Good morning, everyone, and welcome to this Capital Markets Day for Green Minerals. The first one in our history. And before we start here, Eric, I think you need to update.
Probably. Frozen pillow.
Yeah, here we go. Before we start, we got a brief disclaimer for anyone to read p resentation is on our website. Before we get into the details here, I just want to provide a brief overview of the company as we are today. So Green Minerals is one out of two listed deep-sea mining companies globally. The company is headquartered in Oslo. We are listed on Oslo Stock Exchange with the ticker code GEM, which I think is very fitting, no. The company supports a modest market cap of $8 million.
We had some massive news for the company, for the industry, and indeed for the company on the ninth of January this year, when the Norwegian government, or the Norwegian Parliament, I should say, opened up for deep-sea mining. With this, Green Minerals is approaching the, our next phase, which is license ownership. Today, we are going to present targets for the company in the form of, license our first license win, which we expect to be the first half 2025. We expect our second license win to come in the second half of 2025. And there we have a important that target. We expect to start production in 2028, and, as we will see later on, the economics in this project, in this project are really attractive.
The company cash return on investment, which is different from project cash return, but company cash return on investment, pre-tax, looks set to be, to go above 300% per year. The team presenting here today is as follows: led by Ståle Monstad, our CEO. Ståle has more than 25 years of experience in exploration in oil and gas, and comes to, or came, I should say, to Green Minerals from the position as Chief Geologist with Aker BP and Senior Vice President of Exploration of Aker Energy. Our Chief Engineer is Maxime Lesage. Maxime has worked more than 10 years on complex subsea construction projects and also completed his PhD on deep-sea mining production systems on the NCS.
Espen Simonstad, Senior Advisor Geoscience, has more than 10 years' experience from the oil and gas industry, notably eight years with the Oil Directorate, where license management, and application processes were key tasks. And then Angela Maekawa is our ESG lead, and Angela has a background in international trade and supply chain management. And for myself, I'm the chairman of this company. I founded it four years ago under the umbrella of SeaBird Exploration. My background is in the financial industry, investment banking, and as an investor. And I've been the chairman here since founding the company.
The ambition that when we started the company, and the ambition that we presented to our investors, who were part of that founding, was to become a license holder in one of the world's most attractive copper resources with the lowest use of capital possible. This has been a cornerstone over our ambition and our strategy all along, the lowest use of capital possible. Subsequently, then, after winning a license, to deliver 1.5 million tons of world-class quality ore for off-take. And as I said, the strategy to get there is extensive use of partnerships, and therefore an asset-light strategy, which we think is key on the long-duration project like this.
Status for the project, as of now, is, as I said, we had the opening decision on the ninth of January. Our production concept is in place, which we will go in detail into. We have proven blendability with terrestrial ore with our joint processing study. And on the 30th of April, Green Minerals was invited by Norwegian authorities to nominate acreage for licensing. Therefore, I'm really pleased to say that the company is on route to deliver on stated ambitions. We expect then to win our first license in the first half of twenty twenty-five, first ore twenty twenty-eight. And as we will show, we believe we can deliver unmatched capital efficiency versus traditional onshore mining to our investors.
When it comes to license work, we want to emphasize that, despite the modest market cap of the company, Green Minerals actually holds $50 million worth of exploration data, transferred to us from the oil directorate. This forms the basis for our exploration planning. We expect to file our first license application in the second half of 2024. So in the next few months, this will go in. We already talked about the license award, and we believe the company, having prepared for this for the last four years, is in a very good position for a license win. And we are indeed ready to execute on any awards. And with this, I hand it over to Ståle Monstad, our CEO.
Thank you. Good morning, everyone. One of the key things about this business is that the world really needs more metals in order to change out the existing energy system with an electric energy system. You need the materials to build that. And at the moment, there is no immediate solution in sight, unless you actually start also utilizing ore from the sea. I like this picture because it illustrates one of the cables that goes from the offshore wind farms. And just to give you the right ideas in the head, that cable, each meter of that cable is 50 kilos of copper, and it's hundreds of kilometers with cables that are gonna come from offshore wind farms.
There is an enormous need for more copper, actually, for the grid, for just distributing electricity and bringing it to shore, and so on. And we see it also on the table on the left-hand side, that offshore wind is really using a lot of metals in order to work. And if you compare that to what we use today as natural gas and coal, you see it's a really major difference. And of course, the other big thing is the transformation from a fossil-based car park for personal transport to electric cars, which also is a driver for this. So if you look at the sort of the key metals or minerals that we expect to find on the Norwegian sector, it's copper and it's cobalt.
Cobalt is mainly for the battery, EV batteries. Copper is needed all over the place. The copper is the metals that really has the most absolute growth, with about 9 million tons if we are to reach this ambitions of net zero by 2050. Knowing that, and knowing that the sort of copper ore onshore is on a quite a steep decline, all the easy copper, all the obvious places have been mined. And the ore grade in—this is for Chile, the world's largest producer of copper. We see that it's just steadily dropping down, meaning that for each rock you do sort of mine, it went from an average percentage of copper in that ore from in 2005 and 1 1.1%.
It's now below 0.8. If you look at the Nordic countries in Sweden, they are operating on 0.17% copper in the ore, and Finland is around 0.25. So the ore grade is really dropping down, and that has implications also for the energy cost of mining or producing copper. If you want to produce a kilo of copper, it takes much more energy now to make that, to process that and go to the smelter, because the ore grade is so low. And also looking at the recycling rate of different metals. This is quite a busy table. I want to point out copper over here. Today, we recycle almost 50% of all the copper that's produced, which is okay compared to many other metals.
We can do better, but it will never, never be enough to sort of build all the new stuff we need to electrify the energy system. If we look at today's recycling, it is enough to cover 30% of the need today in 2024, but this was 2022, but still. And also we see that all the predictions said it's going to be a supply deficit in copper. And that is not because we are constructing or building more sort of what we used to build more or less forever. It is really to the grid, to enlarge the grid, and also transport for the EV. So copper is one of the elements, one of the metals that is most hard to replace with something else.
You can't just change it up with something else because it has unique, it's a unique metal. So, the mining company saw this. It's gonna be really, really interesting to find more copper. So from 2002 up until 2011, they increased the investments into exploration with 600%. So the money that went into looking for more copper increased six times. But the result was not very good. They didn't find much more copper. That has several reasons. I said, all the easy copper has already been found and been mined. It's more difficult, and it's more remote and challenging locations. And actually, since 2018, only one new copper discovery has been made, on land, onshore, which is not gonna be enough, obviously.
And that is also seen. It's actually a shortage of copper ore now. This is the price for the smelter. It's actually negative at the moment because the smelters doesn't have enough copper ore to keep the plants running. So this is a graph from Bloomberg and CRU Group. And with this decline in ore grade, how much copper you have in the ore, also comes a rise in the sort of cost for producing each ton of copper. So we see in Chile, which again was the cheapest place to produce copper, they had most copper mines. Since 2006, it has gone up from $5 to more than $15,000 per ton copper in production cost.
So the cost of producing copper onshore is also increasing because the ore grade is going down. And we have to dig deeper and deeper, and deeper into the ground to find the metals we need. This is a graph going from 1950, where almost all of the mines were in the upper 100 meters. This is onshore. See how this is moving down. And down, this graph shows down to 800-900 meters, and that means you have to dig out a lot of rock that is gonna be waste before you actually reach the ore that you wanna produce. So all these are signs that the copper we need for the electrification of the energy system is very difficult to get from onshore production, alone, at least.
We know, I'm a geologist, and I know that there's more than enough copper on continental crust in the world, but it gonna take a lot of nature, a lot of hard work to actually get that out, 'cause the ore grade is so low. There's a statement here from BlackRock, which mean that, for to incentivize for new investments into onshore copper ores, you're gonna need a copper price of $12,000. And the price today is, I haven't checked today, but it's around $9.5-$10, in that region. That were about $10,000. $10,000. And as a contrast, we foresee an average copper grade between 2% and 6% in SMS deposits, or a span of copper grades.
We are, of course, aiming for the highest ore grades, and we have used 5% copper in ore. Our economy become between 0.7% in Chile, 0.25% in Finland. When you start taking from 2, 3, 4, 5% copper, it's a big, big difference, and it means lot less energy into the production of copper. Just a few word on the sort of geopolitics. There are three main blocks, the E.U., the U.S. and China, and they all have made their sort of critical list of critical minerals. And in the area, in the middle area, you see the elements that are common to all these different blocks. And both copper and cobalt is on all the different lists of critical minerals.
It is really, really, I can't stress this enough, but copper is the key to electrification. Simple as that. On the flip side of that, the processing and mining is controlled by very few countries, which means that the supply chain is, at least, it's not very secure. We see that China is dominating processing for all the key elements that goes into this, this new green shift, and they also control a lot of these mines that are marked with Congo and Indonesia and so on. So China has a very strong grip on the, on the mining sector, and particularly the processing part of it. And we have seen lately that China is using that monopoly or that power, by starting with graphite, which is really important into batteries.
They have restricted the export of graphite, making it a graphite squeeze, at least for if we are to realize all the gigafactories for batteries that we plan in the West. There's a recent publication from Rice University in Houston, stating that China is also positioning itself to dominate the copper supply in the world. And I think a lot of the politicians in the Western world are a little bit scared of having China too dominant, also within copper... And as a result of that, more and more countries around the world are adopting their own mineral strategies. All the countries that have a sort of color and not gray have sort of adopted a strategy between 2010 and 2023.
And Norway actually is gray here, but they adopted this mineral strategy, published on June 21 last year. Just a few words on the process in Norway, where we are. So we have had gone through a story. We went through part of this. The parliament vote in January, which was the first main hurdle, and now they have announced the nomination, and invited to that. There's gonna be a public hearing on the nomination itself, and application is expected in Q3 or Q4 in this year, and award early next year. And the area that is sort of where we are invited to nominate is reduced compared to the original assessment area by two-thirds, roughly. So it's a little bit over 200,000 square kilometers. And the nomination deadline is actually in exactly one week.
We feel that we have a strong support from the Norwegian government. These are statements from the Oil and Energy Minister Terje Aasland, also Prime Minister Jonas G. Støre, all seeing the importance of at least looking into the possibility of having the deep sea as a source for critical minerals. And we also have sort of a responsibility to look into that, because the world needs metals, more metals. The Norwegian used to be Petroleum Directorate, is Offshore Directorate now. They made a resource report, and that resource report concluded that the sort of potential in Norway is really a significant potential also on global scale. And we're gonna look more into the exploration part of it with our senior advisor for geology, Espen Simonstad.
Thank you, Ståle. I'm gonna talk you through the third part, the exploration, the first part that we are looking into now. So as Ståle mentioned, the area is now open. More than around 281,000 square kilometers opened for mineral activity with an 80-20 vote in favor at the Norwegian Storting in the Norwegian Parliament in ninth of January, and was formalized in King in Council now a couple of weeks ago. We are one of the recognized industrial actors that have been invited to nominate acreage within this area, and the nomination deadline is, as mentioned, next week. First, initial de-risk have already been done by Norwegian authorities and academic institutions.
Data covering all of this area in different kinds of multi-beam bathymetry, geophysics, and so on, sampling, drilling, have been done by Norwegian Offshore Directorate, University of Bergen, University of Tromsø, etc. And the value of that, more than $50 million, have we now access to, and that's - they have already done the initial risking or de-risking of the acreage we are looking at. So we're gonna use that in our work on the nomination and also further into the application part. And as Ståle mentioned, as part of the impact assessment, the Norwegian authorities did a resource assessment. If you look at it on a graph like this, you see that copper is one of the main drivers, but also manganese, and cobalt is a significant resource of what has economical value.
But the rare earths that you have in the manganese crust or polymetallic crust seems to be quite little. But if you look at it in a relative scale and take the amount of metal used annually, globally, you see that copper is approximately two years of global use, while other metals on this side have a relatively significant resource. So, as Ståle mentioned, the most interesting for us on seafloor massive sulfides is the copper, which is this main, main resource here, with also a cobalt and potentially gold and silver as a by-product, when the processing is, if we're able to take that out.
But on the manganese crust that you see, you have cobalt, the main, main driver, but also nickel, manganese, and vanadium, and scandium, that's used for metal alloys, in the, in several industries, that could be a very important potential. So it just show that the resource, we have two types of resources, the seafloor massive sulfides and the polymetallic crusts. And we are this is our main focus, but we are looking into it and studying it further to make sure that we evaluate all opportunities. This is a picture or a map showing the spreading ridge, the system, the Knipovich Ridge, no, the Mohns Ridge going up here, and the Knipovich taking a turn up here. This is out in the deep sea. Norway started to spread apart from Greenland about 55 million years ago.
Statistically, you have one hydrothermal deposit each 100 km along the way of the mid-ocean spreading ridge. This ridge is 1,000 km long, and science have proven that they have a lifetime, so a lifespan between 25-50,000 years. Taking that into account, we can assume that it could be more than 50,000 deposits in this area that have been overburdened by sediments, volcanics, et cetera. But they are available out there and should be on, and is, it should- are up for exploration. So the amount of deposits and the significant resource estimate seem to show us that we have a world-class resource to explore around. If you then take it a bit more down into what we call a play model, which are the geological concept of the discoveries.
We have two types of play models for seafloor massive sulfides. You have in the middle of the spreading ridge, you have what you call axial volcanic ridges, which have the mantle plume or the volcanic plume underneath it, and have as a heat source for hydrothermal activity. These are located as in orange here. You see the Loki's Castle is one deposit that have been discovered there, and the Aegir's Source is another one. These are relatively short-lived, and you have the volcanic activity covering after they die out and spread aside. So that's a lot of small deposits in the middle of the axis. But if you go to the flanks, you have Gnitahei and Fåvne deep inside here as examples. Also Copper Hill up on here.
These are having the heat source, which generates the hydrothermal activity, which again, is the source of the metal sourcing. They are longer lived. They live for a longer time, which means they get bigger. So the main potential, what we see is along the flanks, and especially on the eastern, the western flank, northwestern flank, where you have less sediment input from the, from the Greenland side compared to the Norwegian side. And also overburden with sediments are easier to handle than volcanic overburden. So now I'll talk you through what we have identified as four candidates for further exploration to mining and, or the area for mining.
As it says in the opening paper, the white paper from the authorities, the active vents are no places to no go, and they are not allowed to explore around, but you can use them as laboratories to understand the spreading trends in each direction. So that's important data points to take into account. So the first one I want to go through was actually made by University of Bergen last year. It was discovered by University of Bergen, just on the eastern flank, northwestern flank of the Mohns Ridge here. Water depth, just above, just below 10,000 meters.
So relatively shallow compared to what you have in the central axis, where you are down to 2.5-3,000 meters depth, which has a significant impact on the production again, that when you're talking about one third of the water depth. They were able to take drill cores, as you see here on the picture. They took three, I think they took three different drill cores down to 80 meters depth. And the core measurements that are in the laboratory now show very good copper-rich intervals over several intervals. This is by far one of the largest at this time found in Norwegian waters.
This is Brann Stadion in Bergen, and you have about two or three of these pitches, football pitches, in the size of this large deposit, but in an aerial size, we're talking about just a needle pin in the big picture. First estimates are we're talking about between 10-15 million tons of ore, which is a significant deposit for a license. Next one is Gnitahei and Fåvne. This one shows average values from Fåvne, which is an active deposit, but it shows what average values you can expect. You have copper and cobalt, that's the main drivers.
This one was discovered by the Norwegian Offshore Directorate, and the very positive thing about this one is that they managed to discover Gnitahei, which is an extinct deposit further away from it, with remote sensing geophysics. That potential shows the conductivity in the bedrock, and they were able to locate the deposit by this type of technology. So this is also one of the good candidates we are looking at. Mohns Treasure is further north on the ridge. This one is probably the most studied deposit by academia and authorities at this time. It has been drilled by Norwegian Offshore Directorate. They did the coil tube testing, or they drilled it with coil tubes, coil tube technology.
They have used self-potential to test the anomalies, and you see they have a very good fit with the deposit, and on the ancient vents you see here. They have taken several core assessments. As you see, this is a model we foresee how the ore body could be in the underground. You're talking about maybe 50-100 meters upper layers. So this is approximately 400 meters across and 400 meters down there. That's a significant deposit as well. You see the values we have. Samples show up to 14.3% copper and 0.19% cobalt, and this one's one of the most studied, so this is very attractive for us.
Excuse me, what is the size of this, the deposit inside this 10-15 box? Or what is sort of the most special?
I don't think you have enough data, because the drill cores are very, very loose, so you don't have a three-dimensional point of view in that yet. But in, if you're talking about aerial size, you are talking about the same size and kind of the outline stretch. But on the three-dimensional, we need more, more three-dimensional data and to make, to be certain on that. And then in 2021, the German scientist went up to the Knipovich Ridge and discovered Gjøa, which is the, was the first hydrothermal vent system along the Knipovich Ridge. There you have several active vent systems, but this one, although it's an active vent system, it confirms the prospectivity along the Knipovich Ridge all the way to the north here. And it's a very large active field.
It has, it's 200 meters across and 1 kilometer long. And, the NPD, the Norwegian Offshore Directorate, went out there last year, and they had a sample. This one shows, and the bulk, sample of that shows up to more than 29.5% copper. That, when you crushed it down and analyzed it. So this is the first discovery along the Knipovich Ridge, which confirms that you have the prospectivity along the entire Mid-Ocean Ridge, within the Norwegian waters. Also, on the other side, we are, it's important to us to make sure that, the academia is part of this. And we are co-supervising several PhD programs, which we can add, which we add value to our exploration.
So one PhD program in University of Southampton look at sediment cores to use that exploration as an exploration tool to identify previous hydrothermal activity. So if you take the geochemical analysis of a sediment core, you can point out in which direction ancient hydrothermal activity have been made, have been happening. The other one is a understanding the alteration process of iron hydroxides, which could be used as a trap mechanism for metals, and also it could be potentially be used as an ore if it has a high copper content. So both of these are adding value to our exploration in terms of the ore and the exploration technology. As mentioned, we also look at the polymetallic crust.
So we have a PhD program at the NTNU, where we look at the deep sea mining system for the entire value chain on the crust as well. Just show where we have modeled up a seamount here with a 0.4 valid % of cobalt, which would be a significant resource. If you take and if you look at the crust, there's basically the main crust zone is the one just north of the ridge on here. If you take what concentrations we have, we have more than 12% manganese, 0.2, more than two, 0.2% cobalt, and 0.2% nickel. You then assume that you have a 30 cm thickness of this crust on the seamount.
Then we're talking about these numbers per kilos metal per square meters. If you compare that with a nodule field, where you have around 15 kilos of nodules per square meters, you see the difference in numbers. This is a higher density metals per square meters, but it's more challenge, it could be more challenging to, to harvest. But we are, this is, a part of our exploration, work to consider this, this, crust as well. When it comes to technology, there's no showstoppers. We have shown, it has been shown that, remote sensing with self-potential, potentially electromagnetics have been used, consortium have been out there using seismic, where they managed to show a, the potential three-dimensional outline of the Mohns Treasure here. And all of these have been, are known, known technology, been used in oil and gas for inspections.
They can go down to the depths we're talking about using AUVs from, like this one, example five with HUGIN. So there's no showstoppers in the technology that we are planning to use for the exploration. If you take the expected license work that we are now aiming to, if we get a—because several of the deposits, there are different degree of maturation, how much data you have available. So if you get a, when we get a license over, for instance, the Mohns Treasure, we expect to take a first cruise in the, in 2025, where you do a detailed bathymetric mapping, you do the physical sampling, geophysics, and also you see, you, you'll try to do a coring of the data based on what you have.
And also, of course, you need to acquire the environmental data that you need to have to make sure you understand the mining operation. And then in the second year, second cruise in 2026, you can go out and do extended mapping for added prospectivity around it based on the knowledge you already have acquired through the first cruise. And you need to do a detailed coring to get a perfect three-dimensional understanding of the ore and the concentration of metals. And also, of course, the environmental data that needs to be in place to understand. All of this will then go into the mine planning. That will go for one and a half year before you can do a pilot production in 2028.
So to sum up the exploration, the Norwegian authorities have already de-risked the area with more than $50 million. You have several deposits confirmed, both active, inactive, and extinct, and they are all playing an important role in the exploration that's now coming. Recent discoveries show very promising copper concentrations, and we are ready to execute on the awarded acreage, and we have a world-class resource potential available for us in the first licensing round, which we are front runner on. So that was the exploration part, and I think we're now approximately halfway through the presentation, so we'll take a 5-minute break. We will reconvene at 11:45.
10:45 .
10:45. Sorry.
It's gonna be a long break.
Okay, everyone. I think we're,
Yeah.
We're about to continue, and before we do, I just wanted to, because the issues or the parts, various parts of the presentation, I think I forgot to mention. So we have now seen Ståle on the market backdrop, and Espen on exploration. Maxime, our Chief Engineer, will go through production, our production system, and processing. Thereafter, Angela is going to talk about ESG, the company's perspective and strategy for ESG. And then Ståle Monstad will come back and talk about environmental concerns. And finally, I'm going to try to wrap the whole thing up, and we're also gonna look at some numbers in the end. So, Maxime, please.
Good morning. So I'm going to run you through the concept study that we are completing for the production system. Yes. So what you see here on the right is a graph coming from a study that has been performed studying the production rates of deep sea mining system in Norwegian conditions if we were to be using a system similar to what has been presented by many companies already. And what you see here is that out of all the parameters four are really pivotal towards value creation and they can be summarized in three points. First, you need a weather-robust riser system which basically means a riser system that you can deploy in very harsh conditions icy states.
A weather-robust, ship-to-ship system, which is basically the kind of operations where you have two ships next to one another. For example, when you're offloading ore from a mining vessel to a bulker, when you're transferring personnel, and when you're performing logistics operation, maintenance parts, these sort of things. And then, the last one, which is a feedback loop with the first one, is a system that lifts ore at a fast rate. If you can deploy a riser system in very harsh condition, and in addition to that, you have a vertical transportation system that can go very, very quick, then you will get a better production rate. That's the main factors.
So what we have done is we have taken these three main points and systematically addressed them, looked for what was the state of the art and how we could optimize and maybe find some breakthrough ideas. So for the weather-robust riser system, the first thing that comes is that if you have a stable platform that doesn't move that much, then it's less efforts in the riser system. And that's the reason why we have selected a semi-submersible instead of a drill ship for the mining system. Because also there is a possibility to moor, and if you're moored, then you are very, very less impacted by waves. Then you can select a very rapid riser system when it comes to installation, and that's the reason why we selected a system that has bolt-free connections.
These riser systems comes from the drilling industry, so they are basically joints that are made together and then lowered into the seawater column. So, now we have a system that has less than one minute per joint, compared to minutes when it is bolted. And that's a big game changer when you have hundreds of these connections to do to deploy a riser system. We have also selected a field-proven pipe running system that can deploy 300 meters per hours of line pipe, which basically means that altogether, now we have a system that can deploy in around 3,000 meters of water depth in 10 hours. And that's very little compared to the systems that we were looking at during the previous study, where you would need more than a day. Then, a weather-robust ship-to-ship system.
First of all, do we need all this, or can we decrease the need for this operation? If you decrease the need for these operations, this will have a direct benefit impact on the availability of the overall system. The second question is: Is it possible to decrease the movement between the two floating assets? The problem is that these two assets are moving independently, but if we can, if we can reduce their movement relative to one another, then it will be easier to transfer something from A to B. And the last question is, actually, can we just bypass the ship-to-ship challenge? First question: Do we need to store the ore on the mining vessel? All the mining systems you will see, most of them, they are, they are storing the ore on the mining vessel and then transferring on the ore carrier.
The second question is: How can we transfer personnel? Can we use light craft or a small, smaller ship that goes from mining vessel to the bulk carrier, where the bulk carrier would bring people from shore to this site, and then, complicated with the Norwegian conditions. Is there a way to enable helicopter transfer? The issue is that, the distance from the shore to the ridge where these deposits are is too far for conventional helicopter transfers. And the last one is: Can we reduce the amount of, of personnel to transfer? If we have most of the people working not on the mining vessel, but on the bulk carrier that is going naturally, doing back and forth between the site and the shore, then that will reduce the stress on the need for ship-to-ship operations.
Lastly, a system that lifts ore at a fast rate. First, you need a system that can excavate at the desired rate, because you can pump as quick as you want, but if you don't mine quick enough, then there is no ore to lift, and therefore, you don't produce what you want to produce. And then you need a convection system, which basically means a transport system, so through the riser, that is highly available and field-proven. And that's the reason why we have looked at slurry lifting, instead, or with, with pump, pumping system instead of airlifts, alongside, and I will explain why after. We have also looked at container lifting, because then if you have containers, you don't need the riser. You are more resilient when it comes to weather windows.
Well, the issue is that container lifting doesn't seem to scale up. So it will work, but not to reach the production target we have. So to look at all these questions and develop our concept, we entered into a collaboration partnership with a consortium of industry players. This consortium is led by Oil States Industries, that most probably most of you know from the oil and gas industry. They are delivering a lot of equipment to the drilling industry. But they have also delivered risers for Allseas TMC, so the Hidden Gem, it's an OSI riser, and to Japanese consortium. So the Japanese consortium that lifted SMS in Japan in 2017, that's an OSI riser.
The one that has lifted the rare, rare earth, I think it was last year, is also an OSI riser. OSI has been involved with all these studies, so that's also the reason why we chose them, because, apart from making risers, they also have a lot of experience in designing this deep-sea mining system by now. Then we also have SMD, Soil Machine Dynamics, also in the U.K.. They have been delivering a lot of subsea excavators, deep sea intervention systems, but they have also delivered mining machines for SMS projects. Through this partnership, OSI becomes a shareholder in Green Minerals. Before the video, I'm going to present briefly the system, the concept system. So at the bottom, you can see excavators that have been designed by SMD. Oops, sorry.
Can I come back? Yes. These machines are producing a slurry on the SeaBird, so they are excavating ore as particles. This particle is mixed with local ambient seawater, and then is transferred to a pressure exchange chamber. This actually is not a pump. This is just a place where the slurry from the SeaBird is pushed upward. How does it work? The pumps are actually top side, and they are pushing seawater into the pressure exchange chamber. So that means that you have no pumps on the SeaBird, only an exchange chamber. The slurry doesn't actually stop on the mining vessel. The slurry goes directly to the bulk carrier, so there is no storage of ore on the sub- on the semi-sub. The ore carrier, most of you may have actually noticed, this is moored.
Why is it moored? Because it is connected to the mining system via a disconnectable turret, which is actually an oil and gas very well-known technology that was developed for arctic conditions in order to be able to disconnect FPSOs for seasonal icing. On the ore carrier, the slurry is dewatered. We separate the ore solid from the seawater, and then the seawater is sent back to the riser, to the semi-submersible, pressurized by the topside pumps, goes back to the pressure exchange chamber, and then released to the environment. So that's not a closed system. That's what we call semi-closed system, because the seawater that comes from here goes back here, and the only new seawater is the top-up we need to make here to replace the fraction of solids that has been removed during dewatering.
Now, I'm going to let you enjoy the video. All right, so it is not new. The first nodules were lifted with airlift in the 1970s. It has also been used in the latest pilot mining by TMC. Nevertheless, airlift comes with a challenge, several, actually. The first one is it's sort of difficult to control the natural degassing of the fluid when it comes up, right? And as a consequence, you need larger sections of riser at the top in order to allow for degassing, and this comes at a cost for tension, basically, and also volume requirements. It's actually more energy-consuming than pumps, estimated +50% of energy consumption for airlifts. So that's the reason why we decided to go for pumping solutions.
The current concept is based, as I said, on the pumping solution that are on top side, and only a pressure chamber is at the bottom. It's actually a technology that is proven, that it's used in slurry convection in land mining. It has a stronger redundancy than other setups because we can put several pumps top side that can be shut down for maintenance. Or if they shut down, then we have other pumps, and you never run on one leg, basically. The riser technology, as I explained, Oil States Industries have been delivering riser systems in the last 35 years for oil and gas, so they know what a riser is. They have delivered to the JOGMEC Consortium in Japan.
Their riser system is on board the Chikyu, for the Japanese research vessel, and they equip also the TMC vessels. It's a very fast connection system, and it has been field-proven at 4,500 meters, so we are in Norway, well below that water depth. Here, pictures from the rare earth mud lifting that has been performed in Japan with this riser system. They have a global network, and they are able to deliver everywhere in the world. When it comes to the excavator, what you see here is a smaller version of our concept that has been used in a flooded pit, for the VAMOS project. So real copper ore in flooded conditions, and also dark.
What you see on the top right is the counter-rotating heads, which are basically gathering the particles towards a central suction point. The point of this is to minimize the fines released to the environment and to ensure proper convection into the vehicle. This is the typical semi-submersible that we considered for this study. The good candidates are cold stack rigs, yes?
Excavator, how is that run? Is that run from the top side- Yes- manually, or is it
Yeah, it's like an ROV.
Okay.
Yeah. Basically, that's an ROV. Yeah, so, like, trenchers, these kind of things. Yeah. So it doesn't really call for control and power. Yes. So our candidates for rigs are cold stack rigs that are ready for sale and revamp that are qualified for harsh environments. In terms of deck size, we were looking at something like 85-75 meters in footprint, available footprint. But if it's less, then we are also open to put some equipment on outer riggers to extend the available deck space. And our system needs to be moored, so the candidate needs to have mooring capabilities. Right? Right.
Yeah.
Okay. Now, I'm going to go through the processing, so mineral processing. And first of all, refocusing on where the mineral processing is in the value chain and why it's important to start looking at mineral processing early, in the study of mineral projects. Exploration, identify and define resources. Mining engineering, convert resources into reserves, which basically mean the minable part of a resource. And then when mining starts, the ore is transferred to a mineral processing plant, where you transform the ore into the first valuable product: concentrate, that's sellable. It's important to look at mineral processing because mineral processing infers some cost structure information to the mining engineering, and the mining engineering will then use that in order to take the portion of the resource that has been defined by geology into reserve, what we can actually mine.
It's also important to look at mineral processing because the philosophy of mineral processing may also impact the exploration strategy, and this is something I'm going to develop after that. So the, the paradigm here is that SMS, as Ståle mentioned, as Sveinung mentioned, are very, very rich kind of ore. They are actually ore that we had in 1900s. We don't have access to this rich ore anymore. We believe that they can valorize the submarginal ore and maybe what was considered as waste in existing mines. What you see here on the left is a typical ore body in an open pit. There is a portion that can be mined, that has value and then you have blue, which is suboptimal.
And there is a portion that will never be mined because it's not economical to dig further with regards to the cost of expanding the pit. Right. The reason is maybe because this is suboptimal as well in term of economic value. But if you can mix super rich ore with poorer ore, then maybe this becomes a reserve as well. And then suddenly, you are producing more of what exists on land, you have less waste to handle, and you may also extend the life of the mine because now you can go deeper. And that has a very important consequence on mining. It's that it can extend the life of mines. And if you extend the life of mines, two things happen. The first one is financial. You push back the mine closure CapEx further. So in term of NPV, extremely beneficial.
Environmentally speaking, it's also a good idea to do that because you can capitalize on the portion of virgin soil that you have sacrificed at the beginning of the mine by continuing on using tailings facilities that are there anyway. So just a small review of what is mineral processing. Mineral processing transform the raw material ore into a concentrate that will be then further smelting and refined in order to produce, for example, copper cathodes, in our case. It's very often connected to the mine site, and it's very often tuned to the local ore. It represents a large CapEx in term of mining projects, because it includes a lot of infrastructures, and one of which is, is big spot, is actually the waste storage capacity or the tailings ponds. It requires a relatively constant ore feed.
It's a process. is not likely to be stopped. It is rationalized over the life of mine. If we look at the study made by the MIT for nodule in the Pacific, the investment needed for a mineral processing plant is going to be amortized over 10-15 years. So then, looking at this, we ask ourselves the question: Can we integrate the marine super ore into the land minerals value chain? Can we boost the sub-economic ore? Can we delay mine closures? Must we invest in a new plant, or can we capitalize on a plant that already exists? Do we need to take the risk of ore delivery stoppage and basically process stoppage if we own the plant? And can we capitalize on existing infrastructures and avoid developing on virgin soils? And, funnily enough, we are not the only one thinking like that.
This is a very recent article where The Metals Company has produced their first nickel sulfate from seafloor nodules by actually integrating in an existing nickel sulfate processing plant. So they have not invested in a new processing plant, they have reused an existing plant. If we look at SMS in isolation of the existing ore, because of their geology, there is almost no overburden, so there is no waste to remove on top. Because of their ore grade, then we can look at waste reduction up to 75%. When I mean waste, I mean rock that has not enough value in it, that will never go into the processing plant. Tailings reduction up to 50%.
Tailings is the waste coming outside of the processing plant, so the non-valuable part of ore that has been depressed after, for example, flotation. As a bonus for land, SMS waste can be separated on the sSaBird. Then we don't need to use some land space to handle and store them. They don't provoke, they don't arise a risk to land water source. One of the main issue with storing sulfidic waste is that they are sulfidic. So if fresh water touch it, start producing sulfuric gas, and then it's called acid mine drainage. You might have seen these pictures in Brazil, for example, you have these kind of orange rivers. That's basically a waste pond that's been raining on it, and this went down the hill into the river.
Here, if we segregate them on the SeaBird, we obviously are never in contact with fresh water. Seawater can act as a buffer. It's not the same as fresh water, it doesn't have the same ionic properties, so it is less actually production of acid, if acid at all. In order to prove our... or go ahead with our hypothesis that we can integrate the marine ore into the land ore value chain, we need to look at the blendability. Can they actually be mixed? Are they genetically compatible for being put together in the same processing plant? As I said, building a new processing plant means high CapEx.
And if we look at high CapEx, long life of mine, it has a direct impact on the amount of resource you need to find during exploration stage before you can actually click on investment production. On the right, with our hypothesis of 1.5 million tons per year, if we need to go MIT hypothesis 10-15 years of production, then we need to secure 15-22.5 million tons of ore in our exploration portfolio before we press the button of investment production. But if we can integrate into an existing facilities, then the only requirement comes from the long-term charter for the deep-sea mining operation, the production system.
With our hypothesis of five years of long-term charter, that means we need to secure only 7.5 million ton of ore before we can take the decision of starting production. So we knew from before that they are genetically related, because on land, the VMS are baby, SMS are babies, VMS. After millions of year, they will end up on the land. But a lot of things happened during this moving, so we had to verify that they were actually compatible. So we acquired some typical copper ore from land, and we acquired some SMS ore from the Mid-Atlantic Ridge via our academic partners in the U.K. We took samples that were actually not that rich in ore. And actually, they are blendable.
We tested 15 different setups, varying the ratio of land ore, subsea ore. We have only used common reagents for flotation and depression, so what is used commonly in the land processing value chain. Some comminution. So comminution is the crushing you need to do in order to transform the ore into a powder before it goes into the flotation cells. And they can be floated together, so using the same kind of reagents, so there is no showstopper to actually put this marine ore into the land value chain, and as such, our business plan for smaller reserves requirement stands.
Good morning. Green Minerals is very committed to responsible business practice. Since its first year, we've been building our ESG framework. Without regulatory mandates, we have been improving and updating our work. To make sure that this all consider and everything that you've seen today, presented today, our Chief Engineer is directly involved in the development of our ESG, SG framework. Our purpose is to understand, strategize, and anticipate all risks and opportunities that we can on environmental and societal footprint. Green Minerals is also a participant of the UN Global Compact, and we support the sustainable development goals.
With our experience from all this process, and guided by international instruments like OECD and the UN guidelines, we are shaping our governance structure with focus on environmental impact, protection, and mitigation of impacts. We consider three essential tools for this, and where we count on the stakeholder engagement to integrate their perspectives in our decision-making process. We also very relevant, our due diligence process, where we ensure very thorough assessment of potential risks, enabling us to make responsible choices. And a reporting process, where we not only benchmark our performance against industry standards, but we also facilitate comparability with other companies and track our progress over time.
Green Minerals proudly produced the first sustainability report for the deep-sea mining, now on its third edition, updated edition, and in accordance with the Global Reporting Initiative. And why have we chosen the GRI? GRI is the most widely adopted framework globally, with 73% of the world's largest companies adhering to its principles. And also, they have introduced standards tailored to the mining sector, which reinforce their relevance to our work. As do our current activities, to set KPIs and targets can be challenging. But our reporting process enabled us to identify material topics that are important to our stakeholders, especially the environmental impact. With the feedback from our stakeholders and our technical team, we can translate these concerns into strategies for environmental impact, for environmental protection.
Also, besides our internal initiatives, we contribute to industry-wide progress, and one of these endeavors was the collaboration for the development of the handbook for marine minerals that aims to establish guidelines to facilitate comparability and tracking of progress across the industry. This project exemplifies our commitment to collaborate beyond our work inside the company. As mentioned, now we are reporting in accordance with GRI, and we also produce annual communication on progress for the UN Global Compact. And then for the first year, we're gonna produce also to comply with the Norwegian Transparency Act, where we report on the due diligence on human rights.
Looking ahead to 2025, and with the commencement of our exploration activities, we are planning to adopt the ESRS and the TCFD. And furthermore, we want to raise the bar and take more meaningful commitments and start with the science-based target, for example, to keep driving our journey to sustainability ahead. Thank you. Now, Ståle.
Thank you very much, Angela. The environmental concern is, of course, has been sort of the greatest source of controversy around this industry, and it is something we take very seriously in Green Minerals. And today I'm just gonna try to explain our view a little bit and why we think this is one of the absolutely most the best way for nature to get the metals we need. Because there has been a lot of sort of writings in papers and magazines. Some are positive, a lot of them are negative, but we believe truly believe that deep-sea minerals needs to be accepted as an enabler for the green shift.
I was touching on this topic a little bit on the backdrop. We need to accept that we have to extract new minerals from somewhere. And we also need to accept that every action, in particular extraction, mining in itself, has an impact on the environment and on nature. That is unavoidable. So the question is more where can you get a kilo of copper or a kilo of cobalt, whatever it is, for the least amount of environmental impact, negative impact? So, because the impact is gonna be there, no matter what you do, as humans, everything we build, everything we do has an impact on nature. And one of the things we're faced with is the perception that is out there.
Every time it's written in one of these articles and papers and so on, the images they choose are very colorful, it's full of life. While if you take a look at the videos that the NPD have put out, I think there are, h ow many hours do you have? three, four hours of video going along the SeaBird. This is more what it looks like. It's never a photo like this in the papers, it's always like this, or with sometimes they use the images from 50 meters of water depth with crabs and fishes and everything. So it is creating a perception or sort of a mindset in everyone who doesn't really have an insight into the industry.
I think there are several sort of types of impact. One is the indirect environmental impact, which is the energy consumption. We know that energy is a resource that is, we don't have enough at the moment, or we have enough, but it's under pressure. So how much energy do you actually use to produce the metals we need? And to take something from a rock into a metal uses a lot of energy, really, one of the main energy consumptions in the world. So if you look at this red line here, it's up there. That is a typical Nordic mine from Finland. And Sweden is even lower. So we are around 40 gigajoule energy consumption per ton.
If you look at the star of the copper world, which is Chile, we are just below 30 gigajoules per ton of copper. And if you look at the spread between 2%-6% that we expect for SMS, we are less than half of that energy consumption, just by the processing of the ore. So that is a positive indirect environmental, yeah, it's a positive. We use only half the energy compared to what you use on land. And then you have the more direct environmental risks, and I want again to emphasize a bit what kind of assumptions are we putting into sort of the narrative?
Because all the images that you see, which are particularly from institutions against deep-sea mining, you have these kind of drawings. You have a huge collector plume here. You have a dewatering plume. You have a lot of noise all the way down along the riser system. Well, no company in Norway plans to do anything like this. It is not what we are planning for. Like Maxime explained, we're gonna take all the water, all the way back down to the sea floor. We don't have any sort of noise or pumps along the riser that disturbs the communication of whales or whatever it is. It is just not reality. It is something that is an assumption, and it's wrong.
And that's the way it is. So the main risks has been pointed out is sediment plumes, is noise, is light pollution. We're not gonna use any light. This is robots working. It's not humans. Toxic waste and for SMS, destruction of the endemic ecosystems around the black smokers, 'cause they are unique. They are, something very special, the environment that lives around these active smokers, because they live on the energy from, from the heat that comes out, and from the methane, and they live on the sulfur, and so on. Once these, hydrothermal vents die out, which they do after between 10 and 50,000 years, something like this, all the endemic, ecosystem dies with it because they don't have the, the source of, food to survive. That's one thing.
The other thing is, there's no one who's gonna go anywhere near these active systems because they are environmentally important. That's one thing. They're super hot. It's like you talk about 300-400 degrees close to the surface, and they're very acidic, and the water around it is super acidic, and it's full of metal ions and everything. So it's not possible from a technical point of view, and it's not desirable from an environmental point of view. So you can just put a big red cross over that. No one is gonna mine any black smokers. When it comes to sediment plumes, so we'll come back to it a little bit later, the noise, like I said, the noise is not a big problem along the riser because we don't have any pumps.
When it comes to toxic waste, what is the sort of the concern is actually metal ions into the water. Well, the water in these areas, along the Spreading Ridge, in the mid-ocean Spreading Ridge, are really full of metals. That is why we have the deposits out there. All these vents are spewing out enormous amount of metal ions. So, even if there are some grains coming out of the mining, it's very little compared to what's there naturally already. And this is a very active system. It is a lot of faulting. There's a lot of sliding, rock slides. It's volcanic eruptions. It is already a very challenging environment to live in, to put it mildly.
So these, this is a hypothesis about the plumes, like is very often published in papers and so on. This is from Drazen et al. in Hawaii in 2020. And then we have the reality. Because this has been monitored actually by MIT in Boston, by DHI in Denmark, during actual sort of test mining operations. So what they observe is that almost all the sediments that are mobilized stay really close to the sea floor. It doesn't rise up through the water column. Not like it's drawn here, that it rises for, I don't know, 2,000 meters or whatever they have it here. It stays very close to the sea floor, and it doesn't spread a long way off, away from the mining site itself, which is two very important thing.
When it comes to the mid-water plume here, that is, if you release the return water in sort of in the middle of the water column, which we are not gonna do. We're gonna bring it all the way back down to the sea floor. And this is a video from a test mining in the Pacific. And again, I just want to stress, this is nodules. It is a very soft bottom. It's full of sediment, so it's more plume here than we expect from SMS, but we don't have a video from SMS, so I'm gonna use this one. And this vehicle here is actually the collector. So what it did, it has a camera on top, and it did the mining, and it turned and went back into the plume. Good.
There is plume generation in this one. So now it's going into the plume, and as you can see, the camera, which is 3 or 4 meters above sea level, stays actually on top over the plume for almost all the entire drive back. So the plume rises, even in this very sediment-rich area, rises only 5-6 meters above sea level, and then it settles back again. And that's in accordance with all the modeling that MIT did, and DHI as well. And we realized that we have to do similar modeling along the mid-ocean ridge we have in Norwegian waters.
But then I wanna just, I'm gonna try to visualize the aerial effect, because one thing is sort of the effects that might spread out from the mining site to other areas, through plumes or noise or whatever. But the other thing is, what is the direct sort of the hole we make and the impact? How big is it? So I'm gonna use an example from Utah, which is a big mining state in the U.S., and compare a little bit with the mining that we are looking into in Norway. If you look at the scale, this is a scale for this. So this is the scale of the entire state of Utah, and this is the original assessment area in Norway.
The distance here is 1,500 kilometers roughly. Here, it's 500. So, it's a much larger area compared to Utah. In Utah, one of the biggest mines is the Bingham Canyon Mining area. And as we can see in this one, if you can read that far, it is actually 65 kilometers across. While an example in the Loki's Castle from tip to tip is 120 meters. So it's a completely different scale. It's really, it's really condensed deposit, the SMS, compared to the size of the, the onshore mine. And remember, again, we need to take these metals from somewhere. We need to dig a hole somewhere. It is not available to us, and we need it.
So if you take that typical Loki's Castle and put it into the mine, this little blue dot here, that is a representation of one sort of operation, deep sea mining, SMS operation. It's gonna be this size, but maybe a little bit larger, but not much. And again, if you take the Bingham Mine into Utah, that is. Oops, go back. It's supposed to be a little circle here. It's between these two green lines. It makes up a very small part of Utah.
So my point is really, even though the area that is also Norway, is very large, and it's been sort of, again, the narrative in the paper, so it's like we're gonna mine an area larger than Germany or larger than, I don't know which country they compare to, that is the expression of assessment area. The actual mining is going to be very limited. And when we are done with one mining site, we can lift all the equipment, sail to the next one, and lower it down again and continue. There's nothing, no infrastructure left on the SeaBird. It is really like surgical interventions when you compare it to a large area.
So just for this audience, to compare it with Nordmarka, if you scale that area to Nordmarka, having one of these operations out in the deep sea is equivalent to one of us walking into the Nordmarka area and digging a hole of 20 centimeters. Or maybe we are looking at 10, 20 of these sort of excavations in Norwegian waters, 10, 20 centimeters hole in the Nordmarka. It is a very small area that is directly impacted. And we, like Maxime explained, we have designed, in the concept study, a system that is minimizing all the environmental effects or impacts, negative impacts. We are bringing all the return water back down to the sea floor.
We don't have any pumps along the line, disturbing any communication channels or anything for mammals that might use that. We have a system of counter-rotating sort of excavation heads that goes into the middle, and everything is sucked up, so minimizing the plume. From all the studies we've seen, the plume stays very close to the sea floor. It doesn't move around. So it is important at least to have the right parameters in your head when you evaluate if this is a good idea or not. It's not very good to use the wrong assumptions. Right. I hand it back to you, Ståle.
Okay. Thank you very much. So going to try to wrap it up here, and look at some metrics and some numbers for the investment case. But before I do, I just- I like the Nordmarka analogy, where I think nobody would claim that if you put the shovel down in Nordmarka and dig up one of them that you would ruin Nordmarka. And that is probably the same thing that Norwegian politicians have understood when opening up for deep sea mining in Norway. It's really surgical intervention into a very, very large area. All right, so how does this look then from an investment perspective?
First of all, what strikes you when you look at the numbers for deep sea mining, for what we are going to do, versus traditional terrestrial mining? ... is that the economic metrics, or the economics of this, is such that we could talk about a disruption, in terms of, comparing it to the economics and of traditional mining. As has been said several times here today, there are no infrastructure investments needed in deep sea mining. Now, if you want to open a mine, a terrestrial mine today, you need to go to faraway places, often into the rainforest or the like, and you need to build substantial infrastructure.
There's substantial interference even before you start mining, and this costs billions of dollars, and it takes a lot of time to invest, and to create this infrastructure. In deep sea mining, we don't have that. We just take a ship and go where we want to take this up and start producing. The CapEx per ton of copper, and this is mainly a copper play as, as we have shown today. The CapEx per ton of copper produced is $17,000, and this is to be compared to CapEx, per ton of copper produced of $30,000 for onshore mining. So there already, we have an additional, an additional significant capital, advantage in deep sea mining. Also, as shown here today, there is 0 sunk cost in the mine.
That is, we pick up the equipment, and we leave for the next site when done with the deposit that we're producing from. As has been showed here today, there are various sizes of these deposits, ranging from a few million tons to maybe up to as much as 10-15 million tons. With the production rate of 1.5 million tons, the mathematics is such then that we stay in one place for two to three years and then move on. As has been shown, it could be up to 10 years production from one site. Furthermore, and this is super important, the business model that we are looking at is an offshore oil and gas services business model. That means we are looking to rent the equipment.
Just like if you're an oil and gas company, you rent a drilling rig from a contractor, we are looking to rent a drilling rig from a contractor, and then we have a consortium that provides the subsea equipment. This is different from the traditional mining model, where everything from the billions of dollars in infrastructure investment to the equipment goes on the balance sheet of the mining company. We don't do that. This is super important when you look at return on investment for deep within deep sea mining. So asset-light business model, very high capital efficiency, very high return numbers, because what we step into is the cost structure of the traditional miners, and the price levels set in world markets are, of course, dependent on this cost structure.
The disruption happens when you put a very different business model into that market. We get the advantage from a very high copper price based on very, very high costs. We have low costs ourselves. When it comes to environmental, as Ståle showed, there is, as we see it, having worked with this for some years now, there is a difference here between perception and reality. There is a study done by Paulikas et al., 2020, this is for nodules, that points to on a number of factors, including environment, biodiversity, and so on, points to a 90% reduction in the environmental footprint in deep sea mining versus terrestrial mining. I think we have shown here today the reasons why this is so.
We will operate a semi-closed loop, harsh environment, deep sea mining system. There will be no mid-water plume. Return water will be transported to the sea floor. There are no pumps along the riser that creates noise. And as Maxime showed, a sharply reduced overburden leads to less waste and less tailings, which is important. I can add, I don't know if, if the listeners are aware of that, but there are around 3,500 tailings dams worldwide. More than 800 of these are in Brazil, as the Western world prefers to have this industry onshore, which creates a lot of waste. It looks like the Western world prefers to have it happening in, developing countries rather than in our own backyard. 3,500 tailings dams.
The expected number of breaks on these tailings dams is three to five every year. Think about that number. three to five of these dams are expected to break every year. Every one of these that breaks is a disaster. It's a natural disaster wherever it happens, and there's been a few of those over the years, among others, in Brazil in 2016. To help reduce that pressure on those areas is something that we are proud of. Key metrics on investment case. Green Minerals is a copper play, first and foremost. We are targeting a world-class copper resource. This is happening at the time when the copper market is about to enter deficit, as Måns showed. It's an extremely good timing for this.
To have a new terrestrial copper project, to bring that on stream takes 10-15 years. 10-15 years, and market is about to enter deficit now. So in that sense, our project also has an advantage of being able to be brought to the market at an early stage compared to everything that you see onshore. We mentioned this before, but I want to repeat it. I think it's important. Despite the modest market cap of the company, $50 million of exploration data has been transferred to us at zero cost. I think as Espen showed clearly, what this data is doing for us in terms of understanding the geology there. The company expects a license within the next few months.
If you take one Green Minerals harsh environment deep-sea mining system, we are looking at the production of 1.5 million tons per hour, a 5% average copper ore grade. That gives us an expected annual EBITDA of $176 million. This is company EBITDA, not project EBITDA. The project EBITDA is far higher, and the reason is that we pay the contractor, we pay the drilling company, or the rig owner, to do this work. Project EBITDA is substantially higher than this.
This company, just to put a number on it, this company, will be able to pay the drilling contractor a day rate that is, if you compare to high-end leading day rates today, around $500,000. We are looking at a number that is 70% or more higher than that day rate. So we think, we think we have attractive business to bring to these players. We are, we are very excited about the discussions, we're going to have. Max drawdown on cash is $50 million. I will show you how this looks in terms of timeline. And the payback time, for the investment on the company level, not on a project level, is four months pre-tax. And I'm saying pre-tax because the tax system around this has not been decided on yet.
We think it will be a normal corporate tax rate, but that remains to be seen. So in order to talk about numbers that we know and not speculate on it, we talk about pre-tax. And that gives us a cash return on investment on a company basis again, of more than 300% per annum, pre-tax. This is how the cash flow profile of the company looks. And again, just repeat what I started off saying is that when we started this company, our ambition and our goal, and what we told our investors that we would work extremely hard to deliver, was a world-class copper resource with a minimum use of capital. So far, we have delivered all that. The company has a burn rate of NOK 2.5 million per quarter.
If you compare that to the other listed company in the world, The Metals Company, they have a burn rate of $15 million per quarter. And this is all back to this asset-light thinking, this partnership thinking. We have, of course, talked to senior people at the, at TMC, and it's just a whole different thinking in terms of, how you approach this resource and what you need at any point of time in order to drive, to drive, the process towards license. And, so far, this has worked extremely well for us and, has been beneficial for our shareholders, getting access to this license with a minimum use of capital. When we start, exploration or the ad- sorry, I think I went, back there.
So when we start our exploration or the add-on exploration, in addition to the data that we have, and the environmental monitoring and so on, we will start to spend some more capital. In the area, we think around $10 million per year. Still, at the maximum drawdown point for this company, which is 2028, when we start producing, we will be below $50 million spent. What you get in return for the $50 million spent in total on the company level is a cash EBITDA coming back of $176 million based on today's copper prices. And we already talked about the copper market entering deficit. We've seen BlackRock, Goldman Sachs, and others talking about higher prices, 20% up, in order to necessary than to invest in new projects terrestrially, and others have forecasts of far higher copper prices.
But only on today's price, $176 million against this cash drawdown. And then, as we can see, the cash builds extremely rapidly in the company into the hundreds of millions of dollars, quite soon after we start production. So in summary then, just wanna start with actually the bottom statement there. Green Minerals is primarily a copper play. We, as a company, has spent a lot of time deciding on which resource we think is the most attractive, and this has been really important for our strategy here, and our thinking that Norway and the SMS deposits is really the most interesting deep-sea mining play to be had.
We also have an MoU on the license in the Clarion-Clipperton Zone, and this is a really, really big license. To put some numbers on it, there's more than 200 million tons of wet nodules, $40 million has been sunk into exploration on that license, and the size of the license is humongous. It's equivalent of 180 North Sea blocks in oil and gas. Or to put that in perspective in terms of listed Norwegian companies, this is the MoU that we have there, or the license that we have the MoU on, is five Aker BPs in terms of size. It's truly big. The International Seabed Authority has said that they will deliver the mining code by July 2025.
We are very happy with that, in terms of our own timeline in Norway, meaning it gives us the time to work on this MoU, and to get the best result possible before we start the transfer of rights to Green Minerals. But as you understand from what I'm saying now, is that when we look at the qualities, the minerals, that are represented on the CCZ, we are more bullish, we are more confident on, the, on the SMS deposits than we are on the, the nodules. I can, for example, say that the first player that starts production of these nodules is going to have a really big, impact on the manganese market. You're not going to see that in copper.
We are not going to impact the copper market by producing, but the first one who starts producing nodules is going to have an impact on some of these much smaller markets that the nodules go for. So I just want to make a point out of that. Otherwise, we have been delivering on our strategy and fully intend to continue to do so, and we're ready for the next step. The Norway 9th of January decision is massive for the company, de-risks the business case, and we have now been invited to nominate acreage for licenses. We believe Green Minerals is in pole position to win licenses as soon as the first half of 2025. The production concept Maxime has shown has been developed together with globally leading partners and is ready.
And this is, a ll the elements that you saw on what Maxime presented is basically TRL 9. These are known technologies put together in our own way and with a good bit of input from Maxime himself. We have proven blendability SMS with onshore VMS. This is super important for the business case, and it adds industrial value. It is hard to imagine that any onshore copper miner in our vicinity would not be interested in ore that is 20 times richer on copper than what they produce today. That is what we're talking about. Mining infrastructure in Nordics is well developed, and you saw where we plan to ship the ore. Our current plans, it's Narvik, and the infrastructure is in place.
The DSM metrics, as I said, is superior to traditional terrestrial mining. Importantly, it allows us to produce copper with a different business model, super important. It impacts the economics in the case substantially, and not least on ESG factors. We talked about the environment today, but we could talk about other things, such as social, such as cobalt production, for example, in other places of the world. But just to stay with the environment, there is a reality that we see down there from the work we're doing versus the drawings done on land by people who's not been at the 3,000 meters looking at what's there.... We have an unusually strong investment case, financially.
Stated annual EBITDA, pre-tax cash return on investment, of 300% per annum on company level, and a pre-tax cash payback of, almost unheard of, four months. And, the market cap on all of this is, almost $8 million. So with that, I think we have, concluded, the prepared, the presentation. We have stayed within our timeline, actually beating it by foufour minutes - in Green Minerals time. So, so happy about that. And, we are open for question. We welcome questions, and, also we are going to hang around here for those, who might not want to ask them in, in, in public, or rather have, private conversations. So, please, anyone.
Maybe, one from from me, Ståle. How large is the variance in terms of ore grade? I think you showed one example that Måns got, and it was 14.3 in the example in the economic calculation by, h ow much variance can we see there, maybe in one deposit or general?
I think, I think I'll leave it to the geologists to, to answer that.
It is a difficult question to answer because we don't have all that many data points, hard, hard data, of course. So, what we can do is to look at how does it look on land, like, I think it was Espen example or Maxime example. But these SMS masses eventually ends up on land, maybe in 100-200 million years' time. But it's the same this is the process that created all the copper that is taken out of the rails and left them on these mines in Norway. So we got a fair idea. But there will be differences in different zones, because what sort of controls the precipitation of copper is temperature and pressure.
So that could vary a long time, and suddenly you just put out zinc here, and then it increases the pressure, for instance, and then copper comes out or decreases, I mean. So it is. But we see that the example of Espen showed of 29.5% copper in one rock that they took from the earth is extreme. And then we have other samples with 0.1% copper from the need to have a new special sample. So that's the span that you have. But we believe there are zones that are rich in copper and other minerals. And one of the beauties of this type of mining is that you don't invest in roads and build facilities on the place.
If you reach poor areas, you can just lift up and go to the next one. And that is the idea. That's why we use relatively high average ore grade of 5% in the economics, because we do not want to mine bad rocks or lower grade rocks. We want to focus on high-grade zones. Sometimes that is easier to do than other times, but at least much easier when you do marine type of mining compared to rock, because you don't have any sunk cost. I mean, if you invested in a road and a plant, you need to dig until you are broke.
Okay. Anybody else in the room?
Yeah, I have a question or a couple of them. You talked a bit about plumes I was wondering if you've done any modeling in the Norwegian Sea, or is all the results that you referred to from the Pacific? That's one question.
Yeah. Okay, let's just take another one.
Yeah. And then you mentioned that several of the interesting points are active vent fields, which you also mentioned that you don't want to mine on. So I'm just wondering how you will? The vent fields? differentiate between them. Particularly as the scientific knowledge is a bit uncertain on whether, how you can determine whether a field is or a vent is inactive or just sleeping. There are examples of vents being activated by mining operations on core sampling on inactive vents.
I'm not aware of that. So your first question was the blues. All the examples and all the, all the studies that I showed are from the Pacific. That, that is where it has been, sort of, been going on for the longest time. The exploration has been going on there for 20 years with, with different companies. We are- we do work with, with another company, and we're setting up a system also for, for Norwegian waters. One thing that has been done is a mapping of the sediment layers. Now, I'm getting a little bit geological, I thought, but the sediment cover inside the rift itself. And, and that is done by a guy called Stalsberg and the University of Bergen. They looked at the, sort of very shallow seismic.
You can see from these images that it's a very thin layer of sediment, but it's evenly thick all over the place, meaning that there are not many currents moving around there. But if you go towards the fjord, if you have like a rock sticking up or some high, it will be no sediment at all on top of that because the current washes away the sediment, and it deposit it in the lows. That is basic sedimentology. What we see out there is that it is just even sediment layer, very thin, but even, indicating that there are very little strong currents able to move sediments. So that is an indication, it's an indirect indirect sort of point that towards not much transport of plumes are possible, because of this.
Espen, we can elaborate a bit about that. We have started a cooperation with the Danish Hydraulic Institute, looking at plumes specifically for the Mid-Ocean Ridge and now. And I think, do you have anything else to add or, Espen?
No, that's one of the first thing to understand the local variation in plume. And as Ståle mentioned, there's very little sediment variation, which then indicates that there's continuation of sediments coming into the system. But for us to understand the local variation, it's important.
And then the second question, you have to remind me again.
It's about how you will determine whether -
Yes. Yeah, active .
-active or sleeping. Also, perhaps if you could elaborate on the data that you gathered before, actually sampling the SMS to have a reference?
Well, when it comes to the requirements, we have discussed this with the, with the Energy Department and with the, Offshore Directorate. And, I think we, most of the very small community of deep sea mining companies know and agree that it is a good idea that the, authorities come up with specific requirements for environmental data collection and observations before we actually do anything. Because, that makes it a, a bit more easier to, to sort of, to know what you're gonna do, what you are not going, what's not important, what is important. But then, with the help of environmental, department and so on, put up a set of criteria, this is what you need to have, a handle on before you can start.
When it comes to the active, active or, you call them sleeping, sometimes, there is a little bit of activity, typically like, 20 degrees of water coming out and not 300-400 degrees of water coming out. So still a little bit of light going up. I'm not aware of any cases where mining has, has, sort of waking up, a sleeping, vent. I don't know where you have that information, but, you're welcome to send the, the, the publication if you have it. And avoiding these it's not, difficult with the active one, because they are black smokers. It is really, the easy thing to see down there.
You can use chemical sniffers, you can use optical instruments, you will see black smoke coming up. And we need to avoid that, both from an environmental and from a technical and mechanical point of view. And lastly, we think that the, like Espen said, the most interesting part is the flanks, where you don't have this, it's not as dramatic as you have in the actual valley. You don't have a same sort of, i t's a little bit cooler system. It doesn't have the same temperature because it's a long way to go from the magma up to where they actually precipitate their metals. So of course, we're gonna stay away from all the active vents and the venting.
I don't know what else I can say. We're gonna stay away from them and distinguish between an active and an inactive- Yeah .. or extinct system.
Okay. Should we take some questions from the listeners here? One is: Could you advise on the exploration, the depth, and the overburden that you're anticipating? I think we talked about this throughout the presentation, but is there anything to add over and above what we had?
We're working with depths as one deposit shows, we are around 1,000 meters, and down in the actual valley-
1,000-3,000.
1,000-3,000. Yeah ... the overburden we're talking about on sediments is, well, not very much.
Couple of meters.
Yeah.
They're largely outcropping, so there is no overburden.
There is only a marginal outcropping. That is one of the pillars of the strong environmental case we feel for the resource. And then we have one here: For the deep-sea mining process and the invasive gathering extraction on the crust vents by, I assume, some kind of AUV, is there going to be AI assessment by the use of machine vision on the fly, or interfacing the floor on the targeted extraction points? I don't know if anyone wants to have a go at that? You want to start this one?
Well, AUVs are not going to be used for any extraction.
For production.
It is an observation and data gathering tool, AUVs. So, but there have been some proposals from some companies to use AI assessment to avoid sort of environmental biological life during nodule picking. I know, it's not so relevant for us.
Yeah. Okay, and then we can go to, for example, this one, which I think is interesting.
Yeah.
There is a lot of questions from Mr. Luke Brown.
Yeah. We are not going to answer every question from Luke Brown.
Well, actually.
SMD's Solwara 1 work on production vehicles lasted around 10 years. How does this compare to our timeline?
I think they're all for me anyway. So first one, 10 years. Yes, because they were the first ones to be produced. So you had all the design phase to do, the testing phase, and then, okay, now what we are going to do is to take all this experience that is already being gathered, has been already designed. So our lead time for the full system is three years, mainly driven by the waiting time in naval yards.
Yep.
So nothing to do with the robots, actually. Are you planning to recover any other metals besides copper? Yeah. Actually, cobalt. Part of the mineral, mineral processing study, was to identify where the cobalt, was, located in the mineralogy. The cobalt is, intrinsically, in, in the pyrite. So if you want to recover the cobalt, in addition, you have to, do the retreatment of the tailings, which is another study that we are planning on.
And I think we just go to. I guess you already...
Very briefly. So Nautilus Solwara 1 project is a mobile system by definition, because it's a different geology. The SMS of Solwara 1 were on a fast-spreading ridge, so it's almost a 2D deposit. It's not much expression in depth. It was very, very wide, actually.
Yeah.
So very different. Our system is more fixed because we are looking at different geology.
Yeah. Can also just add that there are big differences in terms of how we, how we approach this resource and approach the, the whole project from a business case point of view, which we have explained, with the, with the numbers as well. And then, this last one, Maxime, have you identified ship-based or seafloor drills that will be essential for resource definition?
Let's see.
Okay.
Oh, yeah. Well... No, go ahead, Ståle.
No, I can take that. Yes, there are at least two systems that we know of of seafloor drills that can be used. We are not anticipating using ship-based drilling in our exploration.
Yeah.
Okay, we can take this. Although the first pass exploration has been provided by the Norwegian Offshore Directorate, what are your plans for detailed geophysics and drilling to define alteration in your deposits, and when will that kick in?
Well, the first pass exploration or the next pass will be after license award, then first 25. So then you need to do a detailed geophysics of the deposit that you find most interesting to get as good as you get as a three-dimensional overview of the concentration and the ore itself. Based on that, then you need to do drilling. The first drilling, which again will lead us to the second cruise, which again we have to take to get even better drilling, to get an even better three-dimensional overview of the ore. Yeah, that's the general, first exploration plan.
Yeah. And here's a question on the whole licensing process and approval process. So, Ståle, do you want to have a go at it? What type of companies do you expect to apply for the region licenses? Mining companies, trading companies, what is the expected competition and also the timeline?
Yes, it's a two question in two parts there. The first one is ISA approvals. It's not really what we focus on at the moment. We will follow very closely what happens at the ISA regarding the MoU we have for the license down there, but it's not relevant for Norwegian process. So, the type of companies we expect to apply in Norway is actually deep-sea mining companies or companies that have already flagged themselves as interested. And it's quite a well-known cluster of companies, not too many, so the competition is, there's more than enough acreage in this first round for companies that have done the work beforehand, like we have.
Yeah. And I think, just to make that clear, so Norway has sovereignty over this area, over the Norwegian continental shelf, and has how should we say? large degree of self-confidence in its ability to manage natural resources after having successfully done so with oil and gas, also offshore, over the last 50 years. So Norway is driving this process from a domestic perspective. All right, this last one.
I have a question, if that's okay.
Yep.
Yeah. The resource estimate that was kind of put forward as part of the opening process has been heavily criticized for being misleading and blown up and kind of too big from, among others, the Norwegian Geological Survey. A nd they are proposing a copper estimation of 1.5% instead of 5%, as you're talking about here. And NGU, they're saying that the earlier estimation from SODIR, as we read about that, were based on too few and shallow samples. So do you disagree with NGU on this, or do you have a recommendation that kind of counter NGU, which is, like, the main knowledge base here?
NGU is the main institution for onshore geology. That's correct. And I've discussed this only, I think, three weeks ago with the author of that report from NGU. And I'll try to give a brief explanation. Again, they have compared onshore mine copper mines in Norway and in the around and see, well, what is the average grade in here? But the average ore grade for a mine is dependent on how far out you're willing to go to mine. If you construct a road and a processing plant and a, like, a small town almost around an area, and you start mining, and maybe you start with the best parts, and then you have to do more mining because you already have the plant, so you can just as well do the mining.
So my point is, the average ore grade of that mine is dependent on when is the commercial, sort of, economic cut-off value for mine. Like I said, in the beginning, in Sweden, the biggest mine in Sweden are now mining at 0.17% copper. In Finland, Kevitsa mine, the Luossavaara mine, they are around 0.2-0.3, something like this, because already they have all the stuff built, so they need to make the most of it. So when you say, what is the average ore grade on this mine, it would be, of course, drawn on quite significantly, but delayed the production. When you go offshore and do mining, like I said, you never want to mine when it's not commercial.
You don't have anything, any sunk cost. You just lift it and go to the next one. So it is a, it is a completely different sort of something, and sort of circumstances around it. So it's not wrong, what NGU put in there. I think they are close to 2% instead of four. But it's based on maybe 1.5, based on on mining averages onshore, which is a different situation than mining offshore. Yeah. So I don't know if you understood where I'm at, right?
So in conclusion, if you want to talk about minerals in the deep sea, it's you should probably talk to a deep sea miner rather than an onshore miner or onshore geologist. All right. I think we are sort of approaching the end of this. No further questions coming in on the screen, and so we want to thank you all for participating, and especially those who came here in person. We appreciate that after these hard years that we just have come out of. So thank you very much, and again, we'll be hanging around here, so any other questions here physically, we'll be happy to discuss them.