All righty. Nice to see everybody here. I'm John Passalacqua. I'm the CEO of First Phosphate. First Phosphate, as many of you know. First thing I'm going to do, though, I have to make a little bit of a disclaimer here. In some of the presentations that we've been in, there's been automated note takers taking notes and then posting that on the Internet, putting that on the cloud, reflecting that with other things on AI, and it just creates a lot of inaccuracy out there. I just ask everybody, if you have a note taker right now, please turn it off. This presentation is meant only for human ears, and it's something that we will enforce very strongly. We do not want to have this transcribed. Otherwise, I would have prepared it very differently if it had to be transcribed.
I want to have a back-to-back human conversation with you today. Thank you very much for that. I'm John Passalacqua. I'm the CEO of First Phosphate. First Phosphate is a mineral development and clean tech company. We're dedicated to igneous phosphate for the lithium iron phosphate battery industry, not for fertilizer. We're into a very high purity phosphate rock here that has a high purity for these, for lithium iron phosphate batteries, which I have in this pocket right here. Let's move on here. When you look at the company, really, we're a pure play, leading chemistry for LFP batteries, mine to market, pure igneous phosphate now in the Quebec fast track status, near-term feasibility study with a critical path to production, bankable off takes, and G7 support and support from the leading Western economies. Let's talk about LFP for a second.
If you look at LFP here I don't know if my clicker's working, but if you look at-- I guess this will show here, right? If I do this like this?
Put your clicker here.
Perfect. Yeah, I got that. Okay, great. Basically, LFP batteries are 77% of all batteries produced on the planet right now. That's huge. When we started the company in 2022, the amount was about 20%-25%. We caught this trend. We knew it was coming, and we made an educated guess, and what a good one to make. We're now 77%, and we're going even higher, as you can see. Why has LFP taken off so well? It's really a versatile technology, and it's a technology of mass adoption. It isn't just electric vehicles like everybody thinks around electrification. Electric vehicles are only 13% of the LFP category.
You've got things such as large scale energy storage, which dominates. Large scale energy storage is growing at 25%-30% quarter over quarter right now in China. You've got AI data centers, robotics factory automation, sectors such as marine, agriculture, and defense. Defense is really important for autonomous vehicles, drones. It's even starting to go into things like submarines. Small mobility, right? Skateboards, everything you see around the city, little mopeds, et cetera. Then you've got, obviously, EV charging stations, a number of consumer products, and a telecom category as well. The reason for this, obviously, why LFP is taking off, while superior fire safety, well-defined performance, lowest cost battery in the market, and longer life. What is the issue around LFP? Everything LFP is focused in China, right?
Not just the cathode material that goes into these, not the batteries themselves, but all the end products are coming from China. It is a massive export market for China. It is one of their largest. The G7, obviously, has looked at some of these supply chains and has said certain supply chains like the LFP battery supply chain, we would like it to be no more than 60% concentrated in any one country by 2030. That is only 3 years away. That is the gap that First Phosphate is trying to fill here with a domesticated LFP battery supply chain, and that is what I will be telling you about in the next few minutes here. Before we can speak about onshoring LFP battery, let us understand what is it made of. The LFP battery obviously has got a cathode and an anode.
The anode obviously is where your graphite is, but let us look at the cathode. What is a cathode composed of? The cathode is composed of 3 materials, lithium, iron, and phosphate. The lithium, to everyone's surprise sometimes, is only 4% of the composition of the cathode material. If you look in the lithium space, there is over 150 public companies that are fighting for that space for the extraction and purification of lithium. When we look at iron is already out there. It is a big market for many different types of uses. There is over 100 public companies out there in the iron space. High purity iron is hard to find, but it is out there. We got the lithium covered, we have got the iron covered, but now what happens when we go to the phosphate? 61% of the cathode of the battery is phosphate.
That is 15 times, 15 times more phosphate in the battery than there is lithium. How do we got that covered? When we look at the public markets, we have only got a handful of companies trading in the phosphate market, and all of that is really phosphate for agriculture. As far as we know, there is only one company that is fully 100% dedicated to phosphate for the lithium iron phosphate battery, and that is First Phosphate. We have got all this open ice here where we are skating on. Right now, First Phosphate just upgraded to the Nasdaq in August of last year. We are a first-time, first-ever category for igneous phosphate on the Nasdaq. That, by nature, makes us a leader, makes us a bellwether. Let us understand a little bit about phosphate. We need so much phosphate, 15 times more phosphate than lithium in a battery.
Where do we get it from, and what is its significance? If you look at what Benchmark Minerals is saying, purified phosphoric acid, that is the highest form of purification of phosphate, is second in the energy transition after copper. Very important from that level. But now let us look at the supply. This is the supply of purified phosphoric acid right now in the world. It is this pale blue line. What you are seeing there is pretty much inelastic supply curve. Now, why is that curve inelastic? Currently, we are making purified phosphoric acid, for the most part, on the back of sedimentary rocks, meaning that you purify the phosphate to a certain level.
Most of the unpure stuff will go into fertilizers, and only a very small pure stream can be upgraded to purified phosphoric acid, sometimes 10%, 20%, 30%, depending on the rock type, and depending on if the producer is large enough to be able to do this. We are kind of constrained by the amount of fertilizer in the world. To make more purified phosphoric acid, you would have to make a lot more fertilizer, but the world is in equilibrium for fertilizer. How do we fill in this gap here, right? If you follow what Benchmark is saying, this gap here might even be bigger. It might be 8-10 times the amount of purified phosphoric acid that is going to be needed in the world. Give you an example.
At about 2021, 2022, when we started this company, there was 1 million tons of purified phosphoric acid being produced for LFP battery in China. Now it is about 5-7 million tons. That is projected to go up to 30 million tons by 2030, 2031. From there, it goes up to 65-70 million tons by 2035. It is a lot to be able to supply, and it is coming quickly. How do we do this? Is there a magical way? Is there a magical way to fill this gap without having to have recourse to the fertilizer market? The answer actually is yes. The answer is this: It is igneous phosphate rock, which is what we have here in Saguenay–Lac-Saint-Jean, Quebec. This is a very pure phosphate rock. You have to understand the difference between igneous rock and sedimentary rock.
Igneous rock is basically phosphate that was trapped in the lava many millions of years ago, and it descended to a specific density in the rock, and it froze there. So it does not have the impurities in it. Whereas sedimentary phosphates are exactly that. They are sediments. They are old sea beds, they are old lakes, they are old swamps. The phosphate is in there with everything else that has accumulated over the millennia, cadmium, uranium, thorium, arsenic, lead, zinc, and all of the other heavies. What do you do in there? Well, you could purify it quickly. You get a lot of phosphate for agriculture, which is great, but only a small portion can go into LFP batteries because the purity is not there. Then you get a lot of these gypsum slag piles with high radioactivity, as you might have seen in the Carolinas and Florida.
But when you have igneous phosphate rock, it purifies very clean, almost 100% of it. We get it up to 91.1% that we are able to bring up to purified phosphoric acid. We are thereby going right into the LFP battery sector and almost exclusively bypassing the fertilizer sector. We also have a clean gypsum rock. Igneous phosphate rock, think of it as a clean way to make a lot of purified phosphoric acid for the holy grail, which is going to be the LFP batteries, which are growing by leaps and bounds. Think of your sedimentary rock as great for fertilizer, but not great for LFP battery. Okay, if the solution to this is igneous phosphate rock, then let us just go out there and mine a lot of igneous phosphate rock. What is the problem, right? The problem is this word here is rare.
When you look at phosphate reserves around the world, 95% of the world's phosphate, that's 95, is these red dots. That's sedimentary phosphate deposits. They're right around the central part of the world. There are only five areas where you have igneous phosphate. Here in Quebec, igneous anorthosites. Then in Southern Brazil, Southern Africa, and in Northern Russia, we've got igneous carbonatites. The igneous carbonatites are very pure, but the problem in there sometimes is the veins can change. You can have rare earths in there, and you can also have thorium, and the mineralogy is not always consistent. If you look at Brazil, they use them in the fertilizer, the agricultural world, because it's a breadbasket. The ones here in Southern Africa are a little bit inaccessible.
It's only in Russia that they're able to really properly purify these carbonatites, and they are an export market as well. As you know right now, they're behind the sanctions. When you come here to Saguenay Lac-Saint-Jean, Quebec, we've got an anorthosite. An igneous anorthosite is extremely pure. The mineralogy is extremely consistent. It's constant, and it makes for a metallurgy that's fairly easy. We're able to pull out magnetite, ilmenite, and silicates, and then we end up with a reading of a phosphate of 40.4% P2O5, which is by far the world's highest. You get into a very pure rock and a very consistent rock that allows you to convert it into purified phosphoric acid, as we were saying before, at a rate of 91.1%, which is staggering. Again, that's due to the purity. Let's talk a little bit about the deposit.
The deposit is here. It's an open-pit mine. It's very close to infrastructure. It's about 2 kilometers from a major highway, 2 kilometers from a major electrical. Its strike zone is 2.7 kilometers long. It's about 400 to 500 meters wide, and it goes down 400 meters. It's fully open at depth, and it's somewhat open on the sides as well still. We did our last drilling campaign about four months ago. That's when we drilled the property up to definition for feasibility study. We don't have to do any more drilling. All the drilling is done. I think we've done about 80,000 meters in total over three years. What did we do? We drilled up an extra 378% indicated reserves. That's quite massive.
There's another almost 90 million tons of inferred resources which could be drilled up to indicated, and that puts us at a 204 million tons ready for the feasibility study. There's a lot more to go, but we have enough to get through our feasibility study. We're very happy. It's going to be a very nice mine life. Already what we had at the PEA level, that's before the increase in indicated, was an NPV of $2.1 billion, IRR of 37%, 2.9-year payback, and 1.5 to 1 strip ratio. The feasibility study will be ready here in the Q1 of 2027. What's the most important thing we think about critical minerals projects that many people overlook is really proximity to infrastructure. You can have a lot of something, but if it's far and it costs too much to move it, that's a big problem.
We've got a really big advantage here in that we're in this area here of Saguenay–Lac-Saint-Jean, Quebec, if everybody can see that, where I'm pointing with my pointer. This is just 2 and a half hours drive from Quebec City, which everybody knows. We're sitting in the fifth most populous region of Quebec. The reason that this is the fifth most populous region of Quebec is that there's two sets of heavy industry up here. There's aluminum from Rio Tinto, and there's also the forestry industry. Because of that, we've got a really big population base, and that's right in this area here between Alma and Saguenay that we can pull from. When we did our drill programs, we never had to set up camp. We just pulled from the local population. That's going to be very beneficial when we go into production.
Also because this is such an industrial area, all of the area is sort of geared towards industry. There's great equipment suppliers in the area. There's great entrepreneurs that have come out of there because of the affiliation with all the work that had to be done with the Rio Tinto and Alcan aluminum plant. There's a very skilled workforce in the area, so we're very lucky and fortunate for that. We're sitting here at 70 kilometers driving distance, 50 kilometers direct distance from the Port of Saguenay. That's where we have our secondary transformation facilities. There's 12 square kilometers of open land there. The federal government is really pushing hard on the development of Port Saguenay. They've just put in funding for a second quay.
They want to move all of the critical minerals from northern Quebec and from the Ring of Fire across through Port Saguenay. From there, we've got open ocean to offtakers around the world, and we've also got the rail line because of the aluminum industry all the way directly into the heart of North America. Perfectly positioned at Port of Saguenay. We've got the best spot at Port of Saguenay, just sitting right above the quays because we were early. This is really important. These are the LFP batteries. We actually were able to make these LFP batteries with Ultion Technologies Inc. out of Nevada. These are the first LFP batteries that were produced in 25 years from North American Critical Minerals. The reason I say the first in 25 years is because LFP technology was actually invented in North America in 2001.
By 2003, it had left our shores, and it hasn't come back since. We have been able to take the igneous anorthosite from Saguenay–Lac-Saint-Jean, get that into an apatite concentrate through solventless recovery, like we said, by removing ilmenite, magnetite, and silicates. Then we got to purified phosphoric acid, and then we got to LFP pre-CAM, LFP CAM, and eventually to LFP cathode active material and LFP batteries. This was all done with our phosphate from Bégin-Lamarche, and it was done with iron and lithium that came from North America as well. We tested these batteries. There was about 150 of them made. We tested them at 2,000 cycles. They perform like any other battery in the market, meaning that all the products that went into here, all the critical minerals, as well as the processes, are fully validated.
I can tell you as well that there's no R&D in this process. I'm not a big believer in that. These are all commercial players. They're some of the largest in the world. They all have commercial facilities already. This supply chain could be very easily upscaled for landing the LFP battery supply chain in North America. The reason that is very important is because having done that has got us this extreme ultimate support from everywhere from the regional level all the way up to the provincial level, federal level, and also international level. We have Quebec fast track status for the project. There's only three projects in Quebec that are fast-tracked. We're one of them. We received CAD 21.5 million of non-dilutive government support from the government of Canada. That's for our feasibility study, that's for the road, and that's for the electrical infrastructure.
We have strong support from the local suppliers guilds, indigenous community, chambers of commerce, and all the local groups in Saguenay. Most importantly, though, at the G7 Leaders Summit in June of this past year, we were put on the list of Critical Minerals Resilience and Production Alliance projects. We are officially backed by the G7 now. Why? Because like you saw earlier in the presentation, the G7 has certain supply chains that it wants to be re-onshored here in the Western world, and First Phosphate is one of the projects that they've chosen out of 13. Two out of 13 of the projects are First Phosphate, our mine, and our phosphoric acid plant. That's already got us the support from many governments.
Government of Denmark is at the table for CAD 190 million of CapEx, Swiss government for CAD 212 million, and the Italian government is postulating through three of their entities for the phosphoric acid plant. At the same G7 Leaders Summit, we announced offtake agreements, 200,000 tons of our phosphate concentrate and 60,000 tons of phosphoric acid. Where does that leave us? Right now the company's in a very good position. We have about CAD 23 million of capital in the coffers. We have access to over CAD 20 million of non-reimbursable, non-dilutive funding from the Canadian government. That's over CAD 40 million of capital. That gets us from here, where we are now, all the way to Q2 2028, where then is our final investment decision. What have we got to do? The company's done a lot since 2022 to 2026. Q1 2027 will be our feasibility study.
Q3, we'll get through our local consultations and our environmental process, which has already started. We're looking for permitting by Q1 of 2028. Q2 of 2028, that's when we have our final investment decision. The current capital runway takes us to Q2 2028 and beyond. What happens at Q2 2028? Well, then we've got to go out to build out the mine. That's where the Swiss government and that's where the Danish government at the table for currently CAD 400 million of CapEx on a total CapEx build of $500 million. We're already sitting at 80% of the CapEx done, and that doesn't even bring into account the Quebec government, local governments, and federal government of Canada and other G7 members who might come to the table as well.
You are looking at a company, you are looking at a critical minerals project that is, I would say, as de-risked as they get right now, all the way to the end of the curve here. That is really important. Let us talk a little bit about our share structure. Right now, we are mostly equity. We have no debt. We have not taken on any kind of toxic capital. We have raised CAD 80 million. I have raised most of that capital on my own, so I know everyone who has come into our book. We have curated the book especially well. That is why when you come into these times of big turbulence in the markets, our stock comes off like everyone else, but I feel that we shelter these shocks a little bit better because we have been able to curate a very good shareholder base.
We have some warrants that are at $2.50, which are expiring at the end of 2026. After that, the remaining warrants are in the hands of board and management. Like I said, debt-free. Management has CAD 4 million of capital. Management and board, CAD 4 million of capital invested in the business. A large portion of management and board compensation is taken in RSUs. As CEO, I am paid fully in stock. All of the board is paid fully in stock as well, and a lot of the management takes a lot of their salaries in stock. Why is that? That is that way because when we started off, times were tough, but it became sort of a tradition, and we are very happy to be involved in the equity of the company. I own 10% of the stock. The management and the board together, we own 20%.
We want to keep our pro rata position as high as possible. It makes it so that we are aligned with shareholders as well. We are looking for the capital of the company, the market cap to increase. We are not here for salaries and paychecks. We are here to really build a business. We are really here aligned with shareholders to see market cap gains. In terms of board and management, I think we are very strong in capital markets. We are very strong in business.
We are very strong in mining. Our real focus is this. It is the LFP battery supply chain in North America. It is not about a mine, it is not about a hole in the wall, but it is about how that mineral from that mine gets us to this. The LFP battery supply chain and how do we onshore it here in North America. With that being said, I think I am right on here. This is the first time I did it in 20 minutes. I will gladly take any questions. Yes, sir.
Yeah. Sulfuric acid in this process?
Is sulfuric acid a key ingredient in this process?
Phosphoric?
No, sulfuric.
Yes, good question. Sulfuric acid is a very key ingredient. In the world of phosphate at this step that you see right here where we have the phosphate concentrate, in order to create phosphoric acid, either for fertilizer or for LFP batteries, you need to attack this rock with sulfuric acid. We all know what's going on with sulfuric acid. It's put the fertilizer world and the prices in a tilt. What's really good about our rock, because of the high purity, guess what? We use one-third less sulfuric acid in the processing of high purity igneous rock.
Okay. Next question is what's your Class One or Two cost estimate to build this mine?
When you go back to the PEA level, which is where we're at, we'll have a feasibility study out Q1 of 2027. But at the PEA level, it was approximately 500 million USD. Next question.
Can you talk a little bit about the economics at current prices for phosphate? The PEA was done when prices were much higher. Just help me understand a little bit the economics at current prices, commodity prices.
Yeah. When the PEA was done, and with where prices are now, prices are just slightly more elevated than where the PEA was done. Next question.
How do you intend to bridge the capital between what you have as guarantees and what you need to build the mine?
Can you repeat the question? I don't think everybody heard.
How do you intend to bridge the capital between how much you need to build the mine and what you have in terms of guarantees?
Yeah. This project is not even at a feasibility level yet, and we have already got committed capital for the CapEx to build the mine. That is almost rare or unheard of in this business. Right now, from now until Q2 2028, like I said, we have got the capital in the coffers as well as from the Government of Canada contributions to get us through to Q2 2028 and beyond. So almost 2 years of runway. That gets us to the final investment decision. When you get to the final investment decision, then you are saying, "Well, how much capital do you have?" So far, we have CAD 400 million on CAD 500 million committed, and we are not even at the feasibility stage.
Once we pass the feasibility work, we feel that all that capital will be committed, and then some, because we see it is Denmark and Switzerland. The G7 still has to come to the table as well as per the G7 Critical Minerals Resilience and Production Alliance. The other thing that I would want to focus, and thank you for the question, sir, is when we talk capital there, capital is a big word. There is very nasty toxic capital all the way to very good friendly capital. When you are getting money from a sovereign government, is that nasty toxic capital, or is that the extreme end of very friendly capital?
Obviously, it is the utmost friendly capital that you can get, and that is the capital we have been going after because a lot of times mining projects are built, and those that lend you the capital, they are looking for you to fail so they can take over the project. We know this trick. It has happened many times in the mining industry, but this is friendly capital. The nation-states do not want to run our mine. They want us to run the mine. They want us to employ the people. They want us to hire in the projects and services that companies in their countries can serve to the mine. So it gets circular, and also they want the offtakes, and they want the material to be there for national defense and national security.
This is a really important strategic supply chain that the West has to re-onshored as soon as possible, and we have all their commitment to do it. Remember also, when you are taking money from the sovereigns, the nation-states, it usually comes with the best levels of interest, and they also want to see you succeed, and they are forgiving. They are not there to see your failure. They are there to see your success. That is a really big difference in a lot of things. Any other questions? Yes, sir.
Hi. In terms of the LFP market, can you tell us where it is today and what your assumptions are for growth over the next 5 years, shall we say?
Can you just repeat because you weren't-
The LFP market, the production of batteries today, what is it now, and what do you assume it was going to be in 5 years, and how important is that to driving your economics?
Yeah, thank you for the question. It's everything. Like I said, when we started the project in 2022, LFP was 20%-25% of the global market for batteries. It's now 77%, and it's only getting stronger. When we come down to things like large-scale energy storage, this is growing at 25%-30% quarter-over-quarter in China. It's not just the battery growing, it's the storage systems that are growing with it. Anything that's wind, even hydroelectric, nuclear, or solar power, when it comes down and it needs to be collected, it needs to be stored in those batteries and redistributed.
With the big move towards compute and AI data centers, all of that power going into those data centers, that needs to be regulated, and it needs to be stored, distributed, and it has to be continuous, and it has to be clean, if you will, without any bumps in it. It is all about batteries. It is all about LFP batteries going forward. The shortages are going to be massive on the lithium side. The shortages are going to be massive on the phosphate side. You have this whole discussion here as well, which is you have got to take 40% of that, right? Forty percent of what is right now sitting in China and distribute it out to the rest of the world to meet the G7 requirements.
Give me time to think about it. Sir, we do not have any more time for questions.
You can look that up on the internet. It is constantly changing, and it is everywhere. The only thing that I can tell you is somebody might say, "Oh, it is only growing 20%." Somebody might say it is 40, somebody will say it is 30, somebody will say it is 100, but it is just growing at leaps and bounds. The research is out there. I welcome you to go online and find it. Thank you. Thank you, everybody. That was great.