Automated transcript · Written by software from the replay's audio. It can mishear names and figures; the replay is the record.
26:05 I think and Monica that will you I think that Monarca is doing some things that are very similar to the opportunity that we identified in establishing the company and the brand that we have at Bunker Hill is that mining brings a certain amount of capital intensity and generation of economic and social benefits that is in a lot of ways an anchor or a critical mass that you can build around. You're doing it with chili peppers, you know, and Richard showed a very well-developed but kind of detailed slide in our introduction. And we've identified that, you know, the reality is that because this mine is reopening in Idaho in a county that is amongst America's most economically challenged, this now gives liftoff to a whole bunch of other related businesses that will deepen and broaden these triple bottom line impacts that all start with the regeneration of the mind.
27:02 Thank you, Brad. Ali, I think you wanted to hop in there. Yeah, no, speaking about Mongolia and what we've done so far, in terms of the community and the social aspect of things, the sister company that I mentioned earlier, Stepgold, That's one that we're quite proud of as far as engaging the local community and training individuals. So of the 176 people that are employed today a number of those came from the local community. So the local local soon Tony would be familiar with that word. And beyond that we use co-ops to help provide our dairy and our meat. So everything is locally sourced, everything is locally supplied. You're providing scholarships for the local population. We've also helped build sanitation services and provide clean water, including drinking wells and that kind of thing. But yeah, it's a very fascinating place, Monica. And the people of Mongolia are very hard workers.
27:56 And they are keen to learn and keen to be a part of the mining ecosystem as well. Yeah, one of the things that, you know, I think my experience in Mongolia and one of the keys there for the success of a mining industry is you're going to have to have Mongolian entrepreneurs ultimately creating their own companies and leading their own companies and developing their own companies, listing those companies on foreign exchanges and accessing foreign capital. That will go a long ways towards really strengthening mining's reputation in Mongolia and the ability to attract investors and also working very closely with the government. And those are going to be very key and it's how that transfer of wealth ultimately ends up happening. And that's happened in other communities. We've seen it obviously in the mining industry in Chile and other Latin American communities.
28:46 But it needs to happen more in places like Mongolia and other sort of frontier environments as companies are going in. Precisely right. If I could just touch on that for a quick second here. 9 percent of ION's shares outstanding are owned by Mongolian nationals that were given the opportunity to participate pre-IPO. And we think that it's very important to include the local population as they profit from their own resources. Erdene Resources, which is a gold explorer in Western Mongolia, recently listed on the Mongolian Stock Exchange. Step Gold, our sister company, is looking to do the same, and Ion Energy will do that in due course as well. We think it's important to spread the wealth and ensure that it's shared with the local community. One thing that I wanted to raise, and I saw a story yesterday, it was a tech, they were talking about their $4 billion credit facility and they had ESG metrics attached to it that impacted the borrowing rates.
29:41 And we're all talking about development companies today, exploration development companies. And one of the things that is definitely going to impact us is going to be access to capital. Where we've been generally reliant on equity investors to sort of get the company going and then from there you look to more conventional sources of other conventional sources of financing, debt, etc. On the debt side and particularly project financing, it's going to become a big consideration in terms of how ESG fits in. And whether we look at ESG audits or some of those considerations, that's going to be an area where at your peril if you're not focused on ESG and thinking about those things, whether it's commercial banks or whether it's other lending institutions or whether it's the World Bank or EBRD, any of those type of entities, they're going to be thinking about how ESG impacts.
30:31 And it might impact the borrowing rate, but more than likely what it will impact is their interest in actually being involved with the projects. Well I think that's a very good point. Apologies Monica, You go first. I just only want to go very quickly on what Tony says. Because the rating and the evaluation of Brownie is, let's be clear, is it is, is this project well managed? That's it. That is the question that they want to be answered. And on the other hand, my experience with junior exploration is that not all the time, unfortunately, the funding is there and they find it very difficult to work on the social ticket. And they might sell the project and it's a project you cannot operate at all, because the conflict around or the conflict created by the project, either by any of the ESG, lack of governance, poor environmental programs implemented and no social management in place, which just makes it a non-operational project or a project that lands in the cracks of legal issues or basically it has no access at all. So I think that the ESG piece is just for all of those stakeholders that Tony mentioned and totally agree with you, Tony, is just saying is this an opportunity, is it really Or is not? And that's what I wanted to say.
31:52 I think that's good. And I'll echo some of those 2 points in that, Tony, what 1 observes in the tech example, but there are other examples too, is effectively the cost of capital can be lower for those that are superior when it comes to ESG method and superior when it comes to ESG impact beyond mining. And I think it's going to be very interesting to see if that trend is sustained and increased, because boy, would it be useful, I have to say. And then the second point on that example is that actually getting non-mining investors, generalist investors or investors that haven't participated in mining into our capital structures is also going to be very interesting.
32:45 And I note that Foran, a polymetallic development project in Canada run by Dan Myerson with Pierre Lassonde and others behind them, managed to pull Fairfax in to great advantage of their equity value and their subsequent cost of capital. And I think it's a challenge that all of us, you know, I only speak for our company, that we take very seriously is how do we turn a site that was shut for environmental mismanagement and then subsequently remained toxic in the market for 40 years into a position where we can bring somebody into the mining industry that's never invested in mining before because they believe in the positive ESG impact that we're doing. It's quite a hard challenge, But it's sort of kind of representative of what we're all trying to do, I think.
33:35 I think this has been a great conversation so far. Oh, Ali, sorry, you want to go ahead? Yeah, I was just gonna chime in very quickly there on the lithium front. Obviously, brines in the Atacama and their evaporation ponds are considered a massive environmental impact, right? You're depleting the water table, you're essentially destroying the environment using evaporation ponds. So the remitted ion anyway is one that will look at direct lithium extraction as the extraction methodology, because you are able to pump 90% of that liquid back into the ground. So yeah, environment is front and center for us, and we do have to work with the environmental ministries and country on a quarterly basis to ensure we have access to exploration and ultimate development production. One of the other things that is important, and it's not ESG per se, but it sort of ties to that social license to operate and how people look at mining.
34:26 And this is coming back to Monica and her comment about sort of original industries, key industries. It's the products that you're producing, so whether it's lithium or copper or zinc, and how we tie that into, obviously, what's happening with the decarbonization, with the changes to the electric grid. And if you look at Tesla as a perfect example, if someone thinks about Tesla, they think of it as an automotive company, sure, but it's also a high tech company. And they're also very careful about where they're sourcing their products from in terms of environmentally friendly and thinking about those considerations, whether it's nickel or lithium and how they're accessing that. So as an industry, we're looking primarily at produced copper and zinc, and we have to think about how that ties into the focus on decarbonization, the electric grid, how much more copper, lithium is going to be needed as we move forward in terms of electric vehicles, in terms of infrastructure that's going to be needed to support decarbonization.
35:29 And those are all important considerations in terms of how we think about ESG and how we message ESG to investors in terms of getting outside of that 40 to 70 year old age group that Richard was mentioning in terms of a typical type of investor and attracting new investors and people seeing that these products need to be produced. And yes, of course we need to have scrap and recycling and all of these things, but it's not going to be enough to meet the demand that's out there for these critical metals going forward. Precisely right. I mean, the clean green energy revolution is underway. We've seen that with all the government spending in the last year and a half or so. The EU, 750 billion euro, assigned 4 billion of that over to electrification.
36:16 And then Biden's 400 billion dollar plan as well. So mining, yes, we are considered the evil in sort of any supply chain. We tend to be looked at as folks that are destroying the environment. But without being able to move to electrification, you do need to mine for lithium. And a good example for Mongolia is that 100% of their power comes from coal. If you've been to Ulaanbaatar, which I'm sure Tony has, in the winter time you can taste the soot in your teeth. That's how much coal they burn to power the city. So moving the Mongolian economy from 1 that has been burning coal to 1 that is now using electrification and sort of lithium batteries for storage wind power etc. Is really the direction we want to go to. And I think using the right tactics and methodologies will allow will allow us to get there and get rid of that evil badge that we currently wear.
37:06 Thank you all for the great discussion so far. I'm wondering if we could from the perspective of investors what is the benefit of investing in ESG and CSR compliant mining companies. Ali, maybe you can bring us right back with that if you're ready. Sure. Yeah, I'll echo Rick's Richard's statements. You know, you look at what's the benefit for an investor. The younger generation, as we've discussed currently, is now looking to ensure that those boxes are being checked. So as an investor, why would you invest in a company that has no ESG mandate in place? The retail investors will not follow. Your liquidity will likely diminish. And as a result of that, you need to ensure that you do have the mandates and the necessary structure in place for investors to even look at you as a potential investment opportunity.
37:54 I think to maybe to add to that, Ali, Cam, if I could, good ESG performance, I think for investors and capital markets really in the end is about better risk management across the whole spectrum of risks and better long-term financial and business performance. So ultimately, if ESG standards and certifications do what we need them to do, that's what it should be telling capital markets. Maybe, Tony, you could take this, your perspective on this. I know that you were mentioning just the age ranges. Yeah, to me it's about relevance. Basically, let's assume you've got a project that makes sense and it ticks a lot of the other boxes.
38:48 If you don't have compliance on the USG front, you don't have relevance. And I think about it from a micro perspective within the local communities, because when we look at the title of the discussion, it's about local communities, you have to have relevance within those communities. So the communities have to be supportive of what you're doing and they have to be engaged and keen on the benefits that they're going to receive, whether it's through employment opportunities, whether it's through sharing of the economic wealth that's going to be created, but those are going to be key factors. And I can tell you, it's not something you can take your eye off of. You can't sit there and say, oh, I've got an ESG checklist and I've done all of the things necessary.
39:36 You have to continue to engage. So, in our communities where we're operating in the northwest part of Alaska and the mining district, it's really about subsistence, subsistence hunting and fishing, which is very key in our communities and we have to continue to engage with the communities and explain to them how the mine development that will ultimately hopefully happen within that area will or will not impact subsistence hunting and fishing. And those are the concerns of the communities in our case. So for us, it's about relevance, and that's how we're thinking about it. Well, if you allow me, Cam, I will add on this, that basically each environment, it's very different, and we need to take that into consideration. The reality that Tony lives in Alaska is far different from Mongolia and far different from Puerto Rico and beyond different from dealing with the border of the US in the case of Monarca.
40:29 And that is one of the elements here. Good social management, it just goes beyond the engagement piece. And good social management just will tell investors and will tell even the communities, not beyond the benefits. It's the opportunity to participate, it's the opportunity to have a voice, to raise their concerns. For example, in the mine design, it is a component that many times the mining industry is a little bit fearful to talk about the tailings and where the tailings should be. And actually, when you make it in a participatory process, the communities will be saying and telling you where they are okay to have the tailings. And that is the perfect answers you want beyond the engagement piece. And that make it that successful. So the communication and that piece of engagement with communities is just a big part of how is a social management.
41:16 And that is what will make the industry sustainable. How we can really work together with the neighbours and how honest we are in terms of acknowledging the impacts that we have as an industry in the region where we operate. Yeah, great point Monica. I mean it's turning that corner from engagement to involvement of stakeholders, right? Yeah. If I could just touch on Udam Hundi, which is a license... Let's carry on Richard. If you wouldn't mind going first and then Richard we'll follow up with you. I'll be quick Richard, I'll be quick. With Udum Hundi which is a license held by our sister company Stepgold that's in Bayan Hongor province and what we did there when we were obtaining that license we essentially offered the government of Bayan Hongor an 80-20% JV where they hold 20% of all resources on that asset and ultimately will profit 20% alongside the company. So that's one way that we find you can obviously better the lives of the locals and involve them and it's quite measurable. I mean when the company starts producing revenue based on those assets, the economic impact will be quite clear to the community as well.
42:24 Thank you. And again, just to sort of echo the definition of community beyond those that you're going to employ or those that live around the mine also extends to other partners we find. Go Back to Bunker Hill was shut down by the US government effectively and the Environmental Protection Agency tidied everything up and manages the water and we see the EPA as part of that community. When we're seeking to build this mine, we're going to do it in ways that has no footprint, underground processing, underground tailings deposition and so on. But even with those techniques copied from elsewhere, You've still got a community that's very nervous about what mining will deliver given its history And so we have to sort of communicate with every party that has an interest in here and demonstrate by bringing others in What benefits beyond mining can happen because our mine will shut at some point. Currently our plan is for 11 years, but we can see 40 years worth of mining. And so what we're trying to demonstrate to our community is a multi-generational mining opportunity, but that spins off other businesses. And I'd like Brad to talk about how he's brought in non-mining partners to deliver waste to energy projects, biochar projects and so on. It means that actually the high schools that are going to be providing us workers are also going to be have opportunities to participate in a local green economy that's completely different to what their grandfathers saw. So Brad, talk a little bit about that and how you
43:54 communicate that, because you're the guy on the ground, with the community. Because I think that's quite instructive about what we've learned elsewhere and what we're trying to bring here, right? Yeah, I mean, I think, Monica, you brought up something that is a real key point. Every community is different. You have to get to know your community intimately, understand who they are, what opportunities exist, what their challenges are, what their worries are. In this environment, as Richard was just mentioning, Shoshone County is economically challenged in many ways. It's a place that is steeped in mining history. Some of the best and most highly skilled miners in American mining are from that environment. But it's a place where mining through the environmental challenges over the years has gradually dissipated and began to disappear.
44:49 Bunker Hill regenerates that opportunity for employment, but at the same time, there are other opportunities. You know, they're spending 15% of their annual budget to dispose of waste in Montana. That's trucking and tipping fees it not only does it put a big dent in their fiscal coffers but generates pretty significant carbon footprint. Now we have the opportunity now that the mine is opening and can service this anchor client consume a lot of the power for waste to energy, to bring in industry experts with both the operational expertise and the development capital to create that plant that saves 50,000 tons a year in carbon emissions, provides the mine with cheaper power, generates greater employment in the county, adds feasibility to a whole host of other businesses in the local environment, and it saves the county a good amount of money.
45:49 In addition to that, you have things like that electricity, not only goes to the mine, but we can apply it to a whole host of real estate development projects. The mine adds 150 new jobs into the local environment, but in general it's a county that has a massive under supply of housing. Once we add that housing not only for our own needs but for the broader economic environment, that then adds feasibility for entertainment, retail and recreational use to develop on the back of that. And so there's this cascade of different benefits that come from not only recognizing the opportunity to regenerate the mine through both addressing the environmental challenges and taking 1 long life loan back to a margin approach, but the best of the end of the stampede, the ecosystem and the community.
46:44 Thank you, Brad. We have had a question come in from Giles Live. He asks, how do you as companies rate your communications with local communities? What support do you have in place to better your employees capability to factor in community communications into their regular work pattern? Maybe Ali, if you wouldn't mind, or if anyone actually wants to leap in on it. Sure, sure. The local sum, which essentially is, call it a municipality within a province, you have to work with the local sum in order to not only get access, but we do have to manage those relationships as Bradley so rightly pointed out. We do that on a monthly basis. We have a local representative that's part of the company. We're headquartered in Ulaanbaatar, which is the capital, but with our Bab Ayool license at 81,000 hectares, I'm sure you can imagine that's a significant chunk of land. And so we do have to meet with the local population on an ongoing basis. We have regularly scheduled meetings to ensure that we have access to not only areas of the license, but we're asking the local community exactly what they require from us as a company, what we can do to do things better, what we can do to ensure that we're not as intrusive, but also the fact that we're looking to employ locals and train them and provide them with a skill set that they can potentially use in the future.
48:04 Yeah, well, I saw the question and thank you, Giles. And I think that the way that you can really rate a good quality communication is when you have an open dialogue and collaboration is happening. That is it. It's no ABC or A plus. It is when collaboration, the communities are really ready to jump on projects with you or be part of the project as when you have a quality communication. And that will be literally linked to the stakeholder engagement and goes to the social management. In terms of their employees, employees are ambassadors and they wear 2 hats. They are community when they are at home and just always keep in mind that they make comments in the dinner table and their mamas and their wives and sisters and daughters and sons, they will be mini ambassadors telling if the experience was good or bad. So if we are having a bad experience in the mind, you can tell you have 5 stakeholders ready to speak bad about you after school or during school time or after church or during church.
49:07 So you have 5 stakeholders that either support you or not just by having 1 employee who are respectfully treated and see the benefit of working with you. So I think that these numbers are multiplying and just kind of showing that the impact we have in communities is just beyond what we are expecting as an industry. Absolutely. Just being cognizant of time, we've also had another question come in from Kevin. Tony, I'd like to pitch this to you to hear your words on it first. Does the majority of the industry recognize the importance of ESG and the acceptance of it from an investor standpoint, or do you think that there's opposition? I think there's been a big change and a big focus on that. I don't think there's opposition. I think people understand that ESG is needs to be at the forefront in terms of how we look at communication and how we move forward. And I think it comes back to a comment I made earlier where ESG and CSR has been around for a long time. I think it's just repackaged and how we're looking at it and how investors are looking at it. And I think one of the things that is going to ultimately happen is going to be how people look at being ESG compliant and how we benchmark ourselves against that. So there's a bigger focus for sure, but I don't think it's something that companies are not thinking about.
50:34 Before I hand the question over to someone else, I just do want to add one thing to the communication side. One of the big challenges for companies like all the companies represented here has been COVID this last year. One of the keys for all of us is you want to get out into the communities and you want to meet with people and you want to have face-to-face dialogue. So it's been very difficult for us to be able to engage with the local communities directly. So a lot of our engagement has been virtually through town halls, through we deal with the Northwest Arctic Burrow which represents the communities in and around where the mine is slated to be created. But hopefully as things are starting to move forward, we'll be able to get out to the communities more and do a lot more face-to-face engagement, because I think that's going to be a key part of how we tell the story within the communities moving forward. So Ken, back to you.
51:30 If I may just add a little bit of that. Just on community, we have excellent points made by everybody. It's a great question, Giles. Is when we took on the project, community and all of its sensitivity, Just like in any mining site, it was obviously very important to manage. One way in which we had an advantage was that Sam Ash, who we made the CEO, who had been running very effectively and optimizing our Lemuana copper mine in Zambia. Turned out his father had worked on the mine in the 1970s. And so when he took on the job, he flew down to the mine site, bought a house there and lives 5 minutes walk from the mine site. So he became part of the community.
52:20 Brad also, although lives in California, is spending 70 or 80% of his time in and around the community. So we actually have to embed ourselves within the community as a corporation in order to try and win the argument, which is a tough argument to win, that what we're going to do is going to be in everybody's interests. And We don't get it right all the time. I've got to say, you're learning as you go, like you are in any relationship. But Brad, talk a little bit about how you find it, please. Yeah, and I think a big part of effective communications with local community is taking it beyond formal process and becoming part of the community. I mean, a big part of our approach to reopening Bunker Hill Mine, as Richard mentioned, is Sam and I living there full time.
53:15 And it isn't just discussing the business of the mine with the City Council but it's running into people at the supermarket and talking to them about when we're going to start there. There's a whole range of different things that need to happen as a, both on the level of developing trust and understanding to being able to take action as people need it and want it when you're there and you're inside of that community. But it's paid off tremendously, not only with the local stakeholders in and around Kellogg, but it's also increased our access to and our dialogue with key regulators like the EPA, where I think in the past they had gone years, maybe even decades, without communicating with the mine operator at Bunker Hill.
54:10 We speak to them on average about 4 hours a week. Amazing. Thank you. I would like just to add 1 token here. Is that the industry understand ESGs? Yes. I mean, in my career as a social scientist, I have never seen more socially conscious people than geologists. They drink the water, they sleep in those areas, they walk the areas and they work with communities. Nobody better than a geologist. Does the other side, the corporate side of the industry understand ESGs? Big question mark. Does the lawyers, do the lawyers understand? Do investors understand? Do financiers understand? How connected they are? I think that we need more geologists telling their personal stories, demonstrating how cool they are. And they really understand that. That's it. Thank you.
55:00 In the interest of time, I wish we could keep going. I think this has been an amazing conversation. I do want to be able to go around the room with a quick 1 minute long wrap ups talking about the horizon for each of your companies with upcoming ESG or CSR initiatives. But to the audience members, that is really all the time we have scheduled for today, and I'd like to thank everyone in attendance, all of the presenters and everyone in the attendee group. If you didn't get a chance to ask a question, or if you think of 1 after the summit, or if we weren't able to quite get to it, we'll be passing along these questions to the speakers who will be able to answer it on their own time. We'll also be sending out some short surveys where you can leave your contact information and get into direct contact with any of the companies represented here. And with that, Again, I'd like to go around the room 1 last time. Monica, I'd like to start with you just a minute about any upcoming initiatives.
55:53 Well, I appreciate that. Ladies first. Okay. Monarca, so, well, we are in Mexico. We are managing the risk in an extraordinary way. And I think that from Monarchia, we really tried really hard from the board to make sure that we have a healthy junior exploration company that can pass the torch to development. And that is what we really, really want to be. Thank you very much for attending. Thank you, Monica. Thank you very much. Ali, I'll pass it over to you. Thank you, Kem. For us, ESG, a bit of diversity I think will go a very long way. 0.5 my board is Mongolian, but We're looking to add some more diversity to our board. We're also now employing a local Dorn Govi province community specialist that can work with the community and essentially allow us to progress that project as well. So we're looking forward to the year ahead. And again, thank you very much for the opportunity.
56:47 Thank you. Richard, Brad, I'm going to hand things over to you now. Thank you. I'll quickly say we're going to restart Bunker Hill Mine, and that's gonna generate a series of spin off green businesses. Brad, talk about those. Yeah, that's right. I mean, not only do we have a low impact mine with underground milling, processing, water treatment and paste backfill that solves the long-term environmental challenges at the time of closure for that mine whenever it happens. But in the near future, we fly into action with green power initiatives. We have satellite monitoring of biodiversity impacts. We have real-time access from the public to provide radical visibility and transparency.
57:38 And we have to build out the broader economy with a whole range of real estate initiatives. Wonderful. Thank you, Bradley. Thank you, Richard. And Tony, I'm going to hand things over to you. Well, what I'd like to do is actually thank our partners up in Alaska. I'd like to thank NANA. Today is actually the tenth anniversary of signing our agreement with NANA. NANA is a regional Alaska Native corporation. It was formed in 1971 under the Alaska Native Claims Settlement Act. And we entered into a partnership 10 years ago with NANA. We've got an oversight committee where we work with them. We've got regular representation from both NANA and the company and Ambler Metalside, which is a JV, to review our plans activities on the project. There's an option for NANA, similar to what Allie was talking about, to participate in the development of a project. They can either do that through a net profit interest of 15% or direct interest in any of the mines that are developed in the area. There's a commitment on our part to promote employment with NANA shareholders.
58:40 They've got 14,000 residents up there that they call shareholders. And also to focus on hiring and contractual opportunities with NANA. So I just wanna thank NANA and the Northwest Arctic Burl for being our partners in the project and I look forward to further updates on Trilogy and the Ambler Mining District and Thanks to 6 for the ability to participate in this very interesting discussion. Well, thank you. And again, I'd like to reiterate my thanks for everyone here coming on and speaking. With that, I think that we are going to wrap up. Thank you everyone in attendance, and thank you all for coming on again. I hope everyone has a good rest of their day and cheers. Thank you so much. Thank you guys. Nice to meet you. Bye.
