Forgent (LSE:FORG) — Investor Presentation

0:00 Good afternoon, and welcome to the FORGENT PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all 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 to James Parsons, CEO. Good afternoon, sir. Thank you, Lily, and good afternoon, everybody. Thank you for joining us. As Lily said, this is James Parsons, chief executive officer, and joining me on the call today are Jeremy Madden, our finance director and company secretary, and Ed Mead, our lead geologist.

0:46 We wanted to get back out in front of you following our recent announcements because activity here is about to accelerate sharply. Let me start with the headline. Next week, we commence drilling at Peak Hills. For FORGENT, this is a defining moment. The balance sheet has been repaired, the portfolio has been assembled, and now the real work begins. This is not another AIM story based on distant potential. This is a story about delivery, execution, and near term catalysts. So within days, there'll be a drill rig turning at Peak Hills. And this summer, we expect to be reporting the results. Now before we get into the assets themselves and the details of the drill program, it's worth just taking a step back and reminding ourselves of the broader market backdrop. We believe FORGENT is positioned at the intersection of two powerful commodity themes, copper increasingly critical to electrification, AI infrastructure, and grid expansion with long term supply expected to remain constrained.

1:45 And gold, which continues to benefit from strong central bank demand, geopolitical uncertainty in its role as a store of value. And let me just remind you that our assets are located in Western Australia, one of the world's great mining jurisdictions with a long history of successful exploration and mine development. So that gives us a highly established mining environment, strong infrastructure, and the regulatory certainty needed to advance projects efficiently. But good geology and good jurisdiction alone did not create value. Execution does. Ultimately, value in our industry is created by drill rigs. And let's remember, none of this happened by accident today. We're a very different company from the one we inherited.

2:32 Now for those of you who are new to the story, let's briefly recap. Since the start of the year, we've taken a series of deliberate steps to reposition the company, strengthen the balance sheet, and build the platform we now have. We've simplified the business, reduced leverage, cut costs, resolved legacy issues, and repositioned FORGENT around a focused Australian mining strategy. And as we recently announced, we'll be asking shareholders to vote on that in the forthcoming AGM. And subject to that AGM, the restructuring phase is largely complete. Today, management attention and capital are focused on exploration, drilling, and value creation. Now as you know, the company has three core assets, Peak Hills, Mount Shoal, and Green Rocks. Each asset really plays a different role, but together, they provide exposure to gold, copper, and nickel, multiple near term catalysts, and significant resource growth potential.

3:29 Let me briefly walk through each one of them before handing over to Ed to discuss the Peak Hill drill program in more detail. Peak Hill is our immediate focus and in many respects, the reasons we're here today. We we expect really to drill approximately 2,800 meters with 42 holes across seven high priority target areas. Now these are not conceptual targets. They're based on historic gold and copper intercepts, which we now intend to validate, extend, and better understand through modern exploration. Drilling is expected to commence next week, continue for approximately three weeks, and we expect to report results in early August. We see huge potential here for an early monetization pathway leveraging off existing plants in the area.

4:17 Now Mount Shoal is different. That adds another dimension to the portfolio. Here, we've secured an exclusive option over 80% of the project. And importantly, it introduces Jawp mineral resources to the portfolio for the first time. We're talking here about a defined 23,400,000 tonne resource together with an exploration target of between 80 and a 150,000,000 tons. And perhaps most importantly, only around 6% of the mineralized systems has been drilled. So that means Mount Shell combines something relatively rare in junior miners, existing exploration scale today, and meaningful expansion potential that is still ahead of us. And finally, Green Rocks, where recent sampling results look really quite fantastic with copper grades up to 29%.

5:08 We'll soon there submit POWs for drilling permissions, and these results will, for sure, help shape the next phase of exploration and target generation. Bottom line, the last six months have been about laying the tracks. Now the train is leaving the station. We've done everything we can from behind the desk. From here, the rocks take over. And with that, Ed, perhaps we could, just walk everyone through the drill program and he help paint a picture of what success could look like. Thanks, James. So I suppose what we believe success looks like at Peak Hills is replication of the the historical results. The drilling was done on a very, very broad 400 meter by 100 meter pattern.

5:56 And so this next phase is about follow-up, draw a hole on previous intercepts such as, like, you know, two meters at five grams, from from roughly 40 meters. And by stepping out and, hopefully, we intersect the structure now. By stepping out, we hopefully can replicate that, and then that gives us an idea of scale. So that's that's really the next phase that we're targeting for about six targets and a couple of other other one off holes that we're doing in in the project. If results are good, that that will then lead into, another drill program later this year. As James highlighted, we're expecting results from the drilling, which will, be underway on Monday oh, sorry, on Sunday. We'll be expecting those results sometime in in August.

6:50 That's great. Thank you, Jay. I can see we've already got, quite a few questions coming in. Liddy, can let me hand back to you so that we can sort of feel the q and a element? That's great. Thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just via the q and a tab situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you the recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Can I please hand back to you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end? Thanks, Lily. So, Ed, a couple of questions here really more in your, more for you to respond to. The first one is, you know, really asking how did you select the target areas for the, Peak Hills draw campaign?

7:39 Should we try and cover that, fairly generically, Ed? Yeah. Yeah. Sure. Sure. So, basically, we looked at anything that was in within the top 100 meters, shallower the better, and also what we would consider to be economic, which we believe is, you know, effectively four meters at one gram as as an as a minimum minimum intercept. So everything we're targeting, we believe, is is above that. You know, two meters of five is, four beers at two and a half grams, and that's essentially how we how we've worked out, what is the first round for target at Peak Hills. Thanks for that, Ed. And and some other questions coming in in the particular order. So apologies if we jump around a little bit.

8:31 These are really in the order that they submitted. Question here, what's happening to the gasification aspect aspect of of the the company, which is, of course, the legacy position? We have put into the AGM as a resolution, and we announced that this week that we are asking shareholders to fully vote through a change in our primary strategy to be an Australian sort of mining focused company. The gasification business continues in the background. We're very much focused on commissioning on two key projects, which we've, you you know, been working on for some time as a company. The first one in Greece, the second one over in California, which is called Norfolk. So no changes there. And, obviously, we'll update as and when we do have news. But I I think our our sort of judgment is that the future of the company we propose is very much in terms of capital deployed news flow activity and value accretion very much on this this mining, which which frankly is low capital to drill, quick to drill, you know, and what's going on with copper and gold in the world just make it very compelling at this particular point in in the cycle. So that's our focus.

9:39 And, you know, we're happy to let gasification, subject to shareholder votes in in the AGM, sit in the background and and, you know, have time to gestate. And we'll also keep it under review in terms of what's the right way forward for that business. It does have a cost base associated with it, which we're obviously conscious of. So that hopefully just ticks off that question there. And another one here for you, which is just around Mount Shoal and and if and when we do trigger the option and pick that up, what would be the sort of plan from that? So we know we've after the review of the the data, we can see that mineralization is is basically open in multiple directions. Over a period of time with the project, the geological model has has changed.

10:26 And with from, a lot of work that's been done by, SQM around, the Andover intrusion, which is to the to the east of us. And that is nickel copper plus the main the main focus for the SQM has been, has been lithium. So what we see is that there is effectively a whole lot of flat laying, sulfide zones that, haven't been previously understood. We were looking more for traditional embayment models related to layered intrusions, which basically means that a magma source comes up and and scurries its way around and creates, basically, a a layered intrusion in in in the rock. So what we see is the best way forward is we can continue we can go and drill to extend non mineralization and step out, but we can also use technology such as what Greatland Gold's using at Telfa, which is a high definition electromagnetic system down to about 12.5 hertz is the level it reads at. It's a very, very sensitive system to to sulfide.

11:44 So we I believe that the best way forward would be to do that where we can get a signature from known mineralization, looking for extensions outside of drilled areas. And that way, we can probably more expeditiously and and efficiently look to increase the the the size of the project at at Mount Shoal. And one more add on, this time, Pete Hill, just on the drilling depth. So we are sub 100 meters for our current drill program. And the question is, are we confident enough the good results will be seen at these shallow depths? So I suppose we touched on before about how how we would look at the, the grade, how we work to that, like, saying, like, four meters at one gram. Four meters is a mining is essentially a mining width that is, you know, fairly well understood.

12:41 One gram of gold in Australian dollars is worth 200 grams. So roughly, mining and processing costs would be less than a $100. Therefore, that's kind of the metric we're using. So we're essentially saying when we look at how we how we view the targets and what we're looking for, we're looking at, say, something where we believe that the mining and processing costs would be a $100, but the the ore that you would mine would be worth $200. So we see that as lower risk as as an act like, as a target to move forward. The other reason we've been looking for shallower stuff is because the cost of drilling is a lot lower, and it means that we can also do a lot more and a lot more quickly. Whereas the DPU drill, the costs go up and the time takes longer. So our first phase, is really about trying to target real the reality. Everything that's about 50 meters or shallower, that that's really our primary focus.

13:44 And then beyond that, when we, step out and if we if drilling goes the way that we hope, that we then look at deeper drilling, you know, at at a later time. Thanks, Ed. Question here on the Greenrock drill timings. And, obviously, we were we were really happy and pleased with the the recent sampling results that that that's quite material for us. We need a bit of time to process those, but we will be, as we announced, putting in the POWs, are the sort of drilling request quickly. We have to navigate a few heritage issues, which are, you know, natural in that that part of Western Australia. The first thing we're doing, obviously, next week is is the first of the Peak Hills drill programs. Depending on the results there, I think probably we'll we'll do back to back Peak Hills drills. So probably a second one is my guess, but it does depend a little bit on what we find in the first drill program.

14:42 And then, you know, green rocks would naturally fit in after that. I don't see us doing multiple drills at the same time, but they are quick. So it's a bit of a juggling act, and it'll evolve as we see the results as they come in. But Green Rock certainly is giving us a really positive problem in the sense of this. There's a lot to drill for there, and and the grades look great. So that's an, you know, a luxury problem to have as it were. In terms of other questions here, there is a question here on are we going too far too faster, you know, sort of the transition to mining? Are we are we bulking up too quickly in terms of number of assets? I think what I'd say there is there there is clearly a balance here that's between securing the right assets at the right price and, you know, minimizing dilution from buying those assets. And that's a balance we're constantly reviewing.

15:31 My personal view is that these three assets, once we've got them, is probably enough for now. I mean, that that's a a big big portfolio with a lot of opportunity. The good news is drilling is cheap and quick. And, obviously, if we hit a home run on peak hills, this this will change again. So, look, I think we we're very lucky and fortunate to have timed this well with what's going on in the world to have advantage access to the assets we've picked up. And these three, I think, provide the the foundational bedrock of the company going forward subject to the AGM vote, obviously. So that's our our thinking at the moment, and, you know, that's sort of our our perspective on it. There's a lot of questions here that are difficult for listing companies to answer in terms of, you know, cash balance and so on. We put out our annual report just this week, so you've got pretty fresh in financial information out there.

16:20 We don't really comment on funding. What I would say is, obviously, things are cheap. We're funded for the program. We're starting next week. We've said that, and and that that's obvious. So, you know, we're in a relatively advantaged position, I think, you know, FORGENT in a way as as as for the first time in a long time, been exactly where we want it to be, funded, focused, and ready to execute, which is great. Lily, let me hand that that back to you if that's okay. I think that that exhausts the question list. That's great. Thank you for addressing those questions you can from investors. And, of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, James, could I please just ask you for a few closing comments? Yeah. Certainly. I mean, putting it all together, Peak Hills delivering at the drill bit with drilling commencing imminently and results expecting early August.

17:13 Green Rock's providing additional near term news flow on the back of those recent sampling results we've talked about. As it moves towards drilling, we expect more and more information flowing through there. Mount Shoal introducing resource scale and what we believe could be really transformational growth potential. Together, these assets provide multiple opportunities for for value creation across different commodities, different stages of development, different time horizons. So our view is the portfolio has been assembled. The restructuring phase is complete. And as I said, for the first time in a long time, we we are where we want to be. The next chapter for FORGENT will be written in meters drilled, not fordrum presentations. And on a slightly lighter note, like the England World Cup team tonight, the time to talk really is over. Now it's time to get on the pitch.

17:58 Thank you. That's great. Thank you for updating investors today. Can I please ask investors not to close this session? I shall now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon to you all.