Metallium Limited (MTM) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to a webinar by MTM Critical Metals. I'm Michael Walshe. And we've got some very exciting news that we'd like to present today about a strategic collaboration. Next slide, please. So before I begin to talk about our strategic collaboration, just give an overview of the company for all those not familiar. So MTM is an industrial technology company. We're focused on commercializing the Flash Joule Heating, metal recovery and processing technology. Our headquarters are based in Perth, Western Australia, but our primary operations are based out of Texas, U.S.A. That's where the technology was born. It was from Rice University beginnings, and it's also where our engineering partner, KnightHawk, is based. Next slide, please. And just -- this was previously announced, but we're soon to list on the U.S. via the OTC market. So we're currently listed on the ASX, but we believe that we will get a lot of interest in this technology in the U.S. and the vast markets that are available there. We previously -- recently were in the U.S. on a roadshow and we had lots of interest in the technology. And we were presenting at a conference in Seattle called COSM, and that was a really eye-opening event to basically tap into what's potentially very, very large capital markets over there. And the interest at the conference was really strong. And we were advised to fast track this listing in the U.S. because of this interest. Now, the conference was -- it's founded by a guy called George Gilder. He's very famous in the Silicon Valley and Wall Street spaces. He's been around -- he must be about 85, but he's got a cult following. He has about 150,000 subscribers to his investment newsletter. And we hope to begin coverage in his newsletter early in the new year. So that's why we wanted to fast track this listing on the OTC to really harness that power of his newsletter. Next slide, please. And you might ask what are the comparable companies on the ASX. Well, there are quite a few industrial tech companies on the ASX. And probably our most analogous peer would be IperionX. They have also licensed a technology from a university in the U.S. and they're also focused on the urban mining or the capture of metals from scrap. They, in particular, are looking at titanium. And as you can see, some of these peers trade at very, very high valuations compared to what might be normally seen in the exploration and mining space. So very chunky valuations are available for companies that can really harness the markets like the U.S. and also anything that's innovative in the metal refining space, which we believe we are. Next slide, please. And now for the very important news update that we recently announced last week. Next slide, please. So we have now a strategic partnership with Indium Corporation. They're one of the Western world's biggest traders and refiners of gallium, germanium and indium, these ultra -- high-value, ultra-critical metals for various technology applications. Now this really needs to be underlined. These are a very prominent player. They've been around since the 1930s. They're headquartered in New York and we visited them on our recent roadshow. And one of the fruits from that roadshow was this collaboration that we can now publicly announce. These guys are major players. They've got 16 facilities around the world and their clients include semiconductor, military defense and various other industrial markets. So this really is a significant moment for us. It's the first external validation that we've been able to publicly announce. And it's what our investors have been asking for, this external validation. And this really is only the first of potentially many that are yet to come. We've got several other industry partnerships bubbling away in the background that we will hopefully soon begin to announce as well. Next slide, please. And what this really means for us is that we now have feedstock security for our demonstration plant that's currently under design and we couldn't ask for a better feedstock. The material is ultra-high-value gallium, germanium and indium. It really fits with the whole narrative in the new administration of this onshoring push back to manufacturing in the U.S.A. And it also helps us raise our profile ahead of our OTC listing. And the -- I'm sure people would be aware if they're in the metal space of the geopolitical spat that China has been having with the West. And these 2 metals, gallium and germanium, have been used several times to affect that by implementing export restrictions. China is pretty much in control of 100% of the downstream processing of these metals. Now the significance for us is that we now -- we hope, get on the radar of much more bigger players and that now -- this is now being validated by an external player. And it also establishes a framework for us towards a formal supply offtake agreement with Indium, which, as mentioned, is one of the biggest players in the industry, really derisking our path towards revenue. Next slide, please. And here's just a nice comment from Indium themselves and you'll really see what they -- they're all about onshoring. And it's definitely supported by the incoming Trump administration. So this partnership with MTM aligns with our commitment to enhance U.S.-based supply chains for critical metals essential to modern technologies. FJH technology offers a novel and sustainable solution to recover these metals from waste materials, ensuring reliable access without relying on external sources. So this really underlines the narrative that I've been speaking about onshoring in the U.S. And we're very pleased to finally be able to announce this partnership, which has been in the works for several months. Next slide, please. And now just to put it into perspective of just how high value these scrap materials are. So if you compare -- so the primary source of gallium, germanium and indium is as a secondary byproduct from mining of zinc and alumina ores. And gallium, for example, is typically present in bauxite, between 10 and 50 parts per million, that's grams per tonne, whereas we've got access to material that's 15,000x higher than that 150,000 ppm. Similar story for germanium and similar story for indium. So when you're talking about such high-value scrap, we couldn't ask for a better feedstock. And this really -- we don't need to get to huge scales to have a really commercial proposition here. Next slide, please. And these are really geopolitical metals. You'll see that the price is extremely elevated right now. This is from the last quarter, but gallium trading over USD 600 a kilo and germanium over $1.7 million a tonne. So really, really ultra-high-value materials. And China controls the majority of the supply and the downstream refining of these metals. Next slide, please. And they're strategic metals as well because they're used in so many of the technologies that underpin our modern life, such as semiconductors, LEDs, radar systems and military defense technologies. And really, this -- there couldn't be any more strategic. Next slide, please. And what are the next steps with Indium? Well, we're aiming to get into commercial production by Q4 next year. So we'll continue with the ongoing test work on their various different types of scrap that are available to us in the next quarter and into Q1. And within Q1, we also hope to finalize the design of their demonstration plant and then begin procurement, construction and commissioning early in probably March, April, and hopefully be within commercial operations by Q4. And that's when we hope to enter into the formal binding supply and offtake agreements and execute commercial operations. Next slide, please. And now just for those unfamiliar, I'll just give a brief overview and these are some of the slides we presented at the recent AGM. So next slide, please. As mentioned, Flash Joule Heating was developed out of Rice University by inventor, Dr. James Tour, who is a very renowned scientist. And it was originally developed for graphene manufacturing. And it's already been scaled up to 1 tonne per day within this graphene application. So it's already been derisked from that aspect. But we've got access to all metals on the periodic table. So we've got a huge potential addressable market. And the ambition here is to revolutionize how metals are extracted and processed. And that's beating the current incumbent techniques of pyrometallurgy and hydrometallurgy and also improve refractory mineral processing, those that require lots of energy and assets to process. Next slide, please. Now the issues with these incumbent techniques are that they're very energy intensive. They primarily get their energy from fossil fuel. The majority of kilns still use fossil fuel-derived energy. So, very carbon intensive. There's also various waste and tailings management issues with both techniques, both pyrometallurgy and hydrometallurgy. And within hydrometallurgy itself, there's a significant carbon footprint when you also factor in the footprint of the chemicals that go into it. So the overall message here is that the legacy technologies are not sustainable, and we've got a much more sustainable solution. Next slide, please. And to put it into perspective, there's some of the skepticism that we might get as a new technology in this arena. Well, a lot of these technologies here have had similar skepticism in the past, but they have pretty much changed humanity for the better. So the Bessemer converter really underpinned the industrial revolution and also the expansion of the railway systems in the U.S. because it was the first real inexpensive method to mass produce steel. And it was a batch process. Then in the 1880s, the rotary kiln was introduced, or the modern version of the rotary kiln. And that really revolutionized continuous processing and the scale at which some of these metals are able to be refined. Next was around the 1920s, the fluidized bed. This really revolutionized petroleum cracking. And all the products that come from that, like paints and plastics, really were underpinned by this technology at the time. And then the 1950s was the last major breakthrough, the electric arc, or the mini mill. And this was a technology that was using electricity to derive its heat and it was initially ridiculed. And it's the exact same situation we were in a couple of months ago. Next slide, please. And with that mini mill, that skepticism, they were dismissing it as a toy, this thing can never be scaled up, you can't use electricity to extract metals, et cetera. And now it's by far and away, the dominant technology for steel production. So it overtook pretty much every other method to produce steel globally and not just in the U.S. And this just shows that whilst we might also face skepticism that we'll never be able to scale up, this is a prime example of not to believe the incumbents. Next slide, please. And just a quick overview of the last 6 months, 2024. Next slide, please. So really, the last 6 months have been solely focused on advancing the Flash Joule Heating technology. So we've released several announcements pertaining to different feedstocks that we're processing and we've had really great breakthroughs in both the refractory minerals like monazite from rare earths and also spodumene, the main source of lithium and also the waste streams like electronic scrap and others. And we have been so focused on getting this technology to advance a number of different feedstocks and not just be beholden to one feedstock. So we really build a moat around our business and we can pivot to different feedstocks as required. We've also released several updates on the pilot plant and this 1 tonne per day unit and the recent breakthrough that we can now operate continuously instead of batch, which is definitely a major step towards the commercialization and the scale up. We've also been working on several strategic partnerships, one that we can finally announce, which is Indium, and there are several more bubbling away in the background. We've also raised $8 million and was heavily oversubscribed, and this really accelerates our growth initiatives and it also allows us to really push the message in the U.S. The upcoming OTC listing will really help accelerate that as well. And we've also been getting the name out there at events like the COSM Technology Summit. And as mentioned, we hope to get into that George Gilder newsletter, which we hope really will take us to the next level in terms of exposure in the U.S. Next slide, please. And here are just a couple of the price-sensitive announcements around the Flash Joule Heating that we've released over the last several months. Next slide, please. And now just a recap on our commercialization strategy. Next slide, please. So it's really all underpinned by the demonstration plant, which is going to be initially based in Texas, and we are on track for completion of that design by February 2025. Next slide, please. And this demonstration plant, as mentioned before, it's going to be able to handle multiple different types of feedstocks, such as the gallium scrap, the printed circuit boards, which are rich in gold and copper, and also the mineral concentrates like spodumene, monazite, niobium, antimony and also the red mud tailings and the black mass that spent lithium-ion batteries. So it's going to be feedstock agnostic and it'll be due for completion of the design end of February 2025 and then we're straightaway into procurement and construction, et cetera. Next slide, please. And just a couple of final comments about how does this U.S. administration potentially affect MTM. Next slide, please. Well, it really will be all about onshoring and localizing critical metal supply chains. And there's already been a lot of narrative from Trump in addressing this, but really the high expectation that he will push heavily to get more manufacturing in the U.S. And what we're trying to do with all the different metal applications, given that we're based in Texas, a very pro-Trump state, I think we will definitely benefit from the tailwinds from this administration and what he's trying to achieve. And when you -- if you -- next slide, please. When you consider how beholden to China, the current U.S. is in terms of metals, it's really staggering. So all the eggs are really in the Chinese basket. Pretty much most of the critical metals for several of these high-tech applications are all 100% dominated by China. And they've recently shown what they can do with both antimony and gallium, germanium that they can just turn on, turn off the taps of supply and therefore cause issue for many of those reliant on the metals for their high-tech applications. Next slide, please. And the demand for these metals is certainly not going backwards. And the data centers is probably the most easiest to get your head around in terms of metal intensity. Like the metal intensity of these data centers is really staggering. There's publication research from a recent Microsoft data center in Chicago that needed over 2 million kilograms of copper and similar numbers for alumina, steel and several other metals. So this really underscores the metal intensity of this push towards AI and the electrification of everything. It's really -- we're never going to consume more metals than we have at the moment and it's not going backwards. And there's more data centers in the U.S. than anywhere else in the world, and the expansion rate in the U.S. is also like no other country in the world either. So next slide, please. And I think this has been well touted, but there's -- I think about 6x more metals in an electric vehicle compared to a typical combustion vehicle. So the metal intensity of everything really is going up all around us. And even though we're supposed to be pushing towards decarbonizing, the amount of ore you need to mine to get these metals is only going up because of the declining ore grades. And that's why getting the metals from urban mining sources like scrap and waste is going to become a lot more prominent in our opinion. Next slide, please. And the rare earth intensity of all these modern technologies is very similar. We use a huge amount of rare earths in a lot of the military defense systems like over 4 tons in a typical submarine, over 2 tons in a typical destroyer, and half a ton in an F-35. And in the average iPhone, there are 16 of the 17 rare earth elements doing some form or function. And similar story in all the renewable technologies. So these metals are critical and yet China controls almost 100% of the supply. Next slide, please. And now just some indicative targets to drive our value in the next 12 months. So as mentioned, in the remaining quarter, we hope to have the listing on the OTC in the U.S. to give us access to a much broader investment market. We'll keep publishing test work updates as we have them. And we will obviously announce any strategic partnerships that we can when we're allowed to. And there are several bubbling away in the background. Then from Q1 to Q3, we're going to be all focused on getting this demonstration plan finished in design, procured and constructed and commissioned. And during that time, we'll also continue to put out test work updates on all the different materials like niobium, antimony, spent lithium-ion batteries, or black mass and red mud tailings, et cetera. So there's a huge amount of feedstock that we have incoming to test and all that news will be coming out as soon as possible. And we should also have some updates on the non-dilutive funding sources such as the DoD and DoE grants that we're applying to and also the grants here in Australia that we're applying to as well. And then by Q4, we hope to be in commercial operations on the gallium, germanium, indium. And that's when we will get binding offtake and supply agreements executed and hope to be commercializing and into positive revenue. And that's pretty much it for the slides on the webinar. And just a quick summary. So really, we're fully focused now on commercializing this Flash Joule Heating technology. We now have external validation from a major player in the industry. And the metals that these guys are involved with are some of the most strategic on the planet and they're also some of the most valuable on the planet. And we have -- these guys do not have another means of extracting the metals from their scrap and that's why they're interested in Flash Joule Heating technology. And we believe that with our U.S. listing, our profile in the U.S. is only going to increase and we think that 2025 really is going to be the year for MTM. And that's pretty much the end of the slide deck and I'll just go to some of the Q&A.

Thanks, Michael. Look, we'll ask the questions. I guess, I really appreciate your time today. It's been a fantastic presentation and some truly transformational news for the company. As you can imagine, we've had a stack of questions that have come through. You talked about other partnerships during your presentation and understanding the ASX listing rules, how close do you think you are to securing one or more of these?

Yes. Look, we are very close. So we previously mentioned that we were talking to players in both the lithium and rare earth spaces and also the e-waste, the printed circuit board type of players. And we're close on all of them, to be honest. Because of the lithium market, I suppose the lithium discussions have just taken a bit of a go-slow backseat at the moment, but they're still definitely very much relevant in the background. But the rare earth strategic partnership, we hope to be able to announce in the coming weeks, all going to plan. And the other partnerships like with the e-waste and the other players that we're speaking to, maybe they're more Q1 next year, Q2. But definitely, the rare earth and the e-waste and even some of the black mass discussions that could accelerate as well. But I think the most -- probably the quickest to announce will probably be the rare earth partnership, which will be another, I think, step change for MTM in terms of profile.

Excellent. Just a question that's come through. Are you fully funded for a 1 tonne per day demonstration plant? And where do you expect final costings to come in?

Well, yes, we obviously don't have final costings yet because we have to wait until the design is fully finished. And then they will pass that up to get a much more accurate cost. But at the moment, based on the budget estimates that we have, we're very -- more than adequately covered in terms of the CapEx. So that's all I can really say. But yes, we don't feel we will need any more capital requirements to build this demonstration plant.

And I guess just another question. What were your options for the demonstration part location? In a perfect world, would you locate the FGH plants on existing Indium industrial sites?

Well, yes, those discussions are actually already underway. And that is probably the most likely scenario for the Indium relationship to co-build at their various sites, probably the first one in the plants, refineries in New York. But the demonstration plant that's going to be feedstock agnostic, that's going to be in Texas. There's lots of support from the local governments in Texas for such an initiative. And we're also looking at other states like Virginia as well, which are very favorable to try and attract technology and getting jobs into manufacturing in those states. So we're initially going to be based obviously in Texas, but we're also looking at other locations in the U.S. And we also hope to have a plant here in Australia as well so that we can focus on the more, I suppose, mining mineral processing applications in the future. But right now, we're getting a plant in Texas -- and in the meantime, we may be able to also announce a co-located plant at the likes of Indium's operations in New York.

Okay. Bit of a technical one here, so please bear with me. I note the genesis of your technologies from Rice University like Weebit ReRAM, Gilder started coverage in November 2022. Do you have a firm date for you OTCBB debut?

So the current date that the OTC guys have given us is around the 12th of December. So it's very close. We don't want to put anything on paper yet until we're absolutely 100% certain of that. And then yes, the Gilder newsletter, we're locked in to be within the newsletter and we hope to begin that coverage in January next year. So get the OTC fully formalized first and then begin coverage in Gilder. And yes, I believe that when Gilder initially started covering Weebit, he -- they were at like about $1.50. And on his final newsletter, they went over $9. So I think his influence on Weebit was really significant. And the whole link to Gilder comes from the COSM conference, which James Tour, the inventor of Flash Joule Heating and Weebit technology, they've got a long relationship and Tour regularly presents at Gilder's conferences. So there's a real symbiotic relationship between the -- Dr. Tour, George Gilder and the U.S., I suppose, investment markets who Gilder really has a cult following within the Wall Street and also Silicon Valley crowds.

Is the FJH technology able to break down forever chemicals, PFOS and PFOA?

Yes. Tour and his team have published that they have successfully destroyed PFAS chemicals from soil. We don't currently plan to exploit that or get that license for PFAS, but it will be offered to us if we want it. But we haven't made any formal decision on that yet. But yes, I think it was co-funded by the DoD or Department of Defense, that specific application. And I'll just reiterate that that DoD has already invested in Flash Joule Heating at the Rice University level several years ago. It initially gave Dr. Tour his applications for metal recovery from unconventional sources like coal fly ash. The DoD, we're interested in rare earth element recovery from coal fly ash or unconventional sources. And so basically, the main message is DoD is already aware of this technology. We're in the process of applying for grants, both from the DoD and DoE. And we believe that we have a strong chance of getting those because of the previous links with the DoD with the technology.

There's a question in. What will the evolution of the Indium MOU look like? What is the first prize for progressing that?

So the evolution is to ultimately get to a binding supply and offtake agreement and a partnership where we've basically got a shared revenue model together and they currently don't have a means of processing this scrap. So we certainly won't be bullied because they're a much bigger player than us to unfavorable terms for us. We've got a technology that they've got a real big need for and they've got the material that our technology needs. So it's really positive [Audio Gap]. And the ultimate goal is to be in commercial [Audio Gap] Q4 next year. And they've already got tons of this feedstock. So I think it's -- once we execute on this 1 tonne per day demonstration plant, I think the relationship is only going to accelerate and improve.

Got another question here. Can you elaborate on the black mass e-waste from battery production?

Yes. So black mass is another problematic waste material that's very hard by conventional methods to pull out the metals from because you've got a hodgepodge mix of metals and chemicals that are from an end-of-life battery. And the current methods are really ineffective like hydrometallurgy and pyrometallurgy. There's no real commercial recovery technique yet, at least to our knowledge. And it's very difficult to separate the hodgepodge mix of lithium, nickel, cobalt, manganese or whatever derivative is in the given black mass because most batteries are going to have their own unique nuances to the manufacturer, like Panasonic might have their own battery chemistry and the other players will have their own as well. So each -- that's why it's so hard to have a consistent process that runs economically. And what the proposition here is that Dr. Tour has already demonstrated this, but you can essentially with Flash Joule Heating like we've found with all the other applications, but using the chlorination plus the Flash Joule Heating and some proprietary catalysts adding in there, we can essentially distill off the target metals like lithium et cetera, individually one at a time, giving this very elegant solution to what's otherwise a very ineffective. You basically smelt a whole lot with the traditional techniques and it results in very low recoveries and lots of problematic tailings. We've got the ability to like distill off individual target methods at a given temperature. And then as we've exhausted one we increase or change the temperature and get the next metal in sequence. So we'll be putting out some test results on our own black mass testing quite soon. But the market here is very big and there's lots of battery manufacturing plants that are being built in the U.S., including in Texas. And we've already got some discussions underway with some of the big players. And as soon as we can, again, same as the Indium story, as soon as we can demonstrate that this technology has a merit, then I think we'll be able to announce those partnerships with the battery guys as well in the near future. Given that they're building these plants in Texas kind of assists our -- massively assists our story and the negotiation with these guys.

You mentioned an OTC listing. Why is that being pursued? What do you think the benefit of it would be to Australian investors?

Yes. So there was a lot of advice from the COSM conference in Seattle where we were sitting around this table with lots of these hedge [ fundy ] IperionX type guys, and they really were pushing that it's really a pain in the ass for these guys to invest on the ASX. There's quite exorbitant fees and there's like reporting -- tax kind of reporting constraints. So it's much -- and for the low cost that is involved in getting an OTC listing, it's kind of a no-brainer. And I believe the mechanics of how it works is that the nominated market maker in the U.S. buys shares on the ASX and then transfers them to the U.S. So there's no new shares being issued and it should hopefully improve overall liquidity and growth in our profile in the U.S. as well. And as I said, given the low cost and that we're soon to debut in this Gilder newsletter, I think it was a no-brainer for us. And several guys at the conference recommended that we do it.

[Operator Instructions] I just got a last one here or maybe just a couple more. You mentioned your attendance at the recent COS conference. Can you share more about the experience and some of the highlights from a company perspective?

Yes, it was quite amazing to be in the room with the guys who, say, invented the -- or is considered the father of the Internet, Bob Metcalfe. He's a guy who invented Ethernet. That technology is still in use today and we were sitting at the same table as him. And also a guy Carver Mead, he's one of the pioneers of the gallium semiconductor chip. So basically sitting at a table with these guys who've changed history really and they're very, very down to earth guys, and they all kind of follow George Gilder. And Gilder is in his 80s as well as some of these guys. Yes, it was quite amazing really to be in the room with some of these guys who have like -- he was one of the early pushers of Google and the -- I suppose, the big tech giants of the time. And he's considered a futurist and he predicts these future trends. And as mentioned, he previously covered Weebit and really drove the value of Weebit massively in the U.S. and the profile in the U.S. And so the majority of the attendees were either hedge [ fundy ] type Wall Street guys or Silicon Valley businessmen and they all were interested in future tech. And we were introduced as tough tech. So we were one of the only tough tech companies that got to present. We're actually the only public company that got a presentation. So we're very privileged really. And it's all to do with James Tour's relationship with George Gilder, and yes, for a company like us to get such a profile. And we had a lot of interest in the technology and the narrative we were pushing was about critical metal security in the U.S. and presenting on the metal consumption for some of these AI technologies that were the main, I suppose, talking trend at the conference. Some of these guys were not really aware of the metal intensity of some of these technologies like AI chips, which use huge amounts of gallium and other critical metals and the metal intensity of data centers, some of them found quite fascinating. And several of them asked for copies of the slides presented after it. So, yes, it's quite positive. And we hope to -- as soon as we get the OTC listing, we hope to get more regular investor roadshows in the U.S. to try and grow this profile and essentially try and emulate the likes of IperionX who had a very successful debut in the U.S. when they listed in the U.S. and their primary like cornerstone investors are now all U.S.-based big strategic investors. So we hope to emulate a lot of that same story and we've got a very similar story to IperionX. So we hope it's -- given this relationship now with Indium, a big U.S. major player in the U.S., it's going to really make those conversations much easier when we try and get on the attention radar of these strategic investors in the U.S.

With that, now exhausts all the questions that have come through. Michael, a very exciting time for MTM Critical Metals on multiple fronts. I really appreciate your time today.

Thanks, [ Colin ]. Thanks for organizing.

And look, thank you to all those attending today's webinar. Have a great day.

Thank you.

Thank you.