Mont Royal Resources Limited (MRZ) Earnings Call Transcript & Summary

Well, a very good morning, everyone, and thanks very much for joining us. I'm Nicholas Read from Read Corporate and on behalf of Mont Royal Resources, ASX Code MRZ and TSXV ticker MRZL. It's my great pleasure to host this shareholder and investor webinar. Well, today, we're joined by Nick Holthouse, Mont Royal's Managing Director for what promises to be a compelling update following some important recent milestones for the company. Earlier this month, Mont Royal delivered an updated preliminary economic assessment study for its flagship Ashram project in Canada, highlighting a globally significant critical minerals asset with a 30-year mine life, robust economics and the potential to become a strategically important supplier -- North American supplier of rare earths and fluorspar. This is the first major update since the Ashram asset, which is one of the largest rare earths development projects globally. Came to the ASX late last year through the successful merger of Commerce Resources at Mont Royal. And beyond the PEA, the company is continuing to build momentum across a number of fronts, advancing downstream processing initiatives, strengthening partnerships and progressing permitting and studies. So Nick relocated to Montreal earlier this year to drive the development of Ashram. So we're very pleased to have him back in Perth for a while at least to update investors on what's next with this exciting story. So rather than a conventional presentation, page turn, Nick is going to talk through some of the key highlights from recent announcements and then we're going to dive straight into Q&A. So we'll refer to the slide pack that's in front of you. But this is intended to be an interactive session. So for those of you who have tuned in please use the Q&A tab on your browser to log your questions and we'll do our best to get to all of them. So let's get right into it. Nick, look, firstly, welcome. It's always great to see you. Thanks for joining us this morning.

Thanks very much, Nicholas, and great to be here again. It's been a while since we've done a webinar. There's been an awful lot happened, I think, since the last update we gave, which would have been back in November, I think, and I think I was probably in Malaysia at a conference at the time. An awful lot has happened. So we are very much looking forward to sharing some of those updates with the audience and looking forward to taking your questions. As I said, it's -- there's some major milestones that we've achieved very recently with this story. We're becoming much more visible with regards to government and industry now. And it's an exciting time for the project going forward. So look forward to sharing that all with you.

Thanks, Nick. Well, look, I thought we might start firstly with the important announcement that came out earlier this month, which was the PEA and sort of rather than going through all the detail, I know you've got a few high-level slides that you can share with us, but maybe just step us through some of the key takeaways from that.

Yes. Sure. So I think we'll just -- we'll dive into the slide deck first up, and then we'll probably talk a little bit about what the recent update today means, which is super exciting, too. I'm really pleased to see that pop up. I took us all a bit by surprise. But look, some of the investment highlights from the study that we've just come through. And bear in mind, too, it's been -- I think the last PEA study was undertaken in 2012. So it was very much in line for a refresh. It's something that government has certainly been asking for. We do get a lot of government support, a lot of government eyes on this project, particularly now with this really positive study that's come out to market. But also industry. Industry has really been sort of milling around the gate for one of a better word with regards to wanting to engage with this project. They've had a broad understanding of the metrics. But now that we've completed this study, we can share some of these really important metrics with industry. I think we're really going to be drawing a lot of those groups into the light now having some much more robust conversations about how we go forward. But just to refresh everyone's minds with regards to what this story is, we're sitting on one of the largest carbonatite deposits in the North American space. That's super meaningful. There's been a lot of work done in the past, 204 million tonnes at around 1.9% TREO. And this story remains open at depth. And bear in mind, too, that what we're looking at with this particular study is Stage 1 component of this study, it only looks at around 25% of that 204 million tonnes. So this project has got an awful long way to go. It's got very low legs and it's got that ability to be scaled up to meet industry demand over time. We're well and truly set for, I think, for the next 30 years with regards to taking the story forward. But along that journey, we can certainly scale up, as I mentioned before, to meet industry demands if those demands change. If they increase, we can very easily scale to meet that. We're looking at making around 17,500 tonnes per annum of TREO. That's a really meaningful contribution. If you start breaking that down, that will come out at this stage. It's a mix rare earth concentrate or carbonate as we call it. It's around 4,000 tonnes of NdPr a year. It's quite a significant chunk. Really importantly, as well, we're looking at around 100 tonnes of DYTB that come along with that as well. This is not a heavy mine, but what we do have, and this is the magic of this story is the metallurgy works, okay? So we've got -- we're starting off with a good resource. We're starting off with a good tenor of TREO. And from that, we draw -- we have a really good, what we call mass pull. We are about -- we were able to pull a lot of metal on a per tonne basis out of that feed that goes into the plant. It's around 1.7 million tonnes a year. We're looking at this stage to keep the story off. So that, at the end of the day, when we get through the high-to-mid stage, these are the sort of numbers we're producing 4,000 tonnes of NdPr, 100 tonnes of DYTB, super important in the magnet space going forward, very much desired by Western separators and industries going forward. It's a challenging element to get hold of. Both of those elements are. New kid on the block, and this is something that's been quite exciting, something we've never really considered before is Yttrium. I haven't got Yttrium on this. I haven't shown it in this particular slide, but Yttrium is becoming really important. We do probably do around 200 tonnes of Yttrium a year. 230, I think, from memory inside that mixed rare earth carbonate. Yttrium is super important in the aerospace industry. Canada itself, Quebec, one of the third largest aerospace industry hubs in the world, which is something I've only just recently found out. So the requirement for Yttrium, always been considered a waste product in the past, is really coming to the fore. So that's become a valuable contributor to the basket going forward. The study, NPV8, 8% discount, around CAD 2 billion, super exciting post tax. So we know this thing works, networks, and we know that the way that we've refigured this project over the last 12 months with regards, particularly with the logistics plan and the way that we've now bought it forward, we were hoping to save a considerable amount of capital. We've done that, and it was also a little bit a project which is eminently operable as well. Myself coming from an operations background. This is of keen interest to me, in particular. We really want to make sure we deliver a robust project. Can watch its space in challenging times, and this is a -- with the data we've got -- we've got a very significant amount of return that comes along with this particular project, okay? Average basket price around CAD 48 per kilo. That is it's not U.S., it's Canadian. And our all-in sustaining cost of around CAD 18.50 actually, that's CAD 18.50. So we've got a good amount of head space there going forward with this story, very important. Government support, government support is really growing, okay?. We've got really -- we've had really good engagement over the past 4 months with the provincial government. We get along extremely well with those guys. We're getting lots of support from those guys, particularly around the capital infrastructure story that is key to this project going forward. But more recently, too, we're really starting to garner some interest from the federal government space as well, and we're meeting with those folks in Ottawa a couple of times now over the past few months. So that support at the federal level is certainly starting to build. One thing they've all been waiting for is this PEA study, okay? They really wanted to see this PEA study come out so they can understand and measure up this project. I think they're pleasantly surprised by what they've seen with regards to the metrics coming through. And there's been quite a bit of feedback over the last week. Governments certainly like the story that they're seeing at the moment. So we'll keep pushing that. CapEx, this is always a contentious point for these hard rock projects, but where we've set at around CAD 1.2 billion with a 30% contingency if you take that away, we sort of sitting around CAD 800 million or CAD 900 million. We're sort of sitting within the mandate with of what these projects cost, okay? That initial capital cost does not include the road. I'll talk a bit more about how we treated the road costs in this study. We certainly captured the road costs. We haven't ignored them, sort of $700 million or $800 million that's required to -- that's been estimated to build that access road down to Schefferville, which is our preferred access route now to get molecules to market. It's absolutely included in the story. It's included as an operating cost at this stage, but I think this is a real opportunity for us to wind that out as well with further engagement with the government and the support that we're seeing from those guys in subsequent studies. And that's really going to just add to the, I guess, the importance of the flavor that we're seeing in regards to the value of this project can deliver. We wind that several hundred million dollars out. It's really going to add to the bottom line. And as I said before, we're scalable. This is Stage 1 only. This is 30 years. If you extrapolate out that 1.7 million tonnes per year feed grade that we're looking at, it's a 120-year mine life. I guess, the anticipation is that over time, industry demands will increase, and the throughput for this mine will increase as well, eminently scalable to be able to serve multiple customers, okay? And it doesn't just stop with rare earth elements. We have fluorspar and Niobium as well as we go forward, Nicholas. So this is a multifaceted project. The fluorspar comes along with the rare earth elements in the main Ashram deposit. Surrounding the Ashram deposit we have multiple Niobium and fluorspar hits, some of really elevated fluorspar grades. We're seeing around 5% to 6% within the deposit itself outside the deposit in the Mallard district, which is only 1.5 kilometers away from the main Ashram deposit itself, and would have seen this in the announcement, we're seeing fluorspar grades of up to 30%, 35%. So that's super exciting as well. There's lots of strings to the bow here. At the moment, the focus really is on that rare earth element story taking that forward. Secondarily, monetizing the fluospar that comes along with those rare earth elements, okay? I'll just split to the last stage here on the highlights. I really want to focus on some Q&A to make sure we capture all the concerns of the audience out there. I'm sure you all read this document back to front. But again, highlighting on some of those findings from $2.3 billion, post-tax NPV, really strong metrics there, 22% IRR payback, theoretical payback in 3.9 years. Initial CapEx, $1.2 billion, as I said before, these are big ticket items. They are not cheap projects to build. But when you look at the resource base that we're sitting on, this is certainly justified okay? We're not here for 5 years, 10 years, 15 years with this project. 30 years in Stage 1 with the ability to go out to 120 without turning it right again, okay? Going back in drilling, looking further down dip, we'll certainly be turning up more of those tonnes that are available. Talking about tonnes as well, the BD zone, which is another announcement that came out a few months ago really is an opportunity for us to grow the tenor of the resource. The BD zone shrouds, the high-grade core that we're looking at 203 million tonnes, 204 million tonnes. We really think there's an opportunity there to turn that into a saleable concentrate as well. Now if that comes along, we're looking at a significantly larger resource that we have at the moment. All-in sustaining costs, these are really important, $18.58, remembering that our current basket value sits at around $43, $44. These special Canadian numbers, remember. So a good gap there, a nice breathable chunk of head space there for us to exist in and allow some of those price fluctuations going forward. 17,500 tonnes of TREO and a mine life of 30 years, okay? So that's really the highlights, Nicholas, I guess, with regards to the story going forward. I think the other question you're alluding to is more around the recent announcement. Is that right?

Yes, that's right. Nick, I thought it would be good to touch on the -- this morning's announcement, which is you were talking earlier about infrastructure and the importance of that. You and other players have welcomed an initiative by the Naskapi Nation this morning. So perhaps you could tease out some of the significance of that for investors.

Yes, absolutely. I mean there's 2 key components to this story going forward, okay, when I jumped on Board 12 months ago. One was the requirement to get some sort of technical assessment out, which really shows the, I guess, the opportunities for the Ashram deposit and how it can fit into an alternative supply chain story for the West. So this PEA document has certainly done that, and it's sort of exceeded my expectations, the ability or the amount that we've reduced the capital cost over the last 12 months would really slam the capital cost down. We've done that through some, I guess, some smart thinking around logistics routes. That's allowed us to move the chess pieces around. The Saguenay story for hydromet is really important, getting that hydromet facility off site, getting into an industrial hub like Saguenay is super important, very cheap power cost there. It's a plug-and-play situation with regards to power, water and gas. And we're getting a lot of support from provincial government, in particular, to locate into that area. They really are looking at Saguenay's becoming a critical minerals processing hub for lots of other industries as well. So we're very pleased to be participating there. But the combination of all those things, we've reduced CapEx. We've made this project much more operable. We'll come up with that all-important sustaining cost per kilo TREO. We've really got that into a comfort zone. And the ability for us to reduce that with further studies and some deeper thinking, I think, is real as we go forward now into the pre-feasibility study. But the logistics piece that comes around that, that's -- I guess that's what that announcement is really about today. And that's the second part of the story. PEA, point one. Second point is how do we get molecules off site, and that's been something that we've been working very closely with government and First Nations Group on over the last 12 months. And today's announcement is super pleasing. What that really is indicating is that that First Nations support, which is super important for government to step on to, they will not move without us getting -- garnering that support from First Nations Group in this particular instance. I think this is a really important step with regards to taking that story forward. They are very keen to take this logistics piece story forward for their own purposes. They really want better access into their territories. There's a couple of mining projects, which they've handpicked, which they see as really good candidates of getting up and going forward and being a good, I guess, champion for their cause with regards to taking the story forward. We've been selected as one of those. So seeing that being officially announced on the Naskapi website a few days ago was really wanting. We're really pleased to see that. It means those conversations are moving forward. They are becoming real and tangible. And with that support from the First Nations Group, it certainly becomes of a lot more interest to government groups to look at stepping on and supporting an infrastructure piece in this part of the world. So this is not just at the provincial level. We're getting really good support from Invest Quebec, DMRNF and also a group called Society the Plan Nord, 3 key government groups which are looking to open up access to this all-important Northern Quebec space that we are looking to operate in. And at the federal level, we've had really meaningful conversations with the Prime Minister's Office, Department of Defense, Department of Transport, the Ministry of the Economy and the -- and [indiscernible] sorry, the name just gave me for a second there, but really important federal government groups that really want to see these projects go forward. It's not just about us getting a road built for us. That's certainly not the case. This is the First Nations groups indicating that they want federal funds to go forward and look at opportunities for opening up their own territories for their own benefits and with us being the secondary benefit to that conversation being that it opens up access for mining companies as well. We're certainly pleased to be in that space and working with these groups to take that story forward. So that's really where that announcement sort of sits, Nicholas. It's super exciting for me. There's been an awful lot of work that's gone on in the background and is culminating, we hope, some very interesting and exciting announcements in the very near future around support for this infrastructure story going forward, consortium of sorts that goes forward and lobbies government for funds to go and build these roads. So a PEA in place, this road story is really starting to crystallize with regards to government support. Those 2 key elements of what we said that we needed to go out and solve at the start of this process. PEA has been knocked over great results there. The next thing is getting this government support for an infrastructure piece around the road puts bed. And I think we're getting very close to that now. So this announcement is a very solid step forward with regards to that whole story.

That's fantastic, Nick. We've got a lot of questions, so -- and I see they're coming through online here as well. But before I get into some of those, just a lot of shareholders and investors have asked about the share price over the last couple of weeks. Obviously, the PEA landed in a week of extreme volatility before the Iran conflict has since been resolved. Was that -- has that been the main factor, do you think? Or have there been other factors? And I suppose it's fair to ask what has the feedback been more broadly on the PEA, both from investors and other stakeholders?

It's a great question, Nicholas, and it's been -- it's been really hard to put a finger on, to be honest. Some people have sort of intimated that they think that the price deck isn't perhaps correct. That's a valid point. Price decks are price decks. One thing you can guarantee with any price deck in any commodity is that for nearly all or nearly 100% of the time, it's going to be wrong. Those forecasts are forecasts. There's a whole bunch of moving parts that feed into those matrices which build up those forecasts. We use a group called Adamas. Adamas are absolutely -- they're well known and well regarded in the critical minerals space with regards to price forecasting. The deck that we have used is really focused on a non-China route. And I think that's an absolute valid -- absolutely, that's a valid approach to take going forward. The non-Chinese decks are fairly new. So there's what they call a CIF U.S. deck, which is popped out and a few of those forecasters are starting to develop those decks. There's enough sort of sales outside China now which can support those price decks and the metrics and the -- what we're seeing in the downstream space to build out those ecosystems for industry to use those molecules outside of China is real. That is starting to grow. There's a lot of commitments that have been made in that space. So the U.S. pricing deck, what we've gone through is the European pricing deck. We really see a strong connection with Europe going forward. I think there's a lot of opportunities in Europe as well as the U.S. as well. But in this case, we've chosen the European deck. They're quite similar. But what it's really demonstrating is, and this is something that we've been really pushing for in the industry for quite some time now. We need to get away from that very opaque Chinese pricing story, which we've always sort of been living and dying by and we've been heavily manipulated by, unfortunately. Projects have really suffered in that sense. There's been lots of projects which have come quite close to the financing point and have been manipulated, I guess, out of that ability to get to that last stage and get built because of that strong influence that we see coming out of China and their ability to control the market. So that I think we're well on the way to seeing a bifurcation in that story. And on top of that as well, you have the $110 floor price, which is becoming -- there's a couple of businesses which have availed from that in the U.S. space and more recently, Lynas in Japan. So $110 as a floor price story absolutely suits us as well. We'd be quite happy living with the floor price, a minimum price of $110. That absolutely works for us and then sharing in some upside as well. So that the deck that we've chosen, it's not the upper case, it's not the lower case. We've sort of gone from the middle of the road in that CIF pricing deck. And I think that is completely justifiable in this case. When we get to the next stage of work, the PFS, there will be a new price deck, okay? Very likely that we'll probably stick with the European format with regards to pricing and very likely we'll probably sit with the base case again. But who knows what those numbers are going to look like in 9 or 12 months when we get to that stage, of course.

Excellent, Nick. Thanks very much. Let's get through these questions. So a few investors have asked, do you -- does the company plan to issue flow-through shares in Canada this year?

No. Unfortunately, flow-through is a really interesting concept in Canada. Flow-through at the moment is unfortunately just restricted to exploration activities. We don't see ourselves doing any exploration activities over the next 12 months. I'm not saying that next year, we don't. We may look at potentially doing some additional drilling next year, but that's a decision that hasn't yet been made. So the potential for some flow-through there is possible. But what we are really -- we're working with some lobby groups that are very keen on pushing or extending the boundaries of flow-through to cover environmental permitting, metallurgical studies and engineering studies as well. And that's where it gets really exciting for us, I think, in the space where we're really not in that exploration space anymore. It's really about a development phase for us. So if we could secure -- if they do get that legislation change, I think there's another review for that towards the end of this year. If that does change, that would certainly be of interest to us to go and raise some funds under that flow-through story because it will be completely applicable and would fit our development profile going forward.

Okay. Thanks, Nick. I have an investor that notes here that the flow sheet, your flow sheet proposes the production of a mixed rare earth concentrate, which she says further downstream than a lot of other peers. If you were to produce a concentrate instead, what's your gut feel on the potential reduction in CapEx?

That's a great question. It's certainly something we are -- we have been looking at from Day 1. We've always sort of said that we're open to those sort of options. It's really about finding the right sort of industry partner. So I guess, at a thumb suck, I'm just mentally flicking through the capital cost numbers here. We'll probably see our capital cost with contingency come down to something in the order of CAD 700 million to CAD 800 million, I would think, by dropping out the entire Saguenay of hydromet story. So that's what we're looking at $5 million to, say, $500 million with contingency by removing that. But again, it really comes down to partnerships, who would we sell that product to. There are some industry players that are certainly interested in looking at accepting a concentrate only and doing that hydromet processing themselves or potentially in a JV type arrangement. So all these things are opportunities that we will be looking at as we keep going forward. We've got a few months now through to the end of the year. We certainly aren't kicking off the pre-feasibility study in full swing off the back of this study. We've got a little bit of work to do, and we've got some real opportunities here to go and shop this PEA around and see what sort of interest we can get from industry and government with regards to how we go forward, particularly in some sort of non-dilutive funding approach. I think this story really crystallizes the opportunity for Ashram, along with what we're seeing happening in the road space as well. That's really starting to move forward with the announcement that you saw come out this morning that I can't stress how important that acknowledgment from the First Nations Groups is. It's a real positive step forward. So for us now to start looking at some of these industry players and looking at how we can -- they can potentially participate in some nondilutive way with helping us take that story forward is really important. But I think to go back to, I guess, the grist of the initial question, absolutely going to a concentrate-only story is something we can certainly entertain. Payability is somewhere between 30% and 40%. We just need to understand how that sits within our profile. But I really sort of -- as long as we can sort of maintain that IRR, I guess that's really where we need to try and play if we get somewhere between 30% and 40% payability on concentrate, 40% might be a stretch. 30% is probably imminently achievable. The truth probably lies somewhere in between and seeing where that sits with an IRR, we really want to try and maintain that at something above 20% if we can. And if it does that, then we would certainly look at that as an opportunity.

Thanks, Nick. You've covered -- that's a great answer on the product there. I just wanted to throw this question in here that it was a great question that was e-mailed in about offtake, just to flesh that out a bit more. The question was, can you describe what the likely customer base for Ashram's planned product actually looks like? Are there existing Western processors, magnet manufacturers, OEMs or government-backed entities that could consume Ashram produced material at commercial scale? And how advanced are those discussions?

Great question. Look, it's chicken and egg sort of stuff. As I said before, there was a couple of key things we needed to get in place before we could sort of take -- bring a lot of those groups in from the shadows into the life, which is starting to happen now. We're getting some really positive feedback from industry that we have been talking -- we've been talking to lots of groups in industry, lots of groups in the U.S., lots of groups in Europe in particular. All these folks are looking for molecules. Some are looking for material to separate. Some are looking for magnets, okay? It's a growing story, the whole ecosystem that's required to get from separated oxide, for instance, or a mixture of carbonate through to a magnet. There is -- it's a very different space from where it was 8 or 9 years ago when I first started in this industry. We were faced with the same sorts of questions and the same sorts of challenges. Very tough back then. It's certainly becoming easier in that space. There's some green shoots around that midstream processing and downstream processing area. I think there's real opportunity in Europe. We certainly are looking very closely at some opportunities in Europe. I've just been through Europe on a trade mission with Invest Quebec. It was a fascinating trip into Germany, France and into Belgium as well. Certainly getting a lot of interest from industry groups there with regards to securing molecules in various forms. So look, there's nothing concrete in place at this stage. We now have the document in hand that we can actually go back to these groups and start having some more robust conversations about how we go forward. And how they can participate as well, as I said, nondilutive equity in our story going forward is first prize. I think we've got some real opportunities now in attracting some cornerstone investment around from some of these groups, some of these larger groups going forward, but we really needed to demonstrate to them what the metrics of the Ashram project look like. And I think we've done that now. And I think there's a lot we can do to improve those metrics as well going forward. But as long as those conversations go, I think we're in a good space.

So there's a parallel question here, Nick, from the same investor on funding, financing, and you're probably going to say the same thing about the importance of the PEA document. But he says that understanding the various sources from where capital can be raised given the CapEx requirement, what he's interested in some commentary around the specific sources of capital that you see coming into the mix -- is it commercial lenders, government agencies, OEMs, strategic partners, ECAs or I guess, all of the above? And what discussions are already underway on that front?

Yes. Well, I guess the short answer to that is all the above. That is the traditional mix of these projects. They have not been easy to finance in the past, and that's been a real challenge. Government support is key in taking these stories forward. Commercial lending is tough. Commercial lenders typically do not want to play in this space. However, there's a couple of things that have changed recently, which may change that view. I don't think it's -- as far as I know, I haven't heard of any commercial lenders stepping into the space to debt fund projects like this. But the addition of the floor price maybe that's a catalyst for these groups to take a step closer and look at potentially funding these. If we can guarantee a floor price in projects like Ashram, then I think it becomes of more interest to commercial lenders. But at the moment, it's the classic case of debt financing typically from government funds. We're certainly talking to those folks in Canada and in Europe at this stage, not so much in Australia, but those conversations will come, I think. And I'm sure the audience can work out who those groups are. There are government groups which will support in that space with regards to debt financing. Very much looking to industry for support around cornerstone, nondilutive sort of funding approach with regards to equity going forward. ECAs, absolutely. ECAs, it's a little early to engage with ECAs at this stage. We really need to be a little sharper on what things like our mechanical equipment looks like. That's typically where that funding comes from. Once we understand that to a higher level, then we can probably start engaging with those groups. Towards the end of the PFS, it's probably a good time to start having those conversations. Certainly not at the PEA level. We haven't identified any specific equipment groups or countries where that equipment would come from at this stage, which will drive those conversations. But it's a real mix. I think in a short answer, all the above would help fund that mix. Again, this PEA document is what we've needed to sort of really start having those deeper conversations around that. And we've got that now and we can advance through that door into that next room and start getting a little bit more meaningful with those discussions.

Excellent. Thanks, Nick. A investor has just asked online here that the CapEx outlined in the PEA, the $1.23 billion, he says excludes the road development component. How do you plan to fund that aspect of the project? And are you talking to any strategic partners on that front?

Sorry, you're talking about the road.

The road, yes.

Well, at the moment, the plan is that -- the ultimate plan is that government comes in and builds this as a piece of national infrastructure. And as I said before, this is something that the First Nations Groups are looking to government to fund. At the moment, we have a grant from the CMIF which is run under the NRCan for $2.6 million. That's to go towards road studies looking south between Ashram and Schefferville. So we're just working through the DD component of that. We're expecting, I think, all our documentation went in for that grant around 2 months ago, 6 weeks ago, perhaps. No feedback yet at this stage, which is a good sign, I think. So we're getting reasonably close, I think, to getting some sort of firm commitment from government for that $2.6 million. Now that will go into -- if there's some sort of consortium that comes together to take this story forward mining groups and First Nations Groups, we would look at putting that money into that consortium. Now we'd be focusing on our access route only. Other mining groups will have their own interest with regards to access routes as well with the First Nations Groups really controlling how that I guess, that road network falls out. But that $2.6 million would certainly go into that to kick that process off for us really, first step in the road access story really understanding what is an agreeable alignment between Ashram and Schefferville and First Nations group. We need to make sure that they're comfortable where that road alignment sits. That's step 1. And then step 2, we start looking at -- once that alignment has been settled, really start looking at some of the engineering that goes into that and the permitting process. But our expectation is that at some stage, with that government commitment, that those processes will be taken off us and it becomes a government-funded story in its entirety from permitting design right through into construction as well.

Excellent. Thanks, Nick. Probably a good opportunity just to sort of tease out from you a bit more, I guess, the what next question here. And also just the company's funding position. You mentioned the road grant coming in, you're well funded cash-wise. What happens next in terms of -- and how do you sort of transition into that PFS phase? How -- can you sort of talk us through that process?

Yes. Look, absolutely. We are -- certainly aren't interested in barrowing long into full PFS. We've still got a reasonable treasury sitting with us at the moment. I think we're sort of sitting around the $5 million mark with regards to funds, we have another $2.6 million, which is taking its time to come back in, but that's a rebate from flow through from drilling -- tax rebate from drilling from a couple of years ago, actually, but that's been granted. We're just waiting for that -- those funds to hit our bank account. So I think we've got a reasonable amount of money to sit on for the next while. We certainly don't need to go and chase any more funds this year. It's -- as I said before, it's really about using this document now and starting to work in a much more meaningful way with industry groups and looking at bringing them to the table, showing them the opportunity, demonstrating the opportunity for this project and having those deeper conversations and trying to attract that nondilutive capital into the story now. I think that's the real opportunity for us. That's really where our focus is for the remainder of this year and probably the early part of next year. There are a few bits and pieces we will be kicking off. We've got a little bit of work with ANSTO coming up, which is going to be really interesting, looking at potential for a mixed rare earth oxide as opposed to mixed rare earth carbonate, for instance. These are just trade-offs as we go into the pre-feasibility study stage. There's a little bit of permitting that we're going to kick off. We made some really solid gains on the capital cost of the tailings dam on site, for instance just through shuffling that around. But we do need to go back and do a little bit of baseline work around that just to cover that area. So we're going to get that knocked off as well. And that will set us up for a good launch into a full-blown permitting process in the early part of next year, along with the PFS as well, a couple of smaller trade-off studies, particularly on the metallurgical side. Fluorspar is a big part of that. We really want to try and make sure we do enough work to get fluorspar into the pre-feasibility study when we table that at the end of -- we're still planning on that by the end of next year. But we really want fluorspar to be a part of that. Fluorspar is going to be a big driver. My back of the cigarette packet calculations are telling me that it's somewhere between 8% and 10%, but that's an absolute welcome addition to any flow sheet. And the fact that it's sitting there, the fact that it bypasses through the process and essentially transitions into the tailings dam as the waste product, there's a real opportunity there for us to go and monetize that and add that to the financial model going forward. So super keen to do that. Valorizing waste streams in Canada is a huge deal. We think -- and there's a lot of money floating around for those sorts of stakes. There's a good chance we'll get the -- I think the tap picked up to go and do that work, particularly around in the fluorspar space. So we look forward to kicking that off. But really, as I said before, it's really about leveraging what we have achieved here with this pre-feasibility -- this PEA, sorry, and working with industry groups to get to that next level of commitment from those guys and seeing who we can attract to the table in a more meaningful way. And we've got a few suitors which are floating around in the wings there. They've been waiting for this document. We're really pleased to start working more closely with them with it.

Just you mentioned fluorspar, Nick. I might just quickly stop here on that because we're hearing a lot about fluorspar and other ASX companies have been doing -- trading rather well on the back of fluorspar projects. What is fluorspar? Can you -- just for the benefit of those that may not know, what is it? What's it used for? And why is it such a hot topic at the moment?

Yes, sure CaF2, I'm fairly new to this story as well. I have to admit it's not something that's on my radar previously. But it's an important industrial mineral. It's used, I guess, for us in the first sense, there's 2 grades of fluorspar. There's what we call a metspar product, which is around 65% CaF2, which is what we're looking to produce initially on site at Ashram just through flotation -- simple flotation. And then you've got an acid grade or an acid spar product, which is around 96%, 97% CaF2. Now we have produced that before through a slightly different flow sheet, but we know that we can produce it. And that announcement went out just on some of that previous work, which has been done 4 or 5 years ago, maybe less than that 3 or 4 years ago, I think. On producing an acid spar product that went out to market again just recently. So we can -- we know we can produce it. We know we've demonstrated that. But for us, I think first cab off the rank is really producing what we call a metspar product. That's a lower grade 65% CaF2 product. Used a lot within Quebec itself is around 150,000 to 200,000 tonnes a year is used in then Saguenay all places. So right next door where we're looking to process -- do our secondary processing for our rare earth elements through our hydromet plant. The Saguenay uses around 150,000 to 200,000 tonnes a year. In 3 of the aluminum smelters, they may have additional -- there's 3 that I know of, there could be others in that region. Why do they grade -- why aluminum smelters in Quebec when they don't have bauxite resources because it's a super cheap place to run those electric arc furnaces. Very cheap hydro power there's $0.05 to $0.06 a kilowatt hour. So a lot of bauxite is imported into Saguenay. It's smelted. The CaF2 within the metspar product that we have is a flux. It reduces cracking, I think, in the final product, the billet product that they produce, but it also lowers the melting temperature, I believe. So they use that. All that product comes out of China, a little bit out of Mexico at this stage. So we see a real opportunity right on our doorstep to sell a fluorspar product. But going further into what they call an acid spar product. The acid spar product is used in all sorts of pharmaceuticals, chemical applications, refrigerants. It's used in the food industry. But the ability to produce that is real as well. But as I said before, first stage, I think we get to a metspar product and we'll look at selling that.

Thanks, Nick. We'll do a couple of quick ones here before we start to wrap things up because we could talk all day here, couldn't we? Investor says you quote NdPr and NdPr floor price, but you don't have separated oxide to sell. Is that correct?

Yes, that's right. So at this stage of the study, study stops at the hydromet stage. So we produce what we call a mixed rare earth carbonate. It's around 55% total rare earth oxides inside that carbon or that secondary concentrate. And within that 55% is the breakdown, that basket breakdown of all the elements. So those numbers that I quoted before, 17,500 tonnes of TREO or metal, which contains all 15 elements. And amongst that 7,500, we've got 4,000 tonnes of neodymium-praseodymium, around 100 tonnes of dysprosium and terbium. And as I said, new kid on the block, around 230 tonnes, I believe, 250, 230, somewhere around there of yttrium that comes along as well. So they're really -- those 5 components really of that 17,500 tonnes, you're looking at, say, 4,000, 4,200 tonnes of material there. That accounts for around 95%, 96% of the value of that 17,500 tonnes. So those 5 elements alone, 30% of the value of the listed elements account for around 95%, 96% of the value of those elements for that total rare earth oxide basket.

Excellent. Thanks, Nick. There's a specific question here. What catalysts can we look forward to in the next few months?

I think we've already sort of hashed over that. As I said, it's really more of a deeper dive into the study. The road is super important. As I said, today's announcement, I know it's hard for folks, particularly outside of Canada to sort of really appreciate the value of that announcement, and it's a massive step forward. The fact that this is being led by First Nations groups is really -- it's quite unheard of within Canada itself. There's a lot of surprise when we -- when people talk about this, it will be a big deal over in Canada, not so much of a big deal over here, I'm sure. But rest assured, it is a very much a positive step forward in the whole road story going forward. The government are very -- they're very much keen to jump on, but they needed that First Nations endorsement to do that, and this is the first part of that endorsement.

Thanks, Nick. We might sort of wrap up with a couple of really big picture questions just to give people the big picture forward outlook for MRZ and the value proposition here. Firstly, I did want to ask you, on the ASX, we hear a lot about Brazilian rare earth projects. And I know you have some experience of that sector as well. How do you compare Ashram and what you have here to some of those projects in terms of some of the key metrics? And I guess where I'm getting to with that is why is this asset, given its location and what you have in front of you? What are the real advantages of Ashram?

Yes, sure. That can be an enormous question and I think Nicholas, look, the immediate differences are really the, I guess, the processing flow sheet. So in Brazil, they are predominantly players that we're looking at might be a different story. That's certainly shaping up to be a hard rock story. But most of the stories that are getting the air play are really in the clay space. Now clays are good if you get the grades right. And there's a couple of projects which sit within some high-grade clay areas. So they've got a real opportunity going forward. The problem with -- or the challenges around some of those projects is really at the back end is how do you put that back together. You take the clay product, you need to mine quite a bit of it, you slurry it and then you need to stick it back together into -- because they're all going away from TSF type flow sheets. No one wants to build tailings dams in Brazil, and that's a fair call. But dry -- so getting the material back in the state where you can dry stack is certainly a challenge. I think that's going to be the bigger challenge of all these projects going forward. I'm not saying it's not impossible and they won't achieve it, but it's certainly a challenge going forward. Where we are different, we are in the hard rock space. So we have a very different flow sheet in that sense. But it's really about who we connect with. I think those Brazilian projects are really very much focused on engaging in the U.S. space with the exception of VMM, I believe they've just done a deal with Solvay, which is good to see. But for us, we really are very much looking to Europe, certainly looking to the U.S. as well, but I think Europe is a real opportunity for us going forward with regards to those sorts of relationships. But very different projects. It's hard to -- it's hard to summarize them in a short space of time, Nicholas, but we have different markets. I think ultimately, we certainly have different flow sheets. We have a different cost profile. But Ashram is interesting in the sense that we've got a good grade profile, a really strong metallurgy. We produce a lot of metal on a per tonne basis. It's around 12 kilos of TREO per tonne of material that we put through the front end. We see that realized in the mixed rare earth carbonate as a separable product. So that's a real advantage, and that really puts this project. We're not the cheapest hard rock project out there, but we're certainly sitting within the bandwidth and the opportunity for us now is to really sort of drive those costs down with some smart thinking going forward.

Thanks, Nick. That's great. Just one final one to sort of bring us home. We had some great questions e-mailed in, by the way, which I've sort of weaved in here. But investors sort of asked, given the strategic significance of this project, and there's no doubt, I think everyone can see that in terms of jurisdiction and scale. Can you identify a credible customer and financing pathway given that the scale and the significance of the asset? And also, how do you see big picture, how do MRZ shareholders win out of that process, given all the pieces of the jigsaw that need to come together?

Yes, sure. Look, I think we've touched on parts of that question already. Look, I think the interest of this -- of the Ashram story is in -- it's not just the scale. Scale is important. The ability for industry to couple up with a company or with a group like Ashram, with a deposit like Ashram, which is going to be around for an awful long time. This is a multigenerational proposition. It's not going to be around for 15, 20 years before we run out of resources. We are going to be around for an awful long time. So the ability to become a steady-state producer is of interest to the larger industry groups downstream. I think that's the real advantage here. The other important thing is that we don't intend to be a project which is going to be living on the margins and sort of relying on government support to go forward. The road infrastructure piece is important. Once that is in place, then this is a project which certainly was the space quite easily. So for us, it's about delivering a project which is robust, has really -- has the best, I guess, margin in the all-in sustaining cost operating space that we can possibly deliver. And I think we've got the right sort of project to do that. So delivering a strong independent project, which is going to be around for an awful long time, I think, is really the attraction for this story. And I think that is what attracts -- and the ability to scale up as well. We can service multiple partners in Stage 1. But by increasing throughput on site, which is quite easy for us to do. We have a very low strip ratio. It's 0.3, 0.4:1. So we don't -- our upfront costs, our mining costs are very low. We don't have a -- it's a very small pit that we're talking about that we take forward. It's not an enormous mining operation by any sense. So all those things, I think, feed into a very sustainable and long-lived and scalable project, which is appealing to the industry.

Fantastic. Nick, well, look, on that note, I think we've done our best to cover most of the topics, and I think we've done that pretty comprehensively. So obviously, if we missed anything, I'm sure you'd be happy to take questions offline. But maybe just a couple of final notes before we wrap up.

Look, I just -- I know it's been a challenging time in the market over the past few weeks, but I think when you look at the metrics of this project going forward, I think the PEA that we've delivered, this is a really robust story in the rare earth space. I think where we sit geographically in that Quebec space, we're just sitting above that all important market in the U.S., close to those industries in Europe as well. And the fact that we're getting a lot of support now from government, I think this project is well and truly off to the races in that sense. We are grossly undervalued at this stage, and that is really the opportunity going forward. So get on board.

Well said, look, thanks very much, Nick. It's always great to chat to you, and we appreciate your time this morning. And thank you to everyone for tuning in. We had some great questions and some great engagement. So we do appreciate it. We will release a recording of this webinar on the company's socials and website later today. And we appreciate your time and your interest in Mont Royal and no doubt we'll be getting Nick back later this year to give us some further updates. So we wish everyone a great day, and thank you very much for your time.