Morning, everyone, welcome to this second quarter conference call for Green Minerals. My name is Ståle Rodahl, and I'm the Executive Chairman of the company. I'm here with Ståle Monstad, our CEO, and Angela Mehech, our ESG lead. Just want to make some initial remarks before handing it over to Ståle and Angela. It has been an eventful first half, 2023, and I'm very pleased to see that a number of steps towards opening has passed. The industry, as such, is well underway. On Green Minerals, we signed a memorandum of understanding for our first marine minerals license in January, and in July, we participated in the 28th International Seabed Authority Council meeting as part of the license holders' delegation.
Significant work has been done on this license- to- date, indicating a resource, a resource of global significance at more than 200 million tons of wet nodules. Our counterparties are nation-states, it is a somewhat time-consuming process to get all the pieces in the puzzles together, but we're working towards transferring our rights to Green Minerals on this license, and it's a truly exciting prospect. In June, the Norwegian government sent out the white paper to the parliament, recommending opening up for the Norwegian continental shelf for deep-sea minerals. A parliamentary vote is expected this fall. This sets the stage for an important new industry in Norway, creating thousands of jobs and new activity for the whole country, Green Minerals is in pole position to become a license holder in this area.
With this, Green Minerals is well positioned for the expected opening up for marine minerals in both of the two most exciting areas in the world. We're excited about the next few months to come. With that, I hand it over to you, Ståle, for the second quarter presentation.
Thank you very much, Ståle, and I'll just dive in directly into the highlights. Like, Ståle Rodahl just mentioned, the, the really big news, this last quarter was the, the parliamentary notice that was handed in by, the government to parliament, recommending an opening for the deep-sea mining activity in Norwegian waters. This is a huge step towards this opening. In addition, on the international scene, the, International Seabed Authority is moving forward with the Mining Code, working hard on all the different issues for an exploitation of Mining Code, in, in the area or in international waters.
Further, we have started the first of its kind in the world, study, this summer at the GTK in Finland, trying to demonstrate that we can blend the seafloor massive sulfide ore with the traditional onshore copper ore in existing processing facilities. This is, we believe, an also very important piece of the puzzle to make this new industry a commercial, viable industry. Finally, the harsh environment deep-sea mining system concept study that we do together with the partners OSI is progressing as planned, and OSI has also become a shareholder in the company. On the financial side, it is actually no sort of deviations from what we have been guiding on previous run rate.
We have a underlying EBITDA of NOK 2.3 million, and a cash balance just shy of NOK 16 million. In the half-year report on our website, you can see a bit more detail about the finances. Just to sum up, what we did there last year, just to recap, we achieved all our milestones during 2022. We completed the research cruise to the Mid-Atlantic Ridge, together with our, our partners in Southampton, where we also have two PhD students working on the project, Ultra. We did the first phase of a metallurgy study in Finland on seafloor massive sulfides. This is what we do to this year is a continuation of that study.
We have implemented all the released data from the Norwegian Petroleum Directorate into our database and into our workflow and exploration framework. As Ståle just mentioned, we signed a memorandum of, of understanding with the license holder in the Clarion-Clipperton Zone in the Pacific, and we are still working actively towards other strategic partnerships, both in Norway and internationally. Back to Norway. The Labour Party had a unanimous vote on the white paper or parliamentary notice that was sent to the parliament in June. That was the big news. Also together with the, the government partners in, in the Centre Party, all the major political parties are in favor of an opening for exploration. The responsible Norwegian ministry, which is the MPD, is supportive, very supportive.
We see that the offshore industry is ready to take part in this business. In Green Minerals, we don't just sit around and wait, we're also actively working together with the in the development towards the opening. At the moment, we have a project going with the University in Trondheim on tax regime sensitivities for this future industry. The Norwegian authorities in their Meld. St. 25, has also sort of promised to take their share of the research cost for this industry. They have increased the funding for the MAREANO study, which is an environmental based on research that is done on in the Norwegian waters. They will continue to fund the Institute of Marine Research in Bergen to increase the knowledge of currents in the Norwegian Sea and the Greenland Sea.
They continue to fund the Norwegian Trondheim Directorate for cruises on exploration, both on mainly on geological topics, but also on environment. Also importantly, they have ensured that all the relevant environmental data collected by different parties will be shared among relevant stakeholders, which is a very important step towards getting a better overview of the environment in the deep sea. A little bit on the resource itself. The Norwegian waters is mainly copper plate, at least the one that we focus on in Green Minerals, the seafloor massive sulfides. I just want to recap what I said last quarter, that there is, according to the analysts around the world, it's more a question of when and not if the copper demand is likely to surge.
Recently, the United States Geological Survey included copper also on the critical metal list, that they operate for, for energy security and also for, for general security, national security. We see that China is really moving aggressively when it comes to copper. They are the main, by far the biggest consumer in the world of copper, and also controls a lot of the refining. Just recently, in July, there was news that they will increase their, their refining capacity of copper significantly. On that sort of note, it's interesting to see that the report that the NPD put out last quarter or first quarter indicates a huge or very large resource when it comes to copper.
More than 38 million tons of copper estimated on the Norwegian sector, in addition to a significant amount of cobalt as well, which is also an important critical mineral. What we do with the study in Finland? We have acquired more material from seafloor massive sulfides from the deep sea, and we have also secured VMS, volcanic massive sulfide, which is typical Scandinavian onshore copper ore. We're doing a study that aims to prove the blendability, that we can actually process these two ores together in existing plants. Currently, we have done a flotation study on the seafloor massive sulfide, meaning that we have demonstrated that it's possible to use the existing facility to process the SMS.
We will continue the study by blending in onshore ore together with the deep sea ore of SMS, and see that we can actually process this together. The reason this is important is that it, it will be a sort of a launchpad or a bridge towards the existing onshore mining industry. Showing that we can take our copper ore from the deep sea and blend it directly into their current production. We do have quite a bit of opportunities in Scandinavia to process this SMS. On this map, I put on a few of the existing plants in Norway that are can easily be modified or converted into, into processing copper. There are more than these three I put in. This is Mo i Rana and Røyrvik and Odda.
Also, we have an active processing plant. Boliden has an active processing plant in Skellefteå in Sweden, that can that can blend in this this seafloor massive sulfide. In addition to all the plant and existing gigafactories for batteries, we believe that it is possible to create quite a, a low, low emission value chain internally in the Scandinavian or Nordic countries. Relatively short sailing distance from from the Mohns Ridge into Northern Norway, a good network of railroads and existing processing facilities together with with sort of consumers or, or, or off-takers. Could be battery factories, could be the other off-takers.
When we take a look at the roadmap that we have had since the beginning in 2019, we see that all the boxes that we put up back then has ticked in as planned or scheduled. The public consultation was completed by the end of 2020. The only difference from last quarter is that the parliamentary notice came in second quarter 2023, and we were hoping for an opening decision before summer, but it's pushed towards after summer and after the opening of the Norwegian Parliament in October. As a consequence, we shifted all these dates by two months, but still it's holding up quite well, and the last bottom line here is still unchanged.
I mentioned the cooperation with the Oil States and this consortium that is working on a harsh environment concept study, for exclusively for, for Norway. It is, is progressing, also has become a shareholder in Green Minerals, and their ownership will increase to above 4% by completion of the study. The partners we have in this consortium are quite, is all world-class, and they are, have experience with the, the work done, the tests done in, in the Pacific and also in, in Japan. SMD has, has delivered mining machines for the previous, seafloor massive mining, projects. We, we're very happy with this, this partnership, and, and we are quite excited about the preliminary results that we have from the study as well.
Moving on to the Pacific, like Ståle mentioned, we were invited as part of the operators delegation, to the 28th council meeting in Kingston in July. It is quite a, a sort of, it's not a very speedy process in the ISA, but it's working steadily towards a Mining Code, and it's, it's moving forward from meeting to meeting, and we hope to have a Mining Code ready next year. If we, if we sort of compare the two different areas that we are, are focusing on, the Norwegian Shelf, where we look at the seafloor massive sulfides, and in the Pacific, we look at the polymetallic nodules. It is, it is similarities, but also quite different.
In Norway, the SMS is mainly a copper play, and it's also a three-dimensional deposit, meaning that goes into depth, maybe 50 to 100 meters down into the crust, and it covers quite small areas, comparable to two football fields. While the nodule play is different. It's a two-dimensional deposit, sit unattached on the seafloor, and you actually harvest it. You don't have to mine it, you just pick it up. Also, when it comes to the composition of these two ores, it's different. It's copper play in Norway, while it's more of a battery play, the nodules, in the Pacific, containing cobalt, nickel, manganese, and copper.
The actual license we are negotiating at the moment is, is like also a very large license and has a very significant resource already mapped on the license. At least 200 million tons, and if you, if you look at the production of between one and three million tons a year, there's many, many years of production to be had on that license. Also, the nodules are interesting enough, the only ore that contains all these four different essential battery metals in one single ore. There's no sort of toxic levels of heavy elements associated with nodules, which is also quite positive for the environment. Key objectives for this year, we hope to have a license win within the end of the year.
It could be that we manage to, to land the license in, in the Pacific, or it could be another opportunity that we're looking at internationally. We are also planning on going on a second research cruise to the Mid-Atlantic Ridge, together with the National Oceanography Centre and University of Southampton on this project, Ultra. We, like I mentioned earlier, we are in the process of doing this blending exercise with the Geological Survey of Finland, which is the first time anyone has, has done that. It's the first in the world. We continue to work on our partnership model throughout the value chain, from exploration to the processing. We're actively working towards strategic partnerships. Also, new, you might say, is that we're looking into the shipping space for, for partners.
Then I hand it over to Angela to go through our ESG activity.
Thank you, Ståle. Good morning, everyone. I'm Angela, ESG Lead at Green Minerals. At Green Minerals, we act responsibly with transparency and focus on continuous improvement to guarantee sustainable operations. In order to accomplish it, we are building a solid base with policies and procedures, their strength in governance, and focus on social impact and environment protection. The latter being the biggest concern due its potential negative impact. Green Minerals believes in a science-based approach, where gathering the necessary data is the only way to inform us in how these minerals can be harvested with the least possible impact. Studies done so far indicate that environmental footprint from deep-sea mining may be less than 10% of that in terrestrial mining.
Following, we rely on stakeholder engagement to raise concerns and indicate areas of improvement, due diligence process to identify potential and actual risks and act on them, and reporting to keep stakeholders informed and measure progress. In April, we released our second sustainability report in accordance with GRI. Green Minerals is a participant of the UN Global Compact, supporting the 10 principles. The company is committed to act on the Sustainable Development Goals and participates on the development of an ESG handbook for marine minerals. That's it. Thank you. Back to you, Ståle.
Thank you very much, Angela. If you look at the aspirational targets for the company, it's unchanged. We are looking at the Clarion-Clipperton Zone in the Pacific with the large license there, and the target production start for that license is 2026, still a bit dependent on the International Seabed Authority and the Mining Code and the timing for that. It's also unchanged, unchanged for NCS. We think that it's possible to get production late 2020s. Again, it's dependent on the decisions in the parliament.
We still see quite a healthy sort of economy for the Norwegian continental shelf with more than $550 million revenue on copper alone, based on the 5.6 average copper content in the ore. This EBITDA includes the overhead mining cost and the processing cost as well. To sum up, Green Minerals is a pioneer and a front runner in marine minerals in Norway. We are working toward transfer of rights on international license and the CCS, and we are also, of course, approaching license holder status earlier than previously guided. The opening decision in Norway is expected this year, hopefully, in October or November.
The E.U. and U.S. Geological Survey declares more than 30 minerals critical to national security, and that includes copper, which is the main play in Norway. We see, see that large oil and gas contractors are starting to position themselves in the deep sea mining industry, which is, of course, shedding light on the industry values that we see. With that, I thank you for listening and open up for Q&A.
All right. Thanks, and some questions that's come in. Here we can start with, this one: When do you expect, when do you expect the Parliament, I guess that's the Norwegian Parliament, to vote?
Well, it, it is, it was, handed in in June, and then they, they closed the parliament for summer, which opens again in October. We believe the decision will be taken either in October or November, potentially early in December.
Okay. Which mineral is the, is the most interesting for you? The classic battery metals in the nodules or the copper in the SMS?
D ifficult question. They're both very interesting, and they're all on the critical list, both E.U. and in U.S. The difference is that the nodules are more closely linked to one specific product, namely, batteries, while copper is going to be in high demand, regardless of battery chemistry, regardless of what kind of path we choose going forward, it will always be in an electric sort of energy system, a large... We need a lot of new copper in the world to electrify the energy system. They're both interesting. We don't have a preference at the moment. We think they're both very critical and important metals for the world.
Okay, here's one: How far have we come in understanding the ore and its properties? Can it be used for processing and blending with onshore ore?
Yes, we believe it can be. We still have to do the actual test, but we have done a study last year in Finland. This, I'm talking now about massive sulfides, the Norwegian sort of play. The processing can be done in existing facilities. What remains to be proven is that you can actually do it at the same time as you process onshore ore, which means that you can blend in the super ore from the deep sea with the existing onshore ore, which has lower ore grade, copper grade than than the SMS.
That is, that is what we are working towards now in, in September, and, and we expect the results for that study or that test to be ready in October.
Okay, very good. By the way, I don't know if I mentioned it, but there is a Q&A on the webcast, so you can pose questions there. There is a few that's come in, we can start with those. When will Oil States Industries become shareholder in Green Minerals? I guess I can answer that. That has happened already, and not sure when it will show up in the shareholder list, but we post them regularly on our website. Should be done every two weeks, every fortnight. I guess it will show up there on the next one, I anticipate. But the first batch of shares has been transacted as we announced, and there are two more to come then.
What are possible triggers for the GEM share? I can try that one as well. I don't know. I don't think we have a crystal ball to sort of talk about how the share is going to behave going forward, but I guess normally in this industry, or yeah, normally for mining companies, then obtaining a license is a key event. Having obtained the license, you're in a position then to, to produce a reserve report, and that reserve report will give investors some sort of indication of a, of a net asset value or, or the value of the resource system in, in this license. Green Minerals have an MoU for a license. We announced that in January.
Can't see that that has had any effect on the stock, but in any case, there, there is an MoU, and the details in the final agreement needs to be penned out. We're working hard to make that to get to that point. The counterparties being nation states, it takes a little bit of time here, but that normally is a key event. Of course, one particular feature of the deep sea mining industry is that the industry hasn't really opened yet. There's no formal decision by the authorities for opening. We are now in a phase where a white paper has been sent from the government asking for an opening of, for, marine minerals in Norway.
That is sort of particular event for this industry that might have an impact on the valuation on these companies. I think what we can say on behalf of Green Minerals is that the, the company is very well positioned to win a license in Norway. To the extent that investors feel that the formal decision by the Parliament is, is sufficient for some sort of probability weighted, you know, pricing for a license of Green Minerals, that, that might be an event. Otherwise, we expect the license applications to go in and be decided on next year. That would be the timing on that. And I think those are, are the most important events.
As Ståle mentioned, of course, we are working, we are working across the entire value chain, to continue to form partnerships, the way we have done in the past. We'll see if that, if that will have any effect. How will Green Minerals attract more industrial shareholders? Well, I guess I already touched upon it. We are working across the entire value chain, and I think that probably sets Green Minerals a little bit apart from other players in the industry. As Ståle mentioned, we're doing a, a world-first study on the blending properties of this ore, and also the properties in terms of processing.
We, through this work done, which is significant work that will inform, call the traditional mining companies about the particular properties of this ore, we will seek partnerships that may end up in shareholderships later on. When will the Nordic processing facility be selected? I think it ties in with the last question that I answered, but Monstad, do you have anything to add to that?
No, it, it, it is, the selection is of course dependent on, on, on the discussions we will have with the potential processing facilities after we completed the study in Finland. The study in Finland is a very important piece in the puzzle. If we can demonstrate that you can actually take ore from the deep sea and put it into your processing plant, let's say that the typical copper grade for onshore ore in Scandinavia is around 0.7%, 0.7%, and we come in with an ore that has 5% or 4% or 6% copper in it, it's gonna have a very positive impact also on the onshore processing facility. It will sort of also increase the, the, the life of mine onshore.
You can, you can put in lower grade.
... Or, and blended with the, with the super from, from, from the-
Yeah.
So-
I guess we can also-
Yeah.
Yeah, I guess we can also point to an sort of actual example. I'm not saying that this is anything that sort of will happen, but at least it's an example just to put some numbers on it. There is a large mining company in the Nordics called Boliden. They have a copper mine up north called Aitik. That mine currently has an ore grade for its copper of 0.17%, so 0.17%. I think they have announced previously, at least, maybe they changed it, but previously they said that the cutoff for economically ex- continue to mine there would be 0.15%. That would be in contrast to the type of ore grades that Monsta just reflected on, which are potentially tens of times of what you find in Aitik.
Also, if you look at the map that Monstad presented about the infrastructure in the Nordic, you will see that natural landing port will be Narvik, and that there is railway going all the way in there. That could be, you know, if you want to look at sort of the industrial setup, and the industrial infrastructure already in place for this company, that, that, you know, that could be an example of, you know, a project that would make a lot of sense, not only for Green Minerals, but also for mining companies owning such, such mines and being in need of upgrading the ore grades of their current resources.
We are very excited about that, and I think, I just wanna sort of underline that once more. To the best of our knowledge, we are the only company doing, doing all this work across the entire value chain, and we are adding significant knowledge and competencies to onshore miners on the basis of this work. This is important for us. Okay, any other questions? I can't see any. With that, do you wanna... Any, anything else you want to add, Monstad?
No, it's good. Nothing more from me.
Okay. I think we'll close today's presentation, and thanks a lot for attending and we'll keep you up on on any news on our side, and see you again in three months. Thank you.