Good morning, everyone, and welcome to this Green Minerals Third Quarter Conference Call. My name is Ståle Rodahl, and I'm here with, or at different locations than with, Ståle Monstad, our CEO. Before I hand it over, I just want to make a couple of initial remarks. There are two important events that has happened in our industry over the last few months. This was in the end of the second quarter and the beginning of the third, and the first one in Norway. The government then sent a white paper forming the basis for an opening decision to Parliament, and we are excited to inform you that the Parliament now plans to vote over this as soon as in January this year.
So that will set the stage for Norway to become the first country globally to open up for this new and important industry. In July, the ISA decided to work on the Mining Code to be decided on in July 2025. This will open up for our Clarion-Clipperton's nodule license to become active and fits well with the timeline to transfer license rights to Green Minerals. We are excited to see this essential industry moving towards opening and believe Green Minerals is well positioned as a true front runner to benefit from this. And with that, I hand it over to you, Ståle.
Thank you very much, Ståle. I'll start off with the financial highlights. The underlying EBITDA for the third quarter in this year was NOK -2 million, which is broadly in line with previous guiding and the previous run rate, and this is the level we expect it to stay on until a license award in Norway. As you can see from the table here, our cash balance is a bit under NOK 14 million, which will take us approximately to the license award date that we think is most likely. If we look at the highlights for this third quarter, like Ståle just mentioned, there is a decision date for the vote in the Parliament on opening of Norway's exclusive economic zone.
That date is set to the 9th of January. We are very excited to and look forward to that day. Also, the ISA Council set a new deadline for completion of the Mining Code. They have been working on this code for quite some time, and the new date is in July 2025, which is a date that fits well with the plans Green Minerals have for transfer of rights of nodule license in the Clarion-Clipperton Zone. Also, quite interestingly, there was a research cruise recently this summer, called GoNorth, that discovered a large hydrothermal field between Svalbard and Greenland, just again underlining the potential of the spreading ridge between Norway and Greenland.
And finally, the first phase of this study we're doing on processing was completed with promising results. A bit back to the timeline. This is a very simplified figure illustrating the time and the time, the dates we have at the moment. As mentioned earlier, in June, the government handed in a white paper proposing a decision on opening of Norwegian waters, and there's been public consultation in the Parliament, this October 6, and the committee, the Energy and Environment Committee, working on this, this white paper proposal, has a deadline of December 19 this year to hand in their recommendation.
The date for the parliamentary vote is set to January 9, 2024, and that is, in reality, the big hurdle to cross before the NPD and the Oil and Energy Department take over and arrange the license award procedure. It's still a bit uncertain exactly when the application will be open and when the award will be. Our estimate is that we will have an award of license somewhere around fourth quarter next year or the first quarter in 2025. And we in Green Minerals is a front runner in Norway, and we are also active in the development towards an opening. There is a couple of or a number of positive indications.
All the major political parties are in favor of an opening for exploration, and the responsible Norwegian ministry and agency is supporting. We can also see that the offshore industry is ready to take at least some of the sweat to take part in deep sea mining, and we are also collaborating with NTNU in Trondheim on working on the tax regime policies and sensitivities around the tax regime for this potential new industry. In addition, the Norwegian authorities take their share of the research cost. It's a large—it's a huge area, really, and to do the background mapping, so to speak, it is important that the government also take their responsibility and their share of the cost. We have seen that the MAREANO project, which is working on environmental baseline research, has increased its funding.
The Institute for Marine Research in Bergen will get funding to increase the knowledge around regional and local ocean currents in the Norwegian and Greenland Sea. That is important when it comes to modeling the effect of potential deep-sea mining. The Norwegian Petroleum Directorate has continued funding to make cruises to explore the resource potential, and also to acquire environmental data during their cruises. Finally, it has been said and stated that all relevant information on environment that is collected by the different stakeholders and parties will be shared. It is a model that has been used in the oil and gas industry for many years, and we're happy to see that they are continuing this model in the deep-sea mining industry as well.
A bit on the geopolitical side, it is really becoming more and more evident that China is positioning itself to dominate the world's copper supply. It is already the number one and very dominant when it comes to the processing of copper. And it's also taking a larger role as an importer and taking control on copper mines around the globe. At the same time, we see that China is starting to use their control to, for instance, tighten exports on key battery materials, like graphite. So the geopolitical situation with supply chain is very much a hot topic these days. And China has been, for many years, securing rights and control over mines all over the globe, actually. And this map is an indication of that.
It's probably a bit difficult to see the different commodities, but it is very critical commodities like copper, lithium, and nickel included in this map. Chinese control is very strong in Africa, but also in other parts of the world, like South America and Australia. So to mitigate that or to balance that, we think that marine minerals could be a good addition to the global production of critical metals. The Norwegian Petroleum Directorate released a report earlier this year about the resources on the Norwegian within the Norwegian sector. As you can see from the numbers, it's quite a significant resource on a global scale. The table shows just a couple of the metals, like copper, gold, silver, and cobalt.
In addition, there are other, very important elements, like rare earth elements, in the, in the crust deposits. So this table to the right there is only for seafloor massive sulfides. It does not cover anything of the crust potential in Norway. But still, it's very interesting and very significant numbers that the Petroleum Directorate has published, earlier this year. And as I said, the latest cruise that went way up north, it's between, Svalbard and Greenland, the GoNorth research cruise, discovered a very large, one of the biggest hydrothermal fields we know of, was discovered in this area. This is outside of the assessment area, a potential area for Norwegian, activities, but still it indicates the potential of, of the spreading ridge between Norway and, and Greenland.
On the right-hand side here, you see images from the cruise. This is active black smoker, which is not something that we or any of the other deep-sea mining companies intend to exploit. But on the lower right corner, you see an extinct smoker or deposit. And also, without having any details, because the analysis has not been done and there's no public results yet, but speaking to people that was involved in the cruise, it was very encouraging when it came to the copper content of this deposit. And this micro photograph here shows chalcopyrite, which is the main mineral for copper in seafloor massive sulfides.
So that's very encouraging to see that it's still discovered large deposits of seafloor massive sulfides along the spreading ridge between Norway and Greenland. It shows productivity. In addition, Green Minerals has, for a long time now, been taking the entire value chain into account. We believe that the processing part is also very important. We have had a project running for more than a year now on characterizing and also cost of processing of marine minerals. We have now completed a flotation study on seafloor massive sulfide ore from the Atlantic Ridge, and we have just started a study where we want to blend onshore ore with marine ore.
I will come back a bit to why we do that, this a bit later, but first, the results show that there is quite a high recovery of copper using the standard conventional processing methods. Without any optimization, we reached almost 80%, and this phase we're working on now will also optimize that process. So that's for the copper, and also the cobalt is interesting in the seafloor massive sulfide. We see that there's up to 0.3% cobalt in the tailings, meaning the, so the waste after you're taking out the copper. That cobalt is linked to iron oxide, pyrite, and we're looking into how to actually retrieve or to process out that cobalt as well.
The reason for doing this is, number one, to have a more robust financial productions of the activity. Having the processing part in. Processing is probably up to close to 50% of the cost of the operation, and it's very important for us to demonstrate that we can use existing conventional methods to process copper and cobalt out of the seafloor massive sulfide. In addition to this, we are also bridging this new industry of seafloor marine minerals with the conventional onshore mining industry by and also, of course, with mutual benefits. If we can process seafloor massive sulfides in existing plants, we can prolong the life of mine for the onshore mines as well. So that's a win-win situation. So very encouraging results from this study.
We're happy to see that, and we are continuing with the blendability, blending marine and onshore ore, now in November. We are also getting closer to finalize the concept study that we're doing together with OSI and consortium partners. We know that this consortium also very responsible for delivering risers to the test that was done in the Pacific with Oil States and The Metals Company. This is a consortium consisting of a number of companies that have experience in this, in deep-sea mining. And also, OSI has already become a shareholder in the company, and that ownership will increase to about 4% by completion of the study. A few words now on international activities.
Green Minerals participated in the International Seabed Authority's council meeting or session in Kingston in July this year, and in that meeting, it was agreed to continue to work on the mining code for international waters. As mentioned earlier, the new final date for completion was set to July 2025, and Norway is involved in several of the working groups, including the working group on financial terms and compliance. Importantly, and worth noticing, is that also countries who advocate the precautionary reports, like Germany and France, are actively and constructively participating in the working groups to complete the mining code. Actually, all the member states in ISA, that's 168 countries, are supporting the work to complete the mining code in the Pacific or in international waters.
If we look at the Pacific, Green Minerals is working on pre-qualifying scratching for merger into the Clarion-Clipperton Zone. We took part, as I mentioned, in the delegation in the meeting this summer, and as I also mentioned before, our consortium partners that is working on harsh environment system for Norway, has already been involved in the test production in the Clarion-Clipperton Zone. We are well-positioned also to contribute positively and constructively in the nodule play in the Pacific. If you look a little bit at the two different areas and resources, they are quite different in many ways. The seafloor massive sulfide is mainly a copper play, albeit with also some interesting cobalt ore grades, and they are three-dimensional deposit.
You need to mine it out. You cannot just pick it up. You need to do mining, but they cover very small areas of the seafloor. Typically, 200 meters in diameter and 100 meters deep. While nodules, on the other hand, is a two-dimensional deposit sitting unattached to the seafloor and is produced through harvesting, and the nodules is what you can call a typical battery play with important metals for battery, like nickel and manganese, and cobalt, in addition to copper, and also iron. So it's quite different, different ores in two different areas.
So to sum up a bit, the key objective for 2023, as put forward at the beginning of the year, we are still working on the transfer of rights and final contract in the Clarion-Clipperton Zone. And in addition, we're also looking at other international opportunities that we are evaluating. On the research side, the James Cook is leaving again for the Mid-Atlantic Ridge with the project ULTRA, which is led by the National Oceanography Centre in Southampton, and we are participating in that consortium, and we have two PhD students on the project. The focus this year is gonna be focusing on exploration strategy and sediment coring. The processing study we're doing is also moving towards completion. We are in the final stage. We are working on...
blendability, so blending marine ore with onshore ore to prove that that is possible, which will be an important sort of bridging stone or stepping stone towards the conventional mining industry on land. We are continuing to working on the partnership model. Also, I would like to mention that based on the work we're doing with the OSI consortium, we also included shipping industry in the business development process. So to sum up, Green Minerals is a pioneer and frontrunner in marine minerals in Norway. We are working on, in addition to Norway, working on transatlantic, on a large nodule license in the Pacific. The opening decision in Norway is expected to be taken in January next year, and the U.S. and EU declare that copper is among the 30 minerals- critical minerals for national security.
Also interestingly, Norway and the U.S. just signed an agreement on critical minerals called the Mineral Security Partnership. That was done in late October this year, and that agreement included also seabed mineral resources. So that's quite encouraging that it has attention all the way up. And that was all from me. Thank you very much, and if you have any questions, you're welcome.
Okay, thank you, Ståle. So I don't know if I remember to make everyone aware that there is a Q&A button on the webcast, so please put the questions in there. We've had a couple on email before we started the webcast, so I guess we can start with that. The first one here is that you say that you are in pole position to win licenses. As the industry hasn't opened up yet, why is that? How do you know that? So I don't know, Ståle, do you want to have a go at that one?
Yes, I can start at least. Well, we have been active, like I said, working with also authorities and in all the sort of relevant forums for three years now. So we have started important studies both on the concept study for production system, on processing, on the processing part, and been an active contributor to discussions also on legislation and on tax regime for this new industry. We have the competence and we have demonstrated that through these discussions. So we and we are one of the few pure play marine minerals company in Norway at the moment.
Right. And yeah, I think I'd just like to add to that, so the proof of the pudding of what Monstad said here is, if you look at the MOU that we have for this license in the Clarion-Clipperton Zone, it sort of proves that our frontrunner position here, working with nation states that are in need of commercial partners, and even though a fairly, fairly small company and a start-up, we have gained this position then. And this is for a massive license. The size of it, as we've said previously, is equal to 180 sort of normal blocks in the North Sea, if you look at the oil and gas industry.
So that would be, for those of you who know, that industry, would be around five times Aker BP, the number of blocks that they are involved in, if you just look at the sheer size of, the area that the license covers, and we talk about more than 200 million tonnes. So it's massive, and it proves that, you know, in an nascent industry like this, a company like ours, an early mover, a frontrunner, is able to do these type of exercises. So we're very pleased on behalf of our shareholders, for that. Okay, so there's another question came in here: "You showed how China, over decades, has gained control over the world's mineral resources.
Why has the EU and the U.S. allowed this to happen? Ståle,
That's a good question. Do you want me to start, or do you want to do it yourself, Ståle?
Yeah, no, please, go, go ahead.
Well, of course, no one really knows the answer to this question. I think the globalization that has been dominant sort of dogma in the world for the last decade is part of that answer. I think the interesting thing is that now the EU and U.S. actually is seeing it differently and starting to take action accordingly in order to secure a stable and reliable supply chain for this critical mineral markets.
The globalization as was probably not anticipated by the West. Rather, one thought that we go the other way. More or less up the same alley, considering leading NATO countries effectively having made themselves dependent on China for the minerals, supporting also the military capabilities. Why is this taking so long? Why hasn't this been fast-tracked? I guess I can try and start. I think Monstad was touched upon it, why this has taken so long. It's simply there have been geopolitical changes or changes in the relationship with China in recent years that was not anticipated.
However, after these changes have occurred, I would probably say that this fast-tracking that the question alludes to is actually happening as we speak. It happened with the E.U. and the U.S. more or less at the same time, with one year in between themselves, around 2018, stated that they saw over 30 of these minerals being critical, not only to their national economies, but also to national securities. So here we are touching upon the military industry or the military capabilities again. So, since those statements came out, the pace on opening up for marine minerals has definitely strengthened.
So, in Norway, for example, the legislation came in place, probably not a coincidence, came in place with the Seabed Minerals Act in 2019. So just one year after this, EU and U.S. statements came out. So that legislation came in place in 2019, and since then, I would say Norwegian authorities has done a commendable job, and at a fast pace, to set the foundation, to create the foundation for an opening up of the industry in Norway. We are now only four years after the legislation came in place, and the white paper is already out from the government, and a decision is imminent.
So, we see that as fast indeed, and also considering sort of the normal timeline for the mining industry, where you see projects taking 10-15 years to put in place, we think this 4-year timeline since legislation is very effective indeed, and a big plus for Norway. Yeah. And then the ISA is sort of a slightly different animal. Of course, in Norway it can happen fast. It's only one country with sovereignty over these resources. The ISA is a body comprised of 168 countries. It's a mini UN that sits together and decides on these things. So obviously, more difficult, more time-consuming to put in place. But also there we...
Or the statement from the last council meeting was that July 2025 we'll see an opening. And the Metals Company, along with Allseas and others, are ready to more or less start producing as soon as the green light has been given. Okay, here's one more on lots of interest on China here. But I guess that is now popping up in papers all over the place, and they also put in place limitations for exports of some of these minerals, amongst other is graphite recently. So it's becoming a hot topic in international papers. So question is, has China shown any interest for marine minerals licenses as well?
Yes, they have. China is one of the, one of the most active countries in the ISA. So they, they have also done a number of, of cruises and done research and exploration for a long time. So they are very much, very much looking at also at marine minerals. So it's important to, to, to be aware of that and not let, let China take dominance in that, that space as well.
Right. Okay, and, let me see. Are there any other... Any other questions here? Let me just check the mail. Yeah. Right, so I can't see, I can't see that there are any other questions. So, with that, I think any final comments, Ståle or-
No, I think that's good. I think the only final comment is that it really looks like we're getting close to opening in Norway, which is, of course, very exciting for us.
Yeah. All right, and with that excitement, we close up today's call. Thank you, everyone, for participating, and we'll see you again in three months. Thank you very much.
You too.