Investor update

Mar 12, 2025

Slides

Good morning, ladies and gentlemen. Welcome to the Empire Metals Limited investor presentation. Throughout this recorded meeting, attendees will be in listen-only mode. Questions are encouraged and can be submitted at any time using the Q&A tab just situated on the right-hand corner of your screen. Simply type in your questions at any time and press send. Given the significant attendance on today's call, the company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. I'd now like to hand over to Managing Director, Shaun Bunn. Good morning. Yes, good morning. Firstly, I'd just like to thank everybody for their attendance this morning. It's about 12 months since we held an investor meets company review like this. A lot has happened in that time. When I think about that, in reality, it's only about 18 months ago that we made this discovery of a giant mineral system at Pitfield. In that 18 months, the company has rapidly advanced the project. Also the company has to evolve. It's really been a game changer. I hope today, with this presentation, we can bring everybody up to speed, give some clarity, give some confidence that the Pitfield project's heading in the right direction. Just a brief disclaimer. Just a summary upfront. I see Empire Metals as being well-positioned now for significant growth in the titanium industry. We've become very focused on Pitfield and the fact that this is a giant titanium system. It's a district scale discovery. Has exceptionally high grades. The continuity of the ore body is amazing. The importance of this is that giants are highly desired in the mining industry. They're rare, difficult to find, often hidden in plain sight. With this discovery, it has really set the company up, really changed the company from being a junior explorer to a developer of a major mining project. Importantly, a titanium discovery is strategically important. Titanium is a critical metal. There are many supply chain challenges. We'll go into that in a little while. Location-wise, this is the best place in the world to have made a major mining discovery like this. We're close to infrastructure. Western Australia are a tier one mining jurisdiction. Federal government support for developing critical mineral projects has been evidenced by significant funds raised provided by the federal government for developing a critical mineral industry. Importantly, Pitfield, the interesting thing about the ore body being a sedimentary-hosted, sandstone, siltstone-type discovery, it allows for bulk mining, very simple upfront conventional processing steps, leading towards the production of what will be a very high-value product. It's easily scalable and we're advancing the technology at a very rapid rate. We put together a very strong technical team in Perth, not far from where the project's located. We've got very strong metallurgical mining processing project development experience there. Importantly, we're led by a very well-experienced board who are used to doing big projects. We'll go into that in a little bit more detail later in the presentation. Finally on this point, we're clearly undervalued. By any metrics, people could see that we are not getting any real recognition at the moment for the size and quality of this discovery. I'm looking forward to 2025 as a year when we will hit some of these major milestones that we've been talking about in our releases. We will see some significant value add over the coming 12 months. Just pause for a second to talk about titanium. It's an interesting market, not really well understood. One of the important things to recognize is that it's a $23 billion market as of 2022. It's been growing steadily, driven by basic consumer price index. Majority of titanium goes into titanium dioxide. These pigments, there are no substitutes for these pigments. They are the best, brightest of their kind. They're generally used in paints, paper, plastics. There's a strong underlying consumption there that will continue to grow for many, many, many decades. Importantly, titanium metal is the wonder metal. The strength of steel, half the weight. It doesn't corrode. It's highly valued, particularly in aerospace, for the defense industries, marine industries, and I think it's a metal that will continue to gain market share. It will start to compete against some of the more expensive stainless steels, for instance, and find, I think, a niche in the developing industries where they need the light weight and strength. One of the interesting things on the supply chain side of things is that there are several geopolitical risks that have been emerging over the last few years. Russian exports have been restricted. The growth of Chinese metal production and pigment production has caused some concerns. They've been slowly taking more and more market share. It's only recently that the E.U., the U.S., have imposed tariffs, and continuing to put more tariffs on these supply chains. There's an opening coming up in the market where a Western-based tier one producer like Pitfield could take a large market share. I talked a bit about the supply constraints. Importantly, 95% of the world's titanium, or titanium pigment and metal, is sourced from ilmenite. Now, ilmenite requires energy-intensive upgrading in order to get to a purity before you can convert it to a pigment or a metal. The market currently is seeking and desperately looking for high-value feedstock to go into the pigment and titanium metal markets. They require greater than 90% TiO2 in a product, whether it's a mineral product or a compound. Natural rutile, which is highly prized, is a natural mineral that contains over 95% TiO2. It is extremely scarce. There is an opportunity. I see a competitive advantage for Empire. We are targeting the high-purity end of the market. The in situ minerals that we have, anatase and rutile, are minerals that contain 95% TiO2. I do believe that with additional processing, we'll be able to produce products that will go straight to the very high-value end of the titanium industry or the titanium market, and be suitable for aerospace, titanium pigments. A lot of the value in the market lies in that target. About 18 months ago, we came to the market and said that we had found something, a vast mineral system. It's taken us a little bit of time to get our heads around this, to be honest. This is the world's largest known titanium discovery by an order of magnitude. That's based on the U.S. Geological Survey's data that was published a few years ago, which put the total resource inventory for titanium dioxide at around about 4.5 billion tons. The Pitfield exploration target, which we announced last year, the 26.4-32.2 billion tons, ranging between 4.5%-5.5% TiO2, equates to 1.5 billion tons of contained TiO2, a third of the entire world's resource. Keep in mind that the total district scale discovery spans 40 km in strike length, is approximately 8 km wide, and we've tracked this thing 5 km deep. The exploration target represents only 20% of that area, only to a depth of 150 m. There's no doubt that this deposit, this vast mineral system, which has been extensively drilled and contains what we now know to be high purity anatase and rutile, clean of contaminants. No deleterious elements such as the uranium, chromium, thorium, phosphorus. This truly represents a magnificent discovery that we are now looking to take through to making these high-grade TiO2 products. Location. Every real estate agent will highlight this. We are no different. This is truly a world-class area to be operating in. We're in the Midwest area of Western Australia, very close to the major Port of Geraldton. We're connected to that port by an existing railway system. We have high-voltage power hubs running through the tenements. We're on a major highway system linking the site to the local facilities, to the town of Geraldton. We have excellent pre-existing infrastructure. I think what we're going to be seeing in the future as we advance the project is the importance of a green energy hub. The largest wind farms, solar farms in Western Australia are located within this Mid West region. We've also got established gas fields, and they are looking to build a hydrogen hub quite close to the current tenements. At middle of last year, we went back. We were drilling more and more towards evaluating what we now refer to as the in-situ weathered cap. There is a natural weathering zone on this big, vast mineral system. It can extend down to 40-60 meters, maybe at places 80 meters that we've drilled. It's quite an extensive deposit in its own right. The amazing thing about this weathered cap is that Mother Nature has already done a lot of the work for us. In the fresh bedrock that sits below the cap, a lot of the titanium-bearing minerals have now been altered, further oxidized by natural weathering. What that leaves in the surface is these high-grade anatase rutile minerals that can be upgraded. We'll talk about the beneficiation processes shortly. We've already got a fantastic starting point. This is clearly where the project will focus its next phase of development. The other thing, as I mentioned at the start of the process, was that this represents an area that's incredibly suitable for low-cost strip mining. There's no overburden, there's no inter-burden. Every meter that we've ever drilled has hit ore, has hit the mineral system. It will require no blasting. The weathered cap now is our focus, and we are zooming in on that at two of our exploration target sites. Product development. Clearly, having a giant ore body doesn't mean much if you can't extract the ore, if you can't beneficiate it, if you can't produce a valuable product. Our focus since this discovery over the last few months has been to fast-track the development of the process to the point where we can produce a product. Now, we've made several announcements over the last few months. We've mentioned in previous presentations that simple attritioning and screening will provide suitable feed for a beneficiation plant. Gravity and flotation processing is working efficiently on two different size distributions coming out of the ore body. We can separate the coarser material from the fines, and we can produce concentrates from both of those streams. Importantly, we are developing a process which upgrades, removes the gangue material, often gangue silicates. These are minerals that will consume acid in the digestion process. We reject those at a very low cost right up front. We've already started the acid digestion process, looking at what techniques would best bring the titanium out of these concentrates and into a solution. I'm pleased to say that all the test work we've done to date suggests that 90% or better of our anatase and rutile can be dissolved in a simple acid digestion process. Which leaves the titanium now moving forward into a, what we would call a liquor, a titanium-rich liquor. As many now would be aware that we just announced at the start of the week the results of initial purification testing and product finishing that we had kicked off some weeks ago. We were delighted with the result. To achieve in our very first attempt a titanium dioxide compound that is nearly 92% TiO2, has, as I said, no deleterious elements, is an extraordinary achievement. It is a semi-finished product. It's not our final effort. We are looking now to fine-tune this process, lift the grade to above 95% or better, and look to produce what I would consider would be at a scale, if you like. Take the test work to a scale that would allow us to produce several hundred kilos of this for product marketing purposes as we go forward. Could you just move to the next slide, please? Thank you. Just to be clear on what we've been talking about, and just to highlight some of the key points about this processing route that we've been working towards. What we always set out to do was to keep the processing route that we wanted to follow as simple, as effective as possible. Taking advantage of the natural friable ores that we have in the ground, taking advantage of the fact that the titanium minerals have already been converted into a TiO2 mineral, and looking at ways to separate out the gangues. A simple low-energy processing step up front. We don't need to crush, we don't need to grind. We are scrubbing, de-sliming. We found that we could send both streams forward to different stages of beneficiation. Funny enough, the gravity circuit is working obviously on the heavy minerals. Anatase, rutile are heavy, and so we can easily separate that from the sandstones, the silicates, the quartz that sits in the coarser fraction. The froth flotation techniques that we're adopting are very important as well. The slimes do contain some finer anatase and rutile minerals. It also contains kyanite. One of the major advantages that we've been able to implement here is that the kyanite industry have been developing flotation techniques to remove anatase, which they consider to be, in small quantities, affects the quality of their product. The techniques that we're adopting are conventional. They've been around for decades and are very effective. The next phase in the conceptual flow sheet is then to take those concentrates, to digest them, to bring out the titanium, and separate them from the rest of the residual gangue materials that are in that concentrate. From there, it's a simple stage of advancing that to purification and product finishing. The product that we are looking to make is still under review, but the fact that we've achieved 92% on our first attempt, as I said, is extremely encouraging. We're not going to stop there. I think what we have is now the opportunity to move to premium-grade pigment-type material or to look to leverage into the titanium metal to make titanium metal sponge as part of our production scenarios. Next slide, please. Let's just look at what 2025 may represent for the company as we move through key milestones and we consider how best to de-risk the project as we go forward. Just stepping back for a second. 2024 was an amazing year for us. The discoveries, the realization that we had a giant, the realization that we had an unusual weathered cap that had significant economic advantages has meant that we've constantly had to evolve, redevelop our thinking, and it's a credit to our technical team that they've been able to advance the project so fast in this period of time. I think that sets us up incredibly well for the 2025 year. We've already sent drill rigs to site. We announced that a few weeks ago. We drilled 84 air core drill holes. We managed to take a very large bulk sample from that. That'll be used for scaling up test work in our bench scale programs. We'll be talking about 1 tonne to 2 tonne test parcels instead of 5 or 10 kilos. We're starting to consider how best to engage with others in the industry. The benefit of having a high-grade product at this early phase and being able to produce a large quantity of it quickly means that we can get out there and start to let others have a look at exactly what quality of titanium products that Pitfield can produce. The infill drilling program will commence. We're going to leverage off this air core program. We sampled every hole, drilled 84 holes, 100-meter grid, covered 60 hectares. We will go back and do some further infill drilling during the year to tidy that up. We're quite hopeful of reducing our initial JORC mineral estimate in the not-too-distant future. We will be looking to do mining studies. We need to come back and look at how best to strip the ore from these clear paddocks that we're working in. We are working in what is a farming community. The land is cleared. It's mainly used for sheep and for producing wheat. Not a lot of stripping required, but we do need to look at the best methods going forward for long-term sustainable mining. Importantly, we're going to quickly now advance to the designing and with the intention of constructing the pilot plant. Which will help us refine the process, optimize the economics, and move us into the next phase of development. There's a lot of value creation opportunities coming forward, and we certainly intend to make the most of that over the next 12 months. When we look around, we're often not criticized. I think that's probably not the word. What we're often challenged upon is where are the comparables? Who do you see are your peers? What do you compete against? How do we value you? It's a frustration, I think, for all of us because we are such a unique, such an unusual outlier with the potential to completely disrupt the industry. We're definitely undervalued. A snapshot of several of the emerging companies that are operating in the titanium space. They have received significant market support over the last 12 months. They have been able to advance their projects through studies, through agreements. In case of Sovereign, they were able to get Rio Tinto's interest and investment. Nordic Mining has brought in a strategic Japanese investor. IperionX has found a partnership within Ford. All these events over the period of time has created massive value adds to these groups. So far, we've been able to advance our project. Discovery, Exploration Targets, showing that we can produce and process things, producing a product of high value. We really haven't had the opportunity at this stage to engage with others in the industry and to create what I would consider to be a very significant rewriting of our project. I look forward to 2025 and look forward to the changing cycle that we hope to achieve in our valuation. Next, please. Our capital structure. A lot of retail trade in here. We've got some of the bigger retail groups operating in London. Down the list, we have a couple of what I would regard as our long-term, almost cornerstone investors have come in, holding around about 4% each. We're very pleased that these groups have been here for a very long time supporting us. We're looking to bring others, similar other high net worths or institutions onto the register as we grow and working very hard to get some more, let's say, longer term money into the share registry. The share price has been appreciating over the last few months, which has been pleasing. The last time we reported a cash position to the market was in September last year. We reported GBP 4.8 million. We're still well-financed. There's a great runway ahead of us that we've planned, and we're well set up to execute that. Key management and the board. Well, the board has grown recently with Phil Brumit joining us earlier this year. That was announced. Phil comes out of big company experience with Freeport, Lundin Mining, Newmont Corp. Really happy to see Phil join the board as a non-exec. He's a mining guy by background. Dr. Neil O'Brien, Non-Executive Chair, again, was the Senior VP for Lundin Mining. He has a massive big project experience. It's a really strong Non-Executive group, and along with Peter Damouni, with a massive finance background, we're really pleased. The executive, Greg Kuenzel. Now, Greg was one of the founding directors of this company, and he's been with us for, obviously, since those early days. He's got a lot of wealth of experience and knowledge, a steady guiding hand. Arabella, our corporate development manager, has joined us on a more permanent basis recently. We're really pleased because now we're starting to get our outreach, getting our network working across several markets instead of being locked up in just trying to sort out the technical stuff there in Perth. I'll also go and mention Norelle and Andrew, two of our managers back in Perth, done an exceptional job over the last 12 months. Really pleased with the way that the team is working. I think it's important that we just have a think about this before we wrap up. Pitfield will be the next generation supplier. It's timely. This is a long-term solution to some major industry issues that are rising. The industry has been around a long time, hasn't changed. The methods of making titanium metal and pigment. Those have been around nearly 100 years. No real technical advancement has been made. There are higher costs constantly putting pressure on these producers, lower availability of high-grade feedstock. Rutile in itself is extremely rare these days to have a large rutile project coming into the market. They're all carbon dioxide-intensive processes. The fact is, there's a huge amount of old money, assets, capital investment in these. Extremely difficult to bring in new technology and to retrofit the existing facilities should there be a new project or a new process on the horizon. Pitfield opens up a lot of opportunity for these groups to improve their financial positions, to improve their cost of production. We can make high-grade, high-value products clean of contaminants. We will be operating at much lower reagent and energy costs in the future. There is a lower carbon footprint. One of the most interesting things about this is, should titanium metal production become more cost-effective, and hence the cost of the metal itself going out to the end users becomes something that you could compete against stainless steel, then the growth of the metal market could be quite, well, will be quite significant. Next, please. Pitfield. We are a strategic asset. This is a long life source of supply for the industry. It's a giant, there's no doubt about it. We are making high-value, high-purity end products. We've done that. One of the most critical important achievements that we've made in the last 12 months, apart from the discovery itself, was to be able to announce after only a short period of time that we'd found a way to make a pigment-type product. We are operating in the world's best location. We have access not only to that infrastructure, but there are research facilities, experts in the titanium industry located in Perth or in the surrounds. We have a federal government and a Western Australian government that are highly supportive of this type of industry going forward. I expect a number of big milestones to be achieved over the next 12 months. I expect value creation through development. I look forward to coming back to this group in less than 12 months on the next occasion to update you all yet again on our achievements and our successes. I'll end on that note and pass it back to the That's great. Shaun, thank you very much indeed for updating investors. Ladies and gentlemen, please do continue to submit your questions just using the Q&A tab situated on the right-hand corner of your screen. Shaun, perhaps we could use your remaining time, excuse me, with some of the questions that we have that's come through. Why are you so excited about the fact you've achieved around 92% TiO2 product? Well, to us, at the start, we were not clear on exactly how the ore body was going to behave during the processing route. Fair to say that we've been slowly marching ourselves down towards final production of a product. We've obviously tested every step of the process now. The desliming, the beneficiation, the flotation, the gravity, the acid digestion, has all led to one particular focused outcome. And that was, what's the product? What's the purity of the product? It's a credit to the technical team in one way that we've achieved this so early, so rapidly, and it's also got to be recognized that a large reason why we have such a high purity product on day one is the ore body itself is clean. It's free of these types of deleterious elements in the first place. We don't have to remove them in the processing. Why are we excited about this? It's something now that we can rapidly advance. We've got the bulk samples coming down from Pitfield. We're advancing our test work and going up in scale. As I said, I think earlier in the conversation, I plan to make hundreds of kilos of this product as soon as I can. Start to engage with industry players. Start to engage with not just the pigment groups, but also the end users. The people that want the titanium metal. The people that want the premium pigment. We've got something now that we can go out, show, and tell people. I think we're going to get an enormous amount of interest at that point. Great. Thank you very much indeed. A number of questions around hedging strategies. If I just read out this one. "How does Empire Metals assess the impact of commodity prices on its projects? What hedging strategies, if any, are in place to mitigate the potential risk of price volatility? Well, there are two aspects of that. I think we're obviously constantly monitoring trends and prices in the titanium industry, whether it's pigment pricing or the metal pricing. These things are transparent. You can source that information. A lot of the market is obviously sold on long-term contracts, and we're not privy to those price arrangements. The growth of China in the market and its endeavors to try and occupy a much larger market share have obviously created some overhanging supply. We're aware of all these things, but we don't see that as being an immediate threat, if you like, to the financial success of Pitfield. When the time comes, we'll be getting outsourcing supply options. We'll be talking to people about longer-term supply contracts. The price of those contracts will be determined between us and the other party. I'm confident that from a pricing point of view, we're not exposed. Hedging titanium, not sure that that's where we want to go. It's not something I've given any thought to. The world is littered with very good projects that have very bad hedging policies. I think that's something that I will leave to our financial gurus and advisors when the time comes to look at how we de-risk the project as we move into capital development. Great. Thank you. I guess sticking along that theme, when do you think you'll be able to go to potential customers with product? Well, in the near future. When I say near future, I'm talking months. We just got these bulk samples drilled. We announced, as I said, a program that just went up there to collect 40-60 tons of bulk samples. We're waiting for the final assays to come back from the program. They should be back in the system in the next weeks. Once that's in, we can assess how we put together metallurgical bulk samples to bring down to the operations to the laboratories in Perth. We'll start running. We've already booked those laboratories, so we're going to start running those bulk samples as quickly as possible. What that means is we'll have concentrates ready to digest and make products over the coming months. When we launch a campaign to go out and meet with potential customers, it's difficult to say at this point. We are getting out there. We are attending conferences next week in New York, Singapore at the end of the month. We're getting out there and about and talking to people who may be interested in putting their hand up and saying, "We'll take a sample, please. Thank you, Sean. I guess a couple of questions again around milestones. What do you view as your next big milestone that investors should look out for? Well, there are multiple coming. I wouldn't want to single one out over another, but I do obviously think that the development of a mineral resource estimate, which will flow from our recent drilling program and if we need follow-up with some infill just to bring it up in confidence level. I think that's going to be a very important milestone for the company. That's almost always a precursor to getting larger institutional investors, government financing, for instance. Also funds, grants generally require us to have at least that level of confidence in the resource. That's an important one. I think also the wrap-up of the processing, producing bulk samples of product, refining that further from the 92% to plus 95%. They're going to be really also important value-adding steps. Great. Sean, thank you very much indeed. Sean, I know investor feedback is particularly important to you. I'll shortly redirect those on the call to give you their thoughts and expectations, but I wonder before doing so, if I may, Sean, just ask you for a couple of closing comments, and then I'll pick up from you. Yes. Well, as I said, it was 12 months ago since we last had the opportunity to give this type of presentation and have a lot of our shareholders be able to get some confidence and clarity, I hope, of where the company's going. Empire Metals, we're evolving. This is an enormous, vast mineral system. It's unique, but it sets us up in an industry, the titanium industry, as a very important player going forward. The company continues to grow. We have growing pains like all rapidly developing, growing businesses. We're managing those as we go. The board is growing, diversifying. The technical team will continue to be added to as we need more and more technical expertise. Yeah, I think this is a really important transformational time for Empire, and we're going to build on our successes. My final point is that over the last 12-18 months, we've been in front of shareholders, we've been in front of these processes where we've said what we were going to do. We've done it, and we've done it well. We've been successful. I see no reason why that success will not continue. That's great, Shaun. Thank you very much indeed for updating investors. If I could please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. This may take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Empire Metals Limited, we'd like to thank you for attending today's presentation, and good morning to you all.