Keras Resources (LSE:KRS) — Investor Presentation

0:01 Good morning ladies and gentlemen and welcome to the KERAS RESOURCES PLC investor presentation. Throughout this recorded presentation investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just please simply type in your questions at any time and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your investor meeting company platform and we'll notify you when they're ready for

0:31 your review. I'd now like to hand over to CEO Graham Stacy. Good morning. It really is a pleasure to be able to present KERAS as quite a transformed organization. Know, not too long ago, we were aspirant manganese producers out of West Africa. And I think just to be very clear, because we've already got questions regarding Togo, We still remain very much committed to that asset. We've spent a lot of time, energy and money in getting that asset to where it is and we look forward, we still look forward to the granting of that permit and developing that asset to the potential that it has. But I think that the purpose of today's presentation was really to present KERAS' investment in Falcon Eye Resources and its Diamond Creek asset The USA. And it's quite a unique position for us to be the 100% owners of a fully funded cash flow positive asset in The U. S, a fully integrated mine to market operation with full autonomy of operations and sales, selling a premium organically certified direct selling ore into the North American fertilizer market.

1:57 We certainly feel that we are in the right sort of market. There's been a rapid rise in synthetic in the pricing of synthetic products in The U. S. And worldwide and we'll get to the details of that in a second. But there are real expectations of real price growth in the products that we sell going forward in the medium medium long term. And to establish us you know to really take advantage of our low carbon footprint relative to our synthetic competitors. And we we feel that we have a compelling growth strategy and I hope that this presentation really puts that message forth. We've recently announced a number of board changes as of the September 1.

2:48 Russell has stepped down as CEO but remains has taken on the role of non executive chairman. Our long standing non exec chairman Brian Moritz has stepped down from that position but remains on the board as company secretary. Long standing and founding director Dave Reeves has recently resigned and been replaced by Claire Parry. So I for one will lean quite heavily on Claire as far as IFRS accounting and particularly in the area of junior mining in The UK. So we welcome Claire to the board and I look forward to working with Claire. And I've taken over the role of CEO.

3:35 So perhaps a brief introduction to who I am. I'm a miner, I studied mining in Johannesburg. I spent ten years, the first ten years of my career with Anglo Coal, largely in underground operations, but then spent a year on secondment with Anglo Technical, working with Anglo Platts in the Eastern Limb PGE development project team. So that was clearly a fairly wide departure from being at the coalface, which I'd been at for the prior ten years. So I knew I needed to understand the businesses that I was operating in a little bit a little bit better which I so I went and studied for advanced my studies for a year and ended up joining Joburg consultancy Benman Rand in in 2004, which is where Russell and my parts crossed for the first time.

4:30 But kick forward to 2008, Russell was running aimless at Chromix and he approached me to help run the technical side of that business, which I did. And you will recall it was not a particularly interesting, a good time for the mining sector at that point in time, but we successfully built the Stellite mine. And that really laid the platform for the acquisition of KERAS of KROMEK, sorry, back end of twenty ten, early twenty eleven. Kicked forward to 2019 and the opportunity for KERAS to look at Falcon Eye Resources and its Diamond Creek asset in Utah was presented to KERAS and of all the projects that we had looked at over time, it was one of those assets that really ticked a lot of boxes for KERAS.

5:25 Its position close to or location close to Salt Lake City and all the infrastructure and support that location brought. The project had a long history of geological exploration and mineral resource estimation and that culminated in a phase of mining during the 1940s and 50s, where roughly two acre block of ground was cleared off of the mountain leaving something like 40,000 tons of immediately minable ore up on the mountain, which gave us the sort of immediate sense of longevity that we were looking for in an asset. And although the asset lay dormant between the 1950s and the 1980s, the most recent resource estimate was approx of surface mineable phosphate ore was around about 5,000,000 tonnes within the mid peak phosphate ore body.

6:23 The products from the mine were organically certified with the three certification agencies in The U. S, in Washington, California and the Federal OMRI Organization. And two phases of drilling during the '19 sorry, nineteen twenty nineteen and 2016 and 2019 sorry really just demonstrated the quality of the ore body that we had been presented with in the DD. So all that really remained for us at the time was to extract a bulk sample from the operation just to demonstrate a couple of things. One was the minability of the asset and two was the quality of the asset. And the third was really for us to be able to send a sample to the OEM of a crushing plant, which we were in the process of ordering. So everything around the asset ticked a lot of boxes and was certainly an asset that we liked as KERAS.

7:26 So come early twenty twenty and on the back of the results of the bulk sample, which demonstrated everything that we had seen in the DD, KERAS made the decision to invest $2,500,000 into the operation, which was essentially the total CapEx for the development of the mine. So what that really represented was completing all the studies for the granting of the small scale mining permit and the development of the access road and the Upper Mountain Haul Road to an engineered spec required for the equipment that we had planned for the mining of the resource. And the picture on the left you see is what we were faced in early twenty twenty and the balance of the year was spent upgrading the roads to the images that you see on your right. And the Upper Mountain Hall Road accesses the ore body right up at the top of the mountain.

8:29 So this is what the Mead Peak ore body looks like up at the top of the mountain. The ore body is roughly three meters in thickness and we have a roughly seven foot thickness of high grade at the top end of the ore body and three feet of what we call average grade at the base of the ore body. And because we can't mine these two layers discreetly, all of our runner mine is blended down at a runner mine pad at the base of the mountain. So as you can see on the slide on the right, we are mining in a down dip fashion. So we ramp up to the top of the ore body and we are mining down dip. And the immediate future of the mine lies immediately to the Southeast when the already dips between twenty and twenty five degrees down towards the Southeast with a strike of roughly North South.

9:20 So we have enough ore exposed on the mountain, which was demonstrated during those drilling campaigns, for a roughly five year mining campaign. And we have ongoing drilling during the course of this year and next term to generate the minimum of at least a ten year life of mine and a formalized ore reserve.

9:45 So given that at the beginning of twenty twenty that we did not have our own milling plant, we needed to outsource that operation to our mining contractor. And we they offered us a site which was fully permitted for that crushing operation and we commissioned three crushing rigs to crush our product to what we initially felt was the anchor product for our mine, was roughly 100 mesh, which is something like a 150 micron product. We had several difficulties with the mill that we had access to down at Fillmore. So with a hammer and a bit of welding, we managed to modify the secondary mill to produce a 10 mesh, which is a roughly two millimeter granule, which we would all recognize as a fairly typical fertilizer product.

10:43 And a minus 50 mesh or a minus 300 micron screen underflow. So during the course of that year we just packaged and began the process of selling those two products. 10 mesh has become an anchor product for us and we need to sell it today and it remains an anchor revenue generator for us.

11:12 So having ordered the milling plant back in 2020, we identified a site in a town called Spanish Fork, which is roughly 20 miles from the mine. And we set about constructing that plant and we were successful in building and commissioning that plant in June and July. And one of the benefits that we got from milling down to a 50 mesh down at Fillmore was that we could track that fine product up to Fillmore to feed into this milling plant. And given that this plant was initially designed to take a five inch product, the fact that we were feeding it with a much finer 50 mesh product meant that we had the benefit of increased throughput, economies of scale and a reduction in operating cost due to the simple case of wear and tear.

12:06 So we can produce one hundred and three fifty mesh products through our milling plant. And given the success that we had had with selling a 10 mesh product or a coarse product which very much resembled a fertilizer granule, we sent a 100 tonne sample up to Idaho for granulated test work, which really would have opened up a number of markets for us and given us a product that would fit well within the traditional framework of fertilizers. So we, at the end of that process, after successful results from the granulated test work, we procured a granulated plant from an OEM out of China and we took delivery of that plant early in 2022.

13:03 And what of course that meant for us is that we still needed to produce a 10 mesh and a 50 mesh product and in hindsight being twentytwenty, we would have designed that plant to produce those products. But we needed to therefore find a site closer to the mine to produce our ten and fifty mesh products, which found in Pleasant Grove, roughly 20 miles up the road from Spanish Fork. So this is how the operation looks at the moment and as a colleague of mine often says to us is that these graphics make it look simple, it certainly is never easy. But in simple terms, we drill, blast and mine ore from the top of the mountain. We load and haul that down to a lay down area down at the base on our lease area where we primary crush.

13:56 And given that we are mining on forest service ground, we may not construct any permanent infrastructure there. So we then load and haul that crushed material from the lay down area variously to Spanish Fork, but largely to Pleasant Grove at the moment where we conduct our secondary milling to produce our ten and fifty mesh products. And then we dispatch and sell from both Pleasant Grove and the Spanish Falk sites. So these are the products that we produce and we don't do any chemical or gravity upgrade to our product. It's simply a case of mining the product as cleanly as we can and crushing and milling to different size fractions.

14:47 But the important chemistry for us is the guaranteed total 23% guaranteed more than 23% P2O5 or FOS. But a more important distinction for us is guaranteeing greater than 12

15:02 P2O5 which puts us right at the top end of all organic phosphate fertiliser producers in The US and in North America. One of the other important chemistries of our product is greater than 25% calcium. But perhaps more importantly, typical of sedimentary deposits such as these is that they contain hazardous heavy metals and we are fortunate in that our deposit contains trace levels of heavy metals of less than 25 ppm which are below the thresholds for the certification that we have through the three agencies in The US, in Washington, California and the OMRI organization.

15:50 So as I've said, the 10 mesh and the 50 mesh products have constituted the bulk of our sales to date. But as we continue to produce one hundred and three fifty mesh, we are developing markets for those products which as you can imagine in the three fifty mesh, which is a minus 50 micron product, lend itself well to the liquid fertilizer market. So we look forward to developing that side of the market.

16:18 As I mentioned, we went through a process of granulated test work and on the back of successful test work there, we ordered a granulated plant and during the early part of twenty twenty three we will have that plant constructed and we will therefore have four dry products available as well as two sized granulated products. And as I said, having granulates available to us mean that we can access the traditional value streams for typical fertilizers in terms of the size fraction. So the market for organic fertilizers in North America during 2021 was of the order of 5,000,000 tonnes.

17:11 Of course we don't compete in the nitrogen and the potassium segments of that market. Phosphate fertilisers constitute roughly 22% of that total market or roughly a million tonnes per year. But what's important for us is market research which suggests volume growth on a consolidated annual basis of in excess of 8%, but most importantly for us is 14% in value terms, which clearly speaks to a

17:42 disjoint between demand and supply. And that is twofold. The fact that not new supply of organic fertilizers are coming on board anytime soon, but also the fact that organic fertilizers are slowly penetrating into the traditional fertilizer industry. For various reasons and more recently the excessive price of traditional fertilizers. And not to labor the point, but I think we are all familiar with the state of pricing in the traditional synthetic fertilizer markets over the last year with traditional fertilisers across the board seeing year on year price increases of in excess of 60%. And granted that that is in part due to geo geopolitical issues and there have been corrections over the last couple of months to prices for all of these fertilizers. I think that the general tailwind for fertilizer sales going forward is positive and we feel that with organic fertilizers penetration into the global fertilizers market we see very real prospects for price growth for our products going forward.

19:02 So planning for the next year to the end of twenty twenty three. Obviously I've said that we need to concentrate our operations into Spanish Fork. We are currently producing 10 mesh and 50 mesh out of Pleasant Grove. And during the course of the next two weeks or so, we will be moving that secondary mill across to our site in Spanish Fork. So we will be producing all of our products out of a single location and I think you're all aware of the benefits

19:33 that brings in terms of economies of scale and the ability to concentrate all of our operations in a single location. And as I mentioned, we are building a granulated plant which is also at Spanish Fork. So we have an ideal situation brewing where we have all of our operations downstream of the mine concentrated in a single location. Secondly, ongoing value engineering, which is very typical of all operations and two examples of those are building of grid power to our installation at Spanish Fork, as well as to build a permanent primary crushing and screening circuit right at the front end of our plant to be able to produce 10 mesh and 50 mesh on the back of grid power rather than using diesel generator power which we currently use for both of our plants.

20:35 One of the important things of course going forward is marketing our product on a value in use basis. We have all of our products we guarantee greater than 12% available FOS, which puts us, as I say, right at the top end of organic fertilizer producers. And it's going to be important for us. The balance of the industry offers available FOS of between 28%. So we clearly do stand pardon me, head and shoulders above the balance of the industry in terms of our quality. And we certainly need to market on that basis rather than marketing simply a tonne of organic fertilizer.

21:16 So I think an important forecast for us to consider between now and the middle of twenty twenty three, and our announcement of a couple of days ago pointed to this sales guidance of somewhere between 7,508 tonnes between now and the end of June twenty twenty three, with an all in sustaining cost margin of between $80 and $100 per tonne. And obviously, with economies of scale as we progress beyond that, it's relatively early days for us, we will expand that margin progressively. So So I think that is our classic business model of integrated mine to market organic fertilizers.

22:05 But something that we do need to take advantage of as I said earlier we are a zero effluent producer so our environmental footprint as far as fertilizer producers is concerned is relatively low compared to our competitors. But more importantly our carbon footprint relative to synthetic fertilizer producers. And to give you an example, for us to produce a tonne of organic fertiliser, we will generate of the order of 0.2 to 0.3 tonnes of carbon dioxide. If you compare that with synthetic fertiliser producers who produce of the order of 1.3 tonnes of carbon dioxide for every tonne of synthetic fertiliser that we can replace with organic fertiliser will result in the benefit of one ton of carbon dioxide emitted.

22:56 So it's relatively early days for us. We need to go through a fairly comprehensive process of growth tests and beginning to understand exactly the impact on yield across a range of different commodities and rather commodities crops,

23:16 as well as to get growers on board. So the ultimate business model is for us to have every single tonne that we produce into market go into organic farmers and to have those farmers on board. And the business model is for us to share in revenue between the farmer, the verification agencies and ourselves. So it's mechanism for us to augment our revenue model without deviating from our core business of producing and selling organic fertilizer. So in summary, we are producing a product of the future. The three things that we are focusing doing well is to optimize Diamond Creek and all of our downstream processing operations, centralizing all of our operations in one location and to contract to construct a granulated plant in that same location will give us obvious economies of scale and cost benefits that that brings.

24:22 Marketing is going to be a significant component of our business going forward obviously and we're in the process of engaging an expert in this field who will bring with him a wide network of consumers in the organic space. I think that's probably an area that we have left to date and a big priority for us is to grow the volume of organic fertilizer that we produce into the North American market. And to access new markets through the production of granules as I said. And the focus of the business going forward will be fundamentally to improve soil health, to support sustainable agriculture and as I said to initiate a program of generating carbon credits and the revenue benefits that will bring.

25:17 And I think all of that under the byline of responsibly minded value creation is something that we are all behind in the business and will underlie all organic growth that

25:30 we engage in going forward as well as any sort of M and A activity that we see going forward. So that I think is the future of KERAS. And I'm sure I've lost over a number of issues and forgotten to mention a number of other issues. That is the close of the presentation and I look forward to or we look forward to taking any questions to clarify anything that you'd like to know about what lies in the future for this business. Thanks for joining us. That's great, Graham. Thank you very much indeed. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. Just while the company take a few moments to review those questions submitted already, I'd 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 Meet company dashboard.

26:23 Graham Russell, obviously, we have a number of investors with us in the room today. So perhaps before we look at the online questions, if I may just ask if there's any questions from the room that you'd like to propose to the company. Of course.

26:38 Thank you. It's Graham Hart. Shard introduced a analysis for, in 2020 with a five year plan. I can see that we've already hit the costs at 80 to a 100 there, you put $92. Do we see any further reduction in the costs and what the likelihood that we can use the figures they submitted for revenue as a guide for the future? Graeme, yes, remember the number that I presented was actually a margin rather than an absolute cost. But given where we are at the moment and I don't want to give away too much of our cost on this forum. But yes indeed, obviously economies of scale bring significant benefit to operating costs and it's I think at this point it's a little bit difficult for us to understand exactly what the overhead cost growth is likely to be. But certainly we're going to be expanding on that margin and yes, on a unit basis, our unit cost will reduce as an automatic result of that process.

27:51 So yes indeed, when we reach full capacity and I haven't spoken yet to what that full capacity is, I think it's just a little bit early for us to understand exactly what that is. But we are cash positive at the moment, which I think has been my primary objective over the last year. And we're now 100% owners of that asset, so we have full control over that process. And being cash flow generative has obviously lifted a great deal of weight off of our shoulders and the economies of scale that we will achieve over the coming years is obviously going to significantly reduce that operating cost. So I hope that answers your question. Thank you very much, Yigal. Any other questions from the room before I jump online?

28:39 Of course, can. Absolutely. Can you give us a snapshot of what's going on in the world, discussions, the way that the market's changing and the approaching opportunities?

28:52 And are we talking directly to farmers or are we talking to distributors? Graham, talking to your first question, the nature of the market, it is obviously fairly dynamic given what's going on in the supply of ammonia and the impact on the pricing and cost of the synthetic fertilizers. So the dynamic in the market is, to an extent, being driven by that in that farms are transferring transferring their purchases from synthetic to organic simply on the basis of affordability. Know, prices up at 1,100 per tonne are unsustainable for most farmers.

29:39 So there's an obvious cost based transfer across to organic fertilizers, but also the psychological transfer to organic fertilizers where our carbon footprint is substantially lower. So we are seeing and you could see that in the forecasts between volume growth and fertilizers value growth of between 814%, that there is a movement into the organic space, in the California Valley and the consumption of organic products in that part of the world certainly is driving what is happening in the organic pricing space. Sorry, what was your second question, Graham? Just saying how are you going to market? To farmers? Farmers directly?

30:27 Yeah. You know How are doing it? We are marketing through distributors and blenders at the moment. Largely largely to blenders, know. We produce a product which has a significant P component. Know, fertilizers need to have that nitrogen, phosphorus and potassium and various other components. So we are selling a P unit to largely blenders because it's important for them to be able to then sell bespoke blends onto their direct consumers. So we at the moment are not selling directly to farmers, although we have, and I think I've worded it ad hoc sales to farmers. We're not selling directly to farmers, but it's through wholesalers, blenders and the like, yeah. One thing that I would point out is that, you know, going forward in the future, retail is an area that we certainly do need to look into. The margins are significantly larger, but that has an implication on how we package our product the volume certainly not quite in terms of the blenders and wholesalers of products going forward. So we've really been focusing on those large volume markets and you know it's early days for us we'll progressively look at which markets make sense for us.

31:55 For example you know selling a ton of organic fertilizer through the likes of Walmart, get a number of something like $7,000 a ton, which is fantastic on the face of it. But know getting yourself into that market and getting the packaging right and actually doing well in volume terms through that market takes will take time. It'll take an operational change but also change in the way that we distribute our product at the moment in bulk but in the larger packaging that we

32:30 presently sell it. Okay. If I may have to give you a bit of time to think about any other questions you may have and I'll just jump in online to a number of questions that we've received. So thank you to everyone for your questions this morning. The first question is from Adrian who asks: Given what is going on globally with fertilizer supply, and we won't be able to mine more until July 23, are you mining enough now? Thank you, Adrian. As you saw in our announcement a couple of days ago, yes, yes we are, given the demand that we have between now and then. And I hope that short answer gives you what you're looking for. We will be mining another 2,500 tonnes between now and the end of October, which will give us sufficient run of mine material to generate the largely 10 mesh, which we'll be selling going forward.

33:25 But again, it's a matter of managing cash flow to take too much for the mountain given that demand over the winter season may not be quite what we want it to be. Yes after we've taken that amount yeah which is why we've announced we've got our program to bring to mind. Thank you. Julian asks what is the pricing strategy and what are premium current sales of the equivalent non organic products? Can we talk about pricing at the moment?

34:08 Okay, let's talk in percentage terms. Let's use $1,000 a tonne as a number for synthetic fertilisers. You know, are probably about, and of course it depends on which product we're talking about, we're something like 50% below that, 50 to 60% below that. I don't know if that answers the question. But yeah, when you look at the ammonium fertilizers with available FOS content of more than forty-forty 5% and we in the organic space with Guaranty 12% and we're at the top of the pile, clearly our pricing is never quite going to be at the same level as the synthetic producers.

34:56 I know you did touch on this in the presentation, but John F asked, could you just repeat the amount of CO2 you produce for one tonne of phosphate versus synthetic producers? Yes, as organic producers we per tonne of product produce between zero point two and zero point three tons of CO2 and compare that with the synthetic fertiliser guys who produce something around 1.3 tons. So there's ton margin between the two of us. Sure. Turning to a question from David S. What extra resources are required to extend the mining in Utah during the winter months? What CapEx is required and any additional challenges when mining during this time?

35:37 In short you know there are mines obviously in Utah up in the mountains the biggest of which is Bingham Canyon which certainly don't stop mining during the winter months. Given that we are operating on US Forest Service property, we have a license and permit limit to them. So while I think it may well be possible for us to change that permit, that is ultimately where we are stuck. Snow comes in and we have seven or eight feet of snow on top of our ore body as well as the haul road, which makes life particularly unsafe and interesting. But yes, between May first of May and let's say something around about the middle of November is really what we are limited to.

36:26 One thing that we certainly can do is implement a night shift during summer. That is likewise somewhat challenging, certainly as we get into the hunting season now, where you've got haul trucks and you've got hunters with good scopes looking for targets other than moose, it is going to be somewhat of a challenge. Although earlier on in the season this is certainly something that we can do. What we also can do and what I didn't mention is that production is currently from the southern outcrop of the ore body. So we from our access road, can from one of our hairpins, we can redevelop a mountain road up to the northern part of the reserve resource rather.

37:16 And I hesitate to use the word resource at the moment, certainly the historical estimates all are open to the north from where we are mining. So it will be a combination of mining an evening shift and accessing the northern part of the ore body from different access roads. Thank you. Let's turn to the next question. Can you tell us more about your Cornerstone Investor and their rationale for investing? Is KRS looking for further strategic partners? Do you want to have that? Yeah. Would you mind having a go at that? Our Cornerstone Investor is a company out Vancouver. They approached us just as we were acquiring the final 49%.

38:08 They have obviously looked at the sector, they like what we are in, they are looking at putting a portfolio of those assets together. They had recently just completed a rare earth and phosphate project in Arkansas and they felt that with where we were specifically on the development stage that we were in production that it matched their portfolio very well. We're always looking for new investors, whether Cornerstone or not. But they've been very supportive. You'll have seen that they initially came in for a 10% subscription and then have bought a further seven or 8% in the market. So they are basically supporting us on both sides if that answers the question. Thank you very much.

39:02 Is your plan for increasing market share in The US fertilizer? Yeah, good question and the short answer to that is to have the right person with the right network and we are right in the final stages of engaging exactly that person. Know having experience in the fertiliser business in this part of the world and having experience particularly in the organic space is something that we have perhaps lacked but that's been a seriously important part of what we're doing is engaging the right person. Then of course, making our name, marketing our name out there, getting our brand name out there at the right trade shows, a couple of which are coming up over the coming months.

39:57 But certainly that is a significant part of what it is that we're doing is having the right people, selling the right product right to people and understanding exactly where that product will find greatest demand. Okay, thank you. If I may, the next one which is what is KRS overarching strategy to deliver value for shareholders? Yes, I mean, think that's a very simple one. We feel that we're in a market with forecast volume growth rates and value growth rates, which exceed the synthetic market. Generating economies of scale is really what is going to deliver value for this business.

40:46 Value engineering at our operational sites is obviously going to bring us fairly significant benefits, given the price of diesel over the last year and the impact that, that's had on our power costs and our ability to get our operations onto grid power further increase that. So economies of scale in the mining business is really what it's about, is making sure that you can get the volumes up. And we certainly, I think, have demonstrated that over the last year and our latest announcement, I hope, you know gave everybody the impression that the relationships that we are developing with clients largely in California, but elsewhere, you know, we're selling as far as Pennsylvania.

41:33 So it really is a case of getting us up to our maximum run rate and keeping our and that will of course generate economies of scale and deliver value to clients. I mean, as I mentioned, know, our carbon credit programme as we develop it will certainly enhance our revenue model without detracting significantly at all from our traditional business model. So you know there I think are two you know the two key key factors that we're looking at going forward. Great thank you. Maybe an extension to that is can you explain more about the different products and which one you are seeing the most traction with in The US?

42:22 Yes indeed. The 10 mesh as I've said has developed the most traction for us. And that is, it surprised us at the time because a 10 mesh hard rock granule and a 10 mesh synthetic granule are not created equal. But the 10 mesh behaves best in the value chain of the established fertilizer industry. So in the end, this has not been at all surprising. And in addition to the fact that the 10 has developed the greatest traction, One of our clients in California, we're looking at a joint venture type arrangement, where we can sell a lot more of our 50 mesh into the blending operation.

43:14 So that is certainly something that is going to be value accretive for us going forward as well. Granulation plans certainly will also continue to deliver a lot more value and as I said we're learning that the course of the product the better it fits within the traditional value chain meaning that the growers don't have to overhaul their farming equipment to finally apply the product. Yeah, I think that's it. You know, an important part of the agricultural industry going forward is going to be in the liquid industry and hydroponics. And it may be that the volumes are not necessarily there yet. It certainly is a sector that we are going to be applying a lot of our marketing effort.

44:09 Great. Turning to a question from David. Thank you, David. He just simply asks, you know, what are the greatest risks that you see to the business? Yes, that's on the mountain. Yeah. I've thought long and hard about this and I think that, you know if you know given that we are organic suppliers and that there is a significant move towards organic foodstuffs and as a result organic fertilizers. If the big boys have a segment of their ore body which they can deem organic, certainly represents a growth and supply risk for us.

44:56 But generally speaking, the synthetic fertiliser mining operations upgrades down in the low 1s and twos. So, know that would represent a significant risk for us going forward. Although, I mean if you look at a general SWOT analysis your opportunity and threats are often quite similar. And I think you know the threat that Graeme talks about is also an opportunity where potentially we become that high grade organic ore body for a big player. You know when you start talking about carbon credits and you look at the motor industry where you need a set emission for your global range, well potentially that's what happens in the fertiliser market where you can't produce everything at 1.3 tonnes of carbon dioxide and you need to offset it with some organic and you have a blended range of your carbon footprint.

46:02 And that's a significant opportunity for us, as well as a potential threat. I mean our whole body is not going away anyway. Thank you. We did have a pre submitted question apologies for coming to us towards the end but given that we've invested in an in country manager in Togo and invested in community products, Can the board please give a summary of our position regarding Naga? You're welcome to have a go at that. I'm happy to talk about it. I mean I think it's pretty simple. First of all our country manager still advises us on those things. We have a very close relationship with the government. Clearly not close enough at the moment but what we have told the markets is what we know.

46:52 I can't tell you any more about the process. Have completed bulk samples, we have had various decrees from the government. But we are on a wait and see process. We remain committed to the process and that's really where we are which is why Graeme spent the first few minutes explaining that our focus is mainly North American and obviously that's a very big upside if and when it happens. I might just turn back to the room as we've come probably to the end of the online questions and just ask if there were any further questions at all from anyone in the room. No? Okay, perfect. Well, Graham, Russell, thank you very much indeed for updating investors. I know investor feedback will be particularly important to you both and I'll shortly redirect all the attendees on to give you their thoughts and expectations. Before going so, if I just ask you for a few closing comments.

47:51 Yeah, indeed. Think that we've come a heck of a long way as a business, as I said, from aspirant manganese producers to for the first time being 100% owners of an asset in an exceptional location producing a premium product. We are fully funded, we are cash flow positive and I think that if I had to have given this presentation six months ago, I would have been far more uncomfortable in my seat than I am right now. So we look forward to updating the market on a routine basis as far as these value initiatives of ours mature.

48:40 And yeah, it's really great to sit in a position here and say that we're cash flow positive and the prospects great for the rest of the year and we look forward to constantly giving positive news out into the marketplace. I think that's all I really have to say. That's great. Graham Russell, thank you both very much for updating investors. I'll please ask investors online not to close this session as we're now automatically redirect you for the opportunity to provide feedback and all the management team can better understand your views and expectations. May take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of KERAS RESOURCES PLC, we'd like to thank you for attending today's presentation. Good morning to you all.