Investor conferences. On behalf of OTC Markets Group, we are very pleased you've joined us for our two-day Precious Metals and Critical Minerals Virtual Investor Conference. The next presentation is from IBC Advanced Alloys. Please note you may submit questions for the presenter at any time. You can also view a company's availability for one-on-one meetings by clicking Book a Meeting. At this point, I am very pleased to welcome Mark Smith, Chief Executive Officer and Chairman of the Board of IBC Advanced Alloys, which trades on the OTCQB Venture market under the symbol IAALF, and on TSXV under the symbol IB. Welcome back, Mark.
Thank you, Lily. What an honor to be here today, and it's a real pleasure for us as we're going through some really positive changes with this company that I'm pretty excited to talk about today. With that, let's go to our forward-looking statements. Publicly traded, so we have to provide these, but let's get into the presentation. Just a little background for people that may not be familiar with us. IBC is a producer of copper and aluminum-scandium alloys and products. We're really focused on the copper side, and the aluminum-scandium side is looking extremely promising going forward. We're the only United States company that both casts and forges copper and copper alloy products as our primary business. We're known for the depth of our technical expertise. In fact, a lot of our customers come to us first with their technical issues.
We help them with what they need for materials, and we make that part or make those materials for them. We have the capability of doing casting, forging, both hammer press and ring rolling, as well as heat treating and machining operations. Very vertically integrated operation, and we're located in Franklin, Indiana. Next slide, just a very quick snapshot here to show you what the stock has been doing for almost a year now. You can see that we had a very nice pickup in share price, kind of in the October-November timeframe of last year, both on TSXV and OTCQB. Next slide. What are the markets that we serve with these copper and aluminum-scandium products? Again, primarily copper at this point.
This is an extremely diverse market base that we serve, and it includes defense, automotive, oil and gas, resistance welding, electronics manufacturing, injection molding, and foundry. Just to support that a little bit more, the next slide shows you some of our select past and current customers, and these are certainly names that I think everybody listening to the presentation today would view as household names. These are our customers, and we're very proud of the fact that we have these names in our customer list, and we serve these customers day in and day out. Next, I'd like to talk about the copper super cycle that we see coming on really starting last year. Let's talk about that copper super cycle for a moment. Let's go back in history just a little bit.
If we start with what happened back in the 1999 to 2012 timeframe, which was the last copper super cycle that we saw, we noticed that the global demand for copper had risen by 46.7%. That was largely driven by Chinese consumption. Prices increased by 406%, and during this time, the demand for IBC's products, the value-added copper products, also rose significantly. Let's take a look at the next slide and take a look at what the experts are forecasting as part of a new copper super cycle from 2024 onward. You can see here that the estimated demand increase is about 63% between 2024 and 2035. We expect that this new demand is largely going to be driven by U.S. consumption as opposed to Chinese consumption.
We're looking at the refined copper use rising from just over 25 million metric tons in 2021 to nearly 49 million metric tons by 2035. This is going to be a tremendous opportunity for IBC going forward. The next slide will show you what the price of copper has been doing since August of 2025 till now, and you can see a very definite upward trend in the price of copper. Again, largely driven by the supply and demand fundamentals, and most of that demand is coming from the United States. If we go to the next slide, what is IBC doing to take advantage of this situation that we're seeing?
Higher copper pricing is definitely boosting our revenue, it's boosting our margins, and it's this precision copper products that the market is asking for right now, and that perfectly positions IBC as a vertically integrated supplier to take advantage of that situation. Lastly, let me point out that although a little confusing a little more than a year ago as tariffs came out on copper and many other elements and products, it was pretty confusing for a while for a lot of companies, and we definitely saw a slowdown in business as a result of that confusion. People didn't know what to do. They didn't know what to order. That has largely passed by now, which is the good news.
I'm also happy to report that to a large extent, the U.S. copper tariffs on finished and semi-finished copper goods really advantaged IBC during this timeframe. We were just as confused as everyone else when it first came out.
This has been a very good opportunity for the company. Next slide talks about the ways that we want to take advantage of this copper super cycle and ways that we can grow our business, and we are definitely in a growth mode right now. One of the things that we have already started into is expanding into the near net shape copper alloy cast products. You can see one of those products in the picture to the right. We've been launching an additional business now of casting copper nickel and aluminum bronze alloys, also in near net shape cast products. We're expanding our cast and our forged parts made with aluminum-scandium alloy.
Number four, which is pretty exciting to us right now because it's happening as I give this presentation, we're expanding sales of all of these copper and copper alloy products to the United States Navy. In fact, if we take a look at our business as it stands right now, we're actually producing products for the government and defense sector at about 40% of our production capacity right now. Power generation. We're serving that with about 19% of our production right now. Electronics. About 13.5%. In foundry work, in other words, making billets for other people to use as a feedstock, about 11.5%. This is a fairly significant change for the company in terms of product mix, and that also helps our gross margin, and we're now seeing gross margins on almost everything in the 25%-55% range, again, largely depending on that product mix.
In terms of next steps, what the company's looking at, first of all, that stage one, launching the capability to cast near net shape parts from a variety of copper alloys. Again, you can see the part on the right that we're capable of making today. We can make individual cast components upwards of 500 lbs each. After we secure a vacuum cap furnace, which we're working with the Department of War on ways to secure that furnace, we'll be able to cast copper nickel and other gas sensitive alloy products. We'll just expand our product base tremendously and open up more sources of revenue. If we go to the next slide, we'll talk about stage two, which is a copper nickel alloy production. This gets to the purchase of a copper nickel alloy vacuum cap furnace. Again, for gas sensitive type alloys.
We can cast 10% and 30% copper nickel alloys in-house with that furnace. We've listed some of the alloys that we can make using a vacuum cap furnace. Again, we can make these shapes, these castings up to 500 lbs each. Estimated cost of this vacuum cap furnace is about CAD 5 million, and we've already invested over CAD 500,000 in the support infrastructure for that vacuum cap furnace. Let me finish by saying one more time, we are working with the Department of War on ways to secure a vacuum cap furnace, and we'll continue to work with them. I think that they're just as excited as we are to get this capability in the United States, since the U.S. Navy is importing about 90% of those copper nickel alloys that they need in the shipyards today.
Next slide talks about stage three of our growth strategy. This involves the aluminum scandium alloy production and the production of parts utilizing those alloys. We have successfully poured the end use alloy at the shop. Happy to report that on the very first pour that the company made, we hit every single spec for the aluminum scandium alloy right on target. We're very proud of that. Again, really speaks loudly to the technical capabilities of our company and the people that are undertaking those activities.
This is all part of an effort by the Department of War to create an onshore scandium supply chain that will go from the actual mining of ore, the production of high purity scandium oxide, the production of a master alloy, and then ultimately where IBC fits in, which is to take the master alloy and to produce the finished alloy that the aerospace and defense primes are looking to utilize in their production capabilities. It all goes to the light weighting, the lower cost as compared to composites, and the easier ability to work with this material as compared to composites. We're very excited about where this market is going to go, and we hope to report some very good news on that in the near future.
As part of our stage four growth driver, this is really kind of in the copper nickel alloy sector again. Now we're looking at needing to probably spend upwards of about CAD 25 million to put a radial forge in at the Franklin, Indiana facility. This will allow us to take what we can produce with a vacuum cap furnace, which would just be ingots and billets, and with a radial forge, we'll be able to produce the rounds, the bars, and the hollows. We're looking to do that anywhere in the 1 in-6 in diameter shapes. This is a step downstream of our stage two growth effort, and this just provides us with more activity within that supply chain, and the margins on that supply chain grow as you go further and further downstream.
This is a natural fit for us, and we would hope to be able to undertake this type of a growth driver within the next, say, three to five years. That really concludes what we have today. Here's our board of directors. It's a group of five, all highly experienced individuals in this particular manufacturing space and work on a very highly consensus basis at all times. Next slide shows the senior management for the company. Again, just an extremely experienced group of people. Rajeev and Ken are both metallurgists, and they are our primary technical resources that customers are clamoring to get hold of and get more and more of their time for because they make things happen for those customers. That's really the conclusion of the presentation part, and I would be more than happy to take any questions the audience may have.
Thanks, Mark. We've got several. Let's get started. First question is, what are the biggest catalysts that would push IBC from turnaround mode into real growth mode over the next few quarters?
I think there's a couple of things. One is what I'll call the base business. We're seeing that grow very nicely, and by virtue of us getting into these near net shape castings, we're actually expanding our capabilities in that foundational business. That's nice to see growth that's above and beyond that normal 4%-5% that we would normally see if we weren't doing cast products. That's a great piece of foundational business that we feel very confident about going into the future. The one that's really exciting, though, is the defense work that we're doing now, supplying various copper alloy ingots and billets to the Navy. As I mentioned during the presentation, we're seeing upwards of 40% of our production in this category, and that really feeds into what we're seeing for overall sales growth in our company right now.
A year ago, we were in the doldrums because people were confused about all of the duties and tariffs that were being placed on everything. Our sales had really kind of gotten down into the CAD 1 million-CAD 1.2 million a month category. Now that things are kind of settled out, the last quarter of our fiscal year, which ended on June 30th of 2026, we were seeing monthly sales figures of CAD 2 million or more. I'm happy to report that as we're starting our first quarter of the new fiscal year, we're actually seeing additional sales growth upwards of 30%-40% already on a monthly basis. This is all being driven by this defense sector. I think we're going to see that continuing to drive our business, we're going to see that continuing to help the business.
We know that there are now 42 shipyards that are either in operation or being built in this country right now, and every single one of those is going to be building ships with dry dock capabilities. This is going to drive, with a lot of traction, this continuing need and demand by the defense industry for these copper products. If I sound a little bit excited about that, I am. We're looking forward to serving that industry to the best of our capabilities. Remember, about 90% of those materials are being imported today, so this is going to present an outstanding growth opportunity for IBC.
Okay, Mark, our next question is this: Can you share more on the near net shape copper alloy expansion and how quickly that can translate into revenue growth?
Yeah, we're already doing it is already translating into revenue growth. The better news on that front is that the further we go downstream into the actual production of parts, the higher the gross margin is for the company. Not only are we increasing the actual sales or revenue for the company, we're also increasing the gross margin for the company. That will drive the company to where we have wanted to be for quite some time, and we can certainly see it coming, and that's positive earnings and cash flow. It's coming, and we're pretty excited to get to that point.
Okay, thanks, Mark. Here's our next question. Are you seeing stronger customer pull from aerospace and defense, or is the bigger opportunity still in the broader copper cycle?
Well, we see opportunities in all of those areas, let me define it a little bit better in terms of defense. We're really seeing the big driver being the Navy. Having said that, I will also add that the space sector is also going to be a huge contributor to this company going forward. We've been working with all of the commercial space as well as the government space entities. They're asking for more and more products from our company. We're helping them not just with providing products, but providing the technical expertise on the front end to make sure they have the right materials of construction and the right design for the part that they're looking for. This is a really symbiotic relationship, and I think our technical expertise is really capturing the attention of our customers. They're asking for that help every day.
All right. Our next question is: what needs to happen for IBC to reach cash flow breakeven, what would you say would be a reasonable timeline?
I always speculate on these things fairly aggressively, so bear with me on my answer. As part of going through some corrections to the company, shutting down one division, focusing on the one that's really been the mainstay for the company for its history, that's taken some time and some effort to go through that change process. As part of that, we did end up taking on some additional debt to the company. What we're focused on right now is continuing to grow the revenue and the gross margins, then taking the cash flow that we're generating from the sales of these parts and alloys and converting that into the ability to not only buy more feedstock inventory so we can continue to increase those sales, but also pay down debt. We're very focused on paying down that debt.
As that debt starts to come down, we anticipate fairly significant changes in our debt as early as first or second quarter of 2027. That means that we're going to be doing a lot of hard work and very disciplined cash management between now and then. That starts to open things up for the company even more broadly. It allows us to add more capital equipment to the company so we can make more parts and increase our sales even more, increase our inventory of feedstock materials. Debt reduction is huge on our minds. It's a high priority for the company, and I think we could really start to see some significant progress first or second quarter of 2027 with good disciplined approaches to it between now and then.
Mark, I think you're referencing first and second quarter of fiscal 2027, right?
Yeah. Good catch. I'm talking about first and second quarter, where you'll see results of debt reduction in the calendar year 2027.
Okay.
We'll be working the first and second quarter of fiscal year 2027, which started July 1 of this month. We'll be working hard on that discipline to get that debt paid down so you see a difference, as early as the first or second calendar quarter for the calendar year 2027. Thanks for that, Jim.
No, that makes good sense. Thank you. Our next question. You just reported improved financial results and margin expansion. What are the key drivers you see sustaining this earnings momentum over the next few quarters?
I think it's continuing to do exactly what we're doing, which is not just simply making alloy billets and/or ingots for our customers, but taking those products and converting them into a near net shape product. Again, the revenue from that product goes up as compared to the ingots or the billets. We also get a higher margin on those parts. Continuing to do what we're doing and then figuring out how to get that vacuum cap furnace on order and into our production plans as soon as possible. The U.S. Navy wants the copper nickel materials today, and they would really like to stop depending upwards of 90% on foreign sources for that material. Those are the two areas that we're focused on.
We've already demonstrated very good results on the casting, we're getting more and more orders for that, as we demonstrate our capabilities in that category.
Our next question, which customer or end market segment gives you the most confidence in sustained demand?
Right now, I'd have to say it's all Navy related. I don't want to discount our, what I call our foundational business. We have certain customers that have been with us for decades, and they continue to provide that base foundation of a business plan for us. I very much appreciate that and appreciate their commitment to us year after year. When find out that there are 42 shipyards that are either being built or are in operation right now, compared to the very minimal amount we had, and you take a look at all of the money the U.S. government is putting into our naval programs, that's where a large part of our really substantial growth is going to come from. That gets me excited as I think about this business and we wake up every day worrying about some new things now.
How can we meet those production targets? Those are good problems to have, and we're glad to have them.
Okay, thanks. Our next question is: with The Lind Partners funding now in place, where does that capital have the highest return potential inside the business?
We primarily used the Lind capital for two reasons. One was to secure additional feedstock so that we could match that to the growing sales. Before we had the Lind financing, we were getting some additional sales indications that were very nice, but we were having to put it into the backlog. Now what we've done with the Lind funding is we've been able to purchase more feedstock, and we're keeping our backlog to a reasonable level and being able to provide the parts and the materials that our customers are asking for. That was greatly appreciated. The other thing that we've used the Lind money for is to repair equipment. Our facility has some older equipment and some newer equipment, and the older equipment obviously requires more maintenance than the newer equipment.
We've been able to put some very good investment back into some of our older equipment, and we're still doing that as we speak. It's all part of maximizing your production capacity. Thank goodness for the fine people at The Lind Partners. This is the third or fourth time that they've come in to help the company. We have a great relationship there, a trusting relationship. We've always paid them back, and paid them back on time, and they continue to see progress in terms of growth at the company. I think they'll be there for us for a long time.
Okay. Do you see the current funding and credit structure as sufficient to support the next stage of expansion without further dilution?
The answer to that would be yes, because raising money at this share price is never a pleasant thing anyway. Really, we see the path going forward as coming from two things, and I mention this almost every week to our senior executives in the company. We need sales, sales, and we need production, production. I see a very realistic path to getting this company turned around in short order based on the sales we're seeing right now, based on the organic growth and capabilities that we can demonstrate as a company. I don't want to take on any more debt. I would not want to raise any more money than necessary at these share prices.
If we can undertake the growth plan that we're on right now and utilize this Navy unbelievable demand to our advantage, I think we can turn this company around in fairly short order.
Okay, we got just under two and a half minutes left, I'll go fast. We have a lot of questions left, which is great. With your recent promotion of your VP of Operations to President of a division, and that's the NF division, what tangible improvements have you already seen on throughput yields and on-time delivery?
We named her as Vice President of Operations kind of in the March timeframe of 2026. I'm always very careful about putting two things together and saying that they're necessarily related based on when they happen in time. There is a very interesting correlation there between putting her in charge of operations and seeing our sales almost more than double, for the last three months of the fiscal year 2026. We're seeing this pattern continue under her leadership now as the President of our Non-ferrous group, or the Copper organization. I think we have an excellent new leader in this division, one that's providing very good communication, very good drive to the employees.
While I compliment her as in every way possible, I also want to make sure that we recognize all the years of service that Mark Wolma, our past president of Copper, provided to the company as well. He's a phenomenal individual, as honest as you'll find, as hardworking as you'll find, and he really carried us through some hard times at the company. We want to thank Mark, but we also want to really talk about how excited we are with Jenny being at the helm right now.
All right, Mark, we got 30 seconds left. Here's the last lightning round question. Where do you think the Street most underappreciates your competitive moat versus other specialty metals or advanced materials producers?
I think there's two things there really. Number one is the absolute focus that we have on copper, which no one else in the United States really has. You'll see similar companies, but they're into multiple metals. Now granted, we're growing into the aluminum scandium side as well, but that's extremely unique as well, and IBC is really kind of the company that has that capability. I think that we differentiate ourselves in that way with a very focused product line. I think we also differentiate ourselves with the full vertical integration capability. We pour the metal, we pour the alloys, we can then convert those into finished parts, either by machining, casting, hammering. It's that full line of capabilities that I think distinguishes us as well.
I think we've got a couple of different ways to really stand out from the crowd, and we plan to exploit that more and more.
All right. We've run out of time. Mark, thank you, and thanks to everyone who's joined us today. I will note there are a number of additional questions from investors. We will get back to all of you with answers to those questions to the best of our ability. Please stay tuned for that. Thank you for your patience. To learn more about IBC Advanced Alloys, please visit our website at www.ibcadvancedalloys.com. As always, you can get in touch with me either via email at