Hello, and welcome to Virtual Investor Conferences. On behalf of OTC Markets, we are very pleased you have joined us for our Clean Energy Metals 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 view the 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 Nasdaq and CSE under the symbol PHOS. Welcome back, John.
Yeah, thanks. Great to be here, Greg. I guess I got my Nasdaq slide up and I want to thank all the hard work from the OTCQX in maintaining our listing for the ADR, which then graduated to Nasdaq. I know you are all happy about that as well, to see great companies graduate. I will just go into that a little bit because I get a lot of questions about it. Two weeks ago, we did graduate our ADR, which was FPHOY on the OTCQX. It is now trading on the Nasdaq under ticker symbol PHOS. We continue to trade under the ticker symbol FRSPF, that is our common shares on the OTCQX. The common shares also trade on the Canadian Securities Exchange under ticker symbol PHOS, and they also trade in Frankfurt and Tradegate under KD0.
What is important to realize is that the common shares remain as they are. They trade on the three exchanges, the CSE, the OTCQX, and Tradegate/Frankfurt Stock Exchange. The American depository receipt that has now graduated onto Nasdaq is 10 : 1, meaning it represents 10 common shares. If you look out there, you might see the common share trading at about CAD 1.90 as FRSPF on the OTCQX. Then it is trading with a little bit of a premium, CAD 20 on the Nasdaq, meaning you take CAD 1.90, you multiply it by 10, and that should get you to CAD 19. But obviously we are trading a little bit of a premium here now as there is more demand now that the securities are listed on Nasdaq.
The securities are directly fungible, meaning if you have common shares, regardless of where you purchased them, and mostly for non-Canadian holders, you are able to basically convert them into ADRs that are then tradable on the Nasdaq. You just have to reach out to BNY, and if you look at our last press release on that, all that information is there and it is present. Also if you have ADRs and for some reason you want to go back to the common shares, you can do that as well through BNY, and the process is free. The company has decided to cover that process for the first little while just to encourage better trading and better liquidity. Some might think, well, so many ticker symbols and one becomes competitive to another. It has actually been the opposite.
In the last 10 days since we've been listed on Nasdaq, we've seen more trading volume, I would say, in the last two weeks than we've probably seen in the entire genesis of our company collectively, meaning we are now trading between those five exchanges. We are trading a total of about CAD 15 million - CAD 20 million worth of stock, at least $12 million - $15 million per day. That means there's been a big volume swell on the OTCQX. Some days we're trading as high as 500,000, 700,000 shares on the OTCQX under ticker FRSPF. We're trading in the millions, sometimes 2 million, 3 million on the Canadian Securities Exchange. We've been really surprised in what's been going on in Frankfurt and Tradegate, sometimes trading up to a million or 2 million on that exchange or on those exchanges in Germany under ticker symbol KD0.
On the Nasdaq, the American depository receipt has been trading sometimes up to 70,000 or 100,000 per day. Remember, that's a 10 : 1, so that's really like as if we're trading 700,000 to a million. I've gotten past that. Thank you for understanding the new share structure and how it's all accretive and it's all good. We're happy to keep all of our listings going on all the great exchanges that we work with, of none of the least OTCQX. Nasdaq bell ringing was a profoundly changing moment in my life. I didn't expect it. We were there just to do what we had to do and to ring the bell, but it was really transformative for me.
I just realized the power of entrepreneurship in America and just the recognition that it gave to me for a lifetime of work in the sector of technology. I've been involved in technology for almost 30 years in different capacities, technology and capital markets and the cross-section of those two. Also just a great moment for all of our shareholders and all of our staff. The electrification that you feel in that moment when you graduate to that senior-most exchange in the world, the senior driver of technology in the world when you've been a technology entrepreneur, there's nothing to compare it. It's not a point of arrival. You arrive there for half an hour and then it's great, and then you got to go on, and you got a lot of work ahead of you when you get back home.
What a great moment and really special when I was handed that crystal from Andy Hall at Nasdaq and what it represented to me as an entrepreneur. Only about 200 of these companies graduate to Nasdaq per annum, and we were one of them. So great recognition. Again, thank you to all the great shareholders and all the great investors in the United States and those around the world that have access to the Nasdaq market through the Nasdaq for supporting us and giving us such a great welcome. First Phosphate was so welcome on the Nasdaq Stock Exchange. We came out and we said, "This is igneous phosphate, a first-time ever asset class, igneous phosphate for LFP battery, and now available on Nasdaq." It was powerful. Thank you to all for listening to that message and for supporting us.
Okay, I got to go really quick into my presentation because I've only got 25 minutes left, and I've spent six telling you about our great journey onto Nasdaq. Let's talk a little bit about the company. We are igneous phosphate. That's not sedimentary phosphate. It's the highest purity phosphate in the world, and we're specifically for LFP battery. Why? Lithium iron phosphate batteries and anything in the battery requires ultimate purity, and you can really only get it through this rock. I'll tell you as we go through here why this rock is so magical, and it's almost like it was specifically created for LFP. Okay, let's start. Let's talk about what is LFP.
LFP batteries are now basically over 70%, some say as high as 80%, of all batteries produced on planet Earth, and they have a massive trajectory of growth, as you can see. The reason for that is quite simple. LFP battery is versatile, and it's a technology of mass adoption. It's not just electric vehicles. Electric vehicles is only 14%, but we have all these other categories here, especially large scale energy storage, which is growing leaps and bounds, 25%-30% quarter-over-quarter in China. Then we have AI data centers as well. These batteries really are the battery of mass adoption because they're superior fire safety, well-defined performance, and they're the lowest cost batteries on the market. They offer very long life.
As we move on here, the lithium market has reacted really well to what is battery energy storage, which is the biggest growth sector for batteries in general, and obviously for LFP battery. Elon Musk came out and he said that if only we could better store the energy that we have on the grid, in LFP batteries, we'd be able to double the output of the U.S. energy grid without having to put online another power plant. That's true. We have a lot of electricity, but we just don't manage it well. What do we do with these big batteries? Sometimes you see football field size batteries out there. We just take down energy during the day, through solar, for instance, and we store it so that we can better distribute it at night. These are becoming almost fundamental.
You can't have a renewable energy without having the batteries. The lithium ETF has reacted to that. Lithium price have reacted to that. If anybody wants to invest in this, there's over 150 public companies in the world that will give you exposure to lithium. There's over 100 public companies that'll give you exposure to iron. What happens when we come to phosphate? Phosphate's a big question mark. Why? There's only a handful of companies out there that are in phosphates, and all of them are geared towards fertilizer, first and foremost. The only company that we know that's 100% geared towards phosphate for the lithium iron phosphate battery industry and 100% focused on that day in and day out with the best rock for making that type of high grade phosphate is First Phosphate.
That is why we are very proud now to be on the Nasdaq Stock Exchange to be able to bring that first ever asset class to the world. Why do we do this? When you look at the cathode of the LFP battery, which is the positive pole of the LFP battery, you break it down. Look at this. Lithium is only 4% of the cathode, but that is all that we have all been focused on in the capital markets, and that is what all the off-takers and everybody has been focused on for the last four to five years. What about the other parts that count in the battery or in the cathode of the battery? The iron, we know it is there, but it is difficult to find in this high purity format. The biggest linchpin is probably going to be the purified phosphoric acid.
A full 60%, 60% of the cathode of the LFP battery is phosphate, and there is 15 times, 15 times more phosphate in an LFP battery than there is lithium. When you think about that, you are like, "Okay, well, who has been doing something about phosphate?" The answer is, not too many people, just First Phosphate have been focused on this 100%. Has this been missed? Yeah, well, obviously it has been missed. Phosphate, purified phosphoric acid is the second most important element in all electrification after copper. The amount of purified phosphoric acid that we are going to need is staggering, and this is a very conservative estimate.
When we look at some of the other projections out there, it is really going to be something like this, like 8x - 10x what is the current supply of purified phosphoric acid, which is this deep dark blue line. This current supply of purified phosphoric acid in the West is really limited to traditional uses. It is all gobbled up by things like carbonated beverages like Coca-Cola, dental like Colgate, water treatment, cosmetics, pharmaceuticals, paints, industrial supplies, water treatment, and fire retardants. Then you say, "Well, how do we increase the amount of purified phosphoric acid that is out there?" Look at this line here. If you can still see it, I have made such a mess. Look at this. I just keep doodling.
If you look at this line right here, that is the supply of purified phosphoric acid in the West out to 2045, and it is flat.
Why is it flat? It is flat because purified phosphoric acid, for the time being, has been made off of the back of sedimentary phosphate rock, where 70% - 80% of it currently goes into fertilizer, and we just skim the most purest part off the top to make it into purified phosphoric acid. If we want to make more purified phosphoric acid, that means we have got to make a lot more fertilizer. The world is in equilibrium. What would we do with all that fertilizer? People say, "Well, that might help Elon Musk, right? He wanted to colonize Mars." Yes, you would have enough fertilizer to colonize Mars just to make this amount of purified phosphoric acid for battery. How do we do that? How do we do that in a realistic fashion?
Is there a way to make a lot of purified phosphoric acid without having to make a lot of fertilizer-grade acid? The answer is yes. The answer lies in this, in the igneous phosphate rock. That's what we have at Saguenay-Lac-Saint-Jean, Quebec. It's extremely rare, and this purifies very quickly into a lot of purified phosphoric acid for LFP batteries. It's a conversion ratio of 91% from the rock to the phosphate that needs to go into LFP battery. It's done clean. The gypsum is fully recyclable and can be recycled into building products or agriculture. Whereas with the sedimentary rock, which is where we currently get our phosphates, because we're only going into agriculture, we get some really big gypsum slag piles because it's not pure, it's got a lot of cadmium, uranium, thorium in it.
We can only make a small amount of purified phosphoric acid for batteries. So think of sedimentary rock as fertilizer. Think of igneous phosphate rock technology, LFP battery. It's where we want to be. Okay, so we've got that straight. Now we're like, "Okay, well, let's just go out and get the igneous rock." Well, just like everything else, how available is it? The answer is this, it's rare. Igneous phosphate rock is very rare. Sedimentary phosphate rock is this big area here, all these red dots in the world. That's 95% of the world's phosphate. If you look for the igneous rock, you'll only find it here in northern Quebec. You find it up here in northern Russia. You find it here in Southern Africa and in Brazil. The igneous carbonatites in Brazil and Southern Africa, they have rare earths in them.
It's difficult to separate, so most of it goes into agriculture, especially here in Brazil. The only igneous carbonatites that have been able to be separated in good way in a commercial are those in Russia. But now that's behind the sanctions. So what we have here in Saguenay-Lac-Saint-Jean, Quebec, is very special. Not only because it's one of the only areas with this igneous phosphate rock in North America, but also we're able to separate it. We're able to separate it quite easily. We're able to pull out the magnetite and the ilmenite. We're able to do that solventless without any bad chemicals for the environment. We're able to make a lot of purified phosphoric acid, and this phosphate concentrate comes in at 40.4% P2O5, which is the measure of phosphate, and it's amongst the purest in the world.
That's why we get this big 91.1% conversion into this purified phosphoric acid. We've tested this, and it's been validated by Prayon in Belgium, the world's largest producer of phosphoric acid. So we're comfortable that this deposit here that we have can produce this phosphoric acid at that level of purity. The deposit is wonderful in my opinion. It's 2.7 km long. It's about 300 m- 500 m wide, and it goes down for about 400 m, and it's open at depth. We just finished the drilling on that. We just restated our updated mineral resource estimate, and it shows a massive amount of phosphate that's enough to electrify at least 350 GWh of LFP batteries per annum. That would represent half of the fleet of new vehicles produced in North America for the next 23 years.
With the latest drilling that we have done, we know we have got a lot more of this phosphate. We moved to the indicated category by an increase of almost 400%, which is unheard of. The resource is consistent, it is contiguous, and we are very comfortable that we are now moving it into our feasibility study, which we hope to have ready by early 2027. That is only a few months away. It has got a great NPV, CAD 2.1 billion, IRR of 37%, 2.9-year payback, and a great strip ratio of 1.5 : 1. What is the really, really big, important part about this deposit? Sometimes you have critical minerals, but you have to find them in the right spot. What do I mean? They need to be near, close to infrastructure.
This is an open-pit mine, so it is less onerous to build, and it is also at about 2 km from major provincial federal highway and state highway, I mean. Then it has also got electricity very readily available and very near, and it has got great workforce right in the area. Let me show you a little about that. This is here in Saguenay-Lac-Saint-Jean, Quebec. This is Quebec's fifth most populous region. It is just 2. 5 hours north of Quebec City. Everybody knows Quebec City. You can drive there. It is a wonderful area. It has got 300,000 inhabitants in this area. Our future mine is at about 45 minutes to an hour drive from that area, so the workforce does not need a camp. They can just drive. They can stay home with their families.
Everyone is really excited about having this mine in the area for that reason.
Also, there already is another mine in the area right here in Niobec. It is a niobium mine. It is underground mine. So the region is familiar with mining. The other thing is, Rio Tinto has been in this area for 100 years. That is the old Alcan aluminum, as has the forestry industry. Both those industries are under pressure now, obviously because of the trade tensions and other environmental factors. So the region is really looking for a new industry, and they look at First Phosphate as that industry. It is a great industry. It develops local resources, not only the mine, but also here we will be purifying at the Port of Saguenay into purified phosphoric acid for batteries. So it is secondary transformation, and it gets at an economic diversification that the area needs.
It goes into something great, decarbonization, which no one can really disagree that it is not a good thing for the world. Logistics are great. Right here we have access to the deep sea Port of Saguenay, obviously, which takes us out to our off-takers in Europe. We also have great rail work all the way to the center of North America. This stuff I cannot basically say more about why it is so important to have that infrastructure. It lowers the cost, and it makes the projects feasible and less risk in developing them. Okay, so I will get into this. We have already made the first LFP batteries made in North America using North American critical minerals. We took the rock from Saguenay-Lac-Saint-Jean, made it into apatite concentrate, made it into purified phosphoric acid.
We made iron phosphate precursor, LFP cathode active material, and these LFP battery cells, the first made in North America in 25 years with North American critical minerals in the anode and the cathode. We did all that with some of the largest companies in the world. We did all that with, like I said, local critical minerals, which means this whole little supply chain in miniature is now validated. Not only the technology, not only the partners, but also the critical minerals. This is really important because if you remember when there was a little spat between President Trump and President Xi in October of last year, three things were threatened. Number one was rare earths, number two was semiconductors, but number three was the LFP battery supply chain.
That's quite ironic because a little bit of trivia here, the LFP battery supply chain was actually invented in North America. Great cooperation program between Université de Montréal in Quebec and the University of Texas. A few other bodies as well in the West helped to commercialize this. This was done in 2001. By 2003, we'd lost it. The technology was lost to China. There we have it, the LFP battery supply chain ready to be onshored to North America. Why are we successful? To us, it's the key relationships, right? The number of relationships here at the table make this project work. They start to work from really the grassroots. Great indigenous collaboration agreements. The Quebec government now has fast-tracked the project. There's only three projects fast-tracked in Quebec. We are one of three of them.
We've had also CAD 21.5 million of non-refundable, non-dilutive financing from the government of Canada. We've had European, EIFO at the table for a EUR 170 million loan guarantee to build out the mine. That's about 40%-45% of our CapEx. We've had at the table as well, EXIM Bank from the United States, and a number of other sovereign export credit agencies at the table from Europe. Let me go a little bit into that. We were very lucky, through the Global Partnerships Initiative, we had the first CAD 16.7 million from the Canadian government. At the table, we needed international partners. We had the ambassador from Belgium at the table and the EU Critical Minerals envoy as well. This is myself. That's myself. You see that? This is the Minister of Natural Resources, Timothy Hodgson, which we felt very fortunate for that contribution.
Just a couple of weeks ago, we received the First and Last Mile Fund from Canada. That's to basically get the roadworks and the electricity to the property, and that was all from the federal government of Canada. That's because we had the global partners at the table to make this happen. Europe is very, very interested in what we're doing. In fact, at the G7 leaders' summit in Évian-les-Bains, France, that was in June of this year, we were selected as two of 13 projects that were brought to the table under what is the G7 Critical Minerals Resilience and Production Alliance. Under that, we announced the letter of interest from the Danish government, letters of interest from three entities of senior entities of the Italian government and Maire Group.
That's one of the largest market cap companies on the Milan Stock Exchange, an engineering firm that works in the phosphoric acid area. We also announced definitive bankable offtake for 200,000 tons of phosphate concentrate and definitive bankable offtake on the merchant grade phosphoric acid plant at Port of Saguenay, as well as the technology to make that. We see that we are not only supported here at the local level, at the provincial, which is the state level, and then also at the national level of Canada and the United States, but also on the G7. That's really, really important. G7 said there's a few supply chains that are now really critical to us. LFP is one of them. We need to get these supply chains down to under no more than 60% controlled by any one entity or any one country by 2030.
The only one at the table for LFP battery was First Phosphate. This brings us, I can't stress how important this is. It brings the sovereigns to the table, brings the nation-states. The nation-states are ready to put up the non-dilutive, non-equity capital to build this out. They're not there for returns. They're not there for warrants. They're not there to ruin the project. They're really there to make the project happen. This is going to come at very preferable interest rates. It's going to be very friendly capital. Its only intention is to get these supply chains landed in the West and to get people in the West working. It's really important to understand. That puts us on a really good timeline.
We're looking to have our feasibility study done by early 2027, permitting by mid-2027, investment decision by end of 2027, operating mine by 2029. The big question, everybody, do you have enough capital in the bank? Yes, we do. We have CAD 30 million in our treasury. We have access to another CAD 21 million from the Canadian government. That's access to capital of CAD 50 million. That gets us to all those stages and well past FID. It gives us 2.5 to three years of runway in the company. Not just sitting on our hands, at a very accelerated rate of pace of development.
We still have 2. 5 to three years of runway in this company, which puts us in a really good position, especially with that nation-state debt that would come on the table to build this out, that we can raise capital opportunistically. We do not have to be beholden to the capital markets. We can raise opportunistically, and we have two to three years to do it all. That's really important for a company of our size and too. It's something we worked very hard on. We've also kept this company debt-free. It says CAD 1.80 per share now Canadian, I think we're at CAD 2.60. We've had a really great volume swell and also price appreciation that goes with that since we've come onto Nasdaq. Our market cap is somewhere near CAD 500 million now Canadian, and still far away from our NPV, which is CAD 2.1 billion.
It's all common shares, very few warrants. The few warrants that are there are held by mostly myself and the board and the management. Board and management are fully in. Board and myself as CEO, we're fully paid into shares. I don't get salary. I just get paid in stock, and I like that. Our board and management already has CAD 4 million invested in the company. We want to keep every single penny in this company going towards development. We want us, we want the entire board and management really compensated when the shares go up. We hold 20% of the company still. That's our compensation in building the market cap and in building the company, not in taking salaries that obviously dilute the company. That's why I get my full pay in shares.
Even our management, a good almost 50% of what the management gets is in shares and the rest in stock. That's great because everyone's motivated to work on capital appreciation for the company, and so far it's worked out very well for all of us. We've also raised CAD 80 million on our own with no underwriters to date. Because of that, we have brought in very, very good strategic capital, long-term capital that generally does not really invest even in stocks. A lot of good, strong real estate, family office capital that's patient, that gets it, that it takes time to build something. We've got a very strong capital structure, and we're very well poised to get on these U.S. capital markets. Also because we self-listed onto Nasdaq, we did not raise capital.
There's only 1.3 million ADRs out there, which is great, puts us in a strong position. The company is, I think we've got a great management team, we're great in business, capital markets, mining, but above all in technology. We see the mine as a means to an end, which is a means to this, the LFP battery. Without further ado, I'm going to answer some questions here. I see there's tons of them. You can always email me if you need to. Just go onto our Contact Us page and just email them through, and we'll get to them. Question, you recently raised approximately CAD 17.7 million. What are the most valuable accretive milestones that capital is intended to advance? It's really to get to that feasibility study, to get the permitting, and to get past the final investment decision.
That is complemented by the capital that has come in from the governments and the commitments from the nation states to make this happen. How does the company intend to balance project acceleration with disciplined dilution management as it advances toward larger scale development? I think we've discussed all of that. We've got access to capital of CAD 50 million. We've got a track record and a runway now for 2.5 to three years of capital without having to raise a cent, and we've already got 40%-50% of the non-dilutive capital at the table, to build out the mine in early 2028. I'm getting so many questions. The updated report shows 378% increase in indicated resources. What changed most in your geological understanding of Bégin-Lamarche? Bégin-Lamarche was more continuous and it was more consistent than what we thought.
It was larger than what we thought, and it wasn't extremely larger, but it was just so compact that it was all there that we were able to get to that level. There's still the edges high in that depth where it is open, so it can get potentially larger. We are extremely happy with where we're at. Extremely confident to be able to move into the feasibility study now. Where do you see the greatest near term demand pull grid scale storage, data centers, robotics, national security? It's all there. LFP battery, as we showed before, is just so many sectors of the economy. The biggest one is obviously grid scale storage that's growing at 25%-30% quarter-over-quarter. There's going to be such a need for phosphate. Two, three years ago, China was consuming 1 million tons of purified phosphoric acid to make these batteries.
Now it's almost 5 million tons, and we're only three, four years later. It's going to 10, 15 million tons by 2030, and then it's going up to 50 million tons by 2035. If electrification provides to be what it seems to be that it will be. The technical report cites an 88% recovery assumption. What gives management confidence and consistency and scalability of that recovery rate? We've worked really hard on that. I've been involved in that personally. I've been testing the team on various levels. We're very comfortable that we can get to an 88% recovery rate, and that's for producing the world's cleanest apatite, we think, that has ever been produced. We came down a little bit from 91 to 88. I don't know where we'll end up. We'll end up somewhere between 88 and 91.
Came down a little bit to get it really, really extra clean. So we have to see if we're able to increase from there, but very comfortable with 88% recovery rate. What advantages does a Saguenay-Lac-Saint-Jean location provide when planning heavy infrastructure for a future mine? Yes, it's brilliant. Like I said, we have a 300,000 population basin just to the south of us, an hour away, far enough not to bother anybody, but close enough to not have to have a camp. Aluminum industry has been going on in that industry for over 100 years. So has the forestry industry. So we basically, we have a lot of really good equipment suppliers, and we have a lot of really good also workforce that has been in there for a number of years.
That's really one of the big things is, Canada's got a lot of critical minerals, but the question is, and so does North America, and so does everybody. The question is, where are those critical minerals, right? Where do you find them, and do they have logistics associated to them? This is a phenomenal area for infrastructure. That's the beauty of Saguenay-Lac-Saint-Jean. People know how to live and work with industry. They've been doing it with Rio Tinto and Niobec mines and the forestry industry for 100 years. So it's a perfect region. It's a perfect spot for a new industry, and we're extremely welcomed in the area. I can't tell you the amount of questions and basically welcome from supplier guilds, chambers of commerce, and local workers and equipment suppliers in the area.
What specific infrastructure decisions can now move from concept stage into engineering and permitting? We have worked a lot on that. We are obviously working on the feasibility study where it brings all that together. Right after the feasibility study, while we are working on permits, we start putting all that into action, which is the detailed engineering and the entire equipment supply process for what is needed for the mine. Okay, another one. Can you share more about the significance of the collaboration agreement with the First Nation and the company's issuance of shares linked to work done for the First Nation? We have a very good relationship with the First Nations. It keeps coming up all the time. They always say, "We are so thankful that you consulted us early. You make us a part of the project.
We really feel involved." They are really, really good partners. We issue shares to them whenever we do exploration on their ancestral lands, and it was a way to get them involved and to have a certain ownership in the company. They have done extremely well in those shares. They started gathering shares at CAD 0.25, and they continue to gather them every year. Okay, I saw lots of questions. There is at least 10 times the amount of questions than what I have answered here. I am sorry that I could not answer them all. We would need a full another hour to do it. Thank you for that. That is really special that everybody shows such interest in the company. Please come onto our Contact Us page. Email us the questions directly. I will attempt to answer them all personally, if I can.
If not, please join some of our other sessions. Also, every Tuesday afternoon at 4:15 P.M. Eastern, we do have a public call. If you would like to join that, you are welcome to do it. Just, again, message us, and we will get you invited to that. Thank you so much, Greg. Thank you, [Janelle]. It has been great to be here, as usual.