Altius Minerals Corporation (ALS) Earnings Call Transcript & Summary

Okay. We've just opened the conference call and webcast. And I'd like to thank everybody who's joined us in person. We've got a slide presentation that's on our website and also will be on the webcast. And as we go through, there'll be a couple of Q&A periods where we'll open the conference call for questions. And we welcome anybody in the room just putting your hands up during the presentation. So you can ask questions at any time. We've got a forward-looking statement that you'll see on Slide 2. With me in the room speakers, I've got Brian Dalton, who's the CEO; Lawrence Winter, VP Exploration; Mark and me, you know. And Ben Lewis will be [indiscernible] CFO for Q&A. When we do the break, we'll then be followed by Frank Getman, who is the CEO of GBR, the operating co for ARR; and Ernie Ortiz, who's CEO of Lithium Royalties Corp., and he'll arrive sometime between now and the break. So with that, anything I missed, Brian, I'll turn it over to you.

Thank you. Really, really good here doing this in person. I wish things weren't as gloomy as for backdrop out there, but I guess that just makes my job a little more interesting today to see if I can raise the chair levels a little bit and get some enthusiasm in the room here. So thank you, Flora. Thank you, everybody else. There's a lot of work that goes into this. So I'm going to start out by acknowledging the team. Yes. And just every time we do this kind of look at ourselves and say, boy, we're into a lot of things and just realize how many moving parts are in our business these days, but all fun, all good and a great team to get it done. There will be forward-looking statements in this presentation. You can be sure we'll be prepared. I'm going to start out and take us through a little bit of a look back from what I believe was the bottom of this cycle in 2016 to where we are now, just look at some of the things we did position for the current cycle. Then I'm going to make an attempt that explaining where I think Altius is -- or the whole cycle is too and how we're positioned and then the rest of the presentation, we'll talk about how we see our assets and interests developing and unfolding in that cyclical context. And then just to give you a sense of what we believe our growth looks like. So this is our interpretation of the cycle and where it's been over the entire history of Altius. So Altius later this year will celebrate its 25th anniversary as a public company. We were formed in a very poor market just before all the mining companies were converting to dot-com, and that sort of things [indiscernible] could get. We went through an entire cycle, which came to be known as the super cycle. And obviously follow things down to [ 26 ] and we think the bottom happened. The stars on this map show a whole series of acquisitions that we made through that bottoming period that had some things in common. Generally, they were connected around a few thematics. -- A, it was ultra-long lives for the most part. There were linkages in terms of connections to macro scale growth trends that we saw emerging generally around sustainability. And -- but broadly speaking, again, if you know Altius you know that we pride ourselves on being countercyclical investors. So we see ourselves now about 6 years into this market cycle, but that's around where to now from the bottom to where we are today. So first, look at the history of the acquisitions that we made, mostly through that down cycle contrarian period. So here, we list the purchase prices of various acquisitions, including a merger -- and then as you go along, you can see where we realized net revenue. In several cases, we've now already achieved simple paybacks. And if you consider the revenues we've received to date plus estimated values of the residual lives of the assets, in many cases, it's worked out obviously very well with 2 or 3 times type implied gains against investments. And that's obviously what you hope for when you're a countercyclical investor. But anyway, we feel very proud of this and think that we're well on our way. So [ paddy ], even this year, we probably will cross over into simple payback. Potash, I don't think we'll get there this year, but who knows what potash the way it's going right now, but soon. Coal, we won't get there. We know that because of the curtailment by regulation. But then if you go to the next line, you go to Altius Renewable Royalties, where we invested $85 million, we haven't received much revenue yet, but that is certainly on the comp but the market value of the business overall, certainly eclipses anything that we feel we would have left on the table with the coal investments over time. And then Lithium Royalty Corporation, Ernie will talk about that. To be seen, what kind of return we realize on that investment. So since 2016, this is what the revenue profile looks like, just as how things have grown. It's been about a threefold increase in royalty revenue from bottom to here. A lot of that would just be price appreciation but some obviously, accretion around different types of acquisitions. I believe that the portfolio these days is really nicely balanced. We're dealing with about equal parts potash and basin battery metals combined as sort of the key anchor pieces, but there's good reason to believe that on the power generation side through the Altius Renewables piece. And also through our iron ore component that there's a lot of growth ahead for those. And again, key point to make here, when you're thinking about a royalty business and these growing revenues that are coming from increasing prices. We're obviously all starting to hear a lot from mine operators these days about pressures the other way, right? Lots of cost increases at the capital level and operating side. So just a little reminder here that as a royalty holder, we do get the benefits of the higher prices, but we don't share any increase in costs. So we're essentially an inflation hedge in that regard. In addition to that royalty revenue that growth in Royal revenue, we've also had over $40 million in monetizations come from our Project Generation investing business. So that wouldn't be included in what we report as quarterly royalty revenue, but it's real money nonetheless. And we've also got to position equity -- combined equity position that stands at about $67 million. So generally speaking, over that period from 2016 when we had about a $20 million junior mining equity portfolio, if you include what's been monetized and what we hold today, that's grown to over $100 million. But there's other things to say really about the project generation business that I think are even more important. Over that time, it's also created over 60 new royalties for our business that are really the long-term growth profile of the business. This is the growth engine of what we do. And the last thing is a bit of foreshadowing for when we get later in the presentation. Some people might be surprised to know that over 1/3 of what we do in the Project Generation business these days is related to precious metals. How this all played out in terms of our balance sheet. You can see that over that period of time, we've gone from being in a debt position related to various acquisitions to now being in a strongly net debt position here at year 6 as we move through the cycle. A lot of that relates to the value of public market securities, so you can see here. On the far right, the green part of the bar relates to the value of Altius Renewables, the middle dark bar is cash and then at the base, you've got the value of the project generation portfolio and then the debt level, which has been gradually coming down. But it hasn't been a serious focus for us over the last couple of years to really get aggressive with our debt levels. We feel pretty comfortable with that leverage level. So we're negative $191 million in net debt. We've got a revolver that we -- of unused revolver capacity over $100 million. And the last thing I'll point out about this slide, and I know this will differ in terms of what -- how many people view us on this metric. But when we look at our EV to EBITDA when we're looking at it in comparison to other potential investments or in terms of our buyback, we just take that number deducted from the market cap and look at it against EBITDA. And if you do those numbers on last year's quarterly basis, and you'll see that we're probably trading at well below 10x EBITDA, which compares to something much higher in the rest of the sector. And again, it's different methodologies, but we've always just taken the view that if we're going to compare and as we consider whether or not it's a good time to be on our buyback or not, this is how we calculate the metric. And in the future, for example, if LRC were to go public, we would add that here as well. We think that's a reasonable way to look at it. If somebody were looking at acquiring Altius for example, we think this is how they would look at valuing the business. So anyway, just a smaller side there. Returns of capital have grown steadily as a result of the acquisitions and obviously the improvement in prices. But really what it reflects is just strengthening operating cash flow over time. And what you can see over that period is that we've been distributing roughly 1/3, maybe a little more on average of our operating cash flow out to shareholders either through the dividend and the buyback. But I will point out here that -- we don't really look at our buyback. When it happens, it's certainly a return of capital to shareholders, but it's not how we look at -- not -- when we think about capital allocation, we don't put buyback in that pocket. It's not how we assess whether or not we should be active in our buyback. For us, the buyback competes with growth. So if we think buying the business that is Altius Minerals, is a great use of capital from a -- on a per share basis. It has to compete with other investment opportunities that we see there. So we don't -- again, we don't put it in that traditional bucket where most capital allocators might just say, okay, how much are we going to return to shareholders. It's -- yes, it goes in the growth bucket for Altius, so that's important to note. As far as dividend grows -- dividend growth goes last year, I guess, in late summer, going into our reporting on our second quarter, we announced an increase to the dividend. We just came through a strategy session with the rest of the Board. And certainly, continuing to increase that dividend as our cash flow grows as a big priority for the company and management are [ loud and clear ] from the Board. So take that for foreshadowing, if you will. But after the second quarter, we'll obviously have a much better handle on how we think the year is shaping out and we ultimately make that decision. And we'll get into a little bit of a look at where we think we're in the cycle right now. We don't do this for the sake of trying to sound like we have some kind of expertise in any of this, but it matters where a countercyclical investor and how can you call yourself a countercyclical investor, if you don't take a stand or a viewpoint on where you're actually to in the cycle. So it is something we do spend time on because it's meant to inform our long-term decision making. Most of the information you'll see here is not original. We're just borrowing and stealing it and aggregating it from others. So take that. So -- this is all from a -- pulled from a presentation that Robert Friedland recently delivered. Love Robert's talks, if he can't get you fired up bullish. I don't know who can. But it was a great chart, and it was a sobering chart. What he shows here, this is copper. We typically use copper as the leading indicator for making a call on cyclical position. And what he shows here is that there is a precipitous decline coming in global copper production. And this isn't a guess. These things are known. These are mines that are scheduled to close, closure plans are being implemented. There's a big drop coming. The blue line we show here is just steady state demand that sort of typical -- global GDP growth rate. Anyway, the bottom line of it is that at the current -- as we see things right now, there's a big, big gap in the not-too-distant future here almost 6 million tons according to the data that he's using here. And on the right, there's a from a recent presentation at Goldman Sachs, on their numbers, they think the gap is actually more than 8 million tons. That's really big numbers. That's like the equivalent of 25 medium-sized mines, it's like 25 Cobre Panamas or Kamoa. This is not a small challenge at all. And that's not an assumption that global demand just continues growing at its normal compound rate following global GDP. There is reason to believe, however, that, that demand forecast is conservative. There's this little thing going on called electrification and it is very copper and metals intensive. So when you relook at those numbers on the right-hand side there, the blue line is the steady state normal GDP kind of demand pool that you'd expect in the copper market. The red is a forecast when you factor in electrification. So assuming these adoption curves and everything else that are happening as far as renewable energy and electric vehicles and what not go, this is what we actually need. And in that case, the [ gaps ] that you're talking about goes to like 50 medium-size mines in the next 5 or 6 years. So pretty exciting. The driver for it is obviously that -- I'll go back a step. In that last cycle, which ultimately got termed or Mark as the super cycle, what happened was that we had a normal cycle setting up that there was just aging lines were going to decline, but you had a sort of a normal demand expectation and investments sort of geared around that kind of a scenario. But then all of a sudden, something happened. There was this -- all this extra demand started to emerge and what that was, was just an underestimation of how much metal China was going to need. And it's a big push that came into the market, really shocked the market, all of a sudden, we had what became the super cycle. And that was late while us a bit of an increment of extra demand over and above what was expected. So I like this chart. This is also from Goldman Sachs. So the compares that kind of some of the model numbers around the electrification requirement for copper increments and compares it to the last cycle when it was China. And you can see you got something pretty similar potentially setting up here. So the question is, do you believe electrification trends are really going to need that much metal. So now let's look at -- are we going to have enough copper? Is the market prepared to give the world as much copper as it seems like it's going to need. And there are some real challenges. Top chart here, what you see is the average grade of a porphyry copper mine, mainly most of these are in South America as most people here now. But it's been going down very steadily. And what that means is that you've got to just mine a lot more rock to get the same amount of copper and you've got to pull more waste and you've got to handle more tailings, you need way more energy. And it gets reflected on the bottom chart with the blue bars which show the capital cost that's required to bring a new pound of copper production on stream. So to build a 1 million-pound year mine, you need to spend what would that be $8 million. So it's basically what's going on here is that as that grade decline has taken place, the CapEx intensity for a pound of new production of copper has gone from $2 to about $8 from the beginning of the last cycle to around where we are today. So pretty dramatic shift. Now there's more factors in here other than just that grade decline. There's obviously other types of inflation. But nevertheless, this is the real number. This is the reported average capital intensity per pound of new production copper every year, so up 4x. There's also been operating costs increase over that period. And combined, that capital intensity, the average operating cost, if you put those together and you try to model what copper price you need to, in fact, make that investment decision to build that mine. You get what referred to as the incentive price. This is ballpark we're using average data and numbers, but we use it and we sort of solve for what price do you need to achieve about a 15% rate of return. And we just follow this over time. So the green line is overlaying on the copper price here. And you can see that the incentive price from beginning of the last cycle would have been in the low $1.20-ish, range that's moved up somewhere now $1 to $4. So that's where we would have guessed based on data for the end of last year. So last year at this time at Investor Day, we actually got pretty bold and we predicted we're about to see a big surge in capital investment coming out because you've got the magic conditions you're at that point where the copper price exceeds the incentive price, and it's always been the trigger that's when the investment comes and that's when you get your surge and growth. A year later though, we were very wrong. And essentially, there was no response in the form of a big push or announcements for capital investing and growing out supply. There's a couple of reasons we think for this: a, is that the incentive price actually went up faster than the price did throughout the rest of the year. And that's just because capital intensity, operating costs all went up and the price stayed flat and even has come down a little bit recently. So we're not actually in incentivization conditions in our estimation anymore. So that's one very big reason. And the other is that there's this new religion amongst the mining companies around capital allocation and very heavily focused on returns of capital to shareholders. And more recently, it's been -- it's come to include a lot of decarbonization initiatives. So that discipline, at least to this point, is very much holding. And the reality of it is that we just still haven't seen the investment response that will ultimately cause the supply to [ come ] that the market. It looks like it's going to be very short of and not too far out from now. So this chart, the green bars are the actual amount of capital invested in gross in the copper markets over time. Going back to 2000. And if you just look at the green bars, it doesn't look all that bad. It looks like, hey, there's -- we're kind of spending -- kind of spending at this sort of 9, 10, 11 level. So everything is on track. The world is doing the right thing. You got to remember, the price to bring a new pound of copper production on has gone from $2 to $8 in that time frame. So what the orange line on does it solves for it. It solves for how many pounds of new copper production are actually being bought with that investment amount. And so that's the orange line here. And you can see that this investment response does not buy you what -- that investment level does not buy you what it used to buy you. And it puts us somewhere still in this range right here, basically incentivizing 600 million, 700 million pounds of copper production a year. We're on track to lose over 1 million in the next 3 from other mines going down. We're not even holding pace as the bottom line here. Quite frankly, it just hasn't begun yet. So all to say that we're pretty bullish still despite the background in the noise. This is Goldman's estimates. So this is real copper and real dollar terms, which is a neat way to look at it, actually. Couple of things here. You can see a lot of these cycles within a bigger down trend. The downtrend was because we found a cheaper way to make copper for a long period of time. We started opening up big porphyries and [indiscernible] technology came along. And the real price of taking copper from the ground went down for a long period of time before that inflection happened. But these are short. The cycles used to take about 6, 7, 8 years. So prices would come on, miners would get incentivized, and they could respond very quickly and on cantor production. So the cycle -- the demand or supply response to prices was quick. Now it's not quick at all. You can get this incentivization, but you've got to go through so many hoops from that day. The day that you actually decide to do it when you actually bring the copper on is a much different undertaking. So we see cycles getting longer, and this is the grade decline. This is really what you're seeing here. It's just cost more to bring on new production. So that's what Goldman's things was happening, and this is generally where we stand on the matter for now. Beginning of the last cycle, lots of blips and noise through here, but this is around where we put ourselves today, maybe the magnitude of that. If this takes longer, like if it takes longer to get going, the capital investment takes longer to get started here. The amplitude here will have to get much bigger. That's just the way it works. So the longer it takes, I think I used the phrase in a presentation a few years ago, the longer it takes for the storm to make landfall, the more intense it becomes. And that's -- I think we're probably not going on here now. But the bottom line is like the industry, the world really needs this investment to start yesterday and just not getting those signals. So it's extremely bullish, and we think we're really well-positioned. So that's unfortunately, now this is memorialized in time. We're going to have live with it forever, but we do reserve the right to adjust as we see fit in future. I'm going to talk a little now about something we touched on in terms of why mining companies, for the most part, haven't really got going with investing yet other than the fact that they're not incentivized but other capital allocation priorities. And one of the big ones is decarbonization. And in that context, it goes to where Altius is positioned overall, the kind of sustainability alignments. It's built its business around and talking sustainability. These days, you can't -- not talk about how your business is looked upon by this huge new class of investors that call themselves sustainability or ESG-focused investors. So we're not going to say a lot on this. We do have a new fairly recent sustainability report just published, and I thank everyone for their feedback on. We've had some really good feedback. But one thing that stands out here, and it's a bit of a grievance, I suppose, is that it's very confusing if you looked at Altius right now and just look at ratings agencies to determine, is that a good company or a bad company. If you go to MSCI, well, they look pretty good. By sustain -- sustainability would have us pretty much -- but I think we'd be burning nicotine to manufacture guns or something would be our business something along those lines. There's a reason for it, it's frustrating. It's basically it's our market cap, which means that we're not big enough for them to find a real person to analyze what our business does. And we can solve force. The answer is you have to pay. So there's a fee if you want to get -- you want to improve some of these things. So we haven't done that. But anyway, just sort of clear to hear with some investors who get questions on around what are you or good or bad. But forgetting all that, I think it's more important to think about what it is we do as a business and how it relates to sustainability in all forms of the world, not just sustainability of our business in our industries, but obviously, in terms of broader sustainability, ecological sustainability. So our interests are aligned around 4 key pillars, I would say, these days. Renewable energy, Frank will talk about that in a little bit. So that was originally a coal business that we decided to invest remaining revenues from to build out this new renewable energy platform. So that goes to just decarbonizing power generation, probably the biggest single source of CO2 emissions in the world right now. Various exposures to key battery metals. Ernie will talk a little later about lithium, but there's also copper, nickel from our is pay interest. And this goes directly to about energy storage for grids, but more acutely to electric vehicle transitions. Cleaner Steel, we're going to talk quite a bit about today. So in order, you've got for -- like where are the culprit, in terms of CO2 emissions. You've got power generation, you've got transportation. And then next on the list would be steelmaking and concrete mix. But -- these are the biggies, the top 3 were very heavily invested in what seems like will be the solutions. And then finally, so those 3 -- all 3 of those would really lead to decarbonization. It would be the macro -- big macro you'd link to. And then potash, which is -- it's a really special part of our business. Thematically, there is a sustainability angle just around food security basic as you can get. Decarbonization -- it's an opportunity. It's obviously something that can have incredible impacts on demand for a lot of the commodities that we're exposed to so what we see it in that regard. But as observers of the industry and investors in the industry, it's become increasingly cost as well, right? There's definitely 2 sides. Mining companies to extract these metals that we need to decarbonize, produce carbon. And it's becoming an increasing part of cost structures [indiscernible] which is why all this investment is happening in decarbonizing because it's an increasing cost overall to their businesses. Yes. So again, it's one of the key challenges, just being an observer wasn't enough for us. We saw a challenge and whenever we see a challenge, we look for an opportunity. So we have found several ways and again, we'll talk through these as we go along to make even more of an opportunity around decarbonization. And not just being a beneficiary of the extra demand for commodities, but also being part of the solution in terms of the overall decarbonization effort, I'll call it. And that's through ARR, obviously, lithium royalty, which we'll talk about. And a newer investment is in a company called Inverse. And what Inverse does, I like the name when I heard it first because the way I thought about their business when it was first described it, this is kind of like Inverse mining. In mining, we go looking for minerals to bust them up and take things out of them. And here, you're actually trying to mine elements to put them in rocks and things like that and put them away. So it just felt like the inverse. Anyway, Mark, we'll be here. Mark [indiscernible] will be here, I think, for the latter part of our presentation. So I'll certainly invite anyone here to talk to him a little bit later. And then decarbonization, steelmaking, which is -- we're going to take things to right now. I should have added. Yes. So I missed my little segue here. Ernie will talk about LRC a little bit later. When we talk about ARR, we talk about our investment in LRC and now in Inverse, there's some commonality. I know we talk about how we're not big investors because it's the wrong part of the cycle. When it comes to initiatives that we can be part of from the ground floor, we'll take shorter-term cyclical opportunity and the market serves them up a lot. So when we formed LRC, that was the lithium price and this broader trend of adoption that was starting to happen in electric vehicles, but not a great time. There was lots of money right here. Everything was a wash. But there was that, that happened. And all of a sudden, these projects that were feeling so close and there was so much access to capital that all just evaporated overnight. And so Ernie and his team were able to act very quickly and loaded off on a whole bunch of assets in that short-term turmoil. And that's obviously then we came through the other side and we just used that window very, very effectively. But I just find in parallel is kind of interesting. Does that want to be -- also would look like the IPO point for ARR. [indiscernible] these issues in the market and capital has gotten a little harder to come by, and it creates an incredible opportunity, I think, for ARR to grow its business. And similarly, Inverse. We all know that there's going to be a huge demand for these carbon credits. But at this moment in time, things are dicey. Like the EU yesterday was talking about flooding the market with a bunch more to raise money. And so pricing is a little bit iffy. People don't know if it's their priority at the moment. So it's creating opportunity. And I think that there's projects out there that an Inverse can take advantage of today and buy into. So we really like these sorts of opportunities. And that's [indiscernible] for all of the companies -- the other companies that will speak to. Labrador Trough. Okay. So what's happening here? In the last investment cycle in iron ore, there was a lot of money [ pour ] in to build up new mines, mostly because the previous generation of mines we're getting old, but also because there's just been so much demand growth, particularly out of China. A lot of that investment happened in Australia, and it was directed towards deposits that were generally speaking, lower quality than the previous generation. So the average grade of iron ore mines came down as a result of that investment. So that's what you get. But what's interesting about iron ore, it's basically made up of iron and oxygen, those are the heavyweight components of the chunk of iron ore. And then the other little bit is going to be impurities. And that impurity is the real important part. So high-quality iron ore, this is getting up here to the highest amount of iron you can physically get in iron ore has about 66% and only 6% overall impurities. Low-quality iron ore, a lot of the type of new material that was incentivized and built in Australia in the last cycle, a 58% iron ore and 17% impurities. And so it's not just that difference between 58% and 66% that matters. Actually, what really matters is the difference between the 6% and the 17% because it's those impurities that make the reactions in steel mill inefficient. And so there's exponentially more coal required in a blast furnace to make steel from 58% versus 66%. Back then who cares, we don't care. That's fine. Doesn't matter. We don't get charged for the CO2 that gets produced. Well, guess what, now you do. Every steel mill does. It's becoming a part of the cost structure. So that's what's shifted so dramatically from the last cycle to where we are today. Mean it's the carbon footprint of your steelmaking overall really matters. And the way it's being reflected in the market, go to here, is in the price spreads like it used to be price was benchmark, 62% and then you had a little bit of variation for little premium, a little discount. Well, now it's not a little premium and a little discounts, it big premiums and big discounts. And the spread between low quality and high quality in 2019 an average was 28%, 38% in 2020, 56% in 2021. So there's really strong market incentivization forces in play here to tackle that next big culprit steelmaking, right? That 8%, 9% to the world CO2 right behind transportation. And the way it's happening is that we're being incentivized to produce higher and higher quality material and penalized for the use of lower and lower quality material. So I steal this slide from Champion iron ore. They've done some really neat math around this. So steel mill that we're to use the -- its high-grade 66% iron ore product versus one that we're using a 58% iron ore product would -- using the Champion material would save about 2 millions, per carbon per year, that's against Champions 15 million tonne a year production rate. And the value of that is roughly $170 million. They're now trying to upgrade their business further and to produce what's called a direct reduction iron ore pellet. So essentially requires no coal in steelmaking and the relative same 15 million tonnes. The relative CO2 difference is about 9.7 million tonnes. That's how much less CO2 is produced to produce exactly the same amount of steel. And that has a value of about $880 million. This math didn't exist when the last wave of investment happened in iron ore. It didn't just simply did not exist. It didn't matter. It was not something you were going to get penalized for, it was not something we want to get value for. Yes, I probably set that up as much as I need, which takes us to the Kami project. Kami project is an iron ore deposit located not far from Champions current Bloom Lake Mine in Labrador. It was discovered by Altius during that last market cycle, and it's found its way to Champion. So I was really keen to see -- or glad to see on the Champions website the other day that the Kami books. Kami project has now moved up to their flagship project page. So we'll take that as a good sign. But what's neat about Kami, Champion is obviously coming through expansion of the Bloom Lake mine from Phase 1 to Phase 2 and have said that they are studying the potential for the development of the Kami project as the next step in their path to grow their production profile. What's neat about Kami is that it also can be concentrated to levels that we think anyway that can reach that holy grail of being -- becoming a DR pellet, which is Champion seems to be going all in on by the minute here. In fact, recently just acquired an old pellet plant that's not operational today, down at the end of where the port facilities are. So they are now seeking to actually go from making just feed materials, but even potentially going all the way to making their own DR pellet to. Another little tidbit on the Kami deposit. And one difference between it and Bloom Lake is that Kami is more magnetite-rich than Bloom Lake is. So at least notionally, and we've got studies to come to demonstrate this, but notionally, is actually a superior pellet feed product than a more hematite-rich product. It can take a long time from project generation effort to an actual development of a project that becomes a royalty. So that's -- hematite, when you scratch it, it has this red color as a geology student, you learned that, that's how you can identify hematite. So at least 15 years ago, I scratched that Altius was here time 3% on a piece of core. So it's somewhere up in the core box of at the site love somebody is going to find something you get a real [indiscernible] out of it. Obviously, we don't want to get our hopes up too much on this. But if Kami makes the go decision on this project, it immediately becomes our most important largest royalty assets like literally overnight, and we expect to get some -- at least some signals one way or the other over the next few months. So very important potential asset. But it's not all that we have in Labrador Trough. We also own through a holding in Labrador Iron Ore Royalty Corporation, essentially, which is a pass-through vehicle for royalties from the IOC mine. We've been seeing some interesting things out of IOC in the past year or 2. Rio Tinto was the parent operator there. There's certainly been a big uptick in capital investment at the mine site. It was pretty widely known a few years ago that Rio was intending to sell this asset. But now all of a sudden, they've turned and become investor. So capital investment budgets have gone up. They talk about growth to some degree, but it doesn't seem like it's big growth at this point. It really at least has more to do with sustaining and keeping the long-term operation up and even some of the investment being directed towards decarbonization. But within their brand or scheme of things, Rio has definite problems in their system with grades and quality of deterioration overall. And can't put words in their mouth, but I would be surprised if they're not considering significant expansion opportunities at this site as well. And then beyond that, Altius has other earlier-stage investments throughout the Labrador Trough, including a project called Labrador West Iron that we recently ended into a company called High Tide and this is like I described it as an advanced stage project with several pretty exciting drill holes, but not at the stage that it put Kami right now. Again, our bets are long for the Labrador Trough or investment horizon, we're into it for 15 or more years now and when we think about it, we think about it in terms of 50 or 100. So day 1, potash, the chart here really on the bottom just shows compound annual growth of the potash market over time. So last year, this market hit about 70 million tonnes. And if you just continue at that growth rate I would couple out to the end of the decade. That market will have grown at 90 million tonnes. So about 25% or 30% market growth ahead of it. There's obviously lots of things going on in the potash market, not least of which has been the disruption of huge chunks of global supply out of Russia and Belarus, some estimated to be roughly 40% of the market that's currently maybe or maybe not with us for the near, medium or long-term. What it does is it's created an incredible opportunity for the operators of the big potash mines in Canada. Not only is there a market hole that needs to be filled for some period of time. I think what it's also done is really just put a spotlight on how important those assets are like how valuable they really are that means they're required to feed the world but where else can you really rely on that. This is not an optional material. We really need this stuff. So again, we've made this comment before that, we think these are the most important mines, of any type that exist in the world. And then by extension, we think that our royalties are the most important royalties of any natural resource sites that exist in the world. Our royalty revenues from potash has certainly been hedging up. Most of this has been priced over the last couple of years. And This is even before really the bulk of the issues in Russia and Belarus emerged. Yes. In the first quarter, our revenue was almost $10 million, and for comparison in the entirety of last year. It was about $20 million. So obviously, things are moving along. Really just wanted to point out on this chart that -- so this is U.S. Midwest prices as a proxy, that's the blue line. And then the green line is our realized prices. We often get that question from investors, why it was your realized price looks a lot lower than the market. There's just a basic lag. If you look pretty much in any period here. So this would have been the price in that quarter. That's the realized price this quarter. There's the average price that quarter, there's the realized price. So you can just see that. So just I think most people are getting that now, but anyway I wanted to point it out. The price part is great, but really where we get excited is thinking about long-term volumes, that's what countercyclical -- as a countercyclical investor, what we're really aiming for. We want good prices to happen periodically, but we really -- what we really want to have happen is for those better prices to result in incentivizing operators to grow out long-term production volumes. So in the last little bit, we've heard -- we've had really good signals with probably the best term I can use from [ board ] operators of our mines, Nutrien and Mosaic about plans to increase production rates from here. And what they signaled in the case of Nutrien is an increase. They're trying to bring production to about 18 million tonnes, up from 13.8 million tonnes last year, and you want to do that time frame, it's a little nebulous, but 1 to 3 years is what they've kind of signaled. And over a similar time frame, Esterhazy mine run by Mosaic is being signaled to be increased, from what would have been 4.4 million tonnes to about 6.5 million tonnes over the next couple of years. Long and the short of it is that these aren't formal commitments yet as far as investment decisions go, and I think they've got lots to figure out in terms of what they might or might not be able to do. But it results in about a 30% -- 38% increase in exposure. If they follow through with those investment plans in the near-term that's about the volume impact we would expect here. Last year at Investor Day, we talked about that growth rate has been steadily increasing, but obviously, things have really accelerated with recent events. And that's the kind of impact if they do achieve that signal growth that we'd expect here. So that's how are attributable to -- would have been in the 1.6, 1.7 range last year would shoot up somewhere in the 2.2 range. This is where it gets really interesting, though. So -- the orange line is the nameplate capacity of all the mines that we have royalty exposure to. Last year, there's a sort of a long-term historic growth rate in potash that if you project and assume that these mines held their current market shares, we project that they would reach nameplate capacities somewhere towards the end of the decade. But then we were noticing that over a shorter time frame that these mines seem to be ramping up, they were gaining market share and it's ramping up a little faster than global demand. So that would put things here. If you look at what they've just signaled, there's 2 million tonnes of capacity left between nameplate and where that production level would sit at. It takes well, at least the last cycle when there was investment in growing out nameplate capacities, it takes about 7 years from making the investment decision to actually getting that product and having it available to put in the market. So -- if this is the scenario we're looking at, they're already too late. They've already missed the shot here. So when you think about that 28% global market demand at normal rates globally that we've seen going out to 2030, these mines won't have spare capacity to feed into it. And the time frame with 7 years from investment to when you can make it happen, it's already too late, which really begs the question of these operators just basically say BHP, you can have it or are we closer than a lot of people think from big investment decisions out of these big Canadian mines to grow out their nameplate capacity. They won't be able to meet the short-term problem. But in the bigger picture, are we closed. And that would really matter to us. These are incredibly capital-intensive operations. So as a royalty holder, we just get that benefit of all that potential volume growth long-term without the capital cost? And they can certainly do it. The average mine lives we're talking about here at current production rates would be, again, hundreds to thousands of years. So when somebody looks at -- an analyst looks at the value of our potash portfolio, I don't know, maybe someone who can tell me what the number is. What you do is you take current production rates and then you run it out over a period of time and you discount the value of that. So I don't know how much at whatever discount rate the revenues for year '17, $138 million attributed to current net present value, but I wouldn't think very much. But again, the minute you start to increase that production rate with these super long life assets and bring those cash flows forward it can have really, really dramatic impacts. And this isn't hypothetical like these are the best mines in the world. They're essential to the world. And there's a great price to incentivize this growth. In fact, I think we're almost at a point where the operators will be challenged politically if they don't do this like we're almost at that point. That's how important these mines are. Anyway, I've probably already speculated too much there, but we're pretty optimistic that in the fullness of time, and this is how we've always described it that every time we look at these things over a 10- or 15- or 20-year snapshots, they're just going to be way more valuable than they were the last time we looked at them and really playing out. [indiscernible] last year, we did the math on this. We just went back to the last cycle and looked at the real capital cost and then we look at Janssen's numbers for Greenfield. Brownfield, we thought it was around [ $420 or $410 ] or something last year in last year's Investor Day materials. And Greenfield was like well in the 8. But then your guess is as good as mine as what's happened to capital cost for the past year. Like even to get to the -- like trying to ramp up that remaining nameplate capacity, I think they're a little bit freaked out. I don't know if they can get mining machines. They haven't made of steel, and I don't know hopefully, they don't come out of -- So like again, there's real challenges. You just -- in more so than almost anything else that we're involved with, you really just can't snap your fingers and make this stuff. Show you can't alters your incentive price give us the potash. Here's your incentive price and the response is going to be okay. We'll do our best to get it to you in a decade -- that for supply chain. Base metals, and I'll start to zip through because I know people have got places to be. Chapada is that now clearly our most important mine royalties as far as base metals battery materials goal. We bought this one in 2016. And what really drew us to this asset was the upside potential for long-term resource expansion, future higher production rates, a longer life, all those kinds of things. And that was the geologist in Australia. That was -- we really, really got excited when we went to this project. We love the fact that we were getting an opportunity to buy the royalty when copper was $1.60 a pound, but what truly excited us was the upside. So over that period of time, since 2016, total resources have grown by almost 50%. So it's added, obviously, it's the mine life. And it stimulated the new owner. At the time it was owned by a gold company, now it's owned by Lundin Mining, it stimulated that the group to look at expansion options. And they have started to signal around about 25% expansion. We'll hear a little more on it later this year. And so that was kind of going into the year where we were that's -- what can go right this year on that list, we're thinking, okay, we're really going to look for that to see what Lundin comes with as far as resource growth and expansion and those sorts of things. But we were surprised because the real exciting news was not expected, it was -- it was not expected, but it was still a surprise. It was a new discovery at a target called Sauva. We were actually up there on the site visit. We saw the first holes from a thing called [indiscernible], and it was really strange or had no gold in it. So the gold operating company at the time was not that interest that we were losing our minds over. We actually tried to buy the land separately from the royalty from Humana at the time. We tried to get at those lands then they just wouldn't do it. Anyway, it's I think this could be really important for us and for Lundin for that matter. And the reason is that this new zone -- and again, it's got a lot -- there's a lot of work to do to prove this out. It's considerably higher grade than it's currently being mined. I think last quarter, head grades at Chapada were around 0.23% copper and intercepts [indiscernible] 0.6, 0.4, 0.44. So to me, it's like at least notionally, at this point, creates a couple of options for Lundin here. A, they could simply start to either mix this ore in or run this ore through the current infrastructure and by virtue of having practically twice the copper grade, notionally anyway, you would produce twice the amount of copper just by shifting your ore source. That may or may not be technically or practically feasible. But another option, particularly as this plays out with some scale and it certainly seems to be taking on scale. I think they have to consider maintaining the current operation here. So the loads and load the resource here, it makes good money. We'll continue with their current mine as it is here, and they start to look at something like this as a whole new production center on the project. Either way, either one of those scenarios result in potentially anyway significantly more pounds coming through from our stream interest. We think this one is pretty important. Early days, but really exciting news. Other good news from the base metal side this year, and I should preface this in case anyone doesn't know, we will lose our 777 royalty revenue later this year. It's very close to closure, which is part of the reason -- a few years ago, we made our investment in buying a royalty in the El Domo project. So this is [indiscernible] project in Ecuador, which is a similar copper, zinc, precious metals rich VMS deposit. So big news from that in the past few months was an announcement that they have secured full project financing with a package put together through a stream agreement with Wheaton Precious and offtake through Trafigura, I believe. There's still some milestones left here. The biggest one would be final permits and clearances from the Ecuadorian government. But assuming that, that goes to schedule would be looking at our next new royalty kicking in somewhere in the late 2024 period. So -- but that project finance package, I think, particularly in this environment, was a very big hurdle and so big kudos to Christian, Sam and the rest of the team. Voisey's Bay, can't -- not have a slide on Voisey's Bay. This was our original royalty bought back in 2003. And even before that, land staking preforming Altius was ultimately what led to the formation of Altius. But what's happening now at Voisey's Bay is that got a mine plan that extends to about 2034. So recently, they've gone from -- transitioning now from mining the last parts of the Ovoid open pit, started production right here at the Reid Brook mine are about to start production at the Eastern Deeps mine. And so yes, based on reserves or the reds and the dark blues, they've got a mine life that takes into about 2034. There is a lot of room. This is the forward-looking statement. There's a lot of scope, we believe, for this mine to go for much, much longer. For comparison, so that's the mining depth of the current plan, and this is the current mining depths at Sudbury. Look at this one. That's a whole that would be about 2.5% nickel or equivalent to 7% or so copper over [ 50 meters ] in here. So again, we think there's a lot of upside. The other thing that was neat about this project this year, Voisey's has a pretty low carbon footprint as far as nickel producers go but it signed or the operator here Vale for all of its Canadian operations signed supply agreements with both Northvolt and Tesla, a trend I think we'll really start to see a lot more across the mining industry and the next little bit. Somebody is going to have to motivate these mining companies to write some checks and start breaking some ground. I think it's going to have to come from the likes of these. Okay. This is the last part for me. But here we are, there's a [ valid ] diversified mining royalty company. You've been beaten tables for years and complaining about why precious metals royalty company shouldn't be valued hired and non-precious metals company, in fact, it was better. There was positive reasons why it was even better to be a diversified binding royalty company. And we turned around and looked at ourselves a little while ago and realized that we built the precious metals royalty business. So just to talk a little bit about that. Huge development for us. When we acquired Callinan, we inherited a royalty interest in a project called Silicon, it was through a grubstake agreement that they put together with a company called Renaissance. Renaissance went on to sell the property to Anglo Gold, who has since gone on to make what certainly seems to be shaping up to be a world-class gold discovery in Nevada. So numerous zones so far identified a resource published just a month or 2 ago what's called Silicon Central of about 3.7 million ounces, but also other zones, Merlin, [indiscernible], Maverick that we recently showcased on a site business. So Lawrence is here, he is just back from there. Lawrence has got a pretty -- tall fellow, he's got a pretty big wingspan, but I can tell you his arms aren't wide enough for how excited he was when he came back about how many ounces he actually think will be on this property when all was [indiscernible]. So there's where the 3.7 million ounces more or less. That's the footprint we envision that that's calculated from that was drilling, I guess, up to what Lawrence?

Sometime last fall. So the resource was dated by December, but they've been drilling ever since then.

Yes. And it's by all accounts has been continuing to expand since then. And there's also this thing called Merlin, the drilling footprint of which is significantly larger than Silicon. We expect first resource out from this year. But anyway, in terms of the overall mining royalty world, world-class discoveries on gold mines in Nevada, probably about as good as it gets as far as how things get valued in the world. It's something we're obviously really, really excited about. So from this, we started to think about -- well, the next slide is to just point out that Silicon is expanding laterally, but also there is something pretty exciting happening at depth. The highest grade mineralization is what we're seeing now at the bottom of the mine. They talk about total vertical extent of high-grade [indiscernible] has not been constrained by drilling to date. So again, very big system. It seems to be shaping up there and incredibly citing new discovery. And obviously, what we're trying to suggest here is we think we potentially have a very, very, very valuable royalty on our hands. Anglo has been quite aggressive. They're talking about first production in 2020 -- by 2025. Initially production rate, you're already trying production numbers around, talking about more than 300,000 ounces a year. I saw the CEO recently at a conference who couldn't say the word conservatively 300,000 ounces and off. So I think, again, pretty early days there. Related to this or somewhat related to this, we also are -- there's another royalty on this project it's held by a company called Orogen. So we have a 1.5% NSR, Orogen has 1%. But on a fully diluted basis, we control about 20% of Origin as well. Origin's other interest -- the main interest today is a cash flowing royalty on The Ermitaño Project in Mexico. Another part of our Gold Royalty Holdings. And then -- we talked about this a little bit earlier on, but the El Domo project, which most people see as a copper project, there is also a very significant precious metals component. So about 1/3 of the overall NSR value for that asset for us comes from precious metals. I won't go through all of the -- Moosehead is a project that we've held for a very long time. It's very similar in style in nature to a project that gets a lot more attention called Queensway by NewFound Gold. But similar, very exciting results coming from this project as well in a company called Sokoman. There we hold a royalty. And then more broadly speaking, loads and loads of royalties on precious metals exploration projects that come from our Project Generation business. A lot of those are in our own province in Newfoundland, but also throughout the world. There you go, Altius has a precious metals royalty business. I mentioned that we had a strategy session recently with the Board. And obviously, this was one of the topics like what do we -- what does Altius do with the precious metals, assets or a precious metals royalties business. And it was generally concluded that really doesn't fit with us on a long-term basis that it's not the best way to create value for our shareholders to simply have these revenues eventually build up and become part of our broader revenue profile. So we've got work to do there, meeting only happened a week or so ago, and we've been pretty busy ever since. But generally speaking, I don't know how it plays out, whether we look to sell this precious metals business or if we look to leverage it or swap it into non-precious metal royalty assets or maybe vended into another company so that precious metals business becomes something like the way we hold our renewables business as a major shareholder, all of those things are to be determined. But it's obviously a really common question we've been getting from shareholders lately as the silicon story has unfolded, where does this fit? And I guess -- at least on [ first loss ] our view is that one way or the other we will most likely be divesting it because we think there's many ways for us to generate more value for shareholders than have it sitting within a big diversified mining royalty portfolio. Pretty sure. That's all for me. And we do questions now for, are we going to do, again, and then we'll have the other speakers come up.

Yes. Sylvie, we can take any questions on the call and questions in the room as well. .

Thank you very much.

[Operator Instructions] No phone questions at this time.

With respect to the permit for silicon, they're trying to cover the whole land package, are there any concerns they can make your site visit with respect to permitting any sort of [indiscernible] growth or that may be a concern perspective?

Yes. So the -- they're doing it in piecemeal, they've got each deposit, if you will. Each project has its own plan. I understand it has its own budget. And there's not -- no, they haven't pointed a lot of concerns. I think there was some mention of some Corvus that was an issue and there's not a lot of obstacles there to permitting. And they're going to -- they're being very aggressive here. It seems like North Bullfrog is planning is well underway there. And I think for AngloGold, it's part of their strategy is to get that going to demonstrate that you can permit projects in the neck of the woods and then they'll move on to silicon and potentially Merlin, as they've described. So...

It wasn't part of the feature of acquiring Corvus to the extent water rights came with that acquisition.

Yes, they have -- they say they have more than -- more water rights than they need to build North Bullfrog. And again, they've indicated there's other water opportunities there should they need additional water. So I mean, there's power there. There's a transmission line that runs down the highway right through the project. I mean, there doesn't seem to be many obvious obstacles right now. So it seems like an overall great project. I mean, I think it's impressive to see how quickly they've actually gone from a discovery to talking about building mines here. In the world these days, it's got to be a bit of a record right now. So yes, they seem pretty firm on 2025 for first gold.

[indiscernible]

I can't speak to the specifics of exactly where they are or what they need. Again, silicon...

Geological field trip, it wasn't part of our -- we didn't exercise our rights for like a site visit around the royalty, where it's part of a broader wet land permits are going to be initiated.

No. It's an extremely arid area. And again, there's always obstacles, I'm sure, but I think you're being very aggressive to work through it. The Corvus data also gave them years of background environmental data that buys them probably a few years that they normally would have to wait to acquire that, that baseline data. So they've already got that. So again, there just doesn't seem to be many serious obstacles right now for them.

Knocking on wood.

Absolutely.

Yes, I don't know if there's a Bloom Lake 3 per se. There is an upgrade project that's -- have they made that investment decision? Or is it still feasibility stage? I think it's still the upgrader to take things up to direct production [indiscernible]

Right. So -- yes. So it's basically Bloom 2 is done. That study is coming and then somewhere on the heels of that is when we'd expect the revised scoping study. So there was a feasibility study done at Kami, the company didn't get the project across the line, different market conditions and timing. And so there's a lot that can be relied upon within that study, but Champion has been clear that the intended product grade from that former feasibility study is not what they'll be targeting. That was looking to try to do around a 65% concentrate, but Champion wants to take this up to 67%, 68%. So that explains sort of the revisions that are underway now. So they're basically going to come out with the results for that mid- to late next year, but I can't speculate further as to like if they like what they see, lots of time line from there or where it fits in terms of their broader capital allocation priorities. So just have to wait to hear from them. What I do know, and I've heard CEO talk about it a few times now in different conversations, is that you could literally pick his partner from steelmaking companies around the world to be their project partner to build this. So much demand and the need really from steel makers to secure that kind of product that it seems like if all of these investment initiatives have got underway, need to get funded and that presents a constraint that there are significant opportunities to partner around any of that kind of problem.

[indiscernible]

Yes. I don't see that as a divestment. We just basically kind of quasi announced that we're planning to sell our gold assets at some point near term is not the way we look at the renewables business. And again, maybe that's what happens with the precious metal component. Maybe we don't actually [ severe ] either maybe we just told it is a spin off of [ Ampco ] at some point. But yes, now the growth trajectory at the renewables level pretty feels pretty special. And something, in fact, that I would say I would look at as something that we'd probably continue to allocate capital towards and participate in that longer-term buildup in revenue growth profile. Certainly would rank up there as far as anything we see as a growth opportunity. Rank is building relation back there. Okay, I think we have a break schedule for us.

I think there might be a question on the line here. Sylvie, do you have a question?

Yes, we do have a question from Adrian Day at Adrian Day Asset Management.

Very good presentation, Brian. Listen, on your slide on the balance sheet. You exclude the Labrador Iron Ore. So I should know this, but I don't. How much is that worth now? And do you view that as a core investment? Or is that potentially a source of funding?

Well, the last part first. Really, we see -- we try to look at it as a royalty holding, not so much as an investment. And that holds up, that rationalization holds up for us as long as Labrador Iron Ore Royalty Corporation continues to sort of follow this mandate of being a pass-through vehicle for that royalty income. I don't know if you recall -- a few years ago, there was some discussion around potentially changing that mandate, which we were quite vigorously opposed to. And in fact, if they had gone ahead with changing that mandate, we would have pretty much had to divest. But as long as it stays a pass-through vehicle, we just look at it as the IOC holding is one of our holdings. Now in full fairness, when you buy Labrador Iron Ore Royalty Corporation, yes, it's a pass-through vehicle. But today, you can't just buy the royalty. It also means you have to buy their core proportional interest in the equity of the IOC mine. So we don't like that. We'd rather that weren't the case, but it is. And every time we've ever acquired shares, really, the discipline that we brought to that is we will only buy those shares when we believe the market price is less than our estimate of the net present value of the royalty only. So we'll take the equity for free, but they won't pay for us. And yes, we were recently buying.

Okay. So what's the value now? .

How many shares?

It's about [ $95 million and still $3 million]

Break time?

Yes.

Thanks, everyone. How long are we breaking for?

Yes. So we're going to have a 15-minute break.

And then I think it's Frank and Ernie up next behind. [Break]

Okay. So we're ready to resume. And at the table here, we have Frank Getman, who is the CEO, Great Bay Renewables, the Operating Co for ARR; Ernie Ortiz, who's the CEO of LRC; and Mark Zekulin.

Or you can call Zekulin, second one.

Zekulin, second one. All right. And you are the Founder...

Founder and Chairman of Invert.

Perfect. So Frank will let you go ahead.

Excellent. I'm just going to start my timer here, so I don't go on too long. I can tend to get excited talking about our business. I don't want Flora have to give me the hook down there. I thought I'd start, to begin with, just to give you an overview of our overall story, and then I'm going to dive deeper on each of these points. But at a high level, I just wanted to share with you, why I think this is such a -- it's a relatively straight forward story, but I think it's a really compelling story with ARR. And the first point being just the renewables are exploding. There's an insatiable demand, and I'll talk a little bit about that, that there's going to be massive investment required to build out the renewables and meet this demand. That the royalty model is simply a better way to invest in renewables. And if you like what you heard for the first part of this story related to base metals and potash and the like, I think there's even maybe perhaps better reason or at least as much reason that should be excited about the royalty model, applying that to the renewable space. And the next point would be that it's working. When we started this opportunity several years ago, Brian and I, or I should first say maybe as a full disclosure, I've been an Altius shareholder for over a decade, and that's how I met Brian. I was here in Toronto, we had lunch, and I was telling what we were doing and that I was [ ambered ] with the royalty model and trying to figure out how to do that in oil and gas, and it started working on it in renewables. And he said, "Well, I have this issue with my coal royalties, and I'd like to see how we can imply and put our 2 teams together." So really, in some ways, this is taking our 20-plus years experience in renewables and coupling it with Brian's 25 years in royalties, and it's proving to be, I think, a powerful combination, but it was not clear that we necessarily be successful when we started this that the market would adopt. And I think I'm happy to report that it's not only adopting it, but it seems to be flourishing. And it's a huge addressable market as time goes on, just continues to get larger. And we have a massive runway for growth. And lastly, I'm going to touch upon the barbell approach that I'm talking about and where we see the best opportunity, the best value in renewables to use our royalty financing. With this, I mentioned I'm a long-term shareholder. I guess this just highlights how we're set up ARR is a 50-50 -- is 50% owner in the company that I run, which is Great Bay Renewables. And that's the operating company for this renewable royalties business. The other 50% is owned by Apollo. And I think it's just interesting to note here, there's no special rights or preferences afforded to Apollo. It's a straight 50-50 heads-up partnership. This is to the point that renewables are exploding. And we passed the tipping point. When we started this business, I used to have to start off the conversation saying, I think this is coming and this is going to happen. It's clear it's happening the -- and I think the biggest reason and what really caused me to leave being a developer and saying, I want to get into using basically on the financing side and spread our knowledge and expertise over a larger opportunity, I think, looking at the royalty model than being a one-off developer was that we've passed the tipping point that if you're not building new renewables today to meet increased electricity demand, you're no longer making economic decision. And that has changed in the last -- probably 24 or 36 months. And so that's really what's driven this massive inflection point. You can see here that the -- we're 15% renewables today, need to be at 90% plus by 2050. And with that is going to be a massive investment in renewables. And one of the things that there's been massive innovation on the technology front with renewables, but there's been very little innovation on the financing front. And we are one piece of that. I think there's going to be continued innovation on the financing front because we're never going to meet the build-out that everyone wants to achieve on the renewables front, if we continue to just use the same project finance tools that we've been using for the last 20 years. And the other thing I'd note is that we're trying to electrify everything. As Brian noted, in transportation, in power generation, HVAC, manufacturing. The way we're going to reduce our carbon footprint is electrifying everything. Well, we don't match the growth of renewables with that electrification of everything, we're not going to achieve our carbon reduction. It makes no sense for everyone to be driving EVs if we're going to -- if we don't grow our renewables base at the same time. So this -- I'm not going to spend too much time on this slide. This just shows you the reasons why you're all here because you are familiar with the royalty model. I'm not going to jump into it. But I think it's interesting to note, and I'll talk about it here. This is what we call our bluebird value or the embedded optionality that you get inherently by being a royalty owner. I feel like this opportunity with renewables is as big, if not bigger than maybe some of the traditional resource sectors where you have royalty model. And it's because Brian has taught me that resource life is a key determining factor in that embedded optionality. While this resource life on the royalties that we have is in perpetuity, right? This is not a declining resource and therefore, we feel like this value, this embedded optionality in the renewable sector is a huge potential upside for our royalty portfolio. If you think about it, we're high-grading these opportunities. We're building these projects on the best resource, the best solar, wind resource and they're already connected to the grid. They're going to continue to invest in these locations. It's getting harder. We're seeing it already today. Whether it would be nimbyism or permitting or just interconnection delays. It's getting harder and harder to site and permit and build these locations. So when you have royalties on locations that are already operating, they're going to continue to invest in those for the foreseeable future. Another way to think about this, and I like to think of this as by being a royalty holder on a renewable portfolio, it's basically a call option on the future technology associated with renewables. And I think that's a bet that will pay off handsomely going forward. There's already -- I know in the solar world, they're looking at different materials and things, they are talking about step change improvements in solar panel technology. It's still in the labs today, but that's going to be coming. And we're not talking like incremental 1% or 2%. We're talking step change improvements and being able to harvest that energy resource. And it's going to be -- you're already connected to the grid. You don't have permitting issues. It's going to make sense for them to invest and deploy these new technologies on existing locations. So we will be the beneficiary of that with none of the costs. Higher electricity prices, we're already seeing that. Colocation of battery storage. When we started this business, batteries were not economic. People were talking about it. Now you don't see a solar project being proposed today or very rarely see when being proposed that doesn't have associated battery storage, either being deployed upfront or factored in and actually having the land already carved out where they would put it, how they would connect it to the grid already being thought about upfront. And if it's not associated with the upfront, they added after the fact that would be pure upside to us. If they do -- if it's planned originally and when we're making our investment, then that would be factored into the original base investment that we make. And I think Brian mentioned the carbon credits and things. If those come in after we have a royalty on our project, we would be the full beneficiary of those. So this is the point where I say it's working. We have royalties on over 3,500 megawatts. Starting from 0, this is, I think, quite an achievement over the last couple of years. We've deployed or committed to deploy over $230 million in renewable royalties. We have 16 royalties today with 9 top-tier sponsors across 5 states within 4 regional transmission areas. This is -- it's about 70% wind today, 30% solar. Solar is quickly catching up. I expect that to be 50-50 here in the next couple of years. And then I think solar will probably overtake wind just seems like that seems to be there's much -- many more locations right now that are seem to be in the pipeline for solar than wind. Offshore wind is something we get asked about. We don't have any offshore wind investments today, but there's no reason that our royalty financing couldn't be used in offshore wind. Those are big single projects. So I think it would probably be -- it wouldn't be at a developer stage. That seems like an awful lot of risk that probably wouldn't fit our investment criteria. But once it's proven up and they're looking for capital, that would be something that we'd be very open to looking at. I love to point out on this slide some of the names of -- like I mentioned, when we started this, I was cold calling, I must have made 150 cold calls, just calling people that I knew and associated contacts in the industry. As I mentioned, we were developers. I don't think you could have started this business just being a Wall Street financing person because I'm not sure you would have been able to get people's attention. So based on our contacts and relationships, people thankfully took the time, listened to us. We were able to build this out. And if you look at some of the names Longroad, Northleaf Capital, WEC Energy, Copenhagen Infrastructure Partner, NextEra, Leeward, this is -- these are the who's who. This is a top-tier blue-chip counterparties. And these are our long-term counterparties for these royalties. So this is the kind of -- the credit risk that we have is these are top-tier players. So not only we're getting adoption, I think we're getting adoption by some of the best counterparties out there, which I think bodes really well for further adoption of our royalty finance. So this is a relatively a new phenomenon. I had been for the last 10 years in power, the prices had done nothing but gone down. And just in the last 12 -- literally 12, 18 months, we're starting to see things turn around, and we're starting to see a fairly dramatic increase in power prices in all regions across the country. And as Brian has telling me royalties love inflation. So we will be the beneficiaries on our royalties of these higher prices. And the other thing that these higher prices, wholesale prices are producing, is a change in the sponsors, the owners' desire to lock everything up in long-term PPAs. Because in a rising price environment, they don't want to lock down prices, let's say, a fixed price PPA over the long-term in a rising price environment. So they're wanting to leave more of the offtake to merchant pricing, the merchants just market pricing, what we call in the power world. It's a scary thing. They -- so they had to give it a special name. It's just market pricing. Well, banks don't like merchant pricing. They don't like market pricing risk. They like everything to be locked down. So these sponsors, there's a tension going on right now that these sponsors want to lead more of the output to market prices because prices are going up. The banks are saying, "Well, we're not going to give you as much." And the interest rates are going up as well. So they're not providing as much debt as they would otherwise perhaps if the thing was locked down with a 20-year or 10-year PPA purchase agreement, they're not providing as much debt. So therefore, there's a hole in the capital stack where they're having to write a larger project equity check. Well, our capital replaces or supplants or supports that project equity really well. So like, for example, with Longroad, we wrote a $42.5 million royalty check at the time of COD alongside the bank and tax equity making their investment. So at operations, which that opportunity was not even on our radar screen when we started this business because the cost of capital was so low because everything was locked down. Now, that project has 30% being left to the wholesale market. So there's a hole. And I'm much happier competing with replacing equity than I was initially trying to get in and squeeze my way in to fit in and knock some debt out of the way. So this is a much better opportunity for us, and it provides immediate cash flow as well as to these investments. So our total addressable market went from being just at the developer stages where we started to now literally every single project is an opportunity for us. So now I want to talk a little bit about some of the dynamics going on in the market and things that are changing and that I was at a big conference last week, and everyone was still very bullish and excited about renewables and had smiles on their face, but their smiles were starting to crack a little bit. And it's because of issues like this, where we're seeing massive backlogs in interconnection applications. And they're not simply -- they simply can't process them fast enough and they don't have the resources to do it. And the costs are coming in higher than they thought and supply chain issues and inflation. So all these issues are starting to creep in and all of a sudden, the traditional investors who've been supporting these projects and the big pension funds with really low-cost capital they're starting to say, there might be more risk in this business than I fully recognize, and it's leaving an opportunity for folks like ourselves, who are willing to look at these risks who take a long-term perspective, who have more flexible capital, who don't view these assets as simply bonds to be able to capture more of the investment opportunity. Now the cost of our capital is higher than theirs, but there's an opportunity with the whole entire complex, the expected returns in the entire renewables complex is moving up. So that's creating a greater opportunity for us. So this is just a slide that I've talked a little bit about this, but I've never put a slide together to share what I mean when I say the barbell approach that we're finding the best opportunities. When we started in this business, we were investing in the middle stage, which was with our TGE and Apex Steel, where they had a very well-established pipeline a portfolio of development assets. By development, I mean they're nonoperational. They're still at the earlier stage, but they had a very deep and robust pipeline. So we invested in those companies we said, "You can use our capital to advance these projects." But we kind of looked at their pipeline is almost like collateral. We knew we were going to get enough royalties so that we would earn our threshold return. But what's happened in the market in the last 12 months is that big institutional investors used to come in and buy single projects from Tri-Global, TGE and Apex. They now are going in and say, "I'm going to buy your entire portfolio. I'm going to make you beholden to me instead of having to compete with others to buy your projects." So the big institutions and strategics are buying pipelines and not just projects. So that opportunity has gotten very, very competitive. So what we've done is we said, "Well, I just told you about the opportunity at the far end, which is where the -- these are operating projects like our North Leaf and our Longroad investment, and there's many other opportunities like that, that were in the pipeline for us where we're investing into operating projects because there's perhaps more merchant risk or some other perceived risk or interest rates are moving up or they can't get as much debt as they would otherwise want, and that's an investment opportunity for us at that end of the barbell." Now those returns, I think we've talked about 8% to 12% range for our investment, those will be at the lower end because those are operating assets. They're providing immediate cash flow. They're less risky, right? And then on the other hand, what we're having to do and what we're seeing actually higher returns and better opportunities is to -- don't compete with these big institutions who want to buy an entire pipeline. We're going to move a little bit earlier. And we're going to back those folks who are providing the pipelines of tomorrow, the projects of tomorrow, which are very highly valued. I think one way to think about this market today is that we are long dollars in short projects. If you have a well-advanced project, there is no shortage of very interested buyers who are willing to pay top dollar for those projects. So we're taking the opportunity to look a little bit earlier. And since we were developers and we know these folks, we can figure out who's real, who's not and be able to back those teams who we believe have a great potential to provide the pipelines of tomorrow. Since it's in a little earlier stage, we're going to get a higher return than we would have when they're investing into someone with an existing pipeline. And we're also learning from seeing the high prices that people are paying for pipelines, and we're requiring that we get a little bit of an equity participation as well so that we don't just get our royalties out of it. We're also going to get some equity participation. So if you look at our recently announced Bluestar Energy Capital deal. Declan Flanagan, is maybe one of the -- the most successful or one of the top recognized developers in the entire industry. He could have chosen anybody to partner with to help back his new startup. He chose to work with us because he knew that we understood the market. We understood what it was to invest in a development stage company. And he also saw the benefit to him of our royalty model that we are going to get some of our value through royalty. So he wanted to protect his capture as much equity value as he could because he's going to see that's what he's hopefully going to monetize in the future. But as part of that, we also are participating in the equity side of things. So we're going to have 1.5 gigawatts of royalties out of that deal as well as an equity participation. So in the future, if he does monetize it and sell it for whatever these things are selling for today, we will capture some of that value as well because we're taking that risk alongside him upfront. So I think it's a really interesting way for us to earn a higher return, to get additional royalties and also participate in creating the pipelines the things that everyone watch, we're going to get invest a little earlier to help create those pipelines of tomorrow. So I think between these 2 ends, we have a significant runway, a significant addressable market, and we're looking forward to deploying capital into lots of deals moving forward. I guess that's -- I'll stop there. And if folks have any questions?

I'm just going to repeat the question for the people online. I was told to. So the question was around how do we participate in -- if we have a revenue royalty, how do we receive value from battery, when batteries are added to a project? These battery -- today, the revenue model for batteries or I guess, the investment case for batteries is uncertain. And it's really a regulatory issue as much as anything that how do you get paid for quick-start capability, how do you get paid for being that back up to the intermittency is the value of that to the grid and some jurisdictions will provide you capacity value that will provide you revenue for just being there. And we would share in that -- our pro rata share of that revenue that we receive from that capacity payment. And then the other way is that they're seeking to charge them during low periods, low-price periods and discharge them during high-price periods and we would receive our share of that revenue as well. So at the end of the day, these batteries need to generate revenue in order to make their investment case. So whatever source -- so the way our royalty works, it's a top line revenue royalty regardless of where it comes from. I mean, our CFO likes to say, "They start selling hunting licenses on some of these places down in Texas, we'll get our share of those hunting licenses." So it's whatever the source of revenue is. But your question is a good one, that it's not entirely clear, the investment case for batteries, I think, is actually because of the regulatory changes needed to pay people for that capacity value isn't always clear. It's actually behind the technology, which is interesting because a few years ago, the improvements in the battery technology have increased dramatically in the last couple of years. So basically onshore wind went first, then solar and now battery storage is catching up. The question is, does our business model support leverage or do we need to use additional equity investment now for some period of time? Well, I think that's a question Brian can help address as well. But I think the answer is that we have 16 royalties. Only 6 of them today are cash flowing. The others are going to be coming online here in the next several years. And I think we're still in an early stage to think about leverage. But if you back up a little bit and look at where we're heading and what we're trying to create, and I think we have a great start on this, is we're trying to create a broad and deep, large, diversified portfolio of royalties across numerous projects, across various jurisdictions in the country with very different counterparties. So you have I think it's going to be a highly attractive cash flow stream that we would be able to use leverage on in the future, but I just don't think we're there yet. Yes. I think that the larger checks are going to be in the operating stage on the -- those checks tend to be larger. And I think that because we're investing at an earlier stage, it's easier to give someone with a broad and deep pipeline, more capital because you feel like you're protected at that stage. So I think what we're going to see is probably, like, for example, with Bluestar, we committed $32.5 million. We're only funding a small portion of that upfront and then there's additional capital calls as they grow their portfolio. So I think it's going to be larger checks at the later end, and perhaps more backing several other teams and platforms at the earlier stage. And those I love it because those are going to be the royalties of tomorrow, which we -- we're not paying for those. The way that structure works is we provide the investment into the entity and then whatever comes out of it because there are some people who look at the development stage and they try to approach it with mezz debt or more a debt-like structure. And they try to protect themselves with covenants and with belts and suspenders and hooks and barbs. And I think that's a fool's game because all I can tell you, having been a developer is -- for me to think that I'm going to go in today and tell someone though this project is going to be successful and not get held up or this was going to be held up. I think this one will beat this one. I would be wrong. So the way we structure this with all our developer deals is we don't try to choose which projects. Whatever comes out of their portfolio, we get a royalty on up to a certain threshold. And I think that -- I personally think our model is a much smarter way to invest at the developer stage. Okay. The question was how was the mix of our PPA exposure to merchant price exposure changed over time? It was 100% PPA when we started this. The most recent projects we've seen have had 30% merchant exposure. I think, I haven't seen anything for a new project. I haven't seen anything greater than 30% yet because they still want to attract tax equity, which is trying to say we need certain cash flows for at least a 7-year period. So the PPAs are getting shorter. But that 30% is what I've seen today, although I will say for operating projects, particularly some that maybe ran into hiccups with their shaped hedges and may have some -- their hedges are not working out, they may be the way that they thought. Like it's crazy to me. When we start -- when I started in this business, we signed long-term PPAs at above market prices because you couldn't get the financing otherwise because the economics didn't work. Well, that switched several years back, but we still kept signing long-term PPAs, but we are signing at below market prices because they thought they needed to do it to get these investors to the table. And what they ended up doing is bastardizing these structures, these hedges such that they were taking risk, they didn't really fully appreciate they were taking. We saw it last year with Storm Uri down in Texas, where some of these hedges blew up, and there was actually large losses on things that were supposedly protected. Well, our capital is coming in, in some of those cases and saying, "Let's unwind those hedges." And the owners are saying, "You know what, these hedges aren't providing the insurance I wanted. The hedge ensures that I didn't get the full price today, so why am I doing this?" So we're actually talking to some folks about using our capital to pay off the hedge provider to provide more merchant exposure. And they're running the numbers and saying that they'll do better off doing that than having -- leaving these hedges in place. Yes. No, the question was with Bluestar is a one-off investment? Or is there opportunities for additional follow-on investments with some of the either projects or developers that Bluestar invest in? And there's no obligation or commitment that we would have that opportunity, but it's something that Declan and I have discussed in great detail, and he's starting to see the benefits of this royalty for the project that he's developing. So at that other end of the barbell, it may be that we end up investing additional capital into projects that Bluestar develops as at the other end of the barbell, not at the developer stage, but there's no commitment to do that. But I think the way these things happen in life is you need to just to build these relationships, you need to build that trust. And they need to see that -- I think the fact that we did one of those deals with Longroad, I think the market stood up and took notice that, "Hey, there's another way to finance these projects at COD than just doing the way everyone has done it." Longroad is a very well respected, very successful developer. Yes. So just to repeat the question was -- when we think about an investment like Bluestar, how do we think about the royalties that we get out of it versus the equity side? I tried to think of it as we get our capital back from the royalties and the equities a kicker. Like that's how we try to structure it. I'm not counting. I don't need to hit a home run on the equity to earn a return. That's a -- we're a royalty company, and I think Brian's point is correct. Oftentimes these things will happen where you make a lot of money on the equity. But at our core, I want to build a very large, diverse royalty portfolio. Right. The question is -- we don't know what the offtake is going to be. And we actually -- part of the deal with our royalty is that we don't get -- if we started going to start dictating to the developers and the owners and the sponsors what their offtake needs to be, we would have 0 business. So but I think the market is going to take care of that for us. So I mean the -- these folks are smart folks and they're going to do, hopefully, well, they also tax equity, as long as tax equities around a certain portion of it is going to be contracted just because tax equity, I joke that when I come back to my next life, I want to be a tax equity investor because they take no risk. Well, that's what Tri-Global, it's that way with Bluestar its based upon their capital cost as to grow their business. It's -- we're matching equal amounts. So we feel very comfortable that he's not going to put his own in. I should mention, I think we put this in Declan is personally investing a lot of money in this venture. Yes, I'm sorry, I took too long.

So 59% of royalty renewable -- Lithium Royalty Corporation, partly was founded in early 2018.

Correct.

A couple of little chart earlier, I hope, you were on there. I just show where the lithium price was as the company -- it's pretty lofty and things pretty excited, and I remember us talking about very countercyclical at the moment. But next thing you know potash all these projects that were capital -- apparently forward suddenly or with coal, they had no access [indiscernible] adoption curve and the issues of adoption of EV [indiscernible] it quickly turn your whole story , but we're back on track. We've got all [indiscernible] shareholder equity invested credit [indiscernible] Ernie Ortiz?

Yes. As Brian said, my name is Ernie Ortiz, I'm the President and Managing Director of LRC. LRC is the private royalty company. So that's why you may have not have heard so much about this, but we have been pretty active in this space for the last few years. I think we can skip the disclaimer soon we touched on it earlier, but maybe just to start on the team. So I initially got my head start in lithium as a research analyst at Credit Suisse in New York. So we covered names like Dow, DuPont, but also names like FMC and Rockwood, which are now morphed into Albemarle and Livent. In this role, I was actually the lead author for the Lithium primer back in 2014 for CS. And actually 1 of the top 5 lithium producers today, he joke -- the CEO jokes that primer got him financed. So I guess, proud of that. Subsequent to that, I went to an investment fund where I met Blair Levinsky, who is one of the sponsors of the venture being CEO and Co-Founder of Waratah Capital, which is a $3.5 billion investment manager. Obviously, we're very appreciative of Altius support as well. They're 1 of the leading and founding investors of the venture. And as you can see, it's a pretty diverse team. We have geologists, technical staff people from Albemarle, Senior Vice President of Albemarle, Matt Juneau is on advisory board. Constantine, who used to be the Chairman of Neo Lithium. I sit on the LME Board for the Lithium Advisory Committee. The LME is trying to bring an exchange-traded product, and I sit on that board with Albemarle, Tesla, Ford, Pilbara and a few other participants. And of course, Mark Welling, he's on the Board of Lifecycle, which is North America's largest recycler. So overall, we think we have a very solid team head start in the space. No one has really looked at lithium full time like we have. So yes, we're very proud to really become thought leaders in the space. And now in many cases, royalty companies and producing companies want to align themselves with us for -- to get access to that human capital that we've built over the last few years. Before we go into LRC itself, I thought it would be a good idea to touch on the lithium market. And to give you an idea on why we're so excited about the future and what we see going forward. So on lithium itself and why we're so excited. So lithium by default is the lightest metal on the periodic table. So it does have lightweight benefits that other metals can't compete with. And the other element going forward is that it's an excellent charge carrier. So you really can't compete with lithium from a mobility standpoint, and it's really the enabling agent of the electric vehicle era. We've spoken to several scientists, PhDs who look at various battery chemistries. And they all generally agree that for the next foreseeable future, lithium is essentially in every chemistry out there. So the risk of obsolescence is very, very low. And as you can see, Volkswagen has commented to a similar degree. And just to get the quote right, the International Energy Agency commented on this as well this week. They mentioned that "There's no commercial alternative battery chemistries available at scale today that meet the performance of lithium-ion batteries." And that was with regards to lithium. So yes, we think many outside parties agree that there is no viable alternative. We do think that's for storage, you could see other potential solutions. But even then, lithium is gaining 70% of the market. So overall, we're still very bullish about the prospects for lithium. On the market, as Brian said, it's been quite a bit of a roller coaster over the last few years. Last year was a fairly good year. The market grew by 55% to around 500,000 tonnes and the market is forecast to grow by at least 30% this year. So more or less, we're talking about 650,000 to 700,000 tonne market in 2022. The current consensus forecast is to get to 3 million tonnes by 2030. So more or less, you're talking about a 25% demand CAGR looking out for the balance of the decade. And just to give you a sense for how much of a tall order that will be to supply. So currently, SQM in Chile produces around 140,000 tonnes of lithium carbonate per year. This is an operation that's been in production for 30 years. And had probably one of the largest single investments in the world for lithium. So we would need 21 of those new facilities as replicas to meet that demand. So our thesis coming into this was a supply will take longer, cost more and in some cases, not happen at all. So you have this natural supply constraint that's going to keep supply/demand relatively tight. And as Brian alluded to it earlier, EV penetration and demand continues to accelerate. And in many cases, it's exponential. So in the first quarter of 2022, we had 16% of total sales in electric. That was about 1% in the second quarter of 2017. As the year last year was 8% penetration globally and the forecast right now to reach 50% by 2030, 87% by 2040. It is now not uncommon to see German monthly sales be around 30% to 35% fully electric. In China, roughly 20% to 25% of every month is now fully electric. And we are very bullish on what the potential could be in North America. I'm sure you guys have seen a lot of announcements of battery plants here in Ontario in the Southern U.S. that we think North America could accelerate beyond what expectations are out there. Morgan Stanley estimates around 7,000 gigawatt hours of battery capacity by 2040. And that would imply around 5.5 million tonnes of lithium demand, which is 11x 2021 levels. Interestingly, UBS reiterated their call this past week for continued accelerated adoption for EVs. So they're calling for that market size to be reached by 2030. So as you can see, pretty varied demand forecast out there, but overall, you do kind of have that hockey stick figure, which lends well for LRC and our continued volume growth for both the portfolio and the market. So naturally, supply is taking longer to come into the market. Demand is growing exponentially. So Benchmark Minerals is one of the key consultants in this space. They are calling infrastructural deficit starting this year. And just to give you some perspective, there is a time mismatch between the upstream and the downstream. So it can take around 2 years to actually build a battery plant and start producing, whereas mining takes 5 to 8 years and sometimes even longer to get up and running. So at least for the foreseeable future, the near-to-medium term, we do have high visibility on what projects will and will not come into production. And we are very confident in a very tight market for the near-to-medium term, and obviously, in the longer-term, it has less visibility. Either way, just to give you another quick anecdote, starting from this year, we'll need 160,000 tonnes at least of new supply to come online just to meet demand, and that is 8 new commercial plants essentially arriving on time at the required specifications. And it takes around 6 to 12 months to get specked into a battery supply line. So there's still a lot of potential lags that can happen on supply that again will lead to pretty tight market conditions. So on lithium pricing, which I think is getting a lot of press in the last few months. 2020 was a pretty lonely period in the lithium space. Lithium prices bottomed in 2020 at around $6,000 per tonne for lithium carbonate. The last spot price in China is around $68,000 per tonne and SQM recently reported earnings of around $38,000 per tonne for the lithium business in the first quarter. They reported more revenue in the first quarter of 2022 in the lithium business than all of 2020 and 2021 combined. So as you can see very elevated pricing and very bullish for LRC and lithium overall. The million-dollar question is, is this sustainable? And what's the longer-term price? So our view is that these tight market conditions have shifted pricing to an incentive price structure. Clearly, we're no longer in marginal cost territory. But on that, we are seeing both CapEx intensity and operating costs continue to increase. So it was not uncommon for OpEx for spodumene producers to be in the $600 to $800 per tonne range a few years ago. And now we are seeing projects get financed that likely could be in the $1,000 to $1,500 per tonne. And then on the carbonate side, CapEx intensity even for majors and juniors has increased to $20,000 to $35,000 per tonne. And that's pretty much across geography. China is still the cheapest CapEx intensity in the world. But as we are seeing more localization and the move to reduce emissions and have more of a domestic supply chain in both Europe and in North America, we are seeing those costs continue to increase. So it's not uncommon, like I said, to have $20,000 to $35,000 per tonne type CapEx intensities and coincidentally enough, that's where the contract prices seem to be shaking out for this year with SQM kind of reporting that new evidence. And even Albemarle reporting this past week on increasing their price guidance. And we just did a tour in Australia of several lithium projects 2 weeks ago, and it does seem like the producers view is that $20,000 to $35,000 per tonne seems like a reasonable long-term price. So on LRC, as Brian said, we were founded in 2018, and we've been busy since the get-go. So we're very proud that since inception, we were a cash flow paying company or a producing company. Our first deal was with Galaxy Resources Mt Cattlin mine, that's one of the few mines that was in operation at the time. And even today, it's one of the lowest cost operations in the world. Now, it has merged with Allkem, which was the merger with Orocobre. So it is a top 5 global producers. So a very high-grade counterparty and operator on that mine. And as you can see, we've been very active. We have the Zijin Mining royalty, which was the ex-Neo Lithium royalty. They just commented that they're going to be in production in 2023 and are already looking to do a PFS to get to 50,000 tonnes of production annual lithium. So a lot of embedded growth in those royalties. And 2 other ones that I wanted to point out are the Core Lithium and the Sigma Lithium royalties. So both of those producers or developers are in construction. Core have guided to producing in September of this year. And Sigma Lithium is in construction as well and likely to start production later in the next 6 to 9 months. And the key fact here is that I think it shows our foresight and due diligence process. All of these companies have brand name offtake. So Core Lithium has an offtake with Ganfeng, with Yahua and with Tesla. And of course, Sigma has offtakes with LG Energy Solutions, South Korea's largest battery manufacturer. So you can tell that our royalties are specifically suited for that EV supply chain, which is where the growth is coming from. And not to mention, while royalties are our focus, we have been able to extract different types of instruments to get value for LRC. So we do have several offtake agreements, and certain equity positions and project interest positions that we think we can monetize and deliver more value. And just to give you more sense on the offtake, we have an offtake with the Moblan mine, which is operated by Sayona Mining and they have a 17 million-tonne mineral resource, 1.4% grade core screened ore body. So we think that's going to be one of the key projects to be developed in Quebec. Yes. So just more of an overview on LRC. So we are focused on top line revenue royalties. We think this is the best way to capture this once in 100-year type thematic. And like I mentioned, lithium is the key way to play in raw materials, most of the growth for lithium is EVs as compared to other potential minerals in the space. 19 royalties on top-quality projects globally. Like I said, offtake with Tesla, with Ganfeng, with Yahua, some of the top lithium carbonate hydroxide producers in the world. We have focused quite heavily on quality. So I think a key hallmark of our portfolio is that the average grade for our portfolio is rather high. So I think on a spodumene basis, we have 1.3% lithium oxide on average. And on the brine basis, it's a 700 milligrams per liter. So overall, very high-grade, very low cost. And we are also proud that Galaxy, which did maintain operations through the downturn in 2020 and was, like I said, one of the lowest cost producers in this space, whereas a few other producers actually went into care and maintenance. So we are very proud that through the down cycle, our producing royalty was able to be successful. We've also done a lot of work on processing as well. So we've done a lot of benchmarking on actual real-world recoveries. We think we found the right playbook of what to invest in. We like simple type projects, DMS processing, core screened, not to say that flotation won't work, but we'd rather have some simpler projects where cash flow. We have more visibility on the cash flow and can be nearer term and no exposure to mining technology at this present time. Not to say we wouldn't invest in the future, but I think we still need to do more work and see how the industry develops on that front. We are well diversified. No royalty today is more than 15% of our NAV, and we are overweight to very solid countries. So I think 70% of our revenues are forecast to come from Canada, the U.S. and Australia. So overall, very high-quality mining jurisdictions. Two producing projects in 2021, Mt Cattlin and 1 of our projects in British Columbia, it's actually a silica court project is our only non-lithium royalty at this time. But we do have 3 assets in construction. So we're on track to have 5 assets producing cash flow in 2023. So a pretty aggressive ramp. We do have a lot of embedded optionality in the portfolio. So we think in the -- we have essentially one new asset coming into production for the balance of the decade. So a lot of optionality even if we weren't to transact any further, even though we still have quite an aggressive pipeline at this time. And we are starting to see that our brand is taking hold in this space. So we are starting to see first look opportunities that these companies want to align themselves with us. And as a result, they want access to our network and different capital providers that we can facilitate. So we are getting very early-stage opportunities that perhaps other peers wouldn't be able to get. And then we do feel very confident that we are the first mover, and we do have a very competitive advantage in just the human capital that we've built. We know all the companies pretty much off hand and know the executive fairly well. So we can act very quickly when looking at these deals. And at this point in time, there's many of these operators that wouldn't give royalties anymore beyond the LRC royalty. So pretty much it is an irreplaceable portfolio at this point in time. We were able to capitalize over the last few years. And we still think we can get a lot more royalty. So we have 19 now. I think there's a path to getting to 25-plus by year-end, and there's still a lot of pipeline opportunities that we can continue to deploy. And I do want to touch on ESG. So LRC is a signatory for the United Nations Principles for Responsible Investment. We did have an ESG criteria even before we joined the UN PRI. So this is something that we're very focused on. That's why we have favored investments towards dry stack tailings as opposed to tailings dams. We do encourage solar as opposed to diesel. And of course, it is something that is being increasingly viewed on in this space. And also, we think investment in lithium is the fact that ESG given its decarbonization initiatives. So just to recap, we think we have a 5-year head start across the space. No one has really looked at lithium on a full-time basis like we have. So we've got a lot of knowledge and a lot of connections that are hard to replicate. We have some top class team with people from Albemarle, people from Neo Lithium and several other disciplines that lends itself to being able to execute efficiently and proactively. We do have a very aggressive pipeline and we think we can execute and that continues to grow. A lot of technical expertise. It is a nascent industry. So 500,000 tonne market today at only 8% penetration. So we are of the view that business is going to be a 3 million to 5 million-tonne market within the next decade or a little longer. And overall, we've proven we can do it. I think in 2018, it was still to be determined. But now we have a playbook. We had done 19 royalties. We've done both primary royalties and secondhand royalties. So while we've seen quite a bit of different scenarios and have been able to capitalize no matter how they come. I can stop there and take any questions.

Sure. I think at the onset, there was some competition from private investors. There was actually some family offices that we're looking to get into the space. Clearly, in 2020, we are probably one of the only games in town. Now the key competition would probably the equity markets. But as I alluded to earlier, LRC has also made several equity investments in conjunction with the royalty. We'd only do equity investments as part of a royalty transaction. So overall, I think we've been able to expand our overall capital base and capital providing abilities to issuers. And not only that our brand has grown over time. So we've been able to continue to grow our competitive advantage and kind of overall our offerings. So it hasn't really slowed down. The strength in the equity markets hasn't slowed down our activity levels. But yes, I would say at the moment, probably our biggest competitor is the equity markets. Yes. Good question. So we do have exposure to the lithium carbonate through our Zijin Mining royalty. So they are looking to produce the carbonate plant there. And it's something that we're not opposed to. I think the bias towards spodumene and hard rock has been just that near-term cash flow visibility. But now that -- and I guess, Brian projects do have a higher CapEx profile in chemical projects as well, whereas before we were the only kind of game in town. But now that there's more capital providers, it has derisked those larger chemical operations, so it is something that we're interested in and would look at. Right. Good question. So just for everyone on the line. Do we fund our capital investments publicly or privately or what's the next step there? Yes, a good question. So -- we have -- we do think we are at an appropriate scale and diversity now to potentially think about tapping the public markets. It is something that we're evaluating internally. No major decisions have been taken yet. But I think with the strength of the lithium market, I think all options are on the table. I think we have -- we are seeing interest from both private and public entities on how to proceed. So yes, I think we're still gathering information at this stage and -- but it is something that we're heavily considering.

[Audio Gap] change in the sense new technologies that are meant to replace technologies that produce a lot of carbon. So there's a solution in that they're coming out with new technologies that will see less carbon actually produced. I also wanted to introduce Mark with Invert because this is the other side of the spectrum. The way or reduce its carbon impact or its carbon footprint is: a, you stop produce, you produce less of it, but then there's the other side of that. And can you pull some of what's already been produced or what still has to be produced in the future out of the atmosphere. So we're invested here as well with Invert. It's a newer investment. We didn't prepare slides. We knew we had a full day, but I fully expect that by next year, we'll have lots to add in here. But I did want to give Mark the opportunity just to take a few minutes and describe what it is that we're doing here. Don't give away too much secret sauce at this point, but...

You got it. It's like the pre drinks, 2-minute teaser to make people want to come talk to me. So yes, simply put, we are applying the streaming model to carbon credits. I enjoyed both presentations. I really like listening to the ARR presentation, because this is some years ago, you looked at the market and you said, gee, renewables, obviously, something huge is going to happen here. Not quite certain how it's going to shape out, pretty certainly can apply a streaming royalties model to this. And fast forward a few years, it's working and very successfully. We are those a few years ago, right? If you look at, as Brian said, companies are making all of these massive commitments of what they need to do to get to a carbon-neutral position. They have to change what they're doing. They have to move towards clean energy grids. And then for everything else, they need to buy offsets. They need to say, "Yes, we're still putting out emissions here, but we're funding these projects over here via carbon credits, and it balances out for now while we continue down our trajectory." So a huge opportunity in the multitrillions of dollars by 2050, and we're excited to leverage the experience in this room, have a team in place already, a great pipeline. And if you want to learn more, over a drink.

If you want to [ call for ] anybody on the call.

[Operator Instructions] Currently, no questions from the phone.

Okay. Well, I want to thank everybody who joined on the webcast and conference call. And for everybody else, the alcohol scheduled to arrive in 10 minutes. So we're -- we hope you all stick around and talk to us in the next room. Thank you.