Clean Energy Transition Inc. (GDO.F) Earnings Call Transcript & Summary

Hi, everyone. This is Sean Samson from Rogue Resources. Thank you for joining our investor call. It's noon Toronto time by my watch, so we will get started. We're going to run through slides that we posted on our website yesterday, and we encouraged questions to come in on the questions e-mail. We have a number of those, which we'll get to later in the call, but I'm going to run through the slides that are available on our website. So welcome, everybody. This is one of a series of calls we've been doing since 2016 to keep you updated and try to be a good, transparent manager of your company. We do this by outlining what we plan to do, and then we keep you posted on our progress as we move forward. So working through those slides, on Slide 3, you'll see that's the questions e-mail. Again, as I mentioned, a number have come in, and we will be getting to those at the end of the call. If additional questions come up during the call, please send along that note, and we'll be monitoring that as we go along. Slide 4. On the call today, you've got me on the left, that's Sean Samson; on the right, Paul Davis, my colleague, who is the VP of Technical and also a Director of the company. Slide 5, we'll be making statements about the future. So keep in mind the limitations when we make those. So Slide 6 is really setting things up. TSX, we're traded on the Venture Exchange. We've got a tight flotation, a little over 35 million shares trading. At today's value, we're in and around $3 million, which is a pretty low price based on all the activity we have going on, and we'll get into the current valuation of the company. A significant insider ownership. We think of friends and broadly described family or a family and broadly described friends as owning around half of the current shares outstanding. We don't have major institutions in the company presently. It's mainly split across high net worth individuals in Canada and Europe. On the debt side, the Stone business, when we got into that, we took on $1.8 million in relatively expensive corporate debt, which was initially a 12-month term, and we've extended that for 2 subsequent 6-month periods. So that gets us through to the middle of this calendar year. So we're paying a pretty expensive 12% on that. Alongside that, we have a vendor note back with the vendor of the Bobcaygeon asset, which is still a couple of years out. And payments start on that once we have profits out of the Bobcaygeon Quarry. And then we have vehicle equipment leases in addition. So those are all tied back in secured against the equipment. So Rogue Resources is 4 things, and we'll go through them in this order on today's update discussion. So first and foremost, our core business is the Stone business, which we've been in a couple of years now. We'll spend a bunch of time talking about that. We will also update on the noncore assets across Quartz, remaining in Timmins within Rogue. And then we'll discuss a bit about the shares we hold in EV Nickel, the nickel spin-out, which Rogue Resources owns a significant chunk of. So Slide 7. We still put this in here. This is the slide we've used since I inherited Rogue Resources 5 years ago, yes, 5-plus years ago. And when we think about our portfolio, we focus on 3 criteria. So we're not tied to any metal. We look at rock value, which allows us to compare across assets. We're looking for the sorts of assets that can make money in the ups and the downs of our price cycle. And then importantly, we are looking for something that we can try to get to cash flow within a few years. So that's also the lens that we use when we're talking about the non-Stone assets of our portfolio, and we'll come back to this. So we want to be in politically stable jurisdictions. Right now, we're in Canada. We ran into some issues in Québec. So that becomes even more important, where we have supportive mining regulations and a straightforward permitting regulatory environment. And what we're after is grade, stage and jurisdiction. So those are our things. And our intention here is to make money as miners. And I think we're doing that now with the Stone business. So jumping into that on Slide 8. So Rogue Stone currently has 3 producing quarries for which we pull limestone for landscaping. Now if you're new to the story, I'll spend some time here in the building blocks over the next few slides, no pun intended. What we have for Landscape Stone are 3 quarries, the Speiran Quarry, which we refer to as Orillia; Johnston Farm, which we refer to as Bobcaygeon. We own 85% of that. And then our most recent addition to the portfolio is the Batty Quarry, which we are operating on a royalty basis, which we call Shadow Lake. So where those deposits are in the zoom-in map is in Southern Ontario. So they're all within a couple of hours of Toronto, and they're up on what I refer to as sort of a Limestone Crescent in the province of Ontario. So that you see in the zoom-in map, the Bruce Peninsula, that extends up like the thumb on the top left of that map. And the limestone really comes down that, which is the Niagara Escarpment, and then loops around to the east and then moves off to northeast of where we are with Shadow Lake towards Ottawa. And of course, north of that is primarily the granites with the Canadian Shield. So in this limestone area, south of the beginning of the Canadian Shield, there's very nice stone, which we can pull out and sell for landscaping. So Shadow Lake, Bobcaygeon and Orillia are the 3 quarries. Now each of these are permitted to produce 20,000 metric tonnes per year, which gets us the potential to be producing and selling 60,000 tonnes of limestone per year. Now if you're new to the story, this gets a little confusing, and we noted across the bottom. It's permitted in metric tonnes, so tonnes, some people say. And then from here on, I'll refer to short tons or imperial tons because that's what the business is conducted in. So 20,000 tonnes roughly matches to 22,000 short tons. So we have 66,000 potential annual sales out of these 3 quarries. So on Slide 9, you get to see a bit of what our product actually is. So 3 broad categories for our bulk stone business. It's Armour Stone, which are really the building blocks, people refer to them as wall stone. Armour Stone on the left. And then we have Step material for limestone step, so stone that you take in the quarry and you'd stack in that middle photo to create a series of steps. And then Flag on the right. All these 3 photos are entirely stone from our quarries, which is kind of neat. So our bulk business is split across those 3. And no surprise, the way the business -- the way the products are really split is by the height of the bench. Paul will talk a bit more about that, and you'll see that as we get into the extraction. But the bulk business is across those 3 categories. So when I say Armour Stone, I'm referring to building walls, like the photo on the left. Step are usually deeper pieces with less height to them. And then Flag is the thinnest of these 3 broad categories that rounds out our bulk product. Slide 10, as you think about the pricing of the bulk business across Armour, Step and Flag, we have a couple of things going on here. One is across those products, the thickest material, so that's the height of the bench, we sell everything by mass, so by ton. And you see here, we're back to short ton because that's the way the business is conducted. And we sell them either loose, which has the prices in the middle. Or we put them on skids and then we get a premium for the bulk stone. So again, this is, and you'll see here in the next couple of slides is to just pulled out of the ground and smashed with the excavator to try to get a shape to it. And then we either put it loose on to a flatbed or we skid it and put it on a flatbed. So you see there the photos in the bottom of Slide 10, where it's a loose load for bulk stone on the left. And that's the sort of material that we would stack and we'd sell prices down the middle of the table up top. And then the skidded on the bottom right reflects the higher price for the skidded stone on the price up top. Now I'll hand off to Paul, who will talk a bit more about the operations of the Stone business.

Great. Thanks, Sean. On to Slide 11. So the limestone for landscape quarry business represents a simple extraction process. It does not require any drilling or blasting. As we explained on our previous calls, each quarry is a layer cake of the various limestone beds representing different products as we go down. We model those layer [indiscernible] from our due diligence drilling before acquiring the quarries and continue to monitor based on our actual experience over the last 2 years. The operation is now confirming our projected model, and the products are being produced as we had anticipated and planned. These natural layers within the limestone units are extracted primarily with the excavator with a flat bucket and occasionally by a loader using its forks. For the bulk business, larger pieces are shaped into the desired size and dimensions depending on the customer requirements, which you can see in the photo on the top right of Slide 11, which is a shot from our Orillia operation. All of the anticipated production will come from limestone beds within a few meters of the quarry floor and above the water table. Remediation of quarries in Ontario is a straightforward or is straightforward, where royalty is paid into a provincially reserve fund. Progressive rehabilitation of the site is required as sections of the quarry are depleted. Sean mentioned before the different bulk products and how some goes as bulk and deck loaded on to the trucks and others are placed upon skids. These different products are found at different horizons, and a single layer will generally produce the same style product across the entire quarry. Again, we saw this from our drill core, and it's included in our quarry models. One size and if required, placed on a skid, the product is loaded directly on to road trucks and off to customers for delivery, as depicted in the photo you will see on the bottom right of Slide 11. So that's how the quarry has been modeled and how the stone is meant to come out. Let's now review how we stock and equip each of our quarry operations. So let's move on to Slide 12. As you've heard, each of the quarries is licensed to produce 20,000 metric tonnes or approximately 22,000 short tons, and that's what we had in minds when we were setting up the teams and fleets. We currently have 2 core teams. And over the winter, they have been combined in Orillia because the other quarries have spring road restrictions, which also complicates the sales when the spring rush arises. The core teams that we have in each quarry for the bulk business include 4 equipment operators and up to 3 labors. The operators run a large excavator, 2 loaders and a mini-excavator. The labor is focused on packaging the bulk material we sell on skids, which generally consists of a small wall and Flagstone products. This is a setup we have had, and this should support our growing into the license production at 2 of our quarries. To reach the full 66,000 short tons of production across the 3 quarries, we would need to expand the fleet and team of labor. This is how our bulk business works. Now let's talk about our new and exciting guillotined business that we've just got into here in the fall of 2021. So on to Slide 13. Since we launched into the selling business a few years ago, we have wanted to get in the further processing of our stone. From a business perspective, we knew that our main constraint was our annual license tonnage. And once we drill into that, the objective would then become how to maximize the average value per ton sold. The way to achieve this is by adding more value to the product before it leaves our gate. And in the Stone business, there are all kinds of ways you can try to do that. Investing in processing capabilities like complex saws and planning systems are other examples. We've had our eye on the simplest move down the value chain, getting stone guillotines to break the stone with a bit more finesse than we've been doing so far with the excavators and slab buckets. We knew that this is a strong market. The [ stones are ] gloved to have the more refined products in stock, and we've had customers taking their stones and processing it themselves through guillotines. We also [indiscernible] stone breaks beautifully, and there -- those are a couple of photos of stones from our quarries on a lake with very nice straight edges shown that have gone through the guillotines. In the fall, we bought 2 [ U.S. ] machines and pulled together the additional infrastructure we needed, including [indiscernible] rollers and a genset. Now we have a simple processing tent with 2 parallel guillotine circuits that became operational in November, and we are ramping up our production over the winter. Sean will now talk us through the market, and then we will view the economics of the guillotine business in comparison to the bulk sales business.

So on Slide 14, just to speak a bit about what's happening on the demand side of the limestone business. So we've got a couple of big things going on. One is the general boom in landscaping, where this home improvement trend continues on with the pandemic. People are stuck at home still and generally as well, less travel and continued access to credit. So we hear from landscapers and stone yards, our customers, that the market continues to boom on the demand side. As I look publicly for sort of representation of this, because it's sort of a niche thing, what's going on with stone sales within landscape yards, I continue to have my eye on SiteOne. So we -- I've used this in the past with investors. This is now a very large company doing a roll-up across the landscaping business. But I think it's a good benchmark for what's going on in this landscaping space. And they've had continued huge growth since the beginning of the pandemic challenges. So first big thing on the demand side is just continued growth in demand for general landscaping. Then the other big thing that continues on is the sort of infrastructure spend. And where we see it in the region of North America we are in are shoreline rehabilitation projects. So there continues to be just radical changes in water levels across the Great Lakes, and that has decimated shorelines. And like many areas in infrastructure in North America, it's under-invested. So there has been very large investment most recently by levels of government around the Great Lakes, and they have enormous plans, how much spending they're going to do. So that's on the sort of public and commercial side. But then you've also got residential issues. And we've got a couple of neat photos, a little bit of quick date here from online. But things are falling into the lakes because of climate change impacting the water levels. And as you've got homes and landscaping that has been done, and all of a sudden, it's all getting pulled apart based on either water level shifts or that with a combination of increased storm activity. So it's good news for people who have massive stones that are used to rebuild shorelines. And you see in the bottom right here on Slide 14 one of our really neat projects that all of the stone has come from our quarries. So that shoreline stuff especially is the bulk business. So let me jump to Slide 15, which shows you, so far, how we've been doing in the bulk business. So again, Rogue models bulk for us on a unit basis as being roughly $75 top line. So the value of tons, we're going to get paid $75 on average for the bulk stone that we put on the flatbeds. That's a combination of the price list we showed you on the earlier slide across the different stone categories, so across least expensive, the most expensive, Armour, Step and Flag; and then loose and skidded. So it all sort of averages out that blend for us as being roughly $75 top line, so the value of tons. And then the cost to us, the cost to get it loaded on to a flatbed, we think of as being roughly $40. So roughly $35 of margin on a unit basis across our tons. And then, of course, the other big metric for us is how many tons will we push. So we've talked about now we have 3 quarries and we have the 66,000 tons of full license potential of sales across the 3 quarries. We grew our bulk business between 2020 and 2021 by about 18%. So we have the potential to be growing this up to 66,000 tons per year. So you heard Paul say earlier, our main constraint is that license. So we've got a lot of headroom between where we're at and where we plan to go to get our production up to what our permit is. And then as Paul mentioned, the other part of this will be how do you increase that margin per ton, and that's where our guillotine business is really exciting. But if I look, rearview mirror on Slide 15, we've pretty consistently come in at the unit economics, and we've been gradually growing on a year-over-year basis our volume. So between 2020 and 2021, we grew about 18% in terms of the tons that we pushed. So Slide 16, as I look forward to this year and look at now our guillotined business plus the bulked. So the way we model out the guillotine business, and again, this is new for us. We understand it to some extent because we're selling it to the same people. We know what the market trades the stuff for. And on the cost side, we know how we have geared ourselves up to produce through the processing tent, and we have assumptions about how much volume we'll push through the processing tent this year. So the way we think about the unit economics in the guillotine business is top line, the value of tons, will average out between $150 and $175 per short ton of guillotined stone that we sell. On the cost side, we believe that the cost for the guillotined stone to again get loaded on to a flatbed will be between $80 and $90 per ton. And then in terms of how much we think we'll sell, we've modeled this all out. We know how much we have sold so far. We know how much similar circuits are able to push stone through. And we think we have the potential to sell 5,000 tons of guillotined stone in 2022. So that's our new guillotine business. So then if I think about what we're doing over on the bulk, we plan this year to grow the bulk business in 2022 by another 20%. So that's how many tons we'll push through. So that is with 2 crews and fleets that are currently wintering at Orillia. And we plan to return 1 team and the fleet to Shadow Lake in the spring of 2022. So we've got to figure out how we allocate the 2 fleets and teams, but the intention is, once spring hits, we'll send 1 team back to Shadow Lake. So our current modeling builds from this potential of 2 crews and fleets for the bulk sales. So we have potential to grow the bulk tons sold more aggressively if we add additional crew and fleets. So that's the way we think about the business. There continues to be variance across months and seasons, of course, but we believe that we're getting into the guillotine business that's got very good unit economics. There will be some good tons that we'll be able to sell in that guillotine business. On the bulk side, we'll hold on to our unit economics, and we will continue to grow the bulk business in this calendar year. We have some decisions to be made about how we want to resource the stone business. And of course, that would be able to grow our tons even further. But overall, to summarize, we think that Rogue Stone will continue as a predictable cash flow generator for Rogue, and that was the intention of us getting into the stone business. Okay. So now we'll get into the remaining portfolio and the noncore assets. I'll start off with Rogue Quartz, which is the Snow White Project in Ontario, which, as I mentioned here on Slide 17, we're struggling to commercialize and then the permitting issues at Silicon Ridge in Québec. So these are different situations, but similar frustration across our 2 Quartz assets. So Snow White has very high-quality quartz, has some of the lowest impurities really ever measured by quartz deposits, and it's permitted production, all great news. We have not been successful in finalizing a sales agreement for the Snow White Project. We continue to be focused on the 2 main buyers of quartz like we have at Snow White. And broadly speaking, we think of those as being the higher volume and lower price paid commodity business, which is primarily the major silicon metal companies and then also the ferrosilicon. So these are the ones who buy by the boat load or the many train carload commodity volume of quartz like ours. And we have continued to be in touch with them, but it's been very difficult to get traction with them through the pandemic. And they've had very -- as we say here on the slide, minimal bandwidth for foreign business development, which is a nice way to say they've been spinning in different directions. So that's the commodity business. So there's that. And then alongside that, there is the specialty sales, which would be into things like high-end glasses, so glass manufacturing, and also in additives to other products where they bring in especially the very pure white quartz into things like countertops. And we've been in touch with major distributors, and they have interest in selling the material. But for us to make a production decision on Snow White, we require locking in that commodity commitment in addition to making the specialty sales. So specialty sales alone can't carry the fixed cost of us getting in and starting up the Snow White Project. So this has been frustrating with Snow White. The ball is in our court to make the sales and get them across the line. The pandemic for Snow White has been a complication. There's a lot going on in the silicon metal world in that silicon metal is a key part of decarbonization and the fight against climate change. But the reality of large buyers of quartz in North America has not yet still been crystallized. So that's where we stand with Snow White. We're still working on sales. Silicon Ridge is a little better understand and it's pretty grim. So again, after 6 years of investment, we were refused last year by the Québec government. So this is the MSFP as directed by the center of government. And this, of course, is after we invested more than $5 million. We had an NPV out of PEA done by a Québec consultant, so SNC-Lavalin out of Québec, which valued the project on an after-tax basis at more than $23 million. So after we spent all this money and proved the thing had this value, and this was all the while being approved as we went through various stage gates with the province of Québec, they ripped the rug from underneath us and refused our permit. So as we've said publicly, we're seeking compensation for investment and project value and other damages. Our next step here remains that we need to select a litigation finance partner. So what this means is it's not worth the while of Rogue to pay legal to fight this case. There are groups who step in to situations like this, where they would finance the lawyer spending to try to go down the path and get and recover damages. But with them investing in the lawyers, it means they usually get a percentage of the winnings, and you get yourself on a sliding scale where when you begin the process, like right now, we own all of Silicon Ridge, but to try to get it down the path to actually realize something back, you need to sign up to hand off potential proceeds from litigation process. So we're in that now. We're assessing where we stand. This is not the bread and butter of miners like me and Paul. So we are relying on our counsel for helping us figure this out. But this is a different world of lawyers in the litigation finance world. And there's a potential that we would -- Rogue would spin Silicon Ridge into its own entity for structure and purposes, and then that's the entity that hires the litigation consultant -- the litigation finance company, and it's the ownership of that entity. So that's where we stand at Silicon Ridge. There's no reopening this with the Québec government as best we've been told by the Québec government as we tried in addition to our Québec-based lawyers as well. So it's a very frustrating situation. And frankly, when I come back to the way we plan to build the company, we want to be operating in safe, supportive jurisdictions. And frankly, Québec has not been that for us by the sort of bait and switch that the province played with us. And this is exactly what I tell anybody who asks about our experience in Québec. It was a frustrating one. So that's where we stand on Quartz. Snow White, we know has value. We know it has great material. We're trying to make a business out of it. Silicon Ridge, we know it was a valuable asset, but the host government has told us it's not going to happen. So somebody needs to compensate us for all the money we invested in that market as we were -- as we say here, stage gate approved along. So each time they signed off on us spending more and more money in Québec, and then after all the money had been spent, they pulled the rug out. So that's Quartz. Timmins, Rogue Timmins is another noncore asset, which is the Radio Hill iron ore project, for which we think has really interesting gold exploration potential. So on Slide 20, this is southwest of Timmins. So EV Nickel and the Langmuir project is southeast of Timmins and closer to town. Radio Hill is 80 kilometers southwest of Timmins, but still right in sort of the core area where people are finding gold. It's an historic iron ore project. But again, we think it's highly prospective for potential gold mineralization. It's located along the western extension of the Destor-Porcupine Fault system, which has been one of the most productive gold structures in the world. We are completely surrounded now by GFG, which is another junior miner and they've been -- I should say, junior explorer. And they've been drilling and having pretty good success with what they found. The stratigraphy is very interesting, and we think it's very promising with tremendous potential for a company willing to invest in gold exploration. But right now, that's not us. So it would be a great place if somebody was looking for that sort of profile. We think it's very prospective, but it's a noncore asset for Rogue. Finally, let's get into EV Nickel. So in -- the portfolio is rounded out by the 6.6 million shares that Rogue Resources holds in EV Nickel. So as we say here on Slide 22, this is really a breakout value for Rogue shareholders. Let me just run through sort of how this all came about. So in 2020, Rogue began aggressively marketing and trying to raise awareness about the Langmuir project. So nickel in the ground -- as nickel price was taking off, nickel value in the ground was rising and investors were very interested in stand-alone nickel investment stories. So Langmuir had a small, but high-grade resource close to a permitted mill and it compared very favorably in 2020. And you can look back, it's all on our website when we were telling the investor story. Langmuir compared very favorably to the stand-alone nickel investment stories. But we continue to hear back from investors we were trying to woo in, but no investments had been made in Langmuir since 2012 and investors didn't want to buy Rogue shares to have it be their play in nickel. So we continuously told that story, and then we began to work with a group who came to us, a group of founders who agreed to raise $2 million into a private company, which would then be invested in Langmuir and they would steward the process along to take Langmuir public, which they eventually did in December with $5.4 million raised in an IPO. So all of those dollars are being invested to advance Langmuir along. So no dilution to Rogue. And Rogue from that original deal into the private company got 6.6 million shares of EV Nickel, which is really neat. Because if you look at roughly the price EV Nickel is trading at now, it's a little under $0.50, but at $0.50, Rogue's shares in EV Nickel are worth about the same value as the equity value of today's Rogue Resources market cap. So if Rogue is trading at $0.095 and EV Nickel is at $0.50, it's basically the same value. So the value that the market ascribes to Rogue Resources matches the value that the market is putting on EV Nickel today and for those shares that Rogue holds. So this has been a neat little flip where it held no value within Rogue Resources previously, and we were able to spin it out and the market is now rewarding Rogue Resources for that. So if I add it all up, stack it all up on Slide 23, it's a tricky thing for a company of our size to be talking about the valuation opportunity, and I've said this on past calls. So apologies from a broken record. But really, any way you look at it, we add up at a deep, deep value opportunity. So if I break down the parts of the business, Slide 23, Rogue Stone, so we've proven out that we have positive cash flow from the bulk business within stone. And we've got these growth plans. We intend to be growing our overall volumes. We said that this year, we want to push 20% more tons than we did last year. In addition, we've got the guillotined business on top of that, with even better margins, and we'll get into that and we'll begin to grow that business on the guillotine side. So that's Stone, which I think is a great business on its own. Then you've got the noncore assets across Quartz and remaining in Timmins. So with Quartz, as you heard me say, there's real potential commercial value with Snow White. It's a thing. It's got wonderful, very low impurities. That should be a business that produces and sells quartz into the commodity and specialized markets. Silicon Ridge also should have been in business, but the Québec government has told us no. So we do believe there is some potential litigation value attached to Silicon Ridge. Radio Hill, large land package. We think it's tremendously prospective as interest in gold, especially in that area. And we do hope that with more and more success down on the Porcupine-Destor Fault, so southwest of Timmins, people will begin to notice that we sit on a very interesting patch of land there. So again, potential takeout value for Radio Hill. And then we have with the EV Nickel, we have 6.6 million shares in a new PubCo. And if I wrap this all up, that package has a very tight flotation, with Rogue trading with 35 million shares. So it's a great thing that over the past year, Rogue didn't issue any new shares. So we're sort of off of that treadmill by having a cash flowing Stone business, and we can be opportunistic as a result across the portfolio. So that's how I think about the valuation. So net-net, as you look at this slide, any way you look at it, we're undervalued, where basically the public valuation of Rogue Resources matches the public valuation of our shares in EV Nickel. So if you come at it from the EV Nickel perspective, you get Stone and the other assets for free. Or you can value what you see as the positive cash flow from the Stone business, you put a multiple on that, and that's discounted or public value, and then you get the EV Nickel shares for free. So that's sort of how I think about the valuation opportunity and our portfolio. Finally, as I think about the pieces of our portfolio that we have, on Slide 24. So across the Rogue Resources business, we are positioned for climate change, which didn't just sort of naturally happen. We consciously have pulled together the business, and we have focused in on assets that we think put us in a good spot for what we think is this epic challenge with decarbonization in future. So climate change with the Stone business, you heard me say, we see this with increased storm activity and these great shifts in the water levels across the Great Lakes. So our limestone goes into that. And it's a heck of a lot better with a lower carbon cost, popping limestone out of the ground to be able to buttress our shore versus doing anything with concrete. So the Stone business is very low carbon cost for being able to combat water level shifts and storm activity. Then the Quartz business with Snow White's quartz in the ground, quartz goes into silicon metal, which is the way that we get lighter and stronger aluminum car bodies in addition to -- it's integral to all solar cells for power generation. And then finally, nickel itself. So with Langmuir and our position in EV Nickel, they are going to play a key part in decarbonization. And the mission of EV Nickel itself is to accelerate the transition to clean energy. So as I think about Rogue Resources, we are a cash flowing Stone business, but we have our fingers in the pie of what's going to happen here with decarbonization and climate change. So that's really the thing that stitches together our portfolio. So that's a run-through of the investment opportunity. Now we'll jump into some Q&A.

Again, we have a bunch of questions that came in prior to the call, some that came in during today's call, and we'll get into those now. So first question from a North American investor regarding Silicon Ridge, have there been any additional meetings to revitalize the issue or to revisit the issue with the Québec government to change or alter their decision? Were there any legal articles in the original purchase that would allow renegotiation lower on the purchase price? And then what is the Board ad hoc committee doing regarding this process? So let me -- I'll take those. So in terms of Silicon Ridge, no, we have not had further meetings. We've had communications with the Québec government. They've been crystal clear that they will not budge. So as mentioned in the presentation, the next step really is getting into litigation. The question about the original purchase price, that ship has sailed, seeing as the company paid for it. And no, there were no articles in the original acquisition, which would allow, I think, what you're asking here would be recourse to the vendors, which was actually before my time. Because again, when I took over Rogue, Silicon Ridge was the jewel in the crown of Rogue Resources. So we had already acquired it. The company had paid out the full consideration and the project was ours. So no, there would not be recourse back against the original purchase price. The Board ad hoc committee, which we announced some time ago, yes, they are running point. So primarily, my colleague on the Board, François Cartier, has been a key guy and our interactions with the province. And also I'm working very closely with the members of the Board regarding this litigation situation. So that's really where we're in. So there is a tough message on Silicon Ridge, right? We really got side-swiped by the Québec government, and it's incredibly frustrating. So that's where we stand. It's not going to move. Next stage is to see how much we can get out of the government for all we've put in. And yes, I'm working closely with our Board ad hoc committee on that one. Okay. Next question. Also silica business. So from a North American investor, Snow White, with the boom in the EV-related economy in Central Canada and the use of silicon and new battery technology, do you see this driving them out? Okay. Yes, I do, big picture, but it's been slow going in terms of plans and government announcements actually shifting to people buying quartz. So yes, it all seems very promising. And I hope that people are hearing that I am positive, borderline bullish on the potential value for good-quality quartz in the ground in North America. So I still like the Snow White asset a lot, but it is slow going, and then you need to get sales contracts. So we continue to be focused on selling into commodity and specialty. We do need the volume of the commodity business to set up Snow White to make it an economic asset that's worth commissioning. And that's really where our focus has been. Also another part of that question, if this doesn't work, so the boom and the EV-related economy, is there a consideration to revisit the more traditional buyers of silica? So yes, we are focused on commodity and specialty, and that's where we're going to find the sales contracts to make a go of Snow white. So specialty includes countertops and other additives. So again, that's a lower volume purchaser of the material. But we need that hand-in-hand with the high-volume commodity sales. So commodity plus specialty continues to be our focus there. Okay. From an European investor, a question about stone, so the core business on stone. How -- who do we sell stone to? Who are the buyers? Let me hand that one off to Paul about the stone business. Paul, can you run us through that?

Yes. Great. Thanks, Sean. Yes, we sell most of our products to the mix of stone yards and landscapers with a few sales to DIY customers. Geographically, we export to the U.S. in addition to across Ontario and into Québec. Everything goes out by flatbed, and it's old FOB at the quarry gate. So it's a great business to be in.

Great. Okay. Next one, here's another stone question from North American investor. So Paul, I'll hand this to you. Do you mean to say that you need to get another fleet and team if you wanted to go to the full 3 quarries by 22,000 tons. So Paul, do you want to see that again?

Sure. Yes. For our bulk business, we source the fleet and built the team for each of the first 2 22,000-ton quarries. With the third quarter, if we are planning on maximizing the tons out on each, we need to increase the fleet by roughly 50%. More importantly, building out the team and getting and retaining strong operators was the greatest challenge. You can always find and buy or lease machines, but the professionals to run them, that's the biggest issue, and that's where we focus our time. Our current ramp-up does not require a third fleet and team immediately, but it is on our horizon.

Okay. Thanks, Paul. Another question from a European investor about stone. Do you plan to bring stone from Bobcaygeon and Shadow Lake to use at the Orillia processing tent? Paul, maybe you can talk us through us to bringing stone over to Orillia.

Okay. That's correct. Potentially, there's an option to use roll-on, roll-off trucks to deliver stone from our other operations to process through our guillotine circuits. Importantly, we have confirmed with the Ministry of Natural Resources and Forest that stone brought from another quarry to Orillia for processing and sale does not count against the license production for the Orillia Quarry and will only be counted against the source quarry and taxed from that sourced quarry. This concept was another one of the reasons why we are very excited about the guillotined business and the opportunities it presents.

Great. Okay. Thanks, Paul. Here's a question, same question from a couple of investors. What are the plans for Rogue's EV Nickel shares? Great one. Okay. I'll take that. So yes, they are a very important asset that is sitting at Rogue Resources. So a few things on that. One, it is currently part -- it remains part of the security against the $1.8 million project debt. So we would need sign-off from the project debt lender to sell any of the EV Nickel shares in addition to escrows back with EV Nickel. They're tied up over the short term. But that being said, you can still sell escrow shares. But we would need sign-off from the secured lender for us to be able to sell those shares. Secondly, and this relates back to the secured lender. As we're thinking about refinancing the secured debt with the lender, the -- obviously, the Rogue shares of EV Nickel become part of that puzzle. So that's a bit of a rambling response to what are our plans for the shares. We're not selling them right away. I see them as playing part of the role as we look at refinancing that debt, which is middle of 2022. But we are not selling them out of the gate. Okay. Another question. What is the governance for management of the EV Nickel shares? Yes. Okay. So let's get into the governance issue here. I'll answer that. So yes, we have an ad hoc committee of the Rogue Board with the independent, unconflicted, if that's a term, directors. So that includes Julie Ward, Chris Berlet and François Cartier. So they are -- and we're being overly conscious of this at the Rogue board level. It will be a decision made by them and not at all by members of the Board who also are officers and me as a Director of EV Nickel. So we want to make sure that, that's done completely above board. But the first thing to note is we can't do anything on that without sign-off from the external lender. So we have no plans to be selling the EV Nickel shares. But when the time comes and we're looking at the refinancing, yes, we have the governance in place to be able to make decisions regarding the EV Nickel shares and potentially pull the trigger on action, which will not be done by the conflicted, if that's a term, directors of Rogue. So then people have also asked, which I'm not sure if I touched on in the presentation, so yes. The Rogue management team has been asked -- was asked by the EV Nickel main shareholders and the private company to also manage and run EV Nickel. So Paul and I are actively managing EV Nickel. So a question that came in from multiple investors was, what is the sort of type of management between Rogue and EV Nickel. So it ebbs and flow -- I'll answer this one. So it ebbs and flows for how we spend our time. Paul's focus on Rogue has been primarily in managing the operations, which we do together, but we have been working on trying to find management to join our team on the Rogue Stone side to allow Paul to transition out of that and really focus in on as people who have been following the company know well, his deep experience with Timmins geology. But the point is the work that EV Nickel is doing now is primarily starting out with an exploration campaign for which there is a team up in Timmins who certainly doesn't need me looking over their shoulders. And Paul is able to manage the team in Timmins remotely, but continues to be actively involved in the management of the stone operations on the Rogue side with me. So again, lots of words. The way we split our time is based on demand from the 2 sides. It is very doable to build around the 2 companies and grow the Rogue side. And we report on this up to both Boards. Because clearly, both Boards are also sensitive, and this is a question that they ask. But again, it's very doable. And I would say that maybe not done as much in our business between companies that include active operations like we have within Rogue Resources. But it's something that, on our horizon, bringing additional management in to help us with operations on the stone side is part of the plan. And we've also challenged the people who are running the assets on the stone side to begin to step up and take over more responsibilities, which have been getting done by the level above, so me and Paul on the Rogue Resources side. So we split our time based on what's required. It is very doable, and we are confident of that. And we are regularly reporting up to the Board of both companies about our split of time and our capacity to do it. Looking down the road, we intend to be adding resources, especially on the Rogue Resources side, to begin taking some of the weight off of us with the operations management of Rogue. And then clearly, on the EV Nickel side, we are -- we will be growing that team as our activity up in the Timmins camp continues to grow. So that's where we stand on the management time split, which is a question from a few different investors. Okay. Here's one from an European investor. Here's a great one for you, Paul. I know that Radio Hill is on the extension of the Destor-Porcupine Fault, but how should investors think of the value attached to having that location? And also have the neighbors, GFG, having success. Paul, do you want to jump into that?

Sure. The Destor-Porcupine Fault is a world-class gold concentrating system and has been well established that deep seated crustal fault focused the gold-bearing fluids along the corridor associated with these trends. GFG has been exploring the interpreted extension of the Destor-Porcupine Fault on the Pen Gold Project for over 3 years with some good success, including results from drilling on the Nib showing located just to the northeast of Radio Hill property, with a strong intersection with gold, including 71.27 grams gold over 8.5 meters. They've also identified anomalous gold both to the east and west of the Radio Hill property associated with the same geological and structural features and trends. Certainly, GFG could be a key candidate to buy Radio Hill, and we remain in contact. But the size of the land package plus the prospectivity associated with the fault corridor, and considering the general buzz in the Timmins camp regarding gold potential, we may be able to attract another junior that wants to spend its exploration dollars and time drilling there. It's not the right fit for us and is noncore, but would be a great fit for somebody else.

Okay. Thanks, Paul. Okay. One more question here from a North American investor, again, back to EV Nickel. What is the timing on the new Langmuir resource? Okay. This question is, of course, related to as part of our sale of Langmuir to EV Nickel. There was a future resource payment. So based on the success of the drilling and the size of identified indicated resource, there's payment back to Rogue based on a formula and based on EV Nickel's wishes between cash and shares, which is up to $5 million. So it's potentially very material for Rogue. So to answer that question, we hope for 2022, but it's still to be determined. So EV Nickel, and I encourage people on this call and investors of Rogue Resources who indirectly own a big chunk of EV Nickel, as we discussed, I'd encourage you all to sign up for getting the news from EV Nickel. They had some today, which was the second half of the drill results from last summer's drilling at Langmuir. So they did 4,200 meters last summer, and it was basically to confirm the mineralization extends up and down from the original W4 starter resource. And with the news today, EV Nickel is confirming that. So the mineralization extends east-west and down dip. So it's very exciting news. And it's just the start of the work that the EV Nickel is doing, which is right now on 3 fronts. One is to find more nickel at Langmuir. The second one is to get our hands on more land on the Shaw Dome. And the third one is to begin putting together the clean nickel story. And that's really where the company's focus is going to be. And today's announcement is a big part is number one, which is confirming the mineralization extends beyond that original starter resource at W4. So to answer this question, when does Rogue expect that the new Langmuir resource will come out for EV Nickel and the subsequent potential resource payment, the plan is 2022, but that's still really to be determined based on success of drilling and drill plans as well. Okay. I think that's it for the questions. I would -- so again, thank you very much for everyone who has joined this call. To summarize sort of where we stand with Rogue Resources, it really is an exciting time in that we have another year under our belt with the Stone business, and we're really beginning to prove out that the unit economics holds up in the Stone business. So we've got opportunities to grow that both right in front of us to just grow the volume that goes through the Rogue Stone business at that unit economics. Plus, you've heard us talk about the very exciting guillotine business, which we're now in. And then there's also the bigger picture potential for growth where there remains an opportunity to acquire additional quarries. So that Stone business is really interesting. And then on top of that, with Rogue Resources, a bunch more comes along for the ride. So we've talked about the noncore assets and the potential for some value to shake loose from those. But then we've got the EV Nickel shares, which EV Nickel separately has very aggressive growth plans. And then I would anticipate, as we sit -- as Rogue Resources sits on those EVNI shares, the value of those should be going up. So it's a really exciting time for those of us who have a big chunk of their worth tied up in the Rogue stock. It's been frustrating to look at our stock chart, but really where our focus is in running this company for you is trying to be adding value. And we're pretty confident that we've been doing that with the steps we've been taking. The connection between the value we add in the company and when we begin to see that reflected in the stock, that's a little tougher to predict. But I do know that we are genuinely adding value to Rogue Resources with the strategy we've set out and the moves we've been making. So it's an exciting time. Again, I appreciate everyone joining on this call. That questions e-mail is always open, goes straight to the management team. This is your company. We try to be as transparent as possible. We tell you about the ups and the downs, some of both in this call. But hopefully, the takeaway is we've got significant ups, and we think there's a real valuation opportunity going forward with the Rogue stock. Thanks, everyone. Take care.