Asiamet Resources (LSE:ARS) — Ares - Meet the CEO - Why Invest in Ares?

0:01 Good morning, good afternoon, good evening, and welcome to the ARES STRATEGIC MINING INvestor Presentation. Throughout this recorded presentation, attendees will be in listen only mode. Questions are encouraged. They can be submitted at any time using the Q and A tab just situated on the right hand corner of your screen. Please feel free to type in your questions at any time and press send. The company may not be in a position to answer every question it receives during today's meeting. However, the company can review your questions, we'll publish those responses on the Investor Meet company platform.

0:28 Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. And I'd now like to hand over to CEO, James Walker. Good afternoon. Okay. All right. Thank you, Mark. Actually, it's giving me those same polling questions. Let me just scroll through those. Okay. Here we go. Hi. I'm I'm James Walker. I'm the CEO of ARES STRATEGIC MINING, and I'd like to walk you through our project and how it's going and sort of the components that make up our project and hopefully give you a good understanding of everything we've done, we're currently doing, and will be doing over the over the coming few months. And, yeah, I hope it's it's something we're excited about, so, hopefully, we can communicate that excitement to everybody who's watching now.

1:23 So it's it's funny, but, obviously, if there's a gold mine, you would never start with a a slide on what gold is, but it's necessary for Florspar. Obviously, I think a lot of shareholders are probably familiar with what FluorSpa is and I'll try to speed through these slides so we can get to questions, which is probably more what people are interested in doing. But just to give people a bit of a background who don't know, FluorSpa is a industrial mineral, and it's classified as such because it's, used in the manufacture of lots of industrial items such as steel, aluminum, hydrofluoric acid, fluorine, lithium ion batteries, some cement, the glass industries. It's one of the most ubiquitously used industrial minerals in the world.

2:12 And just to add to the strangeness of the situation, it's a 100% imported into The United States at the moment. And this is despite the fact that it's also classified as a critical mineral, which means it's vital to the economic security of the country. So despite that, we have this big foreign dependence on this very, very valuable resource, and we need a lot of it. We need hundreds of thousands of tons, if not millions of tons of this stuff on a year just to keep industry ticking along. And currently, I I think a lot of the demand for this is being driven by the emergence of lithium lithium ion batteries where you need, floor spar for the anode, the cathode, and the electrolyte as well. So it's extremely important.

2:59 And particularly in the chemical industry, even even just the manufacture of hydrofluoric acid is very important in a lot of other processes to do with the industry. So even the creation of nonrelated acids like sulfuric acid requires hydrofluoric acid. So it's it's a very important thing. It's very it's very important to The US and every country who has a who has big industry. And, we're trying to set ourselves up to be the only domestic US producer of this mineral. So just to give a bit of a background about how we got here and what we're currently doing at the moment, we didn't actually start with the intention of doing floor spar. We we started with the intention of trying to find a project that was near to production or permitted.

3:46 There was low capital costs to get it into production and was relatively simple mining operation because, you know, otherwise, you could start by start a mine, and you'd need tens of millions to explore it and develop it, and then you need hundreds of millions of dollars for processing plants. And the whole thing creates an unfeasible expectation around getting it there, whereas we aim for something small and easy, and then you're obviously much more likely to succeed. So we identified floor spa, this project, particularly because the the people who were mining it were too old artisanal miners, and they were just basically taking it out of the ground and putting it into a bag and selling that to the steel mills. And it's pretty much unheard of in the mining industry to be able to do that, which means that the product that you're getting out the ground is very close to a final product. And when we saw that, we we bought out those two gentlemen and we went and staked the entire area.

4:46 So we've now got about 6,000 acres of of claims where all the showings were across the whole Spall Mountain District, so it's district scale project. And then we began development work. We started drilling, we did lidar, we did metallurgical work, we did geophysics, assaying, plant design, everything that you would normally do associated with building this thing up. I think as we moved through the stages, I mean, it began to look better and better because, one, you couldn't you couldn't move across the mountain without tripping up over floor spars showing it's just rising at surface. And so as we as we progressed, we finally we we realized that there was a a mandate within the country to support, critical mineral industries within this in the country.

5:38 And so, even though there was no direct grant money for this, I think it's a lot easier for politicians politicians to talk about wanting to bring back industries, getting a bill passed is much harder. But they still put us in touch with the US Department of Agriculture who are looking to develop rural development areas and rural development projects. And we closed the financing with them. And we also got put in touch with the state of Utah that have a manufacturing bond to promote the domestic industry within the state. And that was a $10,500,000 bond we closed there. But as we with that cash, we went out and bought 50 acre industrial estate with buildings. We'd already purchased a plant. That plant came in, and it's under construction at the moment.

6:29 Concrete's been poured. The base the foundations are all done. Steel steel is going into the ground, and the plant is already fabricated. The lumps plant, the first plant, is already fabricated and assembled at sites, and so it just needs to be slotted into the steel structure. And alongside that, we brought in a mining group to develop the mine, and now we bought all the heavy equipment. So the loaders, the dozers, the excavators, all of that kind of stuff. So all of the heavy equipment we need is already there. And they've even started they've they've already started, like, a couple 100 feet deep now into the mine. It's a few more 100 feet, then we intersect ore. And so we we really are just a few months off now from actually being able to take that ore out the ground and stick it into the plant. And both the mine and the the plant are sort of timed to coincide together so we can finally get our revenue, like, as the company, and then then it should be self sustaining at that point.

7:32 And, again, like, we've that money has been spent very prudently. It it's only gone on capital infrastructure, capital items, and we've tried to keep our overheads extremely low. So we might even hold the record when we finally get to production of, like, doing the least amount of capital raises to get the the project into production. And it's just a bit of an overview about the global market. So in America, they in terms of raw floor spar exports on an annual basis, they import something in the region about 600,000 tons. But actually, if you look at all the downstream products as well that include that fluorospar that can't be produced domestically, really does balloon up to a couple million tons of, fluorospar and fluorospar fluorospar downstream products that get brought in. So, obviously very critical to the to the industry. And if you think about how much steel The US produces as an example, like 80,000,000 tonnes or something like that, and each tonne requires 20 pounds of floor spar, and each tonne of aluminum requires 60 pounds of floor spar, you can begin to get an understanding of how important this stuff is.

8:44 It's it's interesting because The US did actually used to have a a big floor spar industry, and, it got destroyed when China was industrializing because they were just mining high grade pits and, they were flooding the market with cheap produce, that killed the domestic industry. But China since then has actually gone from a net exporter to a net import, and that's obviously constrained supply chains quite dramatically. And it's it's it's causing a lot of issues, there's a there's now a spike in price in floor spot, which is which is great for us. Like, I'm I wouldn't complain about that. But it's being caused essentially by a drive towards electric vehicles, solar panels, things like that.

9:30 At the same time, as more and more countries need this, there are very few big suppliers. The The US does get some of its produce from Mexico, but even then, there's it really only comes down to one mine down there, the Les Juarez mine, which can produce a lot. But even then, recently, they found that the grades have been fairly inconsistent and has had fairly high arctic content. And so, really, US industry is really hunting for a domestic supply of this mineral. And, obviously, that's that's us. So the good part here is that there's a lot of blue sky potential for us. And, obviously, we put this into production. We'll build up the we'll build up the mine. We'll build up the operation, and we'll try and ramp up as best we can over the over the year over the next few months and the years.

10:25 But the good part is the expansion potential is there. So investing now, obviously, we can once we hit that revenue and it's increasing and it's getting more stable and and output is becoming more, we can we can expect a very decent appreciation over time, which should be a a general upward trend. And we we have a lot of things on us to favor. Obviously, I've I've I've mentioned that we're gonna be the only domestic supplier, but it's also coming at a time when international relations are becoming more strained. And, certainly, I don't see the relationship with Russia and China improving anytime soon, and they are producers of this mineral, and they're gonna be competitors for this mineral too. And in some areas of the world, such as Africa, they they actually have more

11:14 sway there. They're actually more able to bring in that material and and beat The US for actually purchasing it out. And we have we have but we have major advantages over other competition even internationally because the OpEx is very low. The grade is very high, unusually high, and the the impurities are very low. Very few sulfides, very few arsenic. And so the amount of processing we need to do and the amount of staff that need to be involved in this is is very low. So we have big advantages in in that area too.

11:48 And with all of these mandates that are coming in from governments about decarbonizing, that's only in our favor. It's only it's only gonna work in our favor. And already, that's that's manifested in a lot of big US companies coming to see us. And we recently signed a sales agreement with a big materials broker, a multibillion dollar firm that wants to buy everything we can produce, and they've even offered a forward sale of a couple million dollars. And we even have groups like Honeywell coming to visit our site, and they've already been through our data room, and they're very interested in taking us. Again, multibillion dollar, big chemical firm, very dependent on acid spa for its operations, and, again, a domestic supply.

12:39 They couldn't they obviously want that. And people are probably very familiar with Tesla and its and the way it operates business. But even then, they it's very likely that at some point, they're going to want a direct sales agreement for these materials that are inherent in their in their batteries. So the prospects are really pretty excellent. And one one thing that gives us a tremendous amount of confidence too is that when we were starting this, we realized the industry had been shipped overseas, and experts were kind of thin on the ground. We we did actually reach out to a Thai based company that was ran floor spar mines in Thailand, Laos, and Cambodia.

13:25 And, they were producing a couple 100,000 tons, but they they, they were very useful for us. Like, they they advised on things like reagents, processing, plant design to try and derisk the project for us. And we even ran our ore through their systems to know what we would get so that when we had results and we sent them to these big partners like Cramer, Rez, Contour, etcetera, they were representative samples of what we could expect out of a real plant and not just SGS developed metallurgical work, which is actually more typical with putting a mine into production. So we know that the ore can be processed into a product that's wanted by industry, and we know the plants are gonna work. And we've got we bought two plants now that are going to be one up and running in a few months, one that's gonna be delivered for assembly in another few months. And once they both come online, then we'll be able to produce those two very desired product lines who can cater for both the metals industry, but also the chemical industry and the the industries that require that higher grade.

14:36 So a little bit about the team. My background, I've got a I've got a professional mining engineer. And even though it says on this presentation, I'm registered with the as an engineer, that's out of date, actually. I need to update that, but I'm I'm professional engineer. And even though he's not on this on this management team, I should just quickly man mention Bob Lee, one of our directors who runs several floor spar mines. And I was on-site with him a couple weeks ago where we were going through the processing facilities, the mine, and all and all those kind of things. And, it's a real asset actually having somebody who runs several floor spar mines already, and a big benefit of that too is insight into the industry workings, what things are selling for, where the customers should be, where we should target, where certain grades of products could go. And that kind of knowledge we've inherited, it's it's been very, very useful.

15:34 Victoria is the CFO, so as people probably realize, the backbone of how things work. I make decisions, but she keeps everything on track. And we've got two really wonderful geologists. One is the VP of Exploration with about twenty five years of experience in geology. He already runs public companies himself, so he's obviously very experienced in this area. And Raul has about twenty years of experience as a geologist, but importantly, he was working on Europe's largest fluorospore mine, the MINERSA group. So he was an expert in fluorospore even before we got we got started with this. So if you in terms of geological mapping and determining where the the floor spars likely to be located, where the fault lines would be, He was he was an invaluable resource to get this going as well.

16:32 So a bit about the company. We we are obviously a junior mining company at the moment. We don't wanna be a junior mining company. I don't think any junior mining company should want to stay a junior mining company. You should always be looking to move away from that. We're only a few months out from being a manufacturing company, and at that point, it becomes a very different beast with with revenue and and profits. And and and it will also give us the, obviously, the the fuel we need to expand appropriately. And we're trading somewhere in the region of about 18¢ at the moment. But the the the important thing I think about the project generally is that it's been severely derisked. And that little map just beneath, it's those threes these three squares just show everything that we built up, the mining operation.

17:23 As we've said, the tunnels are built now. It's been shot created. Reinforced steel has gone in there. It is and all the mining equipment has been purchased, and it's sitting there ready to start digging out. We already have our rails burn where we are leasing it. We've revamped it. It's ready to start shipments. And then just to the bottom there, we've got our 50 acre industrial state with buildings, with, permitting to build, build the facilities that we want and just start processing. The good is it really in terms of a mining company or a junior mining company? It's as close as you can get to a manufacturing facility with or manufacturing company without being one. So so I can I can jump on to these questions first and try and fly through these and just so Let me let me just jump in there, James, just to give you a a small break before we go into the q and a? Ladies and gentlemen, thank you very much indeed for submitting the questions you have thus far. Please do continue to submit those questions just using the Q and A tab situated on the right hand corner of the screen.

18:28 And as I say, these questions will be published on the investment company platform post today's meeting. You have received a number of questions throughout your presentation there, James, and you've also received quite a few ahead of today's events. Firstly, thank you to everybody for your engagement. What I might do, if I may, hand over to Carl, who will moderate through today's questions. And if I I may just hand over to you at that time, Carl. Over to you, sir. Sure. Thanks very much. Actually, James, we're we're gonna move on to some of the investor questions rather than the deck questions just because we had such a big response. These are these are a little bit more topical. People actually want answers to. So I thought I thought you start start you off with a couple softballs just to get you warmed up.

19:14 Of course. So we're we're kinda used to the image of a modern CEO and all their extravagance. So we're just wondering in a junior mind like yours, what would a typical CEO's life be like? What what does a typical day look like for you? Well, I I don't know why you used the word extravagance. Like, I mean, if I take today for an example, I mean, I still got small kids, so I was being woken up by them throughout the night. So I wake up tired, and then I get ready, I get the bus to work. When I come down to the office and start working, typically, start I try and start early just so and I put the phone down just so I can work on actual not actual work, but, like, the the the reports that need to be done, the writing up that needs to be done.

20:09 And then, obviously, I start fielding things like questions and that sort stuff. But there's usually some very key things they need to get to on a daily basis. So we've got two project teams at the moment, the MINING team and the construction team. So, obviously, checking with them in with them about the day, the plan, how things are going, what staff members they're arguing with. That kind of thing is obviously very important. But, like, the the days, to be honest, are quite long. So you get you get here early and you do leave quite late. And then, obviously, I just get back on the bus and then go home. And if I can do some exercise, great. If I if I can't, I just go to bed and get woken up by small kids again. It sounded like until until the weekend, and then I get woken up by small kids, but I try and sleep in despite them.

21:00 Good good luck with that. One of the other questions, was talking about information, being such a important part of decision making. What what how do you keep yourself informed? Where do you find your sources of information? I mean, it really varies. I mean, I I don't have actually any prescribed sources of of of getting any information. It can come from anywhere. To be honest, a lot of the time people will just write to me and tell me things. And to be honest when you're quite embedded in the work it's very easy to miss a lot and so people will sometimes write to me with updates and news that I have no idea about because all I've been doing is just writing things or or making decisions on that steel needs to be bought at that time and that needs to be shipped there and that thing can be sold. And so it can take you out of it.

21:53 But discussions with other with trading groups are very interesting for industry insights, as well as I mentioned speaking to producers. And, recently, was having some very interesting conversations with with big chemical companies that were giving some insights into their industries. And it gives you it's actually stuff that's very difficult to find. But if you speak to the source, you can actually get a lot of very useful information and work out how to tailor certain things, certainly to do with, like, grade control and and that kind of stuff. And even a couple weeks ago, I was speaking to a guy. He just and he was bringing up those assay guns. Was He giving me new I was just discovering new techniques to actually get more accurate assays at site before we deliver for certification purposes before they get loaded onto the railcars.

22:48 So, yeah, it's it's a cacophony of different routes. And, actually, you've you've learned quite a lot, even the mining guys at the moment. I knew, obviously, a fair amount about mining, but just being involved in some of the engineering decisions that have gone into the ramp installation together with the delineation drilling. You you just you pick up quite a lot of information just from doing things. Right? And I would say that it's probably as useful as just reading industry magazines and websites. Thanks, James. And then over the last few years running the MINDs, you've been through some difficult world environments, COVID and the like of. What have been some of the the most difficult things you've had to deal with? And what would you say you've learned from that that you're gonna be able to help the company propel forward in the future with those lessons?

23:43 Well, obviously, COVID COVID was annoying. It's not the biggest problem we had, actually. Well, it caused some big problems. I mean, one one when that did happen, like, as an example, Raul at the time who was the VP of exploration couldn't get into The States. He couldn't get in by plane, so he had to try and drive. And he got stopped to the border and be in British Columbia. So he drove to Alberta to try get in that way. And then they blacklisted him for two years, and then we couldn't get him to the mine at all. So he was trying to run drill programs remotely. And, obviously, you're dealing you're dealing with a situation where you can't operate normally. And even when even when we were deploying people to site, we weren't allowed to put them in hotels. We had to put them in individual caravans because they couldn't or what they call RVs because they couldn't share. And obviously, was a big pain in the neck.

24:38 There are other things too, like during that time, there was a big backlog of shipping vessels off the port of the Port Of Los Angeles, and we got stuck in that. So we got stuck at sea. And then the Port Of Los Angeles was trying to charge us for occupying space on a ship while we were at sea. And I they called me about it. I said, I don't wanna be at sea. I was like was the that That was the equipment you were trying to ship at the time? That was the equipment. I was trying to ship a plant. So it was kind of an annoying time because you couldn't do anything without tripping over some weird rule that had just been made up. So that was that was really annoying. And what else was a was a problem? I I one big thing that was quite annoying is that we in 2021, we actually began to make quite a lot of progress in spite of in spite of all the restrictions, and things were actually looking up, the share price was really flying up. And then that drew we ended up being one of the top 10 performing companies on the TSX Venture, and that drew ire from the from the TSX Venture, they halted us for four months to do a complete audit.

25:49 And it just killed the momentum. And I I I to this day, like, I'm still upset about they did that because, one, it stopped us being able to raise money at a much higher price, like 80¢. And they and there was people who wanted to put in, even institutions were talking to us about becoming involved, it would have taken the whole thing right through. So we beat COVID, and then the the venture exchange tripped us up. That was a pain. And another one, just just quickly, I know everyone doesn't wanna hear me whining too much, but the the new administration, when they got in in 2020, they put in a bunch of new laws that we weren't aware of. So we'd run a drill program in 2020. But the second one we did, there were new archaeological rules introduced.

26:37 So when we got to site, we found out that some there were some big bean cans that were older than 50 years, which made them a relic, which meant the whole program had to be just suspended while we got an archaeologist out there to look at the big bean cans and give us permission to proceed. So dumb dumb things like that, very annoying. And, of course, because of COVID, the the financing routes that we'd set up in 2020 for the USDA, and the bond, effectively got got shut down until 2023. So finally, in 2023, we could close them and actually really start building much faster. So, yeah, there are lots of lots of unanticipated things I don't think you could have anticipated. But, yeah, that is we'd be we'd be way further along if it had just been like if if COVID had never happened, we would have just flown. Like, you would have been very, very fast to to get this thing going.

27:34 Good. Thanks, James. Just to speed things along because lot of questions come in. Thanks everybody for your questions. One that keeps coming up is you recently announced a private placement Specifically, to actually purchase those units, what would be involved for somebody and what important information would they need to know? What's a it's a non brokered private placement. Mean, anybody I I think it's a it's mostly Canadian investors that it's open to. Like, in typical lawyer fashion, we ask them to make it available to everybody. And I but the subscription agreement looks like it's mostly for Canadians. But the the raise itself is purchasing at 18¢, but you get a full warrant with that exercisable at 26¢.

28:26 But it's also a life exemption, which means it's immediately trading stock, so you don't have a hold period on it. So we actually, just before we announced the private placement, the stock was picking up. But I think that the private placement, obviously, as it always does, bring it back down to the level of the raise. But, like, obviously, as we clear this, it should get back to the momentum it was at before and and pick up. So it should be an easy it should be a good win for everybody because we're close to production, we're close to revenue, and the momentum was there before the private placement. And the warrant will be there at 26¢ too. So there's a there's a potentially a good double win built in for this. And and just to touch on it quickly, I mean, I didn't wanna do the private placement, but the the government financings cannot be used for the purpose of the mining.

29:17 So we to keep the mining guys going, we have to do a separate financing just to feed into what they're doing, which is why we we opened it up because, obviously, we need to get into war while the guys are building the plant. Yeah. Good. And just just to follow on that a little bit. So you believe that the the the price drop was was just a reaction to the private placement, that there was nothing fundamental that caused that that dip? No. Actually, I mean, you you can't really get more derisked than this project. I mean, it's it's very well backed. It's very well funded. It's got all the equipment. It's it's got everything like that. I mean, all the fundamentals are actually really good. It's just it's kinda typical when you do that kinda thing. I think we were even worried about it going over the mark where we could put it at 18¢.

30:03 But it typically, that that's fairly standard that the market will adjust to the private placement amount. But that only lasts as long as it's open, then it can appreciate back. So it should start going right back to the same momentum as before. There's a question here about competition. Are there competitors that you you you have to begin with? And a follow on to that question was, are there other or will there be any other floor spar mines that you know of in North America or Canada, that that may be coming online? So in The US, the answer, I I believe, is no. Like, we we've actually spoken to a couple of very small sort of mom and pop operations that do maybe a couple 100 tons or a few 100 tons a year. I mean, these are tiny things that are hand copped, and so they need a big revamp to do it. And so I think with US, we've not got it locked up, but, like, we we're in the best position to lock it up.

31:04 In Canada, there is a big floor spa mine. It did it went into receivership in Newfoundland. That recently got bought by a group for, I think, $25,000,000. They've got a they've got quite a lot to do to revamp the pits, but, like, I I don't think it's a bad project, actually. I I think it's a pretty decent one because it's open pit. The grade's a lot lower than what we've got, and it needs a a huge amount more capital. I would say probably $30,000,000 for their pits. You probably need another 20 for roads and infrastructure and revamping. They probably need to put another $100,000,000 into that, so they need deep pockets. But they're not exactly a competitor because a lot of their produce goes down the East Coast to, like, Rio Tinto's aluminum smelters and industries like that, whereas being further in in West, we're sort of nearer to other industries that would take our product much more readily.

32:07 And the other reason is that we've actually spoken to them as well. And, like, there's I think they're interested in well, obviously, I'm not in trouble for saying it. I think they're interested in trying to consolidate North America. So at one point, maybe they'll even try and buy the company. We'll see. But, like, they'd have to go that that's a shareholder vote issue. That's not up to any of us, and they everyone should win out. If if they ever do anything like that, everyone should win. But we're just gonna keep building. And I think for us because there's no real competition in The US targeting the big previous producers producing areas in The US like the Kentucky and Illinois region makes a lot of sense because we already know the facilities that that are required. You know the mining type. We could take what we've done here as a blueprint and apply it there very, very fast. So we can we can I think we can tie up The US over the next few years pretty pretty well?

33:03 And we can create whatever happens, we can create a pretty big company here. Thanks, James. Just a note to everybody, fantastic response to questions. We're we're getting a lot of questions here live. Unfortunately, we'll not be able to answer all of them. If we don't manage to answer today on this call, somebody will be in response to you with an answer to your questions. So keep those questions coming in, and we'll get them answered to you either today or very shortly. Thinking about seals, your recent hires on your seals team, will they be seeking potential customers prior to completing the plant? Oh, no. They've got them already. So, you know, the the Cramer Group, for instance, on the sale on the sales side of this, even though they're materials brokers, they're obviously it's kind of an awkward thing with the with The US industry because their preference is actually to buy from materials brokers because it's actually less risky for them. Even if the material broker supplies, great. If he doesn't, they just go somewhere else. Whereas if they're tied to one project, then they're very reliant on that and they don't have the versatility to jump around.

34:16 But materials brokers then are in the boat of having to secure those arrangements. So for things like steel industry, groups like the Kremer Group are really quite important because they'll only operate through them, and then the mines will only operate through them. But they know exactly who they're going to sell to because we've already sent them samples. We've already sent them specifications. They've already approved those things, which is why they visited the mine, they they signed an agreement to pay us that forward sale of a couple million dollars. So, yeah, on that on that front, it's they know where it's going, and they they know how much they need. The good part is that no matter how much we ramp up, they'll take everything we can produce because The US industry requirements are far in excess of what we can produce. Yeah.

35:09 And since you you kind of first set foot on what you expected, you you've talked about finding more pipes. What how much bigger is the project they initially thought? And is is it too early, or could you give us an idea of the potential lifespan of the project? This is this is a bit fun to talk about as well because, obviously, we have the permitted area where we're we're we're putting that ramp installation now. But, like, the the funny thing about that is as soon as you put stop putting drill holes into the ground, you keep hitting new deposits. Even though it's a weird structure, we had three pipes that we identified that we wanted to mine. And we had one ramp installation that was going to have offshoot edits. What actually happened was, as we were doing the delineation drilling for the dimensions of that ramp, we hit ore that was connecting those pipes.

36:01 So even though they were non contiguous pipes, at depth, they joined up. So it actually became one very large mining operation. And that's something we can expect to be fairly typical right across the range because these things have to emerge from somewhere. So we in terms of blue sky potential, we know the next area we want to mine. That's the the Bell Hill claims to the south of the Spall Mountain because they have a lot of pipes in a very concentrated area, which by themselves, which is how you have to plan for these things, is enough for put a ramp installation as an extract from these these pipes. Being on the lost sheep area where we're current where the permitted mine is, it's very obvious that these things will link up. So as we develop that area, it's very likely that'll turn into a much larger ore body that we can then that we can take out. But just on a blue sky potential, if you look at where where we took the the whole project to an independent engineering firm, they looked at how many pipes we'd identified through geophysics, LIDAR, all that kind of thing. And they they looked at those sort of historic production data and oh, I can't remember the other geophysics software.

37:22 And to work out that these things typically give you between 25,000 to 400,000 tons each. But even then, that that if you they they took all of those showings, just those showings, not the one subsurface, and then they they halved it and halved it again, and they were still getting a twenty year mine life. Now, obviously, some of these pipes will be isolated and so not worth going for. But the good the good part here is that it's very likely that the the fault that links all of these that that we gave birth to all these things does intersect its surface at one point, and so we will find out where that is. And then there should be a big chunk of floor spa that is gonna be that we that we can just mine for many, many years, just this one big chunk.

38:12 And, actually, we've got we've got we've got some groups looking into that information right now. They've got all the drill results. They've got all the fault lines. They've got all the mapping. They're actually working with the university to work out where that chunk might most likely be. But we've already got our primary mine, our secondary mine, and I'd like that to be our tertiary mining site. A big chunk. Because then then we just sit back and chuck it all out, we've got tens of millions, hundreds of millions of dollars of product there, so the last few years. Yeah. We see the the picture on the screen right now. That's a new portal. Thinking about that new portal, had several questions. I'll I'll try and cover most of them in in this question. The money that you needed for this this portal, this mine, does that get you to material depth for production or is it the entire ramp?

39:06 And then the second part of that question is, what is plan b with regards to needing funding? I guess that could be outside of the the the loans that you have from USD and the bond. Yeah. So the the the first part is actually the the money we're trying to raise at the moment is actually just to get the ramp into the ore. The the way the ramp is is designed is that it's actually going to intersect the same big ore body at three different levels, and so we have to hit the first level. Obviously, that gives us a lot of material to work with, And that material is gonna be revenue generating, and then that is going to be paying for the development of the rest of the the ramp installation. But, actually, even after we hit that ore, because most of the heavy lifting is done, it's only another couple million dollars to complete that ramp installation, to get it all the way down to those two new intersecting levels.

40:04 Because the we've gone through the clay, we've gone through the portal, we put these these steel infrastructures in. Once we hit that initial ore in three or four months, we'll put the ventilation in, and then it's actually just ready to start taking it out the ground. And the second part of the question is about further funding. Yes. Yes. So, obviously, the further funding I want here is our own revenue to begin generating this. But actually, the the good part about this is that, obviously, there's gonna be a couple of million dollars coming in from Cramer. But the the one of the good parts about this is that as soon as you shift from being a junior mining exploration company, which nobody really likes or wants to deal with, and you're producing revenue, you can borrow against income at that point if you want to put more advanced facilities in there. So I don't wanna do any more dilutive financing.

41:00 I just I just want to get more product out the ground and create more revenue. And so if we have to borrow against that money to put in a secondary MINING site or a secondary ADIT or anything like that, that's what we can do. But we can do that when we're a manufacturing company. It's something we can't do at the moment. It's the the how we treat it will be will change quite dramatically. Yeah. Thanks, James. One of the other questions I was talking about, if your production facility gets completed before the the mine is finished, will you be able to use any of the tailings on the property to generate revenues? So interesting enough with the tailings, even though it doesn't sound like it, Delta is a is a small city where the processing plant is.

41:47 But there's actually quite a lot of construction going on down there. I I I think generally a lot of small Western towns are getting a lot of influx from, like, fleeing Californians, and it's sort of driving up property prices and driving up a lot of construction in housing there. So the the aggregate we actually produce is actually very suitable for a lot of that that housing. So I haven't factored these these sort of things into any of the projections or financials. But when the tailings start to be produced, one thing I'd really quite like to do actually is talk to the construction firms about buying or taking that aggregate because they'll pay for it. Now we go we can obviously backfill pipes and and build tailings dams, but but I think as everybody can probably guess, like, benefit is selling it. And, like, there's a lot of there's a lot of aggregate that's needed for these things. And if it's in town, it's even better, and we're just piling it up because it's it's very inert. It's there's nothing there's nothing deleterious in in the tailings. It's it's very clean.

42:53 You could just put it back into the ground. And, actually, we've got even the Bureau of Land Management have signed off for us to be able to do that because the there's there's really, it's a washing plant for floor spar. Like, you're just washing it clean, so you're not using any it's not like gold where you need to use, like, chemicals that are pretty dangerous to the environment. A lot of questions about the timing on the project. Yeah. We're now in May. Has the timeline changed? Because there were some some kind of loose projections at the start of the year. Kinda being this far into the year, are you able to give us a better idea of when the company hopes to be in production? Yeah.

43:38 So, obviously, even we go off what the contractors tell us. And with the plant, actually, we I admit it. I I would have liked it to have been further along. We there was this there was we had a bit of a situation where because there were there was a very unusually long winter, pouring concrete became we either had to opt for a very expensive heating process to be able to pour the concrete in winter, and I didn't wanna spend the money, especially when I saw that the mine would take a bit longer anyway. And then so it seemed to me that I just wait out winter so I didn't have to spend the extra cash. And then I could just coincide the the plant construction with the mine construction. And, obviously, that made a lot of sense. But in but both teams now are are really saying several months away. And, like, I but, obviously, the law I get asked this question a lot, as you can imagine, and the lawyers are always cautioning me that I shouldn't give timelines away. But, like, it's I'm being told it's a few months away. If it if something happens, then something went wrong. But, like, really, actually, most of the high heavy lifting on both sides are done. Foundations are the on the on the processing side are the hardest part to actually get done because of the concrete pouring, and we're in good weather now.

44:57 And on the mining side, getting the whole thing cleared out, flattened, and port portal constructed, and then steel infrastructure, shock crate, all that sort of stuff. That's all done. Actually, the the heavy lifting is now done on both sides. It's just assembly at the processing site and digging at the mining site. I mean, it's it's pretty derisked now. It should be just it should be much more smooth sailing than it's been. Yeah. And and kinda seeing the kind of the the light at the end of the tunnel, just to use the pun. Yeah. Yeah. Literally. Yeah. Full score at the end of the tunnel. Yeah. Yeah. Even better. Can you provide more details in regards to the the broker sales? I'm not sure if if this was misheard, but a 100,000,000 advance payment.

45:43 Can you use a little bit more I mean, if that's correct, that if I'm wrong, can you just I'll help that process, and is it something that you're thinking seriously about executing? A 100,000,000 advance? What? I it was the question is is asking about the the brokered seals. So I guess it's the advanced purchase of FloorSpa. Oh, yes. Okay. Sorry. Yeah. I I just it I don't I'm not sure where this particular investor got that figure from, but if it's wrong, can you correct that? The advanced payment. Are there advanced payments, I guess, first of all? And is that something that you're considering executing? Yes. I mean, the the prepayments so the presale is is a real thing.

46:30 And, also, it might be a $100,000,000,000 over several years. Sure. Like, I mean, there's no shortage to how much we could sell this stuff. Well, of the amount we could sell this for over the next few years, it will amount to that those amounts over time. Do do you have an offer currently that you can talk about? Or So we do. So, actually, we we publicly released it in the documents, and there are there are even pictures of us with the Kramer Group in the press release because they obviously visited site. They did their due diligence. They took their geologists and engineers down there to investigate everything. But off the base of that, they signed a forward set agreement. So the next the next stage is that this is this is a bit of an annoying thing is that they need to be able to see product that comes out of the plant at the site.

47:20 And then but it can just be a small amount. So, actually, we can we can construct the plant almost in its entirety and just run some samples through it, get a get a representative sample, and give that to them. But on the bay as soon as we do that, then that contract gets signed. That that payment is immediate. And then and then, obviously, we we would just get going, they would just take everything off the train once the full the plant was fully operational producing. But, yeah, there's a forward sale there for us to execute on. And why why if unless we get a better offer, why not execute on it? It's it's money up front. It'll help with the development. It'll help with paying for things, and we can just recoup that over time with shipments to them.

48:06 Yeah. And and thinking about into the future and infrastructure, what what's gonna be necessary to refine the ore to the acid spar, Mark? And how large your project will that be? So I probably I maybe I jumped this part, but, like, the the ASSIST SPAR plan, we've actually paid for that in full. So that's actually being fabricated and constructed right now. Not at site, but it's being fabricated and all the pieces assembled, and it's gonna be shipped to us. And that should arrive in q three this year. That plant is a bit more sophisticated than the lumps plant, and they could be complementary as well depending on how we want to try and meet market needs. But it also is the more expensive product that retails or the retail selling price.

48:58 So we could end up producing a lot more with that second plant. And we've tried to optimize it as much as possible to require as few people as possible. So there's some significant updates even from even significant updates compared to the plant of the the producer who helped us design this based on their own experience. But that plant will be will be on-site soon. Obviously, we'll announce this, and we'll we'll show the pictures of it. But the good part is that contracting firm that's on on-site at the moment doing the lumps plant construction, all they would do is just move over and probably a little bit of concurrent activity, but just move over and build that one either simultaneously or after.

49:44 So as far as infrastructure, land, water, electricity, is that all in place, or we need to develop that? No. I mean, the we've got the utilities. We've got electric. We've got water. We'll probably widen the the water pipe a little bit so the the flow is a bit more. But one once it's actually fully stocked with water, it's a recirculating system anyway, so it's not like you're dumping water out, and then needing a new a new inflow. And, actually, one of the big decisions behind why we chose this industrial estate was because our original industrial estate was going to use city water. And in that part of the world there's a bit of a restriction on how much water you can utilise from city.

50:33 But the new area has its own water wells, so it's our own water. So how much we extract is really dependent on our ability to extract it. So we'll just wide we'll widen those pipes a little bit, so I think, to accommodate that flotation plant. But everything else, yeah, it's it's a permitted area. It's industrially zoned. In fact, the joke in Delta is that we have a monopoly on industrially zoned land in the area because it's the only industrially zoned zoned land in the area. So we even get companies asking to sites on little bits of our land that we're not using in exchange for cash. So that could be an option as well. Great. James, you won't believe how many questions we have gotten today about the project, But, unfortunately, we're not gonna be able to get to all of them. I wanna move on to just kinda some of the more technical corporate questions that that I received kind of just for our last few minutes.

51:31 There was a question about envoy stock envoy stock. I said that right? Stock. Oh, yeah. Some of our shareholders have received their annual shares, and there's there's several questions here asking when those shares will IPO and what the value would be. Is there can you give us a kind of any insight onto that spin out and and what Yeah. So be honest, this is this is not our fault exactly, but, like, the project in Nenio is, I think, is actually pretty decent. And we took a similar strategy to ARES, but the the shares will only begin to start trading once we start doing work on it. And to be honest, we're so occupied in Utah at the moment, and I'm pretty much living at a mine site. So trying to build two mines at the same time would be a bit of a stretch.

52:17 So we're we're kind of holding off on INYO until this is really in production, and it's there's a general manager down there that's managing the day to day. At that point, we actually would have free time to go and develop the the ENYO project. But that might even be an easier one than this one because it's a contiguous block of a certain mineral that's very much in demand by a nearby neighbor. But it will it will probably list at 10¢ because I think that's what the the value the lawyers put on it. But, yeah, it's it's it's not that it's valueless. It's the fact that we haven't started operations, and so it hasn't started trading. And it will start trading as soon as we start operations. So, yeah, I didn't know this would happen this way, but you've gotta prioritize certain things. And, unfortunately, like, this is very important, but this is a big this is a success. And it'll also it'll also make the success of the next project easier.

53:18 People wanna work with groups that that succeed and, like, this this will this one will. So and by proxy, our shareholders will win off any year when we get when we do get around to it. Yeah. And and just to clarify on that point that this is kind of a historical legacy thing for the older shareholders. Anybody purchasing shares now or kind of within the last months wouldn't be included in that. Is that correct? Yeah. It was at the time of the spinout. So at the time of the spinout, you you basically take the Novo list, the the list of shareholders that that have the stock. Or even if they missed, they can apply and they can they can receive them. And and it's they're issued at the same time. Obviously, we wanted actually, we wanted it to be a real dividend for the shareholders.

54:05 Half half as well just being thankful that they're supporting us and they're being patient while we work through COVID and shipping delays and held up federal financings and that sort of stuff. So it was supposed to be a bonus, but it's a bonus that's also been suspect, like, deferred until next year maybe. So Yeah. Well, practice makes perfect. Yeah. Next next one will be easier. Are you going unless we have another stupid pandemic that basically means I have to sneak geologists across borders. You know how to do it this time. Yeah. Just a little bit looking into the future. We're really getting short on time. So if you could kinda keep this answer kinda brief. Yeah. As far as dilution is, do you see there'd be a much more dilution in the stock before you hit profitability?

54:55 No. I mean, this I want this to be the last dilutive financing. And even then, I I what I in the long run, it'd be nice to up up up list to a bigger exchange in The US as well. And then that would probably mean I will obviously have to meet the structuring of the of the Nasdaq, and that that might even actually reduce some of the dilution that that as you structure it to go on to that kind of firm. But it would it would would obviously be more beneficial for everybody in the long run. And it's so it's something that I think is very likely given the fact that it should be a fairly large company over time, and it should have a it should gradually keep building up. And that dilution will obviously come down. Obviously, I I always wanted to try and avoid as much dilution as possible, which is why I did the government financings.

55:46 But I don't wanna do I don't really wanna do anymore. And I we if everything goes according to plan, then this should be, hopefully, the last raise we have to do. Now we still need to get that $3,000,000 to get into that ore. So as much as we can do in this, the better. And then that's the end of it. And then we can just get on with running profitable, expanding nice nice company that starts off little and becomes big. There's a question here that kinda kinda lends itself to that. When you get profitable, soon, hopefully, do you see the company potentially buying back some of the stock? Yeah. That could happen. I I wouldn't mind seeing that at all. I don't think anybody would object. It depend it depends, like, you obviously gotta weigh up.

56:36 We can expand in this area to create to create that additional revenue coming into the company. If there's surplus, then it can go into buying back that stock and then obviously liquidating it and then tie and tightening the structure. It's some tactic the reason why some people do, obviously, the stock buyback for the big companies is that to create a smaller float means that you can spike the share price, which is obviously what everyone wants. But the company does it so they can go out to the institutional level and raise a lot more capital. So it's it's almost becomes a choice between raising capital at a much higher share price with a smaller float or bringing in that extra revenue. And the decision needs to be really evaluated at that point. So, yeah, we'll we'll see. It it obviously need we need to play it by ear a little bit, but, like, I think we all wanna see a tighter share structure. We wanna see a smaller float, and we obviously wanna see that share price pop up. So Perfect. And then just kind of our last questions are about communication.

57:37 There's an acknowledgement that the company's done much better at informing its shareholders in recent months. So we're hoping that that continues. And they want also some questions about the July third summit. So can you tell us a little bit about the company's plan to keep shareholders involved and and what's involved in the summit? I don't I don't mind doing any more of these, actually. These are fine. Like, I to be honest, sometimes you get so focused into the projects that you you it almost you say, oh, god. I've gotta tell everybody what's going on. And so we're gonna keep the updates coming out. We'll keep the construction photos coming out too because it's better to see something real. I mean, who cares about a press release where you just write that things are going great? I think pictures tell you a million words, so we'll keep we'll keep on putting those out.

58:27 What's the July the third summit? Like So that's an invitation that's going out to all shareholders for Oh, yes. That's Sorry. Complete update, and there'll be more questions fielded. So, yeah, just to let everybody know that everybody will receive an invitation to the July third summit. These are gonna be done quarterly as well as the the the month to month once we're doing some new investors. James, that that's about all the time we have for today. So I wanna thank you very much. And just to remind anybody, if we didn't get around to asking a question to James, you will receive a response within the next couple of days. So we appreciate everybody's time today. Please keep those questions coming to the company. Keep, getting engaged with us on social media. We we do love to see your comments and your encouragement. So thank you very much.

59:16 Thank you, James. Thanks Yeah. No worries. Thanks very much, everybody, for tuning in. So That's great. James, Carl, thank you very much indeed for your time this evening and for updating investors. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order the company can better understand your views and expectations? This will only take a few moments complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of ARES STRATEGIC, we'd like to thank you for attending today's presentation.