Asiamet Resources (LSE:ARS) — Investor Update

0:00 Good afternoon, ladies and gentlemen. Welcome to the ARES STRATEGIC MINING INvestor Update. Throughout today's recorded meeting, investors will be in listen only mode. Questions are encouraged and can be submitted at any time just using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions at any time and press send. Given the significant attendance on today's call, the company will not be able to answer every question received during the meeting itself. However, the company can review your questions submitted today, and we'll publish their responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'm sure the company will be most grateful for your participation. I'd now like to hand over to James Walker, CEO. Good afternoon. Afternoon, everyone. Thanks for all for jumping on. So I think the format of today is to just run you quickly through the project and recent developments and then move on to the questions. But, hopefully, you can all see the presentation in front of you at the moment. I don't know if you can see me. If you can, my apologies.

0:56 But, yeah, I and I I imagine a lot of you will already be familiar with the project. A lot of you are investors already, but we'll still just give a bit of an overview. Hopefully, there'll be something in there that's interesting for everybody. So just to give a little bit of background about who we are, ARES STRATEGIC MINING, and we do have the only firm, permitted floor spa mine in The US.

1:22 This was a big industry in the nineties in The US, and it was responsible for, you know, supplying to US industry, but a lot of that did get shipped overseas. And so what's what's ended up happening now is that there's a lot more focus on domestic produce and returning of and reindustrialization of The US. Obviously, we're we're part of that too. Fluorospar is bit of a unique mineral. I think it's, it it's a critical mineral, which means it's vital to the economic security of The United States. I think it's the only nonmetallic critical mineral that is a 100% imported into The US as well. So it's quite unique in that fashion, which is why it's, it's garnering a lot of attention. And I I'm sure, a lot of people wouldn't have heard of Florspar before because when you ship a industry overseas, you don't technically you don't really get to hear about it.

2:15 But now that it's making a bit of a comeback, I'm sure we'll be the first of, of several people that are really gonna be pursuing this. China was obviously a very big producer of, floor spa, and, that was one of the reasons why the, the industry was shipped overseas. But, even they have gone from being a net exporter to the net importer. And so and that's principally because they mined out a lot of their high grade floor spar during their their industrialization period, and that sort of left them in a situation now where they've just got low level low level deposits far under the grade that we've got at the Spore Mountain and that ARES will be mining very shortly. So just to give a bit more about about the project itself, there's a whole district scale operation that we have at the Spore Mountain.

3:09 Covers about 6,000 acres. We've done drilling there, metallurgical work, assaying, lidar, geophysics. We've done we've done, obviously, a lot of work to get the property with to where it is today, is things like, you know, ramp installations, heavy mining equipment coming in, ventilation systems going in, all the big stuff that that leads up to mining and including, you know, plant purchasing and all that stuff. So there's been, we've been very well supported, and we've we've tried to take the tactic of really trying to, avoid, I think, some of the traps that before junior mining companies, which is really you you start with a low valuation, which also means a low share price. And if raise you any amount of money, it can be incredibly dilutive.

3:56 And if you if you do want to be one of the few junior miners that takes the operation all the way up to production, I mean, typically, you would dilute yourself into oblivion. And so we've sought government funding to try and avoid that as much as we possibly can. And and in that, we've been very successful. So things like the USDA has come in for low interest funding, and we use that to purchase things like, the lumps plant and, do construction work at the at the at the site and buy in big industrial land. Then we got $10,500,000 bond from the state of Utah for the for the promotion of manufacturing within the state. That allowed us to do things like buy the flotation plant, and continue the construction at the, at the Delta site. And then most recently, we, we got an $11,000,000 grant from the state of Utah and the, the CIB there.

4:55 And a lot of that was also, related to the fact that we found, very good grades of gallium actually in our in our floor spar at a time when there's sort of an economic war war going on with China, and and China, cut off gallium supply to The US to try and inhibit The US tech industry from really competing, in the long term because, obviously, you guys did a inherently important mineral, in the creation of microchips for computers. So, the fact that we got that, got us a lot of attention, and we, the fact that we already had a critical mineral plus the gallium, it led to enormous amount of support from the state of Utah. So, and that that's been complemented as well by having institutional investment from people like Sorby and and and other players in the space too.

5:44 But the good part is now that because we've done most of the work, and we're now sitting very comfortably within the cash position, the project itself has has been very streamlined by all this government investment. And the nice thing for all of us as well is that it's avoided having to do any of that by buying in shares, and or using shares and equity to, to raise that financing just so we can protect our positions in the long run, which is which I think what we all really want out of this is we all want to receive a good return, and we don't really want to undermine that prospect. So, I've spoken a little bit about the FluorSpA and gallium already, but just to touch a little bit more on those. I mean, the FluorSpA in The US is is incredibly important, industry. I mean, it's used in the manufacture of aluminum, steel, hydrofluoric acid, fluorine, refrigeration units, microchips, electronics, glass, cement. It's basically used in everything.

6:36 And and prior to, say, the nineties when the industry got shipped over overseas, it would have been something that everyone was relatively familiar with because it was a big industry and it it was necessary in all of these different areas. It can't be it can't be recycled and it can't and there are no substitutes for it either. And the fact that The US actually has a really thriving, you know, steel industry that requires so much, floor spar because there are twin for every ton of steel produced, you need 20 pounds of floor spar. You can get an idea of just just how important this is as a mineral. And, the fact that we've had to be importing all of this really is, I think, highlighted, especially, recent administrations. I'm talking about Trump's and actually the recent Biden administrations have been very concentrated on trying to build back a national resilience to imports. We're around strategic and critical minerals because that dependence has led leads to an inability to exercise, like, inter international policy. You need to make exceptions for things, and we even see that with the Ukrainian war where The US makes exceptions for, buying in uranium because it can't manufacture its own highly enriched uranium for its own defense purposes.

7:54 And on the gallium side of things, that's become, critically important as well. And and just a just a quick background about that is that we we had detected some gallium in our fluorescein with SGS assay assaying testing, but it was really when we, began working with the AMES National Laboratory who reached out to us because they had a mandate to investigate gallium because of the economic war with China and found that actually the the, in their reports, there were very sizable concentrations, much more than we expected, within our floor spar ore. And so now we're actually got a partnership with them to look at, how we adapt our flotation plant to siphon off a gallium concentrate that we could then sell independently. So the nice part here is that that sort of landed in our lap, and we didn't really have to do anything to work to that, but now we're gonna have to do some work to look at how we do the metallurgy around recovering that. And once we do that, gallium sells for an enormous amount more than floor spar.

8:51 We wouldn't recover nearly as much, of course, but, it would be, you know, not pure profit exactly, but it would be a major boost to our top and bottom lines as we as we build this project out. And so, yeah, that that that's something to watch out for. Again, gallium, very important in in the tech industry. That's half the reason why or, well, 100% of the reason why China cut off the supply to The US just to try and cripple them. So the good part here is that, if you've been following the story, last year, we did a huge amount of work on the site, and that meant, ramp installations, edits, ventilation installations, rock, rock bolting, cementing, purchase of mining equipment.

9:41 All all of this kind of stuff was sort of done last year. And when we closed this recent 11,000,000 from the state, we we got everyone back to work straight away. Like, well, we kept a sort of a care and maintenance, and then we ramped it up completely. And so all the mining guys are back on-site. So I would be I'd be watching out for some future releases, public releases of just about the progress that's that's underway there at the site. So a few we bought in a few more pieces of equipment in the last month. We've we've obviously starting now to go through the ore body. So the ramp was already at, ore body level. Now we're drifting through, which means actually we we would very imminently be able to start stockpiling big, big ore bodies of, floor spar at at surface, ready for the starting to truck into delta, for when the lumps plant is ready.

10:31 So we've got, the haulage companies ready. We've got the mining equipment done. We've got the ramp installations done. The mining teams are on-site. And so, you know, we're in a it's a very nice comfortable position. Like, one of the one of one of the few nice positions I think junior miners are actually in recently because it's a very difficult industry to, take a project that's greenfield and and progress it all this way. But infrastructure's there, equipment's there, plant infrastructure's there, and importantly, customers in the market are just waiting for this. So I would say, on the on the Delta site front, you'll probably see some pictures coming out imminently of the assembled parts coming together a lot more just to form that overall plant. We'll probably pour a bit more concrete.

11:17 And the idea here is we'll bring that lumps plant on, online later this year first, but we'll start obviously on the on the flotation plant construction, and that'll be completed early next year. But the idea here is to get into production, get revenue generating this year, and then that second plant can come online, and that'll boost our capacity and boost our product line because we'll be able to produce both METSPAR and ACIDSPAR. Sorry. Oh, I jumped ahead a little bit there, but, the processing facility is a very important component of this. You probably remember from last year seeing concrete being poured and foundations being laid and then steel structures being erected. And so that obviously, that is now being complemented by the fact that construction crews are back on that site. And so a lot of that work where we had assembled a lot of the plant components, now we're taking those into the proper places, and we're we're putting those in place.

12:10 Now we'll look next to begin pouring concrete foundations for the flotation plant separately, and then we'll have a concurrent, construction project where we're building up both plants at the same time. But that lumps plant will come online a lot faster. We've had it on-site for a bit longer, so we've been able to assemble it and get it all ready. And then it should hopefully be like a bit like a Lego set, and we can just sort of, like, move all the pieces into into place. And then the the nice part is that any stuff, any material that can't be turned into final product for steel industry, metal industry, whoever wants the metallurgical grade, we can stockpile that equipment, that that that stuff and have the have it ready for when the flotation plant is operational. And then we'll just feed it into that system, and then we'll have that acid spar.

12:57 And the the nice thing about acid spar

12:59 and is that, you can basically feed anything into that system. Now, obviously, the higher grade, the better. But, if you can feed low grade in, you can still concentrate it to get towards that high quality product. Whereas for metallurgical grade, it's best to begin with some higher grade products. So you can get toward that 80 to 90% premium metallurgical grade product, which we which we'll be producing at the, later this year. So the the as I said, like, we're in a very nice position at the moment. I mean, there's some, in front of you at the moment, you've seen, some of the the costs of MetSpa and AscSpa. Fortunately, the lower end of those ranges is is kind of unlikely at the moment. We're not seeing that very much because, as I said, there is there's a big squeeze on this stuff. China going from a net exporter to a net importer, and there's not many countries that actually produce fluorspar.

13:56 There's countries like Vietnam and South Africa, China.

14:02 But even even everything in Asia, even if it's Mongolia, it gets eaten up by the Chinese market. And so the constraint now is trying to find, good floor spa products, projects that can be brought online. But because of that, there's a squeeze on the price that has pushed it up for, that's put us in a very advantageous position for when we do start producing. And, the nice part is that, there's obviously big interest in our product because it would be a US derived product. And there have been complications in the past. We're trying to source it internationally. It's emitting supply, high arsenic contents, impurities. Thankfully, a lot of these these, detriments we don't fall foul of. So we we we should be in a very strong position, and we also have the, of course, the advantage of shipping domestically is obviously much easier than taking international shipments in from from Asia or Europe or South Africa or wherever it is.

14:59 And, there's no shortage, thankfully, of of customers here. Like, obviously, we put out announcements about our German partners, but there's been another there's been a number of, people that are reaching out to us recently, especially as we're ramping up, you know, very eager to get ahold of this. So we could produce all day. We could double or triple production, and then, really, we would have no end to or no inability to to sell this this stuff. In fact, it's because it's on the because it's on the screen at the moment as well. Like, the fact that we have this has been of major interest in the Department of Energy. And last year, they put out an award for building back, the The US's ability to be able to enrich uranium up to, up to reactor levels.

15:52 But the the the process actually involves a pro a product called uranium hexafluoride. And the DOE's mandate was that everything should try and be as domestically sourced as possible, and that put us in line to be part of the DOE contract to supply the fluorospore necessary to create the uranium hexafluoride to do enrichment for the uranium industry. And, the nuclear energy industry is looking to power big data centers, big AI. So their order book is becoming enormous, which means a huge amount of uranium hexafluoride needs to be created. And, obviously, we're we're standing in a very strong position to be able to supply that that massive demand that's that's looming. Talking about gigawatts and gigawatts of power that's gonna be required from nuclear. And so it's just just one of one of many industries that we can supply, but it's a big looming one that, we're intrinsically important to, especially during a reindustrialization phase and looking at more domestic, capability.

16:52 So the I mean, what's what's quite nice for all of us is that, over the next few months, you're gonna see a lot of progress in construction, and that's always very reassuring. But the good part is that, all the big as all the big stuff was done last year in terms of, like, mining and ramp installations, now you're gonna see the finalization of, of the project, over the next few months. So, obviously, we now we need to install a secondary ventilation system so that, we can we can, formally mine, but the leases are paid. The the mining permits are up to date. The bonds are all in place. So, effectively, you can start mining any day now. All it is is just a in infrastructure installation process. And so later this year, we'll start trucking that ore. Well well, before that, we'll start stockpiling the ore at surface and, you know, standby for, for seeing some press releases when we start bringing that stuff to surface. And later this year, we'll start trucking that into Delta, where we will start actually processing that, to create that, that that first initial product, which we'll ship along our own rail spur. And the rail spur, we're readying at the moment too. Leases are all paid up on that. And

18:02 now what we gotta do is install a unloading system at our rail spur so we can just stop putting that onto the onto the rail line so Union Pacific can pick that up and deliver it around the country.

18:16 And next year as well, once once all this is going on, we'll finish the completion of the flotation plant. And at that point, we can start producing acid spawn. So that's the the higher grade floor spawn that's used in the manufacture of aluminum, hydrofluoric acid, fluorine, uranium hexafluoride, electronics, all all those kind of areas. These are two thirds of the of the fluorospore market. And so at that point, you know, we should be dealing with some very big chemical companies on that front. And then directly after that, we'll we'll adapt the plants. We can produce that gallium concentrate that we'll then ship off to a refinery, but that should be a big cash boost to the company as well coming in next year once we do finalize the methodology for separating out that gallium to create that concentrate ready for the refinery.

19:04 And, you know, at that point, we should be we should be in a very strong position. Again, technically, we are a floor spar mine, but it becomes a gallium mine. And as we're already permitted, we've become the only gallium the permitted gallium mine in the country as well. So it's, as I say, very fortunate circumstance. So we've we've got obviously a really wonderful team. I couldn't I couldn't really be, you know they they deserve a lot of generosity here. Some some people that, have, been added to this roster is, Roy Duh, who's been doing the mining for us. And, obviously, we're we're integrating them more closely with ARES at the moment, and it's become a much closer partnership than a contractor role. They really are, really sort of being integrated into ARES at the moment. But there's many floor spa experts in our in our company.

19:55 Raul, who's on our board of directors, He served with MINRSA in in Spain, Europe's largest floor spar producer, and it's very rare to get a geologist who has a floor spar background, and that was very serendipitous that he had that experience. And through our network, we brought in Bob Lee, who's also a director, who, runs floor spa mines in Thailand, and was also very instrumental in helping us with our plant design because one of the unfortunate components of trying to do something individually and for the first time essentially is that the expertise does not exist for things like plant design. But Bob had designed plants. He knew exactly how to do that for floor spa. So we were able to come in and do what it was a bit of a struggle to do in The States, was was, was build a a a plant specific to Floorspar that could recover as much as possible and get to the grades we wanted and achieve the specifications that the customer wanted.

20:52 So, you know, so everyone here is is fed very hugely into, where we've got to today. So, hopefully, that was a good summary of the of the industry, where it's where the project is currently at, and and what we can expect in the next few months. So, I can turn it over to a few, questions now. That's great. James, let me just jump in there. Just give you a few seconds before we file the questions that you've had from investors. So thank you to everybody for your engagement this afternoon. Ladies and please do continue just to submit your questions, and I'm sure we'll get through to those in due course. Karl, as you can see, there's a number of questions from investors. If I may just hand back to you just to read through those questions, and then I'll pick up from you at the end.

21:41 Wonderful. James, thank you very much. We all appreciate that, overview of things. We have a lot of questions to get through. Unfortunately, we're not gonna be able to get all of them, so I'm gonna try and summarize and combine as many of them as I can. Jim, some of these are gonna be a bit repetitive from some of the things that you may have talked about, but maybe you can you can take this time to maybe give us a little bit more detail. And I do appreciate some of these. You'll not be able to give definite times and dates as much as we would like, but, please, as best as you can, we we we appreciate your your your candor. So the first question we received is you touched on this a little bit. Let's talk about the the shaft and the vent secondary ventilation system, kind of with an eye to when we can because it's it's something that has held the company back for a little while, but when can we hope to see that completed and really what's involved in in that process?

22:35 Yeah. No. This is this is a good question because I mentioned it was a bit of a prohibition on on on stopping us from actually formally mining even when we had the mining permit and the bond in place. And the reason for that is that we to meet to be MSHAW compliant, who are the regulators of mines, you usually have a a a secondary exit way, essentially a scape shaft, and a second method of delivering air to to the crew. But what was necessary, though we last year, got the ramp down to the level of the ore body, we we needed to drift through that ore body to have that on the other side of the ore body because if we drill and blast from the top, then we still need that excavated portion below the pipe so that the material can fall into that space and then be removed, which means that the only possible place the second exit could be would be on the other side of the ore body. So the guys have now they're drilling right into the ore body at the moment, so they're drifting through it right now.

23:40 So that's why I said we can start expecting to see soon floor spa being stacked at the surface because that that drift will produce that that floor spa to go there. Now the the nice thing here is that once that drift is completed through, the the the shaft that is necessary to install that secondary ventilation system has actually already been done. We've taken advantage of a historic manhole that was used for pipe examinations, and we can we can run the ventilation system up that that that shaft. So the nice part is that once that drift is completed, the ventilation system installation becomes an incredibly fast process. So it it it is very necessary to mine even though we are removing that ore from ore body, is technically part of the mine installation work rather than mining.

24:31 But the formal drill and blast to remove that stuff will come directly after the installation of that secondary ventilation system. So when when investors have reached out in the past and they've asked what's what stops you actually mining now? It was that ventilation system and that drift through the ore body. But the good part is that that drift has already started, and that ventilation system is mostly built. So that that that should give you an approximate idea. It'll certainly be done later this year, that that installation of that secondary that secondary ventilation system and escape portal. Excellent. I guess that kinda moves the company the next stage and logistics. So what what's involved in the logistics of the company? I know we've been buying, some machinery, but that transition from going from being a mining company to a production company, what will be involved in the in the logistics side of that, and and what have you already got in place, and what still needs to be done to to manage that portion of the business? So the I mean, the good part here is that well, first of all, we're not a logistics company.

25:38 And I if you once you start speaking to buyers and people who are involved, like material brokers and what's involved in the management of the shipment. It's it's it's actually a very complicated system, but the nice part is that we are we don't have to be involved in that. So say, for instance, we just need to sell at site, and the ownership gets taken over as soon as it gets loaded onto the railcar. So all we have to be responsible for is the maintenance of that rail spur and the loading. But once it goes on to loading, effectively at that point, we've already verified the specification of that material, the customer's accepted it, And so effectively, it it stops becoming our product at that point. It becomes the customer's product, and the payment is authorized to go ahead at that point.

26:24 And then the delivery of that material and the logistics around that become the responsibility of the buyer. So there's a lot of companies all around the states. I mean, from from Texas right over to, the Northeast Part of of The US that want this stuff, including, like, big steel mills, you know, like, in Ohio and all those sort of places. That will fortunately get managed for us, and it's a it's a cost we don't need to we don't need to bear as part of our selling price. There's the market price. We'll sell for that. We'll load it for you onto the rail rail spur, and then it's the customer takes ownership of of it as soon as it gets loaded. So we've maybe in the future, we'll build a rail spur a bit closer to

27:11 the manufacturing operation in Delta, But we have a we have a rail spur that Union Pacific leased to us up in Lindell, just a bit north of that. So there'll be just a trucking operation that's only a few miles from the Delta facility all the way up to the Lindell

27:30 the Lindell rail spur. And it'll be loaded on there and then obviously that's that's our responsibility over with. About that step from the loss sheet mine to the Delta facility? Is they're much involved in that? So, I mean, like every mine, no mine is ever in a nice place. I mean and when I say nice, I really mean it's it's never near anything. And the Spall Mountain is actually in a very fortunate position in that because it's got that whole area has incredibly unique geology, the only beryllium mine in the country sits just next to us, the Materion Mine. But because because beryllium is used in a lot of defense applications, the government has built this massive highway that goes all the way up to the mine site.

28:16 So the infrastructure is already installed that allows us to transport material directly from the Spall Mountain all the way to site. It's just a big highway that's essentially gonna be allocated to just us and the material in operation. So it's that that is typically one thing that gives everyone a lot of hassle because transporting hundreds, thousands of tons of material is difficult if you don't have a road system, and that can be cause incredible time delays. So the big infrastructure works are done for us. We just need to truck it. Unfortunately, for the trucking component, you know, that's not that's not a difficult part. Essentially, the work that we're doing with Provo at the moment and with mining, it would just be an extension of that work. So as they pull that ore out, it will be stockpiled.

29:05 And will be sorted, and then it'll be packaged off so it can just go on a a delivery vehicle that just takes into Delta and then just gets dumped at the side and ready for processing. So that we already have people in place to do all of that driving. We have the trucks. We have the personnel, and we've got the strategy to deliver all of that. So, yeah, the the nice part, as I said, like, the big heavy lifting got done last year. Now it's just piecing all the small parts together. Excellent. Thanks for that explanation. It's really good to understand that. And then moving to the lumps plant and further the flotation. I know you did touch on this a little bit, but but maybe you could give us an idea of what still needs to be done and kind of the time that you have in mind so that for each portion of that to be completed?

29:54 So with the with the lumps plant, we received that one first before the flotation plant, which was delivered last year. So the the lumps plant, were able to assemble the main components of it, and we poured the foundations for the main part of the plant as well as a rectus steel structure that would support the lumps plant. There is some additional concrete pouring that needs to be done just for a few other smaller bases of the other pieces of equipment. But the the the idea now with the lumps plant is that it sort of has an expedited route to get towards finalization and production, which is really just sort of assembling it a bit like a Lego set. So there's no it looks very feasible that we can complete that this year and then start putting that material that will be ready and delivered to the site through the lumps plant so we can start producing that metallurgical lump.

30:44 That gives us our first revenue. That that stops us from being a junior mining company, makes us a manufacturing company. And while that's all going on,

30:53 the flotation plant, again, will need to pour concrete foundations, and we'll erect the steel for that. But the good part is we've we've got all that that stuff at site now. We've got all the steel foundations and structure. We've got all the flotation plant components, and we're gonna be building that out at the same time the lumps plant is being constructed. It'll just take a little bit longer because we received it later, and just needs a bit more of assembly. And it's a bit more of a fine process than the the lumps plant, which is sort of a heavy handed way of just getting to a high grade metallurgical product that can then just go to the steel markets. But the the nice part is because there is that little bit of extra time that's gonna be taken to instruct that flotation plant, we can complete the gallium investigations just so we can adapt that appropriately so we can create that siphoned off gallium concentrate. Now I don't wanna I don't wanna get ahead and promise too much, but, obviously, we need to ensure that it can be economically extrapolated.

31:51 But assuming it can be, we can that that gallium concentrate will go ahead and will produce that, alongside the high grade floor spar. That'll be intended I I imagine predominantly for the chemical industry who eats up the most of the the acid spa that gets produced in the world. Yeah. Fantastic. And I'm just thinking when we kinda get past that and we're into production, is there any way and I'm sure this is in your models. I'm looking forward into what kind of production we're gonna see in those in Floor Spar and Hasaspar in '25 this year and '26. Do we have any projections on that? I mean, I would say what we've done in the past is when we brought in independent mining engineers just to do an assessment of the property, They kept the production around about 50,000 tons a year, and they they did that not because of the plant capacity or the or the the amount of floor spar available at this at this mining site. They did that just because of the fact that the type of mining that we're doing, the the ramp installation with the drill and blast and excavation, they sort of saw a bottleneck of about 50,000 tons of final product coming from an operation of that type.

33:10 So if we were to take that 50,000 tons and we sort of let's say a few months of the year towards the end of the year, we're producing some metallurgical grade. Maybe it would be, you know, 10% of that, so a few thousand tonnes. I think a few thousand tonnes later this year is incredibly doable, just given the fact we should be removing some more soon, and the lumps plant should not take too long to construct unless we get some obstacles that come at us through construction delays or backlog on orders for things like concrete. But, certainly, I think yeah. It's it's completely doable. A few thousand tonnes to 10,000 tonnes in that kind of range of producing metallurgical grade this year is certainly what we'd be aiming for.

33:58 But once once we've ramped that whole operation up and we've optimized it, really, 50,000 tons on an annual basis is very easy for us to do. But the idea in the long run will actually be to to just now start doing some additional drilling on the secondary and tertiary mine site that we've identified. So there's that we know of of where we wanna mine next, and that and that will eliminate that 50% that 50,000 tonne bottleneck. So there's no reason why we couldn't double or triple production over the coming years. But just think it'd be it's just prudent to to get everything in in place and then and then ramp up gradually and and stick to stick to conservative estimations around that 50,000 tons just so we don't we don't overpromise.

34:49 I think it would be best at this point to just underpromise a little bit and then surprise everyone. But it's certainly very doable to bring install a secondary ramp installation. And and what I would really like towards the northeast part of the property, there's the ore body drifts towards the surface. So you could even have a an expanded surface operation in that sort of area provided the drilling just bears that out. And if you do that, then you could increase the capacity of the operation quite substantially. And the nice part here is this, it gives us it gives us years of, like, blue sky potential. We just need to make sure that these these initial tentative steps in from junior mining into production are just carefully managed. Margins can be maintained. We're just careful. We keep our costs down, and we build up very gradually. And then we should be in a very comfortable position to expand quite rapidly. So, yeah, I'm not trying to convolute the answer, but 50,000 tonnes is what we were projected to produce. That can certainly be increased over time as well. And, obviously, the the revenues that we projected, they don't really account for any sort of increase in revenue that might be generated from the gallium components of the operation either. So Perfect. I'll give you a nice softball for this one. Can production continue throughout the year?

36:09 Yes. So, I mean, originally, actually, we were we were not planning to do it because, the ground can sometimes get very cold, at a mine site. But the nice part is if you are actually underground, you're not subject to surface conditions. And, obviously, the condition of an underground mine does not change no matter if it's hot or cold or whatever. In fact, if anything, it might make it a bit more pleasant on the guys down in the in the shaft because, you know, my it gets very hot down there. So the the ore the ore body itself, the fact that we're going underground for those that initial mining means we can just keep pulling out ore. Now we could probably pull out ore a little bit well, the the plant can produce final product faster than we can probably supply it.

36:57 So it might not be necessary to do mining all year round just because well, actually, no. Sorry. To actually run the plant all year round because it could it could it could very likely just process everything it could within the sort of annual production floor spar in in fewer months. So say, twelve months of mining, you might only need, like, six, seven months of of processing to do that whole batch. So I would say there's gonna be year round operations, but it might not always be necessary to have each component of the operation functional. If if, for instance, we just need a bit more time to start stockpiling, we know we can and it's more economic just to ramp the production of the plant down a little bit. We can just keep stockpiling and then just turn the plant back on when weather conditions are written nicer, and we can we can just run a whole load of material straight through to produce, you know, a quick turnaround of five, ten, fifteen, twenty thousand tons, whatever it is that we stockpile ready for it. So but, yes, ultimately, it will be a year round offtakes, thinking about Kramer and some of the other relationships that you've been developing.

38:27 When it comes to selling the product, what what do we have a clear picture of what that's gonna look like? Or, you know, with all of the different governmental things that have been going on and the legislation that's being passed, the complete shift in mentality, has that changed the way the company has planned to sell its product? So, I mean, yes and no. I would say provisionally at the moment, the plan is that The US steel industry will probably eat up almost all of our initial production. The the reason why I say it might have changed a little bit is that the the current administration is very focused on doing things like building up building back the national stockpiles of minerals. So just a bit of a history thing, but Bill Clinton, he under his administration, they had all these national stockpiles of minerals, and he he sold them off for pennies on the dollar.

39:20 But that effectively left The US without sufficient stockpiles of certain minerals. Now now that the Trump administration is in and they are looking at replenishing those stockpiles, certain things like Florspar, we're obviously well very well positioned. Now if the government or the Department of Defense said we would like x amount of product and we will pay you y, obviously, we will try and ramp up our ins our operations commensurate to try and meet that demand. So I would say that the customer base has not changed. The off the the the partners that we've been talking with have not changed, but there might be this additional government element to it where we we we might need to be involved in the build back of that national stockpile.

40:05 It's not it's not a guarantee. It just it looks like it it is on the horizon as something we might need to be involved with in the future. And certainly on things like gallium, if we do if we do go ahead with that project and it does look like some of the concentrations that the AIMES National Laboratory identified were accurate and we can produce that concentrate, then there almost certainly would be defense related work that we would have to do to ensure that there was a suitable supply going towards national not national defense so much, but sort of, yeah, strength in-depth, making sure supply chains were sufficient to ensure The US could manufacture what it needs to manufacture.

40:56 Sounds exciting. And given the kind of tariff situation that that that's kind of around, do do we see that enabling the company to get premium pricing on on its product? Do we compared to the world market? I mean, it's it's I think we're still this tariff discussion that's been going on at the moment, I mean, it still might be a bit early to say what's really gonna happen with a lot of it. Some of it might be posturing to get better trade deals. I think a lot of some of it might be that. There are some countries that don't wanna play ball, and they will incur tariffs if they don't wanna play ball on that. I mean, it's it's very difficult to compete with The US as an industrial power. So you're sort of picking a fight that you can't win if you're gonna go down that route. But But some countries will do that do that just out of stupidity. Now, obviously, with things like Florspar, sometimes when it's it's so critical, though, The US will make exceptions for certain minerals that it just desperately needs. But if they've got a domestic producer in the country, they're not gonna make those allowances for those and those exceptions for those companies and those minerals.

41:58 So then those tariffs do get applied to those, those minerals. And in this case, I imagine Florspar, they would make exceptions for it because they desperately need it. If we're producing it, they're not gonna make that exception. And so then that's gonna spike the price of floor spa domestically, which will obviously benefit us because the supply has been massively increased in cost. Whatever it is, 25, 30%, whatever whatever it is. Obviously, we're going to be economically benefiting from that. Sorry. Financially benefiting from that those tariffs. There's only one way it can really go for us, is positive, which is nice to say, because it's there is a level of tariffs that do deal with domestic protectionism. That's good for us. And the increase of costs of international suppliers, and that's good for us too because it enables us to actually we could still raise our prices and come under what they're able to sell for.

42:54 So there's no bad service scenario for us on the on the tariff front. Excellent. And then just thinking about the overall cost, do you believe the company will reach out for any more funding moving forward, or are are we feeling pretty comfortable at the moment? I mean, what I would say is that we have enough we have, I mean, the project has now got easily enough money to get itself into production and start producing. There could be I don't know. If there's if there's anything outside project costs that we could look to raise to increase the strength of the company, its profitability to support the anything outside of the project, maybe we would look at that. But, I mean, at this point, we're in a very probably the most comfortable position we've been in for years.

43:45 I mean, the project is essentially derisked at this point. Anything we would have anything we would raise additionally at this point would just to be support the company outside of that project. That's all I would say about that. But we we fortunately, because we have the institutional investor that supports us, things like basic g and a costs on a monthly basis, I mean, they they very much facilitate our ability to meet those costs. There are certain certainly the the some of the finances the government the company has had to raise in the past to support itself. It would definitely be better to raise money to take out more expensive money with cheaper money. But these these are, I think, more fine tuned decisions that we need to examine.

44:31 We don't wanna dilute very heavily. We don't want to make any any poor decisions late in the game here, especially as the once the revenue is online, we're essentially we we have that non dilutive, non debt income coming into the company, which is very different to anything we've ever had before. So there's a bit of a nuanced examination, I think, that would need to be taken ahead of raising of any funds additional to what we've currently got. Yeah. You mentioned briefly there, about Sorby. There's been quite a few questions about the agreement that ARES has with Sorby. Maybe you could take a few moments and just explain how that is structured and what it looks like. Well, I'm not a banker, so I'm probably gonna get this a little bit wrong. But it's essentially that the institutional investors took a long term hedge on the success of the company. So there they they bought shares in in ARES, but we we made for an arrangement where the the money for that purchase was be would be apportioned to us on a monthly basis over a couple of years with the provision that we expected to get into production and start and the share price would increase. And the benefit to us and Sorby is that as we get closer and the share price will appreciate, the returns we get increase as well. So effectively, it's not that it's free money exactly, but when I think the recent release, we talked about getting a nondilutive capital injection into the company, which didn't cost us any shares or any or anything like

46:02 that. That was because of the appreciation in volume, stock price. And because we took that bet, now that institutional investor pays us out that capital money based on our performance. And we expect that to get even better. We strategically made that investment at a time when we knew we were about to go into production and we were close to revenue, understanding that that would massively boost the company and then it would boost the revenues to the company as well. So if you if you can sort of understand that sort of structure, I'm sure a banker would do a much better job of explaining it. But essentially, we we we incrementally benefit on a monthly basis from performing well. And that's why we've been doing well with Sobe recently as we've been very we're performing very well.

46:52 That's great. And good to have those relationships in place. And thinking of that, we talked a little bit about this in the past. You even touched on it, but your relationship with Kramer. Now there was talk with $2,000,000 funding from Kramer at one point. Where do things stand with with Kramer? And did ARES ever receive that financing? Yeah. So those those guys are really great. They're still standing by waiting. So when when you do an offtake agreement like this, there is that forward sale component that goes into this. Now in order to qualify, you can't take your ore and just send it to the customer. They need to see final spec. But once they see final spec, then materials broker like Kramer says, wonderful. Payment goes out. But you can't take your ore and also just send it to a third party like SGS or, say, Bob Lee's plant in in in in Thailand and have it processed there and then sent on. It's gonna be ore from your ore body that goes into the plant at your site that meets the spec, and then once it meets that spec, then you qualify with the customer.

47:57 So as we get closer to the, the lumps plant being erected, all we've got to do is get that initial screens up and running, process it through that, demonstrate that spec, and then, obviously, we we qualify for the forward investment that would be coming from them. But, obviously, they're they're we're still very much in contact with them. We've been keeping them updated. They they really want to move ahead with this. They're obviously constrained by the way the industry has to work with regard, qualification material for customers. You can understand why they've gotta make that verification before they can guarantee, supply. But, like, the good part is that they're just they're waiting for us here. There's big demand here. They they there's a big enthusiasm for an American producer. So it's that that would be a nice capital injection into the company that would be nondilutive, nondebt, that would obviously be very beneficial just for the the streamlining of operations, if not expedited, operational, capabilities of the company.

48:57 Great. Now, James, we're running really low on time, but we we have a lot of questions. So, unfortunately, we're not gonna be able to answer all of them. But maybe we could do a couple quick rapid fire kind of question style. I know they're complicated topics, but maybe just to cover as much as we can in the last few minutes. Okay. Yeah. So your relationship with ARES and with Nano, Now that the mine is going into production, there's a lot more required of you. Are you still gonna be able to manage both of those, relationships comfortably? I mean, the nice part here is that in I don't I mean, I don't know what I can talk about, but, like, the earlier on, I mentioned the part the fact that the Department of Energy had made ARES part of its winning contract for that $3,400,000,000 pool.

49:48 But the reason why it won that is that the nano element of that relationship was going to be providing things like the enrichments, the conversion, and the uranium mining. And so there's a big synergy between the two companies that we're we're trying to work out how they can be a greater partner because the the nice part for ARES here is that even when it was struggling for cash, there was that ability for it to be supported by funds that were coming in from from another place. And I can't say where that was coming in from, but ARES could be supported to survive. But because of that because of that relationship there, ARES get us additional support from a much larger, more powerful company that has access to many more funds. And the fact that now ARES is allied on a project for the Department of Energy with Nano means that there will be additional funds that come in as the as the relevant task orders come out. So there's been one one main task order that's come out so far. We're expecting the second task order out in August, but then there should be much more rapid fire after that.

50:57 There's only one floor spa producer in the in the country, which will be us. So there will be an additional benefits of that partnership will be very financially beneficial. And I mean and I mean grant money too, not loans and not equity placements or anything like that. Just just grants that come ARES's way just by through that relationship because The US needs a lot of power, a huge amount of power. Like, if you we were speaking to Bloomberg the other day, and they were projecting something like three three hundred gigawatts of power, something crazy like that. But but most of it, they expected to get from the increase in nuclear. And the reason for that is because the if you were to outlay that much more power in the country, you would need massive infrastructure upgrades to the grid. And that would take billions and billions of dollars and years to do.

51:51 But nuclear the advanced nuclear does not need that. That can be put anywhere. It can and it can co locate. So they expect that reindustrialization, electrification of the country, and the powering of those data centers to come from nuclear. That means a lot of uranium hexafluoride, and that may basically puts ARES in a nice strategy. So the two are related parties. They are servicing the same end customer, which is effectively it's gonna be largely the tech industry. But in order for ARES to be involved in that, that relationship is is intrinsically important. Yeah. Thanks, James. I think we probably could spend an hour just hop on on that topic on its own. Yeah. This is the final question because, yeah, the rapid fire required too much too much detail.

52:38 This is a personal So it was asked how are you doing with your new family, and I hope that that you're taking the time and having a balanced life and enjoying your your your young children. I don't know, man. I what I would say is my my wife would not say I I lead a very life at all. I mean, there's three small children. Two of them have just got like, they're four, two, and seven months. But, like, I'm I'm away so much. I think I'm probably not doing a very poor job on the father front. I try and get home as much as I can, but, like, I I work all the time. So, like, I I see them in evenings maybe for, like, half an hour before they go to bed. And then I try and I try and work as little as I can on Saturday, but then that means I've gotta work most of Sunday half of Sunday so I can have Sunday evening free. So I don't know. But it's the the nice part is that, like, if we build now, then the future will be sort of freed up.

53:32 So, you know, maybe the kids will forgive me when I'm a bit you know, when they're a bit older, and I can, you you know, know, come back at a normal time. But, unfortunately, they're 12 they have to be twelve hour days. There's just there's just too much to do, and, that effectively means you leave in the dark and get back in the dark. So yeah. I'm doing my best. I can. Carl, James, thank you very much indeed for your time. And James, the problems only get bigger when they get older, so you're welcome. But again, James, thank thank you for your time, Carl. Thank you for posing those questions, and thank you to everybody for your engagement. And, as the guy said, we will make all the questions available. If there's any topics extra, we can always, hit you back up, post today's meeting. James, know investor feedback is important to you. I will certainly redirect those on the call to give you their thoughts and expectations.

54:21 But before doing so, if I may, just a couple of closing comments, and then I'll send investors to give you their feedback. Oh, well, I think nothing more than what we've touched on today. Like, we're in a really wonderful position now, and things are going along so smoothly at the project site that I I couldn't be happy with the way things are going. There's a lot of construction going on. There's a lot of mining. I'll do my best to get more public releases out. Sometimes you can just get wrapped up in the project enough that you're not getting the updates out fast enough. So I know I know I get criticized for that. I will will do better. But the nice part is that there should be some really positive ones coming out. And, with everything on the horizon, there should be there should be a lot of positive updates coming out over the next few months to the next year, especially as everything starts coming online and we start seeing these things getting erected and built.

55:12 But there's a lot of support for us at the moment. It's a wonderful time to be in this situation just given the geopolitical circumstances. So I don't wanna don't don't wanna waffle on too much, but, yeah, just just generally, I wanna send a message that it's a very positive position to be in. Like, it's one of the happiest I've been with the position of the company in recent times. That's great, James. Thank you once again for updating investors. If I could please ask investors not to close this session as I now automatically redirect you so you can provide your feedback in order the company can better understand your views and expectations. On behalf of the company, I'd like to thank you for attending today's presentation. Enjoy the rest of your day or evening. Thank you once again.