Critical Metals (LSE:CRTM) — Investor Presentation

0:01 Good afternoon, ladies and gentlemen, and welcome to the CRITICAL METALS PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself however the company can review all questions submitted today and we'll publish those responses where it's appropriate to do so on the investor meet company platform. Before we begin, I would just like to

0:32 submit the follow, the following poll, and if you'd give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to CEO Russell Fryer. Russell, good afternoon sir. Good afternoon Jake, thank you for having us and I'm really excited to actually give shareholders and interested parties an update on what's been happening at Wallulu since January of this year. First of all, for the people that haven't seen what's happened in twenty twenty three, I'm going to play a short to one minute video that shows everybody where the capital raises in 2023 have gone, and particularly in building a bridge and building the camp and doing some ESG issues. Also I'll show you some mining areas areas that we were mining.

1:18 Officially we started mining in the third week of January twenty twenty three. You'll see excavators there and such, and this will be a basis for what we're going to talk about later on today. So go ahead, Jake, and queue up the recording, please.

3:46 Hi, Russell. The floor is yours, sir. Okay. Thank you very much. Sorry about any glitches in that video. Pretty exciting time zone. And as I said before, we're getting ready to do a six month twenty '24 video on what's been happening in the ground. And I'll go into a little on that a bit later. Standard disclosure. So you saw a couple of these videos, pictures in the video. On the top right here, we have the coreshack. And what we've done is where there's mineralized copper zones, we've actually cut that core in half and sent it to South Africa for testing at the laboratory. On the middle picture, us doing some stripping, and the bottom is the bridge that we needed to build in order to get the 40 ton trucks across the bridge and to the market.

4:34 As everyone knows, we're listed on the main board, well, standard list of the London Stock Exchange or so. We look at brownfields opportunities, we don't look at greenfields opportunities. And we're developing the Molulu project, which was previously a cobalt and copper producing asset there in the DRC. There were several major Chinese firms that were actually mining in 2017 or 2018 that left to return to their current mines and left this open for the artisanal workers. We've raised capital over the years. We'll continue to raise capital as we grow into production and as we go into M and A and potentially some type of processing plant transaction. And our goal is to restart towards the latter part of this year. And I'll give a timeline more on that later. We have quotes from our contract miner for 10,000 tonnes a month of payable copper ore.

5:28 And we have an off take in place with OM Metals. We actually are updating it because the copper price has actually increased beyond the scale of payables that we have. And we're in the process of doing that now. And so with the capital that we've raised through the CLN, and with some of the plans that we have, which I'll talk about now, we are well positioned for growth, particularly with this copper tailwind.

5:54 Just in terms of the Mululu project, it's a medium scale project as it stands right now. It's just 30 area in terms of the Katanga Copper Belt. Again, as I mentioned, the lack of investment is what hampered this previously. And there are many processing plants, smelters, SXEW plants in the region between Lumumbashi and Lykashi. And in fact, I personally visited six on our due diligence program in order to acquire or rent or all of the above in terms of downstream processing. We have cobalt areas, which I'll highlight now.

6:40 We've set them aside for now because we're focused solely on the copper deposits and the copper seams, I'll get into now. And following the rehabilitation of the road, we will be selling our ore to OM METALS. We've actually had another group come in, two groups, one Chinese and one North American, come in and ask to buy our ore that's on the pad now. We have an agreement with OM METALS, so I'll have to stick to that. And thus, they allow us to get a better price with the other two new entrants. And we're going to talk about the three kilometer copper strike length in further detail now. Let's go to slide five. Most people have seen this in the upper right corner, we see the outline of the Mulu project and there's three defined areas.

7:32 The red rectangle is actually the area where the sulfide open pit is. The blue is going

7:45 into the neighboring property. We've put a couple drill holes there and we're looking to drill a little bit more. And then the phase three area, which has actually been highlighted to the left, is the Cobalt Anomaly area, which again we've set aside, but we believe there are fantastic opportunities to find some cobalt there. We've had a professor from the University of Limabashi, in fact, two professors come out and walk the cobalt area and said, Yes, this is highly prospective for potential cobalt production. So our phase one plan is to drill 2,000 meters. We have 1,000 meters done. In fact, I was just on the phone with our geologist about the second thousand meters that we need to do. And I'll talk about that more.

8:32 We are building a three d representation model right now. Saw the first of that yesterday. It actually looks quite exciting. It'll allow us to present to the market what we have underground. And it actually also allows for a block model to be built, and ultimately a mine plan. So we've been working hard with the firm from Botswana that did the geophysics twelve months ago or so. And we've been working with some geologists, PhD students out of the University of Witsvadarand in South Africa, in terms of three d block modelling and three d geophysics. So moving to slide six. This is a slide that I'm actually very excited to actually show the market. The top part is Wallula sulphide zone where we've had high intercepts, high copper intercepts.

9:23 And this is from February. And if you look at that, you'll see three distinct copper zones. It's actually silestone hosted copper. You'll see the red, you'll see a parallel just below it, yellowish or orangeish, and then you'll see a light green. Those are three copper zones that we knew about come February 2024. The sulfide zone map below that, you'll see now all the zones were in purple. And we did this because we're looking at making potentially one big open pit. So we found four more copper zones since February of this year that we are looking to delineate and figure out the depths of these zones, figuring out the width of these zones. And if you think about how a mine plan would operate, in theory, if you could have some mineralization, any type of mineralization between each of the purple zones, that would be one massive pit.

10:20 The blue area in the bottom is the sulfide zone that was being mined with equipment in 2018 that I had mentioned earlier, and that is roughly about 80 to 100 meters wide. So that'll give you a little bit of scale about from the top purple seam to the bottom purple seam about how big an open pit could go and certainly a long strike. What's also interesting, if you go back to the top sulfide zone map, you'll see to the 03:00 position, you'll see a light green copper interceptor zone. And then if you go down to the sulfide zone map at the bottom, you'll see a light blue, brown, yellow, green, orange, brown and white. Those are new seams that we didn't know about also in February.

11:08 And the thesis is that those seams at the 03:00 will connect with the purple seams that we've delineated. In terms of what the white parallel lines or vertical lines and the red vertical lines are, the red vertical lines are trenches that we've actually just dug and we're taking analysis from the XRF that will be completed by tomorrow. White areas are trenches that we've already done and it's reconfirmed what we already know, which is these seven ore bodies or siltstone seams are homogenous. So very positive. We will continue to extend that to the East and to the West as we go towards the boundaries. Here's just some local ESG data that I've spoken about in the past.

12:01 We've built the first school in the region. It's over 60 students. We have a junior school and then we have a middle school. And the gentleman in the orange on the bottom left is actually a miner, but he's a qualified teacher. He was mining in January, February, March of last year for us. When we spoke about building a school, he put his hand up and said, He's a qualified teacher. Please, can he be involved? And so we actually had another person like that. We had two teachers mining for us that we put in as qualified teachers into Epi Molulu, as the school is known.

12:39 The middle picture is two of our local partners onto the left. And then the picture to the right is our senior geologist, myself. The middle gentleman is from Washington, D. C. Jeanal Greff, who is our senior mine manager and also to the far right, a gentleman from Washington, D. C, coming to do due diligence on the school. So here's a general timeline. I've been asked to put out timelines. I've been asked to not make them so refined, but just to give a general basis on how we're looking. So the funding, the convertible loan note has been funded. We are doing the road rehabilitation. We are preparing to start the drilling and to use that data and the data that I've shown you on the previous slide to create the JORC report.

13:32 From that, we can create a block model, a mine plan. And we're looking for a concentrator, which I'll get into in the Q and A a bit later. The idea is to drill, do the block model, create a mine plan and then turn around and look to restart production all towards the second half of this year. We're almost in the second half of this year, so we think it's achievable. The road is done. It's 7.1 kilometers complete. On the next five kilometers it's 65% complete. So we are on target to have the road completed by the first week of July, which will allow us to sell the ore that's on the pad. And for every 10,000 tons of copper ore per month that we sell, we get a minimum of $765,000 per month at $8,000 a ton. Copper is obviously $10,500 a tonne today. So this number will increase northward.

14:32 And then the idea is to get to phase three drilling. We want to delineate the full three kilometre strike length and look at strategic M and A opportunities. I've been to several countries. I've been to Tanzania, Zimbabwe, Rwanda, Burundi, South Africa, and Namibia, all looking at strategic M and A. Besides what's in the country, each opportunity has its own pluses or minuses, and it takes a little bit longer time to complete due diligence. But we are definitely focused on expanding not only in The Congo, but also regionally. Slide nine. I guess if you think about the 2023 video that I've shown you, and some of the ideas that I've spoken about now, you know, we are at near term cash flow point, and we have ore on the pad that's ready to be sold.

15:29 We are not using that ore on the pad for the road, unlike what some of the pundits are saying, that road is there for OMEN metals, or potentially one of these other two new parties that have come in and asked to purchase it. We have the offtake partner in place, they want a minimum of 10,000 tonnes a month. And because we have oxide ore, and there's a shortage of oxide ore in the region, everybody's knocking on our door to try to do business with this. We've got great market dynamics in terms of the copper price. I won't harbour on that. We're going to stick to $8,000 a tonne and just work our financial models for the next five years on that. As you saw, we actually have a very well developed ESG program. I've been asked to put up another school, which I think we probably will. I've been asked to do several other initiatives.

16:16 And the 28 kilometer road that we're rehabilitating also goes towards the ESG program because it allows the villagers to use a road that's been improved. They use mostly motorcycles. They have been using trucks during the rain season, which caused some degradation on the road. We are putting in laterite road that will allow it to be used during the rain season. We've got a great team. You know, they're all South African expats. They've been able to build mines in surrounding countries, including The Republic Of Congo, which is Congo next door. And they're all trained ex Goldfields Harmony employees. So we have a fantastic team that has experience in the continent. And then, you know, as I've mentioned over the last, say, sixteen months or so, our target is 10,000 tons per month of copper ore.

17:08 As you saw on the previous slide, it looks like we have delineated more copper, and that 10,000 tons a month can be increased just by adding more equipment. Now, we're not going to do that right now. We're going to sit here and drill. We want to understand the ore body. We think it plunges to 100 meters of depth. And we want to make sure that we drill to at least 100 meters of depth to figure out what we really have here in order to construct a big massive potential open pit. That's our first choice. Just from an appendix, there's some of the gentlemen. We have a new board member, Avinash Spithnath, who's a PhD in geology. He's been outstanding in guidance and helping the guidance to find more copper, which is I think what the market wants.

17:55 John Greff and Lloyd Curtley are on the ground and people know Marcus Edwards Jones from his executive chairmanship at Phoenix Copper, another London listed company. I'm going to skip through that. Everybody knows the structure, so to speak. Here is some of the heat maps. I think this is well known in terms of the cobalt anomalies. The heat indicates where we think of this cobalt from ordinary Kriging. And that's about it in terms of the presentation. I will answer some questions. I'll hand over to Jake first. And if you want to maybe moderate or have any questions answered, and then I'll go in and answer in the chat room questions.

18:50 Perfect, Russell, that's great. If I may just jump back in there and thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while the company take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. Russell, we obviously received a number of pre submitted questions ahead of today's event and as you can see there in the Q and A tab and we've also received a number of questions throughout your presentation this afternoon as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. Russell, if I may at this point just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you.

19:37 Absolutely, absolutely. Thank you again. So question number one is, are the grades of copper as promising as initially indicated? When will we prioritize drilling again? What will be the monthly costs in the mining contractors? And the answer is yes. The grades of the copper are as promised. We're getting excellent grades. We have them with the XRF. We are finding mineralization in new areas. And if you think about what we're finding, low grade in this area is 1%. And if you look at Peru and Chile and Arizona and some of these other places, they're mining 0.5s and 0.4s. Now, I'm not suggesting that's what we're going to mine. What I am saying is the grades actually appear to get much greater as you go deeper.

20:23 We have a report from a previous drill program from another company. We can't use that data, but we can use it to guide. At 100 meters, they were hitting 30% sulfide ore. So we will look to twin that hole at the appropriate time and look to announce that when it happens. Terms of prioritizing drilling, that is a priority of mine. We need to start drilling right now. But because we found those other four zones, and because we are actually extending our trenching, I think the drilling will really only start in July, and not late July, I think early July. Should have started right about now, but we still want to do some geotechnical work, geophysics, and look to maybe drill some deeper holes this program. So we would drill to 50 to 60 meters on the first 1,000 meters.

21:11 I think we're going to look to drill 100 to 110 meters deep and try to intercept all seven seams. And that would allow a more robust block model and a mine plan. So that's the only reason why I haven't announced drilling already. But I think it'll happen in early to mid July. And then the monthly cost of mining contractors, well, it's all based on strip ratios, working on a strip ratio of seven or eight at 10,000 tons a month of payable copper ore, because they charge on a bulk cubic equivalent is roughly about 200,000 to 250,000 per month to get to your 10,000 tonnes of payable copper ore. That was the quote from July August last year.

21:57 That might have changed based on internal economics and such, the petrol price or diesel price is about the same. Inflation rate is roughly ten-twelve percent in the DRC. So, but that was the guidance last year when we were looking to really ramp up production, restart production. Thank you very much indeed Russell. Ladies and gentlemen, we will review all the questions submitted today and we'll publish those responses on the Investor Meet company where it's appropriate to do so. Can I please ask investors not to close this session as we're now automatically redirect you for the opportunity to provide your feedback in order the company can better understand your views and expectations? This may take a few moments to complete, I'm sure it'll be greatly valued by the company. On behalf of the management team at CRITICAL METALS, we'd like to thank you for attending today's presentation. Good afternoon to you all.