Good morning, everyone, and welcome to this fourth quarter conference call for Green Minerals. My name is Ståle Rodahl. I'm Chairman in this company, and I'm here with our CEO, Ståle Monstad. Take you through our financial highlights for the quarter. It is, as you've seen in the previous quarter, we have an underlying burn rate of NOK 2.5 million. The number is NOK 4 million for the quarter, but that has to do with a non-cash charge on the incentive program. Net cash in the company NOK 11.7 million by the end of the quarter.
The highlights for the fourth quarter is as follows: we had a massive news setting the stage for executing on Green Minerals strategy when the Norwegian Parliament, on the ninth of January, decided to open the Norway for marine minerals. There have been two major discoveries in the Norwegian sector, timely discoveries related to the opening, and they confirmed two different play models that we will get back to. Green Minerals signed an extension to the memorandum of understanding that we have on the large nodule license in the CCZ, meaning that the timeline here ties well in with the timeline that we're working on in Norway now. Finally, we had some world...
As we said, we've done a world-first study on processing together with the GTK in Finland, and this study confirmed blendability between SMS and onshore copper ore. And these are significant results in order to execute on a Green Minerals strategy. So with this, we are well on the way to execute on our objective, which is to land license holdership for our shareholders with the least possible amount of capital spend going into such license holdership. And with that, I hand it over to our CEO, Ståle Monstad.
Thank you very much, Ståle. So I will go a bit more into detail about what we do and the activities in Green Minerals, and also activities on the Norwegian sector. We, as a company, is working with the entire value chain for marine minerals, meaning that exploration and production and mineral processing all have equal weight in the way we work at the moment. For exploration, we have a number of projects together with academic institutions. We have the project ULTRA, together with the University of Southampton and the National Oceanography Centre over there. We have several master's students at the NTNU in Trondheim, working together with us on different topics, all going into the DeepMineX framework that we have for value of information and as part of our exploration toolbox.
We have also been working with Minor for with regards to artificial intelligence, to sort of extend and improve the data we already have in the region sector. And we have a master's student in the University of Bergen, working under our supervision and sponsorship. When it comes to production, we are finally getting close to the completion of our concept study of harsh environment deep-sea mining system, together with a consortium led by OSI. And we also have a PhD program in Trondheim, working on crust, polymetallic crust.
Finally, on the processing side, as Ståle just mentioned, we have received a final report from GTK in Finland on the processing, which is also massive news for us because that underlines our business strategy for marine minerals, for seafloor massive sulfides, that is. Taking it one step ahead, the timeline is now getting more sort of solid and reliable. We had this event in January the ninth, where the parliament voted with the 80-20 favor of opening Norwegian sector for marine minerals activity. We believe that there will be a nomination and a hearing to that nomination. The exact date for application deadline is not yet published.
We think it will be around third quarter this year, and that means that the award of license will be either just before Christmas or after Christmas, so Q4 in 2024 or Q1 in 2025. So we're getting close. As previously reported by the Norwegian Offshore Directorate, or earlier, NPD, there is a very significant potential resource for SMS along the Mohns Ridge and Knipovich Ridge within the assessment area out in Norway. This year, this quarter, it was reported 2 different discoveries. And as Ståle said, they are confirming the 2 play models that we have. The 2 play models are 1 actual ridge, volcanic ridge model in the center of the spreading ridge Ridge, in the rift valley itself, and then there is another model going on the flanks.
of this, spreading ridge or the Rift Valley. There is, from our perspective, a likelihood of larger deposits on the flank. But most of the important discoveries to date has been made inside the Rift Valley itself. The flank potential is probably larger and also probably better preserved because you don't have any volcanic activities, at least not as much as you have inside the Rift Valley. So if you're looking at what has been reported, this quarter, there was a huge discovery way north, outside of the assessment area, but inside the actual portion of the rift, known as the Ultima Thule discovery. It is probably one of the biggest hydrothermal field systems that we know of globally.
It was reported by Rolf Birger Pedersen, a professor in Bergen, in NRK in August. It should be 2023, not 2018, sorry about that. Then, later it was reported another discovery along the Mohns Ridge, further to the south, and that is on the flank, and that is what's called Deep Insight, sitting up here on this high, next to the rift, rift itself. Very interesting also, and it was again, scientifically led by University of Bergen. On this animation, you can also see the Mohns Ridge stretching to the north and turning and going into the Knipovich Ridge around the corner here with Lokeslottet and the Mohns Treasure. The Deep Insight discovery reportedly was a surprise to find.
The main aim of that activity was to test the FlexiCore drilling system, which was tested, and discovery was at a water depth just over 1,000 meters, which is quite shallow for deep-sea mining. It was located on a low-angle fault zone resembling a small oceanic core complex. The structure is not very large, but it is 200 meters across and rises around 50 meters over the surrounding sea floor. The FlexiCore managed to take drill cores down to a depth of 18 meters with a 4-meter core recovery. On the ship itself, it was done preliminary core measurements, and that indicated presence of copper-rich intervals within the deposit. So it's a very encouraging and interesting discovery made last year.
Moving over to production, there are two main activities in Green Minerals. We're looking at the deep sea mining system for harsh environment, together with the consortium led by Oil States, and we're also looking at the processing of the marine minerals, which is of major importance as well. When it comes to the harsh environment deep sea mining system, it is almost complete now, the concept study. The concept we have come up with is quite revolutionary and unique, and combines technology from both the mining and the oil and gas industry. It was presented for the first time in December by Green Minerals at the GeoNova Marine Minerals Conference held there. I will now show an animation.
It is preliminary, so it's without sound, but there are some captions you can read along the way. It takes around 2.5 minutes. We're using a semi-sub as a production unit, with not too much modification compared to what has been used previously. OSI has this concept of automatic hands-free connectors. All the pumps will be on the surface vessel, minimizing the sound in the water. The mining machines are designed by SMD. Now you see a ROV completing the installation. The concept of using a disconnected turret to move the bulk carrier is something that is unique to Green Minerals and the OSI consortium. As I said, the ore is lifted to the surface without any pumps in the water.
The pumps are located on the semi-sub, and the ore is directly transferred to the bulk carrier that is moored next to the production unit. Dewatering will happen on the ship, on the bulk carrier, and return water is brought all the way back down to the sea floor. So that eliminates the mid-water plume. Once the bulk carrier is filled, it disconnect from the turret and goes to port in northern Norway, and a new bulk carrier comes to the location. So just to sum up a little bit, the concept of having a disconnected turret has many advantages, and one of the main thing is that you have a stable setup with a semi-sub and a moored bulk carrier next to it.
That means that you can have actually, personnel transport from the bulk carrier to the production unit, and you can have supplies and all the logistics can be fixed with helicopter from the bulk carrier to the semi-sub. As previously mentioned in other quarterly presentation, the distance from the Mohns Ridge to Norway is too far for a helicopter transport. So having a helicopter on board on the bulk carrier solves that issue with... And also makes ship-to-ship transfer easier. The ore is transported directly to the bulk carrier, is dewatered here, return water goes back through this flexible hose jumper, and all the way down again to the sea floor.
So that eliminates the problem of a mid-water plume if you release water in the middle of the water column. And also, like mentioned, the pumps are located on the semi-sub, minimizing the sound as well as we produce. So we are very happy, and we are delighted, really, to have developed this concept and really looking forward to the cooperation with the consortium going forward as well. And then moving on to the processing side, we received samples from SMS, from our partner in Southampton, and we have been working together with GTK in Finland to demonstrate that this marine minerals can be processed in a similar way to the onshore copper ore that we see in many countries.
So, the rationale behind it is that building a new processing plant means a high CapEx, and that means that you need a larger portfolio before you can start before you can push the button on investment decision. It means that the exploration time will be longer and expected revenues further in the future. So thinking about that, the seafloor massive sulfides, it's genetically related to all other copper ores on land. Our strategy has been to integrate the marine minerals directly into the processing flow sheet. That means we can have a reduced portfolio, it's reduced time to first revenue, and also you can prolong the life of the onshore mines.
So just to put it again into perspective, if we have a production of 1.5 million ton ore per year, we would need roughly five years production portfolio before we can make a final investment decision. If we have to build a new facility to process this, you have to double or triple that, that, portfolio. So it makes it... It's a huge difference actually, to be able to use existing facilities. The blending test we did was using a low-grade copper nickel sulfide ore from a producing mine in Finland, and then we blended that together with a medium grade SMS ore, and the result of that, that, blending test was a success.
We have proved that you can float it, SMS ore together with other copper ores, and you can also do that within the same combination, meaning that you don't have to do any specific pre-processing or extra processing for the marine ore. You can blend it directly into the workflow. And for us, that means that our business plan that we made for, let's say, smaller reserves, smaller sort of deposits, that model stands. So this is really, really important and good news for Green Minerals. In the Pacific, like mentioned by Ståle, we have extended the memorandum of understanding on the large nodule license down there.
It is moving forward, not fast, but moving steadily forward, and we believe that it will be good timing compared to what has been set as the date for the legislation in ISA, which is July 2025, and it also fits well with the opening of the Norwegian sector. So it doesn't run in parallel, but in sequence with Norway. So to sum up, we are still a pioneer and frontrunner in marine minerals in Norway. We are well positioned for a license win, and expected license award will be either just before or after Christmas this year. The business strategy we have has been proven by the extensive study that we've done together with GTK in Finland, with blending of marine ore with conventional onshore copper ore.
Of course, the opening decision in Norway was a massive news for us, opening on January ninth. Also pleased to note that the vote was 80-20 in favor of opening, which is quite a large majority. As I just mentioned, we're still working towards transfer of rights and the final contract on a large nodule license in the Clarion-Clipperton Zone in the Pacific.
... and we have extended the MOU through 2024. And finally, just to remind everyone, both the U.S. and EU declared that more than 30 minerals are critical to national security, and that is now including copper. So that was all from me, and, thank you very much for listening, and we open up for Q&A.
Okay, let's see. We have a few questions here, and we can start with the following. The GTK study results seems to be a major finding. Congratulations on the results. Does this mean that the ore can be sent to any processing facility or only the one you have been testing with?
It can, in principle, be sent to every existing facility that is set up to process for copper. So being in the Nordic countries, being in Europe or elsewhere, we can send the marine ore and process it together with a standard copper processing plant, which is, of course, great news. And like we have said earlier, we prefer to have the transport distance as short as possible. So Nordic countries, of course, is maybe our first priority, but it can be, in principle, sent everywhere.
Okay. There's another one. Really good to see the animation of the production system. Thanks for sharing. What TRL levels are we talking about here on the various components and the complete system? Can you elaborate a bit on that, please?
I can do that. The system itself, of course, this is a new industry, so it hasn't been proven as such. But all the different components within the production system is proven. So that means that the interfaces needs to be engineered in detail and worked on, and you need to put it together in the right way. But every single component, from mining to lifting to ship-to-ship transfer, and all the way to the quayside in Norway, is proven. So the technology is mature and is used in oil and gas and in mining, and it's proven. So high TRL level on each component.
Okay, so no technical showstoppers. Another question is: I understand that you have participated in two research cruises so far. When will your first exploration cruise take place?
If we have a license award, let's say around the turn of the year, it also depends a little bit on where the license is located. But if it is the license we hope we will win, we can be able to go out as early as the summer of 2025 on exploration cruise.
Okay. And then I can add, so exploration cruise, and then data, and, reserve report, would be a target for us to come up with as soon as possible thereafter. Then there is a question here about Oil States Industries reaching the announced 4.1% stake in Green Minerals. How many tranches are remaining? I guess I can answer that one. It's this agreement, I would say, is in force. It's and the only thing we're waiting for simply is technicals in order to move the shares to OSI. And I know it might seem like a long time, and it is, but it is not, it is not as straightforward as doing a straight out share transaction.
I can say that, I can add, as a background on this, that, Oil States Industries has never entered into an agreement like they did with us before. Meaning, going into this consortium, doing all this work with us, without being paid for that work. So it's an entirely new situation for them, and these are due to technicals. I expect that by this summer, early summer, the complete transaction will have been made, and the shares will have been transferred to OSI, and you will see OSI on the shareholder list as a shareholder in the size we have mentioned, which is 4%+. Another question: How much will the production system cost?
I guess the answer to that is what we said previously. I can take that. What we said previously is $750 million-$1 billion. We had the base case of around $850 million for the production system. That includes everything. Of course, prices have moved up a bit since then. So I think you can expect that this system would be somewhat more, that number would be somewhat higher today. Now, when it comes to our operating model, we have said all along that we don't anticipate that Green Minerals will take the CapEx on the production system.
So the business model that we're establishing here is the same model as you will see in the oil and oil services industry, where we hire an operator to run the semi-sub, as Monstad showed, and the entire production system then below on the seabed, and we will be paying a day rate for that. And then there is another question here of volumes. It is, "How many tons of ore will you produce, and what do you expect in terms of revenues and margins when up and running?" Okay, so we have announced previously a volume of ore around 1.5 million tons per year. We...
and the feedback that we're getting from the consortium is that this, this number does not look particularly high. We have taken a lot of, or a large buffer in terms of weather, in that number. What that will mean in terms of revenues, or to take you through, actually, I think it ties in with the question before that as well. To take you through the model there, what it means is that we would be on current metals prices. Remember that this is largely a copper, copper play. On current metals prices, we will be looking at revenues of somewhat above $500 million for copper only.
If we manage to reprocess the cobalt, which, by the way, the processing study indicates that we will be able to, we are talking about somewhere between $500 million and $800 million in revenues. The EBITDA on that will be, the EBITDA margin for the project in total is very high. I can say that the EBITDA margin on Green Minerals as the operator through a day rate model, as I described, would, on a number of around $500 million, would be close to $200 million. If you include cobalt, that number will be quite a bit higher then.
If you look at total cash spent up until we are in production, and you include the exploration that we're planning for, we do not foresee any CapEx, call it exploration CapEx. We do not foresee a total accumulated CapEx of more than $50 million until we get to production. So that number you can put in relation to the $200 million that I said, which is net of the cost of the entire production system providing for very attractive business case, we believe. Okay, let me see if there are any other questions. All right, so it seems like this is it. And let me see. There is another one, a rather lengthy one that just came in. Okay.
So, yeah, it goes on, it's a question related to our international strategy, or a strategy of building then a mining portfolio and having more than one leg to stand on. And, this strategy has then come to fruition in terms of the MoU that we have signed in the Clarion-Clipperton Zone. This is a MoU on a very large license. We talk about more than 200 million tons of wet nodules, and there's been quite a bit of exploration work done on that license already. We are talking in the tens of millions of dollars of exploration work done on that license. So we're very, very excited about that opportunity, and as you can understand, if we are successful in landing that MoU-...
or executing on that MoU and transferring the rights to Green Minerals. This in itself is a significant license with significant work for the company. So with this and Norway in place, I think we have done quite a bit more than what we would have hoped for at the outset. Other opportunities that has been mentioned, I mean, we have used the plural opportunities here, are in other countries of the world, where the deep-sea mining we're opening up for deep-sea mining. It takes place in a slightly different manner, and these are also different minerals that we're talking about.
The production would be of a manner that would be much quicker to get to, and also with a lower upfront CapEx to get there. So we see this from, just from a cash flow profile, as very interesting opportunities. They are not, though, at all anywhere close to what we are presenting here in terms of Norway and the CCZ. These are really large opportunities with annual cash flows in the $ hundreds of millions. And the other opportunities we're talking about are quite a bit smaller. So at this juncture, I think with the success we're having, this is actually happening now with opening up of Norway and the ISA to take a decision in July 2025 on the mining code, which will open up for the CCZ.
I think we will stick to these two in our presentations and leave these smaller opportunities only for when they are, if, if, if, and when we execute on them. Okay. So, might be something more coming in there, but I think we leave it at that, and I'd like to thank everybody for your attention on this presentation. As you understand, we are very excited about the parliament decision on the ninth of January, and we are working really hard to get where we or to solidify our position, and to make sure that that ends up in the licenses that we want on the Norwegian sector in only a few months.
Thank you very much, and see you again in three months.