Keweenaw Land Association, Limited (KEWL) Earnings Call Transcript & Summary

Okay. Good morning. This meeting will please come to order? I am James Mai, Chairman of Keweenaw Land Association, Limited. And on behalf of the Board of Directors, the management team and the employees of Keweenaw, I welcome you to this meeting. Today's agenda for the meeting is to vote on 3 proposals: namely the election of 3 director nominees; ratification of Anderson, Tackman & Company, PLC as the company's independent auditor; and lastly, an amendment to the company's Plan of Partial Liquidation as set out and sent to all shareholders of record in our notice and proxy statement dated June 14, 2022. As noted in our proxy statement, shareholders will be unable to vote during the meeting itself. However, we thank those who have submitted their votes via proxy in advance of this meeting. The formal part of the meeting will be followed by an informational part where Timothy G. Lynott, our President and CEO, will make a presentation. And after that, we'll host a Q&A session with management, independent auditors and legal counsel. And lastly, we'll declare the preliminary votes of the meeting. A notice of this meeting was sent to each shareholder of record. Prior to this meeting, the company appointed EQ Shareholder Services as inspectors of election for this annual meeting. [indiscernible] is present on the call today to coordinate on their behalf. Keweenaw's transfer agent has certified the list of shareholders of the company as of the close of business on June 8, 2022, which was the record date fixed by the Board of Directors for shareholders entitled to notice of and to vote at this meeting. This list shows that there were 1,296,173 shares of common stock of the company outstanding and entitled to vote. A majority constitutes quorum for this meeting. I'm advised by EQ that the quorum requirement is satisfied for this meeting and that the business of the meeting may proceed. I would now like to introduce our directors who are present. Firstly myself, James Mai; Eric Speron; and Mark Sherman. Next, I would like to introduce Tim Lynott and Paula Aijala. Tim is the President and COO; and Paula is the Secretary of the company. Paula and Tim are serving as proxies for shareholders who voted by proxy. Our proxies for the meeting will also be responsible to make and second the motions to approve the proposals set out for today's meeting. I would also like to introduce Mike Mleko of Grant Thornton LLP, our auditors for the fiscal year 2021; and Dan Bianchi of Anderson, Tackman & Company, PLC, our auditors for 2022; and Brad Wyatt of Dickinson Wright PLC, our legal counsel, and they're all participating in today's meeting. Mr. Mleko and Mr. Bianchi have been given an opportunity to make a statement if they would like. At the end of the meeting, Mr. Mleko, Mr. Bianchi and Mr. Wyatt will be available to answer questions. The minutes of the special meeting of shareholders from December 21, 2021, were electronically made available to you prior to the meeting. I would accept the motion approving the minutes. I would suggest one of the proxies make the motion.

This is Tim Lynott. I move that the minutes of the 2021 annual meeting of Keweenaw shareholders be approved as presented at this meeting.

And just for clarification, I think we're referring to the special meeting from December 21 since the annual meeting minutes were approved already.

That's correct.

Can I have a second?

Yes. This is Paula Aijala, and I second the motion.

We will now vote on the motion to approve the minutes. All in favor, say aye. One of the proxies may speak on behalf of the shareholders.

This is Tim. Aye.

Aye. Okay. The motion is carried. The minutes of the 2021 annual meeting are approved as presented in this meeting. Paula and Tim as proxies were among the persons voting for the motion. Okay. The next order of business is the election of directors, the first item. In accordance with the notice of annual meeting, the Board of Directors of the company has nominated Eric Speron, Mark Sherman and myself for election to the Board of Directors to hold office for a 1-year term expiring at the 2023 annual meeting. In accordance with the bylaws of the company, stockholders are required to provide advanced notice of their intent to nominate candidates for directors. No such notice we've received. Therefore, I declare the nominations closed. I would accept a motion regarding the election of the directors. And again, I would suggest that one of the proxies make the motion.

This is Tim, and I move that the following resolution be adopted, resolved that James Mai, Eric H. Speron, and Mark A. Sherman are hereby elected as Directors of Keweenaw Land Association to serve for a term expiring at the annual meeting in the year 2023 and until the election and qualification of their successors.

Is there a second for the motion?

This is Paula Aijala again, and I second that motion.

Okay. And do we need to vote on that now?

Jamie, this is Brad speaking. We'll have the proxies cast the ballot on all the motions at once. So we can just proceed to announce the second item, and then they'll vote on all 3 at once.

Okay. Very good. The second item of business is the ratification of Anderson, Tackman & Company, PLC as our independent registered public accounting firm. I would accept the motion to ratify Anderson, Tackman as our accountants and would suggest that one of the proxies make the motion.

This is Tim, and I move the following resolution be adopted, resolved that the appointment of Anderson, Tackman & Company, PLC as Keweenaw Land's independent registered public accounting firm for 2022 is ratified.

Is there a second for the motion?

This is Paula Aijala. I second the motion.

Okay. The third and final item of business is the approval of the amendment to the Plan of Partial Liquidation. This amendment will allow the company at the discretion of the Board of Directors to conduct a tender offer in lieu of the second portion of the special dividend. I would suggest that one of the proxies make the motion.

This is Tim, and I move that the following resolution be adopted, resolved that the amendment of the Plan of Partial Liquidation that would allow the company at the discretion of the Board of Directors to conduct tender offer in lieu of the second portion of the special dividend is approved.

Is there a second for the motion?

This is Paula Aijala. I second the motion.

Okay. It is 9:08 a.m. Central Time. The polls are now open for the voting on the 3 motions just received. For all those -- for all 3 of the matters to be voted on today, I would ask the proxies to submit their proxy vote to the inspector on the motions. I'll give a moment for the completion of the voting. [Voting]

And if the proxies could just advise when they've had a chance to send the proxy ballot over to EQ Services, that would be appreciated. Okay. It is now 10:09 a.m., and the polls are now closed. Inspector of election has informed us that the preliminary results of the 3 items voted on today will be available following the informational portion of this meeting. The company will issue a press release announcing the final results after they become available. If there is no further business to come before the meeting, I would accept the motion for adjournment of the formal portion of the Annual Meeting of Shareholders. Would one of the proxies make a motion?

This is Tim, and I move that the formal portion of the meeting be adjourned.

And this is Paula. I second the motion.

You have heard the motion to adjourn. All those in favor, say aye. One of the proxies made to speak on behalf of the shareholders.

This is Tim again. Aye.

Okay. The motion is carried, and the formal portion of the meeting is adjourned. Okay. We will now move to the informational meeting of the agenda. As a reminder, we will be following the rules of order attached to the agenda. Tim Lynott will make a brief presentation. [Operator Instructions] I will be fielding the questions and direct them to others or management or the Board as appropriate. And we will then kick things off with the presentation from Tim. So Tim, I'll turn it over to you.

Thanks, Jamie. Go ahead.

Sorry. Sorry, Tim. Sorry. I apologize. Okay. Go ahead.

Thanks, Jamie. And again, welcome to all of you listening in. Keweenaw -- 2021 for Keweenaw was a transformational year as we sold all of our productive surface timberland property. As a result, we are now focused 100% on our minerals business, and Keweenaw has 428,789 acres of minerals under management in Michigan's historic mining regions of Upper Michigan as well as Michigan's Lower Peninsula and Northern Wisconsin. Currently, over 5,900 acres are under lease at the Copperwood Project, and the expected burn is about 350,000 for 2022, but we are very focused on managing and reducing that burn. This is our safe harbor -- requisite safe harbor forward-looking slides. I'll give you a minute to digest that. For the outline of the presentation today, we expect to include a brief 2021 timberland sale review and the governance items related to that, an overview of the proposed tender as well as KLA's current and general business conditions and what KLA looks like in 2022, followed by a brief Q&A at the end. At the end of 2021, KLA sold out its timberlands. The company achieved a premium valuation under tight time constraints, thanks to a combination of factors, including excellent outside advisers, particularly [indiscernible] and Dickinson Wright and top quality data, which allowed for expedited due diligence. Keweenaw closed the sale and distributed the proceeds to shareholders in less than 60 days from receiving final bids. While it was a team effort that required input from many individuals, I would like to thank Mark Sherman in particular on behalf of the company and all of its shareholders. We could not have met such an aggressive time line for this transaction completion without his leadership. So Mark retired from a full-time role at the end of 2021. We are very pleased that he is continuing as a director. RemainCo reduced its Board membership from 5 members to 3, and it is possible we will add another director in the coming months. We also reverted to a former accounting partner in Anderson, Tackman as our new auditor this year, which was ratified earlier today in our efforts to further reduce accounting and legal costs. Final item that was approved to the shareholder vote earlier today is the amended Plan of Partial Liquidation with which the company is suggesting a tender offer that of the dividend for shareholders to essentially opt in or out of a mineral-only Keweenaw company. As discussed in the proxy materials, the company has modified its original proposal for the additional sale proceeds, which will be held in escrow until the end of the indemnification period, December of 2022. Rather than making the distribution to our shareholders, we believe it is preferable to provide shareholders 2 options to facilitate the ongoing rotation in the shareholder base, which we see as a natural given the company's changing mandates now that the timber assets have been sold. The company is proposing a modified Dutch auction tender, and the funds available would include the indemnity escrow less 35.9%. The 35.9% represents Cornwall and First Foundation not tendering their shares, which means they effectively reinvest the proceeds for distribution into the RemainCo. For those of you who do elect to tender shares, you will have the flexibility to achieve partial or full liquidity depending on your preference. Price range of the tender will be determined at the Board's discretion based on a number of factors, including then current market prices, volume weighted average price following the timberland asset sale announcement and the assessment of intrinsic value. The tender offer will commence following the release of the indemnity escrow at the end of December and remain open for 20 days. And the Board and its discretion could establish other terms of the tender. The next few slides are intended to provide some context for some of the factors the Board will consider setting the price for the tender. This slide shows the 200-day VWAP of Keweenaw, which puts our share price at about $17.98. We note that most of those shares traded immediately following the timberland transaction and before the copper market has rolled over, which relates to some of the following slides. This slide shows essentially a copper price curve reset. Each of the lines reflect the copper futures curve for a particular as update. For example, the white line shows a spot price as of July 2021. The green line shows a spot price as of July 2022, and the orange line as seen in the current price curve is significantly lower, which now reflects that the entire copper price curve has shifted lower. This slide shows our share price performance compared to benchmark copper prices as well as Highland Copper's share price. While the price of copper and Highland shares have declined substantially in the past few months, Keweenaw has remained well above the decline. We are pleased that our share price has shown strength through this difficult time and believe this reflects our solid foundation. However, we want to be transparent about headwinds the company foresees in the coming months. Our intrinsic value considerations. Copper with royalties drive most of this -- most of the intrinsic value, and some of those factors include [indiscernible] mining begins, the timing until the mining begins, discount rates used, minerals that are in the mine plan per the release, per Highland's 2018 feasibility study, minerals that are outside the mine plan as well as mineral prices, which are principally copper and silver, and the 2% to 4% sliding scale royalty that Keweenaw holds on the property. Other assets that factor in are the net present value of the copper with lease income prior to Copperwood being in production, our remaining 423,000 acres as well as future capital allocation decisions. We anticipate that the lower copper prices, as shown in the previous slides, will negatively affect the Copperwood Project, which we will discuss in more detail a bit later in the presentation. Additionally, KLA is facing higher costs due to inflation like everyone else in the general economy, but KLA continues to manage a number of items related to the timberland asset sale in 2021, some of which we expect to extend to the end of 2022, but not beyond. And these costs are one-time legal and accounting costs, [indiscernible] costs related to workforce reduction and some stumpage sales for preferred contracts that did not transfer with the timberland asset sale. The major point of focus in 2022 has been to reduce costs, organize the business and develop opportunities that KLA can execute on going forward. As mentioned at the top of the deck, Keweenaw expects a net operating burn of about 350,000 in 2022. Cost reductions so far include reduced Board size, a new auditor selection, reducing our admin costs related to offices and insurance and reduced legal costs. The company continues to identify potential cost reductions to further reduce that run rate. Cash on hand at the end of Q1 2023 will be dependent upon the results of the tender, as detailed earlier. Our capital allocation decisions are independent of operating costs and subject to change depending on the project generation or business development opportunities. Our criteria for capital allocation includes limited incremental capital outlays for what we believe to be high return on investment opportunities and at no time mortgaging the future success of Keweenaw Land. Keweenaw Land will report its semiannual results on August 15, 2022. Regarding some of these capital allocation decisions, one such allocation was the Sage Minerals purchase, which was completed at the end of September 2021. The acquisition increased our total mineral rights by over 29,000 acres in prospective and under-explored areas of Upper Michigan [indiscernible] acquisition used Tax Advantage 1031 funds to make a $5 million purchase, effectively doubling our exposure underneath the Copperwood Project from 40% to 80% of what's in the permitted mine plan. This also allows Keweenaw to fill in some of its checkerboard type ownership around the Copperwood Project. KLA also plans to continue searching for additional minerals and complementary business opportunities within our existing 429,000 acres of minerals. Some of these opportunities present themselves as project generation opportunities. As we have discussed in prior years, during 2020 and 2021, Keweenaw conducted some limited exploration and drilling activities, which we have packaged for marketing related to a single and specific project area. During 2022, these marketing efforts have begun and are ongoing in an effort to attract a partner to advance this particular project area. Our efforts have not been successful yet as we are finding the market to be quite challenging and uncertain at the moment. The goal would be to enter into a lease option royalty type agreement for partner-paid exploration activities. During this process, with the many discussions we are having with companies, we are developing a network of companies that may be looking to explore in a safe and stable jurisdiction that is Michigan, all while building KLA's profile and reputation as a good business partner. No drilling is currently planned for 2022. And to be sure, Keweenaw has no plans of becoming a junior mining company and is diligent and balance sheet-minded when making these capital allocation decisions. Keweenaw will continue to look for opportunities to increase and consolidate its mineral tenure in Michigan, both strategically and incrementally. KLA's competitive advantage is our land tenure and our strategic relationships within the region. Slide 15 is a nice illustration of this checkerboard ownership, which defines Keweenaw. It also illustrates the capital allocation effort that was the Sage Minerals acquisition, highlighting how we effectively filled in a fair amount of the checkerboard with the acquisition. This demonstrates what that opportunity looks like and what it could mean to KLA. In our marketing discussions, all of the companies that we do talk to like large, contiguous mineral ownership, by Keweenaw facilitating this, we are adding value to our mineral acreage. To better highlight that, we zoomed in on the Copperwood area and showing you exactly what the checkerboard ownership looks like and how we have consolidated it. The light blue areas are the legacy Keweenaw ownership, and the red areas are the recently acquired Sage Minerals acquisition. Notice -- if you notice, there's a few cream-colored areas that are not owned or controlled by Keweenaw, but there could be opportunities in the future. In regards to the Copperwood Project, Copperwood Project has been in development since 2008. It is under a 20-year lease signed by previous management and is in an advanced stage construction-ready copper project economic at about $3.50 per pound. That price is based on a May 2022 presentation that was made by the company's CEO. An updated feasibility study was also promised during the same May 2022 presentation, which at the time was indicated to be 90% complete. The feasibility study, as previously announced, has not been released as of today. This is disappointing to Keweenaw and our shareholders, but not altogether surprising considering the track record. We have been patiently waiting since 2008 due to previous feasibility studies, one released in 2012 by Orvana and another recently released in 2018 by Highland. As a note, the 2018 Highland study anticipated initial production at Copperwood to be in 2021. As of now, there's no new current target date for the release of Highland's 2022 feasibility study. In the meantime, copper prices have been under downward pressure for most of 2022. As noted earlier, the -- maybe not. But the price of copper today was about $3.21 a pound, which is a 12-month low. The execution and advancement of Copperwood is not something that Keweenaw controls, unfortunately. And we plan to operate the business as if Copperwood won't be in our forecasting horizon. We want to be supportive and positive on our efforts and relations at Copperwood. However, we need to be transparent and realistic with our shareholders as well. We have included this copper chart, which shows the 1-year copper price. And as you can clearly see, there is a significant dropoff over the past 3 months. And as I just noted, the price as of yesterday when this chart was developed was $3.21 a pound. While I want to be transparent in communicating some of the recent headwinds that have arisen, I also want to be clear that we do not believe the long-term picture has fundamentally changed. We measure our horizon in years and not months, and hope our shareholders will do the same. Upper Michigan is an excellent jurisdiction for mining with a long [indiscernible] history, with important new chapters that have yet to be written. While we are not in the business of making predictions about timing, we believe there will be strong demand to identify large mineral reserves and that our acreage is a strong contender for future exploration. While we are disappointed that Highland has not realized its full potential by attracting a top-tier operator in the past 12 months, our view about its potential remains very positive. The existing resource that Copperwood is construction-ready, and if combined with White Pine and taking into account the infrastructure and historical successful exploitation in the region, we see top-tier opportunity for [indiscernible] likely to be recognized at some point. In terms of factors that we do control, I have alluded to our capital allocation opportunities throughout the presentation and also showed you how we deployed some of that capital in 2021. Keweenaw plans to continue to investigate opportunities that enhance our mineral and royalty profile, adding shareholder value. This may include other mineral opportunities regionally, filling in that checkerboard or it may include complementary business opportunities that may add value. If anybody wants to build a mine or additional supporting infrastructure nearby, this could be helpful and of interest to Keweenaw. At the end of the day, we plan to be proactive in finding these opportunities and participating in those discussions. The old Keweenaw was a passive mineral owner, while we plan to be an active mineral owner. Capital allocations. Activities that we pursue will have a high potential return on investment for the incremental capital expenditure that we put forth. We have no aspiration of becoming a junior exploration or mine company. And we do intend to attract others to do work on our properties, building shareholder value. While the past few months have been challenging, both copper prices and in the general economy, we are agnostic on the timing and cost of Copperwood Project. And at the same time, we want to be able to take advantage of opportunities across our mineral tenure. And as we mentioned earlier, we see the future of KLA's minerals -- all of our minerals in years and not months. This concludes the informational presentation. And with that, I will return it over to Jamie for Q&A.

Okay. Thanks, Tim. So we will now have a brief Q&A session. And I will start by reading some of the questions that have come in prior to the meeting, and then I see that there have been some additional questions as the meeting has been in progress, which I'll address afterwards. And because of time limitations, we're trying to limit each question to 2 minutes, and we'll see how we do. So the first question coming prior to the meeting is, what is the path forward for the new Keweenaw Land? Do we plan to become a royalty streaming company? And I guess I'd answer that by just providing a bit of context, first, for the assets that we own. We own a lot of acreage, most of it is unexplored and undeveloped, with the one significant exception being the Copperwood resource, which Highland is currently working on. So to the extent that Highland goes into production, we continue to own the mineral underlying -- the project, we would at that point become a royalty streaming company. And so I think that the sort of the path of least resistance and the historical approach that Keweenaw has taken passively has been to wait for things like that to occur. And the best I would say that the vast majority of historical cash flows for Keweenaw Land have come from royalties related to operating mines. And I see a few different numbers, but I think that one estimate was there were $50 million or more generated mostly in the mid to late 19th century and then again, at the end of the 20th century that in -- historical dollars were $50 million plus and then maybe 10x higher than that in terms of the present date. So that's certainly something that we hope will happen. And while we've been disappointed by the development -- sorry, for absence of development with Highland, I think our approach in the meantime is to be opportunistic and tactical about backfilling opportunities that are coming up just from the fact that the process has taken so much longer. And so one issue that we've run into is that I think that expectations are still, to some extent, set by the company and remain amongst shareholders more and more positive, and I'm not speaking about Highland's time line, and that's impacted, I think, the logical way, the willingness of owners of infrastructure assets and so forth to consider transacting and selling either additional acreage or assets that might be necessary or useful if and when the project goes into construction and then production. So we're continuing to be active and exploring for those opportunities and have looked to settle in the last few months. And we'll continue to keep the shareholders apprised as we -- as we're successful in acquiring high ROI assets related to Copperwood and the adjacent properties with conservative assumptions about the time line. And so in addition to that, we're looking to generate interest for several other areas that have historically interesting exploration or production that's covered by our acreage. And this is an ongoing process that again is, to a larger extent, capital markets dependent. So we are managing our portfolio more actively than it has been the case in the past, and at the same time, need to be just -- and shareholders need to be cognizant of the constraints that ultimately are imposed by the fact that we're not an exploration company and we're certainly not a mine development and an operating company. And so at the end of the day, those monetization opportunities will require capital investment from other organizations. And that's something that I believe will ebb and flow with historical cycles in the capital markets. Okay. The next question is, how do we plan to price the tender? And I think we've explained fairly well in the proxy and, again, in the presentation how we're thinking about it. And I think the presentation -- one of the purposes was to just to frame or provide some context for what are changing market conditions. And so I would say that at a high level, conditions are not as good as they were at the end of last year. I mean I think that's just empirically accurate. And at the same time, I think that the long-term view of the project is not fundamentally changed. And so I think that the biggest factor that's sort of been affected is just timing. And obviously, that has an impact on intrinsic value depending upon what one's assumed discount rate is. That number might be higher or lower. But we're going to evaluate all these factors at the time of the tender at the end of the year. But I guess I would just say at a high level, our goal is to leave investors in not in a very different place from where they would have been in the original scenario that we framed out, which was just to make a pro rata dividend to all shareholders. And so we're trying to come up with something that's equitable and that will ideally leave all investors in sort of the same place, and at the same time, give them the opportunity to opt in or opt out of the new Keweenaw as we're calling it, just because the business model has changed substantially, and we think it's a more elegant way to handle the proceeds that do come after the indemnification period lapses. Okay. The next question is, how much cash will be available after the indemnity is over on December 21? And I'll let Tim answer that.

And currently, it's approximately $9 million is what we're looking at out of that $10 million. And I don't take that number changing much between now and the end of the year.

I'm just seeing a message from -- in the Q&A that somebody is saying the audio is crashed. Could I get one of the administrators on this call just to confirm that we're still up?

This is Christine, your producer. We're still recording, audio just fine [indiscernible] to the attendees.

Okay. Great. Thank you. Sorry, Tim.

No. Thanks, Jamie. And just again, it's just over $9 million -- approximately $9 million at this point once the indemnity is released.

Okay. Next question is, what are we going to do with the cash? And while the amount will be sort of a function of the take-up on the tender and the capital that is not spent to repurchase shares, we'll go on to the balance sheet, and we'll hold it and look for new opportunities. And if we can't find them, we'll return that capital to shareholders. The next question is, why are Cornwall and First Foundation not participating in the tender? And I can fill that one. And then that's simply because we think that there's a very interesting asset package here. And even if all of the other shareholders choose to opt out of the new Keweenaw and effectively sell into the tender, we would like there to be some level of cash on the balance sheet. And so as insiders, we've committed to that, and that's something that all shareholders of the company will benefit from. And it's -- I think investors should look at it as a statement of our conviction about the underlying value of this asset over the long term. Next question is, what commodities are we currently trying to vend? And I'd say that's something we're not in a position to disclose. Historically, we earn royalties from copper and iron ore. And at the moment, we're not trying to vend either, but that could change. Next question is, how long can the company last if Copperwood does not come online in 2 years? And Tim, I'll turn that very important question over to you.

And that's a good question, and that's why we're intensely focused on our burn rate and our run rate to make sure that we have all of the expenses under control. We do have some money that was left on the balance sheet at the end of the last year from the timberland transaction, and then it also depends on the results of the tender and what other opportunities might become available. But it's a number of years that we're comfortable with, but not -- certainly not indefinitely. So...

Well, if I can add to that, I would say that, look, we're burning $350,000. It's more than we wanted to be burning. And I think that, that number is going to go down over time, not -- certainly not up, and I hope it will be quickly. So with the $3 million holdback, I mean, that's many, many years already, but I guess I just want to emphasize that the ownership of passive mineral interests is one where -- the last thing an investor wants is to be stopped out by management costs, and that would be sort of an epic failure on management's part, if that were to occur. And so I think Tim is answering the question sort of cautiously and mechanically, but I would say that there's no scenario here in which we would be satisfied, allowing the company's ownership and its mineral tenure to be jeopardized by cash flow concerns, and we would certainly be reducing overhead to the Board, if necessary, to make it a -- as [indiscernible] operation as possible. Historically, the company has, at times, sold land or sold minerals in order to pay taxes, and that's sort of the one sort of an escapable cost in some cases. But that's down a lot given the absence of surface ownership. And in any event, I think that we do recognize the need to develop more top line, and we'll work very hard on that. Okay. Next question is, what minerals are you exploring for? And how much more will you spend in 2022? So Tim, I'll leave that to you.

Okay. Thanks, Jim. And again, for competitive reasons, I don't think we're necessarily ready to disclose that. And again, we're not necessarily conducting any exploration in 2022. In 2020, we expanded about 250,000, and that number decreased in 2021, and it's going to reduce again in 2022 quite dramatically. And it's -- again, it's all based on success-based as defined by positive results with high return on investment opportunities. But just the nature of the company as we stand today, that number is going to be very minimal for 2022, if at all, as we're focused on advancing one of the projects that we have invested money in 2020 and 2021. And again, we continue to look for opportunities, which make sense to consolidate ownership and -- but not necessarily conducting exploration or like in drilling or geophysics or things of that nature, which tend to be very, very high dollars. We're focused on the mineral ownership. So very little, if at all, in 2022.

Okay. And the last question then before we get to the current queue is, do we plan to sell the company when Copperwood goes into production? Well, we certainly can't anticipate what the future holds given the limited variables that we're in control of. I will say that given market conditions as of a year ago or so, my understanding was that royalty companies were actively in the market for projects that didn't even have to be in production, but just that we're in construction and that they were paying substantial multiples given that these are not permanent growing concerns, but wasting assets. So even to think about it in terms of multiples was a bit surprising to me. But I mean -- and then this is just a number that I heard. So it's anecdotal. But I heard that royalty companies were paying up to 8x sort of average cash flows for assets that had 10-year mine lives or longer, which computes to a pretty aggressive discount. Great. So I could say that that's certainly something we would be open to, but we really have to just evaluate that at the time [indiscernible] construction began. So with that, I'll move to the current queue. And the first question is, what is the primary rate-limiting factor at Keweenaw? Well, I apologize. I'm not sure I understand what that question means. So I don't know if there's a way for the investor to elaborate in the Q&A section here, but I'll move on to the next one, and unless Tim or anyone else has a sense for what that means.

And I don't. So why don't you move on, Jamie?

Okay. And then, yes, please come back with rephrasing of that, and I'll do my best. Okay. The next question is, how to properly think about time horizon for the industry in which Keweenaw [indiscernible] Highland Copper operates? And by this, what's heroic versus the non-heroic time frame versus how fast or slow project might go from the concept to finish in reality? And then some Keweenaw advantage point, is Highland Copper tracking above or below expectations? So to the first part of the question, I think that the development process is very long and that one of the sort of most important cutoffs is when you have a proven resource and it's permitted, and the term is shovel-ready. And Highland is represented for some time now that it has a project that's shovel-ready. And Highland has represented for some time now that it has a project that's shovel-ready, and typically what you see at that point is an operator step in to underwrite the project, and then multiple financing sources are available to fund the construction, and then it goes into production from there. So I mean it takes a long time to get to where Highland is today with Copperwood. And then the construction phase, I mean, my understanding is that, that is typically 1 to 2 years. Tim, you can correct me if I'm wrong. I think that given the infrastructure that is in place here, maybe that period is even a bit shorter. But if the company -- Highland announces tomorrow that it was going into construction, my understanding is that we might be in a position to receive royalties within 2 years. So Tim, can you sort of elaborate on that if that's not fully accurate?

No. That's correct. And as you referenced, some of the infrastructure in place, Michigan has good infrastructures. And that construction time line would be anticipated to be 18 to 24 months.

Yes. And so given that Copperwood is sort of a world-class deposit with well over 1% grades for copper, which I understand, is increasingly rare for new projects. And it's in a jurisdiction like Michigan with lots of historical precedence for mining and this infrastructure, and there is a large adjacent project with White Pine that could be integrated. I think the answer to the question is, well, this project is really far along. And so the -- sort of the second -- leads into the second part of the question, which is, are we tracking above or below our expectations? And I think it is appropriate to share our view that we're very disappointed because it's certainly tracking well below expectations. And while we are not insiders, so I don't have any nonpublic information, from our advantage point, the company has been on the cusp of raising capital and bringing in an operator to manage this world-class project for a long time now. And so it's really a bit of a head-scratcher from our perspective. I will say that the company reconstituted its Board late last year, early this year. And so we had -- we've had high hopes. And as Tim mentioned before, so far, the one data point that we have visibility or absence of visibility on is the company's representation that it would be updating the feasibility study sometime in the second quarter, and that hasn't happened. And so we're not really clear where things stand. But the one thing we have done is spoken to operators and royalty companies and folks who are in a position to underwrite projects like this. And we've heard nothing that suggests that the project itself is impaired. I mean I think perhaps the -- this is just speculation on my part. It's possible that the breakevens have gone up due to the inflation, but I think that we were hopeful that something would happen while copper was above $4 because I think it's certainly a very economic project there. And it's not clear to us why that hasn't happened. And we'll continue to monitor it, but we sort of encourage investors to ask the company questions themselves because it seems to us that there's an opportunity that's been missed over the last couple of years. And while it doesn't impact our long-term view, it certainly does impact the NPV just given the time frames involved. Okay. Next question is -- current Copperwood Project yield expires in 2028. What happens in 2028 to the lease agreement going forward? Well, my understanding is that the lease would lapse at that point, and I will leave it to Tim to provide any additional color.

Yes. That's a fair statement. But I mean I hope we don't get that far down the path. And then perhaps we can cross that bridge if we get there.

Well -- and I would say, I mean, yes -- well, actually, I'll hold that thought for tactical reasons. Our understanding is there is one Copperwood lease that's under contract until 2037. But again, as Tim says, I think that it's unlikely that the same owner would be continuing to manage that project or one would imagine because if copper is at an economic value, from our perspective, this is a project that should happen.

Exactly.

Okay. In 2022, do you expect outside companies exploring on Keweenaw Land? And would you share that news? Tim.

[indiscernible]. We would certainly share that news. And again, this relates to the project generation activities that we've worked on in 2020 and 2021, and we're working towards those marketing efforts. The nature of the junior mining industry is they press release everything. So -- I mean however insignificant or significant it is. But we feel if we entered into an agreement of this type, it would certainly be press released both probably in coordination with whoever the company is that's doing the work. It would be significant for Keweenaw and for them. So yes.

Okay. Next question is, are there other mineral assets that Keweenaw has that can be monetized in the next year? Well, I think it depends on what one means by monetize. I mean to the question before, I think we hope that there will be partners coming in to put additional capital into advancing at least a couple of projects that we've identified. Typically, the monetization occurs at a later stage. So these are, by definition, very long lead time projects. I would say, though, that there are assets that Keweenaw owns that could be valuable in the context of a -- an actual mine operation, and one example would be the Groveland Mine asset that we have, which is not currently active, but would be a natural tailings dam for Highland or actually other potential operators in the area as well. And that -- but that would be again subject to the project going into construction, and I don't want to speculate as to when or how that might happen. Okay. I see no further questions at this time. And I'll make our accountants and legal counsel available to answer questions. Does anyone have questions for [indiscernible]? Okay. We're hearing none, I'll now ask our legal counsel, Brad Wyatt, to read the preliminary voting results.

Thank you, Jamie. The votes have been counted. Regarding the election of directors, the inspectors report that each nominee has received a majority of the votes cast. Accordingly, James A. Mai, Eric H. Speron and Mark A. Sherman have been elected as Directors of Keweenaw to serve 1-year terms. The 1-year terms will expire at our annual meeting in the year 2023 or upon the election and qualification of their successors. Regarding the motion to ratify Anderson, Tackman & Company as our accountants for 2022, the inspectors report that a majority of the shares voted were for the ratification. The tally shows 856,099 shares voted for ratification, 29,807 shares voted against and 19,367 shares abstained from voting. Based upon this vote, the appointment of Anderson, Tackman & Company has been ratified. Lastly, regarding the approval of the amendment Plan of Partial Liquidation, the inspectors report that a majority of the shares were for approval. The final tally shows 826,630 shares voted for approval, 78,231 shares voted against and 408 shares abstained from voting.

If there's no further business to come before the informational meeting -- [indiscernible] I would accept the motion for adjournment.

I would move that the informational portion of the meeting be adjourned.

And this is Paula. I second that motion.

Okay. We've heard the motion to adjourn. All those in favor, say aye. One of the proxies may speak on behalf of the shareholders.

And this is Tim. Aye.

Okay. The motion is carried, and the meeting is adjourned. So thank you, everybody. And if you have any follow-up questions, please feel free to reach out to the company, and we will engage you to the best of our abilities. Thank you again.