Ceylon Graphite: Advancing Towards Battery-Grade Graphite to Power Our Future

0:08 Hello, everyone. Welcome to St. Long Graphite's Live Investment Summit today, hosted by 6. I'm pleased to introduce their CEO, Donald Baxter. Don's going to go through a couple of presentations, just a bit of an overview today, but really we're going to be entering into a Q&A session right away. So if you have any questions, please ask them. While Don's going through his overview, start submitting them because we're going to be launching right into that. But as a reminder, You can ask your questions using the Q&A tab found on the right hand side of your screen. And of course, today's presentation and Q&A period is going to be available online

0:38 on Six.com, likely today, but certainly in the coming days. Don, I want to pass things over to you before we get started properly, just for your overview. Yeah, thanks, Cameron. And yeah, I think to our, hopefully we have lots of people signed on here. I'm not gonna go through the presentation, you know, page by page here, like normal presentations or seminars, but I think I'd give an overview and hopefully we can get into some Q&A. Most everybody can download this presentation and take a look at it on their own time, so this I see as an opportunity to get a sort of a live update of where we are right now and a little bit of background here. So I think we'll have a chance for you for some Q&A questions here. We have some frequently asked questions that we'll look to as well.

1:24 But overall I think I'll give a maybe a current update of things where we are. I think most people who followed us have been watching our progress and watching some of the situation in Sri Lanka that we've experienced as we've progressed to moving towards production. And so overall, I think what we'll talk about now is just that situation. So I was last in Sri Lanka in May. I was actually expecting to do this seminar, this presentation from Sri Lanka, a little bit darker there, a little bit 9 hours ahead, but I just postponed my trip for just a couple of weeks, just for certainty on a couple of issues. But we had a situation where we successfully raised $3.5M in May and the task is getting 2 mines to production and we're on our way there. We have 2 mines now fully permitted.

2:22 We had a few slower issues over the summer to get some final minor permits to go with the actual operating permits for K1 and M1. We're there now. I expected to be hoisting Graphite by the end of August out of 1 or both mines. We're a little bit off on that, but not too much. I think the positive thing is that we are having 2 mines permitted. And I think for a junior in any space, that's pretty rare at this point. And we'll just continue on to more and more mines as we progress within our grid packages that we have right now. But just backing up a little bit, a little bit of background on what went on politically in Sri Lanka.

3:10 Simply put, the country went bankrupt. The powers that be in charge of things overspent. And I think amongst a lot of things, a lot of factors, they ran out of foreign currency. So we ran into a situation where it was very difficult for anyone to get fuel. There was a long amount of protests going on for months. And I think overall, they were mainly peaceful. There was a few bit of uprisings where they had about a week or so of some violence, but that was kind of spurred. It seemed to be spurred by the outgoing Prime Minister at the time and some sort of counter-protesters came in. But that resolved pretty quick. When I was there in May, I was there, I saw some remnants of that, some burned-out buses, things that had been turned over, things like that. But overall, it was fairly peaceful at the time. I took my 18-year-old son with me at the time, so I wasn't concerned from a safety standpoint.

4:09 We actually walked down into the protest areas and we're actually part of the solution versus the problem. So I think overall, we're seeing it all came to a head with the departure of the president. And then basically, you know, we are, you know, with a new president, I was actually supposed to meet with him when I was last there in May. He was then the new Prime Minister. He's since become the new President. So we're on line to meet with him as soon as I get there in the next week or so.

4:47 And I think they're looking to help us. And I think the fact that we're there and still operating is very good for the country as a whole. And I think, you know, maybe a small part of their recovery, they have just received an IMF package alone, I think 3Bn coming in, which is significant for to help solve the turn of the tide. And I think as they move forward, I think more and more people, the confidence of other people will rise and the potential we're showing them is pretty significant as well. We may have 50 employees there right now, but the potential is many times that. And as we add mines, continue to add mines to our particular portfolio. So I think overall, I'm pretty confident of moving forward.

5:36 And timing may not actually be too bad from the standpoint of when we're actually hoisting Graphite and as I'm seeing you know on the outside of work in Sri Lanka we're having conversations with OEMs and the OEMs are finally starting to wake up and realize that they have an issue here with the need for critical supply of materials. In the past, Lithium's been a main thing that everyone's chased after, but what I'm seeing right now is that they are really realizing that the anode is graphite and they need a heck of a lot of graphite. So over the course of this presentation, we'll get into that in a little more detail, but I'm having conversations, and I've said this before, we're having conversations with OEMs that we have never had before and probably a year ago we wouldn't be having.

6:27 The likes of not just the battery manufacturers, the cell manufacturers, but the actual car manufacturers. So they're realizing that they can't completely rely on LG or SKI to source all the materials or they don't want to be reliant on that. So we're finding some North American and some European OEM car manufacturers are out there looking for supply critical materials and graphite is one of them. So maybe I'll stop rambling a little bit here now and let's see if there's any specific questions. They're popping up on the screen. I can't read them as fast as they're popping up. So maybe, Gab, you can close a couple of questions here and I'll continue on. Yeah, absolutely. And I mean, I think you've gone over a couple of these points, but reiteration is always good. Just as another reminder to everyone in the audience, you can ask questions using the Q&A tab found on the right hand side of your screen. Michael wants to know when you're gonna be able to start production, assuming that all goes well.

7:27 Well, as I say, we are ready to start development as far as continuing to develop deepening the shaft of K1. We've been talking about that for a while. We're also going to be doing some cross-cutting into some old workings to fast track. So we have a 180-foot shaft right now. We're taking that shaft to 220 to cross cut into some bigger vein systems. But we're also cross cutting right at 180

7:53 where we are into an old section of the mine and they're just dropping down into some internal workings there. So that's very imminent. We just had a delay in getting our explosives delivered to the site. One of the frustrating things of that, but once we have that happen, then we're Gold and we've got enough supply ahead. Our M1 mine, which we just permitted, same thing. We're just waiting for explosives delivery. It's a much shallower shaft, so we're going to take it another 20 feet down into a different vein system, but we're also going to cross-cut much shallower into a system there. The goal is to get to graphite as fast as we can. So production, what we can declare as production will be hoisting graphite. And just from certain reporting rules for 43-101, the term production may be something I'm not allowed to say. That's why I've been saying hoisting graphite, but I'm looking to ever increase that amount.

8:50 I'd say, I hate to put a number to it, but I think within weeks to a couple of months, we'll be doing it. And by months, I mean maybe 2-months. So that's, I think it's still pretty near-term. And from that, we can sell that run of mine material immediately. So we're also looking from that, from a cash flow perspective, we'll need enough Graphite for our own purposes and sampling.

9:15 Actually, 1 OEM has requested a significantly large sample of processed battery graphite. So we'll need to compartmentalize some to sell run of mine. We're having inquiries for run of mine. And we're also having interest in our battery work. So we can probably get into that a bit later as well. Great. I think you really did just answer it. So unless there's like other things, we can go to the next question. But Barry was wondering, when do you estimate hoisting to begin? So unless you've fully covered that, we can go over the next. Sure. Yeah. Yeah. Michael wants to know when you expect to be cash flow positive. Again, that's going to come cash flow positive is going to come you know, as we start selling selling graphite.

10:03 So I think as soon as we're hoisting, I've got enough ahead, I'll be confident to say, I have one particular, more of a broker who's wanting, let me know when you can give us clarity on 200 tons a month. So I'm just a little bit, because of some of the delays we've had, I'm just a little bit sort of shy on that, let's just say, but I think within that timeframe, I think within a couple of months, we should be at least cash flowing and how much I won't say at the moment, because I'm determined to get some better planning in place so I can say, okay, we're gonna be hoisting X number of tons a month and just ever increase that amount. So that'll be part of the process as well too. No, fair enough.

10:53 Another question. Are there any offtake agreements?

10:56 No offtake per se. We have a couple of requests for quotations that we've submitted to a couple of OEMs, but at this stage, there really aren't any off-takes existing. I know there's been a lot of talk about that in the Graphite space for years, people announcing an off-take agreement, but a true off-take agreement is really cash upfront for material coming in. I've only ever seen 1 or 2 of those on the Lithium side. And when you dig into some of the Graphite companies have announced an off-take agreement, it really isn't an off-take agreement. So I'd much rather get a purchase order now and then start dealing with, you know, moving. And our goal obviously is to move with one of the larger battery manufacturers to a letter of intent at least. But to get an offdate is pretty, it doesn't really exist in the graphite space so far.

11:46 All right. Fair enough. Herbert wants to know if the company has a lot of sell pressure and how can the company secure the provision of graphite to the Western world with the instability in the Asia-Pacific region?

11:57 Good question. First of all, The instability, I think we're seeing Sri Lanka is stabilizing. And I think with the new president who I'll be meeting with, we're finding that they're looking to be quite supportive of us. We're already in contact with their staff. And I think, again, the big factor for them is to show a Western company there that's quite willing to still be there and invest and grow. So from that standpoint, I think we're seeing, I think, stabilization of that. And Sri Lanka is, I mean, for the places I've been around the world, I'm quite impressed with Sri Lanka. It's a bit frustrating to do some things, but I think once we have, no, the saying that one of the positive aspects of this, of this, the recent political instability is that they're keen to show stability and keen to attract investment. I think we're going to find some support that we may not have even gotten before. I'm confident of that.

13:01 I'm quite excited about the prospects and showing what Sri Lanka can do, what it's done in the past. At one point, there were 3,000 mines operating in Sri Lanka. A lot of our grid coverage takes into a lot of past producing mines in the region where the regional geology is full of graphite veins. We're looking to go from 2 mines to 10 mines to 40 mines to who knows how many we can go to. I think probably not 3,000, but I think we can start to be the catalyst to revive an industry in Sri Lanka where they're in need to do that. So I think we're in a pretty good position that way. Rehan wants to know if production is going to be done in Sri Lanka or outside of Sri Lanka?

13:44 Well, the key thing with the vein Graphite is that we will obviously run a mine Graphite is 95 carbon. So there's no need for any kind of primary processing, which is typical of a flake mine where you take it from, you know, 2%, 10%, 15% in the ground where you have to put it through a $100M concentrator, which we don't have to do that. We will be doing some secondary processing in Sri Lanka. Initially, it may just be a matter of sizing material to ship to from the battery manufacturing side of things. Secondary processing can be some value add, which is it could be even even micronizing, which size, you know, particle size, make it uniform to go into ultimately go into a furnace for purification and then ultimately spheronization.

14:31 So yeah, we will look to work with the local Bureau of Investment in Sri Lanka to maximize some of our secondary processing, but we're also finding that the trend is, for example, a particular UK battery manufacturer will have a supply part and they'll want the processing taking place there. So I think it'll be a mix of multiple locations most likely.

14:58 Another question I think you've potentially fully answered, but if there's anything else you'd like to touch on, what sort of tonnage do you project? Well, we're looking at each mine. First of all, I've got to be careful on talking tonnage because as some will know, we have some limited 43-101 resource numbers and I'll explain that a little bit more why they're somewhat limited. So we're not allowed to really project long tonnages there. But the key thing is that we're looking to produce, ultimately get to the point where we can be producing,

15:37 hoisting tens of thousands of tonnes. The market is going to need us to show we can do 50 to 100,000 tonnes just for the amounts that some of these individual OEMs are going to need. We can't hope to fulfil all of 1 particular manufacturer. For example, Volkswagen will need 300,000t last count of processed battery graphite. Our hope is just to ever increase the number of mines. We're going to have multiple small mines producing small amounts and just multiply by 10, hopefully, or 20 or 30. Each mine will be small or underground. And that has its advantage as well from an ESG perspective, small-scale mining, low cost.

16:25 It's underground, but it's not too deep. So typically, large-scale mechanised underground mining is very expensive, but it will be a low cost. So again, our goal is to produce hopefully tens of thousands of tons. And what I'm also doing right now to help quantify that is we will be doing some, I'm expecting to go over some computerised models of our 2 mines so far.

16:53 And we've compiled everything. We'll do some more underground drilling, not necessarily 43-101, but it will be for our own planning purposes and stuff we can privately show in OEM that we have, here's our mine plan for the next 2-years. And then I can comfortably say, we're going to be hoisting for multiple levels, X number of times. So it's a bit of a work in progress. When I took over as CEO a year ago, June, a lot of work hadn't been done as far as, and I don't necessarily disagree with the decision to go from doing a whole lot of exploration drilling, which you normally see on a large, open pit massive deposit to spending millions of dollars chasing veins with drills, it's just not prudent.

17:43 We've limited some of the things we can say out loud as far as tonnages going forward yet, but I think it's money well spent and the fact that we're dealing with some past producing mines and just going deeper into areas that haven't been touched gives us a pretty strong advantage to get to production quick. All right. Jose wants to know if you have any free cash flow estimates.

18:05 Well, all I can say is that typically a run of mine vein Graphite sells for $2,000 a ton and we're going to look to sell, starting to sell as many tons of run of mine as we can. If it's 10, 20, 30, it's very easy to do the math with that much a month. As I say, I've got one particular potential client who wants 200 tonnes a month, so it's pretty easy to do the math there. That's the one unique thing too, I've seen about Bain Graphite, with the advantage of it compared to some of the Flake mines I've been involved with in the past, Flake Graphite mines, is that it's a high-cost,

18:46 lower-selling price product. Flake Graphite probably has a basket price of maybe 800, $900 a ton, depending on your distribution of the Flake size. Whereas the Bain Graphite has been known to be, you know, $2,000 a ton or even higher. So We can be profitable just selling run of mine Graf Lake, which is unique in this space. Interesting. Okay. Andrew wants to know, with Ceylon's new relationship with the President's office, Does this mean that the path to additional mine licenses for the remaining 120 square kilometers of land packages is increasingly likely to come online? That's the goal. So one of the main points I want to make is, Besides complaining about our slow process up till now, is the ability to help to look to a one-window permitting process where we're not chasing, we have 1 main entity that's overseeing the mining permits, taking into account all the different agencies that need to comment or give letters of support or whatever. So the current system.

19:56 So we want to look to streamline that. So yeah, absolutely. That's the goal. I think we've had some conversations with the Bureau of Investment to that regard. So it's a question of just getting that pushing to get that done. So typically we may get a main permit, but we still have to chase 20 smaller ones or 20 small letters to go along with

20:16 something. So it's just, it's a little bit frustrating, but the bureaucracy is pretty entrenched there. But yeah, so our main goal is to, my main goal is to streamline the permitting process with the help of the new president's office. All right. Viswana, one of those questions is what's the status of battery grade production from your UK associates and when will OEM approve that?

20:42 Okay, so we have right now, We're setting up some facilities at Warwick Innovation Centre. Right now, all of our work as far as making our own battery materials, we do a certain amount of work. We'll purify it at 1 associate lab. We'll do our sizing and shaping, or micronizing, spherinizing, and coating at other places under our direction with our methods. But right now we're making our batteries and we'll probably continue to make our batteries at Warwick University and UCL, University College London for the foreseeable future. But we're looking to become a little more with our own facilities at work, being able to do some of the smaller scale, kilogram size prep work so we can provide samples and do some more testing on our own. So we're not going to someone else's schedule.

21:35 Ultimately, the Solon Graphite technologies which we have incorporated in the UK, I think will grow to the point where that will be our main processing entity that has the larger processing capabilities in the UK and potentially elsewhere. Great. I just want to make sure we cover all the bases in regards to OEMs and battery makers, but Michael wants to know when you expect to announce the first major purchase contracts. That's the multi-million dollar question. So we're working on that and the frustrating part is we're having lots of interesting conversations that we can't talk about yet. All I can say is that I'm excited by the near-term potential and obviously that's the blue sky, that's the goal of when we can announce even a letter of intent with one of these agencies. But I think there's very few of that, of those things out there.

22:28 There's insinuations of certain things, But let's just say one of my goals of being sort of domicile in the UK is to take advantage of the fact of Brexit that they have. They've got to very quickly establish their battery industry. And they've announced 2 or 3 different mega-factories, giga-factories let's say, and we're kind of in the heart of all that activity. So again, we're working to place ourselves to be of interest to these. One particular OEM came to us because of that association so we're looking to you know get the first one to let us talk publicly about conversations. We have samples out as I say we have some RFQs,

23:19 we have a couple of other sample requests coming so just a matter of time. I can't say if it's if it's 2 weeks or 2 months or a year from now but all I can say is that the activity from that side is increasing. All right. Another question. What's the current cash position and what's the current need for further financing? Well we just raised 3.5 million in May, so We're still pretty cash. I can't give an exact number. Whatever our last quarterly statement was, was all I can say. I think we're showing a little over US$2M in cash at that standpoint. We're finding enough through to 2 mines, hoisting Graphite, more battery work happening. So we're comfortable right now.

24:06 We're not looking to raise any money in the very near term. So I think we're cash, we're comfortable to get to where we reach our goals we have right now. All right. What makes Salins Graphite better than the competitions?

24:23 The one thing about Vane Graphite we're seeing is that, without getting too technical, it has a higher degree of crystallinity than Flake Graphite, which means Flake graphite is worth, we'll still need lots and lots of flake graphite, millions of tons of all graphites, but we're just seeing that it has that extra, it has a higher degree, let's say of electric chemical properties of capacity. So the theoretical limit of a flake graphite is 372mAh per gram, whereas we're well above that with our baseline. We're at 382,392 with our vein graphite. It's just the uniqueness of the graphite

25:07 in Sri Lanka and it is pretty unique to Sri Lanka. The other thing I would say too is that it makes it better. Each mine we bring online, maybe small scale, but it's cheap compared to building a concentrator. Most flake mines need $200M to build a mine and primary processing. I've left a number of feasibility studies and other flake graphite projects that still haven't come in. They haven't been able to finance them yet. We're close to having 2 mines operating.

25:46 There's also an advantage of just developing mines quicker than with the flake mines. But again, it just shows the luck of the geology is that the electrochemical properties of the vein are just that much better than flake and actually even better than synthetic. We want to show from an ESG perspective that we have that capacity to replace synthetic a lot more easily than flake. What is your all-in cost to produce from these 2 mines?

26:21 The mining cost right now is estimated to be about $200 per tonne. That's pretty cheap. And then again, you're looking at that as a market, you're selling it for $2,000 a ton, that makes a little more for run of mine graphite, that makes it a little more, the margin is much better than, For example, a typical flake mine where your costs can be anywhere from 400 to 800t because you've got the concentration happening there as well. And you're selling it for maybe a basket price of maybe $800, $900 a tonne. So that's the advantage of a vein graphite. It's a smaller market than flake per se, but typically the actual market for non-battery Graphite vein is probably a couple of thousand tonnes, 3,000 tonnes per annum.

27:13 But again, we're finding lots of interest coming in, inquiries. I just got 1 the other day from China looking for main Graphite, and for battery purpose. I think we're starting to see, we can probably ultimately build as many as we want. But anyway, That's the main aspect there. That's fair enough. Sort of to what you were just speaking to,

27:36 if there's anything else that you can dive into on the supply and demand situation for battery quality graphite. Absolutely. That's the thing is the talk of the demand that's coming. And we're looking at benchmark mineral intelligence out of the UK is probably the best source of any of this information. And they're showing that they cover all the battery materials, the main battery supply materials. And I think we're probably looking at 500,000 tonnes so far, all graphite used in batteries. And we need beyond 2030, we need beyond 4Mt of processed Graphite, not just Graphite, but processed Graphite, which is purified, micronized, spironized, coated.

28:23 Right now, for natural Graphite, 100% of that capacity is in China. We know what that means. We learned that from COVID that we don't make anything in the West anymore and we're reliant on China. But the key thing with that is that for the factories being built in the West, there's probably 7 or 8 or

28:44 10 factories being built in China. So, like Rare Earths, I'm sure China is going to supply themselves domestically first before they would ship anything out. And they position themselves to be dominant in all of the battery materials. I think that perspective just makes the demand and the need for the West to build capacity, it's just tremendous. So we're in a situation where Salon may be a small player, but we need 20 or 30 or 40 natural, I think the actual number is beyond 70, 70 plus new graphite producing mines to meet the demand coming. And they're all producing maybe 50,000t a year is the number I just saw, but that's just run of mine Graphite. You need to process it.

29:36 So it's also the capacity to process it. So, and the interesting thing is that the processing, secondary processing for natural Graphite is the same, be it flake or vein. So whatever we produce, our process, we could even supplement if we had to with flake, if the supply was available. But we'll look to produce as much, maybe feed into some niche markets, some higher end requirements with the vein graphite. But the demand is, it's just, it's mind boggling how much demand is coming and the fact that the industry is just waking up to it now. Right. Is the impact of energy shortages and high energy costs in Europe slowing battery industry development?

30:20 I don't think so. I think if I can just tack away from that for a second, we're seeing that it is affecting the ability to produce in China as far as their energy shortages and issues they've had there. I think it's almost a driver to get more to renewables and make batteries. I think it's a pretty unique space where, when it comes to wind and solar, if you have a shortage of natural gas, say in Germany, you need the ability to store that wind and solar for use at night when the wind's not blowing and the sun's not shining. So I think it's actually this industry is pretty much insulated from that And I think it's probably going to probably even help even more show the need for that. Like even for example, look at what happened in Texas last year with their grid system and no storage capacity, whatever. So I think

31:14 having That capacity coming online and getting more prevalent is pretty significant. So I think it's a positive for us. Can you dive into and explain how your process is more environmentally friendly? Yes. Well, The first part is that, first of all, we're underground mining, so we don't have the large surface area to expose large open-pit mine, waste rock dumps, that kind of thing from a certain standpoint. We don't have the primary processing, so there is no tailing ponds, waste rock dumps, that kind of stuff. So that perspective alone

31:51 takes away an entire part in comparison to natural, say, the comparison to natural flake. And again, I'm not saying against natural flake. I've been in that industry for quite some time and we need lots of it, but it just gives us that edge. I remember having a conversation with one of the potential OEMs that's interested in what we're doing. And of course, part of the RFQ process is you're asking, they're asking what's your CO2 footprint, what's your life cycle analysis. So we've actually just started with a company called Minviro doing our life cycle analysis. And in comparison to Flake, natural flake is better than synthetic, natural vein, better synthetic.

32:37 If you compare vein solely to synthetic, synthetic graphite is made from petroleum coke, a needle coke and

32:46 some coal tarp, some pitch as well, or just coal tarp, mainly petroleum coke. So you're looking at taking a by-product from refining oil, putting it into a furnace that, you know, 3,000 degrees for, it can be weeks, to graphitize it, to make a product to go into a green car. It just doesn't make any sense. So I think from a standpoint of looking at, you know, vein graphite coming into play or flake graphite coming into play, both will be more environmentally sound than synthetic. It's also cheaper than synthetic. So I think from that standpoint, the ESG factor, which is large in anything, any investment happening right now or any OEM looking at us, I think we have a pretty good picture in comparison to all the others.

33:34 Awesome. Another question, what are your expected end of year revenues for 2022 and 2023?

33:44 That's a tough one. End of year revenues, as I say, it's going to, as far as for Hoisting Graphite, let's say November, we're starting to sell 2,000 bucks a tonne, perhaps 50 tonnes, 100 tonnes. It's going to be pretty minimal. By the end of 2023,

34:04 let's hope it could be potentially several million. I don't want to get into any numbers just yet, but the hope is to be looking at, let's just say if I do get the 1 200t a month, there's an out right there. That's a pretty simple one. So, 2000t minus our cost, 1,800t times 200t a month is the potential revenue. But at this point, I also have to be careful of talking any kind of economics because we don't have a feasibility study and 43-101 are the rules, kind of frown upon that kind of talk. Fair enough. The follow up question just to that is what your monthly burn rate is. Yeah, it's pretty minimal right now.

34:54 Let me just say the one positive thing, I hate to say it from our standpoint, bringing money into Sri Lanka is that our exchange rate used to be US$200 to US$1, now it's US$360 to US$1. So when we're making payroll and whatnot, it's significantly reduced our rate. So our burn rate is strictly on

35:17 main salaries, wages, that kind of stuff. It's about $60,000 to $70,000 a month. And then we'll talk in operation. As we increase our mining operations, we'll increase some of that. But It's pretty minimal in terms of mining. That's the one benefit of being small-scale. It's pretty minimal. Another question. Will you establish a commercial Feasibility Study? And if so, by when? I've given that some thought and I think the main thing that I will we will do is we will you know get into production you know we'll have real live data you know hopefully sales as I say and production and forecasts of that as we're actually physically operating. So I think instead of spending the money and having a projected cost, like I've done many feasibility studies, which are still sitting on a shelf. I'd rather have our true operational plan.

36:22 As I've said to a few of the OEMs, we'll show you our mine models. We'll do our own underground drilling. It'll be private, but here's our short-term, long-term mine plans. And I think that's money better spent than doing a dust collecting feasibility study. I think I've done 3 or 4 for graphite mines that are sitting at the moment still. All right, fair enough. What are the primary catalysts that you see with the company over the next 12 months? I think the main one is going to be hoisting graphite. That's the first one. That's our main goal we're getting to. So that's that's in and of itself is, I think, is is is the main thing was that because that leads to all sorts of different things, you know, leads to cash flow, you know, sales.

37:13 And I think that begins to prove out our overall, you know, business model that we can do that. And the business model is to sell graphite initially and then long-term demand, higher margin is the battery material. So then I think the next catalyst, hopefully it will be more information about our, we're still working with the 2 universities in the UK to optimize our main baseline graphite or anode for batteries, as well as our Silicon enhanced projects as well. So I think we're looking at, as we put out more information on our batteries, we'll get more and more activity from the OEMs. And I think with the combination of that production, showing production and a better ability to show our longer-term potential, combined with more activity with the OEMs and the batteries and the cell manufacturers, that will get us closer to an LOI that we can talk about publicly. So from that standpoint, I think it'll, and that's, I mean, once that happens, we're done. If we get an LOI from an OEM, I think, you know, when one of these brand names, companies that are now out looking, everybody recognizes, you know, then we're good to go.

38:36 Now, fair enough. Is water or flooding an issue with these deep shaft mines, especially during the raining season? And how do you deal with it? Yeah, Well, I mean, water in mine, underground mines is typical since they first started mining underground eons ago. So it's not a problem. I mean, I just, or I think I just ordered 3 or 4 more pumps, a couple of backup pumps and K1 mine. I mean, I actually, I did a video when I was there in May and I was down underground. I was soaking wet. We had lots of rain. Besides sweating profusely, I was also soaking wet from the amount of water coming down the shaft. We did something to mitigate that, but there are sumps underground. We do pump out and they're small-scale mines, but even a 3-inch pump is enough for us at this stage of the game. It's not insurmountable. We're not thousands of feet deep.

39:33 We're a couple of hundred feet deep, 150,200,300 feet deep at the most as we get going. So it's not an issue, but it's a good question. And we've actually, As we, for K1, as we modify the shaft, we will be putting another sort of coverage over top of the hoist. We're upgrading the main head frame with the bigger hoist. So we'll, if you do that, we'll cover it over so you won't get any of the sort of heavy rainfalls coming in. But there's still groundwater, but we can collect that and divert it and then pump it out. So it's not an issue. Absolutely. Gary wants to know if there's a near-term possibility of attaining a secondary dual listing in the UK or for that matter elsewhere? I haven't really given it a lot of thought. My main focus has been operations in Sri Lanka, but it's not out of the realm of possibility.

40:28 We have the UK subsidiary. If there's ever a need, we have a vehicle to go public there. At this stage of the game, it's more listing fees and then consultants and things like that. So that's not my main priority, but You never know. I never say never. We have the OTC listing, we have the Toronto Venture listing, and then the Frankfurt listing. Whether another one is required, I really don't know at the moment. Right. Fair enough. Michael wants to know if there are any analysts who follow Ceylon and provide projections? Oh, not per se. I mean, we have some pretty good support from the guys, the groups, the Finance Power 1 and Primary Capital who finance that.

41:16 I think to get a little more coverage, I think we're close to that. But I think once we start showing, we're twice the graph, we'll start getting that a little bit. We've had Christopher Ecclestone in the UK, there's some coverage on us. So it's been pretty limited up to date because I think, but I think, you know, as we, as we begin to reach some of these goals we've set, then I think we can, we'll, we'll start to see a little more of that coming on board. Great. Okay. Jose asks this taking into account the progress of the electric car in China, wouldn't it be logical to look for a Chinese partner? I see us as an alternative to China. I think there's going to be such a scramble to get non-Chinese Graphite.

42:02 1 conversation we're having, I'm having with an OEM, is they need to have a source, especially for North America, non-Chinese Graphite, non-Chinese methods. So that's the big thing. So if you think about just straight the method of purification for the graphite, for the anode graphite. It's in China, it's hydrofluoric acid. Hydrofluoric acid is horrible to work with. So we're using a thermal method and that we've had quite frankly, someone we've been asked for that. So I think it's a, you know, there is a push to non-Chinese methods and non-Chinese supply completely. Right, okay. Another question, what's the electrical grid supply like in Sri Lanka?

42:50 How stable is it? Good question. The interesting thing is that one of our directors, Jody Lenahan, who is one of the founding members of, shareholders of Solon, who helped in Sri Lanka to get the grid, initial grids. He has come back to us within the last year and a half or so. He's actually heading up SARCON, which is our operating entity in Sri Lanka. He was involved in Runner River Hydro projects in Sri Lanka. So he's quite familiar with the grid. It hasn't been great overall, I have to say overall, in the last, let's say the last 8-months, But we have our own source, we have generators if needed, so we can be pretty self-sufficient. We're not completely reliant on the grid.

43:43 We don't have a huge concentrator plant running where we have hundreds of horsepower requirements, megawatts. We don't need a lot of power, though we're pretty self-sufficient and it's not, you know, with multiple small mines, you know, a small generator will help, you know, tremendously if need be. Great. Fair enough. I got a, I got a triple question for you. How often do you communicate with the field team? How often are you there? And how are the teams structured? Okay, well, it's continuous as far as communication. Now with WhatsApp and whatnot, it's continuous. I was last there in May. I came home. I landed in Toronto on June 8th. I've been going to go back. I was going to be back within August.

44:30 I meant to be doing this seminar, this talk from Sri Lanka. So I'm heading back imminently. We were just waiting for some things to happen on the ground there. We have my, with our main team, We have weekly Zoom calls and we're pretty regular communication. So it's pretty, today's communication technology is pretty good. So we have a pretty almost continuous communication going. And once I'm back, it will be between myself and Jody Lenahan, I would say there'll be one of us there within probably once a month or at least, if I'm heading there in a couple of weeks, it probably won't be very long until I turn around. Once we get things further advanced, we're also looking at some other properties to add to our fold, looking at some quicker development.

45:30 I wanna get not just 1 at a time, I want to get 2 or 3 or 4 mines running. So yeah, so it's a question of, it'll be fairly regular. We had a long lull with COVID and you just couldn't get into the country. So I've been there since I took over as CEO. I've been there 4 times, 5 times. And that's with some restrictions. I had to wait until some COVID restrictions were lifted, but that's pretty much gone by the wayside now and would be fairly regular. All right, great. Adrian wants to know how diverse is the shareholder register? What percent of the largest shareholders own and what percent do retail investors own? Okay, I think we have quite a diversity of shareholders. We probably have more than 1000. I don't know exactly, but typical listed company.

46:23 Our largest individual shareholder is about 13% right now. And second largest is about 6%. We have a group that came in through our last financing. So we have some significant grouping of shareholders, quite supportive in the last financing. So I think we have some larger network chunks there as well as far as percentage ownership. I don't know right off the top of my bat but again I know our largest individual shareholder is about 13% right now. Great, well Donald listen we've covered quite a swath of questions today. It's been great. I want to provide you the opportunity to add anything else that's top of mind or you feel like we've missed that's important for the audience to hear. Yeah, I think I'm happy to do that. I'd say I've been quite excited when I sort of took over the reins, as it were, of Salon. We've had a few delays getting to where I wanted to be. I think my background of mining, I'm a mining engineer.

47:30 I've been in the graphite space for probably far too long. I think I've been seeing this whole thing coming, so I've been prepared from a processing standpoint. A lot of what I was doing privately was processing graphite for batteries. We have a good team. I inherited 2 PhDs in the UK, that's why our technology aspect is based there. So we have combined a decade or more of experience in the battery space, which is pretty new. So I think we have a small company, but we have a huge potential. I'm excited by that aspect of it. I think even maneuvering through some of the roadblocks we've had, I mean COVID was a roadblock for everybody.

48:19 With them, we got hit with the political situation in Sri Lanka and that slowed us down. It really didn't hinder us a lot, it just made it more difficult and slower to get some certain things done. Signatures, For example, the person who was supposed to sign the permit, they're in a queue for fuel. They've been in a queue for the last 3 weeks and they can't lose their spot, that kind of stuff. It's been frustrating, but I do see that we're coming to a point where It's going to be just open doors for us and we're just going to continue to grow. With the onset and the sort of new sense of urgency we're seeing with the battery space, the timing probably is just, ironically, probably better. I look back on some of our competitors, a company for example like Talaga, the Australian group, some of the news releases we're able to put out now, people are paying attention, they put out in 2018, 2016.

49:17 And so I think we're finally at the point where people can notice what we're doing. And you know, graphite is now becoming more and more prominent. It's always been sort of the outlier and the overlooked battery, critical battery material. But I think we've positioned ourselves to where we're going to come into this thing just as the sense of urgency is rising. And I think it's a good time for Salon going forward. So I'm excited for what we have coming. And yeah, I think it's just With the industry, it's going to be phenomenal. We will be able to do as much as we possibly can. If we have 10 mines, 20 mines, 40 mines, I had 1 chairman of the Mines Bureau said, why not 400? So I don't know about that, but I know we'll have a significant amount of material and we'll divert as much of it as we can.

50:13 Growing from run of mine material sales to actual battery materials, which is the tsunami of demand that's coming is battery materials. So I think we're well positioned to take advantage of that. Awesome. I have 2 questions that have cropped up faster while you were speaking to that. Just to follow up on the previous one. What percent do insiders own? Insiders, I say that that's 13 percent and is one of the founding shareholders and the other there are 6 percent is an insider as well. So that's just shy of 20 percent there. So I think that's pretty significant for a junior I think at this stage. Fair enough and final question for you today. Are you going to continue the tradition of sporting a curved mustache? Probably my beard comes in a lot more gray than it used to, so I think, yeah, no, I tried it.

51:06 I let my beard go for a while. As far as the curl of mustache, no, I can't pull that off, sorry. I'd love to see it. I'm sure the audience would as well. Don, I want to thank you for coming on today of course. I also want to thank everyone in the audience who asked questions and made such a great event today. Don, I'm going to hand things back to you for any last-minute remarks before we wrap up for the day though. Again, the more we do these seminars, I think the more people will learn just what we're doing. And I think looking at Salon now, if you looked at it, you know, let's say before I was CEO, I think it's a different company now. I think we're well on track to take advantage of this real push to battery materials and be a producer. So I think in the junior space, that's going to be pretty rare. And the fact that we can make a high margin product, ultimately for battery space is pretty exciting. So I'm looking forward to it and just ready to get to work.