Base Metals Outlook 2024

0:08 Good day everyone and welcome to our Base Metal Outlook panel for 2024. Despite base metals often taking a backseat to precious metals in public discussions, their significance remains undeniable. Today we have individuals from various exploration companies here to delve into the economics of their projects and to validate and anticipate these evolving alongside price fluctuations throughout 2024. After our group discussion, we'll open the floor for some questions. So please feel free to use the chat box in the bottom right corner. But to kick things off, let's just start with some brief introductions, gentlemen. Could you please introduce yourself as well as the type of metals your projects are exposed to? I'm just going to start from my screen left to right. So, Michael, why don't you go ahead and do the first intro?

0:53 No, thanks, Kyle. Great to be here. Looking forward to the discussion. And yes, Sendai Resources is focused on copper, gold and silver. We're in Vicuna, where you've got these telescope porphyries containing all 3 of those metals. So, for the base metal aspect, we will be focusing on Copper. Thank you. And Richard?

1:12 Thanks, everybody. Nice to be here. Bunker Hill is an old Zinc-led silver mine that ran for 100-years, closed in 1980. We got hold of it 3 years ago or so. We are going to bring it back into production at the end of this year. So the base metals component, or the one that we'll most speak about here is zinc. And that produces 70% of our income starting off. And we're a low cap X restart. And also significantly,

1:44 we're the first mine to restart in a US government environmental cleanup site since those programs started in 1969. Thank you, Richard. And Alex. Hi, hi everyone. Thanks for connecting today. Unfortunately, Brandon had an urgent personal matter to attend at exactly this time. So apologies on his behalf, but hopefully I can fill in his shoes. As many of you know,

2:11 we have 2 best in class development projects located in the Yukon, MAC Pass, a polymetallic zinc lead silver deposit, and MAC Tang, a high-grade tungsten deposit. Thank you. Now, as we progress, I anticipate, I did prepare some questions, but I'm sure it won't take the full hour. I'm going to be looking at the chat, trying to incorporate questions in a logical order to the discussion at hand, but please feel free to submit questions. But let's just address the overarching question for now. Are you bullish or bearish on any particular base metal for 2024?

2:46 Do you have insight on metals that aren't under your company's umbrella, that's OK, too. But we're going reverse order now. So with you, Alex, any bullish or bearish sentiment? Complicated question. I think there are multiple views in terms of how the global macroeconomic dynamics might favor a certain base metal over other. But what we all generally agree is that China will play a key role in base metals pricing and Chinese GDP growth and fiscal stimulus will play a key role as well as a price driver in 2024.

3:22 Now these initiatives, how these initiatives trickle down into a specific base metal, I wouldn't know. What I do know is by seeing just as the spread between spot price and consensus pricing for 2024, it looks like Zinc has the biggest upside potential, 13%, now trading at I think 104, analyst consensus is 118. So by having that larger potential, I'm bullish on Zinc. And of course, I may be a little bit biased, but yeah. Richard. Thanks. Good to follow Alex's statement on bullish on Zinc. It's hard to disagree with him. But let me add a little bit to it perhaps, is that we're all trying to guess what, or anticipate, analyse, forecast what's going to happen in China, the Chinese recovery as it's called.

4:15 Has the Chinese economy started to move upwards, the stimulus that we should be hearing more about this year is gonna be a useful indicator for that. But also I think sort of Chinese decline

4:31 represented by the old canary in the coal mine, the collapse of some of their real estate businesses is perhaps oversold at the moment in the market or overrepresented in the market. Huge investments in manufacturing, energy transformation, which leads to energy independence, and more. And remembering in the zinc space, China really consumes 50% of global zinc. So watching what happens in China is exceedingly important from the demand side. On the supply side, again, depending very much as always which analyst you speak to, the market's looking pretty tight if China moves onwards and upwards.

5:20 And remembering, I think all of this is in the context of an energy transition driven super cycle that's gonna see an excess of demand over supply, not just over 2024, but the decade ahead of it. And so what we could be seeing in 2024, we're certainly anticipating it as China moves up and other economies start to move up, look for interest rates and so on in that respect, you're going to see this demand

5:50 to supply imbalance, but very much in favour for prices. So bullish on Zinc and that reflects other base metals too. I'm not going to talk about Copper because Michael's going to go on there. And the one I'd say that one's having a little bit of a hit because it is interesting at the moment is Nickel. When we do forward projections of demand and supply, it's very hard to look at these black swan events, which in many respects, the Nickel supply out of Indonesia represents. Not quite a black swan and it was unanticipated.

6:26 But basically it was investment into a particular type of processing technology that made low-grade laterite useful for electric vehicles. And that's changed the supply and demand dynamic and correspondingly the price. So, although we see a general uplift, and this is me speaking for our team, general uplift in demand for Zinc, and I'll leave Michael to give the exciting Copper story and others there. There are some metals that even with increased demand, electric vehicle demand, there can be an uplift in supply. But we don't see that at a significant, in a significant way for zinc, certainly over the next 8 to 10 years. But we'll come back to that probably. Kyle.

7:15 Thank you. And Michael?

7:17 Yeah, thanks. Thanks, Richard and Alex. And yeah, COPPA for us and for me. And I think the COPPA story is quite widely known and quite compelling. And maybe it's actually getting kind of fast-tracked with a few kind of, like Richard touched on, Black Swan events, particularly the events in Panama, which took up about 1.5% of global supply, the constant falling grade of these big legacy mines, I guess, Candido in Chile, Grasberg, all these big, big, big mines, Cananeo in Mexico, they're all seeing falling production really through falling grade. And combine that with very strong demand projections, it's a very compelling case. And I think 24 actually could be the tipping point. I mean, if you looked in 2023, the deficit was about 200,000t

8:14 in 2023 projections are 3 to 400,000t deficit in 2024. And inventories are starting to get tight. Inventories are now only in the region of 150,000 to 200,000 tonnes. So you could actually see in particularly the latter half of 2024, you start to realise, we've run out of copper and the supply is not there and it could move. I mean, you know, Mr Friedland is projecting 9, 9,500, Goldman Sachs, Citi, similar numbers. 10,500 was the high in 2021 when it started to move. I wouldn't be surprised if we don't get past that in the latter part of 2024, if all of a sudden the inventories have run out and people start to realise. And then the projections going forward are vast. I mean, there's a lot of different projections, but in the region of about 10 million turn deficit between now and 2028.

9:09 By the time you kind of get to 2030 projections, are you going to be running a kind of 6 million turn deficit per year? So this is pretty fundamentally

9:20 micro-driven. It's really a supply-demand dynamic. Now does the demand collapse? Maybe the demand collapses. That's 1 angle. But it looks pretty strong for multiple sources, increasing demand. So I think it's a very compelling thing. I think it's always been kind of viewed latter part of this decade, but like a few events, I think it's starting to move this slightly further forward. And maybe this is the year where we run out of inventories and the price really starts to spike. So for me, yeah, copper is my base metal I'm most focused on. Thank you for that. Now moving into a more nuanced discussion, let's talk about the high grade versus low grade debate.

10:02 While high grade deposits often capture investors' attention in precious metals, does scale play a more significant role in the realm of base metals? Michael, since you're exploring in an area with rather large deposits, perhaps you can start off with this question.

10:18 Yeah, yeah, definitely, Kyle. Scale is a very big factor. A small high-grade copper deposit isn't going to attract that much interest or value. I think your only option would be toll milling. You would never be in a position where you could build the infrastructure to process yourself. So people understand if you're going to go and you're going to build a processing facility, you need to have the scale rather than the grade. Ideally, you have both. But if you had to pick one or the other, yeah, no question. It's the scale if you want to add value to a project

10:51 I think one thing to touch on and particularly we're very focused on as well Is most of the big copper mines are not pure copper by Escondido copper gold silver Casper copper gold Canaia

11:07 The big one I forget the name of the other big one further north in the Andes, Kuluna Wesi, is Copper Moly. So you also see in these deposits, you generally have not just a pure Copper mine, you have generally Copper, Gold or Copper Moly. It's kind of what you're seeing, which really helps with the economics of these deposits. So I think that's a lot of the excitement around the Cunea.

11:32 You have strong Gold and Silver content as well as the Cocoa. So yeah, for me, 100% scale. I've looked at a lot of Copper projects, some very nice high-grade small ones that I think, yeah, Maybe you could have a nice small private business and tome it, but you're never going to attract multi-million, sorry, multi-hundred million, billion plus valuations on a high-grade small deposit.

11:58 Good points. And Alex, your company seems to have exposure to both high-grid and large-scale. Care to share your perspective on this? Yeah, absolutely. So, I mean, I think scale does play a very important role. You know, margins in the base metal space are generally lower and scale allows you to optimize the capturing of value more effectively through price cycles via operational flexibility.

12:27 But I think Michael touched on a very important point. All of the large-scale mines in the world, or many of them actually, have a polymetallic aspect to them. And that, in conjunction with scale, is a big, big and important value driver that helps you navigate pricing cycles better. And in our case, you know,

12:54 in British Columbia, there are multiple deposits across like, you know, there are multiple deposits, very large copper, gold, porphyries that will never see the light of day. In our case, thankfully we have a magpass, which is our zinc project, which has high grade and also significant scale. And boundary is a testament of this, with areas with high-grade massive sulfide and a mineralization halo of more disseminated lower-grade veins and breach-aided mineralization, which is great. And also we have significant, very good continuity, which helps with predictability. So I am glad that we have, that we combine both, you know, scale and grade. That definitely helps. It's also a very surficial deposit.

13:47 So,

13:51 Overall, it's a weird thing to see very large-scale projects with high-grade.

13:58 Richard, before we move on, Do you have anything else to add? No, I mean, the higher grade you can get for your deposit, whatever size, the better. Obviously, we all know that. That insulates you against all the cost challenges and the commodity price challenges. Our particular position, we're a sort of medium grade, 9.6% Zinc equivalent underground mine. But because of the infrastructure that we have in place, the underlying structural cost base contributed such as incredibly low-cost power and so on, we can operate at the lowest quartile of the Zinc cost curve, which for an underground operation like ours is pretty unusual.

14:41 But what we do is we have a low-cap X restart, making the most of the grade and the cost base that we've got and then we'll double that production over time, reinvesting that capital in. So it's a slightly different model to the 2 that Michael and Alex have spoken about. Again, As you said, your question was nuanced.

15:04 You optimize your business plan for the metal that you've got and the underlying cost base. You don't, in our case, have much flexibility with that. And what you're able to do is to generate, you know, 14 to 20 million tons of resource and then continue that for what we anticipate to be multi decades. What Alex and I haven't really studied Michaels is able to do, I know Fireweed very well, is they end up with this extremely large,

15:37 valuable deposit at day 1 that then gives them some very interesting capitalisation options off the bat. We're doing something slightly different. But as I said, we focus, we've got a nice grade, we focus on getting really far down that cost curve to ensure that our margins remain robust, even in a flat sink environment, which is not what we're looking at. We're looking at a bullish think environment, so the margins will be even better.

16:05 Just touching on that actually, Richard, I think the key thing is cost, right? And sometimes people get a bit fixated with grade, which is 1 input into cost, but it's not the be or the nendo. There's a lot of other key parts that go into the cost. So yeah, I think it's great to have, but it's not the be all and end all. No, and you look at, I mean, I'll zip across to sort of precious, but the same applies. And I know, Obviously, some of the portfolios, the larger companies, some of which I've been involved with and there's been often this question, all in sustaining costs has gone up at the same rate that let's say gold price has, for instance, margins are the same. They haven't stayed tight, I mean, the same, but they've remained tighter than people expected.

16:47 People call that that's primarily related to cost inflation. The other factor is grade deflation. You know, in a lot of these portfolios, you're going from higher grade ore that you can put onto cheap processing facilities like heat leach into something that is lower grade and more complex ore that you've got to put through refractory processing. So you end up with a double whammy of grade coming down and costs increasing and as you know over time with as mines as they get older your logistic costs effectively increase, you've got a strip more, you've got to drive further, et cetera. And so that's the underlying story with the grade cost relationship in some of these portfolios.

17:32 And when we look at our planning going forward at Bunker Hill, we're very much focused on margin. So, you know, we would see ourselves as we double production, putting in additional capital infrastructure that allows us to sort of double the mining rates, in other words, open twice the amount of faces in order to ensure that our net margin

17:53 remains really robust. So, you know, I imagine lots of people on this call, certainly the 3 on this call, and you too, Kyle, understand all that, But it's the grade cost relationship and what the optimal business plan is,

18:09 as you said, nuanced. It's a good way of putting the question together. Thank you for that. I'm going to leave this one open to the group. So whoever wants to take the first stab at it, feel free, but let's just move into financing now. And this might be nuanced as well, depending on the type of deposit you have, but precious metal by-products are often utilized as streams to secure funding. Does it ever make sense to retain the precious metal by-product and instead issue a stream on the underlying base metal or should we just might as well call it a precious metal deposit, but since it's a base metal panel, Leave it open to the group.

18:48 I can start with that. I think restricting our exposure to our primary revenue driver, I don't think it would be a good strategy. I'm inclined to say no. In our case, you know, firewood is a vehicle for investors to gain exposure to our primary metal, which is zinc. And any encumbrance of our zinc production will reduce that exposure.

19:12 And so silver, in our case, just represents 10 to 15% of our long revenue. So I think there's better alternatives to having that exposure to Silver than fire with metals. If I add just a little bit, because we have a, you know, we have stream finance and we have royalties on us and so on, is that our starting metal mix in terms of revenue is 70% zinc and 30%

19:41 lead silver. But historically over 100 years, it was 50-50, 50% Silver and 50% Zinc Lead. It's just the nature of the ground that we're mining. And so in our case, we put in a multi-metal stream

19:59 rather than finance off one or the other component so that our investors, notwithstanding the financing costs, get exposure across where we are today, but how we believe the Bunker Hill mine will develop over time, which will make it increasingly, not unsurprisingly in the Silver Valley, increasingly exposed to Silver as well. So we'll have that not unfamiliar for a Zinc-Lead Silver mine, mix of precious and base, which again, if that's what you're looking for, that's pretty interesting.

20:39 Yeah, I think just touching on that, Karl, it's really case by case basis and the cost of the capital. If your equity price is very depressed, then your stream becomes a lot more attractive. If the debt financing is extremely expensive again. So you've got to look case by case, you know, I think the management's job is to find the cheapest cost of capital to advance the project. And it's 1 option.

21:01 Often it's not the cheapest. In some circumstances it is. And then, yeah, it's prudent to use it. And it's the fact, Karl, if I may, just because Michael sort of said this, access to capital is one of the things that is creating, and cost of capital, is creating supply constraints across the board right now. There's been underinvestment in the mining industry for 10 years or so since 2010. When you look at the statistics,

21:31 we're 71% below, this is the projected expense for the next 4 years, 71% below the average spend on growth capex between 2010 and 2022. So 71% under investing in the future. And that's down to a whole bunch of reasons that's worth a sort of podcast all of its own. But when we entered the market, we found that the cost of capital and the availability of a project like ours is, firstly, it's very expensive and secondly, its availability is really tight. And that's across the industry, which is one of the things I also believe contributes to a bullish sentiment

22:17 in metals such as zinc, which has not been the most popular metal, but therefore it has been under-invested in for a period of time. So the relationship between capital, forward projections, price, demand supply,

22:35 inconsistencies are also worth mentioning on this call. And also to add to Richard's comment, We recently did an analysis where we analyzed the top 15 zinc-producing mines in the world, zinc primary producing mines in the world, and we realized that 14 out of the 15 had lives of mines that were below 10 years. Absolutely. 10 years. And

23:03 that's the official number, of course, like what's reported by the company. But it does speak to the underinvestment in this space and the tightness of the space that we can envision in the next coming years. If you look at the top 15 primary copper producing deposits, you will see

23:26 a big chunk of them have lives of mine beyond the 10 years. So to Richard's point, I think we are seeing a perfect storm here, building up for Zinc. Now, I see questions generally in the chat and I do plan on addressing at least one question for each company. There is 1 that

23:48 Richard poses for Richard. If you have any comment on Bunker Hills View or just the scratch on that Bunker Hills View, just in general, the Silver-Lead market because I don't see myself getting into any of the further macro after this. So if you want to touch on the lead market, as well as the Silver.

24:09 I'll do lead first, because we're in the base space and then come across the Silver. You know, lead is sort of, we always sort of say it's a sort of forgotten battery metal. And it's very green too. It's got a terribly bad rep, of course, because managed badly, it's exceedingly poisonous. And hence, it's part of the reasons, think mines like Bunker Hill, all their smelters shut down in the past. But 70% of the lead consumed today,

24:33 and demand for lead is going up, not going down. It's sort of related to urbanization, related to energy transformation, related to industrialization. 70% of lead consumed in the world today is recycled. So by definition, it's a very green metal. We don't look at lead price moving up very much because you do end up with this secondary market, recycling market effect. And so we factor in relative conservative prices going forward, but we see very bullish prices for zinc. In terms of silver, silver I believe will start to be valued more for its industrial qualities than its precious qualities.

25:17 China has, I've got the stats, I don't wanna look down to find them because they're somewhere in my chart here, but I could find them after I've answered this question. China has invested to a degree that's mind blowing in solar energy over the last year in particular, and that will continue. Now, photovoltaic cells depend on silver. So they've been sucking forward and consuming an awful lot of silver. And I think you'll find that as energy transition moves on, silver will,

25:52 those who wish to hold silver and see silver advantages, will see that delivered. The only downside to the silver story, there are many downsides to it as ever, but just worth mentioning here is silver is often a by-product of many mines. So when trying to sort of predict where supply is constrained in the silver market is a little bit harder than in what we just said, copper and Zinc and so on, because a lot of people are mining

26:19 Zinc mines and then they get a whole bunch of Silver as a by-product and then that goes in. I'm bullish Silver. I'm not somebody who sees it goes up rapidly to the sort of $40 per ounce perspective, but I do see it rising steadily from here, related to its demand for industrial reasons. And so we have that benefit too, to our ore body. Sorry if that's a bit long-winded, Kyle. No worries. Sorry, Richard, and also to build on your point,

26:52 silver, you touched a very important aspect of silver. It's by-product nature. So silver supply is extremely inelastic, is extremely inelastic as you approach the fourth quartile.

27:08 Just because of the byproduct nature of it. And so if should demand fundamentals for silver continue to be strong, that can create a silver squeeze as well. Yeah, actually that's a much better expression of what I was trying to say. Yeah, nice 1 Alex. And to add to that on silver, I mean Mexico, the world's biggest producer of our long way, has got many, many challenges And it's definitely seen falling Silver production. So, yeah, I mean, I think it's the case across multiple metals, the supply dynamics

27:42 are pretty compelling. And Silver is definitely one of them as well. Yeah. And again, sorry, Carl, the $130 billion US dollars put into Chinese solar power in 2023 alone. $130 billion, Yeah. No, it's good. And the way Michael ended this, it's good for my next transition here. I wanted to put more of an attention on jurisdictional considerations. We have people from Canada projects, United States, Argentina. We'll start with you, Alex. Can you speak on the challenges and advantages presented by operating in Canada's remote working conditions? Absolutely, and I think we've covered these extensively, but our challenges are pretty evident. First off, our distance to port. It's a big challenge for us.

28:34 Also, the limited infrastructure. We do benefit from a road access, which will be upgraded at some point, but that's still, it's gonna be a challenge for us. In terms of advantages, we have predictable politics, we have great tailwinds from a very supportive territorial government which wants to see that Yukon region being, richness being unlocked. We have rule of law, there's no super profit taxes for instance, as you would sometimes see in Latin America, you know, super profit taxes.

29:10 We have like skilled fly-in, fly-out workforce, etc. In terms of, you know, weather challenges, sometimes many would assume that weather is a big challenge, but it normally isn't. Many projects in mountains well south of us have much bigger problems with snowfall. For example, the Golden Triangle can see almost 10 meters of snowfall on a year easy, we'd get maybe 2 meters. And we're in Canada,

29:44 people operate in adverse conditions and we're used to it. So I don't see that as a big challenge really. Thank you. Richard, for your jurisdiction, we're talking about the United States. It's an election year in the US. Do you see any positive or negative impacts on this election coming forward?

30:04 Yeah, we're in Idaho, Republican state. And as with Alex's comment, not every part of Canada is the same. There are of course, federal laws, there's different relationships and so on. Idaho is exceedingly pro-mining. And we have a governor there who believes in deregulation and lower taxes. So we're in a very favorable place. However, we are in an environmental cleanup site,

30:31 which requires us to be no better than anybody else, but needs to conform to exactly the standards that we'd all respect. With respect to the US election years here, in other words, there are no favours given to us. In terms of the US elections, we don't see that there is going forward, we're neutral, as they say, on the US election result with respect to Idaho and with respect to mining.

30:59 There is some discussion out there about whether as we're running into this election period and everything gets thrown on the table and political debates happen in order to win an election, not necessarily to generate policy. There is a discussion out there as to whether if it was a Trump Republican victory, whether all that investment, the Inflation Reduction Act would continue, or whether he'd do something different. Frankly, every second person you meet has got a different opinion on this. My point on this election this year is we're going to have inconsistency and uncertainty through 2024. And it's going to be this time next year, whoever is elected, it's going to give us greater certainty on critical metal strategy, trade policy, subsidization strategies such as the IRA, relations with Canada, relations with Mexico. We're in an uncertain period, so we must wait and see.

31:59 Thank you. Michael, I'm sure you can guess what I'm about to ask you. Given the recent political changes in Argentina, have exploration projects in the region experienced any significant shifts under President Mealy's administration? Yeah, I think there's a new wave of interest and optimism towards Argentina. And President Mele has definitely come in with a pro-business agenda, wanting to get away from socialism, wanting to generate a lot more entrepreneurship, new businesses, and reduce central government spending. So yeah, I think you're seeing it already. A lot of good exploration projects are starting to get a bit more traction. There's a few of those in the region that we're in that are raising good levels of capital and now starting to do decent exploration programs. And I think you've always had some of the biggest mining companies in the world operate in Argentina. Newmont, Barrick, Glencore, other companies have operations there, maybe not mines, but you've always had a level due to the geology. I mean, the geology is very compelling that big companies are happy to operate there. But yeah, I think at the exploration end of the spectrum, it's been a big start of capital.

33:16 And I think that there is renewed interest in Argentina. And we're seeing that, that there's more capital available for exploration, which is great for us to advance these projects. I think you'll see, I was seeing the other day that Malay had been meeting with First Quantum and talking about getting their projects moving towards production. Definitely, I think you'll see a lot more mines coming online in Argentina under this new presidency and a lot more mining. They know they have great geology and they know mining produces a lot of well-paying jobs, produces a lot of tax revenues. So it's an easy way to start producing a lot more economic activity at a provincial level. So yeah, you know, definitely I think for us it's great timing. You know, we just became a public company and definitely a new wave of optimism towards Argentina.

34:04 Can I can I ask a question on that, Kyle? I was asked a question by somebody and who checked is that do we think that a new American government, Michael, that they're going to look at Argentina as somewhere they're going to want to do a lot more with. In other words, will we see a more of a Washington-Buenos Aires axis that could be beneficial for mining? I don't know what your thought is on that. I think Malay wants that, right? I mean, his first trip was to the US after he got elected. I think he has very strong relationships with the US. And yeah, I mean, mining, oil and gas, right? There's a lot of talk around oil and gas assets as well in Argentina and the US. I think so, Richard. I think that's definitely what Argentina wants.

34:49 Let's see if that's what the US wants. But I think it makes sense for them to get some pretty good deals. I think if they start grabbing up these assets now, their companies start grabbing up these assets now, it will be a good timing. And they'll get a good price on them. So yeah, I think it's coming but it'll be interesting to see how it unfolds over the next few years. Yeah, I agree. To what extent do you think that having a federal government that is pro-investment might influence down into the provinces? Because as you know, there's certain provinces that have, like I think Chubut, for instance, has open pit mining bans. How do you think, and it diverges significantly from the province of San Juan, for instance, that has a lot of investment and it's super pro-mining.

35:42 How do you view that change in federal government to impact the provinces? Yeah, no, good question, Alex. And the cutoff, you know, Malay is slashing the handouts from the central government to the provinces and saying, guys, you've got to generate your own money. You know, we can no longer give you money based on us borrowing money from the international investors, you have to start generating your own money. And they know that mining is a great way to do that. The provinces that have good geology know there's a lot of good jobs, a lot of good tax revenues can come from mining operations. So I think that is the main driver, Alex. The reduction of the central government handouts to the provinces is forcing them to generate their own businesses.

36:27 And those that have mining potential see that as a great business driver for them. Okay, I'm gonna jump on, Michael, one last question for you, and then we'll open it up to the group. But I know it's like 2 a.m. Where you are, you're in Hong Kong. Do you notice any preference toward precious metals over base metals, or is it just economic viability is the primary concern? Yeah, I think in this part of the world, there's maybe more kind of strategic capital, looking for product, not just looking for return? But it's case by case. And, you know, I think there's still a lot of kind of investors looking for return, but you obviously get a lot of the kind of state capital that is allocated for specific purposes that is really looking for product.

37:20 So you do definitely see that as a difference. But I think there's a strong demand for metals as a whole. You know, gold has its own place in China, always has, I think always will do, as in India. But you see the increasing realization that, like we touched on with copper and zinc and silver, there could be real issues over the coming years getting your hands on supply. I think from the Chinese perspective, they're very, they want to make sure they have that supply in place. So I think there's that kind of angle that, yeah, you do see it. And again, it's kind of more centrally planned, right? They allocate capital to secure supply in more soils than you see in the West, where more capital is allocated just to produce a return.

38:11 Opening the discussion to the group, do you perceive a difference in investor appetite between precious and base metal projects? Leave it open to whoever wants to answer that one. Well, having a mix of both, we attract investors into Bunker Hill that want to have precious exposure in the Silver Valley with all that offers, along with those that want base. When we first started, we were catching a moment when there was a lot of interest in precious investment, so we got a lot of precious investors. And then over time, we're getting more people who are interested in exposure to the base metal super cycle. So I'd say that, you know, if anyone's running an investment portfolio, they're wanting exposure to the physical metal, precious, gold, silver, as well as picking their equities carefully, they get that. At the moment, precious equities haven't been performing as well as physical metal. So there's a little bit of nervousness there.

39:19 But for those who are wanting to get in at this stage of what we consider to be a base metal supercycle delivered by energy transformation and a restoration of economic strength in the world, base is a pretty good place to be. Yeah, and I think just to add on to Richard's comment, I think now investors are also starting to see, like, you know, traditionally you hold gold as a store of value. But now investors start to see, OK, if I buy copper or zinc today, in 5 years' time, it's almost certainly going to be worth more money. So Why don't I just buy copper or zinc rather than gold or silver? I think you're going to start to see that particularly as the markets get tighter and tighter.

40:07 They're already tight. And if you actually start to run into, and you see this all the time in oil as well, if you actually start to run into a major deficit with no end in sight, there's going to be a lot of speculation that makes that deficit even worse. And I think you'll see that factor into the base metals market more and more, and maybe to the detriment a little bit of the precious metals. But I think There's a lot of demand for gold. You can see that. I think it's had a tough time. We should touch on definitely the equities. Barrick and Newmont, the biggest guys in town, their equities are still really subdued. And that kind of subdues the whole gold market, where the bigger base metals companies have done a lot better. So as a consequence, helps the whole sector. Yeah, I have a similar perception. I think, you know, precious metals has garnered a lot of attention in the past, but with that, a lot of money has inflowed towards projects that are not necessarily the highest quality, which definitely impacts the perceptions that investors have of how much profitability they can get from these precious metal projects. And so they're beginning to shift into critical metals.

41:23 That's my perception, at least. And as it pertains to Zinc in particular, I think if you manage to remain relevant and continue demonstrating good progress and continue to stay at the top of the, you know, as a tier 1 or at the top of the list for Zinc projects, I think that investment wave will come and it will start benefiting the top tier projects. And unfortunately for now, and I'm experiencing this as I joined from banking into this new world of exploration companies, I'm meeting with more and more with investors and I'm seeing, you know, it's kind of a little bit of a shift towards strategic, you know, critical metals.

42:14 And I hope that we can start seeing this shift in interest in passive investments or funds like ETFs shifting from precious metals into base metals as well. I think everything is shaping up to become more supportive of critical metals? I think that's really important. I mean, as we know, in terms of our equity story, more buyers than sellers is what creates that and getting institutions who have previously been overweight on precious into base-stroke critical is important. I think the influence of Saudi Arabia coming into the market, not just in terms of its ability to fund projects and exploration of a certain scale, but also add credibility to the sector is also going to help us. And everybody on this call benefits of having Robert Friedland's enthusiasm in copper, but now also given Capuchy starting in the DRC in zinc too.

43:15 And of course, when you have a champion such as that, who actually has got a lot of following and a lot of credibility when it comes to generating value in the base space, people like him matter. I mean, we're a little group here in Bunker Hill, but we follow the leaders and we are seeing more leaders coming into this part of the sector and that's practically exceedingly important for sector marketing. When composing the questions for this call, I realized we have companies at different stages in this industry here. We have an early stage explorer with Michael and Sundaro, as well as Bunker Hill with the restart pending here.

44:01 Wanna just delve into the specific opportunities or challenges that can arise from these different stages. How does your team navigate these nuances? What is the main thing investors should be looking for? We'll start from the earliest stage with Michael. Yeah, sure. I mean, we're a newly listed company doing our first drill program and we're valued at $23M to $25M. And I think on any kind of meaningful drill results, we're substantially higher than that. So that's our main focus for now, delivering on draw success, showing investors that not only do we have good targets, but we have good grade, good mineralization within those targets. And then we'll get a substantial B rating and then we move down the curve to defining a resource and everybody I think on this call is probably well aware of the Sun curve and we're at the start of it. So if we deliver, Our share price goes up a lot. We have a lot more access to capital and everybody involved is happy to shareholders and the people operating the project. So yeah, we're in an exciting time. Great to be here with a very exciting project and looking forward to hopefully moving up the sound curve.

45:18 Pretty binary outcome right there. And Alex, for Fireweed? Yeah, so I think Fireweed is at a stage where we have already demonstrated the scale of the project. We know that there's more there and however we need to focus on what actually will unlock further value to our shareholders. And I think moving forward we're going to be more careful in terms of this balance between unlocking further exploration upside with also de-risking our existing asset and providing a solid foundation to provide a pathway to production. I think we're at that stage where we need to look at, understand what is the sweet spot between how we can, you know, provide a view that there is more there.

46:15 However, de-risking what we already have, which is already outstanding, I think there is a lot of value to be unlocked there as well and that'll, from my perspective, I think that's gonna drive a potential re-rate in 2024. Thank you, and Richard. Thanks, we're in construction now, and we're valued as a pre-production asset where there's a lot of risk. All pre-production assets are valued that way. But why are we particularly valued that way? One is we've only issued a PFS. We haven't issued a full feasibility study. So people judge that there's risk in the engineering.

47:03 But we issued that PFS, you know, a year and a bit ago. And a lot of work has gone in to get us to where we are now. Second thing is, with respect to risk, our capital forecast, our expenditure and over time for our project restart is less now than it was when we issued a PEA 3 and a half years ago. So in an inflationary environment, we've managed to actually keep our capital down lower than inflation and actually lower than our original estimates. That's because we have bought equipment in the used market, our processing facilities, for instance, and that's allowed us to leverage existing infrastructure with other people's existing infrastructure and come in at a lower level. But the re-rating question is, can we, there are 3 bits, can we deliver the project, profitable project on time? And you'll be seeing us do that through this year and being in operations through next year. That should deliver a re-rate when our thesis is proved.

48:05 Secondly, is lowering our cost of capital. We've got some expensive facilities in there, which we were negotiating with other parties to bring down. We achieved that. That's more cash flow per share. And thirdly, which is the first question that you asked right at the start here, is if we enter in a bullish market for our metals over this year and next year, you should get a re-rating related not to theoretical value, but to more cash flow per share as we go into production next year. So those are the 3 reasons for restart at the moment, re-rating at the moment, sorry. Thank you, Richard. It looks like we have time that I can get to at least one question for each, excuse me, each company on the call. I think it's only fair I'm gonna read them word for word.

48:56 I see Alan Barry Lovacan, a friend of mine here, has a question. Michael, it's for you. I've done research on the projects held by London companies in the area. One thing I noticed was the massive size of the alteration where they are drilling. Does Sendero see something similar on your claims? And if so, is that where you are drilling? Yes. Massive hydrothermal alteration on all of our targets And other targets that we're not drilling. It's very prevalent at Pempikunia. Do you want to elaborate on how the drill program is going so far? You have 4 targets? Yes. No, good. Thanks, Carl. We've drilled 2. We've drilled a good 500-meter-plus holes into the first 2 targets, La Peña and Tamparis. I think we did 575 into La Peña, 519 into Tamparis. And now we're drilling La Gita, and we're about 150 meters into that third hole. So good production.

49:53 Very happy with the production. Really want to get some true results out, hopefully for PDAC is what we're aiming for. But I'm very happy with the production. I really want to test all these targets. We're blessed to have a clustering and then we want to focus on a bigger program later in the year, but really want to kind of prioritize based on this initial journey over the course of the next few months. Alex, I'll go to you for Fireweed Meadows here. Bryce is asking, can you unlock value through a Royalty Spin similar to Great Bear? Is that of any interest to your company at all at this time? Yes, definitely. We have a significant, right now as we stand today, we have 50 million ounces of silver, which we could potentially spin out as a royalty.

50:50 There's definitely options, but for now we're not evaluating that at the moment. We still want to understand what are the margins of our deposit in order to define what would be the best value strategy, because we're still in growth, I think. And I think the Fireweed shareholders would want me to ask this question. With respect to your market cap, do you feel that the market is undervaluing this deposit? And how do you attribute the recent decline in the stock price? What do you think? I think, of course, we feel undervalued. And I think partly why our share price is being undervalued at the moment has to do with the macroeconomics, I'd say primarily because of that.

51:40 We have very low liquidity coming into this space, which even $5,000 being traded worth of our stock can change our share price significantly. So it's something that we are trying to attack and try to address. But I think primarily what's driving everything here is the macro environment. Thank you. Richard, we have a question from Vincent here for Bunker Hill. Could you provide insights into the anticipated long term returns for investors in B-Hill, considering its projected viability spanning decades? Yeah, thanks. I give it a general point. But I just double down on Alex's point too. The macro conditions here right now are very bearish in terms of forward demand. Everyone's really worried about global economies.

52:34 I think through the middle of the year you're going to see that change. I think Chinese stimulus is going to really make people look at things differently. Watch the interest rates too. Watch inflation. All these various measures. It's not going to happen in the next couple of months, but it will happen over the next 6 plus months. So as we come to Beaver Creek, that's the period of time there should be more positivity in the macro environment. And we should all benefit from that. With respect to Bunker Hill, look, we've done a low capex restart for a number of reasons. 1, because it delivers the best and we can then reinvest cash flow from that operation to expand it, double production. And we see a multi-decade operation at around about 2,500 tonnes a day, 100 to 150 kilotonnes of zinc a year over a long period of time.

53:31 And if you just put, I don't know, 50, 60 million dollars of capital in to unlock all of that value over time, where the rest of it's coming from cash flow, your answers in terms of your long-term returns are obvious. So, we're, our restart project's sitting around about 50 million dollar MPV, do we think we can get to a long-term MPV of 3, 400 million dollars once we get the right infrastructure in place? Yes we do. But again the leap from 50 to 350 isn't generated by going back to the equity markets, it's generated from cash flow. So for our shareholders, if they hold long over that period of time, the value is really pretty remarkable.

54:18 I'm gonna try and tie in Richard's question here for you, Richard, from the 50 to 350 cashflow, yes, but what about resource conversion? He's commenting on the conversion from resources to reserves. Well, that's great. The history of Bunker Hill Mine over 100 years, and we have all the data, they had 4 years of reserves ahead of them at any one time. That's not atypical for an underground zinc mine of this size, or base metal mine of this size. We've got 5 years' worth of reserves ahead of us and you're going to see us this year increasing that. And I mean this year, by the end of this year. Our drills will be turning as we get into the second quarter, and you'll get that normal development uplift.

55:05 In terms of exploration, for those who saw the call, we've got a series of shallow exploration targets. That I mean is right in the upper areas of the mine, near to surface, based on geophysical anomalies that we did, that we identified 2 years ago, but haven't had the money to exploit. You're going to start to see us doing that. And then when the mine shut in 1980, all these very high grade Galena zones, which are primarily the Zinc-Silver, we're all open at depth. We're not going to get down there for a few years because you've got to dewater the mine, put the infrastructure in place, but you've got all of that ahead of you. So in terms of the specifics of resources over this year, you will see us convert inferred into indicated and into reserves.

55:55 And you will see us expanding from our 14 million tons of resource, small compared to these 2 guys, but into something that's far bigger than where we are now. And that's all gonna be part of the story too. Thanks for the question. Thank you, Richard. And thank you everyone that attended it today and submitted questions. We have a few more minutes here, so I might as well just wrap up with a second elevator pitch for each company, even though you guys have expressed a lot of things to look forward to in 2024. Just bring it home. 60 seconds. Why should people care about your story? And then we'll wrap it up. Michael, we'll start with you. Sure. We're at the beginning of an exploration play in probably the hottest copper district in the world.

56:42 So, a company's value is at the mid-$20M market cap. I expect it will be substantially higher in the near future. So it's a good time to be getting into the market. I think unfortunately, the market's been tough. We had to come in at a $13 million post-money valuation, which has created a bit of relativity. Everybody says, you know, you're up nicely, but I still see our company is dirt cheap for what we have. And yeah, true results coming. You know, hopefully by PDAC, we have our initial results and then a flow of results over the next couple of months. So, yes, access to Vicuña. The next cheapest play is Angex, which is $1.5 billion. I think that's worth a punt on Sendero. Thank you. Richard, it might sound redundant, just given you answered the question, but go ahead and feel free, 60 second pitch for Bunker Hill. We'll be in production end of this year.

57:38 That's the re-rating opportunity. Watch this space on refinancing. And as I said before, just a minute ago, watch out for resource conversion and resource expansion all through this year. We're fantastically undervalued and that should change that. Thank you. And Alex for Fireweed Metals? Yes. So, well, Fireweed has 2 best in class development stage projects, one of them being one of the largest sink deposits out there available, and we're continuing to find more and more mineralized zones. We have a tremendous resource, incredible backers underpinned by participation from the Lundins with 19%, 19.7% and tech resources 8.3%.

58:26 So essentially that backing gives us a lot of certainty in terms of how we can move forward this thing. And lots of new catalysts in the horizon, updated resource in early Q2 2024, PEA for MacTang in Q2 as well 2024, and hopefully some additional catalysts originating from certain internal initiatives as well. So very bullish on Fireweed. Gentlemen, thank you so much for your time and for the audience for attending today and asking some questions. Really appreciate it. But yeah, thank you. Enjoy the rest of your evening.