CoTec Market Update

0:08 Hello everyone and welcome to Kotex live event hosted by 6. I'm pleased to introduce their speaker for today, Julian Traeger, President and CEO. Julian will discuss the latest updates and after that we'll be accepting questions. As a reminder you can submit your questions in the chat at any point during the conversation just at the bottom right corner of your screen. As always the summit is being recorded and will be available on 6 and YouTube afterwards to watch. Without further ado, I'll hand things over to you, Julian. Thank you so much, Carl, and thank you all for tuning in to this podcast. And apologies for the technical difficulties that bedeviled us this morning. But I'm glad you're here to get the update on Kotech and I'm pleased to say that Kotech is developing very well.

0:58 The longer-term vision for Kotech is to be the technologically driven disruptor of the commodity extraction sector to produce the commodities the world needs quicker than through existing conventional mining processes and to do so in a very low carbon way, a very green way, and in a way which we can scale a business which can ultimately over the next decade become a challenger to the incumbent commodity extraction businesses. So far in our short life, we have now invested in 3 technologies and we have 3 assets which we plan to bring in online, particularly in the recycling space.

1:51 And our medium-term goal is by the end of next year to have 5 or 6 technologies and ideally 10 assets. But longer term, we'd like to have closer to 10 technologies and say 50 assets and to build a multi-billion dollar business, which I think is absolutely possible. I think we've already created an enormous amount of value for our shareholders and we'll see some of that being realized next year as we engage with investors in our projects. But with that overview maybe I should turn to Q3 which was a very successful 0.25 for the company.

2:39 We announced profits of around $3 million and year-to-date profits of around $13 million, which is a significant amount by comparison to our market capitalization. And I think it gives some indication as to the upside that we all believe is there within the company. But more than the profits that we declared, we also were extremely busy and made a lot of announcements on many fronts. In particular, I think the greatest step forward was that we increased our stake in our very exciting magnet recycling technology, 1 which allows us to recycle processed rare earths, the rare earths which the West desperately is in need of.

3:40 We increased our holding in that to 21%. And we also are moving forward in developing a 50-50 joint venture, which we will have for the US business of Magneta. So on a look-through basis, we'll have 60% of the US business, 20% of 50%, which is 10%, and then the other 50%. And that business has enormous potential. Not only is it already starting to generate revenues in the UK and is building 2 large plants in the UK and Germany for 2024.

4:28 But it's of enormous strategic importance and relevance to the US. And we've been having very promising discussions with members of the US government. Recently, the company was put on the list of priority projects for the Minerals Security Partnership. And so we're very confident and very excited about the way in which this business is going to develop over the next 12 months and the enormous value which we think we'll be able to create for Kotex shareholders through this investment. Ultimately, we think this investment alone will result in many multiples of the current market cap of Cotech.

5:22 But that's obviously not what's alone in the portfolio. We have other technologies and we have other assets which we're very excited about. On the technology front and on the INOR front, we saw a significant uplift in the valuation of our stake in Binding solutions when it was invested in by a large Australian company called Minres, and we've reflected that in our results. But more importantly, we announced that we had obtained an option on the Lac-Chenine deposit in Quebec.

6:10 That is a deposit of tailings from an old Cartier mine, which we think contains 10% iron ore, and something which we can apply the binding solutions technology to, to create super green and much cheaper pellets, which could be used for DR processes, which are very much needed in the US over the coming years. And we've had some very early discussions with the people in Quebec about this, and they're very excited too, Because the importance of these sorts of investments is not only that we can make money because we don't have to mine them, we just recycle them.

7:00 It's that we can reduce the footprint of the waste, we can ameliorate and beautify the waste deposit sites, and we can reduce the environmental rehabilitation costs. So there's a real win-win for all parties involved, not only Kotick and its shareholders, but for the general community and for the governments. So we're excited to be progressing that. And again, next year, we expect to see a significant uplift in the valuation as we bring more financing partners into that asset. The other achievement during the first part of the year was our investment in our revolutionary new copper leaching technology, SABRE.

7:57 And in Q3, it was announced that BHP, one of the largest and most prestigious mining companies in the world, has invested in SABO by its venture arm, which was a great vindication as to our thesis as to how great the potential of SABO could be. And we are hard at work now looking for assets which we can apply the SABO technology to. Having been at this now for close on 2 years with the COTEX strategy, generally we would expect, you know, within a year to have identified the first asset to apply the technology to. And so we're hopeful that we could announce the first asset opportunity in copper in the middle of next year.

8:50 So we are super busy on many fronts, making a lot of progress, working hard on your behalf. And we believe we're creating tremendous value. I have been increasing my shareholding in the company and I intend to continue to do so because I think there's multiples of upside here and I think it's going to be a very exciting journey. So with that overview, I'll hand back to Carl to see if we have any questions that people have. Thank you, Julian. And for any individuals that came in late, just a reminder, we are accepting questions in the bottom right corner. You can see the chat there.

9:37 You were just finishing up with the Sabre technology. Perhaps you could further elaborate on that technology with BHP for individuals that haven't looked into it enough? Well, the thesis of Cotech is that there have been technological developments and discoveries over the past couple of years, which now make deposits which were previously considered uneconomic viable. And SABRE is one of those discoveries. It can be applied to very low-grade copper deposits. And it can leach out the copper in a way which uses much less heat and can deliver the copper quicker and with higher recoveries than alternative bioleaching technologies.

10:38 So we're very excited about it and yes, I think that BHP's involvement is significant because they're obviously a large copper producer. Great. And you also mentioned HyperMIG technology expanding into the United States. Can you discuss the challenges and opportunities about this and further expanding into this from a global scale? Well, I think the business is already operating and is being scaled in Europe, so there's not so much technological risks. I think the area that we're focusing on is working on identifying the partners with the e-waste, whom we could assist in making their processing more efficient by removing the magnets from their processes.

11:34 And so, you know, over the next couple of months, we expect to progress the initial contacts we've had with a number of these parties. But as I mentioned in my summary, all signs are that the US government is very keen on this. And there are lots of other industry players, OEMs, who are also intrigued with the idea that we can bypass the Chinese restrictions and actually recycle the waste we already have within our economies to create new magnets in this way. And Graham from the chat is wondering, what is the dollar value of the support from the MSP for HyperMag?

12:27 Well, all they've done so far is indicated that this is one of their priority projects. Actually, the costs involved in setting up HyperMAC in the US are not that high. One of the interesting things about the technologies that we're involved with is that they use much less heat, they use much less water, they're much cheaper, generally around 20% of traditional CapEx, and they're much more flexible and modular. So, you know, we would not be seeking a large amount of money. We think that the CapEx associated with getting the business up and running is in the order of 60 to 70 million dollars.

13:14 And We expect some of that will come from governmental grants, but there'll also be some room for a partner who could provide some equity. But the business itself, we think, has the potential to be worth several hundred million. Graham has a follow-up question here about your investment in Mekango and if it's maxed out, is there any optionality in there or interest in acquiring more of a stake in it? Well, we don't actually own any shares now in Mekango. We've swapped our shares in Mekango for our shares in Magneto. And that was the way in which we increased our shareholding in Magneto to 21%.

14:04 And I think we're quite happy at the 21% level and with the US joint venture structure, but we work closely with Mekango and we are partners and we want them to succeed alongside us. Peter has a question here, he's complimenting the performance of the stock and he's just wondering what would take it to the next level in terms of volume for next year? Well, I think there are a number of catalysts which we expect. Obviously, you know, continuing performance, continuing profitability would help. We are hoping shortly in the next couple of weeks to finalize the terms of our ownership in the Lackaneen deposit where we'll probably have some partnership with Binding Solutions, the technology provider.

15:10 There'll be some announcements around the drilling results at Lakshanin over the coming at Lakshmin over the coming weeks and months. Funding and acquiring the palletizer at Magain is another catalyst. And with these transactions, we would hope to see higher valuations placed on the investments we've made, which we can then reflect. Excellent. Thank you, Julian. And that's it for questions in the chat. So if you do come in late, this is a recording that will be available on YouTube probably within the day, but I'll leave it for you for any closing remarks.

16:01 Thank you so much, Carl. Well, I think it's very much, you know, moving forward at pace. You know, we think we have a real opportunity to be, you know, a sort of super green commodity extractor focused on recycling and the circular economy, producing the critical minerals which the world is gonna need to cool down and at scale. And therefore, we have the first move advantage. We are seeking to move rapidly to get our options over more assets. And we're very excited that we can both generate significant gains for our shareholders and make a positive difference to the carbon transition for this planet.

16:57 So all the more reason to be supportive. And there's enormous upside already in the stock. So thank you for your time and attention and for dialing in. And if you have any other questions, you can always contact us directly.