1
00:00:00,400 --> 00:00:04,440
That annual free cash flow number that
you mentioned at almost six hundred million dollars

2
00:00:04,519 --> 00:00:08,720
US per a year for twenty nine
years. I think that crystallizes it almost

3
00:00:08,720 --> 00:00:12,800
a little bit better. See that
this is the type and scale of asset

4
00:00:13,160 --> 00:00:17,000
that moves the needle for the largest
mining companies in the world. This would

5
00:00:17,000 --> 00:00:22,359
fit very well into the portfolios of
the largest miners out there. The Financial

6
00:00:22,440 --> 00:00:33,479
Survival Network now more than network,
the Financial Survival Network ed. Welcome.

7
00:00:33,719 --> 00:00:38,679
This is Financial Survival Network. I'm
your host, Carrie Lutz, and many

8
00:00:38,719 --> 00:00:41,240
of you out there have sent me
emails. I've seen it in the chat

9
00:00:41,280 --> 00:00:47,920
rooms. You wanted to get in
update on FPX Nickel, which the CEO,

10
00:00:48,719 --> 00:00:53,399
Martin Terrant, long term sponsor of
the show. Martin, great to

11
00:00:53,439 --> 00:00:59,039
have you back on things are happening. I saw that the PFS, the

12
00:00:59,200 --> 00:01:06,760
preliminary Feasibility study, just got filed
last week and it looks pretty encouraging there.

13
00:01:07,000 --> 00:01:08,319
Yeah, thanks for having us back
on there, Carrie, and yeah,

14
00:01:08,359 --> 00:01:14,799
it's been an exciting time for the
company to make terms of our completion

15
00:01:14,879 --> 00:01:18,560
of that PFS. As you mentioned, it really represents the culmination of a

16
00:01:18,640 --> 00:01:25,159
long body of work over the last
couple of years subsequent to the preliminary economic

17
00:01:25,200 --> 00:01:29,840
assessment that we did in late twenty
twenty. Yeah, I'm happy to delve

18
00:01:29,920 --> 00:01:34,079
deeper into what that PFS showed and
what the road ahead is for FBX.

19
00:01:34,480 --> 00:01:38,480
Well, I always like to look
at the bottom first, the bottom line

20
00:01:38,799 --> 00:01:46,079
the IRR, and I think memory
serves me correct it was almost nineteen percent.

21
00:01:46,560 --> 00:01:49,319
Yeah, that's right. So at
a long term nickel price assumption of

22
00:01:49,319 --> 00:01:53,760
abud eight dollars and seventy five cents
a pound, Yeah, we do generate

23
00:01:55,400 --> 00:02:00,280
post tax or after tax numbers from
an MPV stamp point in excess of two

24
00:02:00,319 --> 00:02:07,680
billion dollars US and an IRR well
over eighteen percent. You know, that

25
00:02:07,760 --> 00:02:10,840
IRR figure is very robust. You
know, a project of this scale and

26
00:02:10,919 --> 00:02:15,759
scope, one that can be producing
nickel for almost thirty years, that is

27
00:02:15,800 --> 00:02:20,919
an incredibly strong IRR. And you
know, one of the other metrics that

28
00:02:20,960 --> 00:02:25,479
we like to look at is that
the ratio of the of the of the

29
00:02:25,599 --> 00:02:31,759
my life to the payback. That's
really something that captures and highlights the positive

30
00:02:31,759 --> 00:02:38,080
attributes of having a multi cycle asset. So in our case that my life

31
00:02:38,080 --> 00:02:40,319
is around twenty nine years, the
payback's about three point seven years, so

32
00:02:40,360 --> 00:02:46,000
that ratio of my life to payback
is almost eight to one. And you'll

33
00:02:46,039 --> 00:02:50,080
see there's a good slide in our
corporate presentation that shows that that that's really

34
00:02:50,159 --> 00:02:54,000
peer leading, that that's the highest
such ratio of any of the major nickel

35
00:02:54,039 --> 00:03:00,159
projects out there. And I think
it speaks to that multicyclical exposure to the

36
00:03:00,199 --> 00:03:05,159
nickel price into the nickel market that
this that our Baptist project offers. It's

37
00:03:05,240 --> 00:03:09,039
interesting, you know, looking at
the cash flow numbers. You're estimating annual

38
00:03:09,960 --> 00:03:15,520
you know, pre text cash flow
five hundred and seventy eight million US dollars,

39
00:03:15,879 --> 00:03:20,759
which you know on a on a
cap X, which you're estimating at

40
00:03:20,759 --> 00:03:24,840
at roughly two point two billion,
that's a pretty good return. And that

41
00:03:24,879 --> 00:03:29,280
only gets better because, right,
let's face it, the market doesn't give

42
00:03:29,319 --> 00:03:36,120
you any credit where production past ten
years generally in these resource plays. So

43
00:03:36,599 --> 00:03:40,639
the upside here is in my view, kind of understated, shall we say.

44
00:03:42,240 --> 00:03:46,039
Yeah, for sure, the effects
of discount rates and discounting of future

45
00:03:46,080 --> 00:03:50,840
cash flows, as you mentioned,
does unnecessarily or unduly punish these long life

46
00:03:50,919 --> 00:03:54,960
projects. And so those NPV and
our numbers, while they are very impressive

47
00:03:54,960 --> 00:04:00,000
for our product. I agree with
you, they're almost understate the economic value

48
00:04:00,120 --> 00:04:02,800
that can be derived here. And
that annual free cash flow number that you

49
00:04:02,879 --> 00:04:08,080
mentioned at almost six hundred million dollars
US per a year for twenty nine years,

50
00:04:08,360 --> 00:04:11,680
I think that crystallizes it almost a
little bit better to see, you

51
00:04:11,719 --> 00:04:15,879
know that this is the type and
scale of asset that moves the needle for

52
00:04:15,120 --> 00:04:18,920
the largest mining companies in the world. This would fit very well into the

53
00:04:18,959 --> 00:04:24,639
portfolios of the largest miners out there, right. So, yeah, and

54
00:04:25,519 --> 00:04:30,759
looking at these numbers, you know, obviously you know the mind life is

55
00:04:30,839 --> 00:04:36,680
also understated as well. So and
your capex pretty much from what you're saying,

56
00:04:36,759 --> 00:04:44,839
is under four years basically is the
payback period. So it produces at

57
00:04:44,920 --> 00:04:50,839
least twenty five years or twenty four
years over and above its payoff period with

58
00:04:50,959 --> 00:04:58,680
a minimal capital expenditure. It really
is a compelling case that many of you

59
00:04:58,800 --> 00:05:02,399
might not really know from looking at
the numbers because they are so conservative and

60
00:05:02,480 --> 00:05:06,279
understated. Yeah, the other point
I would make about the capex is that

61
00:05:06,399 --> 00:05:11,079
absolutely this is a large project,
and it really is a major company scale

62
00:05:11,079 --> 00:05:15,279
project, and we make no bones
about that. But one thing that people

63
00:05:15,279 --> 00:05:19,360
should should look into a little bit
more to understand how to value these projects

64
00:05:19,439 --> 00:05:26,360
is the Canadian federal government passed new
legislation earlier this year that includes a critical

65
00:05:26,360 --> 00:05:31,839
Minerals Extraction and Processing tax credit.
That's a thirty percent tax credit on capital

66
00:05:31,839 --> 00:05:40,199
expenditures to extract and to process critical
minerals in Canada. So for every million

67
00:05:40,199 --> 00:05:45,240
dollars of capital expenditure, the government
will actually cover you know, about three

68
00:05:45,360 --> 00:05:49,439
hundred thousand dollars of that and so
yes, that gross capex figure of two

69
00:05:49,480 --> 00:05:54,680
point two billion dollars is absolutely the
case. But then we believe in our

70
00:05:54,720 --> 00:06:00,399
interpretation of that legislation that the government
of Canada will actually you know, cover

71
00:06:00,439 --> 00:06:04,519
approximately thirty percent of that figure.
And that's obviously not insignificant to the economic

72
00:06:04,519 --> 00:06:09,839
profilogy of the asset. That's huge. I mean, that's basically six hundred

73
00:06:09,839 --> 00:06:14,800
and sixty million US that we're talking
about that Canada foots the bill for.

74
00:06:15,759 --> 00:06:20,319
Obviously shows you how critical these minerals
are that they put that much out and

75
00:06:23,279 --> 00:06:26,399
you know, you can't even put
that in your PFS, I guess because

76
00:06:26,720 --> 00:06:31,160
you're not supposed to put in tax
credits and things like that when you compile

77
00:06:31,199 --> 00:06:36,879
the number, but then the number
has become almost unbelievable Martin. Yeah,

78
00:06:36,920 --> 00:06:43,360
So to clarify that the economic model
in the PF has does incorporate our assumptions

79
00:06:43,399 --> 00:06:46,360
around how that tax credit will be
applied. But to your point, it

80
00:06:46,519 --> 00:06:50,360
just underscores the kind of the importance
of these projects and the importance that the

81
00:06:51,040 --> 00:06:57,040
Government of Canada is placing on indvans
in these projects. Absolutely, all right,

82
00:06:57,079 --> 00:07:00,639
So moving on to switching up gears, Moving on to other matters.

83
00:07:00,240 --> 00:07:08,399
Panasonic battery Toyota battery, I should
say a deal came forward with them.

84
00:07:08,759 --> 00:07:15,199
Yeah, So Toyota and Panasonic formed
a joint venture company a couple of years

85
00:07:15,240 --> 00:07:19,600
ago called Prime Planet Energy and Solutions
or PPEs. It's a bit of a

86
00:07:19,600 --> 00:07:26,279
mouthful, but basically it's Toyota's a
majority owned electric vehicle battery company. The

87
00:07:26,319 --> 00:07:30,240
company that they have formed to make
batteries for their vehicles with Paasonic, which

88
00:07:30,279 --> 00:07:38,439
is the leading battery maker in Japan
currently. And so this group is currently

89
00:07:38,480 --> 00:07:43,959
constructing its first EV battery plant in
North Carolina, and I believe it's going

90
00:07:44,040 --> 00:07:47,920
to come online sometime in twenty twenty
five or twenty twenty six and thereafter they're

91
00:07:47,959 --> 00:07:54,319
also thinking about construction of a second
battery plant elsewhere in North America. So

92
00:07:54,439 --> 00:08:01,199
with that comes a real need for
PPEs or this Toyota battery company to secure

93
00:08:01,000 --> 00:08:05,639
supply chains of raw materials of critical
minerals that go into making the batteries,

94
00:08:05,720 --> 00:08:11,160
so lithium and cobalt, graphite,
and of course nickel figures prominently in that.

95
00:08:13,279 --> 00:08:18,399
In the last couple of years,
pps has done two memorandums of memoranda

96
00:08:18,399 --> 00:08:24,920
of understanding with mining companies around nickel. The first was with BHP and the

97
00:08:24,959 --> 00:08:30,879
second was with us FPX earlier here
this year. It was announced in September,

98
00:08:31,600 --> 00:08:35,720
so that that announcement came at a
signing ceremony that we had with representatives

99
00:08:35,759 --> 00:08:41,080
of PPEs in Ottawa, which is
the nation's capital of Canada earlier this year,

100
00:08:41,279 --> 00:08:46,080
was attended by several prominent ministers at
the federal level, both from Canada

101
00:08:46,440 --> 00:08:52,639
and from Japan. Their their their
Minister Economy, Trade and and uh An

102
00:08:52,720 --> 00:08:56,360
Investment was there and so it was
a great event to kind of formalize our

103
00:08:56,440 --> 00:09:03,039
relationship with PPEs and and happy to
talk more about what that agreement means and

104
00:09:03,039 --> 00:09:07,919
what could lend lend itself to here
down at road. So obviously, Toyota

105
00:09:07,000 --> 00:09:13,480
Motor Company, the largest vehicle producer
in the world, currently expanding their ev

106
00:09:15,080 --> 00:09:20,240
endeavors, so potential future demand.
There's just an article the other day that

107
00:09:20,320 --> 00:09:26,360
they've supposedly perfected a solid state battery
Toyota, which means if they really have

108
00:09:26,879 --> 00:09:31,679
and if it's commercially feasible, they're
going to have a near insatiable appetite for

109
00:09:31,720 --> 00:09:35,679
the metals going into batteries. Yeah, whether in the form of the solid

110
00:09:35,720 --> 00:09:43,679
state or in the more conventional of
Umayan battery formulations. Absolutely, they've said

111
00:09:43,679 --> 00:09:46,440
that nickel is sort of a high
priority for them. You know, the

112
00:09:46,480 --> 00:09:52,480
agreement that we have with them really
establishes a framework for vertical integration of a

113
00:09:52,559 --> 00:10:00,360
nickel supply chain is to serve in
part their nickel requirements for their supply chain.

114
00:10:00,559 --> 00:10:05,759
So the third member of the third
party to that MOLU is jog Mech.

115
00:10:05,360 --> 00:10:11,440
Jog Mech is the Japanese State Agency
for Mineral Expiration, and it's a

116
00:10:11,480 --> 00:10:16,320
group that we already have a free
prior joint venture in place with for expiration

117
00:10:16,480 --> 00:10:20,720
for the for the particular type of
nickel deposits that we're after. Jog Mech

118
00:10:20,799 --> 00:10:26,039
is playing a critical role as as
a representative of the Japanese government in unlocking

119
00:10:26,080 --> 00:10:31,679
funding opportunities for Japanese industry to invest
in critical minerals projects, to secure off

120
00:10:31,759 --> 00:10:37,039
take and and other forms of rights
to future nickel production. And so there

121
00:10:37,120 --> 00:10:41,679
there's going to be an ability here
for us to continue to discuss this the

122
00:10:41,799 --> 00:10:48,399
strategic opportunities around vertical integration with jog
Mech and with the Toyota Battery Company and

123
00:10:48,559 --> 00:10:54,480
to see what what their opportunities there
are for for that collaboration too to come

124
00:10:54,519 --> 00:11:00,200
fruition to fruition in the form of
upstream investment by the Japanese government and by

125
00:11:00,240 --> 00:11:05,440
PPEs to continue to allow us to
advance the Baptiste project at a rapid pace.

126
00:11:07,159 --> 00:11:09,840
We're talking about Baptiste. We're not
even like thinking about Van, Whi's

127
00:11:09,840 --> 00:11:13,559
probably bigger than Baptiste. I just
wanted to add that. But well,

128
00:11:13,600 --> 00:11:20,240
the attention right now by you of
necessity and the market maybe by near sighted

129
00:11:20,360 --> 00:11:26,360
this is on Baptiste. We've kind
of you know, we've kind of forgotten

130
00:11:26,360 --> 00:11:30,720
all about Van, you know,
just asn't decide what's happening with Van right

131
00:11:30,759 --> 00:11:33,039
now. Yeah, so Van,
you know, as you mentioned, is

132
00:11:33,039 --> 00:11:39,840
a discovery that we meet first from
surface sampling and then confirmed into very strong

133
00:11:39,960 --> 00:11:43,120
seasons of drilling in twenty twenty one. In twenty twenty two, we do

134
00:11:43,200 --> 00:11:48,360
have the makings of a discovery.
They're a mineral deposit that could indeed rival

135
00:11:48,480 --> 00:11:54,879
or potentially exceed Baptiste in its scale
and in its great We did not drill

136
00:11:54,080 --> 00:11:56,720
at Van next year, but it's
certainly something that we would look to do

137
00:11:58,559 --> 00:12:01,399
as a potential in future. You're
to continue to expand that resource and to

138
00:12:01,480 --> 00:12:05,720
really demonstrate that, you know,
beyond the twenty nine year of my life

139
00:12:05,799 --> 00:12:09,840
Baptiste, there is scope for continued
expansion of the what we call the Dakar

140
00:12:11,000 --> 00:12:16,480
Nickel District for potentially multi decade or
multi generational nickel production. Yeah. Sorry,

141
00:12:16,600 --> 00:12:20,960
just wanted to get that in because
you know, like everything has been

142
00:12:20,000 --> 00:12:24,559
about Baptiste recently, and I think
that's important for the future upside of the

143
00:12:24,840 --> 00:12:30,600
FPX, because whatever happens with Baptiste, in all likelihood, you're going to

144
00:12:30,600 --> 00:12:35,279
be still have Van to go.
So I just wanted to point that out.

145
00:12:35,360 --> 00:12:41,200
So finally, you relations with first
Nations company with First Nations tribes.

146
00:12:41,240 --> 00:12:46,559
So if you will, stock price
taken a bit of hit a hit on

147
00:12:46,600 --> 00:12:50,519
that front, can you just give
us a brief update where we're at there.

148
00:12:50,919 --> 00:12:54,960
Yeah, So, in the big
picture, the mineral claims that date

149
00:12:54,080 --> 00:13:01,840
far occur in an area that coincides
with the traditional territory of four First Nations

150
00:13:01,879 --> 00:13:07,720
for separate First Nations here in north
central British Columbia. And those those nations

151
00:13:07,720 --> 00:13:15,200
that are centrally impacted are Class the
Nation and Benje wou Ten. You know,

152
00:13:15,720 --> 00:13:20,720
Class the Nation has come out with
some public comments stating their concerns about

153
00:13:20,879 --> 00:13:26,919
mineral expiration and mind development in their
territory. We absolutely hear those concerns and

154
00:13:26,960 --> 00:13:31,799
we take them very seriously. We
have had a relationship with with Klaus and

155
00:13:31,840 --> 00:13:37,639
for the last fourteen years. We've
engaged in close collaboration with the elected representatives

156
00:13:37,679 --> 00:13:43,879
and the and the and the constituent
clan heads or KO holders within the nation

157
00:13:45,639 --> 00:13:50,919
going back for several years. And
we we also engage in similar discussions with

158
00:13:50,000 --> 00:13:54,960
some of those with those neighboring nations
that I mentioned, most particularly benche Wu

159
00:13:54,000 --> 00:13:58,000
Ten. You know, we do
have an agreement in place we have had

160
00:13:58,039 --> 00:14:03,279
an agreement in place coust of Nation. There are certain confidentiality provisions around that

161
00:14:03,279 --> 00:14:09,639
that prevent us from discussing in great
detail exactly what's in that agreement, but

162
00:14:09,320 --> 00:14:13,519
what I'd say is that we continue
to expect that we'll be entering the environmental

163
00:14:13,559 --> 00:14:18,200
assessment process in twenty twenty four,
and we expect that process to really fully

164
00:14:18,320 --> 00:14:24,879
articulate the impacts of the Baptist project, the environmental mitigations that can be put

165
00:14:24,879 --> 00:14:28,720
in place, and really looking at
some of the enhancements that we can work

166
00:14:28,759 --> 00:14:33,600
together with these nations to meet to
the land base, into the land use

167
00:14:33,039 --> 00:14:39,720
to really work towards preserving those key
areas of cultural and environmental sensitivity and those

168
00:14:39,799 --> 00:14:43,039
key habitats that are so important to
these communities, and we fully acknowledge that

169
00:14:43,039 --> 00:14:46,879
that's a fundamental part of how we
want to develop this project, and we

170
00:14:46,960 --> 00:14:52,120
look forward to continued opportunities to engage
with Clause and National Bitcha, Wooten and

171
00:14:52,159 --> 00:14:56,960
the other impacted nations to continue to
move this project forward, as well as

172
00:14:58,000 --> 00:15:01,240
close collaboration with both the federal government
of Canada and the provincial government of BC

173
00:15:01,480 --> 00:15:07,639
to support all those discussions going forward. All right, Well, we're always

174
00:15:07,679 --> 00:15:13,720
optimistic and I'm sure the issues will
be resolved favorably to everybody's benefit because projects

175
00:15:13,759 --> 00:15:20,080
like this don't come along every day, and the fact that it is a

176
00:15:20,120 --> 00:15:28,240
critical mineral, hopefully that will play
a role in the discussions. Yeah,

177
00:15:28,279 --> 00:15:33,440
for sure, it is a time
where we have to recognize as a society

178
00:15:33,440 --> 00:15:37,639
that we're all using these critical minerals. A lot of that supply of nickel

179
00:15:37,759 --> 00:15:41,519
is currently coming from places like China
and Russia. China and Russia controls something

180
00:15:41,600 --> 00:15:48,399
like seventy percent of the global nickel
supply side, and so diversifying away from

181
00:15:48,399 --> 00:15:52,320
those sources of nickels is critically important. But at the same time, these

182
00:15:52,320 --> 00:15:56,039
are projects in Canada that I think
can be developed in a way that really

183
00:15:56,080 --> 00:16:03,799
advanced the theme of reconci with these
First Nations groups. And that's that's a

184
00:16:03,879 --> 00:16:07,519
high priority, and it's it's it's
at the core of what our values are

185
00:16:07,559 --> 00:16:11,240
as a company and be us to
and in the end, it's all about

186
00:16:11,320 --> 00:16:15,960
values. What appreciate your coming on
giving us this update. We've been anxiously

187
00:16:15,240 --> 00:16:19,919
looking forward to it. H check
out f p X nickel dot com,

188
00:16:21,080 --> 00:16:25,600
company's official website, sign up for
notifications so you can be up to date

189
00:16:25,679 --> 00:16:30,559
on the latest developments. The ticker
symbols us f P O c F and

190
00:16:30,720 --> 00:16:37,559
of course in Canada it's f P
X Martin. We'll look forward to getting

191
00:16:37,559 --> 00:16:40,879
an update from you in the future
and we'll talk to you soon. Thanks

192
00:16:40,919 --> 00:16:51,480
again, Kerry really appreciate it.
The Financial Survival Network