Critical Metals (LSE:CRTM) — Investor Presentation

0:01 Good afternoon, and welcome to the CRITICAL METALS PLC investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted any time by the q and a tab situated at 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 all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO, Russell Fry. Good afternoon to you, sir. Good afternoon, Alessandro. Thank you so much for

0:33 allowing me to present on your platform. It's been a long time overdue. I'm actually very excited to get some news out into the market and maybe clear up a lot of some of the misnomers that's going on in the market and also to give some some firm guidance and step ways on how we're gonna add value to this company. There are people that have joined that aren't familiar as familiar with as others to the story. So I'm gonna laboriously go through slide by slide. There aren't a lot of slides to go through, but I just wanna make sure that I highlight all the key points for everybody. So on slide one, we see Raymond and Herve at the core shack, 1,000 meters of core that's been drilled. I'm going to push to slide two, which is a normal disclaimer that the FCA and LSE make us put out there to the market.

1:27 So critical metals for those that are fairly new to the story, we're listed in the standard main board. We're focusing on brownfields deposits or brownfields mines and developing these into cash flow and entities. And I'll go into the cash flow side here momentarily. This Molulu project has been mined previously both by artisanals and multibillion dollar Chinese companies, CDM and CNMC. And they were left the property in 2019 or so just before we got a hold of it. What's interesting and what I haven't portrayed to the market is the more exploration we do, the more copper we find and more copper potential. And I'll go into that here a little bit later. One of the main holdups of getting ore to market in this particular case, OM METALS was the road. The road was a rudimentary, almost a bicycle sized road in order to get from Molulu to the markets.

2:25 We widened that in June 2023 or so, made the the road usable. The road was segregated through the increased use of heavy trucks by the local villagers who were using the forest for charcoal. We didn't anticipate that. So we had to actually invest in the road to make it rain proof. And it is the rain season now and we've had OWEN METALS trucks in picking up ore for delivery to the OWEN METALS plant and the road has actually performed quite well. And one of the other things about the road is it also ticks an ESG box that we have to do as responsible miners and responsible corporate citizens. We still have our near term targets of 10,000 tons per month. We're going over those models and we've done refinement on these models.

3:16 We think that this is achievable targets. The offtake agreement is in place with OM METALS until the end of June twenty twenty five. They're very happy with the quality of our ore. Our ore that we've been delivering or have on the pad is oxide ore. There's a shortage of oxide ore in the region. There's lots of sulfide ores, which is your your deeper ore, a little bit more complex. As I mentioned, last time I spoke to the market in about June or so, we had eight different buyers for oxide ore. And quite frankly, I think there's another one that's knocking on the door. But because we already have an agreement, we won't entertain any more offers for now. And in general, I think from a macro viewpoint, everybody knows that there's a big copper demand globally and particularly with the DRC having now the Libido Corridor that runs from kind of our region into Libido, Angola, you're gonna see the ability to export large amounts of quality copper ore from the DRC and we plan to fully take advantage of that.

4:24 Just a quick macro point that I highlighted briefly, if you look at where India is and in terms of, you know, their demand for copper is growing at 15% per annum. You've seen China demand roughly about 5% or so. What's interesting is is The US demand is starting to pick up. And I think with the new administration and the building of infrastructure and processing plants and such in North America, I think you're gonna see the copper demand in North America also start to pick up. The copper demand growth by sector still pretty stable, but what you can see is from 2020 to 2030, there is a meaningful increase in the copper demand by sector and we look to fill that gap, partially of it anyway.

5:12 So again, for those that aren't as familiar with the Melula project, it's historically been a producing artisanal with potential to be a medium sized copper cobalt mine. It's situated a 100 kilometers north of Lumumbashi, Dock Ninety Eight to be exact. The license includes the southern zone, which is the unexplored cobalt area, and we are looking to do additional exploration work on that. And the more that we explore in the southern area, the southern zone, the more excited we get. We're finding more and more high grade copper areas when we do our soil sampling and our trenching. Historically and even today, you know, opportunity at Molulo has been underdeveloped and it's been underdeveloped because it's been underfunded.

5:57 And one of my mistakes, let's say since September 2022, when we've acquired this, we've had this project just over two years is I should have raised more capital when I could. I didn't. It's a mistake of mine. We've identified what we need to do in terms of funding, which I'll get into here in a moment. What nice part about being at Mulu is, as I mentioned before, we have eight different buyers for this particular ore, all copper processing plants around Limabashi and Lacassi. And what's even better is we've had phenomenal grades. We've, you know, in the CPR, we have grades as low as 1%, which is high grade in Peru or Chile or Arizona, all the way up to above 30%, which we've actually seen on the XRF or the handheld X-ray machine on the core. So we know there's high grade there. The Chinese have told us there's high grade there and have shown us ore samples. The artisanals who mined there before have shown us ore samples that they were extracting from the big sulfide pit. So we know we have excellent grades.

7:03 The cobalt areas I mentioned before, so put on the back burner right now because it was in the southern zone and we were in the central and northern zone areas in terms of the scout mining we've been doing. But as we put more workers on the southern zone, we're finding increasingly large amounts of copper and the co credits of cobalt. Cobalt, unfortunately, is a bit low in price right now, but it won't remain at this type of levels from my estimation longer than two years or so. The rehabilitation of the road, I think there was a bit of confusion here. The road was actually completed about middle to end of July. It was completed on time and on budget. And in fact, I think it was about $10,000 under budget. And that has been a boom to the travel time to get to Lumumbashi.

7:53 It used to be just about four hours. It's now two hours and fifteen minutes to get from Molulu to Lumumbashi. And as I mentioned earlier with regards to the O and M metals trucks and vehicles, performed outstanding. The potential opportunity, this is what excites me, and I won't address this in the next few slides, but I will address it right now, which is we have the ability subject to funding to increase our strike length from three kilometers to nine kilometers. And it's one of the items that I've been pursuing now for about a year or so. It will be massively value additive to shareholders and accretive to shareholders because that obviously extends the life of mine.

8:38 So I think when it comes to blue sky, this is this is a massive opportunity for us and it makes sense to the other six kilometers to join forces with Mulu and CRITICAL METALS.

8:56 So one of the one of the perplexing items that I have is the share price performance. And obviously, get at least two emails, messages, texts about really what have you done with the money. You know, where's the money gone? You know, why is our market cap where it's at? So from September 2022, roughly two years ago or so, we've put down there the basic expenditure of what's happened and where the capital has gone. So you can see roughly $4,800,000 because everything's dollarized in the DRC or roughly about £3,800,000 have been invested in Wallulu. Right? As opposed to a market cap of £900,000. And when we listed as a shell with no assets, we're at £1,500,000 market cap. We've acquired an asset. We've acquired 70% of an asset. This has to be cash flowing which I'll talk to you about now in less than twelve months and yet the market is saying, hey, don't understand why you put this money in, where the capital has gone and therefore, we're going to put you in the sin bin, so to speak, with a £900,000 market cap. There's a disconnect there.

10:13 I understand there's a disconnect, and this is the value that we've put into the ground and we'll continue to put value in going forward, which I'll mention here shortly. It's been a difficult capital markets. There's the peer groups are down seventy, eighty, some 90% or so. I don't use that as an excuse because a lot of the peer group won't be cash flow and it has no pathway to cash flow in twelve months or less. But nevertheless, I thought it was important to highlight where the capital has gone and you'll see here just now how we plan on to add value to shareholders. So the value add is the following in terms of the development plan. We all have seen the announcement to RNS from August and September. We all know that there is the potential and we are in discussion still in terms of financing the company.

11:07 And once we get funded, this is what the timeline of production looks like. So we've done exploration, I've told you about the exciting parts of exploration. You'll see that with funding or post funding, we will have entered all of our data, including the information from the competent person support or CPR into the data capturing model and software. We will be hiring, and we've and I'll talk about that in the next slide, exploration geologist for a few months in order to help with the movement from exploration into production. We will be hiring the drilling company to do the thousand meters of diamond drill drilling on month two. We will do a top of a topological survey, which is required in order to understand how the pit design will begin to look like. That'll be on month two. We'll hire a geohydrologist, which is an expert to come in and say, okay, if the pit looks like this, where's the water intrusions?

12:06 Are you going to breach a water table? If you do breach a water table, how are you going to decant? And that's very, very important. Hence, the reason why in month two. Laboratory analysis is really just analysis of the core data that comes from the diamond drilling in month two, and it takes about a month or so. So you'll see month three and month five. It's the core from the drill results going to ALS in South Africa. We've already nominated the laboratory that will do our conduct our testing. What I think is exciting is the the expert for the jerk report. And we've collect all the data for the jerk reports literally on day one of month one. And the reason why is because we'll start with the competent person's report and a lot of the geo technical work that we've done on the ground.

12:56 And for the next six months, we're working on collecting and gathering all the data to create not only a jerk report, but a mineral resource estimate. You'll see on month six, we think that the jerk report will be in draft form, and month seven will be released. You'll see that the mining bill of bill of quantities, what that is is that's a checklist to make sure that you have everything ready to go into production. And month eight after funding will be the beginning of production, which is what the market wants to see. They wanna see capital, what it costs to go in production, what are you gonna do in terms of adding additional personnel, what are you gonna do in terms of jerk report, which is value additive, and what are you gonna do in terms of getting us to that end goal of consistent monthly cash flow.

13:56 So we have two more slides. So the building blocks for success. You know, we've already spoken about the drill program. Thousand meters is what we need to add to the current thousand meters. We'll have 2,000 meters of diamond drilling, and we'll use that to that information and that data to enter into the software to start to create the report. We already have the the idea of hiring hiring a mine contractor. We can sit there, and we've run the model based on us doing the mining, renting equipment, and such. There is a belief that hiring a mine contractor will be more efficient, not only in terms of production, but also cost containments. Right? So that's what we're looking at. We have Raymond who has joined the team, and he will join the team officially post funding. So he's not on the payroll right now. He's looking to help us certainly on the geological side.

14:50 We've got an appointment, as I mentioned previously, on the competent person that will write the report, independent person based in South Africa. We have Luaza advisory to oversee to make sure that no corners have been cut and to make sure that everything is QAQC compliant. And then we have other consultants that I've mentioned in certainly the timeline that are ready to go on the ground. There's been some talk about the license renewal and it expires and we lose it on the 12/28/2024. That couldn't be farther from the truth. We've actually put it in six months early. We've there's two committees that committee meetings that are key. We've gone through the first committee meeting and passed it with flying colors. We're waiting on the second committee meeting.

15:40 And I've already checked on this and had it from my engineer that's involved with all these processes that should the December 28 come and go, we haven't lost it. They actually they said it's almost automatically renewed. Right? So when we're going into the holidays, I'm hoping the committee meeting will happen sometime in the next two or three weeks. It should be go through the 12/28/2024. We still have a license. Right? So I think there's been a lot of chatter in some of the telegram groups or the other chat rooms or whatever that we lose a license. We absolutely do not lose a license. This license we're renewing for another five years. And then after that, and assuming that we can, you know, extend from three kilometers to nine kilometers, we would actually go for a thirty year license.

16:29 And that takes similar type of reports and such, economic reports, jerk reports and such, which we're working towards. In terms of survey, we already have our survey, as I mentioned, survey company ready to do the top of topographical surveys and such. We're ready to go. It's again, it's all gonna happen as soon as we complete the funding transaction, and the competent person or the independent person to write the jerk is there. As recently as last week, I've had a chat to one of The US government entities. They wanna give us a small grant to look at how we're gonna power the region or power the area. I won't tell you which one because I don't want to prejudice anything. But those talks are still ongoing.

17:15 With the change of administration in United States, talks are obviously slow. They saw that coming about a year ago or so. But nevertheless, we have very positive indications and they are very supportive on what we're trying to achieve there. So briefly in summary, know, Mululu has immense value. The market cap doesn't reflect that and I understand why the market cap is where it's at. And we have pieces of the puzzle to put in place here to rectify that. Investment in Mululu, as I mentioned before, is more than four times what the current market cap is. And to me, that's an opportunity to take advantage of that disconnect. We have a seasoned team in Lloyd and Celestine and Emmanuel on the ground and myself and Marcus Edwards Jones, who's executive chairman of Phoenix and Abhinash Bithnath, who's a doctorate in exploration geology.

18:14 We have a seasoned team and where we don't have people that are full time on the team, we hire them and we bring them in post funding. The limited funding as I mentioned before, hurt us a bit, it's delayed us a bit. But as you can see, we actually have a pathway to to production once we get the final funding figured out and signed and announced. There's a notice for the AGM. It's December 9, 11:00. The board's recommendation is to vote yes on all the resolutions. If if the shareholders vote no on the resolutions, it'll make it extremely difficult to hit these targets that I've mentioned earlier. So vote yes.

19:01 And our recommendation is to vote yes on all the resolutions, and let us get to work to get this thing cash flowing and to create some value for shareholders. The next slides are just the pinners. I'll just go through them real quickly. There's some of the names that I've spoken about earlier. There is the structure of how we have set up the company. Here's Malulu down here, 100% owned, 30% partners, 70% Us, and the last one is just the end. So with regards to that, I'll answer questions. Some of the questions, I might not be able to answer because we are in middle of discussions. So the first answer the first question is is, you know, is the board of directors solely focused on proving up Mululu with a view to a sale so investors can still hold and can claim back some of all the paper losses?

20:01 The reality is is, you know, we're not looking to sell the company. Right? We're looking to get the necessary funding in in order to get this in production. Right? And I believe we hit our targets in terms of getting into production, investors will be rewarded. Alright, I don't know what levels people have lost. There are investors at 30 p, there are investors like myself at 25 and 20 p. But what I can say is our goal of getting into production can be met if we're properly funded. There was a question on the £1,600,000 fundraise in April talking optimistically about mine plans and drilling and jerk reports. A the loans haven't been repaid, the loan in particular. Where have all the funds raised gone?

20:51 Well, out of the 1,600,000, actually 1.35 is what we received net. So the fees from the broker and the fees from from the other legal advisories. And I broke down in terms of where all the funding went, and £731,000 went into Mululu itself, and that was the number one receiver of the funding. So, you know, over half went directly into Mululu. You say, well, what about the other the other parts? Well, you have exchange fees and audit fees and accounting fees and some some fees with regards to the US government. So we and also to the DRC, we had our surface fees. And for the for the newer investors and the newer interested parties out there, we pay roughly about a $100,000 per year for surface fees to the Ministry of Mines and the DRC government.

21:53 And we're a little small company. Imagine what the big cash loan companies are are paying. Right? So it's we have these overheads that we cannot get around, we cannot cut. If we don't pay them, you end up losing the license.

22:09 One of the questions was why did OM METALS keep resampling the ore from Mululu? Why did it take so long for them to send the first lorry load through? And will investors be notified if OM METALS accept this? So in The Congo, like anywhere else in in in the world, the buyers of ore are always checking and rechecking because there's substitution. Criminal gangs will will take payable or in substitute, which is dirt. Right? So any type of off taker will come and check and recheck and make sure that what we say that we're selling to them is really what's going on. One of the delays of the O and METLS after they checked for the second time is their owners actually went on leave for six weeks. So what happens is is they come and they stay in the country for five months with no vacation, and then they get about six weeks off, and then they keep doing that on a cyclical basis. So they only got back about a month or so ago when we started to actually making rumblings about OM METALS and the truck deliveries.

23:21 We've announced that OM METALS had sent a truck. I can tell you that they're looking to send more trucks now. We'll make an announcement on that, you know, in due course.

23:37 There's a there's a question, what's the main reason for a 90% drop in the share price? How is this likely to improve in the future? Well, you know, sectorally, the micro cap and small cap mining sector on the London Stock Exchange has been diabolical quite frankly. There's another company or two that's gone down 90%. But I don't want to measure that. I want to measure about why it's gone on 90 on a company basis. The reason why it's gone down is because we've missed some of our timelines. We were underfunded, and this is the first time the market's heard from me since about June or July. We were looking to do an investor meet investor meet conference call like this in end of July, and it was canceled because we'd started the financing talks.

24:31 And I didn't want to be put in a corner where I could I I said something that would jeopardize those talks. My commitment to investors and anybody on this is you're gonna hear more from me. Certainly, you're gonna hear from me in December 9, and then hopefully, I will have some more information for you by year end, and we can start 2025 on the proper front foot. Another question about the license, which I've actually just I've just mentioned. Why is it taking so long? Licenses in a lot of the African countries take a year to renewal. I've seen a license in The DRC go and and was renewed two years after the license time frame was due to be expired.

25:19 As I mentioned, I talk weekly to the people down in The Congo, and we follow this up. I'm not concerned that we're gonna lose the license. We flew through the first meeting. I expect the second meeting to be positive and we'll get it renewed when the DRC, Ministry of Mines, decides that they're gonna hold the committee meeting and issue it. There's a question about the ore on the pad ready for delivery in the tonnage. We don't have a weighbridge. I would love to get a weighbridge at Mululu. The reality is is it's not in the budget, So we use the weighbridge at OM METALS or any of the other off takers. So we have to use a simple volumetric calculation that we all learned at elementary school. And we estimated at one time there was roughly about 8,000 tons or so of ore on the pad.

26:10 O and M metals has asked for a specific grade, and so we have taken our hand sorters, and we've moved all the 1% ore the ore around 1% to one side of the pad, and we'll use that to blend with the higher grade ore when we go into production. And we're sending the higher grade ore to OM METALS, which is a lower tonnage. We don't have the actual and I'm not gonna provide a guidance on the tonnage because I'll be wrong. So but we do have tons on the pad and we've separated from the higher grade ore from the lower grade ore. And I might remind the market that, you know, in Chile and Peru and Arizona and other these places, they're actually mining grades that are 0.5% and lower.

26:56 Whereas, you know, 1% is us considered to be very low grade. So we have a high grade deposit, and we are looking at ways of actually improving those grades. Last question that I see is why do you think that so many mining explorers in your space have seen the share price drop? Is there a lack of appetite for mining explorers? I think this answer is twofold. One, I think it's a retail market at this level. You know, with a £900,000 market cap, there's no institutional interest. And I also think that the market's requiring companies to get to cash flow twelve months or less.

27:42 And I think that with the trading ethos that are logged to the retail mines, if the if the cash flow isn't coming or if the chat rooms get get noisy, I think that that's one of the reasons why the share price can drop 20% on a thousand pounds.

28:03 Now I'm not be ready to thousand pound investor. What I'm saying is is in this, you know, sub £30,000,000 market cap sector, a thousand pounds could push the stock down by 20%, And we've seen it happen, and we've experienced it. So I think there's always a retail appetite. I think that there are some noises in the background that are beyond our control. But the key, it really is to have some wins in the sector, whether it's us and others and such, so investors get a chance to recycle their capital. So with that, I think that's just Alessandro, I think that's about all the questions that I saw. Perfect. Russell, thank you very much for answering those questions you can from investors. Of course, the company can review all the questions submitted today.

28:49 We will publish those responses out on the investor me company platform. Just before redirecting investors to provide you with their feedback, you know, it's particularly important to the company. Russell, could I just ask you for a few closing comments? Sure. This has been a painful journey for everybody including myself. This is the only job that I have. I don't sit on other company boards that are listed and and and collect non executive director fees and such. I'm committed to making this work. Yes. We are talk in talks about refinancing and financing. We are in talks about getting this package done. The talks have taken much longer than they should. But as you can see, we have mapped out a plan for success, and I just need to get shareholder support on December 9 with the yes votes, and we will get this company financed properly, and everybody will be able to participate in what I believe will be phenomenal potential moving forward into cash flow.

29:50 There are very few companies around at this type of market cap with four times the investment put in there. And I invite everybody to to support the company at the AGM, and I invite everybody to come along for this journey because I am all in on this, and I'm gonna make it work with the team around us and the people that you saw on the slides. Thank you very much for for joining us. Russell, 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 that the management team can better understand your views and expectations? The phone take a few moments to complete, but some should be greatly valued by the company. On behalf of the management team of CRITICAL METALS PLC, we'd like to thank you for attending today's presentation, and good evening to you all.

30:40 Thank you very much.