Clontarf Energy (LSE:CLON) — Interim Results

0:00 Good morning, and welcome to the CLONTARF ENERGY PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company can review the questions submitted today, and we'll publish response where appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to David Hawken. Good morning to you, sir. Good morning. And thanks,

0:31 everyone, for attending. So moving on, I know that people have many questions about the state of the bid round process in Bolivia, which is always complicated and confusing to many pumpters. So if I can honest if I can help you understand, that's what I'm here for. I mean, the basic story to is that Europe and indeed the world needs clean lithium of high purity. That may seem an easy thing to fulfill, but it's not because the demand is growing quite rapidly and there simply aren't the projects available today to supply the anticipated demand. So Europe needs the pure lithium and Bolivia in its turn needs to export lithium. It hasn't been a significant exporter of lithium to date, although it has maybe 45 of the world's brines.

1:22 And that's due basically to failure of governance. Compare with, say, Chile or even Argentina in fiscal terms or Southern Africa or Australia in development of hard rock mining. They haven't been good at understanding the market and maximizing value added to their economy. And the context of this is that Europe's supplies of critical minerals generally are vulnerable, but particularly in lithium, cobalt and some rare earths. And the reason is that China has developed a very comprehensive strategy over twenty five years, which has been tremendously successful in dominating the mining of many of these materials. And even where China is not a significant player, like in lithium in the mining, it dominates the processing of the material.

2:14 And that makes the rest of the world quite vulnerable to China as Japan found out in 2010 when they had a brief trade war and their supply of warehouse was cut off by the Chinese exporters. And the result is that Japan's dominance of batteries was eliminated almost overnight. We used to sell graphite to the high-tech battery industry. At that time, they dominated 85% of it, and now China dominates the industry. Now that realization dawned, first of all, in The United States with the Inflation Reduction Act, but Europe has now passed its own Critical Resource Minerals Act in an attempt to achieve not complete independence, but at least some measure of duplication of sources.

3:01 And the only answer is a Team Europe approach because no one company or body is able to address these supply concerns on its own. We need to combine finance particularly, which is always tricky in the global South, with market access and distribution skills as well as operating skills in these countries. So we need to effectively compete at all stages of the value chain, both in exploration and development and the processing and also the shipment and placement of the material. And for that, we need involvement of off takers as well as producers and explorers.

3:47 A big issue has in many of these countries, particularly in Bolivia, has been financed because these are not blue chip countries. And Bolivia as a country itself, probably like Argentina or many African countries today, is not really bankable. And so we we sought a solution that would enable us to finance the development of these projects. And the solution basically is for the European Union's global gateway project to provide capital for infrastructural development. What happens is they provide the capital and they have lots of capital. They've got an initial GBP 4,000,000,000 of cash available at the Global Gateway Project, and that can be levered up through guarantees for a greater sum.

4:36 And basically, they provide the capital under their standard lending rules. It's 3.3% approximately, maybe less for the foreign interest rates, twenty year money, so it's very attractive. They provide that money to the state, and the state then spends it in critical infrastructure such as power connections, roads, water and so on. And typically, in a new project in a new geographical area, about two thirds of your CapEx is such infrastructural investment. The balance of the investment, things like the plant itself, we will provide incorporation with off takers. And the logical way to finance such projects is by linking them where possible to offtake because offtake is something that is effectively securitizable.

5:26 The product is only valuable if it goes to the market. And once it's out of the country en route or in the major market, then it has true cash value. And that's the basis on which we've been speaking to off takers over the last twelve months. There are challenges, of course, in a new part of the world. Infrastructure, I've mentioned. Also state control under the law. The Bolivians want to maintain state control. They even thought for a while they'd have 100% state control. There's been a long process of educating and explaining to people that that's not really acceptable to sophisticated markets that are constantly evolving and constantly changing, all of which are disaggregated anyway.

6:11 And traditionally, the industry has been dependent on evaporation technology. In other words, in places like Chile, they took the brine out of the Salt Lake, they put it into these big pools or pacinas, and they had to wait thirteen months or so for evaporation through wind and sunlight to take its course. But the throughput is relatively limited for evaporation technology. And if you look at the fast growth in demand, 25% a year, that's anticipated to continue at least through 2030, there's really no way that existing projects or any projects can evaporate enough lithium to supply that level of demand. Also, are some issues with achieving very high purity through evaporation techniques, all of which has led us to experiment and invest in technology of direct lithium extraction. In other words, using different methods out of the brine and sometimes other economic minerals as well. And work on this technology has gone on for decades, but it's now nearing a point where you're on the point of economic success. And basically, this slide in front of you just shows the traditional technique. You take brine, you put it through evaporation ponds and then you process it because the evaporation only takes you so far, you then got various other techniques to get to reasonable purity.

7:38 And the purities that we've been talking about so recently were probably about 96% or so purity, which we call technical. But talking to the battery manufacturers today, they're really looking for over 99.5%. And in fact, our minimum cutoff has been 99.7%. And that's what we've been working on so hard initially with the synthetic brines at our pilot plant, and we've been achieving that. And having achieved the lithium purity that we sought, we're now fine tuning the other elements because we don't just want to produce economic lithium, we also want to produce economic magnesium or, where possible, other minerals, a bit like a polymetallic mine. This is the type of process schematically that we're involved in. So basically, it's an ionic separation process.

8:29 And what it does effectively is it uses the same electromagnetic forces that exist in the human body. If you think about how evolution has worked, you know, your body is able to to eat pizza and drink beer and other substances and quite efficiently within twenty four hours or so, separate out the nutrients and get rid of the breakdown the alcohol, get rid of the other possible contaminants very successfully. And yet the body temperature is maybe 38 degrees Celsius, and most people don't have any problem processing waste and getting a reasonable throughput. And that's the result of, obviously, hundreds of millions of years of evolution of complex life. And what we've tried to do is duplicate that technology in the chemistry itself.

9:19 So we don't rely on solvents, such as some of the other companies that are involved in DLE are relying on solvents. Solvents have problems with the reinjection of water back into the SALAR. And while we may use membranes for certain parts of the process, such as higher recovery of magnesium, it's basically an ionic process rather than a conventional process. So coming on to the Bolivians, I know this is very confusing to many shareholders, but the Bolivians have embarked on, for them, quite an aggressive program to become a major exporter. Why? Because they've seen the success of the Australians and South Africans with hard rock, although that's not ideally what the market requires, either in terms of cost or cleanliness.

10:10 But they've also seen their neighbors in Chile and, to some extent, Argentina, been able to develop export volumes, which is a bit galling to a country that has brines and the best salaries in terms of grade, albeit with some issues with the magnesium. So initially, they launched a bid round process, what they call a Convocatorio, some years ago. And we were invited to participate, and we didn't proceed at the last minute because they wanted a firm commitment that we would industrialize the production. And at that time, we didn't have a proven technology. We hadn't had a joint venture with direct DLE producer, which is Nex Chem. And also, we didn't have the European funding or the off taker support committed in principle.

10:56 So we didn't want to make the commitment of industrializing product if we couldn't carry through with that commitment. Now maybe we were wrong on that, but that's what we decided to do. Three companies did make a commitment, Russian and Chinese backed companies. But so far, they haven't exported any battery grade lithium, and there's been some issues with their technology and all those companies. But the government is still hopeful that those original convenios signed two or three years ago will be now converted into actual contracts. And as part of that process, they're actually updating the lithium law, which has been a bugbear of ours since it was passed, to clarify the situation that the state should have 51%, but not necessarily more than 51% and not necessarily operating control.

11:47 You know? So what they should want is a seat at the table and the influence over the outcome like successful countries worldwide. If you think about Botswana and diamonds, the Botswana have never dominated the operating of Dabzwana and yet their economy has grown 7% a year over forty years based on the success of De Beers, at least until the lab grown threat of recent day. And I can give you many other examples. So this is not the first time the state has grappled with this problem. And I think they've now come up with a reasonable solution in what they call the International Configuratorio, which is launched this year. And this started off with a few dozen companies, now it's down to 21 companies, of which seven are EU, one British, one Swiss and a couple of Russian.

12:32 And all of them are serious companies of different sizes. We're now in phase four, which is detailed assessment by the state lithium company, the Ilibe, they call it. Basically, they're looking at firstly the technology, especially the maturity of technology and the financial capacity. And that's why they initially tried to resolve the remaining issues over the original Confectatorium three years ago. And you may have seen some press comment on that. That doesn't relate to the current Confectatorium at all, except that it clears the way and it establishes some ground rules. So it's we're a very interested observer of that, not directly involved in those Russian or Chinese contracts.

13:21 And they have started some initial conversations with the three companies that claim to have an existing DLE plan. They did, during August, send their then boss to China due to some due diligence. And I understand that some progress was made, but there are many issues remaining about whether the Chinese daily technology is actually working satisfactorily or not. But anyway, the process is moving ahead, but it has been delayed somewhat. Basically, the whole process has been delayed by about twelve weeks. Now they initially hoped to have contracts being signed in August and now obviously it's the end of September, but they are moving ahead. One And of the things that they've done, and of course, it's entirely up to them, they've changed the top personnel. They've changed the minister and the boss of lithium company.

14:13 Basically, they put in what I would call hard ass decision makers, particularly the new boss of CLB is a former oil guy, former head of refining, a very impressive old school oil man. He knows about lithium as well. He's been lithium expert in the ministry for some months. But, basically, they put in place decision makers to drive this forward process forward, which is the right thing to do. You know, diversity, inclusion, equity are very important, but, you need to export volumes and you need to do it as fast as possible. And I think they're very focused on that now. They've also pushed through with the reform of the lithium law, and that's been pushed forward by a couple of very impressive lady senators who we met in May, June, and they have a very clear vision of what they want to do and why they want to do it. And they're coming at it from a sort of patriotic, indigenous perspective, not from a necessarily a pro international business perspective, but for once our interests align. So we're very happy with their work and we wish them the very best. And we hope that they're able to get that reform through as fast as possible. So we initially would expect in the coming weeks the Stream one companies to enter into formal negotiations. They've had initial discussions.

15:28 And we've been verbally told that we will be treated as the number one company on Stream two now because we have an existing plant ready to run. It's built. It's ready to receive the bulk samples. We originally had planned to deploy the pilot plants to Bolivia, which is best. Now rather than shipping the brines around the world, it's better to deploy to the actual salar itself. And over the summer, the Bolivian state changed their plan on that, partly for logistical reasons. They had some rainfall unseasonally and partly because they were in discussions with indigenous communities. We've never had an issue with indigenous communities, but they decided that you should proceed with the pilot plant work in the location that you have. Ours is Mumbai in India. And they would visit the plant as part of their due diligence.

16:18 And that we had hoped that would happen later this year, certainly by January or February next year. And that will enable us to deploy a plant to Bolivia by midyear. And that suits everyone because there's an election coming up about October next year. So it's always good for the politicians to be cutting ribbons before an election. That, in a nutshell, is the timeframe. There have been some changes. I know this is confusing to people about the time scale, but also about the companies. And part of the reason was that they hadn't really been through this type of process before. You know? So this is not Switzerland. And when they drew up the original criteria, they had some unrealistic expectations in terms of, for example, financial capacity. Now they wanted, at one stage, double A ratings.

17:14 And most of the companies that have top rate. It's obviously because they're either ex startups or junior companies, other miners in in challenging parts of the world. But the we were able to do the offices of the European Commission and themselves. We were able to persuade them of the wisdom of this, so they've dropped the requirement for the double a rating, which makes complete sense because Bolivia doesn't match that rating itself. So, basically, the focus is now on the maturity of the technology, which in the first instance has suited the Chinese because they claim to have existing operating technology. But I think we'll, in due course, suit us because we have a plant ready to run that has already been working on synthetic brines.

18:03 And that's why I just brief it just summarizes how the different streams are defined. So what remains to be done? Well, the focus has been on the maturity of the technology. But obviously, we mine money rather than mineral. And it's always important to work out the contractual and fiscal terms, which is why the next phase of negotiation is so important, not just for us, but also for the European Commission and indeed for the off takers. So we've been working very closely on this Team Europe approach. And we anticipate quite significant support from off takers in the next phase, particularly on the financing phase.

18:48 But the Bolivians have been quite visionary in recent months and that they've taken on a lot of the suggestions that we've made at other people. Traditionally, it's a mining country which has 3% royalties and profits taxes. It would be very familiar to many of your shareholders. But an issue that they've had is that salaries are not spread throughout the entire country. They are focused on certain parts of the country that are in the Highlands and relatively poor and this has caused some local sensitivities over past years, you know, to do with past mining booms. The eighteenth century silver boom in Potosi and then the World War II strategic metals boom enriched the miners.

19:39 You've heard about the Patino family and other families, but didn't enrich necessarily local communities. And this has led to agitation from local communities for a share in the royalty or a piece of the action, which we think makes complete sense. Like this is not an industry where the margins are relatively thin. You know, you're talking about relatively good margins. So it's more like gems on diamonds traditionally or even oil rather than many of the minerals that you might be familiar with. And therefore, is some cream available to be spread around. I think it makes complete sense. And basically, the state has bought into that idea, and that's part of this lithium dollar form. I'm anticipating that probably about 5% to 8% of the revenue will be taken as royalty and distributed to the local community.

20:32 And the percentage may be for the regulator, etcetera, and 1% for the country generally and development fund. So we anticipate having a higher royalty than had originally been contemplated. But I think you have to see that in the context of the shortage of material, the ever increasing specification for puritying and the expectation of offtakers that by 2030, that there may be as much of a as a 30% premium for clean green lithium as opposed to the dirty lithium that comes from for two days in a coal fired furnace in China and then trying to persuade the Tesla buyer that they're buying a clean vehicle when maybe the facts might suggest otherwise.

21:24 So we've been arguing for a stable tax system based where possible on the oil model because they have a lot of oil and gas experience, and it's worked quite well for them. They said until they until they made it very aggressive in recent years, which led to a collapse in oil and gas exploration. Bolivia had a very good exploration hit rate with all the major companies active. So we've encouraged them to learn the lessons, not not in our interest, but to learn the lessons in their own interests. Because, you know, if you have too high taxes in a challenging environment, you know, people won't take risk and they won't develop projects. Too low taxes and maybe there's profiteering by the international miners. So you want to seek a balance which works for everyone. And I think they've come around to that point of view, and that's the reason for the recent progress.

22:13 So we expect effective royalties to be higher than originally anticipated. But in terms of the likely economics, that seems very manageable because although people obsess about the Chinese spot price today being about $13,000 a tonne, I think that is more or less meaningless to someone in brines because, first of all, we've spoken we must have spoken to about a dozen off takers over the last eighteen months. And all of them are looking for long term contracts and none of them expect to be buying the product at Chinese prices. And also, if you talk to people who are currently exporting or importing, it's very clear that the actual price paid in the market is a significant premium over what's quoted the stock price. A lot of our punters out there tend to think that all markets are like Brent oil, and they think that if it's $70 that's the price, subject to short transport or quality differences in different parts of the world. But the reality is that there are many specialty chemicals that don't operate like that.

23:15 We know well because we were in premium graphite for many years, and we sold only to the highest value people. But we would sell products that might be sold out of China at the time for maybe $200. We were selling for up to $2,000, you know, to, you know, Union Carbide and Hoex to S. SKL Technique in Germany because it's simply not a commodity. You can compare it to customers or to applications. And in a situation where people are short of supply, you get what you negotiate, not what you deserve. So just moving on. The reason why we're in this, the reason why we have the European Commission support is because Europe has woken up to its vulnerability. You could say that they should have known that for twenty five years, but maybe better late than never.

24:05 And even though we think of Sir Humphrey in London or Washington or Brussels being very slow moving, I've seen in the past fifteen months how fast they can react when they want to react. Once they realize that there is a serious weakness, they can switch paths very quickly. And even to the extent that the Global Gateway Project, which is their answer to the Chinese Belt and Road Initiative, was originally set up mainly for Africa and mainly as a development project. Now it's flipped. Now all the focus seems to be on Critical Resource Minerals. There's still one some African projects like cobalt in DRC or whatever. But now the focus is very much the sovereign interest of the European off takers and the European market.

24:53 And that's only a healthy thing because the closer you get to market reality, the more likely the project is to succeed. So the Europeans have actually passed an act and basically, they've got 35 critical resource minerals, which are all the things you know and love, I'm sure, of which 17 are considered strategic and lithium is probably the number one of all of those. Complicating the matter somewhat is that they've still got this dream of a green transition. And to some extent, this conflicts with wanting to have some sovereignty or because the same people who very often want to position very often don't want have mines within their own home market? And of course, the answer is in the Global South.

25:45 The countries in the Global South, whether it's in South America or Africa, they're so keen on economic and industrial development. So to the extent that you can do the mining or even some of the processing in safe, friendly third party jurisdictions, that ticks the boxes both of the green and also of the security of supply. So our model then in Bolivia, and this is based on forty years' experience, dealing with Bolivia and dealing with the local communities, is that we see partners, we only pay bosses or employers because they have had difficult experiences with mining in the past. It is a mining rich country.

26:31 And there is plenty of wealth to go around. But the mistake that many companies have made in the past, and you'd be familiar with examples throughout the world, is that if you try to extort too much money in the especially in the short term with that value out the of local economy, then you simply poison relations and you lead to a situation where a future government might increase taxes or even seek to expropriate you. And we've seen that in many countries in the past. So our answer is to, first of all, increase the value of the local company where we can by not just recovering the lithium, but also other valuable minerals where things such as magnesium. And I was quite surprised when we submitted our technical proposals that we were the only company of all the players who had looked at the polymineral or the multiple recovery of different minerals.

27:30 The rest of them focused on lithium, which I think tells you a lot all about the myopia of mining industry. In the end, we mine money, not mineral. And yes, I mean, lithium is a critical shortage and lithium is very valuable. And people are anticipating quite high prices over the medium term. Typically, off takers are talking about $36,000 a tonne, what their expected price is over the next six, ten years. So there is plenty of potential value on the table and there's plenty to go around. And thereby, Bolivia achieves their dream of joining the lithium export. They should have been the first, and they could have been the first. One of the most innovative mining companies was in the eighties and considerable work was done. And it's it's quite depressing in a way when you go through some of those old reports and a lot of the data has stood up to the test of time really well.

28:28 Obviously, they didn't have the techniques that we have today and the prices were only a fraction of what they were today. But it's an opportunity that was lost in the past and led, of course, to development of sub economic projects throughout the world. Projects that normally wouldn't ever have been developed in Africa and elsewhere were developed not because of the best projects, but because they were available to be developed, licenses were available and so on at the time. And I think now having missed out on the first phase of the export boom, the Bolivians are now ready to join us. And maybe they'll be vindicated because, of course, the prices are much higher now than they were twenty years ago, and we expect them to be much higher in the future than they are today.

29:14 So that has really summarized the current state of our project. And I see there's a number of questions that have come through on the chat box. So maybe I'll just read the relevant ones out and answer them now if we can. Is the technology direct lithium extraction once approved of high value to CLONTARF and that it can be used in many different scenarios? Or is it purely lithium from the JV with NEXTARF? So just to be clear, Nexcan developed the technology. Originally, was based on Soviet technology, which was developed to process nuclear waste. Soviets are very good at certain physics and chemistry.

29:59 And they had a particular problem in that they had a lot of accidents at a city called with their nuclear weapons program and also the famous nation of. And they developed some technology to take. So basically, the Netskine team spent the last twenty plus years trying to train that technology and applying to different market applications, one of whom is lithium. So we were looking around the world for economic and technically proficient technologies. And we were looking for high purity, higher than what the market required at the time, which was why it took so long. And in the end, we identified their technology.

30:45 It seemed to work very good, very well in the lab. So we signed a joint venture agreement with them to give us CLONTARF and then exclusive rights for the Bolivian market. Why Bolivia? First, well, because Bolivia is 45% of those brines. And it's also the cleanest source of brines and also the least water stressed. You have enormous problems of water stress in Northern Argentina or particularly in Northern Chile. And Bolivia has issues as well, though not quite as bad as in Northern Chile. So we focused initially on Bolivia, which is, I think, quite big enough for our attention for the time being. But we also talked about adding additional projects in other neighboring countries or even further afield. And we were offered to extend it to petroleum brines because, course, we have a lot of experience with petroleum brines. And there are some petroleum brines worldwide that have reasonable grade.

31:41 And some of them are in places that Americans can't easily work. So that's the possibility that we'll extend to. But we don't allude to focus on Bolivia. Bolivia is where the great opportunity lies. They've also asked us to look at some projects in Africa. But again, while there are brine's projects in Africa, particularly in Botswana, which you know very well, and Algeria, They're not really comparable to the lithium triangle of South America. So we're doing some work on those deposits. And in time, we intend to production test them, but Bolivia is our focus at the moment. Could you please confirm if the synthetic brines have been tested and explain how the technology performed for these samples? What purity levels were achieved for lithium magnesium? Okay.

32:28 I can't give you a full suite of results because we don't have them as yet. We have been working the chemists are working on the synthetic mines. They seem very happy so far. So it's a bit like a drilling in an oil well. You can can see by the smiles on peoples' faces how well it's going. But they don't yet have a complete suite of data, partly because they're looking at the recovery of the different minerals, not just the lithium. But people seem confident that the target grade of minimum 99.7% lithium purity will be achieved and has been achieved. So we're fine tuning throughput and also recovery of other minerals. But that work will still take some time. And I do counsel people to remember that a synthetic brine is not the actual production brine, which is why we've been focused so much on getting the multiple samples, including bulk samples just last September.

33:24 But what the production people say they need, they really need to run major production volumes. And that's why we requested three twenty tonnes of brine from at least two sources. And basically, what ideally we want and what they've agreed verbally to give us is about half of those samples would come from a high grade. So that would be possibly up to 1,000 per liter of brine, so it's quite high grade of lithium. And at least maybe up to half of the production sample would come from reasonable grade of lithium, maybe 400 to 600 per liter, and also high grade of magnesium.

34:11 Magnesium has an interesting history in Bolivia, and that's a good question because if you talk to people, particularly maybe fifteen years ago, they'll say, oh, you can't really mine in Salar D'Ajuni because it has high magnesium. But that's only really a problem with the traditional evaporation techniques. Now there are techniques that will extract the magnesium and magnesium itself is a very, very valuable mineral. You know, sometimes it can be roughly the same value as lithium. Obviously, it's commodities, so the price fluctuates. Magnesium is used mainly in specialty steels, but also in high-tech applications, including in some battery technologies. So it's an interesting mineral, particularly if you can produce high purity. Because just as with lithium, one of the issues with many of the mines producing magnesium throughout the world is that it's a co product and purity may be less than needed for some of the high-tech applications.

35:07 So we saw it as an opportunity, growing as a problem. And the initial results were proceeding. But it turned out that the Indian subcontractor on whose facilities were building the plant has actually developed their own technique, which I understand is mainly a membrane technology, which seems to be delivering higher throughput and lower cost. So one of the things we've been working on delay has been we've been looking at adding the Indian stage to the rest of the processing technology to get better results. So I can't give you a complete sweep because we don't have them as yet, but we are encouraged. And as soon as we agree the sweep with our joint venture partner, it will be our next regulatory new statement, and that will have to go out simultaneously to the SEC in The United States, where NexGen is listed as well as the AIM market as we look at that right. So what market cap would you put on CLONTARF maybe one to two years if all goes well? Well, the market will put the capitalization down.

36:14 It's hard in a rapidly evolving industry with new technology in an emerging country, it's hard to, you know, to forecast the future because there are so many variables. And you've seen even in our share price over recent months how volatile it can be. Like, in June, there was a moment when we thought this financial capacity issue would be a serious constraint. And we were told early on Thursday morning, maybe at 05:20 our time AM, and I wasn't able to double check. So we thought it wise to put out an RNS immediately in London just saying, look, this is an issue. We're hoping to resolve it, but it's an issue. And then, of course, the price halved. And then on the Monday morning, we issued our full results, by which stage we'd resolve the matter with the good offices of the European Commission.

37:02 And then the price doubled and more than doubled. The market will set the price and the price is set by the marginal buyer or seller. So I don't worry too much about the short term market cap or the the share price. Mean, the the market cap is is relatively modest at the moment, about £5,000,000. So any reasonable progress should see a multiple of that. But, you know, that's not up to me to decide, that's up to the market to decide. And the executives are the last people to be able to predict the future. So have synthetic brines test been carried out? Well, they're underway. And results will be issued in a complete suite once all the chemists have signed off on them. What's the cost of transporting the brines to India? Good question.

37:49 Do we have enough capital for this? Yes. We we did raise lots of capital. We've over $600. What's the cost? It'll probably be about $56,000 and the reason is that we may have to pay a small royalty on the mineral just because that's the way the law is written at the moment. And under law, we've got to get the state lithium company to collect the sample from with their own rigs from wells they've already drilled and using their pumps and trucks when we can take charge. They'll take it to the Canton Mantou, we'll take charge, and we'll take it to the seaport. We'll then try and ship it probably through Panama. It takes about two months, which I know is a long time, and the world is still a big place even though the Indian economy is growing rapidly. In an ideal world, we'd have moved the pilot plant to Bolivia, but the state wanted us you know, to work through this initial work in our exist they could visit this location and assess their due diligence at that location. That's what we're gonna do. So that will take about two months. So they've given us verbal approval to collect those samples and they have given us samples before. This is like our fourth set of samples.

39:02 This is a big one. Logistics are everything in South America and maybe in life generally. And we had to get the 320 volt carriers. And in the end, we actually got them from Saudi Aramco. You know, they're exporting petrochemicals and PVC to to South America. So we we bought those 320 containers, and they're ready to go now. That was that was one of the many complicated things that we had to do. But we've organized trucks to take the the samples to the coastal port. So transshipment should be fairly straightforward. The Indian subcontractors looking after the paperwork on the Indian side is the best way to do it because they're a major chemical company.

39:47 They're importing and exporting all the time. So they're better at doing that than us. We don't want any delays.

39:54 A number of people may ask, but is it known when the fifth and final COVICTORIA may be announced? And how confident is CLONTARF in passing to the final stage? Well, they were due to start it in August, and that has drifted because of management changes. And basically, they've said that their meetings are being scheduled from the October 15 onwards. So we would hope as quickly as possible to get permission for the samples to move because that's the right to term instead. No. I don't think you'll sign a final contract, at least with all the fiscal terms, until they've done their due diligence. So the critical element for us anyway, maybe not for some of the companies, is to get those production test volumes to the plant in Mumbai, get them through the plant, hopefully, with satisfactory results all around so we can show off our new baby to the Bolivian government officials, whereupon we would negotiate the final terms of the contract.

40:56 It may well be by that time things like fiscal terms are already established because they will already have gone through the process of the original Configuratorio three years ago and maybe with one or more of the Chinese Stream one companies. Is selling the Ghana license something that CLONTARF would consider? Well, every asset is available for sale at some price. But those of you who follow the oil and gas industry will know that there hasn't really been a farm out market for ten years or so. It's either there or it's not there. And when it's there, a junior can do very well. You know, we've about 20 times, we've been able to farm down, you know, to majors usually and get one or two wells and a carry. Like most recently, we brought in Woodside into the Irish offshore, which would be much more of a frontier province than Ghana.

41:46 And they spent big money, identified gas targets, but then they weren't able to proceed with the drilling because the government changed its policy and exploration. So we're living in a world that has been hostile to oil and gas exploration, even though demand is at record levels, not just for oil and gas, also for coal. So it's a strange market. We're probably investing as an industry, maybe 60% of what we need to invest just to supply the likely demand. We talked about lithium, which is obviously highly stressed because of the fast growth. But petroleum is also going to be stressed because of lack of investment. So yes, I mean, we're quite keen to move forward with the Canadian project. The geology is very good, but the market's not at the point where it's throwing money at you to do your own drilling.

42:34 And there isn't an effective farm up market, at least not for the moment. What is your current cash burn rate? And how long do you see this sustaining the business given the current timetables and samples, negotiations and offtake agreements? Well, we run a fairly tight ship. Total costs of running an AIM company are probably about GBP $0.02 5,000,000. Now if you include your nomad and your stock exchange fees and annual report and all the rest of it. We're quite lean. You know, we salaries have been very modest. For for many years, we didn't take any salaries. And because we believe in the project. We believe in the future, and we think we'll make more money by holding some options at market price and stakes in the company, including converting salary to shares where appropriate.

43:25 And that's been the experience in the past with our companies. Like you go through troughs like the last few years in exploration. But in the end, the market cycle will always come through. If there's underinvestment, prices will adjust. When prices adjust, that will feed through to expiration, not immediately, but over time. And so the key objective in the interim is you've got to keep your costs as low as possible. And so far, we haven't had to contribute to the billion of the pilot plant in Mumbai that's been done by a joint venture partner. But we will be contributing 50% whenever the plant is deployed to site. And obviously, we've been truing up with some cash, but we have up to 600,000 for that.

44:12 I don't think cash will be a problem as long as we're moving forward because just in the last two months, we've been offered cash five times. And at least once of the five was directed by a market maker. And we're obviously reluctant to indulge market makers because the only real reason why market makers would want to buy stock in a junior is that they're short. But, of course, if you give them stock, then you get them out of a short position, whereas what they should do is what you or I would do, simply go into the market and pay the higher price and be burnt for gambling and being called out. So we didn't take any of those five offers we didn't take, but we could go back to them at any stage. So I don't see cash burn as an issue, and I don't see raising cash as an issue. I should have mentioned also that the Australians have been very supportive.

45:05 Know a lot about lithium, mainly on the hard rock side. They haven't been involved in recent placings, but at some stage, we'll probably go around Perth and see whether it makes sense to extend our Australian shareholding, maybe including some of the Australian lithium companies who are quite aggressive and interested in getting into brands. So what milestones do CLONTARF need to achieve to secure offtake funding? Well, this has been a priority in the last six months particularly, and we wouldn't have got as far had it not been for the European Commission. So basically what happened is the head of the team, who's a very powerful individual called Felix Fernandez Shaw, he has been really driving this. So he's got the off takers in the room with the operators. And he's made it clear to them, you know, that, look, the old days of expecting the market to do its work for you, you know, and you as still Antas or Volkswagen simply buying whenever you want to at whatever price the market provides. That's no longer feasible because of what's happened in China, what's happened with the Americans with the IRA. We're in a new world, and you have to think strategically, at least for part of your offtake requirements. And that message has got through.

46:16 There's still some reluctance from the banks and lending agencies to take Bolivian risk. They all want the the European institutions to guarantee it. But the problem is gonna be solved. And this guy, the boss, Felix, actually made that point in the last meeting. He said, look, everyone here is here for a reason. This is going to work. The Team Europe is going to work. We're behind it. We're gonna give whatever resources are necessary for it to work. And the people who are gonna make it work are the people in this room. And I I was really struck by that because I've never seen a functionary lead like that. You know, that's the sort of leadership you expect from an Elon Musk or a Jack Welsh back in the good old GE days, But it worked. You know? Because you could see the psychology just changed. And even the discussions afterwards with the lending agencies and the state bodies, it was just a different type of discussion.

47:10 I mean, before, people were saying, well, I'm not sure how this is gonna work and how we're gonna persuade our minister, you know, that South America is a place to invest. After that recent session, the discussion was, well, how do we do this? You know? Should our country take a stake in your company? And how do we do that? How does it fit with the AIM rules and so on? So they've moved from the conceptual stage on to making it happen. So what challenges or logistical issues did CLONTARF ENERGY face in deploying its pilot plant to Bolivia and Salares? Well, we didn't face any challenges. What happened was we originally were going to deploy. In fact, that was the undertaking we made. And then we were told quite late, like it was April, May, we were told that because of the heavy rains, there had been unseasonal rains in the Salt Lakes, which actually isn't a big deal to us because we drilled wells in the jungle in worse conditions than that.

48:07 They were concerned that if 21 companies were all deploying pilot plants at the same time, there might be reaction to the local community and so on. So it wasn't really our concern. It was more the state's concern that they wouldn't be able to control it. There would be too many companies. And so we don't anticipate a big problem. Obviously, we're going to have to ship the plant to site. Depending on size of the plant that we ship to site, it'll probably be about maybe 30 up to fifty, twenty foot containers, maybe some 40 foot containers. But the plant is designed to be modular. And the logic here is where possible, you want to have as much of the work done in the factory, the original factory, rather than on location. So think of it like like concrete.

48:57 You can pour concrete at a building site, but there's many variables to to manage. And not all variables work the same at 5,000 meters as the sea level. Whereas if you can, say, make precast concrete in a factory under controlled conditions with an autoclave and a lab taking constant lab results of the plasticizers and the cement and all the rest of it, You have far better control, and you can do engineering things that you can't do pouring concrete on a site. And it's very similar with these plants. We want all of the connectivity done as far as possible at the Mumbai plant. We want to move the units in containers. And in the meantime, we'll have access roads developed and concrete poured. So you'll basically have slabs and you'll have skid mounted containers that go onto these slabs. And then it's only a question of connecting, you know, the water and electricity and so on.

49:58 You know? So that's that's the way we're gonna proceed. Are off takers happy to provide funds to business? Yes. I mean, they weren't initially, and now they are. And in fact, when we were going through the last the the phase three requirement, we were working with a very large German off taking group. But being German, of course, they're they're a private entity, and they were reluctant to share their their financial accounts, you know, with lending agencies, which is a bit bizarre. You know, if you're used to American companies or London companies, you just assume the information is publicly available. But looking at one of the very big trading houses that was there presenting immediately after me, I just asked him straight out and said, well, we have this issue. You know, what's your rating? His rating was double a, so he cleared it with his people and we got their approval. So it wasn't an issue. Mean they want exposure to this sector, not just lithium, also cobalt and other minerals.

50:57 So I don't anticipate that as a problem. Unless something dramatically changes, let's say people give up on EVs or the green transition is abandoned or whatever, but that looks pretty unlikely. You know, we never believed the the wild forecasts of no internal combustion engines by 2030, the Boris Johnson type hype. But similarly, we don't think that the recent correction is going to have that big an impact on likely demand because there's just too many applications. It's not just EVs, although they're very important now. It's also storage, grid storage and many other applications. Given the change of leadership at ELA Bay, have CLONTARF asked to shift the testing plant desires in Bolivia? Oh, yeah. I mean, in fact, just two weeks ago, we were asked to update our action plan and with a focus on the next three months, which that was very interesting. So they weren't looking at three years. They were looking at three months.

51:51 And we updated based on the test work that's happening in Mumbai. We were able to update the purities and the throughputs and water consumption, things like that. You know, so we're ready to go. But I think they the Blue Gans do want to do the due diligence in Mumbai first. So the right sequence is the the samples go to Mumbai. They run through over about four weeks for the plant. The results are pulled together over a couple of weeks. The due diligence visit happens ideally when they're being run through the plant, and then we deploy to site. But that will probably require the formal signing of a contract and maybe finalization of the fiscal terms. Yes. It's an interesting question. I said that the new boss is a hard I didn't say the word in the question, but I said he was hard ass.

52:42 I think it's it's exactly what you need. I think the worst thing you can have is a decision maker who doesn't make decisions or someone that's maybe too obsessed with diversity, equity, and inclusion, not that that the DEI is wrong. What you want is someone to make decisions because very often, what's important is that you you you you move forward. You know, I don't think it's that critical whether there's five companies or 10 companies, whether each plant has 15,000 tons or a lesser number or a higher number. That's not the critical thing. The critical thing is that you move forward because nobody has a monopoly of good ideas, and no Salar is the same as any other Salar. Like, even within a Salar, there's variations in grade and impurities within the SALAR. So what you want is you want competition putting different technologies and different companies to achieve best results. Because remember, it's a dynamic market.

53:35 The requirements that you get now from the battery buyers are quite different to eight years ago. You know, they're much more demanding in terms of purity, and they're more obsessive about some of the impurities than they were originally. And the reason is, you know, know, the rising security concerns over EVs and lithium ion batteries not helped maybe by the Israeli attack in Lebanon. People might be more wary about lithium ion batteries, at least in certain applications. So basically, we want hard decision makers, particularly those that have experience in producing and exporting volumes before. And Bolivia has success. It's been very successful as a gas exploration market until they screwed it up by being too greedy over the tax terms. Also being increasingly successful in agribusiness.

54:28 So they do have the skills in contract. Are you able to comment stake mister Warner has taken in the company? Well, there's a you know, it's a it's a pretty traded company. Anyone can buy or sell as long as you have an account with your broker. As it turns out, I've met mister Warner a couple of times. He's a a perfect gentleman, self made man. He's quite a private individual, so I don't want to go too many details about him. But he certainly assures us that he's a long term sticky investor interested in in the opportunity in lithium, not just in in our company and not just in South America. And he's very welcome. Long May, he remained as a as an investor. Is general working capital needs something that the off takers will provide funds for? Yes.

55:13 In fact, we we actually went down the road with one major group, and I'm not too proud to admit. What we did was we plagiarized the Chinese model because the Chinese have this exact model. And we know that works well with oblivions because they already use it in some other projects in Bolivia. So, yes, I mean, they the the the big off takers and the the big trading houses are cash rich, and they are they are mineral poor. And explorers, by contrast, are the opposite. We consume capital in our exploration work. So we have lots of skills and contacts and experience, but we have to get capital in the market. And we're understandably reluctant to dilute it at present levels. Like, when people were offering us capital over recent months, they were saying, you what? When the duck's quack, you have to feed them. There is an argument for that. And if we had no capital at all, we'd probably take some. But when you've got $600, you know, we're not under any immediate pressure. And I think the share price is still very low, you know, market cap of 5,000,000.

56:23 Why would we dilute at the present level? You'd only do that if you were worried about the future. And I think there's there's much more opportunity than there are threats, although nobody can predict the future. So with that, I think all of the questions have been answered. Yeah. David, thank you very much for answering those questions. Investors. Of course, the company can review all the questions for today and will publish our responses on the Investor Meet company platform. But just before redirecting investors, provide you their feedback, which is particularly important to yourself. David, could I just ask you for a few closing comments? Yeah. Well, thank you for your time. I think you'll rarely see an opportunity like lithium, not necessarily CLONTARF alone, but I've rarely seen a market where the growth rate is 25% year in, year out and where there is relatively little investment compared to anticipated demand and where much of the investment that there is, is problematic in terms of the dirtiness of the hard rock mining. And the obvious answer is you go for the lowest decile of cost, and you're looking at operating costs moving together, like of 3,000 to $4,000 a tonne. So it's very modest compared to mining cost.

57:38 You you rarely see opportunities like that. So I don't think the critical resource minerals opportunity has been really grasped by the ordinary investor and certainly not by the institutional investor. And it's something that I think all investors should have some exposure to, obviously not 100% of your portfolio. But I think it would be foolish to miss out on the next commodities boom or especially CLONTARF is a good mix of high upside with relatively limited downside. David, that's great. And thank you once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations.

58:25 This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of CLONTARF ENERGY PLC, we'd like to thank you for attending today's presentation, and good morning to you all.