Clontarf Energy (LSE:CLON) — Investor Presentation

0:02 Good afternoon, and welcome to the CLONTARF ENERGY PLC Investor Meeting. Throughout this recorded meeting, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company can review all the questions submitted today and public responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to David Hawken. Good afternoon to you, sir.

0:30 Afternoon, and thanks everyone for investing your time in speaking to us. We have some time, so with everyone's permission, I'd like to give a quick introduction to explain the context because it is a complex and rapidly evolving industry. Basically, we're involved in the provision of clean and green lithium brines to make high purity lithium for the battery industry, which is mainly used at the moment in the EV market, but also in rapidly evolving new technologies as well as applications you're familiar with, such as computers, iPhones, etcetera. So if you can see this presentation, we're focused on the European initiative, which seeks clean sources of reliable supplies, not just in lithium, but also principally in cobalt and rare earths.

1:31 Basically, the European Union has recently passed a Critical Resource Minerals Act, which identifies 34 essential minerals, of which 17 are nominated as strategic. And the reason why this initiative is being rushed ahead now rather than heretofore basically, is the success of China in dominating the, many of the critical minerals in the world. They've had a strategy for the last twenty five years. It's been incredibly successful and full of admiration for what they've achieved. But belatedly, first North America, now Europe has seen that it poses a potential threat to markets in North America and Europe.

2:17 And the reason for that is not just the dominance of certain areas through mining such as in China, which is about two thirds of the world's supply, but even more so the processing of many of these minerals. So for example, if you look at lithium, China only accounts for about 10% of lithium by mining, whether brines or hard rock, but it dominates about 90% of the very high purity processing at about 57% of the world. So you see that dependence on China is a potential problem. Now it wasn't identified as a problem until about 2010. And what happened then is that there was a a clash between Japan and China over some islands, and the Chinese effectively embarked with the export of railroads to the Japanese market.

3:09 At that time, Japan was the dominant player in high quality batteries. We used to sell them high purity flake graphite in the nineties. And overnight, that industry, was emasculated, and now Japan's gone from about 85, 90% down to about 10%. So China's willingness to exercise its power and flex its muscles is real and poses a potential threat. And that threat was increased when the Americans, a couple of years ago, passed their so called inflation reduction act, which has little to do with inflation reduction, which is basically biasing the development of projects in the NAFTA area, not necessarily The United States, also Mexico and Canada, but it prejudices Europe almost as much as China. And that was a wake up call for European decision makers very belatedly.

4:01 When we had conversations some years ago with people like Volkswagen, they tended to dismiss this as a problem. They said, well, you know, the market will work. We're not miners. Why would we worry about vertical integration? Now everyone can see that the market will not always work, that in some respects, we've gone back to the mercantilism of the eighteenth century, and you need access to secure as well as quality raw materials as well as markets. And that's the new world that we're living in. And if you look at the the numbers involved and many of the challenges involved, I think it's very clear to everyone, including the European Commission, that no one company or even country can solve these problems on their own. That's why we're working to try and to develop a Team Europe effort because different companies bring different skills. For example, we are junior explorers and developers, but we've been in Bolivia since the eighties, and very few people would have the same experience that we have.

4:58 But we've partnered with a high technology company that has developed a ionic separation technology, which provides the capacity to generate high purity lithium directly from the brines rather than going through the very long delayed and expensive process of evaporation ponds and chemical reagents and all the rest of it. But that's not enough by itself. We also need, obviously, financial support as well as off takers because this is an industry where you have long term relationships with key buyers, mainly in the automotive sector at the moment. They're increasingly in more diverse areas, including defense, aerospace, and various high-tech operators.

5:46 There's a particular challenge in the global South, not just Latin America, also Africa particularly, in that many of the countries that we're talking about do not have completely independent or reliable judicial system. So you don't have legal title in the same way that you do have, for example, in Australia or North America or most of Northern Europe. And therefore, we're seeking assistance both from EU institutions, but also from member states to take shareholdings, give us other support so as to make it more difficult for us to be pressured or even expropriated in the future, which has happened, you know, every twenty, thirty years in a continent like Latin America. It's complicated to some extent by the fact that many of these countries, not just Bolivian lithium, also Argentina today, DRC, which dominates cobalt, have complicated histories and may not by themselves be sufficient counterparties.

6:46 Therefore, it's important to, have financial support and effective guarantees, not just from, EU and member state institutions, but also from your off takers. Off takers tend to be concentrated. They have a lot of muscle, and they're now interested in engaging with suppliers, which brings its own complications, but also some opportunity. The reason why, such relationships are now possible is not just because of the flexing of Chinese muscles against Japan, over the last generation or so, but also because of the very tight supply demand balance. Now I know some shareholders are confused by what they see as the spot price, and I can take you through what's happening there.

7:36 But basically, if you look at the way demand is growing, you rarely, in any commodity market, see growth rates like we've experienced. Last year, for example, you saw a growth rate of lithium carbonate equivalent of about, 30%, and you rarely see double figures in any commodity. I mean, so much so that I prefer to talk about lithium more as a specialty chemical than as a pure commodity. A pure commodity would be barley, wheat, iron, or thermal coal where the product is more or less fungible and you can trade it into the future and prices are reasonably liquid and well known. That's not the case in these specialty chemicals. We have a lot of experience in industrial minerals because we formally dominated the upper end of the premium flake graphite industry, which is why we knew the battery manufacturers in Japan and elsewhere.

8:33 And just to give you some term of reference, there was a a very widespread. I mean, you would sell the bulk of your product at 4 or $500 to a factory industries, but you would also sell some tonnages to aerospace and, you know, synthetic diamonds in other industries for maybe $2,000. And people find that hard to understand. How can you have a product that is sold at $2,000 and at $400 when it's chemically a very similar product? And the reason is that price differs by application and by economic value and by negotiating and by volume and all the rest of it, which is why you really need to develop deep relationships with the off takers, ideally with the end users. And we put a lot of effort both directly and also through the EU institutions on developing those relationships.

9:23 The reason why direct lithium extraction is distinct from traditional methods is if you can see that slide, this shows you in cartoon format the traditional way of taking a brine, which is like a salty water, and evaporating it to the point where you can add lime and basically precipitate out some salts out of the concentrate. And that is a reasonably effective way of getting reasonable purities, which was adequate till about five years ago. The problem with the very high quality applications like EVs particularly is that even relatively small impurities can cause the buildup of sharp crystals within a battery cell and simplifying to some extent. These sharp crystals can actually break the membrane and cause a short circuit, which can cause a fire, which causes very high temperature, fires. Now think of a car container going from Japan to West Coast North America.

10:22 If you have one car burning in the middle of a container at 1,500 degrees Celsius, very hard for the crew's safety to put that fire out. And that's why you periodically hear these problems about, high temperature fire problems. That's a big problem, and the solution is higher purity. Now there are limits with traditional technologies, so that's what's really driving the move towards recolithin extraction. So, basically, what what we do is we there there's different technologies, different companies, about 43 of them worldwide, sometimes using reagents, sometimes membranes, sometimes resins, many other technologies. Ours is ionic separation. And, basically, what it does is it works very much like your kidneys. Think of what you eat. Now you might have fish and chips. You might have a beer.

11:10 You might have dessert. Those are very different food stuffs in your gut, but somehow your body is able to process the nutrients out of that food intake and get rid of the waste. And it can do that without high pressure within your gut and without high temperature. There's there's some heat generated, it's relatively modest. And the reason is that nature through hundreds of billions of years has evolved techniques that are quite efficient at ionically separating the useful minerals from the less useful minerals. And what we do in our technology is effectively duplicate these processes, transferring ions across membranes, and that's what gives you the very high purity product.

11:56 Coming on to Bolivia. We've been interested in Bolivia since the eighties. It's been a very long endeavor. We first became interested in brines in the nineties, would you believe, and had our first major project on an Oro Tinto deposit in the Salar D'Auni, the biggest salt lake in the world, from 2008. And that was a joint venture with the military. It worked really well with the military. Unfortunately, the new indigenous government wanted a state monopoly. So we went through some years of relative uncertainty when they set up a new lithium company. Then we were invited back to talk to the lithium company. And since then, we've been working closely. Since about 2018, we've been working closely with the authorities.

12:42 As a result of that, they had an initial call for expressions of interest in 2021. We were asked to bid. We didn't bid because they wanted a commitment that we would commercialize the product, which we weren't ready to commit to, at that time. So then they had a broader international convocutorial, this year, and that has attracted 21 companies, all serious companies, including seven EU, one British, a Swiss, and two Russian. And where we stand now is that we're now in phase four of five. So we're very past the technical evaluation and the financial capacity evaluation. But, basically, what they've done is they've now separated the 21 companies into four streams based on how mature your plant technology is. So in stream one, you've got three Chinese and one Italian water purification company, which has already or claims to have already plants operating.

13:39 Stream two is where they've got a pilot plant in production. Phase three, where we are and the Russian state companies are, is where you're building your pilot plant. And stage four is those companies that are still in the r and d phase. So we're currently here in South America, involved in the negotiation with the authorities. And the next stage for us is acquiring the bulk samples to send us to our pilot plant, which is currently being assembled in India. And this is the, you know, the proof of the pudding because the technology has been shown to work at the micro level. But the proof of the pudding is running actual live blinds to an actual plant. We had hoped to have that plant on-site at Bolivian Salar by now, but the the state had to change their plans for logistical reasons and for proper consultation with the local communities. So what we're all doing now is we're sending a sample to the the plant, wherever the plant may be, whether it's in Europe or North America or wherever.

14:41 Ours is in India. And we've already got smaller samples, which we've already run through a smaller pilot plant. So we're now hoping to ship in the near future about 300 tons or so of brines from two salt lakes. One of high purity and with low magnesium grade. Magnesium can be traditionally a problem. The other one with high magnesium grade because we're optimistic that our technology can take out the magnesium and even sell the magnesium at a profit. A bit of context for you. Bolivia is not new to mining. It was a producer of much of the world's silver from the eighteenth century on. So they understand mining, and they've got a basic system of 3% royalties. They've also a lot of experience in petroleum contracts, might which be more suited maybe to lithium given high profitability, and the greater sensitivity of of lithium, than most mining activities.

15:36 There's no legal certainty because they passed a law. It's not perfect, and they are looking at improving and clarifying the law. And, of course, we will respect the law and work within the constitution, and we're quite experienced at that. Very important throughout the world now is the social license to operate, particularly with the local communities. And we have, like, thirty years experience of this, and we've never had a significant problem drilling oil and gas wells and working on mining projects. But we found that you do have to put the the shoe leather in. You've gotta spend time in the field, whether that's the high mountains at 5,000 meters or the deep jungle. You've gotta do the work. And if you do the work, you can avoid the problems that many larger companies had over the years. It obviously helps if we have strong backing from the offtakers, and we've managed to conclude agreements in principle with a number of major offtakers.

16:30 I can't give you the names today, but I think you'll recognize them as household names. And we've also got very strong support and leadership from the European Commission, which has taken a tremendous commitment to the sector. Some people are skeptical about Washington and Brussels and with good reason. But in my experience, they are like super typos. It's hard to move them, but once they move, they have momentum. And it's absolutely clear. I've just come here from meetings in Brussels, and it's absolutely clear following the passage of the Critical Resource Minerals Act that the European Union is committed to this project. Not necessarily every critical resource, but certainly to lithium or one or two others, and not just to, reliable supplies, which the world desperately needs, but also to clean supplies.

17:21 The problem with many of the current supplies that come mainly from Southern Africa and Western Australia is that they are relatively dirty. This is the big secret that Tesla and the others don't tell you, that you may have a nice squeaky clean EV at the the store when you buy. What they don't tell you is that it takes more than six times as much raw material to make that EV and that many of the minerals that go into that EV have problematic production lines. In the case of Western Australia and Southern Africa, they only mine the very best hard rock, by which I mean the highest grade and the best mineralogy. So most of the deposits are not mined and and won't be mined for the foreseeable future. And when they are mined, they're generally set to China and burnt for two days in coal fired furnaces at 800 degrees Celsius, which is a very dirty process.

18:13 And until now, you know, your your yuppie virtue signal around California doesn't know or care. But I bet you as people become more educated and as the industry becomes more regulated, the whole issue of the green chain and issues like child labor in DRC and elsewhere is gonna become a live issue, including in China. And that's why the EU has given such interest to the Bolivian projects. Now you may well ask, well, how can that help you as a private company? Well, the answer is that when you develop a new mine in a new area, remote area, about two thirds of your capital cost is typically in infrastructure, by which I mean water, mains electricity, roads, and all the associated services, schools, hospital, housing, all the rest of it.

19:02 Two thirds is a lot. And while the EU may find it difficult to lend to individual companies like ourselves, they can lend and they have a huge budget to lend to the states, qualifying states, and the state can then allocate the contracts to connect you to main supply, or, the geothermal well or road project or wherever it may be. And that suits everyone because the state can allocate the contracts to, the contractors that they can rely on. And we have the satisfaction of knowing that the EU is lending them twenty year money at 3.3% interest rate, money that they can't get in a free market. They might be paying 20% if they try to borrow on Wall Street today. So 3.3% is very compelling. So it's a bit like World Bank money.

19:51 The fact that you can borrow relatively cheaply reduces the risk of the borrowing so it suits everyone. It's really creating value from nothing. And we have a lot of experience with this because when we developed mines in Africa previously, we got CDC. Those of you who are British will know the Commonwealth Development Corporation. And they didn't just lend us soft loans. They also took an equity stake, which protected us. Because once you persuade a state body to have a minority equity stake, it's so much more difficult for a future left wing regime. Think of Carbonite or whatever if they get elected, so much more difficult for them to expropriate you because it becomes an international incident. And it's not just the direct benefit of getting someone like the CDC to back you. Because the CDC is backing you, many other lending agencies take comfort from that. So we found that when the CDC backed us in Africa, the EIB came in, with not just 0% money, actually negative interest rate money. I can take you through how that worked. But, basically, they paid us to borrow money from them, and that's not a bad trick. And they, even with the high risk of developing country, you should be able to make money like that. So, just making a couple of points before we move on. What oblivions want is partners, not bosses.

21:08 The communities welcome investment. These are naturally entrepreneurial people, but they've had mixed experiences with miners in the past. So you've got to persuade them that they will be net beneficiaries, which you can do, and we've done it in the past. But there's no quick or easy way to do it, and the reason is their historic experience. But, we're well aware of it, and we're well experienced in how to deal with these issues. And if you can overcome these problems and negotiate the right contracts with the government, which I think we will this time because Bolivia up to now has not exported a kilo of battery grade lithium. All the growth in exports has come from Western Australia and to some extent from Southern Africa, which is a frightening statistic. So you think about the most dirty, the most difficult deposits are the ones that have been developed by the Aussies, and the easiest to develop have not yet been developed.

21:59 There's been some progress in Chile and Argentina, but it's been complicated by the politics. But there's no technical reason why Bolivia couldn't be a dominant player of clean green lithium. But it does need the support of of a big sugar daddy, and right now, the biggest sugar daddy is the EU institutions and also the major off takers. So with that, I noticed there's a lot of questions coming through. So with that, I'll move straight into the questions. And, thank you for these questions. These are very, searching. First one, how advanced is direct lithographic structure technology in our stream and in the other streams? Well, basically, there's a number of different technologies, a very wide range. There's about 43 serious companies that are developing different technologies.

22:47 There is no technical reason why several of these technologies can't work with today's technology. So it's it's simply a question of throughput and cost. But in fact, there's no technical reason why you can't produce with traditional evaporation pond technology. We think our technology is the ultimate solution because it's the only technology that we have seen, and we reviewed dozens over the last ten years worldwide in Singapore and Japan, you name it. Ours is the only one that gets you very high purity, by which I mean a minimum of 99.5%. But certainly 99.7% is attainable. But when you're talking to the battery manufacturers, very often, they focus not on the absolute purity number, but on the nature of the impurities.

23:37 So in other words, they care more about things like calcium content, magnesium content than they do about some other residual minerals. And from what I've seen, only the ionic separation gives you the ability to get a high throughput and the ability to to produce the purity that people want at a reasonable cost level. So just moving on very quickly, I should say that if my very brief answers today don't satisfy everyone, There will be more detailed explanations and q and a at our AGM, which is coming up in London on the July 9 in the Paddington Hilton. And you're very welcome to come, and and you have an opportunity to ask any more detailed questions, whether one on one or to all the rest of the shareholders.

24:31 Second question, does direct lithium extraction technology provide lithium as the highest purity for EV battery, manufacturer? Absolutely at the moment. Basically, it is achievable certainly at lab level to get 99.9, even up to 99.99. The question is the number of cycles that you go through and the trade off between throughput and quality level. And the answer to that question will depend on your customer. If you're speaking to Panasonic, they may will give you one answer. If you're speaking to a gang fan, they may give you a different answer, even people within the same industry. And our view is that the customer is always right. The other aspect is that the market is evolving. So the answer that I give you today may not be the same answer as I give you in six months' time. The third question is about our future share price and market cap. Well, we can't comment on on future share prices, and only an idiot would take it seriously if we did because nobody can forecast the future. It's a bit like a national hunt race where you know that your state is, is a good state. There's no virus in the yard.

25:39 But how can you be sure that the jockey is the best jockey, or that he hasn't been, paid off by some crooked bookie? So it's better that people make their own assessments and let the market decide. And never worry about the share price. The market will decide the share price. It'll fluctuate, and that's how markets work. But with confidence that the market will find its own level. And we wouldn't be investing all our time and effort if if we didn't think that this was a game worth a candle. Next question. What's needed to make CLONTARF's direct lithium extraction technology advance and take off? Well, basically, it's logistics. We are, at the phase now where, the really difficult test, I think, frankly, was phase two, the technology phase.

26:25 And happily, we went through that with fine colors. Then we were worried about phase three because initially, they were looking for bond ratings of reasonably high quality, which makes no sense. If you know anything about tech r r d companies or junior explorers, they don't issue bonds. In fact, European companies generally don't issue bonds. And it took a while to explain that to the authorities that even even a one of our partners in Germany, which is a fair I I won't tell you how who they are, but a very large company. They're a private company, you know, family dominated private company, and they've never issued bonds. They have hundred year relationships with banks, and, they they just didn't want even to release their private financials to a bond rating agency.

27:14 And the reason why they initially had this bond rating, question was because the limited experience that the government had with businesses was really focused in North America. And in North America, it's a totally different culture. It's absolutely normal even for relatively junior companies to issue junk bonds. You know, won't even tell you what the ratings are, but it's it's that's not the case in or Europa. So anyway, we're able to resolve the problem by incorporating a very large industrial company and and offtake whose name you would recognize in our bid, and I hope that solved all the problems. How does the purity of direct lithium extraction lithium compare with mined s g six lithium? For those of you who don't know, s g six is a category which is sometimes traded in the secondary markets of lithium that is produced from spodumene, which is a hard rock.

28:09 But, basically, with DLE, you can produce and we certainly have produced in the lab 99.7%. But what we have specified in our submissions to the authority is 99.7 as a minimum, and that is superior to current technologies producing from spodumene. Now there's a number of technological developments underway, and I never rule out progress in the future for many of the the sources. But right now, the best technology for purity is directed to extraction technology. Next question. For EV battery manufacturer across the various battery technologies, what purity of lithium is preferred to be supplied? Well, that's changing. When we first started speaking to people, they were talking about 98, 98 and a half percent. This would be ten years ago or more.

29:02 Now people really want they call 98 now technical, which means it has to be upgraded in China. Now they're really looking for 99% minimum. But looking ahead six, twelve, or more months, I think 99.5 is gonna be a basic standard. And you never go wrong having a high purity level. And, anyway, we're probably not gonna be selling to the more marginal players in China. We're probably gonna be selling, I don't want to mention their names yet, to the major Japanese and the top Chinese and European companies. Some of them are involved with us in this Team Europe effort. And these people are premium manufacturers. So it's a bit like Porsche or Rolls Royce. I mean, they don't buy cheap grades of steel at a cost. They buy premium steel, and they they capture a price premium in their final product to market.

29:52 So how does the board see the jigsaw pieces fall for CLONTARF with regard to unlocking billions of infrastructure finance from institutions? I have to say there has been incredible progress on this. When we first raised this with the authorities, it was a bit of a flyer. Right? You know, it's like, you know, maybe a a pretty young girl asking a sugar daddy out on the date, and you're I'm not very optimistic about what the sugar daddy's gonna say. Instead, we found we were pushing out her open door that what the EU has, and to some extent, the federal government in Washington has, is lots of money and effectively the ability to print money. I mean, the Americans do it, the 34,000,000,000,000, but the Europeans can also do it, basically, through the EIB, which is the European Investment Bank. And that's the people who gave us a negative interest rate money for our African projects in the past.

30:43 And the basic reason is that if they have a guarantee of, say, €4,000,000,000, they can effectively multiply that, potentially seven or eight times, and that's a lot of money. Even for the wealthy investors that we have in our stock, that that's a lot of money. And the magic of that is it enables you to provide, proper infrastructural funding for projects that may not justify a double digit hurdle rate. And many of the countries that we're looking at in Sub Saharan Africa or Latin America have very good deposits, You know, so there's no essential geological or operating reason why these cannot be a profitable, reliable source of critical raw materials. The problem is that there may not be roads built. Like, when we first went to the Salt Lakes in Bolivia in the nineties, there was no major road to the Salardia Uni. Now we drove there. In fact, we actually landed a plane. We rented a plane from the air force, and we landed on the Salt Lake. You can do that because it's it's as flat as the ocean.

31:45 And then one of our directors, Peter O'Toole, as a road contractor, he actually built the first road to the southwestern part of Oyuni, and that that was literally the first road to a major salt lake. Now you've got Chinese contractors building roads, so the situation has changed completely. Then there was very little electrification. Now you've got a widespread electrification, not just oblivion, of course, rural India, in much of Sub Saharan Africa. Much more work needs to be done. Maybe 2,000,000,000 people are without mains electricity, but it's being done. And but the the problem for the state is how do you fund these projects? And the answer is you use cheap money from the various infrastructural funds. That can be the Inter American Development Bank, which has 17 European shareholders, you might be surprised to hear, CDC in Britain, or the various EU institutions, or indeed other member state, lending institutions, which includes the Germans, the Dutch, the Fins, the Swedes, and many others.

32:49 So next question. What is the model cost in US dollars per ton of lithium of membrane technology? Okay. We do use membranes, so we consider ourselves to be state of the art. Membrane technology is evolving quite rapidly, and it's been one of the long lead items. The other one has been sensors. And, it's a sensitive matter because, there's been a lot of industrial espionage in in membranes and other technologies. So in a perfect world, we would probably be making our membranes somewhere like China, but that's not wise at the moment because of the high risk of leakage of technology. The best membranes are actually manufactured in Germany. The trouble is the supply chain got screwed up during COVID for reasons you're probably familiar with, and they became a long lead item.

33:39 And we have orders in for membranes at a high cost. I won't lie to. They're high cost in Germany. The problem is the time to market. It's a bit like if you think about an oil project, if you have a discovery and you've drilled out all your wells, that's fine, but you can't flow your first oil until the compressors are in place. So if there's a delay with the steel for the pipelines, that's the critical element in the time frame. In our case, it's sensors and membranes. So in the short run, what we've done is we've sourced membranes, which work adequately in technology, but they're not warrantied as long as the German warranty is. So we're moving ahead with synthetic brines in the pilot plant now, and we'll run our tests with these membranes.

34:29 But ultimately, we will be relying, we think, either on the German technology or in somebody who's able to duplicate the success of the German's technology. So what time scale would it take Team Europe to provide an open plan? Well, it's happening now. You know, we're assembling the plant now, and we were ready by this summer to deploy. When I say summer, I mean European summer, which is, of course, the South American winter. We were ready to deploy, over the coming months, and we were asked by the authorities just six weeks ago not to deploy yet, but to run the the volumes through our plant, our case, in India, because they've some more work to do with local communities. And there are 21 companies and just logistically, they couldn't have 21 companies all building a pilot plant at the same time. Now there's plenty of room for 21 or even for 50 companies because the the nature of deposits are so large, that you're basically talking centuries of feedstock.

35:29 So it's a bit like, you know, going to Iraq or or Saudi Arabia or Venezuela and saying, well, you know, at current flow rates, how long will the oil reserves last? And the answer is that, you know, several lifetimes. Though, obviously, as you increase your throughput, you know, the the unless you add lots of reserves, the the lifetime diminishes. Bolivian brines have a high magnesium level. How good is our technology in extracting magnesium? Well, it's an excellent question if you were asking it ten years ago. But, you know, when people first started looking at Bolivian brines, they noticed that certain salares had quite high magnesium. I'm thinking particularly of Culpasa and Oyuni, but there's, like, 28 salares in total, and some of them have quite low magnesium.

36:22 And even within a salar, you find a variation of impurities and grade by depth and across the the size of the the salar. And Just to give you a term of reference, Ojune alone is like 10,000 square kilometers, so it's it's a large place. And but you're right that magnesium is an issue, and we've put a lot of effort over the last three years in extracting magnesium. And in the the end, we found the best solution is to combine the ionic technology with a separate technology developed by an Indian partner, for a different purpose, basically, to produce magnesium for the specialty steel industry for a profit. And that's the best thing. If you can inherit a problem and make it into a revenue stream, that's obviously the best way to deal with the problem. So we don't anticipate a problem with magnesium based on the work we've done so far with the. Plants.

37:14 So would extracted magnesium from the oblivion plant be sold as commercial product commodity? Absolutely. Current price is quite high. It's priced in because the main market is China, but it's about $2,500 per ton at the moment with some premium for very high purity, which we will be producing. Were a pilot plant testing and extraction originally scheduled to begin in spring two thousand and twenty three with the results by by the summer? Well, no. I mean, we

37:44 this caused a bit of confusion. We first identified our technology partner, Nextcam, in 2022 through the good offices of our Aussie shareholders, And they were about the tenth company that we'd we'd visited and spoken with, and we were very impressed by their technology. They came highly recommended. I mean, the origins of the technology were actually Soviet. And the reason was that if you think back to the the Soviet physics, they had first rate physicists, and no one doubts their mathematical physical skills or their chess skills. But they didn't have a great safety record and particularly in a city called Sverdlovsk. They had several nuclear accidents with their weapons programs, and they had contaminated the groundwater.

38:32 So in an attempt to purify the groundwater and make it safe, they developed technology, ionic separation technologies, to take up astrontium principally, and this was quite successful. And then we applied this technology in Chernobyl after 1986 where they had this this terrible accident. And the accident really wasn't a problem with the basic physics. The the problem was the the shoddy construction techniques, the failure not to put a a proper containment vest across it, and poor management. As one guy, software guy explained to me, when they handed over, they were doing a safety test. This was a human caused problem, a terminal bill. They were doing a safety test, but they didn't properly brief the new shift leading to the critical mass, and leading to the the emergency and the accident.

39:19 But the cure that the Soviet scientists developed was a very promising technology, which was never really developed by anybody else, until a company then based in in Ukraine and Kyiv, in recent years, started about the technology from the point of view of purification of salts. When the war happened, they had to flee to Texas, and we identified them, met them, did judosions technology, and we got some of the German off takers to do their own judosions, and that passed swimmingly. And that's now our technical partner. So we did the deal in 2022. Our original target was to have something operating in Texas in 2023, but we were talking there about a relatively small scale.

40:05 And, of course, it's all subject to the funding and to the necessary approvals and to the sampling. And we were quite successful. We we did get sample both sample from the Bolivian authorities, but not till September of last year. And we're one of the only companies to get it. Obviously, the Russians and the Chinese did because they were part of a previous conflict of audio. But as of today, I don't think the other companies, even the major ones, have got both samples yet, and we have. So but, obviously, we can't dictate to the safe. We have to work within the law. You know, we've gotta drill their wells. We've got to take the product under law, apply for the paperwork, and export the the sample. And we'll we'll be doing the same thing, and it could take two months. You know? So that is the rate determining step for taking a sample. But I'm very pleased with the cooperation that we've got, and I think the authorities are pretty happy too. I mean, they're they're keen to go visit the plant.

41:01 And one of the points that they made to us, they said, of all of the applications that we got, and they were originally about 47 companies or even over 50, they said that of all the applications that we got, yours was the only company that focused not just on extracting the valuable lithium, but also in extracting the the various other minerals. And to me, that was a surprise because if you think of a polymetallic deposit, your main mineral might be nickel, for example, or zinc. But maybe 2% of your stream could be cobalt or could be copper or could be gold or silver. So to us, it's it's second nature to look at the different potential revenue streams. Now if you have a mineral like antimony, it can be an impurity. It can actually be a cost. It can reduce the value of your concentrate. But very often, taking silver, gold, or cobalt out of a stream can actually be free credit.

41:58 So to us, it was second nature, and we're quite surprised that we were the only one to follow that route because apart from producing the magnesium, as one questioner pointed out, Now there's also potassium which can produce quite valuable fertilizer. And if you've looked at the the growth of the world's population and the move towards richer protein diets, there's a rising need for fertilizer in the world, particularly with the war in Ukraine. And as long as you can produce it relatively cheaply, there there's every opportunity to produce profitable minerals other than lithium. And to the extent that it's not economic to extract the residual, impurities, we plan to simply, correct the pH or the acidity of the brine back to what was originally and reinject into the salt lake maybe maybe at a different level.

42:53 For those of you familiar with oil and gas, this is what we do all the time in oil and gas. All this, of course, has to be done under proper environmental permitting. But our process has an advantage in the sense that you're not chemically modifying the the brine through the process because it's ionic separation. There will be a small change in pH, obviously, as you take out, the alkaline, metals, but this can be corrected by the addition of buffers and so on. So this is well understood technology, which is used in the food industry and and beer making and so on. Could our technology produce pure magnesium metal in the case where magnesium exists in high concentrations such as Bevia? Absolutely.

43:38 It's a function not just of the concentration, but also of the price in the market. Now there have been times in the past where prices have been very low, but that was before the rise of China and India. Now it's hard to see over the next fifteen, twenty years, you know, the drive for consumption of, you know, construction, cars, gadgets generally, leading to a reduction in magnesium demand for point where the price would fall to a historic low. So it looks very commercial as we speak. How much revenue could be generated for the joint venture in Bolivia if the pilot plant is successful? But that's a function not just of the economics of the pilot plant, but also of the the fiscal terms, which have to be negotiated with the Bolivian authorities. And that's why I signaled in the introductory presentation the point about, the negotiation and how the negotiation will most likely proceed.

44:40 I think the Bolivian authorities, at least the technicians, and the technocrats that we speak to, think there's a good understanding of the, the basic mechanics of finance. In other words, for a project to develop, it has to work for all the stakeholders. You can't have a situation where, say, an oil company in Russia is profiteering at the expense of the local community or the state because you might get away with it for a year or two, but then eventually, you're gonna be expropriated or there's gonna be an issue with the local community, whatever. But it is a mining country, so they do have experience of mining. And historically, the royalties that they've charged have been relatively modest at 3%. In in the colonial times, they were higher, but then there weren't any corporate taxes in those days. So there's a good understanding of the constraints of economics, and they do follow the prices in the market as not just the lithium, but other commodities as well. And they have had a recent experience with natural gas where they had enormous success with natural gas in the nineties, one of the highest resource additions in the world after Angola in the nineties.

45:52 Then they unilaterally changed the fiscal terms with the the mass government after about 2006, and that led to an investor strike. And it didn't bother them for about ten, fifteen years because they had so much reserves that we're able to sell at a high price to the Brazilian Argentine market. However, eventually, your reserves run down. And now they're in a situation where they either have to regalvanize exploration for additional gas, which they could do because they've lots of good geology or leads to a loss of export revenues at the very time when their their markets are growing. So I think now there's a good understanding of the need to to make it work for all the parties, and and this is a negotiation which has to happen. And we've had a fair bit of experience in this. And as do the Bolivians, I mean, the Bolivians, they've been a petroleum producer since the twenties.

46:50 You know, so they have a lot of experience with different petroleum contracts. And you can learn a lot from petroleum for lithium. They're quite similar economics in many ways, but also I think people have had an expensive education in that they have seen that with all of the natural advantages that Bolivia has, they haven't exported any battery grade lithium. Whereas the Aussies, with all of the constraints that they have, have gone to about 35 of the market and have lots of projects that they can develop, not always with great mineralogy, granted. You know? So the everything is possible, but you gotta be pragmatic. And I hope that we've played some role in acting as an honest broker, putting the off takers on the one hand, the urban institutions on the other, and our friends in the Bolivian communities and the Bolivian authorities. We've certainly done our best to do so.

47:44 A question about the different lithium congresses. There's several of them now, and they're they're worth attending. I might go down later this month, partly because it's a good place actually to meet ministers and other high officials. It depends how busy we are here in Bolivia, but it's certainly something that I'd like to do if I possibly can. Question here about June 2023, Bolivia lithium company, Iliwe, signed lithium agreements with Russian and Chinese. I've I've mentioned that here, we were invited to to bid in this process. It was only on three solids, Oyuni, Coipasa, which is quite high, impurities, and Pastos Grande, which literally means large meadow, and that has very high grade and low impurities.

48:30 And, we were about to enter it. We had all our documents ready to go. And then there was a critical meeting where they said to us, can you commit to industrialization? And we said, look. We haven't even got a resource estimate at this stage now. It turned out that was not a big problem as we got into it. But and we haven't spoken to off takers and we haven't been off financing in place. You know, as a London listed company, we cannot commit to industrialize without off takers and financiers. It wouldn't be responsible, wouldn't be honest. But, of course, if you're a state backed Chinese company or a state backed Russian company, you know, you're not bothered by that. You know, you don't have to answer to the regulatory authorities. And at least in theory, you've got infinite government funds. So they committed to industrialization.

49:18 But I ask you what's happened. They haven't exported any battery grade lithium. So I think the proof of the pudding is that maybe honesty is the best policy. So I have no regrets. You know? Now I did worry, have to tell you, you know, when they moved ahead with the Russians and Chinese, I worried that the door closed and and the opportunity might have passed. But the failure of the Russians and Chinese to deliver, in a way has opened the opportunity up to us today, not just us, the other companies too, and I think has helped educate people about how finance works and how markets work. And, I think we're better off now. I mean, the level of discussions we have now are more realistic than they were two or three years ago, so I'm very happy with progress. Whose are the main stakeholders in Team Europe?

50:05 Well, the leadership has really come from the Critical Resource Minerals team in the European Commission, and we're looking it's been led by quite a visionary guy called Fiddick Shaw Fernandez, a Spaniard who is unusual, if I can call him a bureaucrat, in a sense that you rarely find sir Humphrey. Those of you are from England will know sir Humphrey and yes minister. You get enormous skills from sir Humphrey managing the civil service, but you rarely see strategic thinking from sir Humphrey. And, you know, Felix Jean Fernandez is unique, I I would say, in that he thinks strategically. So you're in a meeting with the the funders and the companies and the refiners, and he'll say, okay. That's very interesting.

50:52 But what do you want me to do today to solve the problem? And he says, we are gonna solve this problem. Right? So forget about saying, what if this, what if that happens? It is going to be solved. You have to tell me how to solve it. You, the lenders, you, the companies, you, the refiners, you, the off takers. I'm gonna solve it. Right? I, the European Commission, with all the backing I have, we are gonna solve this problem. We are not going to depend on China. We're not gonna be victimized by, NAFTA. This is gonna be solved. The only uncertainty is which people in this room are going to solve it. And when you see leadership like that, you know, this is not someone who's afraid of making a commitment. The commitment has been made. So I have no doubt at all that that this is gonna be delivered on. And it could well be a combination of technologies. You know? We're we're completely agnostic.

51:43 Like, a year ago, we were gonna go exclusively with the onyx separation route, But the success of the Indian supplier with the magnesium extraction technology has convinced us to tweak it to add an extra slot into technology just because it's so costly. So we're completely open to bringing in new partners, working with the automotive for the companies. Whatever works commercially will work for us. Is our patents protected on the technology, or will this be, able to be copied elsewhere? Well, those of you who have seen patents before, and my, my cousin is lecturing in Cambridge and has written the textbook on it in in English law, A patent gives you a lot of protection provided you make disclosure approximately for fifteen years or so, but, people can cheat.

52:38 So the best protection is confidentiality, and that's the reason why we've gone to such lengths to assemble the pilot plant in India rather than in China. And not that Indians aren't very clever people, but we've confidence that the patent will be protected substantially enough or long enough that our business won't be jeopardized. But, of course, nobody can predict the future. How big are the bulk samples needed in India? Well, the techie people always ask for, you know, more beers than they're able to drink. So they've asked for 300 tons now. Initially, they're asking for 40 tons. So we're hopeful of we've we've asked for 320 tons. That's a lot of tons, obviously. And they all have to be shipped in containers, in bulk containers. We've done it before with other materials, so it can be done, and we're now working on the logistics.

53:31 We haven't got confirmation of the tonnage to be shipped, but the authorities have agreed in principle to proceed with those bulk samples. And will the household name off taker agreement put us in position to support CLONTARF's development financial demands? I don't think the financing is an issue, frankly, unless there's some rile and people who don't have riles. Put it like this. When you speak to the off takers, you know, we were laughed at ten years ago, I have to say, by a couple of automotive companies. Nobody laughs at you today. You know? Now it's about reliable supply. And then secondarily, quality, and then thirdly, price, particularly the Germans.

54:16 The the Germans do care about price, but compared to some parts of the world, what they really care about is quality. Even where they have not yet established that the higher quality enables them to get a price premium in the end product, their bias, their prejudice is that higher quality always leads to defensibility, and they always think in terms of a dynamic market. And as and I've worked in industrial mills for thirty years, so I've seen this strategy work. And the people, very often Spanish, Italian, sometimes British suppliers, who tend to over focus on immediate price, they tend to struggle in future years. It's the people who see the market as dynamic, in my experience, who tend to profit.

55:04 So I I don't anticipate, if we deliver the quality and the throughput, don't anticipate the finance to be an issue. But I think the financing is best done through offtake rather than a pure contract where you're dealing with a state lithium company, the Bolivian government for all sorts of reasons I can take you through. How are CLONTARF going to, to generate shareholder value? I mean, simple. We will we aim to add value through market capitalization, and we don't aim to dividend in the near term. Sorry. The bad news. And the reason is that we see far higher potential rates of return from reinvesting than we do from any possible dividend. Now that isn't always our strategy. We had another company, Kenmare, that dividended a lot in the past before I sold out of it.

55:52 But in the case of lithium, the demand projections, well, you you've seen them. You know? Basically, the standard projection is a million tons of lithium carbonate equivalent today to about three times that within six years. I challenge you to show me a serious bulk market which has similar growth rates. Now there simply aren't the projects being developed within the time frame necessary to deliver that type of supply. There just aren't. Now people can say, what about the Chinese spot price falling? You know, I can tell you, in the end, it's always about supply and demand. People can manipulate a market. They can negotiate long term contracts. But in the end, if you have a 30% rate of growth, you will not be able to deliver. Even with the Aussies and the South Africans, you will not be able to deliver that rate of growth in supply for this foreseeable future.

56:44 You'll get some growth because markets are very flexible. You won't get that level of growth, and that means the prices have to go up. Is the the the tons of brine made twentieth for the demo testing? Yes. The plant that we're assembling in India near Mumbai is the Nex Chem technology with a very good local partner. When do you expect to have the polypenta operational? I'm not allowed to give you the exact dates, but it would be operating now if it weren't for the long lead item issues that I I specified about the sensors and the membrane. The reason why initially we didn't go with the memories that we could have used, but we didn't wanna compromise on quality. And you can understand that. Like, you hate overriding the the engineers, but in the end, you know, the market needs the product ASAP, and, you know, all problems can be solved. It's simply a question of how and cost. So I wouldn't worry about that.

57:44 Anyway, with that, I think we're close to running out of time. So I think I should pass on to Alessandro and ask him for any additional comments. Thanks very much for answering those questions. Can from investors. Of course, company can review all the questions submitted today, and we'll publish search responses on the investor. But just before redirecting investors, project their feedback, it's particularly important the company. David, if I could ask you maybe for a couple of closing comments before we close off, that'd be great. Yes. Thank you very much for having this opportunity to spend an hour because it's an intrinsically complicated subject. And sometimes it's difficult to communicate clearly to the market, and that's why we try to get as many RNSs that as we can. It is an evolving situation.

58:30 We do try to put a lot of detail into our annual report. So if you get a chance, look at the chairman's statement. I think that's very up to date and and I think very clear and valuable to investors. If you want more technical detail, look at the operating review. And do come if you can on the July 9 to the AGM in the Hilton Paddington, and you'll have an opportunity, I think, to ask any question you want. And there'll be, I think, visitors from Europe and possibly elsewhere at that meeting. And thank you for your time. Thank you for your excellent questions. And looking forward to the next exciting months with all of you. Perfect, David. Thank you once again for updating investors today. Could I please ask investors not to close the session? I should now be automatically redirected to provide your feedback and all of the management team can better understand your views and expectations.

59:20 This won't take a few moments to complete, but some should be greatly valued by the company. Behalf of the management team of CLONTARF ENERGY PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.