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

Good morning, everyone. I'd like to call this meeting to order. My name is Jamie Mai, and I serve as Chairman of Keweenaw Land Association. On behalf of our Board of Directors, management team and employees, thank you for joining us today. We have a couple of items to attend to. And the first will be a proposal on the election of the 3 director nominees. And the second will be the ratification of Anderson, Tackman & Company PLC as the company's independent auditor. We thank those who have submitted their votes via proxy in advance of the meeting. And the formal part of the meeting will be followed by an informational section where Tim Lynott, our President and CEO, will make a presentation. We will then host a Q&A session with the management, independent auditors and legal counsel of Keweenaw. And lastly, we will declare the preliminary results of the meeting. A notice of this meeting was sent to each shareholder of record. Prior to this meeting, the company appointed Equiniti Shareholder Services as inspectors of election for the annual meeting. Daisy Kuhn from EQ is present on the call today to coordinate on their behalf. Bare with me, I'm having a technical issue. Okay. Apologies for that. Keweenaw's transfer agent has certified a list of shareholders of the company as of the close of business on April 1, 2026. This list shows that there were 1,126,284 shares of common stock of the company outstanding and entitled to vote as of the record date. The majority constitutes a quorum for this meeting. I'm advised by EQ that the quorum requirement is satisfied and that the business of the meeting may proceed. I would now like to introduce our directors who are present. In addition to myself, James Mai, we have Eric Speron and Mark Sherman. Next, I would like to introduce Tim Lynott and Paula Aijala. Mr. Lynott is the President and CEO; and Ms. Aijala is the Secretary of the company. Ms. Aijala and Mr. Lynott 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 Bill Scheltro of Anderson, Tackman & Company, our auditors for the fiscal year ending December 31, 2025; and Brad Wyatt of Greenberg Traurig, our legal counsel, who are participating in today's meeting. Bill Scheltro has been given an opportunity to make a statement if you would like. And at the end of the meeting, Mr. Scheltro and Mr. Wyatt will be available to answer questions. The minutes of the 2025 Annual Meeting of Shareholders were electronically made available to you prior to the meeting. I would accept a motion approving the minutes, and I would suggest that one of the proxies make the motion.

My name is Tim Lynott, and I move that the minutes of the 2025 Annual Meeting of Keweenaw Shareholders be approved as presented at this meeting.

Thanks, Tim. Is there a second for the motion?

Yes. My name is Paula Aijala, and I second the motion.

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

This is Tim, aye.

The motion is carried. The minutes of the 2025 Annual Meeting are approved as presented to this meeting. Ms. Aijala and Mr. Lynott as proxies are among the persons voting for the motion. The first item of business is the election of 3 directors. In accordance with the notice of Annual Meeting, the Board of Directors of the company has nominated Eric Speron, Mark Sherman and me, Jamie Mai, for election to the Board of Directors to hold office for a 1-year term expiring at the 2027 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 was received. Therefore, I declare the nominations closed. I would accept a motion regarding the election of the directors, and I would suggest that one of the proxies make the motion.

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 2027 and until the election and qualification of their successors.

Thank you for that. Is there a second for the motion?

Yes, Paula Aijala, here. I second the motion.

The second item of business is the ratification of Anderson, Tackman as our independent registered public accounting firm for the fiscal year ending December 31, 2026. I would accept a motion to ratify Anderson, Tackman as our accountants. I would suggest that one of the proxies make the motion.

I move that the following resolution be adopted. Resolved that the appointment of Anderson Tackman & Company PLC as Keweenaw Land Association's independent registered public accounting firm for 2026 is ratified.

Is there a second for the motion?

Yes. I second the motion.

Okay. It is now 10:08 a.m. The polls are open for voting on the 2 motions just received. For both the matters to be voted upon today, I would ask the proxies to submit their proxy votes to the inspector on the motions. I'll give a motion for the completion of the voting. [Voting] Okay. It's 10:09. The polls are now closed. Inspector of Election has informed us that the preliminary results of the 2 items voted on today will be available following the informational portion of this meeting. The company will issue a press release announcing the final voting results after they become available. If there's no further business to come before this meeting, I would accept a motion for adjournment of the formal portion of the Annual Meeting of Shareholders. Would one of the proxies make the motion?

I move that the formal portion of the meeting be adjourned.

And I second that motion.

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

Mr. Tim. Aye.

The motion is carried and the formal portion of the meeting is adjourned. 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. And if after Mr. Lynott's presentation, you wish to ask questions, please enter your questions into the Q&A box located on the right-hand side of your meeting screen. A company representative will direct them to management of the Board as appropriate. So with that, Tim, I'll turn it over to you.

Thank you, Jamie. And again, welcome to all of our shareholders that are on the call today. This presentation may contain forward-looking statements, so please refer to this for customary disclosures regarding risks and uncertainties. Today, I plan to cover a review of the 2025 performance and key mineral activity, our expanded mineral footprint, strategic priorities for 2026, Q1 2026 results and full year outlook, a detailed look at our recent helium transaction, priority mineral targets across our portfolio, an update on the Copperwood project, and we will save some time for Q&A at the end. During 2025, Keweenaw expanded beyond ownership into mineral management, signing 4 agreements covering 32,000 acres. These agreements strengthen title integrity, expand our footprint and reinforce our role as a central operator in the region, all without deploying acquisition capital. As a result, we remain the second largest private mineral holder in Michigan with increased scale translating directly into commercial traction. We converted that scale into 3 new partner agreements and introduced new commodities into the portfolio. I will dive deeper into our new partners in a moment. But this is a critical shift. We are no longer a single asset mineral company. We also advanced a foundational initiative, data digitization. Approximately half of the acquired historical records from 2024 are now digitized and searchable. This can lower the cost and risk for partners entering our ground and can potentially accelerate exploration time lines. In parallel, we are centralizing our physical core inventory also acquired in 2024. Combined with the digitized data, this creates the opportunity to know before you drill, an advantage that is rare in today's market. Finally, we continue to scale the portfolio through acquisitions, trades, management agreements, expanding across the UP and into Wisconsin. At a time when global demand is shifting towards secure domestic mineral supply, large-scale privately controlled mineral districts like ours is increasingly scarce. We intend to continue building on that advantage. Regarding the new partnerships in 2025, we successfully added 3 new partners across 3 distinct mineral targets. Each agreement delivers a similar structure of lease income, defined work commitments and a retained royalty interest with aggregate exploration spending commitments reaching into the multiple 7-figure range. This is a meaningful spend and also validation of both our land position and our model. At the same time, it's important to set measured expectations. While consistently adding new multiple partners each year would be an ideal outcome, the reality of the mineral exploration business, particularly at the scale we operate, is that both the pace of transactions and the profile of the counterparties will vary over time. That said, we are particularly encouraged to secure a mid-cap partner this year, which represents an important step forward in the quality and capacity of the groups working on our lands. However, these partners are very difficult to secure, and we would categorize that as a rarity. Mineral exploration is inherently a long-cycle business and success requires durability through commodity price cycles and evolving capital markets. While not every agreement will rank equally on headline terms, the strength, capability and staying power of our partners are equally critical components of a long-term value creation. As we continue to evaluate new opportunities, our objective remains to attract additional qualified mid-cap and larger partners where possible, while also recognizing that junior and small-cap companies play an essential role in advancing exploration across our portfolio. Today, Keweenaw controls or manages approximately 1.3 million acres of mineral rights as seen on this map. This is a district scale position, and this map shows there is still room to expand and fill in where we can. One note on the colors, the color red is the historical or owned Keweenaw lands and the green is considered as a part of our new mineral management areas. Our priorities for 2026 are clear and execution focused. First, we want to enable our existing tenants to move forward faster. Their success drives our success. Second, we want to continue to expand and consolidate high-quality mineral acreage, both through acquisition and management agreements. We aim to build a platform where being aligned with Keweenaw becomes a competitive advantage. Third, unlock historical data in core. These assets have been largely inaccessible for decades. We are changing that with the intent to improve exploration outcomes as a result. Fourth, partner with credible, well-capitalized operators. Minerals require time and staying power. We prioritize partners who can execute across that time line. And as previously mentioned, we were thrilled to land a mid-cap partner, but that is perhaps the exception, not the norm. Fifth, continue diversifying across commodities. The addition of helium underscores the optionality embedded in our land position. And finally, drive recurring revenue to cover operating costs. A self-funding model increases strategic flexibility and strengthens long-term value creation. 2026 is off to a good start. Copperwood generated $140,000 in recurring lease revenue in Q1 with an additional $466,000 expected or anticipated through year-end. We continue to generate incremental income from our solar and working capital agreements. Our treasury income totaled just over $53,000 in the first quarter. And importantly, we announced a new helium option in Q2, generating $122,000 in additional revenue, which is also included in the top line revenue forecast. We did not transact on any real estate assets during the quarter, but we do remain optimistic. Looking ahead, we expect net income will be positive in 2026. And for the first time since the Timberland divestiture, we expect recurring top line revenue to fully cover operating costs in 2026. We knew post Timberland divestiture revenues would be lumpy as they were in 2025, but reducing and eliminating the cash burn to a self-sustaining operation remains the goal. We expect to exit the second quarter with approximately $6.2 million in cash, while we maintain our strong balance sheet. Capital allocation remains disciplined. We invest where we have high conviction and where scale and jurisdiction provide structural advantage. Some of these activities may increase throughout the year as we have experienced success with some of our past actions, and we want to remain on the front end of other potential target areas to advantage Keweenaw's land position and commodity exposure. And we do plan to result semiannual results in August of this year. The Pulsar agreement offers a good example of the platform we've built. We optioned 488,000 acres, more acreage than the company owned just 4 years ago. And the structure is deliberate. Non-hydrocarbon gases only, helium and hydrogen, mandatory acreage reduction over time with increased option payments until it's put under lease, and we retain all the hard rock mineral rights for other mineral partners. Finally, the targeted 20,000 acres per lease will focus Pulsar's efforts. This prevents -- this preserves long-term optionality while monetizing near-term opportunity. Very few land positions can offer this level of scale, flexibility and multi-commodity exposure. In the context of a tightening global helium supply and geopolitical instability, our position is not just prospective, it is strategically relevant, and we believe this could be a template for future agreements. So what are those critical and strategic minerals in our portfolio? Copper for one at the Copperwood Extension and White Pine extension. Nickel and copper, we have identified a number of nickel and copper targets, which will be supported by the upcoming release of the USGS survey data that was done last year. Also, we believe emerging graphite potential, which will also be supported by some of the USGS survey data, continued hydrogen and industrial mineral opportunities as well as precious metals like gold. With our expanded footprint, now including Wisconsin, we are operating at a district scale across multiple commodities. And the mandate is simple: continue to advance and unlock the full potential of the land position. No annual meeting would be complete without a Copperwood update. Copperwood remains a cornerstone asset. Recent updates from the operator indicate where they have publicly announced they have appointed a new project director and formed a technical committee. They're advancing engineering toward 40% completion by the end of 2026, and they're including project optimization opportunities, which may include mine life extension, all of which could be favorable to Keweenaw. And the project plans to formally initiate project finance alongside engineering in the second half of 2026. The project is fully permitted. Copper prices remain well above feasibility assumptions. But with that said, we continue to run our business without relying on Copperwood, and this discipline ensures resilience while preserving upside. Looking ahead, we are working to build a scaled, diversified self-sustaining mineral platform, and our priorities are consistent: expand the land position, attract high-quality partners, increase recurring revenue and unlock long-term mineral value. The macro environment is increasingly supportive of domestic mineral development, and we are positioned to benefit. We expect the financial forecast in 2026 to exceed 2025, and we would like to maintain that into the future. We appreciate the continued engagement of our shareholders. Many of our recent initiatives, including the mineral management agreements originated with your input, and that dialogue remains important. And with that, it brings us to our Q&A portion of the meeting. Jamie, do you want to take a look at the Q&A queue?

Tim, this is Brad Wyatt. Are you okay if I proceed to lead the Q&A section?

Yes. It looks like Jamie might be having another technical difficulty there. So if you want to que up...

Can you folks hear me?

Now we can, Jamie.

Okay. Yes, let me just read the first one here. It reads the most recent proxy statement has the sentence, the Board remains open to increasing the size of the Board to 4 directors in the near term to add a director with additional expertise in mineral assets. I'd appreciate any color on the mineral-related expertise you're looking to add? And if appropriate, why this is a priority in 2026? Well, I think the answer to that is that we've had a fairly deliberate process to consolidate our land tenure and to understand it better. And I think that we're now getting into a mode where the interest levels are increasing from prospective resource companies. And we've talked for some time about the fact that the stable of geologists that we have is very, very helpful. And I think that as we think about the sort of the range of ways to add value as a Board, the prospect for bringing on somebody who has experience not just in looking for resources and exploration, but also in bringing together strategic opportunities with the right partners is a role that hasn't really been in play before, and we can see it becoming so. So at the moment, the Board is working hard to generate opportunities on our own. And I think that the reason that this additional language was in the statement is because I think that for the first time, we're actually thinking that this role could be one that would be really additive to the current range of experiences that the Board brings to bear. Okay. Tim, do you want to field the second one?

Sure. And I believe -- so maybe I'll work from the -- so the one I'm looking at says about 4 years ago, I read an article describing Groveland Mines as a mineral project. KLA was actively developing. To the extent you are able to comment, I'd appreciate any update or perspective on Groveland. So Groveland -- two things at Groveland. One, this is an area where the solar development is taking place. And there is a number of acres of flat ground that's ideal for solar brand -- solar panels, if you will, across some of their former tailings area. So that's our solar partner that we're working with there through a combination of an option and lease agreement for what they need to do. But we've also reserved what we believe to be an important mining asset, which is a formerly mined out iron ore pit, which is subsequently filled up with water. And the way that Eagle Mine operates, which is now owned by Talon Metals, they process their ore at their mill and then they store their tailings in a formerly mined out iron ore pit. And we believe Groveland could operate in a very similar fashion as a kind of central hub to support any additional mining that were to take place in the UP across our ownership. So that's kind of why we're keeping it lukewarm for now from a mining perspective as we see some of these other potential projects develop.

Well, Tim, maybe you can just speak a bit to the sort of the scarcity of assets like the Groveland mine because my understanding at least is that there are not a lot of prospective suitable tailing sort of locations and Groveland has the potential to be a very important asset for any operating mine, but you can maybe provide a bit more color than I can.

Yes, that's correct, Jamie. So from a mining perspective, one of the highest cost capital cost items is developing a tailings repository to place essentially the mine waste that comes out of the mine. And with this asset, that's a huge pit full of water, it's considered from an environmental perspective to be the preferred solution, subaqueous tailings deposition underwater in an oxygen starved environment that doesn't have any connectivity to groundwater and/or other surface water. So it -- again, we believe it to be a key strategic asset that could potentially unlock all of these other mines being able to have -- find a home for their tailings someday.

Tim, the next question relates to the drill core. Maybe you can provide your thoughts on that as well.

Yes. Yes. So I'll read the question. If I understand correctly, the company has several miles of historical drill core under further study. Could you please share the current status of that effort and where you hope it will be in the next year or 2? And any properly non-heroic expectations for what the data may ultimately show? So as a part of our 2024 acquisition of mineral rights, we also acquired approximately 87,000 feet of drill core. Some of the low-hanging fruit has been analyzed, and we've sent it off to labs to help us better understand what potential may lie on our minerals. Some of the results were less than what we had hoped for, but you always learn something from putting additional minerals through a lab or through assays like that. And we're currently going through a process where we're moving the remaining drill core to a KLA warehouse, where we hope to make that more available to both to us and to our partners so we can more readily either sample that or have it available for folks to, as I mentioned in the presentation, know before you drill. There's a tremendous amount of value in this drill core, and it can potentially save companies millions of dollars that they would have had to previously spend drilling on their own, and they can learn -- certainly learn from us. So again, we may do some of this work ourselves, and we may work with partners to come in and facilitate some of that work, but it's currently in process right now.

I'd just add a bit of context, which is that this reflects probably somewhere in the order of $10 million to $15 million or even $20 million at today's going rates for drilling, and that's just sort of above standard average. So it's a significant amount. I mean it's not a huge amount of additional data, but I think it is significant. And just given that these were drill cores that were taken, in some cases, many decades ago when the mineral stack and the commodity complex was functioning under a very different set of operative constraints. There's a good chance that a lot of these drills wouldn't be sunk today because they were looking for other resources. But at the same time, we have come across some very interesting intercepts and those actually led in one case to the development of a project that has subsequently gotten taken on by a junior exploration company. So I think that in terms of our expectations, they certainly are nonheroic as it relates to these drill cores, but we think at the very least, it adds a lot to the mosaic of data that we're trying to make much more accessible to to prospective resource companies in the UP sort of in a manner that I think is more consistent with what they've done on the other side of Lake Superior because I think that the amount of resource investment into Quebec has been significantly higher. And then we're looking to close the gap because we think that there should probably be a much more even balance. And then obviously, these exploration projects are what ultimately lead to real-world projects with income. And so it's -- yes, just I think another set of data points that we're hoping is going to add value. So yes, I definitely want to temper expectations, but we do think it's valuable.

The next question in the queue there that I see is, can you share any further about the economics of the Pulsar transaction and other new agreements? What royal percentage -- what royalty percentage would KLA receive during production? And for this, I'm going to kind of abstain a little bit for competitive reasons. We published what we did in our press releases, and we don't want to necessarily affect any other potential negotiations or ongoing negotiations, but I'll also defer to Jamie if he wants to put any more color behind that.

Well, without knowing much at my fingertips in terms of what Pulsar's other transactions have disclosed, I'd hold off. But I think we can say that it's not wildly out of line to the extent there are other published accounts.

Sure. And then I'll read -- it looks like the last question in the inbox right now. The USGS website on May 30, 2025, published low-level airplane flights are planned to begin soon over areas of the Upper Peninsula of Michigan and Northern Wisconsin using airborne geophysical technology. I would be interested in any commentary or perspective on whether and how this data may be relevant to [ Keweenaw's ] long-term strategy. So what I would say is the more information you have, the better, which allows companies to make better and more informed decisions on if they want to, a, explore and if they want to b, drill on this ground. And a lot of companies in this day and age, they will do geophysical flights first. There was actually 3 separate types of geophysics being run. One was electromagnetics, one was radiometric and one was gravity. And those combined surveys should be fairly informative across Keweenaw's ownership. And as you saw on the map in the presentation, our ownership spans all the way across the UP. And those flights basically covered pretty much all of our ownership. Unfortunately, they did not necessarily extend into Wisconsin, but it should help both Keweenaw once the data is available, zero in on some of our target areas and make that data more available to potential partners to come in and drill. And then with those partners, it could be -- I mean, it could be across commodities. My understanding is one of the main reasons for flying that was looking for graphite. So we certainly hope to find success in adding additional minerals from the periodic table to our mineral portfolio.

Well, I guess I'd just throw out one question, which I imagine some of the folks on the call might be sort of just thinking about. But Tim, without getting into any specifics, maybe you could just sort of talk at a super high level about what the pace of the discussions looks like today, given I think there's probably expected to be a falloff after the fast pace from last year and just to set expectations, I think there are a couple of interesting things going on and not to get into details, but just to talk about sort of the magnitude of the flow relative to this time last year.

Yes. So without getting too far into the weeds of the details. There are more -- there's more calls incoming this year than there were last year. A lot of the calls that we were making were outgoing to try to attract people to Michigan, and we're seeing that start to change. And a part of that relates to as these companies start coming to Michigan to do work, they're going to start doing additional press releases on their own showing their successes, which we hope are their successes. And across our -- again, with the mineral package that we have now representing about 13% of the minerals in the UP, the likelihood that as these companies have success and more companies want to come to Michigan, they're going to be doing work on Keweenaw's ground. And maybe in terms of the USGS data, they flew that last year, and it's our understanding that they have -- they hope to make that available by summer of this year. So summer to me means July, August, but it is a federal government program. So sometimes those time lines slip. But again, there's increased interest in Michigan. There's increased interest in domestic projects. And again, I believe Keweenaw is well situated for those -- for that interest.

Okay. So if there are no additional questions for management or Board members, I would open up the Q&A to our accountants and legal counsel who are also available. Does anyone have any questions for our accountants or counsel? And I believe the way to opt in is using the Q&A box in the presentation screen.

There is one more question that came into the Q&A, and it's not related to legal counsel or accounting, but it's -- if you don't mind, I'll read it. Can you help us understand to the extent which Keweenaw controls the mineral rights to the waters meat dome and whether or not this would even be a realistic REE, rare earth element mine given its location. Thank you for a productive year. So to address that, it is my understanding Keweenaw does have mineral rights in the vicinity. We don't know a lot of information about the waters meat dome. And I know that between the USGS and also the Michigan Geological Survey, they have been looking for potential rare earths across Upper Michigan. And right now, it's our understanding that some of these fancy intriguing rare earths don't necessarily exist on our ownership. And the other side of that is that rare earths are not necessarily rare. They're just not found in economic amounts. And to be economic, that means you have to be able to get it out of the ground and process it into a final product. And currently, there is very limited processing capacity in the U.S. for rare earth elements. And now there's another question that came in. Talon Metals released their Eagle Mine update last week. Does Keweenaw own any of the acres in their Eagle East or Keel expansion areas? And the short answer is, unfortunately, no. However, I will say Talon Metals recently acquired the Eagle Mine and the Eagle Mill, and they have a fairly large mineral package, not as large as Keweenaw, about 400,000 acres that they're charged with exploring and to be able to find the next nickel copper deposit -- Eagle type deposit across that mineral package. And I will say across their mineral package, they are a neighbor to Keweenaw on a number of areas. So there could be some interesting partnerships there.

Okay. Thanks, Tim. Do you see other questions rolling in?

There's one -- it looks like this might be the last one. Are there plans to acquire additional mineral rights in the area? And is that being actively pursued? And I would say, absolutely. As you saw from the map in the presentation, there are areas that are open across the checkerboard. And it's always better to be able to fill those in and provide contiguous exploration targets for companies. And over the last number of years, Keweenaw has gotten pretty good internally being able to identify who these mineral owners are. And we've also seen success as we demonstrated last year, either acquiring them or putting them under mineral management agreements. In fact, we signed mineral management agreement earlier this year on an industrial scale, adding just over about 217,000 acres under management to Keweenaw, and we would love to do more of those going forward, albeit the scarcity of those large packages is probably few and far between. So we were excited to get that one done, and we're certainly looking for more.

Okay. Great. Well, thanks, Tim, for your commentary. So now I would -- if there are no further questions, I would ask our legal counsel, Brad Wyatt, to read the preliminary voting results.

Absolutely. The votes have been counted regarding the election of directors. The inspectors report that more than 97% of the shares represented in the meeting have voted for each nominee. 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 2027 or upon the election and qualification of their successors. Regarding the motion to ratify Anderson, Tackman & Company as our accountants for 2026, the inspectors report that over 98% of the shares voted were for the ratification. The preliminary tally shows 750,572 for, 15,026 against and 338 shares abstained. Based on the vote, the appointment of Anderson, Tackman & Company has been ratified.

If there's no further business to come before I would accept a motion for adjournment. Would one of the proxies make the motion?

I will make that motion.

And I second that motion.

Okay. You have heard the motion to adjourn the informational portion of the meeting. All those in favor, say aye, one of the proxies may speak on behalf of the shareholders.

Mr. Tim, aye.

Okay. Well, the motion is carried and the meeting is adjourned. And thank you, everyone, for your continued interest in the company. We look forward to being in touch with any questions or follow-ups, and thank you again.