Hello. Good afternoon. I was caught up in one of these one-on-one meetings. My name is Armand MacKenzie. I am President of First Phosphate. Please, let me know how many people are interested in the room about mining. Who is an investor in mining?
I am.
You are? Are you? Good. This is really a mining investment in Quebec, in northern Quebec, Labrador. That is what it is. I will put the legal disclaimer here because it is important for us to make sure that there is ways and means that things can change. That is the reason why I want to put this. I am a lawyer by trade, but also I have 25 years of experience in the mining industry. We are a very good company based in northern Quebec. This eastern part of Canada, the French part of Canada. What is interesting, we have been developing the mine. About maybe two years ago, I looked at the numbers. If you look at the stock, PHOS, we were about, I believe, around $0.30 . Now we went up.
The all-time high was about 275 following an announcement on the NASDAQ because we are listed on the NASDAQ. We have been doing well. We are a fast-growing company. What it is, phosphate is used, basically. You have seen this robot circulating in the conference? It is used for robotics actually. It could be on your computers. I see this gentleman here working on his iPhone here as well. We have phosphate in this. We have phosphate in the Coca-Cola. There is a variety of usage for the phosphate. I am sorry, I am trying to catch my breath. I got caught up in the rain. English is my fourth language, by the way, so please bear with me. I will try to make it very clear for you. Just to give you an idea where it is. It is in Quebec, Canada. It is a phosphate mine.
We're targeting to go the downstream operations. We are under the feasibility study stage and we're in the permitting process as well. Where it is, it's located in Quebec, the French part, like I said. We have access. What it needs when you want to build a mine, from my experience, it's power, infrastructure, rail, road, good logistics, a deep sea port that can deliver the mine to the market, so the material, and social acceptance. That's why it's really strategically located nearby the key infrastructures, which makes it interesting in terms of CapEx because we don't need to build all those infrastructures that are already out there, the port, the rail, the roads, and so on and so forth. We have access to the grid because it's the Hydro-Québec.
Hydro-Québec, the tariff, I believe, the industrial tariff is about $0.03 kWh , which is very low. I don't know what the tariff here in California. The phosphate, what you use it for as well, because we're in California, is the ESS, energy storage system. That's what it is, to bring power, to connect, to give power or bring power to facilities for the air conditioning. I believe here that we use a lot of air conditioning, unlike in Quebec. That's another element that is key, and that's what makes it interesting. That's one element. That's what makes the mining projects interesting, when you're near infrastructures, when you have a usage that is used for all the purposes that I mentioned, but also the business case. What's the business case? We already have offtake agreements with European partners, which makes it interesting.
I'll explain to you why it's key. Because phosphate, as you see here, igneous phosphate is very rare. You have phosphate here in the U.S., in Florida, but it's sedimentary phosphate, which contains radioactive material, and it's very complicated because of regulations to dispose of it. That's one other element. In our case, it's high purity. There's no radioactive material in it. When you want to process it, when you want to change it in concentrate into phosphoric acid, for instance, well, the cost of it, the processing cost, is way much better. We get a premium because of the quality of our rock. As you can see on the map, the blue spots, this is where the high-quality phosphate or igneous phosphate is. The red ones, it's all the sedimentary phosphate, and it's all what I call the material that is radioactive.
We benchmarked the material against others. As you can see, we have 40% of concentrate of phosphate, P2O5, from our company. The next one, igneous phosphate is in Russia, 38.7. You will understand because of geopolitics, the only place where high-quality phosphate is available would be in Quebec because of its volcanic nature, because of its high quality, because it's igneous phosphate, and because, of course, of the geopolitics. Europeans want to have access, they want to secure their supply chain, which makes it valuable, which makes it interesting, which makes it help in our business case. That's why we already have offtake agreements with our European partners. To build the mine, they also secured guaranteed letters for the concentrator and for the mobile equipment to build the mine.
The CapEx right at this moment under the preliminary economic assessment is about $500 million . But 75% of that is already covered by our secured credit that is available, guaranteed, that we have with these Swiss partners, and then with our partners from Denmark. That's the gist of it, of the presentation. I'd rather like to ask one-on-one questions because I'm much more comfortable. Like I said, for me, English is my fourth language, but if you have any questions, I'll take them. Just to give you an example of the debate between the sedimentary phosphate rock, igneous phosphate, et cetera. For 60% of the LFP battery, the content is phosphate. In lithium, 4%. There's lithium everywhere in the world. There's lithium in Canada, probably lithium here in the U.S., lithium in Chile, for instance.
But the high-quality phosphate is only available here in Quebec, Canada. We were selected. The deposit, as you can see, it's a high-quality phosphate, like I mentioned. It's a continuous deposit of phosphate, about 205 million tons of measured and indicated resource. Enough to operate the mine for over 20 more years. That's it. I will go to questions if you have any. If not, I will go one-on-one because I have time for the one-on-one as well. Yes, my friend.
What's the cost advantage of having igneous phosphate versus sedimentary? You mentioned the cost to re-route the material.
Yeah.
Is there a way you can show us how much of an advantage you have?
It's the premium you get. For us, for the operator, it's the premium.
What's that percentage? What's the percent premium you get?
Oh, because of the offtake agreement, I'm not at liberty to divulge that type of information. I wrote, by the way, the offtake agreement, so I'm not at liberty. Still, you understand. That's why I put the disclaimer at the beginning. It's really looked at favorably because of the fact that for the companies that are processing, transforming the phosphate concentrate, for them, it costs less.
Yeah.
Our by-product that produces, for instance, gypsum, it's not contaminated, so we can find another alternative to it. Unlike the sedimentary phosphate, there's contaminated product in it, so it's very difficult to dispose of it. You have certain ways, and it's very costly. It's like any other material. When you process, for instance, iron ore, if you have silica in it, you have problems, and it costs a lot for companies, buyers. Sorry, this gentleman was there. Sir, yeah.
Yeah. This phosphate is similar in constituency to the phosphate that's typically mined from the big producers in Morocco, correct?
No, it's different. That's the beauty of it. I will check. That's the red spots you see in Morocco, which is a big major producer.
Yes.
The OCP, I believe. Well, that's the sedimentary. When they transform it, when you use it, well, they dump it in the ocean, basically, because they don't know what to do with it because the regulations are different. Of course, in the U.S., in Canada, Europe, environmental standards are different. That's the reason why it's so valuable, this type of rock.
Yours is not or is sedimentary?
Not. It's not. It's igneous phosphate. I'll show you here. Where's the rock? Here. Igneous phosphate rock and sedimentary. So that's a lot of contaminated product in the sedimentary phosphate rock. Igneous phosphate rock is more clean, more green, if you will, and there's no issue. You can use the by-product like gypsum for the walls. Sir, in the back.
What's the difference between your igneous phosphate rock and potash as a source of phosphate?
Yeah. Potash can be used, as you know, as a fertilizer, like the sedimentary phosphate rock. Potash is used. It could be used, but it's not our market. Our market is really the robotics, ESS storage facilities, the grid. It can go to cars as well. We have discussions with some manufacturers.
Refining. Which one is simpler to refine, igneous or potash?
Well, igneous, because we don't have the by-product that is contaminated here. Bear with me, I'm not a mining engineer. I'm not a chemist. I'm a miner in the sense of my job here usually is really to extract the ore, process it, concentrate it, I'm sorry. Crush, concentrate, and ship it. That's my job, but I'm not a chemist.
Just a follow-up on my prior question. I understand you get a premium for your product. Is the processing cheaper than the alternative because you don't have to do as much?
Yeah, exactly. That's why it's valuable for our clients because they don't need certain type of equipment, for instance, additional equipment that is costly to process the material.
What would be your cost advantage, let's say, per pound or per?
Per ton.
Yeah.
Per ton. Yeah.
What would be your cost advantage?
Yeah.
You would get a premium on top.
Yeah.
On the cost advantage side, what's your cost advantage versus a sedimentary phosphate?
I didn't get your question. I'm sorry.
What would be your cost advantage per ton for igneous phosphate versus a sedimentary phosphate? Does it cost you less to take out?
Oh, yeah. Yeah. Of course. But that's in our contract formula, our pricing formula. That's why I'm not at liberty to divulge that with our offtake partners. Yeah. More to concentrate, correct? Yeah, concentrate. Yeah, the other stuff's not concentrate.
Right. Because I'm trying to
Yeah.
To produce a ton of phosphate
Yeah
What's the advantage? How much more, how much you got versus another
He needs a lot less
Right. So how much less
to concentrate. The good side of our company is really we are experienced miners. We are experienced people that are skilled to develop mines and then people that are well-versed as well in stock markets, in raising money. So we have enough money to go to final investment decisions. We are not per se looking for additional dollars. But it is always welcome. But we have enough money to go to the eve of the construction of the mine. Which is fantastic. The reason why we are here is really to present the company, to really present what is the product, and then what it is. We are good friends with LD. That is the reason why. Andrea, it is a pleasure seeing you as well. Thank you. This has been informing. Yeah. Appreciate it. Any more additional questions?
Yeah, that is the people on the management, and then mining engineers, permitting. The next timeline, okay, what is to look for? Because a lot of people ask questions. What is coming up next? Well, we have our feasibility study coming up in the first quarter of 2027. We have the permitting, the final permits, authorizations from the Quebec government, sometime in the first quarter of 2028. Okay, that is our ambition, but governments, you know how it is. Sometimes there is a bit of a red tape. But our relations with governments are good. That is the next ones. Then the building of the mine, the construction, and then to put the mine to market. That is my task. That is my job by 2030. So you have to be at that stage before you can even contemplate offtake agreements and sell- No, we do have already. Good.
Yeah, that is the beauty of it. Because a lot of companies, small companies like this, usually are struggling with financing, which we do not, and they are struggling to find offtake partners. So this is a key challenge for small companies like us. But in our case, our business case is good. We have offtake. We have money to realize all the feasibility we want to realize for the final investment decision. This is our timeline, as you can see. Feasibility study, Q1 2027. Consultation, environment, 2027. Mine permitting, Q1 2028. Final investment decision, procurement, and then building the mine, construction, and initial production by 2030. So voila. Merci beaucoup. Good?