NioCorp Developments Ltd. (NB) Earnings Call Transcript & Summary

Hello, everyone. I want to welcome everyone to today's global webcast from NioCorp Developments, which will present an update on our Elk Creek Critical Minerals project in Nebraska. I'm Jim Sims, Chief Communications Officer for NioCorp. Our event today is being broadcast live from Antwerp, Belgium, where Executive Chairman, Mark Smith; and Chief Operating Officer, Scott Honan, will be providing an update on the project to investors, to news media representatives, government officials and many others, via our webcast as well as to a large group of NioCorp investors assembled there in Antwerp. Today's broadcast is being recorded and a replay will be available following the broadcast on NioCorp's website, at www.niocorp.com. Let's go ahead and get started. In our presentation today, we will be making forward-looking statements. Viewers are cautioned not to place undue reliance on such forward-looking statements and information. Investors are urged to read carefully the risks set forth in the public -- in the company's public filings on SEDAR at sedar.com and with the U.S. Securities and Exchange Commission at sec.gov. With that, let me turn the program over to Mark Smith, NioCorp's CEO, to start our presentation. Mark, please go ahead. Hang on for just a second while we fix some audio issues.

[indiscernible] Actual project activities again now, and this is very important. I want you to hear from Scott what it is that we can -- we're going to be doing and the time frames for that, et cetera. So some pretty fun stuff. There's a whole new era of freshness at NioCorp now, and I think you'll understand why here in just a minute. So here's the project financing plan that we have put together, and the plan did not include this section, just about 3 weeks ago. But we looked at the things that XM Bank the U.S. export-import bank wanted us to do in order to secure the loan from them, and there's kind of three important points. There's -- one is the work programs that they wanted, and we'll cover kind of what we're doing in those work programs, but they make a lot of sense for the most part, we're doing some drilling right now. We have what's called probable reserves and XM wants us to elevate that to what's called proven reserves. So if you're like me and you hear the words proven and probable, you just think XM is probably right, right away. But those are just words that geologists chose, and they actually have scientific and statistical meaning behind them. And the difference between proven and probable is actually really, really small and most mining companies in the world never even get things to probable reserve. But XM wanted us to take it up to proven. So we're going to do that. Scott is going to tell you about that program. I think it will be good for the project overall, because we will define the reserves better. We will have probably a 20- to 30-year proven reserve when we're done. It will create very significant positive news flow as well. So the [ one ] of that is the first part of the work program. And then the second part is to update the feasibility study level engineering for the process flow diagram changes that Scott and his team have made, which got us increased recoveries, got rares to the manufacturing success just -- it will create a very, very good economic model for us, even better than what we showed in 2022. So those are the two technical work items. Then they also want us to finish up our offtake agreements with people, because without enforceable offtake agreements, no bank will lend you money. So we have to get those offtake agreements in place. And then finally, as you can see on the right here, this is the long-term or project financing plan, very simplified format. But you can see the $780 million of XM financing, that's what they have set to us in a preliminary project letter. It's a 65-35 debt-to-equity ratio for the project, and then that keeps $420 million in equity or close equity to finish out the financing. And XM would like to see more certainty on the equity financing. And so we're working on that. But along those lines, let me mention that the equity financing, we did do a lot with XM on this last fall and their confidence level in the equity side was very high. The problem that we have now is what's called classic project financing, where you've got so much debt and you've got so much equity and the debt doesn't want to move an inch before equity moves an inch, and vice versa. And so we're kind of at a standstill again right now, and we're trying to get one or the other of them to move. So I'm working both sides of that pretty hard. You can -- going back to the left-hand side for a minute, you can see the feasibility study update, which would include the engineering and the drilling I talked about. As we go through the XM review process, they hire their consultants to do the due diligence and then we have to pay for those consultants. We're estimating that, that will be about $5 million to get through that process. And then our own working capital just to keep the lights on and pay salaries, for our team, a total of $23.5 million to reach what we call FID, final investment decision. It's a very key term. And it means that there's a light at the end of the tunnel in terms of this technical work and the money that will have to be spent for this technical work. So this is a big advancement for us to be able to say, when we're done with that, we will be at FID. So the extra column there, $20.8 million we raised in April through a public placement. That was a $20 million deal and then $800,000 in green shoe that was added. We also brought in about another $3.6 million through warrant conversions and our [ CBMM ] program or what's otherwise known as an ATM. So we had a total of $24.4 million. So we have -- the good news, we have enough money in the treasury to complete everything that needs to be done to reach that FID point in the project and get this thing fully financed. So this is a big day for NioCorp to reach this point, and we're very happy. Then we've got the issue of the DoD. We've been talking about the DoD for a long time. They have a $10 million grant that's sitting in their treasury, waiting to be sent to us. We've been working on that for, I think, over 18 months. Is that right? Yes. Sometimes it boggles my mind how long it is, but we are getting very, very close. And in fact, in March, we were saying that we should have the $10 million grant finalized with DoD by the end of March. Then I don't know if you've kept up with any of the -- there's just a little bit of news that's coming out of the White House from President Trump right now. But one of the things that he created was called DOGE. So it's the Department of Government Efficiency and Elon Musk was running that. About the middle of March is when DOGE showed up on the DoD doorstep to start reviewing and go through everything that they're doing. So the DoD, like every other agency in the U.S. government through their hands up, said we're not doing anything more on anything until this DOGE audit is done. So the DOGE audit is done and they started to work on it again. It didn't take too long, actually. So about the middle of April, Scott and I and Jim and Neal were telling everybody, we think it's going to be by the end of April, we're going to get this grant. Well, now it's May, and so now we're saying we think it's going to be the end of May by the time we get this grant. But just to put a little more certainty behind that. I'm going to read two sentences from an e-mail that we got this morning from the DoD, concerning this grant, and I take it very positively, positively. And I won't say who it's from or anything else that says there is pressure from across the White House National Security Council and inside the building, which means from the DoD itself, on critical mineral, I can't give you a specific date, but we are moving and not sitting idle. So Jim and I have been in D.C., not this last week, but prior 3 weeks, we were there for 2 weeks out of the 3 and we are going to meet with every elected official, every agency of fisher we can that has a touch on this DoD grant. And I think that we're seeing some success on that front. So when that $10 million gets finalized, then clearly, we have more than enough money to finish up that FID decision, and we have extra money in the treasury. So two important things about that. One is that, that extra money will be used as we always use money in the company to advance the project. So Scott already knows that, as soon as we get that signed contract from DoD, we're going to start the property purchase effort again because we've got the one big parcel, but we want to get all the other little parcels around there. We're going to talk to the utilities. We have agreements with them already, we just have to send them a certain amount of money, and they start building the electrical lines to the facility. We have an agreement on natural gas. We just need to tell them go, and then they start building the natural gas pipeline to the facility. And these are those little things that Scott and I know can really bog a project down if you don't get them done and get them done early. So we're going to actually try to get these done before financing occurs and make sure that once we're in that project schedule, we're going full speed at all times and don't have these little setbacks along the way. So we have good uses for those money is my comment. And then the second point I'd make about that treasury position right now and what it's going to be once we get the DoD contract, I've only been in the process of raising money for about 20 years. But, there are a couple of things you learn along the way. These two guys are going to laugh a lot about. When you really, really need money and you go to the market to get it, you're not going to get it. When you don't need money, people are coming to you to invest in the company. And I'm happy to report that, that's the position that we're in right now, and that's a good feeling too, because we haven't been in that position for a long time. They see that we're going to reach that FID decision. They see that DoD grant is going to come in. They see XM is taking this project very seriously. And then they see what President Trump is doing with critical strategic minerals. And the other thing I'll add on all of our visits to Washington, D.C. is when you go to the White House and you talk to any of your staff or any of the agency staff, the #1 issue in the White House right now, it actually is in the House of Representatives and the Senate as well is critical strategic minerals. That's what they'll tell you, if you call them up and ask them what's the #1 issue they're working on. So we're in a very good tailwinds position with unbelievable political support, and they're pushing XM bank hard. They're pushing all the agencies hard. Now don't get disappointed or depressed when the President or the White House stands out list of 10 projects that they're interested in and they're going to fast track for permitting. We're not going to be on that list, because we have all of our permits. By definition, can't be on that list. So we're not uncomfortable for not being on there. We're kind of proud of the fact that we have all of our permits in hand. So we have a lot of things going positively for us right now. And then I believe -- slide advance isn't working. Oh, there we go. Okay. So this is just a little bit on XM. I think most of this is pretty well known already. I will point out on the very last item here that we have engaged JPMorgan and they are just an unbelievable adviser and assistant to us on this project. And as a result of having them as our adviser -- so as a result of that I guess I have -- as usual, I have no control. But the -- as a result of having JPMorgan as an adviser, they suggested that we go and meet with the United Kingdom Export Finance group, which is the exact same thing in the U.K. that XM is in the U.S. So we started meeting with them in December. We were talking to them about the project, they like the project, and they have programs where if you're importing strategic or critical minerals into the U.K. from a foreign country, then they can help support that with their loan guarantee program. So we've been working with them. Scott and I met with all the people from that agency. I think there were 7 of them there, face-to-face on Wednesday, and lo and behold, no expectation of this at all. They handed us a letter at the meeting, telling us that they're interested in funding up to $200 million of debt, and that will be over a 22-year period. That will go hand in hand with XM, by the way. And how that will work is that XM has indicated willingness to fund up to $780 million, if we get $200 million from the United Kingdom Export Credit Facility, then the XM would fund $580 million of that. And we're still looking at the German government loan guarantee program as well, which we qualify for, and that could be another $200 million. And our thinking and our strategy here is, let's get all three of them on board, because as you might imagine, people get nervous when they're lending a company like NioCorp with our market cap, $780 million. They like the project. They like the team. They like the contractors we're using, all that's good. But with our market cap, they get a little bit nervous about that kind of money. So if we change our strategy and we get $380 million from XM, $200 million from the German loan guarantee program and $200 million from the United Kingdom export finance program. They all feel more relaxed about what they're loaning to the company, and they feel like their risk has been spread out quite a bit. So we're getting very positive feedback from all three of the agencies. Very common for them to work together on these things. Takes a little more paperwork because you need inter-creditor agreements between everybody. But very, very -- I like where we're headed with this right now. It was sure nice to get that letter from what they call [ UKAF ] and again, in government circles, you never actually say words, you just say letters. So XM and [ UCAF ] is what we work with. All right. Let's move forward, Jim. I'm not going to spend a lot of time on this because you've seen most of this already, but I am going to go to that bottom arrow about the scandium. And Scott is going to spend a little bit of time on scandium as well, but we've got this project pivot, which we've been undertaking in the United Kingdom. And the government there has provided about $3.8 million of funding for us. And we're just one party. We're kind of like the scandium party in the group. And then there's automobile companies, aerospace companies. There's aluminum companies, they're casting companies, extrusion because it's a very, very large project. This is starting to get some traction. And in addition to Project Pivot, we have sponsored a PhD student at Brunel University, who is working on designing and putting into place the right methods to make scandium master alloy, and then to do the measurement so that you know what the advantages are, what are the additional strengths. So we're going to get hard data on what Scandium does to aluminum, which then supports Project Pivot, which the OEMs in the U.K., in particular, are very excited about. We met with one of those OEMs on Wednesday after we met with the United Kingdom Export Finance group, and they told us that Project Pivot is their #1 R&D effort in the company right now. And they're waiting for the results to come in on all of this testing, so that then we can finalize contracts for offtake. And if we get that offtake agreement for scandium with that OEM, that means that the United Kingdom export financing comes together very nicely. Now the one problem with putting all these different government loan programs together is that they are all very different. So XM as an example, has two ways that they can support a project. One is they can actually provide the cash for the loan amount. And the other one is that they'll provide a guarantee. I want the cash because they pay 100% of the cash, whereas if you get a guarantee from them, they give you 85% of the amount that they've guaranteed. And that means I now have to go out to a commercial bank and I have to get the other 15% cleared by a commercial bank, and it won't be on the same terms and it won't be the same tenure and it will be very expensive. So we want cash, if at all possible. The United Kingdom Export Finance group, they only provide guarantees, but I love them. They provide 100% guarantees. So JPMorgan has already told us this is probably a really hard decision. I bet they didn't have to go to their credit committee for this. They will fund that United Kingdom Export Finance amount if we get approval for that 100% guaranteed, that's a tough decision. And then the German loan guarantee program is an 85% factor as well. So we've got to put this puzzle together very carefully and we're going to try to maximize the amount of cash and maximize the guarantee amount to minimize the additional loan money that we have to get. So complicated, but we're making very good progress on all fronts. Next slide, Jim. So as you've all seen, this is the -- these are the products that we'll be producing and a big part of our story. And although it's in the kind of the Burgundy stripe along there, no production of ferroniobium in the United States. Well, there isn't any ferroniobium production in the European Union or the U.K. either. No production of scandium oxide in the States, Same goes for the U.K. and the EU. Titanium dioxide, very little produced in the United States, none produced in the U.K. and a little bit produced in the EU. The other products are all the rare earth the neodymium, [indiscernible] very, very little of that is produced in the United States today and then dysprosium and terbium. And you heard Sean talk about dysprosium, he needs that to run at higher temperatures. And we will -- there is no production of either one of those in the U.S. today. 100% of that comes out of China. Next slide. We're still working with Stellantis. This has been another frustrating effort for us, but we are engaged in good discussions with them again. That company has been an absolute state of turmoil. As you know, they lost their CEO. And that CEO who's no longer there, completely fired and rehired a group that he had created 15 years ago or so. It's called a critical strategic minerals procurement group. He created that, got them together. We were actually exchanging red line copies of an enforceable offtake agreement with them, and then he fired that whole group and brought in another group. About the time we got the second group educated on what rare earths are all about. That group got fired in its entirety, and we got a third group. Then the CEO left and that third group got fired entirely. And we're now in our fourth group of procurement people trying to get that contract finalized. So I really want that contract with Stellantis, if we can get it, because the banks that we're dealing with on the loan side, the lowest credit risk possible for the offtake agreement. They love [indiscernible]. They love CMC Cometals, who we have offtake agreements with already. They love Stellantis. Tim has told us their preference is that we try to get Stellantis. So we will try to do that. But I don't lose sleep over Stellantis because, as you can imagine, right now in the rare earth world, the demand for these minerals is off the charts and nobody can provide anything except China. So we are being sought out by multiple magnet users, multiple magnet manufacturers and particularly on the heavies, the dysprosium and terbium, because nobody except China produces those minerals. So this is a good place for us to be, but I'd like to get Stellantis, if at all possible. Next slide. We talked about that enough already. Let's go to the next slide. Here's our team. You know me. Scott is here tonight. He's going to go through the details of what we're doing on site. Neil is our CFO; and of course, Jim, our Chief Communications Officer. Next slide. Okay. Now you get to the fun part where Scott comes in and he starts teaching you about geology and engineering. So hang on to your seats.

Thank you, Mark, and thank you as well to everybody that has joined us this evening on the webcast, as well as all of our friends and shareholders here in Antwerp that came out in person. Thanks for coming, and thank you for the warm welcome. As you can tell, Mark and I have very carefully coordinated our presentations tonight. Mark talked to me and said, Scott, I'm going to talk for 5 minutes, you did most of the time. But what you're seeing here is a reflection of our passion about this project. We've been working on it for quite some time. We're very enthusiastic about this latest phase of work, where it's going to lead and finally getting the project built. We're going to talk a little bit about feasibility studies here. And I wanted to report just a couple of things. We talked about the timing of our financing success, but we were able to kick off all of the work needed to get our feasibility study updated on April 22. And then, we had our first drill mobilized to the site on April 28, and I'm pleased to report that the first hole that we started drilling on April 29 is finishing up today. Our second drill is going to come out on May 19. That's Monday, if I'm correct. And so we'll have two drills running in parallel to try and get through the drilling we need to do as quick as possible. Overall, the objective here is to get our feasibility study update done this year or as Mark likes to remind me sooner than that. And again, there's a technical goal that underlies all of this, that helps us with the XM loan and that is to get to this minimum of 10 years of proven reserves. Basically the same amount or the same duration of proven reserves as the duration of the XM loan. Because I work in reserves and resources, I like this, okay. We're not going to talk about that. This is the team that's going to be working on this. And at NioCorp, we are deliberately lean. We have a small team. So I'll be running the program as the project manager. I have my colleague, [ Rick Sickbay ] as our process development lead and our CFO, Neil Shah, will put together the economic model. But other than that, we rely on really a village to put this thing together. And I've listed all the firms that are currently engaged and working on various aspects of design and engineering and geology. I'll highlight a couple of them just really quick. So [ Doug ] has got the biggest piece of the project in terms of scope of work. They have all of the geology. They have geologists in the field running our field program, so I can be here speaking with you. They'll also take responsibility as qualified persons for a number of sections of our report. The two biggest engineering partners we have are Zachry, and Zachry is responsible for the engineering design of the entire surface plant and the costing of all of that, thousands of hours of engineering are required for that work. And the other one is Dumas. Dumas is a Canadian company. They're a mine contractor. They are the company that it will be responsible, for the underground mine design and all the cost thing that goes with that. So we need a lot of help in doing these things. And the reason I wanted to highlight Zachry and Dumas is that you can do these studies with any number of engineering partners, but we deliberately selected Zachry and Dumas because they, at their hearts are construction companies, they build stuff. And so we will have a transition here, where we will go from doing the design work and the study and with continued financing success, we'll move directly into construction. So this is a planned view, looking down from the top at our property in Southeast Nebraska. On the right-hand side of the slide, you can see [ Highway 50 ] and this is kind of our base of operations right here. We have a couple of core shed steel buildings that we work out of. These yellow lines that you see are representations of where the drill holes are going to go. So it's a projection to surface of a hole is drilled at an angle that's why they look different length. A hole we just finished, our finishing is this 1 year. And as you can see, it's a pretty modest program. We're going to drill 9 holes, about 7,000 meters of drilling. What you will see when we do this is you won't see necessarily the resource and the reserve get a whole bunch bigger. What we're doing is increasing confidence. These holes are designed to sit in between other holes that we've already drilled. So we're putting drill holes closer together. That increases statistical confidence in what's under the ground and gets XM what they want. This big blob here, I've labeled as two geotech holes and geotechnical engineering or geomechanical engineering, as it's sometimes called, is an important part of this project. In that area, we're going to have our access to the mine, which will be a couple of ramps that start at surface and go down almost 3,000 feet. And it's important to understand very well the characteristics of that rock mass. So we'll probably put one, maybe two holes there just for geomechanical testing purposes. So we're very certain of the ground that we're going to be constructing through. Next one, Jim. So this is just now some vertical projections or cross-sections that show where these drill holes are going to go. And I'll start with the figure on the left. So you can see on that figure, there's a representation of our mine and the blue blocks are the current design for the mining stopes. On this particular picture, you've got a bunch of green lines. Those are historic drill holes that have been drilled into the deposit and which define the resource and reserve. And it's a little hard to distinguish, but the bright yellow lines are the holes we're going to drill here in 2025. So you can see we're not trying to explore new areas. We're putting holes where we already have a lot of information to increase confidence. The figure on the right is a very similar figure. These red blobs are just a modeled representation of our indicated resource. And so again, we're just showing these yellow lines at the holes we're going to put in to get that confidence up. Next one, Jim. A big part of running a project like this is understanding when everything is going to happen, who needs to do what and how much it's all going to cost. And Mark and I have a great relationship in that regard. He raises the money and then I go and spend it all on these work programs. But we kicked off here really at the end of April, beginning of May. The field program, the drilling, everything that needs to happen at the project site will last for about 4 months through the end of August. At the same time, we'll have surface engineering and underground engineering. Those have kicked off, and those programs will run for the duration of our technical report update. Some things have to happen sequentially. I'd like everything to run in parallel, but it doesn't always work that way. So as we get results from the field program, our resource geologist will be able to take that and update our reserves for the project. And then that -- I'm sorry, resources for the project. And then that resource update is what's used by the mining engineers to develop the reserve and the mining plan. So those things have to happen somewhat sequentially. We'll get some market reports done. My colleague, Neal will put together an economic model. And at the end of this, we'll put this wing together in another 600-page report. I've included a spending curve there just to show you kind of what the spending looks like. It's pretty linear. And certainly, in the early months, the costs are driven by the fuel program. In the later months, it's the engineering work and the report. Next one, Jim. As I mentioned, we were able to get our first drill out to the site on April 28. And like all good field programs, the first thing we had was a lightning delay, fast-moving thunderstorm rolled in. And when you're working at a drill rig where you've got a big piece of steel sticking up 30 feet into the air in an open field, thunderstorms are a big problem. There's really only two things that will slow these drills down. One is lightning and their procedure is if there's lighting within 12 miles, they evacuate the rig. The other is a tornado. But otherwise, these guys keep working. It's 24 hours a day, 7 days a week, it's continuous operations. The technology has come away with these drill rigs. So this is the drill mask, and that's where the drill rods go and the drill bit is pushed down into the ground. But this whole thing here is called the freedom loader, and the drillers are very proud of this piece of technology. It used to be -- and if you look at a movie or something, you'll see that the people who are working in the drill rigs are handling all the drill rods by hand, and it's hard work. It's heavy work. And there's a lot of injuries that happen to people's hands and backs and other things, handling those big heavy drill rods. So this company [indiscernible] has developed this particular technology to completely remove the manual labor part of handling the drill rods. And we've got a little video to show you. I hope this works. That shows you how this thing works. So what you will see is the drill rod being attached to the drill head. It comes down onto this little tray. The clamp engages. The drill head disengages leaving the rod on the tray. That's my friend, [ Greg Kroger ] telling us all about what's happening. And then this magnetic machine picks up the drill rod and drops it down. And so that's an example of a drill rod coming out of the ground. The same thing happens when you put a drill rod in the ground. So you see the gentleman standing to the right of the drill rig watching all those go on. He's the happiest guy on the rig, because he used to have to do this all by hand, and now he just gets to watch. So much safer, a much better approach. Next one, Jim. I'm going to make over logging professionals out of you all tonight. We're going to go through some training here. So on the right-hand side of this slide is a cross-section generalized geologic cross-section of the Elk Creek area. This little brown zone at the top is the glacial till or the soil that's where people grow their crops and get some of their water. Sitting underneath that is about 200 meters of limestone. And then sitting underneath that is the carbonatite. And the carbonatite is the thing that hosts the mineral resource, which is this green blob here. So this is some drill core that we just picked out of -- that we drilled. This is the first core that came out of the ground. And the way you look at this drill core is each box is like a book. So this is the first piece. Second piece, third piece, fourth piece, fifth piece. And so what I'm showing you here is that the drillers got through actually on the first day, the glacial [indiscernible] the soil, that's this brown material and then they got into the limestone. And the rest of these boxes are filled with this very nice limestone that pervades Southeast Nebraska. Next one, Jim. Similarly, once we get out of the limestone in the carbonatite, there's another change in the drill core that we see. So again, we've got this about 200-meter thickness of limestone and then the carbonatite. You can see here, you've got this gray and sometimes black limestone in the boxes. And then right about here, we changed to this dark brown material. And that's the first carbonatite we see. And again, that's significant. We know that we're in the right place, and we're getting into the right geology. Next one, Jim? What happens once these boxes get to our base of operations, which we call the core shed is that the geologists do all kinds of evaluation and testings, and marking of the drill core for various purposes. So these 2 people here are [ Jackson Barrier ] and [ Sam Carothers], 2 of the geologists from Darug taking a look at a bunch of limestone. And I've got some pictures here of 4 boxes of core that contain the carbonatite. And the geologists take a look at this and they mark it up. The first thing they do is they measure all the core. So as the drillers are drilling, they put these little wooden blocks into the core. That's their measurement of the depth that they retrieve that core from. So they measure that frequently during the drilling to make sure we understand what depth we're at. In the core itself, you'll get natural breaks. So the rock isn't a perfect mass of material. It's got brakes and fractures and zones in it. So you can see a natural fracture there. But a lot of times, when people are handling the core, other brakes happen. And when that happens, we marked the natural breaks with an X, and the idea there is that one of the measures of rock quality is the number of fractures in a given section. So we want to identify which fractures are natural and which are man-made. A big part of understanding what this core is, it's getting it analyzed and what the geologists do is they insert these blocks with red writing to guide the process of laboratory, quality assurance, quality control. So what these blocks represent is that, when we get to this point in sampling this core for analysis, we're going to insert some duplicates here. duplicates or a good wave to tell if the assay lab that we're sending it to is giving us reliable results. Another example of QA/QC is over here. And what we would insert into the sample stream at that point is a court blank. So we take some optical grade courts, which we know has absolutely no metals in it, and we inserted into the sample stream. And so if the lab comes back and says there's some metals in this sample, you've got a problem in the lab. So we do a lot of stuff to make sure that we get very good results from the lab and there are whole chapters of our technical report that are devoted to this very topic. Down here, we've got a section of core market where the core is very competent. And what we'll do is we'll come in with the diamond saw, and we'll cut this piece out. We'll know it's diameter and it's linked very accurately, and we weigh it and we do a bunch of measurements on it, but this determines the specific gravity of that section of rock. And fundamentally, when we're calculating how many tons of ore we have, what we're doing is we're taking a volume and we're multiplying it by a density. So we actually take thousands of these density measurements to make sure we have very good understanding of how the density varies across the deposit and making sure we're calculating the funds correctly. And then lastly, there's a whole bunch of markers here in the core where each of each length of core is divided into 1 meter intervals and each of those intervals will be assayed. So we end up with a very long string of assays in space, divided into 1 meter intervals, and that's what we use to generate a resource and reserve. So now you folks know everything there is to know about core logging. So if you ever visit the site, I'm going to put you to work. Next one. It's not old drudgery with the core though. Sometimes we find some interesting things. I was very proud of myself because the first section of core, I found this nice fossil shell in some mudstone. I was pretty proud of that until Sam [indiscernible], the other geologist found this piece, which had about 20 of these shells. But these shelves are something like 200 million years old. It's kind of neat to see. And then just some other interesting pieces here. Here's a speculator hematite. Nobody cares about speculator hematite, but me, but normally hematite looks like rust. And this particular hematite is pretty shiny. And you've got some nice calcite crystals in here. Down here, we have some more calcite crystals, normally calcite kind of yellowish or whitish color. These are all stained brown. You've got some black fluoride crystals here in the back. And it's hard to see, but there's a whole bunch of little cubes of pyrite or [indiscernible] gold staying on this particular piece of core. And this is really cool to look at, and I would always like to take a sample from my boss or for myself, but the geologists are heartless and they will always say, we have to cut all the core. We have to sample it all, no exceptions, no preferential treatment. So that's just some of the fun things we see with the core logging. I'm happy to say that the work there is going according to plan and on schedule. Feeling really good about finishing up the field program in August. And I think that's what we have for a technical update this evening.

Thank you, Scott. As always, captures you. I mean he makes me sit and listen to this stuff 4 times a day, and I can't get enough of it. I think it's wonderful. So that does conclude our presentation tonight. We do have some questions that Jim will read, as I mentioned earlier, and they primarily came from Belgium and the Netherlands. So let's go through those questions as quickly as we can. And then we'll stay here and answer any questions that you may have as well as individuals. Jim, you got the first question?

I do. A couple of Mark all relate to today's announcement that we did about [ UCaaS], and you addressed that pretty well, I think. So I'll move on to the next ones. What are the next steps that you envision for the XM process before they approve alone, when do you expect final approval?

Yes. Two good questions. The first one, let's go through the process. We have to finish that technical work. We have to get the offtake agreements in place, and we have to get them to a level that they're willing to issue a binding agreement to us for the loan, based on our work moving the equity forward. So those -- remember those three things are very important. So that is all in the works. We hope to have it done. There are some -- some of us in the company that talk about it being done by the end of the year. I still like to say well before the end of the year. And then it makes him cringe a little bit, but we've got to get this work done. While we're undertaking this work and we just had a meeting with XM, not this week, but the prior week. And what we're trying to push them towards right now is to sit down and negotiate what's called a long-form term sheet and that's a very important point in the process. The long-form term sheet is basically all of the loan conditions, all of the -- anything associated with the loan, except the legal language that will be in the final loan documents. And the reason why that's important is that we can negotiate that now, and we can just leave placeholders where we need to because of new technical information coming in or whatever. But I want to get that work done, because if we reach agreement with XM on that, XM has a software package that takes that long form term sheet and flips it into the actual legal contract. So it's a very quick process once you're done with that long-form term sheet. So we've got them thinking about that process right now. We hope to hear from them any day as to whether or not they're going to be agreeable to doing that. And we updated them on all of the technical work, the fundraising, the offtake agreement work that we're doing. We updated them on comments from our equity side. So they are as well informed as they can be right now, and let's keep our fingers crossed that they decide to do that quickly. If we're successful on that and they start moving forward with the long-form term sheet, then I don't see any reason why if Scott can move a little faster and get the work done we should be able to be in a position before the end of this year to reach a final binding agreement with XM. Now I -- remember that I'm the Chief Executive Officer but even worse, I'm the Chief Cheerleading Officer. And so I always think that things are going to happen faster than they do. But my message is it's coming. I see the light at the end of the tunnel. Maybe it goes into the first quarter of 2026, not Scott's work, the XM work. So I think we're really, really close at this point in time. A lot of work yet to do. A lot of air miles to go yet, but that's how close things are, and that's how serious these government agencies are about funding the debt for this program.

All right. Mark. Here's one. You have knowledge or do we have knowledge of interest from large investment funds or equity investors to fund the balance required for the project's CapEx of around $400 million?

Yes.

Next question?

I obviously can't say much about it, unfortunately because we're a publicly traded company, and we have confidentiality agreements with the people we're talking to. But we've been talking to a couple of these people for over 2 years. They've decided to partner together on this. It's 2 very large institutional funds. You would all know the names. And I'm very happy with how that's going. They're tough to deal with as well, right? I mean, they want to make money at the end of the day as well. So they're not going to give us money as part of this. And it's project financing used to be a lot easier than what it is today as well. It used to do debt and equity and it was simply you were done. Now you do debt and then you do what we're all defining now is [ quasi ] equity, because there's very little equity that these guys actually want. They probably want some form of convertible debt, maybe a streaming agreement, maybe a royalty agreement, and it becomes a very highly structured quasi-equity agreement. And it will be way more complicated than the debt. But we've seen where these have been used before. We're familiar with them. We just need to get them to tell us which parts of all those [ quasi ] equity pieces they want and then we're ready to go. And we've got [ bulge-bracket ] as we call them in the investment banking world, [ bulge ] bracket firms ready to advise us on that once we get the term sheet from them. So there is a lot of work that's gone into this and good names that we're involved with. Having said that, I will also say that much like the DoD funding that we kept waiting for and basically gave up on and raised our own money to get the technical work going rather than waiting for the DoD to fund us. I'm also not going to sit there and wait for these two firms without having some competition out there for them. So we've got -- if you've heard me say this before, we've got plan A, we have Plan B, we have Plan C, and all these plans are moving forward. We have our favorites and we have the ones that we know can provide the wherewithal to provide this funding, but we're going to make sure we're not dependent on one party at this point in time. So I think that probably answers it.

Mark, we've actually addressed -- you addressed almost all except one of all the other questions we have. So I'll ask the final question this one. It has been suggested that [indiscernible] could possibly process orders from other mines, such as in Greenland, is that true? And are there any limitations there?

Well, Scott is probably the better person to answer this, but he'll -- we'll get into a lot of details on that. So I'll try to make it really simple. Yes, we can process other ores, and that's largely because of the hydrometallurgical process that Scott and his team have come up with on the front end of our metallurgy where we put everything into solution. So we have to care to some extent what we put into that solution, but not as much as others do. We can put other ores in there. We can put recycled rare permanent magnets into that hydromet process. And then it puts it all into solution and they can use the rest of our process to pull out the products in high purity form. We may need some more capital to get some more solvent extraction, capabilities and whatnot, that yes, we can process other ores, and we can process. We've already demonstrated we can process recycled various permanent magnets, which is going to be a huge thing by 2030, 2035. Scott, did you want to add anything more to that?

Mark, you're right. I'd probably just blather on. So you did it well.

All right. Gentlemen, thank you. We come to the end of our time. Thanks, everyone, for joining us today. For those who have questions that we couldn't get to, we apologize for that, but please feel free to send those to me at [email protected], and we'll try to get back to you as soon as we can. Thank you all on the webcast for joining us today. We look forward to seeing you again very soon, either in person or through our next webcast event. Thank you and bye-bye.

Thanks, Jim.