That annual free cash flow number that you mentioned at almost six hundred million dollars
US per a year for twenty nine years. I think that crystallizes it almost
a little bit better. See that this is the type and scale of asset
that moves the needle for the largest mining companies in the world. This would
fit very well into the portfolios of the largest miners out there. The Financial
Survival Network now more than network, the Financial Survival Network ed. Welcome.
This is Financial Survival Network. I'm your host, Carrie Lutz, and many
of you out there have sent me emails. I've seen it in the chat
rooms. You wanted to get in update on FPX Nickel, which the CEO,
Martin Terrant, long term sponsor of the show. Martin, great to
have you back on things are happening. I saw that the PFS, the
preliminary Feasibility study, just got filed last week and it looks pretty encouraging there.
Yeah, thanks for having us back on there, Carrie, and yeah,
it's been an exciting time for the company to make terms of our completion
of that PFS. As you mentioned, it really represents the culmination of a
long body of work over the last couple of years subsequent to the preliminary economic
assessment that we did in late twenty twenty. Yeah, I'm happy to delve
deeper into what that PFS showed and what the road ahead is for FBX.
Well, I always like to look at the bottom first, the bottom line
the IRR, and I think memory serves me correct it was almost nineteen percent.
Yeah, that's right. So at a long term nickel price assumption of
abud eight dollars and seventy five cents a pound, Yeah, we do generate
post tax or after tax numbers from an MPV stamp point in excess of two
billion dollars US and an IRR well over eighteen percent. You know, that
IRR figure is very robust. You know, a project of this scale and
scope, one that can be producing nickel for almost thirty years, that is
an incredibly strong IRR. And you know, one of the other metrics that
we like to look at is that the ratio of the of the of the
my life to the payback. That's really something that captures and highlights the positive
attributes of having a multi cycle asset. So in our case that my life
is around twenty nine years, the payback's about three point seven years, so
that ratio of my life to payback is almost eight to one. And you'll
see there's a good slide in our corporate presentation that shows that that that's really
peer leading, that that's the highest such ratio of any of the major nickel
projects out there. And I think it speaks to that multicyclical exposure to the
nickel price into the nickel market that this that our Baptist project offers. It's
interesting, you know, looking at the cash flow numbers. You're estimating annual
you know, pre text cash flow five hundred and seventy eight million US dollars,
which you know on a on a cap X, which you're estimating at
at roughly two point two billion, that's a pretty good return. And that
only gets better because, right, let's face it, the market doesn't give
you any credit where production past ten years generally in these resource plays. So
the upside here is in my view, kind of understated, shall we say.
Yeah, for sure, the effects of discount rates and discounting of future
cash flows, as you mentioned, does unnecessarily or unduly punish these long life
projects. And so those NPV and our numbers, while they are very impressive
for our product. I agree with you, they're almost understate the economic value
that can be derived here. And that annual free cash flow number that you
mentioned at almost six hundred million dollars US per a year for twenty nine years,
I think that crystallizes it almost a little bit better to see, you
know that this is the type and scale of asset that moves the needle for
the largest mining companies in the world. This would fit very well into the
portfolios of the largest miners out there, right. So, yeah, and
looking at these numbers, you know, obviously you know the mind life is
also understated as well. So and your capex pretty much from what you're saying,
is under four years basically is the payback period. So it produces at
least twenty five years or twenty four years over and above its payoff period with
a minimal capital expenditure. It really is a compelling case that many of you
might not really know from looking at the numbers because they are so conservative and
understated. Yeah, the other point I would make about the capex is that
absolutely this is a large project, and it really is a major company scale
project, and we make no bones about that. But one thing that people
should should look into a little bit more to understand how to value these projects
is the Canadian federal government passed new legislation earlier this year that includes a critical
Minerals Extraction and Processing tax credit. That's a thirty percent tax credit on capital
expenditures to extract and to process critical minerals in Canada. So for every million
dollars of capital expenditure, the government will actually cover you know, about three
hundred thousand dollars of that and so yes, that gross capex figure of two
point two billion dollars is absolutely the case. But then we believe in our
interpretation of that legislation that the government of Canada will actually you know, cover
approximately thirty percent of that figure. And that's obviously not insignificant to the economic
profilogy of the asset. That's huge. I mean, that's basically six hundred
and sixty million US that we're talking about that Canada foots the bill for.
Obviously shows you how critical these minerals are that they put that much out and
you know, you can't even put that in your PFS, I guess because
you're not supposed to put in tax credits and things like that when you compile
the number, but then the number has become almost unbelievable Martin. Yeah,
So to clarify that the economic model in the PF has does incorporate our assumptions
around how that tax credit will be applied. But to your point, it
just underscores the kind of the importance of these projects and the importance that the
Government of Canada is placing on indvans in these projects. Absolutely, all right,
So moving on to switching up gears, Moving on to other matters.
Panasonic battery Toyota battery, I should say a deal came forward with them.
Yeah, So Toyota and Panasonic formed a joint venture company a couple of years
ago called Prime Planet Energy and Solutions or PPEs. It's a bit of a
mouthful, but basically it's Toyota's a majority owned electric vehicle battery company. The
company that they have formed to make batteries for their vehicles with Paasonic, which
is the leading battery maker in Japan currently. And so this group is currently
constructing its first EV battery plant in North Carolina, and I believe it's going
to come online sometime in twenty twenty five or twenty twenty six and thereafter they're
also thinking about construction of a second battery plant elsewhere in North America. So
with that comes a real need for PPEs or this Toyota battery company to secure
supply chains of raw materials of critical minerals that go into making the batteries,
so lithium and cobalt, graphite, and of course nickel figures prominently in that.
In the last couple of years, pps has done two memorandums of memoranda
of understanding with mining companies around nickel. The first was with BHP and the
second was with us FPX earlier here this year. It was announced in September,
so that that announcement came at a signing ceremony that we had with representatives
of PPEs in Ottawa, which is the nation's capital of Canada earlier this year,
was attended by several prominent ministers at the federal level, both from Canada
and from Japan. Their their their Minister Economy, Trade and and uh An
Investment was there and so it was a great event to kind of formalize our
relationship with PPEs and and happy to talk more about what that agreement means and
what could lend lend itself to here down at road. So obviously, Toyota
Motor Company, the largest vehicle producer in the world, currently expanding their ev
endeavors, so potential future demand. There's just an article the other day that
they've supposedly perfected a solid state battery Toyota, which means if they really have
and if it's commercially feasible, they're going to have a near insatiable appetite for
the metals going into batteries. Yeah, whether in the form of the solid
state or in the more conventional of Umayan battery formulations. Absolutely, they've said
that nickel is sort of a high priority for them. You know, the
agreement that we have with them really establishes a framework for vertical integration of a
nickel supply chain is to serve in part their nickel requirements for their supply chain.
So the third member of the third party to that MOLU is jog Mech.
Jog Mech is the Japanese State Agency for Mineral Expiration, and it's a
group that we already have a free prior joint venture in place with for expiration
for the for the particular type of nickel deposits that we're after. Jog Mech
is playing a critical role as as a representative of the Japanese government in unlocking
funding opportunities for Japanese industry to invest in critical minerals projects, to secure off
take and and other forms of rights to future nickel production. And so there
there's going to be an ability here for us to continue to discuss this the
strategic opportunities around vertical integration with jog Mech and with the Toyota Battery Company and
to see what what their opportunities there are for for that collaboration too to come
fruition to fruition in the form of upstream investment by the Japanese government and by
PPEs to continue to allow us to advance the Baptiste project at a rapid pace.
We're talking about Baptiste. We're not even like thinking about Van, Whi's
probably bigger than Baptiste. I just wanted to add that. But well,
the attention right now by you of necessity and the market maybe by near sighted
this is on Baptiste. We've kind of you know, we've kind of forgotten
all about Van, you know, just asn't decide what's happening with Van right
now. Yeah, so Van, you know, as you mentioned, is
a discovery that we meet first from surface sampling and then confirmed into very strong
seasons of drilling in twenty twenty one. In twenty twenty two, we do
have the makings of a discovery. They're a mineral deposit that could indeed rival
or potentially exceed Baptiste in its scale and in its great We did not drill
at Van next year, but it's certainly something that we would look to do
as a potential in future. You're to continue to expand that resource and to
really demonstrate that, you know, beyond the twenty nine year of my life
Baptiste, there is scope for continued expansion of the what we call the Dakar
Nickel District for potentially multi decade or multi generational nickel production. Yeah. Sorry,
just wanted to get that in because you know, like everything has been
about Baptiste recently, and I think that's important for the future upside of the
FPX, because whatever happens with Baptiste, in all likelihood, you're going to
be still have Van to go. So I just wanted to point that out.
So finally, you relations with first Nations company with First Nations tribes.
So if you will, stock price taken a bit of hit a hit on
that front, can you just give us a brief update where we're at there.
Yeah, So, in the big picture, the mineral claims that date
far occur in an area that coincides with the traditional territory of four First Nations
for separate First Nations here in north central British Columbia. And those those nations
that are centrally impacted are Class the Nation and Benje wou Ten. You know,
Class the Nation has come out with some public comments stating their concerns about
mineral expiration and mind development in their territory. We absolutely hear those concerns and
we take them very seriously. We have had a relationship with with Klaus and
for the last fourteen years. We've engaged in close collaboration with the elected representatives
and the and the and the constituent clan heads or KO holders within the nation
going back for several years. And we we also engage in similar discussions with
some of those with those neighboring nations that I mentioned, most particularly benche Wu
Ten. You know, we do have an agreement in place we have had
an agreement in place coust of Nation. There are certain confidentiality provisions around that
that prevent us from discussing in great detail exactly what's in that agreement, but
what I'd say is that we continue to expect that we'll be entering the environmental
assessment process in twenty twenty four, and we expect that process to really fully
articulate the impacts of the Baptist project, the environmental mitigations that can be put
in place, and really looking at some of the enhancements that we can work
together with these nations to meet to the land base, into the land use
to really work towards preserving those key areas of cultural and environmental sensitivity and those
key habitats that are so important to these communities, and we fully acknowledge that
that's a fundamental part of how we want to develop this project, and we
look forward to continued opportunities to engage with Clause and National Bitcha, Wooten and
the other impacted nations to continue to move this project forward, as well as
close collaboration with both the federal government of Canada and the provincial government of BC
to support all those discussions going forward. All right, Well, we're always
optimistic and I'm sure the issues will be resolved favorably to everybody's benefit because projects
like this don't come along every day, and the fact that it is a
critical mineral, hopefully that will play a role in the discussions. Yeah,
for sure, it is a time where we have to recognize as a society
that we're all using these critical minerals. A lot of that supply of nickel
is currently coming from places like China and Russia. China and Russia controls something
like seventy percent of the global nickel supply side, and so diversifying away from
those sources of nickels is critically important. But at the same time, these
are projects in Canada that I think can be developed in a way that really
advanced the theme of reconci with these First Nations groups. And that's that's a
high priority, and it's it's it's at the core of what our values are
as a company and be us to and in the end, it's all about
values. What appreciate your coming on giving us this update. We've been anxiously
looking forward to it. H check out f p X nickel dot com,
company's official website, sign up for notifications so you can be up to date
on the latest developments. The ticker symbols us f P O c F and
of course in Canada it's f P X Martin. We'll look forward to getting
an update from you in the future and we'll talk to you soon. Thanks
again, Kerry really appreciate it. The Financial Survival Network