The Battery Materials Supply Crisis: A Conversation With Industry Leaders

0:08 Hello everyone and welcome to today's featured panel discussion, the battery materials supply crisis. Unfortunately, due to some last minute technical difficulties, Chris Ecclestone is unfortunately unable to join us today as our session moderator. I'll be taking that role, but really I'm pleased to introduce our panelists, the stars of today's show. We have the CEO of Ceylon Graphite, Donald Baxter, President and CEO of EV Nickel, Sean Sampson, CEO of Power Nickel, Terry Lynch, and CEO and Chairman of Giga Metals, Mark Jarvis.

0:39 So before we begin in earnest, I'd like to invite our audience to participate by posing questions to our panel through the use of the Q&A panel found on the right hand side of your screen beside the public chat. As always, today's event is being recorded and is going to be available online in the coming days on six.com for some on-demand viewing. To get us started, in no particular order, I'd like to go around the room, offer you gentlemen the opportunity to introduce yourselves, quickly introduce your company, and in a handful of minutes we can get started with some questions about the topic of the day.

1:11 Don, I'd like to maybe get us started with you. Sure, great. Thanks, Cameron. Yeah, So yeah, Don Baxter, I'm the CEO of Solong Graphite. Actually I'm presently in Colombo, the capital of Sri Lanka, where our projects are. There was actually a pretty cool tower lit up behind me before we started this and the light just went out. So, figures. But so anyway, so Solong Graphite is in the mining, sort of mines and battery business, as it were.

1:41 There's 2 natural forms of graphite that are used in batteries, flake

1:46 and vein. So we are unique. We're the only true vein graphite in the world is located in Sri Lanka. At one point there were 3,000 mines here up until the 2nd World War. We have 2 right now. We're looking to revive an industry here with the demand coming for lithium ion batteries. It makes it a perfect opportunity to build many mines to increase our potential to have, you know, 50,000,100,000 tons or more, which the market will need. And we're also the first to make a lithium-ion battery with Sri Lankan vein graphite. And it shows that it works extremely well.

2:31 The graphite here in the ground is 95 carbon. And so that eliminates our need for any kind of primary processing. I've been in this space for quite some time.

2:44 And so we have a certain expertise in taking the graphite and making it into an anode for a lithium-ion battery. So we're doing that in the UK, but our main source of material is here in Sri Lanka. So we are building, you know, we have 2 mines, near-term production, and We'll just keep adding to our portfolio from our massive grid system here, and we'll just look forward to feeding into this system or into this upcoming

3:12 huge demand for electric vehicles for batteries. So I'll pass it over now to the next guy here. Absolutely. And how about we go over to you, Mark?

3:23 Okay. I'm Mark Jarvis. I'm CEO of Giga Metals. We've got a giant deposit of sulfide, nickel and cobalt in North, Central British Columbia. We recently came out with a new resource estimate. We've got about 1.5 billion tonnes

3:41 of deposit in the measured plus indicated category. A total of 7 billion pounds of contained Nickel. We make a very nice 18% Nickel, 1% Cobalt concentrate.

3:56 And we recently concluded a joint venture with Mitsubishi Corp. They now have 15% interest in our joint venture company and they're funding the pre-feasibility study, which we're currently at work on. So we're just advancing this giant project and

4:19 basically in this space, we think at some point all hell is gonna break loose and we're just trying to get this thing as advanced as we can before that happens. Fair enough, all right. And Sean, I'd like to pass things over to you. Yeah. Sean Sampson, EV Nickel. We have a project in Northern Ontario just below Timmins. So we're just outside of the mining town of Timmins. We have a very large land package, 30,000 hectares with over 100 kilometers of strike on our property that we're exploring. We have a 2 track strategy. We have a high grade business where we have an historic resource in the ground of a little under 700,000 tons at 1%.

5:06 That's all within 200 metres of surface. We've drilled beneath that. We think we're going to double that with a resource that will come out with next year. That in combination with other high-grade mineralization nearby, we think we can package it into a high-grade business. And we're permitting now on our high-grade deposit, where we think we'll have that into production at 3 to 4 years. We have a nearby plant that's permitted. It's owned by one of our investors,

5:35 permitted and operates now. So that high-grade business is 1 track. Our other track is we have an enormous low-grade trend. We've got a 10-kilometre long stretch that looks a lot like some other low grade deposits that are in the Timmins area. We've drilled off a kilometer and a half of it, so 15%. We're coming out with those assays over the next few months. So we'll put out a resource at the beginning of next year, which will be a big number for one of those low-grade, we call it large-scale deposits. So we're Nickel in Ontario. We have the 2 tracks. One is something it should be producing in 3 to 4 years with a nearby concentrator, and the other is likely to be something huge,

6:19 that if it comes into the money and the nickel price and the world of nickel continues to narrow, and that's economic, then we'd likely partner with somebody on that. We push those 2 tracks, and I'm actually in Germany this week. I've had meetings with the car companies, sort of the third meeting in a few months. And we are pushing forward on that high-grade business and those are conversations we're having about that.

6:45 All right. And last but not least, Terry, over to you. Thanks, Cam, and good to be here with everyone. So Power Nickel is developing or exploring the NISQ project, and it's located just south of James Bay in Quebec. It's probably one of the easiest mining

7:05 opportunities I've seen. You drive off the road and there it is, and across on the other side of the road is a major hydro-quebec substation. So it's near civilization, which is really awfully convenient. We're having some great drilling results. We're drilling right now. We had a drill program last year that was very successful. We had a historic resource of about 3.1Mt of 1.5% to 1.6% Nickel EQ, about 1% Nickel, depending on what price you use for Nickel. We'll finish about 7,000m by mid-December this year and look to have an updated resource out late Q1, early Q2.

7:48 And we'll probably, I don't know, we'll certainly look to be doubling our historic resource and then some. So I think we're on track to become, to prove that it's a commercial deposit. And the neat thing about nickel sulfate discoveries of this nature is that we're currently working on what we call 1 pod.

8:09 And typically these types of things are a string of pearls, and there's usually more than 1 pearl. And these nickel sulfate deposits the world over, there are always 3 or 4 pods. So we think we can get to 8 to 10 million tons on this one pod, and then we hope to find some other pods. It's an ultramafic deposit. So, you know, other examples of that in Canada were Glen Lake and Funfond for about 22 million tons and obviously Voisey's Bay with this plus 50. So we're hoping we can ultimately get in between there and that would make it a very exciting time for Power Nickel shareholders. So that's the Power Nickel story. Fair enough. All right. Well, gentlemen, thank you. Now that we've moved through the introductions, we can get started in earnest with today's conversation about battery materials supply crisis.

8:55 To start, you know, so last year the federal government announced all new cars and light duty trucks sold in Canada would be 0 emission vehicles by 2035.

9:03 However, with the expected shortage of EV batteries by 2024, 2025, what do you think is the single most important factor that the Canadian government should consider in order to meet the supply demands of this shift towards electrification? I'd like to pose that question to anyone in the group that wants to take it. I'll start. Probably, it's probably any government, you can ask that question about Canada, United States. And what I'm seeing is that there's been all sorts of talk about, you know, Tesla and electric vehicles and everybody's jumping on the bandwagon and, you know, Super Bowl commercials about electric vehicles,

9:43 but an announcements about building factories, but no one's really thinking about the supply chain that's going to feed those factories. I think we're all in the same boat where we're seeing that the OEMs are now just starting to realize that we need to sort of step up now our game a lot faster. And the demand in my space, graphite, probably the current consumption of batteries is between probably 500,000 tons to maybe 800,000 but by 2030 that's going to be 2 point or say a little over 4 million tons of processed graphite for batteries. So right now, 100% of that natural graphite comes from China, and 65% of the synthetic graphite comes from China as well. So I think in all our cases, China's the elephant in the room and they're building factories at a faster rate than anybody else is.

10:36 And I've been chirping the graphite story for too long. Finally, it's starting to resonate, and we're getting that. You know, it's been lithium and cobalt and nickel and graphite is the anode. So you can't make a battery without graphite. So I think we're finally seeing it starting to be recognized but governments now are finally stepping up but they also have to open up the purse strings to start developing and also helping on the permitting side of things. Yeah, I would pick up on that. I mean, you know, it's one thing to talk about supply chains and needing strategic materials and so forth. But I think particularly in Canada, the government does need to pay more attention to permitting.

11:22 The process is a bit slow here, I would say. And it's fine. It's very thorough. You should have thorough environmental reviews, particularly of large mining projects. But, you know, why can't we be quicker like Australia is? You know, they do a good, thorough job, but they don't take as long as we take in Canada to do it. So I would suggest that, you know, that's an important thing to pay attention to. And in terms of purse strings, I think the governments are starting to create things like the billion-dollar infrastructure fund to support critical materials in Canada. That's helpful. But I think where we are right now is the large mining companies are still very tentative about taking on new projects.

12:14 There is still a hangover from sort of 2008 when everybody was buying everything and they were paying too much. And then all the CEOs got fired.

12:24 So, so far, they've been very tentative. And then the car companies and battery companies are realizing that to compete with China, they need to invest upstream in critical materials. That's as far as their thinking has gotten. They're just starting to think, well, maybe we should hire some mining engineers.

12:44 And they haven't really opened their purse strings yet. My prediction is that it'll be nibble, nibble, nibble. And then I really think there's going to be, everything's going to go crazy. There'll be a panic buying of projects at some point here. And I'm really looking forward to that.

13:04 Well, I can echo that, Mark. It was interesting to see what's happening with Talon Metals, which is in the nickel space. And we've got 3 of the guys here in nickels, where they got that grant from the US Critical Minerals Department, or whatever they're calling it. DOD, Department of Defense. Yeah, interesting to see how

13:27 it's being applied. They actually seem to be breaking up. Obviously, the mine is in Minnesota, but the processing is going to be in, I think, Wyoming or North Dakota. I just forget. North Dakota. South Dakota. Okay. So, so it's, it's, it's interesting that, that they're doing that in, in an attempt to get to market by I think 2017 is the goal, which is like, as you guys know, that's like, that'd be a miracle

13:52 if it was not in the ground right now. But I mean, that just goes to show you how fast we would have to move in this country to hit the targets that the government has set. So as Mark said, the environmental processes, nobody's saying let's skip elements that need to be considered, but it has to be done a lot quicker and there has to be more, And it's really the staff that they need on the government side of things has to be increased. They need guys that can actually do the reviews quicker. They're just not out there. I don't know what the solution is, but that's going to be 1. If they want to help, that's where they got it. They got to get more staff to do the due diligence that they need to get done in order to be ensured that there's no nasties being done. But the mining side, because we're certainly not wanting to do that as miners, but there's a process, but it has to be expedited. Otherwise, we'll never hit those targets.

14:47 Absolutely. Sean?

14:49 I think we're, I personally am seeing it with my project in Ontario, the alignment, even though politically you think that the leadership in my province versus the federal government should not be aligned. They are completely aligned on critical metals. So I see good things, supportive things, and a quick, straightforward path to permitting a new mine. But There is time involved in it, obviously, and what I'm trying to do first is relatively small.

15:21 But I think there are some positive signs, at least from the political end. Terry, that's an interesting point about hiring up staff. I think oftentimes, when we're in the weeds on permitting as miners, we're dealing with the bureaucracies.

15:38 And oftentimes I feel the bureaucracies are genuinely understaffed. So perhaps it's a, you know, there are big numbers being talked about, whether it's the infrastructure bank or other big numbers that are announced around this critical metals thing. But perhaps some of that dough should be put into the ministries to speed the process along. Mark, it'd be very interesting to know if there's more sort of staff reviewing projects in Australia, making that part of the reason it is perceived as going a little easier. But Cam, to answer your question, you know, what can the federal government do? I'm not so much a fan, policy-wise, of money sloshing into our industry. Like I feel as though if we have clear guardrails, we can run ourselves between the guardrails.

16:29 It's just making our permitting more efficient and ensuring that when they back up what they're saying, when they're pro critical minerals, ensure that the processes are in place to allow us to get forward with what we wanna do. Oh, absolutely. You know, I just wanna say, I tend to agree with Sean is that, you know, governments, you know, it's always a little scary when governments start picking winners and losers because they historically aren't very good at it. But the one exception I would make is towards infrastructure funding. I mean, I think that there is a role for government in infrastructure funding, power lines, highways, that sort of thing. But anyways, Yeah, governments make me nervous when they're trying to help.

17:21 Fair enough. Well, we got some great directions from you guys. And obviously, we're listening to the perspectives from graphite and nickel. But when investors think about battery metals required to fuel the electrification of the world, they often think of lithium. So what should investors and the people in the room right now know about the role that other battery metals, any upcoming battery materials demand? I'd say, first of all, graphite is not a metal. It's a metallic, non-metallic mineral, but that's the one thing we get looped in with the battery metals. I usually say battery materials, but what I see it as, It's been all about lithium, and that's sort of been more the junior mining space. It's a lithium-ion battery, so that's what everybody looks after.

18:11 They're all engineered materials that go into these batteries, so it's a matter of not just having a deposit. There's also that ability to process to take it right to the end, which we're doing to take it right from, like I've always said, the world doesn't need more graphite, it needs more processed graphite for batteries. So but I think it's just, It's just we take some things we take for granted and we don't realize that we want to decarbonize the planet and whatnot and we want to build all these electric vehicles, but we still have to mine the materials in order to make all these. And in the case of graphite, majority of the material used in the anode is graphite, but it's synthetic graphite. And synthetic graphite is basically petroleum coke that's graphitized. So it's a byproduct from refining oil. So it's kind of counterintuitive. We're trying to get off fossil fuels and we're using a fossil fuel to make, you know, an atom, a graphite, artificial graphite, where natural graphite can be very, very, you know, much better performance and better capacity.

19:18 And also it's actually cheaper to probably to develop a mine than it is to build furnaces to graphitize the petroleum coke. But all the materials, we need them all. It's a question of people realizing that they can't even their iPhones and everything where you know, we're all using right now I'll require batteries walk around electronics And it's it's coming faster than most people think But the supply of this material has been neglected on all fronts. We've acquired our deposit from Critical Elements, which is a lithium. They just got their permit yesterday, finally, from Quebec. They had their federal permit, now they got their provincial permit, So their final feasibility fully permitted. So I expect great things from that company.

20:07 I'm an investor there, but you know, lithium, there's hard rock and there's the solvent side. And I think, you know, there's going to be a lot of interesting lithium plays in Canada from what I'm seeing. And yeah, I think there's going to be a lot of interesting lithium plays in Canada from what I'm seeing. And yeah, I think there's going to be good growth in that sector. And as Donald said, that's been one of the sectors that's gotten a bit more attention in the market. That's probably been one of the more, you know, healthier, you know, sectors of the mining market is lithium is still, you know, still sort of perceived as, you know, hotter for some reason. And it's done well, but, you know, I think that's encouraging to see these permits finally coming through. And I think you'll start to see partnerships with automakers. And I think these things already start to, as that starts to happen, it's like, you know, the one thing I say to people about North American nickel, I think that's such an important point to make is that if you want to get these full tax deductions or incentives that are being provided by the U.S. Government and probably by the Canadian government at some point for your electric vehicle, you've got to have North American nickel.

21:14 And They just don't have enough of it right now. So it's just not possible. Yeah, I can actually hang some numbers on that. We've looked at the gigafactories in North America that have already been announced. And it depends what percentage will be LFP batteries, which don't have nickel, and which percentage will be, you know, higher nickel chemistry batteries. But it's going to be somewhere between 250 and 450,000 tons per year of, you know, incremental nickel supply just for that. And I think it's gonna be closer to the 450 because in North America, we like range. And that's what nickel does. Nickel is very good at holding electrons.

22:00 And you need more Nickel in the battery chemistry, in the cathode chemistry, if you want more range. It's just that simple. And it's not trivial. It's not just the mines. It's the processing. I think, Don, with Graphite, you've got a simpler route to the anode than we've got with the cathode, because we can make a concentrate. That's step 1. Now what? You can sell it to a smelter, and that's what we're modelling. And then from a smelter, They can make just about anything in their refineries at the back end of the smelter. But ultimately, the battery makers want sulfate, at least right now. That processing route may change. And I know of all sorts of interesting technologies being worked on. But just the amount of processing to take it to the cathode and the amount of purification is something that I don't think that the politicians are really considering enough.

23:01 So you're gonna need all these mines. I think all of these Nickel deposits in this room right now are going to have to be developed. And then some, and people that aren't in this room, their deposits are going to have to be developed. And it still won't be enough. So it's interesting. We've got 3 Nickel companies here. I don't regard anybody as really competition. It's just we're all going to need to be developed at some point. But also the downstream refining to actually take this material to the cathode is a non-trivial problem that I don't think is getting enough attention. Absolutely. And Sean, do you have any thoughts? Yeah, we're doing some interesting stuff with our project where we're trying to figure out what we can add to the existing local concentrator to potentially jump the step and not require the smelter. So we're doing some work on bioleaching and taking, now we're in the lab analyzing, taking a high-grade concentrate out of the existing plant.

24:10 And with bioleaching into vats, being able to produce nickel sulfate or precipitate out a different product that the end users could use. So that's still just lab work, but I echo Mark, if we can't sort something out or we can't be more creative on having that step, we're then still beholden to the existing smelters. And, you know, back to the point about support of governments and willingness to permit, you know, it's 1 deal if you're talking about permitting mines and then permitting sort of the concentrator step. But smelting, there's a reason why they're very rare, and material goes around the world to reach them. I'm not sure if we're necessarily ready to be permitting base metal smelters up and down the country to reach the critical metal demand or critical material, critical metal demand. So it gets complicated.

25:06 It's interesting, you know, we have a lot of assets in Chile and Chile has a unique structure in mining. They have a Nami, which is sort of a public smelter, if you would. And- Smelter for the people. Local miners and small mining companies can mine ore and bring it to a Nami and they smelt it, you know, and make copper. And I always thought that was a great idea. I thought that was a way to put a lot more small mines to work and I'm wondering now in this sector, I know we haven't talked about it, but wouldn't it be great if there was some more nickels melting capacity in the Ontario-Quebec region that we could access for the battery metal sector? And That might be something that the government could do that could de-risk a lot of projects that move things along in a productive way, but thinking outside the box.

26:09 Yeah, and then we could start Picanero mining around the fence outside of the valet and the Glencore assets. And bring it to an audience. Those guys have led to a lot of mind discovery. Don't be, I've had a lot of good surveys with my friends in the Picaneros. They're interesting cats. You know, I think myself, the more likely route is going to be a pressure oxidation to deal with concentrates. And that's already done. I mean, it's already done in Alberta, for Saskatchewan, Sheriff's Refinery. Started off as a concentrate refinery. It's also done at Long Harbor by Vale.

26:57 And the thing about pressure oxidation is it's very flexible. You can create almost any product you want. You can create MHP. You can create sulfate. Depends what you put on the back end. You could also create nickel briquettes, all of which are forms of Nickel that battery makers want. So I just think, you know, it's pressure oxidation is probably less environmentally objectionable than smelters, but it's also, I think, more flexible because Nickel is about, Nickel is not just a simple metal market. It's got many, many different forms. And mostly what the battery makers want is various chemical forms of Nickel that they can then process to count those materials.

27:49 Definitely a lot of things to consider and a lot of potential paths forward. But this year, automakers plan to build 7.7 million electric vehicles and are only going to have access to enough nickel to build around 3.6 million that can travel 400 kilometers or more on a single charge. Terry this question is for you. What can you tell investors about the role that nickel plays in increasing the energy density of NMC batteries. Well I mean I mean just the technology is such that the reason why they're putting more nickel in the batteries is that they're getting better energy density, greater power, longer life, less corrosion. So all those things are, especially as Mark said, in North America, are needed because cars do travel a long ways here.

28:40 And so I think that that's why nickel is, as Mark pointed out, is going to go up in percentage use in the batteries and the weight of it in the batteries because it ultimately leads to an overall more efficient battery and a less weight battery and longer distance, better range, better cycles. So, all those things are a plus. It's interesting, and I think the reality of, it's like when nickel went crazy there, it went to, I don't know, whatever, I don't know what the top price was on that short squeeze, but it was obviously, $30 nickel isn't gonna work, okay? Just like, I'm not familiar with the graphite prices, but if you put 10 times it, it probably wouldn't work for graphite either. Everything is substitutable, You know, and so nickel is substitutable too, but I mean in terms of the You know 11 12 15 dollars, I think but that's the sweet spot You know for nickel and everyone in this room can make a lot of money at those price points And we could justify a lot of investment in nickel in those areas.

29:51 And I think the price curve for nickel looks very favorable as a result of its inherent capabilities. And you got, I mean, 2 things drive the nickel market. Urbanization, which is basically as people are moving from agrarian economies to cities and villages, they're buying more fridges and stoves, pots and pans, and that's stainless steel. And then the second big driver is electrification. So as the percentage of EVs goes up in the world, you're getting to these crazy numbers where you're just gonna have to have so many new nickel mines come into being and so much investment going to nickel. And as Mark said, I don't know when these guys are gonna wake up, but it's gotta be soon because if they wanna get this, hit their targets, The markets need to wake up soon so that we can get financed and get after our game Absolutely. Oh, yeah Okay, guys, I have one thing. I'm first of all, I'm having trouble hearing everybody I guess from where I my internet service isn't the best here, but hopefully you're hearing me.

30:51 So I'm getting bits and pieces of what you guys are saying. But one thing I look at as far as, you know, be it nickel, lithium, graphite, we need to build a whole lot more mines. So it's not a question, we're all in competition for investors and whatnot, but I think investors know, for example, I think Benchmark came out with a number of we need at least 79 new graphite mines producing in the very near term at, you know, 50,000 to 100,000 tons per annum. I'm sure there's a similar number for nickel. Usually they're much larger deposits. But overall, I think, and I also heard a bit about ESG perspective and processing. The beauty about graphite is that, and especially vein graphite here in Sri Lanka, is that from an ESG perspective, we don't have the primary processing, so therefore we don't have tailings, we don't have the waste rock dumps, so we don't have any kind of reagents or effluents from a tailings pond.

31:51 Not that I haven't done that before in other minerals, but I'm just saying for this particular case, when you're making the case and we're looking to replace an actual synthetic material with a natural material, which usually is the other way around, but we can make the graphite here work very well in a battery. It actually works better than flake. And we can also do things to enhance that performance. I heard, I think Mark says I heard about enhancing some of those capacities. We actually add in, like we can add in a little bit of silicon, we take nano silicon that we mix in with our spherinizing process and we can actually take the you know well beyond the theoretical limits of the current anodes. So that may be a bit out of context what I just said but again I'm trying to piece together what you guys are saying overall but hopefully you're hearing me okay. We are Don, thanks. And it's great context, absolutely.

32:51 Going back to sort of the conversation about EV specifically, of course, we have to bring it up, but Elon Musk said in July 2020 conference call that, quote, Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way, end quote. I mean, in this room, we've also seen a JV between Giga Metals and Mitsubishi. So question to the group, but I'm going to go to Mark first. But do you anticipate more audio manufacturers to follow suit? And Mark, for those who are unfamiliar with the JV, what should investors know about the partnership? Oh, well, the partnership is very simple. We sold Mitsubishi a 15% interest in our project by forming a joint venture company. So we formed a 100% owned subsidiary with all the Turnagain assets in it and then sold Mitsubishi 15% of that for US$8M.

33:48 So pretty simple transaction. Mitsubishi, it's a giant company. I mean, it's the largest trading company, commodities trading company in Japan. And that is a tiny part of Mitsubishi's overall business. They've got a couple of banks. They make cars. I mean, it's just a huge conglomerate. But they're focused on battery metals right now. They're primarily focused on nickel and lithium. And they told me they looked at 26 different projects around the world and then settled on us. Tesla, Elon Musk says all sorts of things, but I haven't seen them write a check yet. They like to sort of wave their magic wand around and spread some fairy dust around, which then helps the companies to raise money.

34:42 But I have yet to see them write a check. And it actually takes money to build mines. So, so far, maybe they'll get there. The other thing is about the car and battery companies, but I'm particularly drawing what the car companies right now. A year ago, the thought of them investing upstream in a mining project was absurd. But that's not the case anymore. They are realising that they're in trouble. If they want to be in the EV business and competing with China, they're going to have to own critical, you know, critical mineral supplies. And, you know, And if they don't, they're not going to be in the EV business. And if they're not in the EV business, they're not going to be in the car business.

35:28 Except maybe in a little specialty sense, in some kind of gas-powered vehicles. So they've reached that stage of the thinking where they know they need to invest upstream. I'm just starting for the first time to see mining engineers when I'm talking to car companies. I just talked to my 1st mining engineer at a car company. And he had been there when I talked to him for 5 days. So, you know, I mean, the thinking is progressing. It's bit by bit, it's incremental. But I'll say it again, it's gonna be 1 transaction, it'll be another transaction, and suddenly all hell is gonna break loose and everybody's gonna be buying everything as fast as they can. And you can see it coming.

36:18 No, absolutely. And I mean, it'll be interesting to see where things go. You know, Don, going over to you. Can I just add to that briefly, Cameron? I just want to say, too, we're having conversations with OEMs that, you know, a year ago we wouldn't have had. And just to echo what Mark said, I think the OEMs are really either full battery manufacturers or even the car companies, the GMs, the Fords, the Volkswagens, they're all coming up or coming down, I guess, up the supply chain, I guess, and realizing that they need to get out there. And as Mark said, they need to have their own people who can actually understand geology and mining and whatnot. But a few of them are still pretty slow to come out of their old ways. But I think we're seeing that the OEMs are really starting to, and even, for example, a GM that doesn't necessarily wanna rely on LG to be able to sort all the materials for them, they're actually doing it in parallel with, the feed, their factories are not relying on them to just give them a cell and not have any control over their raw materials.

37:22 So I think you're seeing that with the input materials, I think we're seeing that change. And again, it applies across the board for all these, every battery material. No, fair enough, Don. And you know, looking at China, who produced 79% of the world's graphite supply last year, according to the USGS, at least, you know, however, Sri Lanka has historically been the largest producer of graphite, you know. And so, Don, this question is really for you. What role do you think, as a jurisdiction like Sri Lanka, you know, plays in the long-term global demand for graphite? Well, thanks, Don. I think I got most of your question there. So yeah, so right now, I mean, China is the elephant in the room. China produces, I think it's over 65 or 75 percent of the world's flake graphite.

38:09 But the main thing is for battery material, spherical graphite, they produce 100 percent of it. So that's the big thing with that regard. In the world, we're finding that the OEMs, if they want to put something up in North America, they want non-Chinese graphite, they want non-Chinese processing methods. They're not exactly palatable to ESG perspectives, using hydrofluoric acid, for example. So being in Sri Lanka, where we are, we're looking to revive an industry. So again, we have 2 mines permitted. We're just going to continue on permitting mines. At one point prior to the 2nd World War, there were 3,000 graphite mines in Sri Lanka. There's only 3 others right now, you know, barely operating. So the total output of graphite out of Sri Lanka has been pretty, pretty minimal, and I say more for certain industrial higher end. It has a higher value than Flake.

39:06 But we're looking to just continue to rapidly advance and build as many mines as we can. And the fact that Sri Lanka right now has had some, you know, they basically the country went bankrupt. So they're looking to attract foreign investment and encourage investment. So we're doing what we can to try to hopefully streamline, help streamline permitting processes. And I mean our capital costs for building 1 mine is about 2 million because we don't have the primary processing. So I think Sri Lanka can be a significant player here. It's a little bit difficult, becoming kicking and screaming, let's say, they don't really understand yet what we can do here. So I think we're showing that we're here. We've got 2 operations right now. We employ 50 people. We can probably employ 500 or 5,000. So that's sort of where I think we can go with this.

39:58 And the way the market's going, it needs as much graphite as it possibly can get. And the Sri Lankan vein graphite just happens to be very good in a battery. So the theoretical limit capacity is higher than flake. So we probably will be able to sell and move everything we can produce, so it's a matter of producing as much as possible. Absolutely. Going over to you now, Sean, EV Nickel plans to develop a zero-carbon production of nickel and has applied even for the trademark Clean nickel across several jurisdictions. Can you tell us more about what clean nickel means, especially relative to your project at Shaw Dome? Yeah. So clean nickel is a term we've trademarked. It's very clearly some genius marketing, But beyond that, it's in the DNA of the company. So we are rethinking every step of what we're doing, which you can do when you have a greenfield mine, or I should say a brownfield mine, it's nearby old mines, but it's something we're building anew. So we're looking at electrifying everything we're doing with our underground operations.

41:07 You know, with the, for example, all the electricity that we draw where we are, Northern Ontario is hydro. So very low carbon costs attached to it. Then we're also looking at ore sortation, our head grade that will go to the mill as best we can. The mill, if we use the one nearby that's been constructed, it sort of has its own carbon cost. But then I mentioned the bio-leaching before. If we can add that on, that is also, it's exothermic, so it'll have a negative carbon cost because we should be able to generate electricity from it. And then in our tails, we're looking at the carbon capture potential, so the sequestration. That's definitely a thing for our Dunites, the low-grade business, our large-scale deposit. But each of those things, they fall in under the umbrella of clean nickel, and it also speaks to the ESG perspective that we have. So when I'm here in Germany having meetings with the car companies, they have some very early gating questions around ESG, around carbon cost.

42:08 And frankly, the way I see the nickel price going is in the very near future, we're going to start seeing price differentiation based on the carbon cost attached to the nickel units. So it's happening in other commodities that the buyers who have this front and center and frankly, the buyers in our business, especially the new, the OEMs with this new demand from the EVs, the demand is ahead of supply on this area. So the demands that they are making with all this new demand that's coming into the nickel business is very different than all the stainless steel buyers, you know, up till today. So I see a change going forward in the nickel business. We've already sort of done it with class 1 and other with the nickel world. But within class 1, the nickel sulfides, based on what carbon costs is going to be attached to the nickel units, I see a split coming with premiums and discounts based on what the carbon price is. So for us, clean nickel is a part of everything we do.

43:11 And it's a trademark term towards us trying to have as low possible a carbon cost attached to our nickel production as we can. That's really, really interesting. And I know I think it's time to go to, as it's been called, the elephant in the room, but geopolitical winds are shifting and there have been clear signals from China that they plan to buy up and control as many sources of battery metals as possible, battery materials, Don, as well. Do you think battery materials are a national security issue? And how do you think that it'll play out over the course of the next decade? Whoever wants to jump on that. I'll start very quickly and I'll try to, but definitely China is the elephant in the room, and I think overall their strategy for battery materials has been, you know, they're probably a decade or at least a decade and a half ahead of the West in their thinking and their planning, and where they don't have an abundant supply of a particular metal or mineral, they are getting it from somewhere else, but they have the processing capacity. So they have built processing capacity for lithium hydroxide, lithium carbonate, and every other aspect of it. And again, they have 100 percent of the graphite.

44:23 They also have their thumb on probably most of the graphite deposits in Africa that the Australians are developing. So China is definitely well ahead, and I think if you look at benchmark, when they say about how many factories are being built, you know, if there's 1 built in the West, there's 10 built in China. So China is the value. And again, I think we'll see a similar pattern where what they have, they're going to use domestically, similar to rare earths a while ago, where they went into a quota situation where they wouldn't export or only export a small amount. I think we'll see that with graphite, for example, in our case. And I'm not sure really about their capacity to process and deal with nickel, but you guys will know better than I. But yeah, China is, it's a game of catch up and trying to, you know, where China doesn't care about certain things that we're all talking about, ESG and carbon footprint, you know, they're in the Congo, the DRC getting cobalt, where we're all talking about, you know, other issues that are maybe shying away from getting cobalt from the DRC. So and you need cobalt to help with the support, to deal with nickel. So that's pretty important for what you guys are doing, too.

45:44 So Yeah, China is the elephant in the room, and we are looking to be an alternative and part of a picture where we need, you know, as I said, 70-plus mines and also the processing capacity. So, and we're seeing the EU and the United States have very little capacity to process any of the materials we're talking about. You know, 100% comes from China. The United States has 0 capacity to process graphite, probably very minimal processing capacity for nickel and lithium, et cetera, et cetera. So yeah, that's a good, excellent question. Yeah, I just want to very quickly echo some of what Don said, but particularly about the ESG considerations.

46:30 I mean, China dominates Nickel supply and Cobalt supply, as well as Lithium and Graphite, and the whole suite. But boy, if you look at the largest producer of Nickel today, it's Indonesia, And it's largely with Chinese money. And in Indonesia, both for Nickel Pig Iron for the steel business and for the limonite portion for H-PEL projects, you know, they're strip mines. And they are in most cases, stripping down tropical rainforests, mile after mile after mile of tropical rainforest. Who knows how many species they're destroying. In the case of HPL, they're processing very aggressively with sulfuric acid.

47:18 And then, in most cases, again, dumping their tailings in the ocean. Who knows what's happening there? You can get a permit in a hurry if you know who to pay, I'll say it, in Indonesia. And stripping down all these rainforests as well, and this is something that I've been recently learning about. You just leave these fields of mud, then it rains, as it does in this part of the world. And then you have mudslides that engulf villages and kill villagers. And according to the Indonesian government, these mudslides weren't caused by deforestation. They were caused by rain. It's an act of God. What can you do? So I just, this whole idea that, you know, we're gonna save the planet by driving electric vehicles.

48:11 It depends. It depends where the raw materials are being sourced. Anyways, I've said enough on that. Yeah, I mean, I think that's, you know, we've been talking somewhat to, you know, carbon credit people and just trying to understand just from our own, you know, as we go forward, even drilling, so that we can, you know, have a carbon neutral impact because more and more investors are very sensitive to the ESG elements of your program. And that makes sense, you know, in the context of the world we're working in. And, you know, then you have these egregious, you know, acts that give mining a bad name everywhere. And that's really sort of frustrating to see when you're actually trying to do things right and it's not working. But I suspect as Sean said, that probably there'll be a bifurcated market where you'll actually start to get paid more if you actually have a high ESG deliverable nickel and for these contracts, because these car companies are actually selling to consumers who actually do care.

49:24 So if you're buying these dirty laterites from Indonesia, you're probably not gonna get such an attractive response from your automotive guys, at least in North America. Maybe it's different in other parts of the world, but yeah, I think there'll be, there's a lot unfolding there for sure in this world and you know, I think that you know, for us when we were looking at, you know, developing NISQ, you know, we're blessed by having Hydro Quebec literally across the road. So obviously, having to be able to tie into that capacity would be something you would definitely engineer into it. And I think a lot of times if you go at it with a very strong ESG approach, it doesn't necessarily have to cost more. You just have to think smarter and re-engineer your processes.

50:13 And there's lots of new tech out there, new approaches to doing things better and more efficiently. So I think, and we've been sleepy overall in the mining world, generally speaking, just doing same old thing, same old thing. But I think as a result of the shakeup that's coming, we're going to start to use some newer technologies and some newer, innovative, cleaner tech that will ultimately deliver maybe even more efficient mining. So I think there's both good and bad happening out there. Who wins in the end, I'm not sure, but hopefully the environment. Terry, you may want to talk to Dr. Greg Dippel at the University of British Columbia, because he's been working on passive sequestration of CO2 in silicate tailings for like 20 years.

51:10 Both nickel deposits, but also diamond deposits. He's been working with DIAVEC in the Northwest Territories. Yeah, maybe I'll email you afterwards and get that contact from you if you could. Yeah, he's a really smart guy. And he's developed a method of quantifying how much CO2 is being absorbed and working on getting that certified by the relevant authority so you could actually claim carbon credits. And very, very interesting work. So not only do the silicates convert to carbonate minerals and sequester CO2 basically forever, I mean, you'd have to pour acid on it to release the carbon again. But there's also a process of cementation that happens. And so if you want a nice, secure tailings management facility, that process of cementation is really, really interesting.

52:08 Anyways, I will tell you that. Cool, cool, thank you. Yeah, that's the nice thing about graphite here in Sri Lanka is that it's highest grade in the world, 95 carbon. So we don't have the primary processing. So we don't have that tailings issue, but like I've had other projects. So it's nice to see. And the bottom line is, you can't have these nice green automobiles with dirty inputs, simply put. And it's just another layer. We've just commissioned our LCA study and it covers all that aspect of it. So the car manufacturers wanna see your CO2 per kilogram of production of the anode graphite. So I think it's part and parcel with how we do business going forward. And Terry, I did say, I think I saw Robert Preland talking about, yeah, we just can't go in and into Indonesia and strip mine nickel and then do all the damage and be acceptable anymore for what we're going ahead with this industry. It's just changed the scope of things completely.

53:14 But we're sticking to these rules. We gotta make sure everybody else does too. Yes. Absolutely. Just as a note to the audience and gentlemen yourselves as well, you may have noticed that Sean's dropped. I've been messaging him. Unfortunately, his hotel Wi-Fi is completely cut out. But we thank him for coming on. We have had so many questions come in. We've been able to address a few of them naturally, a couple explicitly, but we really only have enough time today to do sort of what I'd like to go through as the final act. I'd like to go around the room and just offer each of you the chance to get on your soapbox, talk about your company, what's coming next, what's exciting, what should people in the room be paying attention to, and then we'll close off for the day. And I think we'll go in reverse order from our start. Terry, let's begin with you. Okay, great. Yeah, so we're just closing a financing.

54:12 I guess it'll get closed probably later this week or early next week and that will allow us to ramp up additional exploration at NISK and we'll be starting to release assays and drill results in the next I would say week to 10 days and we'll probably release over the next 3 months which is great And then we'll compile that and put it into a amended and updated 43-101. And we're thinking that this is going to go a long ways to showing that NISQ is going to be a commercial mine. And we're anxious to continue to push that forward and to create an opportunity for a nice Nickel to Sulphate mine in Quebec. So that's what Power Nickel is going to be focusing on for the next several months and next year. Appreciate it, Terry. Mark, what about you?

55:02 Well, we're working on our pre-feasibility study and so that's just going on constantly. It should be out by the end of the second quarter of 2023. It's a massive project and it's a lot of work, But we're also looking ahead at the next step. So we think to get from the end of our pre-feasibility study to shovel ready, including the environmental assessment for a project of this size, it's probably gonna be somewhere in the range of US$40M to US$50M. And we're looking to attract another strategic investor in for a minority interest of the project to help fund that. And we're working on that constantly. Some of them may want to wait and see how the PFS looks. That would be natural.

55:51 But I think there's going to be a lot of competition for this. And some of them may not even wait. And If you sign an NDA with us, you can actually review the pre-feasibility bits as they're going forward, as each section gets done. So you don't have to wait blindly until the end if you're serious about doing your due diligence. Absolutely, thank you, Mark. And Don, you have the honor of being our bookends for today. So feel free to go ahead. Thanks, as you see, I'm sitting here in Sri Lanka, I've been here for 3 weeks. My task here is to just sort of streamline some of our issues on operations. We have 2 mines near term to be hoisting graphite.

56:39 We jumped into the going to production into some past producing mines instead of doing all the traditional 43-101. We do have a 43-101 resource, but small scale. So we're, my task here, and I'm a mining engineer, so it's kind of fun to be hands-on with 2 mines, near-term production, and then scouting out within our properties more and try to get, you know, mine 3456, and just continue on there. Dealing with the new government here, so things are turning around economically, so the future is pretty bright for what we're doing here in Sri Lanka. But the main thing we're dealing with is to make batteries. So we have our operations in the UK, we'll have some more battery results coming out being made with our vein graphite, both baseline graphite anodes and then silicon enhanced as well.

57:38 I've got a great team in the UK as well and trying to focus a bit more of our potential production of that in the UK with them spending lots of money to advance their industry. And we're seeing that a lot of these manufacturers wanna have graphite or have their producers, their raw material production within their borders. So we're seeing that we're going to have hopefully some multiple areas where we're producing anode graphite. So that's where we're at. And again, it's exciting to see the demand that's coming and the fact that graphite's finally being recognized as one of these supply critical materials. So it's nice to see. That's good to hear. Well, gentlemen, I wanna thank you all again for coming on today and providing such a great conversation. Of course, also we'd like to thank Sean and Evie Nickell for participating. To everyone in the audience, I want to thank you for joining us. And everyone who asked questions, we are going to be passing those along to the teams here so they can get back to you, rest assured. But with that, gentlemen, that's all we have for today.

58:44 Thank you again. Thank you to the audience. I hope you all have a good rest of your day.