Hello, and welcome to Virtual Investor Conferences. On behalf of OTC Markets, we are very pleased you have joined us for our AI and Technology Conference. The next presentation of the day is from First Phosphate. Please note you may submit questions for the presenter at any time. You can also view a company's availability for a one-on-one meeting by clicking Book a Meeting. At this point, I am very pleased to welcome John Passalacqua. He is the Chief Executive Officer of First Phosphate, which trades on the OTCQX Best Market under the symbol FRSPF, and on the CSE and Nasdaq under the symbol PHOS. Welcome back, John. Good to see you.
Yeah. Great. Thank you for having me. For anybody who is not familiar with the company, we are igneous phosphate for the lithium iron phosphate battery industry. That is different than what is traditionally the sedimentary phosphates that go into the fertilizer industry, and we are really targeting high technology because of the high purity of the input rock. This is the LFP battery industry. I think everyone has heard about it. LFP batteries, the latest stat is 63%, but we are hearing that as high as 70%-80% of the batteries produced on the planet are now LFP batteries. As you can see, the trajectory has only been growing, and it is only going to grow stronger here over the years. The real secret behind LFP batteries is this, versatility, and it is a technology of mass adoption. Why do we say that?
When you look at all the different uses for LFP battery, right here, the electric vehicles is only really 14%. The bigger categories are large scale energy storage, data centers, robotics, marine and agriculture, defense, small mobility, EV charging stations, consumer products, and telecom. The reason that the LFP battery is fitting into all these categories is obviously superior fire safety, well-defined performance, lowest cost battery in the market, and longer life. The reason that we caught on very quickly to the LFP battery here at First Phosphate is when you look at the cathode of the LFP battery, that is the positive pole of the LFP battery, lithium is only 4% of the mass of the cathode, whereas phosphate is a full 61%. Who knew that?
If you look at it, really phosphate is basically 15 times more phosphate by mass in the cathode of the LFP battery than lithium. If we look at it, there is over 150 public companies worldwide in the lithium space. If we are looking at iron, which is 35%, there is over 100 public companies in the iron space. But what happens when we come to phosphate? Why did First Phosphate pick this space in the LFP battery? Well, it is simple. There is only a handful of phosphate companies that trade publicly around the world, and mostly all of them are concentrated fully, or almost fully, into agriculture. So this is why it was important for First Phosphate to become a first-ever asset class where we are fully 100% fully dedicated to phosphate for the lithium iron phosphate battery industry and not for the fertilizer usage.
It was really to respect this fact that phosphate is 61% of the cathode of the LFP battery, and no one's focusing on it, and we believe that this could really be the real linchpin in being able to onshore LFP battery into the Western world. Let's talk a little bit about phosphate and the battery and why it's so important. If you look at Benchmark Mineral Intelligence, they basically say that phosphoric acid, purified phosphoric acid for the LFP battery, is the second most important input after copper in electrification, and they have it up higher than natural graphite, lithium, magnesium, nickel, cobalt, and all the rest. We're really the second most important after copper, obviously, which is all the wiring. But when we look at the supply of purified phosphoric acid, right here is this thin blue line that I'm now turning into red.
We see that it's flat and it cannot be increased. The reason for this is that right now, the purified phosphoric acid is being made on the back of fertilizer grade phosphate from sedimentary rock, and only a certain amount of it can be created from fertilizer, where the rest of it, a good 60%, 70%, 80% sometimes, has to stay back into a fertilizer stream. The problem is we can't really increase this supply curve for purified phosphoric acid. But meanwhile, they're predicting that the need for purified phosphoric acid for batteries will increase by this much, and that's a very conservative estimate. If you follow what Benchmark Mineral Intelligence is saying, it looks like it might even go like this. The big problem is how can you create more of this purified phosphoric acid without incrementing the amount of fertilizer in the world?
Because the amount of fertilizer in the world is stable. Basically, we need some type of a magical solution where we can create a lot of purified phosphoric acid without creating fertilizer grade phosphoric acid. Is that possible? The answer actually is yes. It's in this really pure igneous phosphate rock, which I spoke of earlier, which is what First Phosphate is planning to mine. The igneous phosphate rock that we have, it converts into purified phosphoric acid for LFP batteries at a conversion ratio of 91.1%. That's extremely high, and we do that with fully recyclable gypsum. We do that through solventless recovery.
This is really important because when you look at the sedimentary rocks, they're very good for fertilizer, so let's give them a big check for fertilizer, but we give them a little bit of an X for LFP battery because the sedimentary phosphate rock has got a lot of cadmium, uranium, and thorium in it, and when it processes, it creates these big gypsum slag piles that cannot necessarily be recycled. It creates a lot of lower grade phosphoric acid for the fertilizer industry, and it does a wonderful job there because the phosphoric acid just gets spread on fields, so it's not going into human consumption and it's not going into batteries. But the problem, again, like we mentioned earlier, is that only a small amount can go into high purity purified phosphoric acid.
Whereas here, with the igneous rock, almost all of it goes into purified phosphoric acid for battery. Think of igneous phosphate rock as really the solution for creating a lot of purified phosphoric acid for the LFP battery, which is now the world's most prevalent battery, which all needs to be onshore here in North America. Okay, let's talk about igneous rock. If igneous rock is the solution, then let's just go out and process a lot of igneous rock. This is the problem, right? With a lot of critical minerals, it's really rare. Only 5% of the world's phosphate resources are igneous. You'll find them here in Quebec. That's where First Phosphate is based. You'll find them here in northern Russia. You'll find it here in southern Brazil and also here in southern Africa.
Now, in southern Africa and Brazil, these are igneous, but these are igneous carbonatites. They have a lot of rare earths in them and sometimes they're hard to process. In Brazil, for instance, it all goes back into the fertilizer industry in Brazil. The igneous carbonatites that they have in Russia, they're able to process them. But the problem is now Russia's sitting behind the sanctions. Now, here in Saguenay, Lac-Saint-Jean, Quebec, we have a very special type of igneous phosphate. It represents 1% of the world's total phosphate reserves. This igneous anorthosite is so clean that we're able to purify it up to some of the world's highest purification. That's 40.4% P2O5. That's the measure of phosphate. Because this is so pure, this is why it has a conversion ratio of 91.1% into purified phosphoric acid.
Then we see here the rest of the world's phosphate reserves, these red dots. This is all sedimentary rock, and this is all good for making a lot of fertilizer, not so much purified phosphoric acid. Really here, this really strategic resource that we have, this igneous anorthosite in Quebec, which is one of the only areas where you find it in all of North America. Very strategic for the continent, very strategic for the Western world to make a lot of purified phosphoric acid in very clean fashion with solventless recovery and also with fully recyclable gypsum. Okay, let's keep moving on here. This is again the purified phosphoric acid. This is what it looks like when it's purified. Like I said, we were able to purify to 91.1%. We didn't just do this in a laboratory.
We did this with our strategic partner, Prayon from Belgium, which is one of the world's largest producers of phosphoric acid. They were able to validate, and they were able to purify it up to this level. Okay? Now, the phosphate that you see here really came out of this, right? This is the resource. The resource is 2.7 kilometers long. It's an open pit. It's about 400-500 meters wide, and it goes down about 400 meters, and it's fully open at depth. Okay? We recently did our last bit of definition drilling on the property this April to be able to move it into feasibility study. We were able to increase the indicated resources by a full 378%. We were able to determine great continuity in the resource and also great homogeneity amongst the mineralogy, which makes it all easier for processing.
We're very confident now as we move into our feasibility study, which should be ready by Q1 2027, that we'll be able to get to an operating mine by sometime in 2029. What we have already before the last bit of drilling was about 350 gigawatt hours of LFP batteries. That's enough to power half of the fleet of new vehicles produced in North America for the next 23 years. Think of this resource as being able to power half of the vehicles made in North America. That's a lot of phosphate, and that's a lot of kilowatt hours, 350 gigawatt hours, in fact. The NPV on the mine is $2.1 billion, IRR is 37%, and there's a 2.9 year payback, 23-year mine life. That's before the last bit of drilling.
The nice thing is we're royalty-free, so we don't have to pay royalties on anything we produce, and the strip ratio is 1.5 to one. Even more important as we move forward here, the mining property is found right around here in Saguenay, Lac-Saint-Jean, Quebec. This whole area of Quebec is very special. It's about the fifth largest, most populous region of Quebec, and it is that way because Rio Tinto has been based there for the aluminum industry for over 100 years, and also the full forestry industry has been based in this area as well. So we are here. We're at 70 kilometers from the deep sea Port of Saguenay, where we want to have our secondary processing facilities to move to phosphoric acid and where we have the shipping lanes to get to our off-takers overseas.
We also have rail to be able to get down to the heart of North America when necessary. What's really important about this area, because Rio Tinto and the forestry industry have been there for so long, we've got a great workforce, great workforce that lives in this area, so they can easily commute up to the mine site in under an hour. You don't find that too often anywhere. Then we also have great equipment suppliers in the area that have great industrial and resource background. As we move on here, this is something the company is very proud of. We were able to take the igneous anorthosite from Saguenay, Lac-Saint-Jean, Quebec, step one. We were able to purify it solventlessly, as we discussed, into igneous phosphate concentrate. Then from there, with Prayon, we were able to make purified phosphoric acid.
Then with GKN Hoeganaes, which is the world's largest atomizer of steel powder, in Tennessee, we were able to make iron phosphate precursor and eventually LFP cathode active material with a source of lithium from Century Lithium in Nevada. Then with the anode material from Nouveau Monde Graphite from Montreal and the technology of Altilium in Nevada, we were able to make these. We made about 150 LFP battery cells made of North American critical minerals in the anode and the cathode. This was a really big accomplishment. Why? Well, because LFP technology was first created in North America about 2001. By 2003, we had lost the technology. It went over to Asia.
This was really the first time in 25 years that LFP battery cells, even though very small, they're like AAA, they're an 18650 battery, were made in North America using North American critical minerals. What does this show us? It shows that you know what? We can bring back this supply chain into North America, right? What was really important was we tested these batteries. We cycled them 2,000 times, which is a standard commercial test, and they work just like every other battery, meaning that all the minerals that went into making them are validated, and also the process that went into making them is validated. I will also add that the process that went into making them, all the various processes, in fact, they are all of commercial grade. There is no R&D in this at all. It is all large commercial scale.
You will also remember when President Xi and President Trump had their first little spat in October of 2025, there were three things that were put on the table and threatened. One was rare earths, number two was microprocessors, but number three was the LFP battery supply chain. Look what we have here, right? We have the ability to rebuild this LFP battery supply chain here in North America, getting to the cells, right? The cells is really critical and all the raw materials that go into making them because all the consumer products, stationary energy storage, electric vehicles, robotics, small devices, everything else, all these cells currently right now are coming mostly from China. We have the ability to onshore this whole back end of the process, right from mine to market. That is the big thing for First Phosphate.
Onshoring the LFP battery supply chain from mine to market. We have shown that we can already do this in miniature, and we have shown that we can do this with the phosphate resources from our property due to their very high purity. Okay, so I will continue right along here. We have been able to de-risk the project through really key relationships. Obviously, one of the big relationships is with our local indigenous community, the Quebec government. We have got a full collaboration agreement with the indigenous community in our area, by the way. Quebec government has recently fast-tracked the project. We are one of three projects that have been fast-tracked by the Quebec government. Canadian government has given us CAD 21.5 million of non-refundable, non-repayable, non-dilutive financing for the project.
Recently, SERV, which is the export credit agency of Switzerland, has come forth with 212.5 million US dollars of export value, contracting, and basically insurances. That covers a big portion of the mine. The government of Denmark has done the same for about 170 million euros. So on a CapEx of the mine of about 475 million US dollars, we have already got about $400 million of that at the table between these two institutions, and we already know the products and services that we would source from both of these governments. Okay, so I want to get into a couple of the strategic relationships, just so you get a good understanding. The CAD 21.5 million contribution from the Canadian government came in the way of two programs, the Global Partnerships Initiative. This was CAD 16.7 million. This was signed in March of this year.
For this, we had to have at the table a global partner. We had the Ambassador of Belgium at the table, and we also had the EU Critical Minerals Envoy at the table. This is Minister Hodgson, the Minister of Energy, and this is myself when we were signing. Then we also received CAD 4.8 million as well for the First and Last Mile Fund. What is that? That is to help us to get through the feasibility studies for the road that goes into the mining property as well as the electrical line. That was really important. Indigenous sign-off was very important on that as well. It just goes to show how well we are working locally with the local communities and also senior governments in Canada. Even more importantly, what I will show you next is at the G7 Summit.
We were recognized at the G7 Summit. We were recognized as one of 13 new partnerships and new critical minerals projects that the alliance is getting behind. At that same time, this was in Evian, France, in 2026, just a few months ago in June. We received a letter of intent from the Danish government, as I mentioned before, for export of products and services. We signed definitive offtake agreement for 200,000 tons of our high purity phosphate concentrate and for 60,000 tons of our phosphoric acid. We received letters of interest from three entities of the Italian state as well as their largest engineering firm to build out the phosphoric acid plant at Port Saguenay. That is why two of the 13 new projects that were presented as strategic for the G7 were, in fact, First Phosphate, our mine, and our phosphoric acid plant.
You see how we are doing in this company. We are working from the very grassroots, and we are working all the way up to where it counts. We have been able to work with local chambers of commerce. We have been able to work with local municipalities, with the local indigenous group, and then we have been able to get support from the Quebec government on the Filon fast-track status. Government of Canada has come through with the non-dilutive, non-refundable contributions. Then here you see at the G7, right? The G7, I guess one of the foremost international organizations for the West. We are recognized, and we are supported. This is why you see the Danish government and the Swiss government coming to the table with these loan guarantees.
The last thing that I will add as well before I flip the slide is that you have to understand that the G7, what they are looking for is they are looking to really onshore supply chains in the West. They realize that something like the LFP battery supply chain is 99% outside of the G7. It is sitting in Asia, more precisely in China. They have an ultimate goal to onshore at least 40% of these supply chains by 2030, the supply chains that they have identified, and they are looking for companies to do it. In terms of the LFP battery supply chain, First Phosphate was the only one that they identified.
The other thing that is important to notice is that when these governments come to the table and offer up financing, such as the Swiss government and the Danish government, these are basically institutions that want to see us succeed.
This is very friendly capital. Capital that is understanding, it is forgiving, it comes at the best possible rates of interest. Why? Because they want to see the supply chains landed, they want to see people working, and they want to de-risk. It is very different than some of the commercial capital that might be at the table. We have very friendly capital at the table coming through to finance the project. That is very key. Some of our milestones, we have been very active. We just finished, like I said, our geological model. We are moving to feasibility study. We are hoping to have feasibility study done by Q1 of 2027. From there, we are looking to move into permitting by mid-2027, and then final investment decision by end of 2027, early 2028. I want to point out that the company has about $25 million in treasury.
We have access to the $21.5 million from the Canadian government, the contributions that is, the non-refundable contributions. So that gives us access to capital of about $46 million, and that gives us a runway for at least 2.5 years here. That is a runway at an extremely accelerated path of development as well. So it sees us right through what is usually called the point of no return, when you have got to move from your PEA to your feasibility study, and it is expensive. But we have all the capital already in the company to do that. Really, the only thing that can come in the way right now is our own execution, but we are well-financed to do it. So we can get through feasibility study, permitting, and right to final investment decision with all the capital that we have currently in the company.
We do not need to raise additional funds for a long time. Coming to final investment decision, we have got the sovereign governments of Denmark, Switzerland at the table, as well as the EU, Canada, and Quebec. Let us go to the ownership structure. We are very proud of this. The company is debt-free. The company has raised about $80 million all on our own without any underwriting channels. It has been mostly very good capital, friends and family. Basically, high net worth institutions and family offices. Management and board has $4 million of their own money invested in the company.
We have often bought shares in the market or come in on financing. That is the board and the management team. Currently, our board and myself as CEO, we get paid 100% in RSUs and stock. That is to be able to better internalize the funds in the company for development.
Our management and our board, we still hold a full 20% of the float, which is very important. Also, you will note, very small amount of dilutables. Most of them are going to be expiring December 31st of this year. We are just common shares. Also the board and the management, I would say the board and the management, the strengths really is business, capital markets, mining. Many on our team have built mines before, but also we are very strong in what I would say is technology. Technology is really important to us. We see the mine not as an end in and of itself, but really as an enabler, right? Something that enables us to make these, right? These are the LFP batteries that I showed you earlier.
We're really looking for a mine for high-purity phosphate to onshore the LFP battery supply chain, and that's something that resonates very strongly with governments as well. Okay, I'm finished there. What I'm going to do now is I'm just going to pass it over for questions. I think what I've got to do here is I've got to bring my questions up here on the other side of the stage, and I'll just start answering them. First of all, there's a question about Nasdaq. Yes, the company is listed on Nasdaq. We've been listed on Nasdaq for about a month and a half now. That has worked out really well for us. We listed as an ADR, American depository receipt. We did not raise capital. When we raised, it was non-dilutive, and we self-sponsored.
That was the first time that had ever been done on Nasdaq, and it worked really well because we had been doing a lot of road shows in the U.S., and many had been asking us when we would be on a major board so that they could purchase the shares. So now we're really purchasable by all facets of the finance industry now that we're listed on the major board. Okay, I got another question. PHOS lists data centers, robotics, and energy storage as target markets. Which is pulling the fastest demand? Yeah, really good question. The fastest demand right now is energy storage. Energy storage is growing 25%-30% quarter over quarter in China. Obviously, AI data center uses those batteries as well and has some specific requirements as well that's also growing.
Those are really the big markets, I think, right now is energy storage is first, and then robotics and factory optimization onshoring and data centers as second, and electric vehicles are also starting to pull out a little bit more because we've moved from a nickel manganese cobalt technology in there over to LFP. Okay, I got another one here. Great presentation. Oh, I like that. Thanks for that. How does the company's Quebec location improve access to clean power, transport infrastructure, government incentives, North American battery customers? Yeah, like I said, we're in a very important spot right now in Quebec, in that it's industrial already. There's great industrial workforce. There's clean hydro. We have basically shipping routes from Port Saguenay over to Europe and to the rest of the world via the deep sea port.
We also have routes down into the U.S. markets through the rail. Yes, it's a great region. There's 12 square kilometers of open land at Port Saguenay, and we have one of the best properties there to develop our downstream processes. Okay, this one here is good. "FRSPF is now on the Nasdaq as PHOS. How has the up listing changed your U.S. shareholder base?" Okay, let's clarify that. We trade on the Canadian Securities Exchange as PHOS. We trade in Germany, and Tradegate as KD0. But we're still on the OTCQX as FRSPF, and on the Nasdaq we are PHOS, but the Nasdaq is an ADR, American depository receipts, so it's 10 to 1. It's 10 common shares for every one ADR.
So what has really changed is the fact that we've been able to have more institutional ownership, and it's really just woken up awareness to the stock in general. We trade so much volume now, it's unbelievable. In the last month and a half, we've traded more volume than we traded in the whole other 3 years of the company. So that's really been a big bonus, big eye-opener, and natural eyeballs and publicity for the company, which is really good. Okay, so the next one. Oh, great job. I like that. "Thank you for your time. Has there been consideration of Canadian companies for phosphoric acid production plant?" That one I don't understand right now, but the phosphoric acid plant, we are using technology from Prayon in Belgium, also technology from Ballestra in Italy, and the engineering firm for that will be Ballestra from Italy.
But yes, we will require some local engineering sources as well. Okay. "What would you identify as the 3 most meaningful catalysts between now and a final investment decision?" So the meaningful catalyst obviously is the feasibility study, which we have to basically produce by Q1 2027. We're very much on track. Our team is working day and night on this. And then the next one would be obviously permitting and environmentals. Environmentals are part of permitting. And then after that, we get to a final investment decision, hopefully by end of 2027, early 2028. I've got another question here. "What do you believe the market is most under-appreciating, the resource, financing support, contracted offtake, or LFP supply chain scarcity?" Look, I don't think we're under-appreciated in the market. I think we're very appreciated in the market.
I know we do trade at about 22%-23% of the NPV of the mine alone, and then we have a lot of blue sky on the other projects as well. So you could suggest that we're undervalued. I don't want to become one of these CEOs that's always complaining about the stock and being undervalued. I think we're valued at where the market feels that they should value us, and we've got to keep executing as a management team, and that value will continue to come out. But if you had to ask me what does the market perhaps need to understand about in general, I think what I showed you guys earlier was that LFP, the chemistry is 61% of the cathode. Sorry, the phosphate is 61% of the cathode of the LFP battery, and lithium is only 4%.
So there's 15 times more phosphate in the LFP battery than lithium. And like I said, there's 150 public companies out there trying to figure out lithium extraction and purification on global markets. As far as we know, in terms of phosphate, there's only one company that's 100% fully focused on phosphate for the single focus of LFP battery, and that's First Phosphate. So that puts us in a really great space as a bellwether for this entire sector. And now we're listed on Nasdaq, right? So the first time that the American and global investors can get access to igneous phosphate for LFP battery on a senior U.S. exchange. Okay. This is a good one. "The resource has 6.2 million of measured, 198 million tons of indicated, and 89 million tons of inferred.
What is the plan to upgrade the inferred? We could continue to drill mines forever. There is always more resource. We know that there is more resource on the sides, and there is also more resource at depth. The simple fact that we were able to increase our indicated by 378% on the last drilling campaign just goes to show you that there is a lot and you could just keep going and drilling and drilling. But what we want to do is we want to get to a producing mine as soon as possible because our offtakers need it, and that is where we think that the value is. For now, that inferred resource, we know it is there. It is 89.5 million. Last time we had more inferred, we turned that into indicated.
We could easily work to turn that into indicated, but where is our time best spent, and where should our focus be? I think our focus should be on really bringing this resource forward with 198 million tons of indicated and 6.2 million tons of measured. We already know that we have a mine that is going to be over that initial 23-year mine life that was in the PEA, because obviously we were able to get 378% more indicated. So, we are very comfortable that now we have got a very solid project, a very good mine life, and we are moving that forward down to turning that into a mine through the feasibility study first. Then obviously all that inferred can be drilled up to indicated at any time.
I think focus is really important, and the focus is really on creating this downstream supply chain and getting into production. But very good question, and we are on top of all of that. With Quebec's Filon fast track status and CAD 4.84 million in Canadian government road and power line funding, how much permitting and infrastructure risk is gone? That is a good question. We feel that all or much of the risk is gone because, like I said, we have got CAD 25 million currently in the bank, plus access to over CAD 21 million from government sources.
So we get through our feasibility study, we get through permitting, and we get right to a final investment decision all with the capital that we already have in the bank. So we are quite de-risked to get the final investment decision here. I think I have gone a little bit over time.
Should I hand this back over, or should I be answering a few more questions? Great job. Time to wrap up the webinar. Let us wrap it up. Thank you all, everyone, for coming. Again, the last slide that I am just going to put on here really quickly is this one. Remember, in LFP, remember the P. It is the biggest component of the battery, of the cathode of the battery. Phosphate is 61% of the cathode of the LFP battery. First Phosphate is here as an asset class now on Nasdaq. Igneous phosphate for the lithium iron phosphate battery, which is now the really big majority of all batteries produced on planet Earth. Just waiting here to get this on shore. Thank you very much, everybody. All the best.