, you know, just from a drilling point of view, we're looking at around $400 a meter times 40,000. That's 16 us. Um, and you know, we, we have small operate small offices in, in Peru, but really what we're really focused on is, is putting the money into the ground and really, uh, spending that on top of it. We're going to be doing some metallurgy work, uh, phase two metallurgy work. We've started the geo tech work. Um, so that next year we're able to, you know, once we've updated our resource, we're able to go right into a PEA or PFS stage, uh, economic analysis. So great overview.
[03:16:59] James Connor: Now, I just want to summarize a few of the points you made. And, uh, so here we are, we have two assets in Southern Peru. We have the potential to grow both to much larger, or maybe even the potential to connect two of these deposits. Uh, it's at low elevation, 1600 meters, 5,400 feet. It's close to the coast there. Therefore you have access to water, good infrastructure, strong mining culture. Did I miss anything?
[03:17:29] Speaker 11: No. Well, it's in copper. So I think copper is obviously this is copper conference. So I think, you know, that's one thing that when we sold our last business, we said it was gold business was the way we want to be in 10 years. And copper for us was something that was in, uh, something that was very evident to us. We didn't plan on the, we're, we didn't plan on the AI taking so much of, uh, you know, of, uh, of, uh, an importance for copper. Uh, but we'll take that. Um, you know what, but, uh, yeah, no, it's like, we're, we're really excited with this. And as you mentioned, it's when these operators, you know, potential buyers, potential partners look at an asset like Picoi. It's the builded buildability factor. You know, not mining is a tough business, or if you're able to have things that are a bit easier to do, it's incredibly important. So I think that's what we really like about the Picoi deposit is that buildability factor. Cause in the end, when those companies go to their boards and they have to choose between maybe a very sexy operation on, you know, when you look at the resource and so on. But if you go down to the metallurgy and it's complicated and, or if it's super high elevation, or if it's a big underground thing that you might not get your capital for 10 years. Uh, in the end, I think Picoi is, that's what it gives you. It's a very buildable project and something that's very relevant in today's market.
[03:18:52] James Connor: And Vincent, because you are a relatively new company, it's very important to get out there and tell your story. And that's why we're doing this interview, but what else do you have planned in the coming months as we head into the back half of the year? Are you going to any conferences?
[03:19:06] Speaker 11: Yeah, we're going to be very active on, uh, on, on the, on the road. Uh, you know, we've, we now have four analysts that cover us on research. So we have Scotia, Canaccord, uh, Desjardins and National Bank. So, um, and we're going to keep on, you know, helping, uh, helping the other research analysts, uh, get up to speed on the, on the story. But, uh, I would say hit going on the institutional front, uh, doing a lot of retail, doing a lot of different conferences, those are going to be very important. Um, you know, uh, outreach programs, uh, and same thing from, uh, you know, online point of view is something that we were, we're putting more and more effort into, especially that now from an operational point of view, we've reached kind of a stable state. Um, so now we're able to really focus on getting the story out, making sure that people know that we are a true option in terms of getting your, your, your copper exposure. But, you know, in terms of milestones, we also, we didn't talk about it, but we just finished a geophysical, um, analysis of Picoi an empty survey. That's going to give us more data to actually look at the stuff below what's already there. Because one of the main things with Picoi is we have yet to find the high grade source of that mineralization. So if we end up finding, you know, or getting very big targets on the metallurgy on the, on the empty survey side of things, we could be looking at doing some 2000 meter holes down the road to see if we could have that, that high grade, uh, you know, source, uh, figured out. Well, this has been a great overview.
[03:20:40] James Connor: This has been a great overview. It's a new name for me. So I want to thank you for spending time with me today and sharing this story. And as we wrap up, Vincent, what can investors expect in terms of news flow in the coming months from Picoi Copper? Yeah.
[03:20:53] Speaker 11: Well, as we mentioned, the good thing is, is we have no drilling and, you know, off, off season. Um, so now that we're going to be up to five drills, uh, in the coming weeks, I would say that investors should expect, uh, results every four to four to six weeks, uh, in batches. Um, so that's going to give us a constant, uh, you know, news flow. Uh, I, I just mentioned geophysical results will be coming out. Uh, phase two metallurgy is going to be more on the back end of, of, uh, of the year. Uh, but I would say in general, you know, hopefully some, some, some very good releases, uh, to come. And, you know, we're looking at also a few different, uh, corporate, um, you know, strategy here where we could maybe add some, uh, some other claims in the area, uh, to really keep on growing our presence, um, in, uh, in Southern Peru.
[03:21:48] James Connor: Vincent, once again, thank you. And I look forward to the updates.
[03:21:51] Speaker 11: Thank you very much.
[03:21:53] James Connor: Ross, thank you very much for joining us today. You've been involved in the formation of many different companies throughout your career. Pan American is focused on silver. Equinox gold, of course, is focused on gold, but your latest venture is Lumina metals and it's focused on copper with silver as a byproduct. Why did you decide to focus on copper this time?
[03:22:13] Speaker 12: Well, uh, you know, I, I've done uranium. I've done nickel. I, I spent 10 years building a renewable energy company. I'm just sort of one of these, you know, pathologically busy, you know, deal junkie entrepreneurs that can't, you know, can't sort of stay in with one company for very long. Um, just a serial entrepreneur. So I've had lots of companies, but, but the latest one, Lumina metals, isn't so late. It's, it's sort of, it's sort of an old, it's sort of a new old story. We started Lumina metals in 2011. We went to Poland, uh, recognizing the potential for very large copper silver deposits. Uh, we discovered three and it was all private. It was all privately funded. Um, and finally last year, we decided to take it public, taking advantage of the rocketing silver and copper prices, the new world of critical minerals being important and Poland being important. And for all those reasons, we thought it would be a really good time to surface the company, take it public, which we just did in April this year, or early May, I should say. And, uh, and, and raise a bunch of money to allow us to carry the company to the next level and, and, and get to a production decision with these big deposits we have. So, you know, you could say it's the latest, uh, being like a month old now as a public company, but it's really a 15 year old company. And we, we built Lumina metals, um, or we decided to go after copper. Even in 2011, it was a metal that looked like it had a really, really good future. So that's why we did it.
[03:23:45] James Connor: This is one of the things about mining. You have to be very patient.
[03:23:49] Speaker 12: You do for better or for worse. Yeah. These, uh, these deposits take a long time to develop. They take a long time to discover. Then of course you have to do all your technical studies to figure out if they're economic and then you have to finance and then you have to build and get your social license. Make sure you do all your environmental work properly. It takes typically, you know, it used to take sort of five to 10 years to, to go from discovery to production. Now it's, it's taking 15, 20, 25 years. And that really does change the paradigm for, for sort of supply development.
[03:24:22] James Connor: Copper is trading at an air all time high. So why don't we talk about some of the reasons why? And Robert Friedland quite often says that we've mined 700 million tons of copper since the beginning of time. And we're going to need a similar amount over the next 18 to 22 years, but maybe you can just speak to that and why there is this increase in demand for so much more copper. Sure.
[03:24:46] Speaker 12: I mean, if you look at the whole periodic table and look at what is critical and what isn't so critical, there is nothing more critical than copper. It's called, you know, Dr. Copper because it's so linked to the economy of the world. It's used in just thousands and thousands of different things. But today, the most important use of copper is for electricity conduction. So, so, so in the world where we're now seeing of electrification, creating data centers, which consume huge amounts of power for the AI industry, electric cars, renewable energy, it all uses more and more and more copper, both in the generation of electricity, the transmission of electricity. And at the other end, the use of electricity, so in motors and so on. So copper is just basic. It's basically everything we do, including things like plumbing and wiring and so many other things. So it's a fundamental metal that we need in everyday society. It's demand growth has been fantastic over the last 10 and 20 years. The outlook for copper is excellent. And, and so on the demand side is just the most, I would say large scale metal that has the best legs of all of them.
[03:26:07] James Connor: I read recently that the AI demand or for data centers in the US, the demand for electricity is 4%. And there are experts that are anticipating that number is going to grow to 9% by 2030. So that's, we're going to require a lot more copper. The other side of the equation is the supply side in Chile, which is the world's largest producer of copper producing 24 to 25% of global production. The level of production has been decreasing since 2018. A lot of that has to do with grades. So maybe you can just speak to the supply side of the equation and what's happening there. Sure.
[03:26:48] Speaker 12: I mean, there's lots of supply of copper in the world. There's, there's copper deposits all over the place, but you know, getting them from a deposit of the ground to production takes a long, long time, 10, 15, 20 years. Generally speaking, the low cost, easy to find, easy to mind copper deposits at surface are gone. So we have to go deeper. And the high grade copper tends to be at surface. So as you go deeper, you get lower and lower grade. You need to mine more tons for the same grade. It's cost or higher. You need to make more of an impact in terms of the surface area that you're using. So it's just a much more expensive business as you go deeper and more and more difficult to sustain that sort of supply side. So where the future is going, there are lots of copper deposits out there that are, they're going to come into production over the next 10 and 20 years. But we need all of those deposits because of course, copper, like all metals, ultimately it's a non-renewable resource. So you have depletion from existing deposits. And the only way you can replace mined copper that you've mined is discovery, new copper, or developing new copper deposits that are already discovered. Just simply to stay level with production growth, with production, I should say. So, you know, it's a business, you need new deposits all the time. And most deposits are more expensive, needing higher prices to make them economic. And that's where the balance is between demand and supply. If you have this great demand, yes, you're going to have demand for that new supply, but it's going to be more expensive supply. So you need a higher price to make it economic.
[03:28:26] James Connor: Yeah, you raise a very good point there about the capex and the cost associated with finding more copper. And Barrick's record decad a capex of 5.5 billion just for the first phase. I believe that project is on hold now, but even tech resources, Highland Valley, their mine extension had a capex of over $2 billion. So you think the market is underestimating how challenging it is to bring these copper mines online?
[03:28:56] Speaker 12: Not really. I think the market is fairly savvy, but that's why you have record high copper prices right now. You know, people are saying if we're going to source copper we need, we have to pay up for it. And at a certain price, you're going to see new supply come in, which will moderate that price growth. So, of course, price is the intersection of demand and supply. If you have tremendously increased demand, you're going to kill that demand if you have too high a price. But that's where a new supply comes in because it's incentivized by a high price. And if you have too low a price, you're not going to have that new supply. So that's that balance. Is it $6 a pound? Is it $5 a pound? Is it $10 a pound? I don't know. Inflation has a lot to do with it. We're in a world right now where we do have significant inflationary forces happening versus just a couple of years ago. So, you know, the outlook for copper prices should be robust. I don't think they're going to double. They're not going to go down much either, I don't think. It's going to some degree depend on the inflation outlook. And as I said, I'm relatively of a view that we are going to enter into a higher inflation period. So we will see higher copper prices simply just to stay even.
[03:30:11] James Connor: So let's do a deeper dive on aluminum metals. As you mentioned, you first acquired this asset in 2011. You've been doing a lot of work since that time. How large is the copper resource and also the silver?
[03:30:24] Speaker 12: You know, we went to Poland because Poland has a well-known copper zone called the Kupfer Schiefer, Copper Shale. It's a shale bed about, you know, two meters thick. It underlies a lot of Western Poland and Eastern Germany. It's well-known. I learned about it in my, you know, when I was going to geology school at UBC back in the 70s. And so it's well-known. It supports the establishment and development of Europe's largest copper complex. It's called Copper Company. It's called KGHM. And it's been mining copper on the Kupfer Schiefer for 70 years. It is now one of the world's largest copper producers. But also because there's a lot of silver as a byproduct with the copper. Just geologically, the same brines that formed the copper deposit also had a lot of silver in them in that area. It's also a significant silver producer on a global scale. KGHM is the world's second largest silver producer, has been for the last 50 years, and it probably will be for the next, for the foreseeable future. So it's a remarkable deposit. It goes beyond the boundaries of KGHM's licenses. But KGHM was a state-controlled company, and they just never thought to explore deeper down, deeper below their current levels. They just weren't focused on exploration. So when we came in in 2011, we realized that the country had lots of potential for copper. It was expensive work. We spent about $150 million discovering the three deposits that we have right now. And we've outlined what is actually probably the world's largest undeveloped silver and copper deposit called Novosol, as well as two other deposits which have been less explored. So it's got world-class deposits. It will continue to make Poland, Europe's largest copper and silver producer. And, you know, as I said, it's really on a world-class scale. These are giant deposits.
[03:32:26] James Connor: I want to move the conversation away from mining now and discuss your career. And success is just not about the wins. It's also about the setbacks. Tell me about some of your biggest losses and what did you learn from them?
[03:32:38] Speaker 12: You know, a good entrepreneur early has one lens, and that's on looking forward. And remembering only the good stuff. Like, my wife's the opposite. She's a doctor. So she looks at the negative all the time because that's what kills people. And it's just a different way of looking at the world. But I really am a glass-half-full kind of guy. I have made all kinds of mistakes, all kinds of mistakes. I mean, my biggest one when I started out was working on little tiny projects, little tiny deposits. I spent three years of my life working on our $50,000 total resource gold deposit in California. It was a complete waste of time. I went to Russia. I spent almost four years of my life working on a giant silver deposit. They only have stolen from me when we had a quarter of the way through construction. So, you know, I wouldn't probably do that again. So, but I mean, maybe I would. I don't know. You know, no risk, no reward. That's kind of how the world works. You take risks and sometimes they work, sometimes they don't. But you've got to kind of, you know, scrutinize what those risks are before you get into them. I've made lots of mistakes, but, you know, you just pick yourself up, dust yourself off and move on and try to, you know, keep going. The nice thing with this business is it's, it favors those who, it's a business that requires a lot of luck. And that means discovery luck, withdrawals, and market luck with where metal prices are going. Because if you're in a bear market, it's very hard to raise money, no matter what you have. And by the same token, you can have the smartest geological team in the world. And if they don't have the luck, they actually don't find mines. I mean, you can have genius geologists that don't find mines. You can have idiots who discover mines and make lots of people money. So that's, that's just the nature of this, of this business we're in. But it's been a good run for me. I'm close to the end of the journey and, and aluminum metals is going to be my last company. So I hope we, we go out with a bang.
[03:34:38] James Connor: So, okay. So let me ask you about that. You mentioned this is your 10th company.
[03:34:43] Speaker ?: Oh God, no.
[03:34:44] Speaker 12: It's probably my, I think it's my 16th company, but it's the 10th in that little. So I've had this copper group, which we call the Lumina group. It wasn't just copper. We had a nickel mine. We had a silver mine. I'm sorry. We had a gold deposit, but largely they were mainly copper deposits. That's beyond the silver group, Pan American silver, my gold group, Equinox gold, my renewable energy group, Altera power. You know, I've had all these different companies, but, but aluminum metals is the 10th in that copper line.
[03:35:14] James Connor: So you've had a lot of very successful companies and you said this is going to be your, your last one and then you're going to hang it up. But why are you still working now? Why didn't you hang it up 10 years ago?
[03:35:24] Speaker 12: Yeah, that's a good question. I just, I, well, you know, I kind of did. I mean, I, I'm when you're chair and kind of founder chair of these companies, you actually don't do all that much work, to be honest, Jimmy, you, you, you know, you can be the sort of the gray eminence behind the scenes. Uh, but the guys who do the hard work are the CEO and the, and the, the management team. And each one of these companies has fantastic management needs. Aluminum metals has a guy named Jordan Padoff, who's just an awesome, awesome guy. You interviewed him and he's, he's, uh, he's, you know, he's a hardcore, hard worker, driven man, and, uh, he's going to create great value for the, for the company. And for me as, as the biggest shareholder and as chair, pardon me, I'm gagging on my excitement, but you know, but, uh, but it's also incredibly rewarding to create value. You know, what a good mind does, it's an engine for economic growth and development of anywhere it is, be it Canada or, or Bolivia. Um, you know, a good mind generates, you know, literally tens of billions of dollars of value from nothing, from something you dig up underground, you sell the product, use that money to create jobs for people, taxes for the government, uh, development of, of, of schools and hospitals and all those things for local communities. It's just an incredible engine of, of economic growth if it's done right. You can also do it wrong. You can make a hell of a mess of things. You can make, you know, you can have social problems. You can do all kinds of, you can have all kinds of negative things. You've just gotta be really careful not to get into those, those negatives and focus on the good. So when you go to, you know, Pan American today has something like 25,000 employees. You know, I started that company with an idea back in 1994. Equal Rock School began at the beginning of 2018. We have, I think we have 15,000 employees today. So, you know, each one of those people has families and they live in communities. And that's all stuff that I just love. I absolutely love it. And it's so much fun creating value for shareholders too. I would say, you know, I haven't had very many duds. I've, I've been a very lucky guy and I've had a lot of successful companies that have made people money. It's just fulfilling as hell to, to, to meet people who, who say, thanks for making me a millionaire. You know, it's, it's fun. That's, that's the sort of stuff that drives me. It's, it's not about the ego, not entirely anyway.
[03:37:47] James Connor: One of the great things about the mining industry is that it happens all over the, all over the world. And consequently, it introduces you to many different countries, many different cultures. How many countries have you visited? And I'm curious, what would be the top three countries? That you've enjoyed the most because of the people, the culture, maybe the scenery. Yeah.
[03:38:10] Speaker 12: Uh, well, I am a compulsive traveler. I've always been a traveler ever since I was young. Uh, I've just have itchy feet. Uh, it doesn't matter how I traveled by canoe, kayak, foot, uh, plane, boat, train, you name it. I just love moving around. So I, I've traveled all my life, uh, to, I think I've got 134 countries now behind me, but, but most of those countries I've been to 10 or 20 times. Uh, I've worked in literally dozens of companies, countries in my life. Um, but as I age, you know, I tend to focus on the easier lifestyle than, than, than when I was young and I was sleeping in parks and on benches and, and in, in, you know, flea bag hotels. Um, just living the hard life, but having a lot of fun doing it. Um, so now I prefer easier things where you can go to places you can drink the water and, you know, I got to get robbed if you turn your back. And I have to say anywhere in Europe, you know, I just came back from two week bicycle trip to France, uh, last week. And it, you know, it's my favorite place in the world. I'd say it's, I just love the food and the wine. And there's a lot of view from the French attitude to life. I love that. Um, if beyond that though, uh, you know, anywhere in Europe, I'd say South America, I would focus on Chile and Argentina, probably my favorite places. I really like Brazil too. I like Mexico, uh, in Asia would have to be New Zealand, Australia. I lived in New Zealand for almost two years when I was younger. And, uh, I just love that country. It's a fabulous country. I love Japan. I mean, there's a lot of great places in the world. It's really hard to pick one or two or three. Yeah. I'm with you.
[03:39:47] James Connor: France is a amazing country. It's such a small country, but so diverse. You had the ocean, you got the Mediterranean, you got the mountains. Where were you exactly on your cycling trip?
[03:39:57] Speaker 12: On this trip, I was in Provence, but I've, uh, cycled all over France for 10, the last 10 years, uh, every corner and every corner is wonderful.
[03:40:06] James Connor: And, uh, I gotta ask you, are you using e-bikes or do you? Good question.
[03:40:12] Speaker 12: You know, um, this year I I've always used road bikes. I've cycled all my life. I really like cycling. But, uh, this year I was really, really wondering if I was going to be, uh, be going for an e-bike. And I, I, I didn't, I stayed on my road bike and it actually worked out just fine. So next year I think I'll stick with the road bike. And, but eventually it'll, it'll come, the day'll come. I'll be, I'll be over the edge of the e-bikes are great. Our two friends that we went with both had e-bikes and you know, they're, they're terrific ways to see the, see the country. Not quite as much exercise, but with an e-bike, you get as much exercise as you want.
[03:40:45] James Connor: How many kilometers would you do a day?
[03:40:47] Speaker 12: We would range between 60 and 80 typically some days a hundred, some days, you know, 50, but maybe five, 500 to a thousand meters vertical.
[03:40:57] James Connor: There's no way we could ride with you, but it was in Germany a couple of years ago and everyone had e-bikes.
[03:41:05] Speaker 12: Yeah. Yeah. Yeah. Yeah. It's a very common and a great way to get around.
[03:41:11] James Connor: Well, Russ, this has been a great discussion and I want to thank you very much for spending time with us today and sharing your insights. And as we wrap up, I'm going to ask you one more question. One of my favorite podcasts is called How I Built This and the host will always ask the same question to the guest. And so I'm going to ask you the same question. Do you think your success has more to do with luck or hard work?
[03:41:35] Speaker 12: Oh, I can answer that immediately. In my case, it's luck. And I can, I can tell you, it started where I was born. I was born in Vancouver with middle-class parents. It gave me a good education. Um, I've been lucky in love. I met a woman who has still with me 50 years later. We got married in 1980 and, uh, started living together before that. So, uh, she's raised with me four, five kids and now we have 11 grandchildren and that's luck. It's not, that's not anything to do with hard work or skill. And then all my businesses, I've just been darn lucky. I've discovered mines. I've parlayed that into, you know, new companies and stuff. And I got lucky with timing with, uh, with, uh, different metals. You know, I almost went bankrupt with my, with my silver company in 2001. Raised a little bit of money that kept me going for six months. And then lo and behold, in that six months period, the silver price took off. And we never looked back. The company, actually the company went from $3 a share. Pan American went from $3 a share when we were almost bankrupt to $50 a share just a few years later. So, I mean, I, I would say I work as hard as anyone, but I have that inordinate amount of luck. And, uh, and I've exploited it. And, um, you know, it's a neat thing about the business. If you're, if you have, it's also true that you can't have luck unless you work a bit. Unless, unless you, you know, you, you, you roll the dice or, and you, you take the risk that if you're lucky, you win. Uh, you've got to do that a lot. You've got to roll the dice a lot before you have double eights, but you know, it will come up. And, uh, if you're, if you're there ready, you'll be, uh, you'll be on the winning path. Get ready. Of course, this business is a very cyclical too. So you've got to remember if you're at the bottom, buy, buy, because, you know, the metal prices are going to go up and everybody's going to be happy. If you're at the top, no, you never know exactly where that is, but today things are pretty toppy. It's a good time to take some money off the table and get ready for when the cycles change as they always will. This is the broad stock market, but it's especially the commodity markets, oil and gas, mining of all kinds. Uh, those are the, those are the lessons to learn. It's very hard lessons, but you know, you want to, you want to sell when others are buying and buy when others are selling. Easy to say, hard to do.
[03:43:55] Speaker ?: Great insights.
[03:43:56] James Connor: Ross, once again, thank you. My pleasure. Well, that concludes our conference and I hope you found it useful. I want to thank all of our company participants and also our corporate sponsor Sprott Inc. We have some amazing conferences coming up here in the coming weeks. So be sure to subscribe to our channel, Bloorstreet Capital and also hit that notification button. So you can be kept up to date on upcoming events. Once again, thank you for your support.