The Politics of the Nickel Supply Gap

0:07 Welcome, everybody. My name is Matthew Michelboro. I host the Junior Resource Investing Podcast. I'm just going to start with a little bit of a context just to get the conversation rolling. Then I'll introduce our guests after the fact. Nickel is set to become one of the most in-demand metals in the world over the coming years. This is in large part due to the integral role it plays in battery chemistry and green energy solutions. Simply put, all the ambitious government and corporate policies designed to build the next generation of electrification and green energy doesn't happen without a dramatic increase in nickel supply in a very short period of time. Consider the projections from governments and industry experts. Goals such as Canada's that 60% of auto sales will be EV by 2030 represents a 12 fold increase over the current 5.2% market share EV vehicles currently own.

0:55 Compound annual growth rates of the North American EV market are projected to be a staggering 39% between now and 2030 with a $50 billion industry today forecasted to become a $600 billion industry over that time period. In terms of simple nickel production, Wood Mackenzie projects that the 133,000 tons of Canadian nickel produced in 2021 is set to balloon to 265,000 tons in 2025 and 1.23 million tons in 2040, a near 10x in production in less than 20 years. And this is just the Canadian corner of a global issue. To meet even this decade's clean energy goals, 40 to 60 new nickel mines, each producing 30,000 tons per year, which would place them top 20 in the world in terms of annual production, need to be brought online within the next few years.

1:40 And looking at the 2040, that number is closer to 100. And this unprecedented increase in demand was occurring against a backdrop of stagnating exploration budgets. In a world where just the permitting and construction stages of a nickel mine can stretch to 5 or 10 years, this leaves global nickel explorers and producers precious little time and money with which to bring online these desperately needed new projects, and future supply gaps remain unbridged. To that last point, consider that even while nickel prices continue to march upward and consistently remain at historically elevated levels, annual nickel exploration budgets remain just above 25-year lows. The added layers of global uncertainty around Russia and China and their vast network of nickel production and consumption only makes these concerns over chronic deepening deficits and supply gaps all the more critical.

2:25 So a perfect storm is brewing. Elevated, growing, historical levels of demand, backstopped by anemic exploration budgets and lengthy mine-building times means the future of nickel supply, demand, and pricing is going to be potentially chaotic and dynamic. These problems are in desperate need of meaningful permanent solutions. In response, governments, while delayed, seem to finally be waking up to this looming critical shortage. For example, Canada's critical mineral strategy has earmarked nearly $4 billion to identify and support critical mineral projects and streamline the provincial and federal permitting process.

3:00 Welcome, everyone, again. As I said, my name is Matthew Mickleboro. Joining me today to discuss these looming problems, their potential solutions and why being an investor in the space right now is so exciting are Terry Lynch of Power Nickel, Sean Sampton of EV Nickel and Mark Jarvis of Giga Metals. Gentlemen, Thank you. Welcome. Good to be here. Hey, Matthew. So I'm just going to open this up as a general response, right? I tried to frame this conversation with some facts and figures. Gentlemen, I mean, maybe I'll start with Mark, but I'll let anybody jump in here. Do you have any additional context or color that you would like to

3:33 add? Well, you know, you've highlighted something very interesting, which is that if the EV revolution is going to take place, and in fact, the elect, you know, the electrification revolution is going to take place, You need a lot of nickel. And the only thing that could change that is if there's some radical new battery technology that replaces the nickel-based chemistries. And frankly, there's nothing on the horizon. There's nothing in the next 20 years that's going to replace Nickel in terms of its energy density and batteries. You know, the only competitor is LFP. And that's a, that's a proven technology. It's a great technology, actually, but it doesn't have the energy density of Nickel-based chemistries.

4:25 So, you know, it's good for some applications, but not for all. However, I believe that LFP is going to play a bigger and bigger role in electric vehicles simply because you can't get enough nickel. So they're going to turn to LFP because they can't get enough nickel. It's going to be driven that way. So yeah, that's the background. And I'd add to that, Matt, that as Mark says, nothing's on the horizon to be replacing the nickel winning chemistry. But also we're on the on the edge here of some very material investments

5:04 that the auto companies and the battery companies supplying the auto companies are about to make. So in a way, that will be locking us in with real clarity around the nickel heavy chemistry being required. It's then our job to step into that new demand to try to get the supply for it. But in terms of nickel chemistry, or sorry, battery chemistry and changes on the horizon, There is, as Mark says, the LFP on the lower range, lower end application, where there's definitely going to be expansion there. But that energy dense, longest range batteries, in my conversations with all the car companies and the battery companies, that's here to stay for the near term. Also because there's in addition nothing beyond the horizon of the R&D. They're making decisions now to be invested which locks all that demand in for decades decades of the near future.

6:02 Yeah. When I was looking at some of the Wood Mackenzie studies, they were talking about the major investment in the battery plants, especially in North America. And that, as Sean, accurately projects, that does lock you in in terms of the investment and what's going to happen on the Nickel side. I mean, I think it's going to be, I don't think we'll ever hit these projections. I think that's pure fantasy. There's just no way we could ever find enough Nickel or get it produced quick enough to make that happen. So there's gonna have to be some sort of moderating of the approach, but I mean, I think if you can find anything with any sort of decent, you know, economics, you're gonna have no problem, you know, getting it to market in theory. You know, I mean, hydrogen's got some interesting possibilities, but again, it gets back to while the technology may

6:54 be coming together, distribution is going to be a problem because that's the other thing. It's one thing to make the batteries. It's another thing to make the electrical systems that support the batteries. And that's the other thing that's got to come together. I mean that's why Copper is also an attractive metal to be looking at. And Rare Earth. You need Rare Earths as well. I mean there's all sorts of supply chain issues. But as Matthew mentioned, the government of Canada is, at least they're making the right noises. And I'm happy to hear that. And particularly about permitting, that for critical minerals, they're talking about, not having a lesser environmental assessment process, but speeding up the government responses, the various steps as you go through the environmental assessment.

7:48 And that is really important.

7:51 I know that Australia manages to do a good job of environmental assessment, but they managed to do it a lot quicker than we do in Canada. So that's an important element of it. But I'm also looking at, I mean, you mentioned $4Bn. I'm looking at a $1.5Bn Federal infrastructure

8:13 fund that's designed to support infrastructure for critical minerals development. And we're having conversations with the federal people. We're having conversations with First Nations and we're having conversations with the province here. And part of my message is, you know, you can't spend all that money in Ontario and Quebec. I mean, I know that's where the boaters are,

8:39 but there are some boaters in BC as well. And so we've got a very good project that that money could be spent on that would be very helpful, not only to us, but to other projects that are located up in the North part of BC. I do want to touch on the critical mineral strategy in more depth here, but before we head to that, I thought maybe I'd just, to clean this moment up here. So, you know, I got those, the stats of 40 to 60 mines producing 30,000t per year. That's from Johanna Moininen. So just for context here, Voisey's Bay is about tenth in the world at about 40,000t per year. And so we're looking at essentially, I mean, you know, 40 to 50 new Voisey's Bay in 7 years, right? So I mean, I think that people understand, oh, yeah, there's a deficit, there's a supply gap, but they don't actually take time to understand the numbers. The numbers are bobbling.

9:30 And so I mean, Terry kind of touches on this. Is this even realistic? And I mean, maybe more pertinent to this conversation is what do we need to change to make that rate of growth be realistic? Sean, do you want to start there?

9:42 Yeah, as you've now described it, those numbers are not realistic. So you got to think from a number of different perspectives here. So one being, will that be the genuine demand? You know, these hockey stick forecasts of the rollout of the EV, as Terry mentioned, I don't think that they can hold up knowing what we know about the important, the key element here, the critical metal we need to supply into the batteries. So maybe the demand doesn't hockey stick up as aggressively if the vehicles are not there, if the supply can't come about. But, you know, the other thing that occurs is obviously

10:22 nickel from other jurisdictions, like, let's say, amongst the largest producers in the world, current producers, Indonesia and the Philippines. So The ramp up in Indonesia especially has been completely mind-boggling. And that's all been primarily from Chinese investment that has come in, basically from the decision they made a few years back to ban the export of ore that wasn't going to be processed. What that meant was the Chinese companies poured into Indonesia, built up huge capacity for processing in-country, and now they're feeding that with very low-grade ore from across Indonesia. But the flip side of that very quick trajectory has been absolute environmental degradation. So it gets very interesting, because if we look at just the numbers for what nickel supplies require to meet the forecast demand, You can do that at 1 level. And that's really how people have looked at commodities,

11:21 has been a global supply demand balance. But very soon we're going to enter a period in which, and you're beginning to see it now with European legislation, is that all supply is not equal. So we can't just find the nickel units. We need to find the nickel units that come with, at its simplest, a low carbon cost attached to them, but also the other ESG considerations, whether it's the tacking on some sort of penalty for the environmental degradation for the supply of Indonesia, all kinds of other issues about ownership. You know, once you get into Chinese ownership of everything in Indonesia, you know, is is today's Ukraine with the situation of the Russians, tomorrow's Taiwan, and the situation with the Chinese. So this has many angles to it, many perspectives.

12:10 And to answer your question, Matt, I don't think that at its simplest, us being able to find as a supply business enough supply to match the demand forecasts.

12:22 But even then, when you get inside that, do those demand forecasts require the Western regulations that are coming in, which mean that a lot of today's Nickel is not going to be in bounds for them. So I think there's a lot of competing things that are occurring and all of them contribute in to the fact it's great if you're in a jurisdiction like ours, Canada, sitting on a huge amount of Nickel. You know, at its simplest, maybe they come into the money quicker because the price goes up. But also, I think that you're going to have buyers that are driven to projects like we have in North America because they need that jurisdiction and that's known nickel and they'll go after it. So I think it's gonna be very difficult to, you know, something's got to change. Something's got to budge for the supply business to meet the forecast demand. And I think it's just getting harder and harder for the companies on the demand side to find their supply.

13:17 I was looking at, I was supposed to give a talk at the World Mining Congress in London in December, got cancelled because of the strikes over there. But I had done a bunch of work with Wood McKenzie on that. And basically the analysis we came away with was there's really 3 Nickel markets. There's a Chinese Nickel market, there's a European Nickel market and there's a North American Nickel market. They all have their own supply dynamics. Right now in China, you've got excess supply of both Class 1 and Class 2 in recycled Nickel. I mean, the thing with China is that it doesn't matter. It's never going to come out of there to anywhere else but China. So that's never going to impact our markets in Europe and North America. They're very similar in that there's a shortage of class 1 and there's a balance in class 2. Everyone forgets that you know the number 1 consumer of Nickel is stainless steel and that's basically urbanization.

14:07 So as people are moving from agrarian cultures to cities and villages, they're consuming more pots and pans, fridges and stoves. And that goes at 6% compounded annual growth, you know, on a 70% base, that's a force to be reckoned with in of itself. You know, so, you know, the, yeah, I mean, there's gonna be definitely a shortage of supply, especially in North America with the Inflation Reduction Act. I mean, the challenge is that it hasn't impacted on our stock prices generally. You know, the lithium fever has not caught the nickel market at all. I mean, scratching and clawing,

14:45 trying to keep a pulse, but you know, and there's no way we can finance things properly without the capital markets coming back. You know, it's one thing to talk about government support and stuff like that, but Jesus, we don't wanna be just waiting for those guys because they take forever to decide. God knows how they decide. You know, it's really tough. What we need is the dynamics of the free market to come back and start to reward projects that have a possible, you know, positive economic forecast and life to them. And that's the mystery is, you know, when is that going to happen? Well, I think, you know, part of, part of the whole government angle, as far as I'm concerned, is to encourage, you know, international investment. So the government of Canada stepping up and saying, okay, we've got this pot of money.

15:34 Okay. People are noticing. Now let's see you start to commit it to actual projects. And I think that could really help with the perception that Canada is a good place to invest in mining. So, fingers crossed on that. But you know, it's hard to know when or how decisions are made. We're doing our best to try and make sure that the decisions do get made. Now, part of the whole supply side,

16:07 if we can shift around a little bit, and particularly the Canadian supply side, is that there are 4 giant undeveloped deposits in Canada that are low-grade and open pittable. And this is a model. Basically, they all need to be developed. And you still don't have enough Nickel for the North American market alone. But it's a bit of a shift in perception. It's sort of like what Copper went through with the development of Copper Porphyry projects. And I know that our deposit, which is capable of producing 35,000t-40,000t

16:52 a year in Nickel for more than 35 years, it's a giant deposit. The economics look, if you just looked at the economic model, you'd think you were looking at a Copper porphyry deposit. It's just remarkable. It's not a porphyry. It's a different reagent suite you need for your proffolication. But these deposits have to get developed. And so the model where you have to have high-grade underground Nickel, yes, you need all you can get, but I think we're going to go through a shift where you're going to see tons of production from a large, low-grade sulphide deposits.

17:37 And so the 4 of them in Canada, if you develop all of them, that would be about 120,000t a year of Nickel. And that's a good chunk, but it's still not enough. It's still not enough Nickel. It's quite remarkable. And the thing that all the deposits share is that their economics are not good at the very low end of the Nickel price. Current Nickel prices, the economics of all these deposits are very robust. And so it all depends on your long-term view of Nickel. My long-term view is it has to go higher. It has to incentivise these projects being built in the near term, anything can happen. It's a volatile thing. It can go up, it can go down. But 5 years old and longer, I mean, there's just not enough nickel and something's got to give.

18:30 And the new demand, the car companies, they are also stepping in looking to source this material

18:38 and you understand that they don't see where the supply is going to come from either. So, Mark, as you mentioned, the low-grade deposits across Canada in a safe jurisdiction like ours, as you've been able to recruit interest from downstream, they want to partner up so they can secure their supply. And I think we're going to start seeing more and more of that, Matt, where you've got the downstream buyers coming upstream and cutting deals to secure their supply because they see what we're discussing right here, which is for their forecasted plans, there may not be enough input. And you see this historically as well with car companies, right, where having gone upstream to invest in rubber plantations historically,

19:23 when they realized the global supply wasn't going to be able to match their forecast. I think we have a similar type situation here with the critical metals and the decisions they're making around shifting all of their production over to require what there's going to be this shortage of. And it becomes pretty immaterial in the scheme of things, paying some premium to get your metal to build the battery in the cost of the vehicle, for example, if they can continue to sell vehicles. Their alternative being not selling vehicles, that's pretty catastrophic. So you're going to see more and more creative deals where demand is going to come up the chain and start going hand in hand developing supply along. You start to see the, I noticed just with our own project that clients that would have been buying Nickel from Glencore and Rio Tinto and Wailu are now knocking on the door saying, hey, we think we need to secure our Nickel supply lines in North America.

20:28 And they're talking about not just Nickel Sulphate. They're saying, hey, why don't we partner and get you into the nickel powder business and the nickel wire business and the nickel anode business, which just triples your economics and costs maybe an extra $100 million. Like for a plant for power nickel, instead of costing $225, it might cost $350 million, but it will triple your economic returns. So you're having those types of conversations which are pretty interesting. So the quote I heard from one of these companies that has 17 plants like this around the world, he says, you know, you've got a poker chip, you're at the table now. You're not just a dumb commodity

20:59 guy anymore. You can hurl that into something more. And of course, as Canadians, we want to produce value-add products. That's going to create the most wealth for our shareholders, the most job opportunities for our employees, the most benefits for our society. So we need to not just be hewers of wood and haulers of water. We need to sort of create value in products, I think. Oh, yeah. And if you're going to build a nickel supply chain in North America, you need more refineries. You know, that's there's a whole process to get from the ground into the battery. And none of that's built out either. And so there's a lot to think about. Now, it's interesting in Canada, I haven't seen a car company make a move in Canada yet.

21:49 But I have seen strategic investors get involved. I mean, we managed to get Mitsubishi Corp involved as a joint venture partner. FPX has a mystery strategic investor. And I don't know who that is. I just haven't run into Peter lately. Probably ran into him at PDAC and buy him a couple of beers and find out what's going on there. And then Canada Nickel attracted Anglo as a strategic investor. So one by one, pop, pop, pop. And the interest is increasing. And then there's Demont, which is the most advanced project. It's the old Royal Nickel. It's now owned by Waterton and it's going through a sales process led by Goldman Sachs. It's been going through that process for about a year and a half or so, or maybe longer.

22:38 So we don't really know what's going on there, but sooner or later, I think they're all going to be developed. The interesting thing with the

22:49 Canada Nickel deal is that Anglo's in-house expertise is mostly to do with ferronickel rather than class 1 nickel. And Canada Nickel has been doing its engineering all around creating a Ferro-Nickel product. So there could be a good fit there. I still have trouble believing that there's going to be any Ferro-Nickel projects developed in Canada. I think it's all going to be battery sooner or later. But that seems to be the direction that's going there. I'm speculating. I don't really know. But my point is, one by one, they're all going to get developed. And to Terry's point about, where's the market in all this? My God, what a wasteland.

23:44 Sooner or later, all of a sudden 1 day it's going to be action. This whole sector is just going to get incredibly active. And don't know what day that is. Don't know what the trigger is going to be. But we all know that we're in a cyclical business and when nothing's happening and the markets are down, the one thing you know is markets change. I don't think the market's going to change and go lower. We'll see how that can happen. I have 2 follow-up conversations I'd like to start here. 1, I do want to talk about the on-shoring and the greening of supply chains when it comes to North American production returning. But I also want to talk about, you gentlemen discussed, you know, the desire for international funding to make its way to these projects.

24:31 And I was wondering, there's an evolving competing tension between protecting domestic control over critical minerals and that international funding, as we saw in the fall where the Government of Canada nixed a couple of Chinese stakeholder purchases in the lithium sector. And I was just wondering if I could get, I guess, what's the, is that a natural progression, you think, of a critical mineral strategy where you're going to start seeing more kind of nationalistic protection like that? Is that good policy, bad policy? Yeah, natural progression? Where does that fit in? And I guess maybe, Sean, I'll ask you to start off this one again. Yeah, I don't think it was it was simple nationalism with the moves made against the Chinese. So, yes, I think the world is splitting up into islands. You can refer to it as Terry did with different sort of supply markets, or you can just pick up any issue of The Economist and realize that the West is trying to do less with China. So in terms of protectionism, there's sort of protectionism we all learned about in economics class, which I don't think is the path to wealth creation.

25:37 And then there's let's cut off the enemy, which I think what you've described with the actions of the Canadian government would have been the latter as the world splits up into these islands. But, you know, in terms of protectionism, the Inflation Reduction Act, which includes Australia and Canada in the U.S. For domestic production, is protectionism, right? It's building walls around a part of the world. And that's a funny one from my perspective, because you could think of it as trying to get China out of your important supply chain. But the other thing it does, and I spent a lot of time with the European car companies, is it forces a behavioral change with them. And so I don't think protectionism is the way forward. I think we're seeing a lot of it.

26:23 I think the Inflation Reduction Act, frankly, is the bigger recent example than Canada kicking out Chinese investment from some early stage lithium companies. And I think as we see more and more of this, I've also heard on the horizon is similar European legislation, which will include Canada in the European domestic mix. It's like, yeah, Of course, because when you again, car company talking to your domestic government, whether it's Detroit talking to DC or whether it's Munich speaking to Brussels, they point out there is not the supply within their current domain. You've got 1 operating nickel mine in the US. It's going to be out of ore in a couple of years, Eagle. Maybe Tamarack comes on with some fun, creative way, but the reality is they don't have the nickel endowment. So just for our small piece of the battery, nickel, the US, DC can't build walls just around their own country. So they involve the other ones in. Similarly, in Europe, there's just not the supply. So if they want to put up protectionist walls, they need to include other groups. And all of this just feeds back into the idea of being on top of nickel in the ground in Canada, like the 3 companies presenting are. It's, as Mark says, a very good situation to be because we're going to get picked up. Or it seems as though each of these projects will be developed along because the world needs the Nickel produced in Canada.

27:53 Tyrion Mark. Well, I guess Another factor that you've got to look at is environmental impact. And so the largest new producer of Nickel, I mean the largest current producer, and it's quite recent, is Indonesia. But you look at what's happening there and it's both with the Saprolite, it's both parts of the Limonite. Saprolite, they just dig it out, throw it in furnaces and make nickel pig iron and supply the stainless business. The limonite portion, they dig it up and put it through high pressure, high temperature acid leach facilities and to create class 1 nickel and cobalt.

28:44 But in both cases, they're strip mining everywhere. Like it's unbelievable what's happening over there. The rate of strip mining through complex tropical rainforests is unbelievable. And nobody really knows because nobody's tracking. They're not encouraged us to be tracked, but these tropical islands, you know, 1 valley can have 1 suite of species and the next valley over is completely different. And so nobody really knows how many species are being destroyed by this. And then with the H-PAL, they process it very aggressively with high pressure, high temperature acid leach. And in most cases, they're dumping their tailings into the ocean. What's happening there?

29:31 It's just, you know, and then the other thing is that I've been reading about lately is that there's increasingly, because they just deforest whole swaths of land and then the rains come as they do. It's a very rainy jurisdiction and you get mudslides in built-in villages and people dying. And yet we're not hearing about that much out here. They're not publicizing this, but I just say that there is a huge environmental cost being paid on this whole effort to decarbonize because you're getting your nickel from sources that I can only describe as dirty. And So in Europe and North America, the governments want to be protectionist, but I also think there's an element of the consumers that want to feel good about their choices.

30:27 Now, there's always going to be consumers that price matters more than anything. So I don't know. It's just it's just very interesting. I think you're going to see you can see in the car companies looking to secure their supply chains. You know Ford does not want to be the buyer of nickel from Indonesia if GM is buying it from Mark. One guy's got a clean source of supply. Another guy's got a dirty source of supply. You know in an ad campaign that that will come out and that will affect consumer purchasing behavior. So they definitely want to avoid that. So that's definitely part of the theory behind why these guys want to start to, while they haven't made the move yet, they're certainly looking at it.

31:13 Yeah, and I think it's, So the car companies in Europe are already dealing with the legislation that's changed, right? Where next year, kilometer 0, they're going to have the carbon cost of the vehicle stamped. So you're going to walk into a Volkswagen dealership, you're going to see the full battery electric vehicle. It's going to have a footprint for its carbon cost of everything that went in to make that car beside the internal combustion one. And the big difference is going to be the big slug of metal in the battery electric vehicle is going to have a higher footprint. So we're going to see it right away next year. What's going to happen to consumers when they begin to see that because it's actually going to be a bit backwards because of the disclosure regulations that have already been passed. And then obviously that's 24 2024 2026.

32:02 They're going to start turning the screws on what those scores can be. But as soon as we start getting some sort of measure for the biodiversity thing that's like on ground is 1 deal mark between valleys. But that open water tailings like the concentration of the world's coral reefs, just in that area, the area where all this Indonesian nickel's coming out of, is staggering. So there's all kinds of things that pretty soon you're going to see that Western markets are going to force companies to start talking about that input. And I think maybe it'll start as a nice to have Terry between 1 part of Detroit buying from somebody clean in Canada, then another part buying from Indonesia or even Tesla right now, right, buying from Indonesia.

32:48 But pretty soon you're going to start having regulation and mandates that they're going to have to start disclosing. And I just think any way you cut it, however it crumbles, the cookie crumbles, it's going to be buying from a jurisdiction like Canada with firm rules in place and much more transparency is going to be positive. I think this is something that Mark spoke to prior to us going online, right? Not all nickel is created equal, right? And all these things that all you 3 gentlemen very eloquently prescribed, that this is going to be an increasing issue. That makes me want to talk about, well, the impact of standards. I mean, I think you've already described it yourselves, that these policies will end up creating tailwinds, not headwinds, for Canadian suppliers, right? That these environmental standards that you've all announced and all of you have articulated end up being a boon for you as people start to understand just how, I mean, if you're an environmentalist you need to recognize the absolute critical necessity of these projects.

33:47 And that if you understand and accept the necessity of a Nickel mine, you want that Nickel to be mined in the most environmentally progressive with the strictest jurisdictional bureaucratic process there is. So it's not Indonesia. It is BC. It is Ontario. It is Quebec, where you have renewable energy producing that Nickel for you. So it's a point well made. I want to talk about jurisdictions. I think let's transition into that. So as we said, Gigametals is in BC, EB is in Ontario and Power Nickel is in Quebec. 3 tier 1 jurisdictions. I think I wanted to ask you gentlemen, each on your own time, what are you seeing on the ground? If we're trying to discuss this transition that we're in the middle of from not being aware to being very aware of where and how our nickel comes from, what are you seeing from public policy, government policy, government engagement, public interest, product development? Are you starting to see positive changes where you think that the tailwind for the next 15 years is starting or where is that at?

34:46 In Quebec? For sure. I mean, the Quebec government has been super. I think it's the best jurisdiction in the world right now for critical minerals. In addition to, they've done a great job of partnering with the First Nations and educating them on how they can make money and mining and why it's good for their society. And that's huge because it takes away your community risk and that's always a problem in any sort of mine development. And then they've done a really good job in infrastructure development in the North. We're in, you know, up by Namaska, sort of just south and east of James Bay. But, you know, we're right off a four-lane highway. We've got a major Hydro-Quebec substation across the road from us. You know, they've done a good job of infrastructure. And then now that you've got the two-for-one exploration, you know, with the charity flow through buyback, that's, you know, it's across the country, but it's best in Quebec because of their own additional incentives.

35:38 And that helps. You know I mean as an explorer you know we need access to exploration dollars at a reasonable price. And if you can get double your market value and your stock price in terms of an equity investment that helps to minimize dilution and creates more incentive to go out there and explore. So, and in talking with them, They've also talked about helping us meet investors, come to New York. You know, we're going to put on conferences. They've been very proactive. I've been most impressed with them. I haven't dealt in the other jurisdictions, so I can't really say. But, yeah, Quebec, I got to give them 2 thumbs up. I agree that that Quebec is an awesome jurisdiction. BC is coming along.

36:24 And I think part of it at the end of the day, but so far we haven't been as proactive. The government has not been as proactive as the Quebec government is also, I don't think Terry mentioned, in starting to put together supply chains, starting to think about where is the refinery going to go. They're already building small LFP facilities. Already building small LFP facilities. I know a friend of mine runs a company called Nano 1 that has just taken over an LFP manufacturing facility outside of Montreal. So it's all fantastic. But BC is coming along. And at the end of the day, permitting is about politics.

37:10 And so if you want to get a permit to actually build and run a mine, the politicians have to like it. You have to go through your process. You have to go through your bureaucracy. But at the end of the day if the politicians don't like it ain't going to happen. The difference now is that you know if you're producing nickel and cobalt for the Green Revolution That makes it very easy for the politicians to like it. Everybody's got to have an industrial policy these days. So it's very helpful. And so we are working closely. We just recently changed the Minister of Natural Resources. There was a cabinet shuffle. So we've got a new minister. We've got a meeting lined up with her. We had closely consulted with the old minister.

37:56 We're very, very, very active in talking to the government in BC. And basically, they like the project and they like the idea of a Nickel supply chain. And they're even starting to think about, well, what about refining capacity and so forth? So, you know, things are changing for the better, is what my observation would be. And Sean? Yeah, I need to bite my tongue about Quebec because I run another junior mining company that was completely destroyed by being misled and lied to by the province of Quebec. So let's park that for a moment. I read the Fraser Institute report and it sounds very nice if you're going to have a good relationship with Quebec City, but just watch out. Ontario, though, I'll tell you, we've got a very interesting dynamic in Ontario with polar opposites running the provincial government and the federal government, but better unity and coordination than I've ever seen before, even with shared political parties.

38:53 So I have a hugely supportive provincial government. We have a mines minister who's from our jurisdiction, from Timmins. He used to work in mining. He worked on our project. So in fact, when I go in to meet with the mines minister, George Peary knows the Shaw Dome geology frankly better than I do. And he is very actively involved and engaged at the provincial level. And his team is is very well versed in the mining industry. And they are lockstep with the Feds as well. So Ontario right now, I think, is is firmly positioned for the critical minerals. Ontario also is home to a huge part of our economy is the auto manufacturing.

39:40 So we've seen the golden goose of jobs and economic wealth from the auto industry in the province of Ontario. So they're really running along with critical minerals, and it plays in very nicely with the current provincial government's focus on developing business. That said as well, they do very good coordination with the federal government. So I anticipate that as we begin to test these promises from the federal level with permitting and coordinated processes and getting rid of redundancies, I think that permitting projects across the country will be improved, especially where you have jurisdictions like ours, Ontario, which are completely aligned with the Feds. So we'll see that happen. Plus, politics is all local.

40:26 And in terms of our camp, we're very close to Timmins, one of the world's biggest gold producing areas. We are physically just a few kilometers south of one of the biggest gold mines in the world, the Dome. And we're seeing great things, both with dollars right now, support from levels of government. Frankly, they're almost ahead of us in terms of pulling us along versus us trying to pull them. I want to mention one other factor when it comes to Canadian deposits and Canadian sulphide nickel deposits is that the bulk tonnage sulphide nickel deposits at least are contained in silicate gangue materials. And you've got a tailings material that when you grind it up fine and expose it to the atmosphere, it sucks in CO2, it absorbs CO2 and the silicates convert to carbonate minerals. And they go through a partial cementation process as they do that.

41:28 It's a very interesting angle on all this. Our project, without even accounting for that, is at about, in our PEA, we're at about 2.4t of carbon per ton of Nickel produced, which is extremely low on a world scale. The H-PAL projects in Indonesia are sort of 25 to 30 tons of carbon per ton of nickel. And then if you take nickel, convert it to matte, and then put it into the supply chain. Well, for one thing, it's very energy intensive and expensive. But if you do that, you get up to 60 tons of carbon per ton of nickel. So there's a whole other element to this. And I know Mark Selby's exploring this as well.

42:21 But it would also apply to DuMont. It also applies to FPX's deposit. And it probably applies to most of the bulk tonnage deposits in Canada. Yeah, it applies to ours. Yeah. So, I mean, it's all part of brand Canada. Yeah, the value, similar to Crawford, it's almost like there's more value on the table from the carbon capture and storage side of the low-grade Nickel production than there is with the Nickel. So when you combine the 2, it keeps it afloat. So why don't we carry on this conversation in a slightly different tack. We're kind of dancing on provincial jurisdiction here discussing it and kind of where it overlaps or marries with the federal jurisdiction. Obviously, the critical mineral strategy, as we discussed, there's language in there. It's aspirational.

43:14 It's not hard actual policy yet, but it's aspirational, kind of white paper style. So there's language about streamlining permitting, there's language about fast track and critical projects. I think the sense I get from you gentlemen is that this is a good start, right? We're not at the end yet, but this is at least the Government of Canada is starting to identify what people in the industry have been seeing for years. But maybe the actual question I have for you 3, and let's circle back and let Terry start this one off, is what policy changes would you actually want to see? If you had the chance to railroad through, what is the key largest factor facing us, Canada successfully monetizing its Nickel deposits in a timely fashion that actually makes sense in terms of trying to meet international goals. What's that largest change that you think needs to happen?

44:01 You know, I think, you know, if the government's decided that they're going to invest you know 1 billion and a half or 5 billion or whatever their number is into supporting our critical minimal structure. They should you know I think come up with a formula on how that's going to be allocated. And I think part of it's got to be, it's got to be free enterprise, you know, that drives the boat there in terms of the investment. But maybe it's, I don't know, somewhere between 10 and 25% of the investment is gonna happen. You know, so if you put up, if Mark puts together, you know, 750 million, he's gonna get 250 million from the Feds. That would make it a hell of a lot easier for Mark to go out there and negotiate with everyone if he knew that that was there. You know, because having this ambiguous say, we got this big fund, you know what, that and 50 cents will buy you a coffee somewhere. But I mean, it's like I really think you've got to make it easier for us to get our hands around it because that'll make us, you know, that'll make investors much more aware of the opportunities and make them much more likely to invest in the in the projects because to me, that's one of the challenges. You know, if you need government to be there to make your economics work, then that's that's that's a concern because it's sort of a very grey area how that might work. I don't think necessarily, you know, if our Nickel Sulfide project comes to term in terms of the tonnage, we'll be fine because the economics are different. But if you're, you know, and I

45:32 look at, you know, the 4 big projects that Mark talks about, I think, yeah, they're like compelling projects in a global scale in terms of size and demand and overall economics over the length of time would be phenomenal. But they're going to need some help in terms of economics. It was encouraging to see Canada Nickel get angled for $24 million. That was a pretty serious vote of confidence. It made me think that I wasn't sure exactly what the play was there, but I think that that valued at $220 million. I thought that was maybe the ripple we needed to get investment going in this space. I thought that was a very positive start. But I think, you know, if they knew there was a certain number that was there, if you were able to get your project to a number, it would make it a lot easier for us to rally investors around the cause. Because at the end of the day, we need to get these things to production, right? I mean, that's when people make money. And of course, you need to have a certain ore body size, and then you have to have certain economics. And part of the economics is how do you finance it?

46:32 You know, and that to me is, that's the one that I would be looking for more than any. Well, for one thing, I haven't seen a 50 cent cup of coffee in a long time. Yeah, you're right, you're right. I'm too old, I'm thinking of this. But in terms of infrastructure and government's role in all this, I mean, look, I'm a capitalist. I'm not into government supports in general. That said, infrastructure is a government job. It's not a private sector job. And you know, one of the things that Quebec has in spades is infrastructure because the government has been doing that for a long time. We need more of that in British Columbia. So I am pushing for infrastructure improvements that would directly help our project.

47:19 You know, at current prices, our project doesn't need any help. You know, if you look at the economics of it, if you run the economics model, but, you know, prices could go lower, they could go higher in the near term, who knows. I just think that there is a role for government in providing infrastructure. And I think part of the mechanism would be commit the money subject to a positive investment decision on the part of the operator to actually build the mine. So basically say we're there if you were there. And the investment triggers when you make a positive investment decision. That would be at least 1 structure I can think of that would be plausible for the government to deploy the money or to commit the money.

48:13 And Sean? Yeah, I'm a huge fan of industrial policy and sort of handouts. I guess as Mark's describing it, if it helps the economics, I guess I'd have more of a bias towards incentives, tax incentives as you go along. So that helps your upfront economics and maybe that draws in investors more. I'm all for the infrastructure investment and that is somewhere where genuinely the Quebec government's out in front. Mainly because in other sectors, My perspective is their support of the energy sector, forestry, that sort of thing. I think they've done a wonderful job of helping with just investing in infrastructure and making sure that it allows us to do our work in the mining sector.

49:01 We see that in Ontario as well, but we're a little behind Quebec on the infrastructure front as well. But the thing if I was, and you set this question up offline, Matt, as being if I was dictator for a day, what I would love to do is somehow be able to have government add clarity around the comparison between the nickel that we would produce in Canada versus, as Mark was saying before, the stuff in Indonesia and just the environmental devastation attached to that. Carbon and the carbon score is a straightforward one you can quantify, but I think one of the roles of government is to be cooperating across jurisdictions and try to help with an agreed baseline to be able to say, back to the example of walking into that Volkswagen dealership, not just the kilometer 0 carbon costs, but some other scoring of just sort of all the hair on the nickel that's in 1 battery versus another one.

50:01 Because I think we pretty quickly need to be able to start making those comparisons and I would really appreciate the support of somebody other than the industry. Because what I'm describing is trying to get cooperation across global jurisdictions. And I think that as an industry, we need that. Because again, we all agree that we're moving from sort of a simple commodity to a commodity plus, where not all nickel units are going to be the same. And if we all agree that we're going there, we need to be able to quantify it somehow and be able to have better detail on it. Meanwhile, a Chinese company that owns a bunch of strip mines in Indonesia is not going to be so keen on those rules being set.

50:46 But for the day, global dictator, let's say, I'd like those rules to be set because as a global society, we need to get there. What's the point well made. Thank you gentlemen. This has been an intelligent and articulate conversation. I think I will just transition into our closing discussions here. I'll try to finish on the hour here. I'll give each of you 2 or 3 minutes and I'll just cycle back through. Terry, Mark and Sean, why don't you just provide a brief overview of your project and then maybe what makes it uniquely positioned to benefit from what we've described as a fairly bullish future for Nickel? Can I start? Me first? Yeah. Terry, Mark, Sean, we'll go later. Power Nickel is developing the NISK Nickel Sulphide project in just South and East of James Bay, just outside of Namaska.

51:37 We're expecting to upgrade our 43-101 later this, probably June, July. We would expect to, at that point, maybe get to a commercial status, which would be 8 to 10 million tons of about 1.5% Nickel EQ. So we're drilling aggressively. We're in the midst of a 15,000m program and it's going very well. We've got lots of assays that have come out and it's been positive. And We're also going to be using some interesting new technology to find more pods. I mean, Nickel sulfides around the world historically are multiple pods or multiple pearls. So we've found one. We expect to find others. We've got that very cool ambient noise technology, which should help us with sound waves, imagine our deposit, visualize it at depth and find other pots. So Elon Musk brought it to Tallinn and it's worked for them in Michigan, Minnesota at their mine and Tamarack.

52:27 And we think it can help us here. It boasters economics, but also is very much environmentally friendly in terms of disturbing the earth and less, etc. So, yes, pretty exciting days for Power Nickel. So we're busy releasing results and drilling away and God willing, we'll get the economic update out in the next 3 or 4 months. Mark? Well, we've got the Turnagain deposit and right now that's our sole focus. We were doing a little bit of exploration for copper in Brazil, but we didn't get any joy. So we shut that down and we are to the point that we are entirely focused on this deposit. We're not, anything else would be a distraction at this point. We've got 1.5 million tonnes in the measure plus, or 1.5 billion tonnes in the measure plus indicated category and another million tons in the inferred category.

53:22 So we're working on a pre-feasibility study with funding provided by Mitsubishi Corp. We're expecting a positive study at this point. We expect that out in June. And I think some of the conversations that we're having right now with car companies and battery companies, that's our next target for a strategic investor. I think some of those conversations are going to accelerate after we come up with the Pre-Feasibility Study. So that's our next major milestone. Expected in June of this year, everything seems to be on schedule. And Sean? So EV Nickel has a huge stretch of land just southeast of Timmins, Ontario. We've got over 30,000 hectares.

54:11 And across that, we're working on 2 tracks towards eventual development of a clean nickel, which is our trademark term, a clean nickel business. So our first track is a high grade where we have an historic resource that's all above 200 meters from surface. We have 700,000 tons at 1% nickel. And we've discovered that goes deeper. So we call it the W4 extension. That's between 200 and 500 meters, which we're back in drilling now. We hope to have a resource on that before the summer to update that 2010 resource. So an updated resource on the high grade. And that one's very interesting because 3.5km away on surface is a privately held deposit that has over 1 million tons, better than 1%.

54:57 And that same private company also has a plant, a permitted operating plant 7km away. So our high grade business could have a nice discreet little production we're permitting on our W4. So that could be up and running in 3 to 4 years producing nickel. And then my second track is what we refer to as the Kar-Lang, goes for 10 kilometers on surface, and we drilled off the first 1.4 kilometers of it. So that's the A zone. And with that drilling, we're now working on a resource. We put out all the assays, it's around 0.25. It's quite analogous, we think, to Canada Nichols Crawford and also Aston, the Australian company's deposit, which is southwest of Timmins.

55:42 We think it's very similar to both those deposits, But it's much, much bigger. So ours goes 10 kilometers. We're gonna come out with a resource for the first 1 5th, so 20% of it. And that's the focus for this first quarter. So that's our news soon, very soon, is a resource on the Car Lang A zone, which is expected this quarter. And We think it's going to be one of the biggest in the world and it'll be the first fit of the deposit world. Thank you, gentlemen. Audience, thank you as well. These are 3 companies here with very, very interesting, intriguing potential, coming at it from different perspectives. The Giga coming out from a very, very large deposit, low grade, doing what Copper Porphyry did 10 years ago for Copper, proving it. Terry and Power Nickel, high grade, small deposit.

56:27 And Sean has his feet in both worlds where they have that high grade, but also are exploring for very large bulk tonnage solutions as well. Yeah. Thank you for your time, gentlemen. I appreciate it. I think it was a strong conversation. As a final plug here for myself again, my name is Matt Mickleboro, and please find me on Junior Resource Investing podcast. But I think that'll do it for us here.