Oby Critical Minerals Limited (NPK) Earnings Call Transcript & Summary

Hi, everyone. My name is Cristiano Veloso. I am the Founder and CEO of Verde Agritech. I'm also very happy to be able to lead Oby Rare Earths in this first phase of its development. Together with me for this presentation, I have my 2 fellow directors in Oby Rare Earths. I have our Chairman, Michael Etheridge and our Director, Andrew Whitten. Both residents of Australia, both residents of Sydney, both highly experienced in the mining sector in the corporate world. And together, we are the Board members form this new company. Further down the presentation, I will introduce in a little bit more detail each one of them as we will also be talking about the project, what's going on. And at the end, we're going to be able to answer questions. [Operator Instructions] So there the present, we will answer all of those questions. I think it's our first experience trying to find a time zone for a presentation that works across the globe. So I thank you for waking up early and joining us on this call from Australia. Those of you who are connecting from North America, they are towards the end of the day. So thanks for making the effort to join us. And for those of you in Europe who are around midnight, 11:00 p.m. midnight, I hope you don't fall asleep during the presentation. I'm pretty sure some people will send me e-mails later on and say, oh, I didn't feel you were very energetic tonight, what was going on and I feel it's quite late for me here, but don't let my tiredness, even the late hour be a reason not to understand how excited I am about this opportunity and how excited I am about this next phase of development for Oby Rare Earths. So let me start with the presentation. I'll share my screen and I will look forward to answering questions and receiving feedback towards the end. You can all see the deck now. which we prepared for tonight's presentation. The name of the project is Man Of War. Man of War is the name of a Portuguese battleship. And it was the name given by the first settlers in that region, one of the mountains where we found Rare Earths. It's an area where 300 years ago, there was a lot of diamond exploration and a lot of local fights between different people exploring for diamonds in the region. And a number of those hills, they ended up receiving names of Portuguese war ships. Brazil was mainly colonized by Portugal and the name of another hill there is [indiscernible] and we have [others]. So I think it's quite interesting how this transaction, we're actually merging the company with Nautica. I think there's something there in terms of destiny for the growth and for the future of the company. As I begin the presentation, I would like to remind you all that this presentation contains forward-looking statements and the actual results might be different. What we are developing here at Oby is a very large Rare Earths resource. So we have over 1 billion tonnes of mineral resources compliant both with JORC and 43-101. But not only it's big, it's also very high grade. So you have over 3,000 ppm of total Rare Earths oxide, which doesn't mean much in all honesty because it's really only 4 Rare Earths that represent most of the economic value of any deposit. And those 4 elements are neodymium, Praseodymium, dysprosium and terbium, which as you will see throughout this presentation, we're very lucky to have some very high-grade content of those elements. We more recently did an analysis of our resources applying a greater cutoff that was already thanks to some very good concessions with our Chairman. And even though the resource comes down, as we can see, to about 400 million tonnes, you can see how much greater resources, the average grade goes up. And quite honestly, 400 million tonnes, if you think about the in-house scoping study we did, which was looking at a 15 million tonnes per annum run-of-mine production that was still enough for over 30 years of mine life. Some of the initial work we did came back very positive with ionic clay mineralization. For those of you who are familiar with Rare Esrth, ionic absorption. Clay is the cheapest, the easiest, the simplest, the lowest CapEx type of rare earth you can look to recover. So we're very lucky already to be able to come up with results as high as 35%, which still has plenty of scope for further improvement as we progress the work program. Not just Rare Earths, but it's quite an interesting resource I will invite our Chairman, Michael Etheridge to talk a little bit about mineralogy and geology when we get to the right slide. But it has been very exciting for me to find out what stuff like rubidium is used for. So rubidium, the RB is used on atonic clocks, quantum computing, and we seem to have a fair bit of this. Something else called [indiscernible] is used for cooling semiconductors, cooling nuclear plants, which equally we have a lot of. So some very interesting critical minerals present in this deposit. As I said, we did this in-house scope of study. So this isn't compliant to JORC or anything else, but helps us look at the economic value and more importantly, allows us to plan for the next stage of development for the project. It's in a good location. So it's very close to where we built 2 mines, 2 production facilities, one bio production facility where we made substantial investment in local infrastructure. We upgraded about 20 kilometers of roads. [indiscernible] 10 have been operating in the area for nearly 10 years now, and it's quite fortunate that these other resources is so close to where we are. The transaction -- you saw the press release was the merger between Nautica and Oby. As part of this transaction, Nautica has $1 million and will be looking to potentially raise another $1 million. There has been interest from shareholders, both from Nautica and for the Agritech to participate as well as all the external investors. So the Board of Directors has decided to potentially increase the size of this raise. So if anyone in this call is interested, please reach out to Andrew Whitten or myself, and we can have a specific conversation about that. The [indiscernible] which are both public companies. They've seen their share prices going up last week since China decided to restrict exports of some rare earths which we happen to have a lot. What I will do? I will pause here, and I will allow Mike to say hi and Andrew to say hi. But Mike has an extraordinary successful career, both in the academic world and in the professional entrepreneurial world. He had set up a consultancy company in geology, which was then taken over by SRK, one of the world's largest engineering companies, and then he went on to lead this company in Australia and in Asia. And then he joined several Boards of Directors, and has been very good working with Mike over the last few months now. And then Andrew, who is a very successful entrepreneur and lawyer who has been helping us as well. And like Andrew, has been very valuable on taking it forward. Before I allow Mike and Andrew to introduce themselves as well and say hi, a little bit about myself. I am Brazilian. I am from Belo Horizonte, the mining capital of Brazil. I started my first mining company when I was 23, 24 years old. I took this company public when I was 27. Over those years, we've raised a significant amount of money. We were lucky and fortunate to be able to grow and have all the experience all the way from looking for mineral resources for projects, through drilling them, getting environmental permits, working on metallurgy coming up with metallurgical routes, getting patents. Getting process developed. Working through project finance, building operations, ramping up, getting to production, struggling with adverse markets -- and so we've been lucky over the last 20 years, you've gone through a lot of experience. So with no further ado, Mike, if you want to say hi, Andrew, if you want to say hi and then we can carry on. Sorry, Mark, do you want to go first? You go first, Mike?

Okay. Thanks, Christiano. Good morning, good afternoon, and good evening, everybody. It's a great pleasure for me to be involved in the birth of Oby Rare Earths. I think it is a very exciting project. It has the scale and more importantly, the grade. And even more importantly, for at least part of the deposit, the ability to be developed with as Christiano said, the iron absorption clay methodology, and it is currently at a value which should be attractive to investors. As Cristiano said, my background. I'm a geologist by background for training and practice for what we use and I like to count. I've been involved in research organizations, I've taught geology in universities. I've then established a consulting firm that became SRK in Australia and led that organization for a number of years before I have worked all over the world on all types of deposits, including coal and petroleum as well as a wide range of mineral deposits. And since then, I've been involved mainly in strategic advisory roles and board rights. And when this opportunity came up, initially via Andrew Whitten with whom I've worked on a number of projects then I had a good look at what was available on the deposit. I thought this is too good not to be involved in. I look forward to answering any more technical questions at the end of the presentation. Andrew.

You on mute, Andrew.

Andrew Whitten, thanks for the introduction. My background is experienced corporate lawyer and director and entrepreneur. I listed probably 50 or 60 companies, both professionally and for myself on and been involved in a number of different mining projects, both as lawyer, Investor, entrepreneur director, et cetera. Those of you who are from the Nautica side, obviously, merge Nautica with Oby to form the company going forward. And the reason we chose this project is we looked at a number of projects over a number of years. This one has all the characteristics to become a very large company. It's got a very high-grade resource in a good economic and geopolitical jurisdiction. Mining in Brazil is well trodden path. And the valuation of the capital structure was right. Nautica to partner with. And we believe there's some significant upside in the project, and it has the scale and the grade really -- to really kind of secure alternative supply for countries like the United States than looking for alternative suppliers outside of China. So thereby, kind of strategic rationale as to why Nautica partnered with Oby. And obviously, Christiano's experience in Brazil in country coming from his backyard. And yes, that's -- we're very excited about that project. And -- and yes, I'm excited to partner with Oby and take it forward.

Thanks, Andrew. Michele this screen again, and we can carry on with the presentation. I've just looked at the list of attendees, and I can see a few names in Europe, which I appreciate been awake and enjoy the call as well. There -- a little bit of a history of the project. So Verde AgriTech had about 150,000 hectares of exploration concessions in a very, very exciting area of Brazil in Minas Gerais State phenomenal with phenomenal geology -- we did a lot of sampling, and we did a lot of drilling. We looked at different targets. And one of the areas we drilled where originally were looking for phosphate to nearly 4,000 meters of diamond core drilling. And we kept everything, capital the data, capital drill cores because we had calculated a small source of phosphate recently, well not that recently anymore, but a few months ago, one of the gogologists turn to us and say, "Hey, I think there might be some rare earths in that geology. I think we should reassess some of the drill holes. So we did. We randomly picked a couple of drill holes and sent them to the lab to be reassayed and the results came back with phenomenal -- phenomenal results, very high grade as you saw from the results. We're very excited, but also very cautious because most of you who are familiar with rare earths you will know that rare earths aren't really rare. What is rare is for you to be able to recover it economically. So at an earlier -- still at a very early stage, we sent some of those drill holes to SGS to check if it could be recovered. More importantly, if it could be recovered as ionic absorption clay. It's a very simple test to do. You do pH4, use ammonium sulfate, which is a salt and you do leaching at room temperature for about 30 minutes and then you see how much it recovered. So we're very lucky that straight away from that small sample, we were able to get some results with -- which were very, very encouraging. We then sent all of the other drilling to the lab to get all reassayed. The results came back, carried on very, very encouraging, very positive. We then hired a consultant to do a resource, which demonstrated over 1 billion tonnes of resources, one of the world's largest and highest grade rare earth deposits, especially with magnetic -- very high concentration of magnetic rare earth oxide. And then more recently, we did this in-house scoping study, which showed some potential robust economics. Finally, January, February, we did the transaction spun out and now it's a separate entity with money in the bank that it will start developing the project. A bit later on during the presentation, if I'm still wake, I apologize, but later in the presentation, I will discuss a little bit more of the strategic bid the Board is contemplating and some of the stuff which is happening when -- at which point I hope it will get a little bit more exciting for all of us. So it's an area we know very well. plenty of infrastructure, what wasn't good there in terms of road, it managed to pave a lot of the local roads. So you have good access to power, water, people, you couldn't dream of a better place. This is 3.5 hours drive from where I was born. It's all -- it's all proper good place to live, work and then more importantly, to build a mine. The concessions, which Oby Nautica will be developing or 4 concessions. Together, they represent approximately 50 square kilometers, so very big. But more importantly, this is 50 square kilometers from about 5,000 square kilometers that at one point we had and did a lot of prospecting a lot of large sampling. So this is already like what you want to be developing as a mine. As a matter of fact, all of those mining rights, they already have proven resources with the Brazilian Mining Agency and it's already advancing throughout the regulatory process towards a mining concession. What you can see on this map to the left here, and I will talk a little bit more about this for the new targets, [indiscernible], which, as I said, both names of Portuguese ships given by the local 200, 300 years ago. cross-section of the deposit, it's all pretty much from surface and very wide mineralization. So the mineralization of horizon is over 50 meters thick. Towards Mike from a geological perspective, he has some interesting ideas about like where to get some of the best mineralized zones, which makes a lot of sense, and we're keen to go and test with further drilling. But from what we have and with the different cutoffs, you can see the high grade and the high tonnage for each one of the targets. So this is the first target [indiscernible], which with a higher cutoff, you have about 60 million tonnes. Then you have, again, big crop, little hill and with wide mineralization, likewise, 50, 60 meters thick with another 37 million tonnes with a 4,000 ppm cutoff with outstanding high grades for your magnetic rare earth oxides, neodymium, Praseodymium, dysprosium and terbium. And the last -- the third target, which we had drilled before Balsamo, again, very thick mineralization, 60 meters with a bigger resource here, 309 million tonnes, 4,000 ppm cutoff over 1,000 ppm of magnetic rare earth oxide. So this is there's a JORC report, there's a 43-101 report which looks at those tonnage in detail. The work we've also did more recently, it's in this slide here. And it's very, very exciting. So to the right, you can see B, which was drilled. And then to the left, you have those 2 structures. And you can see some of the results we had just from samples at surface. So you can see, for example, one meter with 5000 ppm total rare earth oxide. You can see 1 meter with 15,000 ppm, 3562 ppm of magnetic rare earths oxide. Another one here with 6,611 magnetic rare earths oxide, [indiscernible] to number of grades of this structure that runs next to Balsamo where we expect to have not just tonnage but very high grades. And what's very exciting is [indiscernible] -- so when we talk about rare earth not being very rare, but being able to recover them economically, this is true for most of the rare earths, but there's a few which are actually rare. And this is terbium and dysprosium, which you can see the phenomenal high grades we were able to get just from grab samples there, 90 ppm, 20 ppm of terbium. There's another one here, 79 ppm of dysprosium. So it's all exciting stuff. Next slide. We did an in situ analysis. Comparing our project to some of the public companies we had mentioned. So you can see how much more valuable our mineral is in comparison to the mineral being explored by those other public companies. And this here is looking exclusively at magnetics -- sorry, looking exclusively at rare earths. And you can see by the color what really matters is your NdPr, DYTB grades. You can see how they make up for like 90% of the value of what companies have. It's not even fair to call companies rare earths, I guess, when what really matters are those elements here. gets more excited than that. And it was quite interesting finding out about those new other critical minerals we have along the journey, as I mentioned, stuff like [indiscernible] and all of that contributes to the in situ value, which when you add them to the calculation, the number goes up significantly. So just -- so this is using a 1,000 ppm cutoff, okay? So those of you who are probably people from Australia [indiscernible] fresh off the bat, excited for the day have seen that this is far less than the in situ value here, but this is a greater cutoff. And you can see the value, which is added by those other elements. And that's why metallurgy right now becomes very important because by doing additional work and being able to recover not just rare earths, but also being able to recover stuff like [indiscernible], it can significantly enhance economics. Some of the results from the leaching test we did, as I mentioned by SGS. We had some conversations with [indiscernible] in Sydney, so they can help us moving it forward to a small pilot plant as well as optimizing and advancing this work forward. When it comes to the usage of the seed capital, the idea here is to be focusing on [indiscernible] that will add value to what we have. So we will be doing additional metallurgical work to further enhance some of this recovery to improve some of this understanding. We will be doing some work on some areas of the deposit for better understanding. Very importantly, we're going to be doing work on the environmental permit in this very unique situation where we can move very fast towards a mining permit from an exploration permit to a mining permit. So already has the company lined up to start doing this work. And I think looking at the other exciting stuff from the conversation before I start answering questions which is on what else is going on with the company. So for those of you who follow the rare earths sector have been following it for a while, especially capital markets, at the beginning of last year, well, if you go back 10, 15 years, there was not a cycle where there was a lot of excitement. But if we just look at the recent cycle in the beginning of last year, there was a lot of excitement on rare earths. There were several companies that went public in Australia with different projects and were progressing its development. Then in the second half of the year, the company went into rather nation. So their appetite for rare earths reduced a lot and the interest reduced a lot in Australia. In all fairness, we want to do an IPO in Australia right now, the market is probably -- it's probably closed. There isn't a window. There isn't an appetite for new IPO in Australia for a rare earths company the way we see it. Other markets though, it has been different. So in the U.S., North American capital markets, especially NASDAQ and YSC, there has been a few listings of rare earths companies, which are doing relatively well, and there is a lot of appetite, which is understandable when Trump and most of his accolades love to talk about rare earths and why it's so strategic and why the U.S. needs them so much and why the country is weak unless we can secure it from wherever it might be able to do so. So it's quite bullish there. And in that regard, we have been having conversations with different investors in the United States who are interested in potentially taking this company public in the U.S. So there are discussions going on. There are possibilities about that type of transaction. One of those conversations even has a Middle Eastern angle to it with the Middle Eastern investor who is looking to do a rare earths refinery in Saudi Arabia. So there's that possibility as well. And in the other buckets of conversations we're having, there is a very well-known large Chinese company that is potentially interested in the project. There's one other alternative for TSX for Canada, but it's a bit -- I rank it bit lower priority in comparison to the other possibilities. So the reason I'm bringing up those other strategic alternatives and discussions is that there is a possibility that we might not list on ASX, there is a possibility that there might be a transaction. There is a possibility that there might be a sale of the company even before we move things further along and the Board will obviously be reviewing and monitoring and looking at it and trying to decide what would be the best for all shareholders. Even though there's lots going on, we need to focus on what is within our control. And what is within our control right now is getting the company ready for an IPO on ASX, getting the company ready. So as soon as there is a window on ASX, we can go and become a public entity. So that's what we're going to be doing. We're going to be doing some strategic investment in the project in the coming months as we move along. We will be monitoring all of those other possibilities and continue to retain those conversations and seeing where they might take us while at the same time, focusing to get the prospective and getting everything ready for an IPO. So let me stop here and start answering some questions, which I can see we already have a few.

First question here, and there will be a lot of questions about from Verde Agritech shareholders about the share certificates. So let's just see how many there is here. 1, 2, 3, Yes, there's a few. So we have already issued shares in Nautica for all the Verde Agritech shareholders. The share certificates have been issued. The share certificates have been posted to Canada. And what happens now, and that's what we are in communication with TSX, TMX, the registrars is that the brokers in Canada, they're going to be getting the share certificates from this Australian company and they're going to need to reallocate those shares to the -- each one of their shareholders because what happens and that might be new or might be something you're aware of if you hold your shares in Canada with Scotia or BMO or National Bank or whichever bank you have your account with, they don't tell us as the Agritech that you are a shareholder in the company. So when we go through our registrar, which is TMX, the same company that owns the exchange in Canada, and we ask TMX for a list of our shareholders, what we get is something called CDS, the Canadian depository system. Only 99% CDS is system that represents all of those different brokers. Then you go one layer and you can get a breakdown of ownership by brokers. We get this other layer that was given to us by TMX, which one of those big brokers owning a big chunk of shares. So that's as much as for clarity as we can have for all of the issued shareholders in the company. So we issued the companies under the structure of TMX to those brokers and we were told that they are -- they know how to reallocate that internally. So we're going to be doing that. And if you have any difficulty or if your broker is working, just please reach out to us, and we will be able to help. I'm pretty sure we're going to make sure your shares should not disappear along the way. There's another question here about the grade. So the grade isn't 35%. The grade is 3,500 ppm. It was just -- it's on the slide as well. There's another question here. pros and cons of listing on stock market versus a private company to develop the project, especially in relation to the significance of the mine being relatively geopolitical neutral location in country and its potential global significance. Boy, pros and cons of being a public company, that's a good question considering I spent the last nearly 20 years as CEO of a public company, I have probably buyers on my [answer]. So I'll let Andrew answer this question. Go ahead, Andrew.

Like all mining projects, mining projects are quite capital intensive. So it's really about creating the best value for shareholders. At this point in time, we haven't kind of got a defined path. If we can get a strategic investor and the capital that we need privately, we may go down that path depending on the terms. But getting the money in for public markets is generally the way these ones develop because of the liquidity that's offered by public markets. And given we have -- we're going to have several hundred shareholders between both Nautica and Verde's pro rata distribution, the liquidity requirements to the shareholders may mean that we'll need to be listed. So at this point in time, the Board hasn't decided exactly what we're going to do. World markets are incredibly volatile at the moment. So we want to position the company so we can take opportunities -- take an opportunity or a window to list. when it's appropriate, but will that be trumped by a private offer of capital to develop the project potentially. At this point in time, we're just going to try and keep our options open and create value for shareholders, which way we go and choose the best path that we can say at that point in time. Does that answer the question?

I think it's a good answer, Andrew. I think it's a good answer. if Mark think it's a good response, please go back here, Mark and ask for more. The other question, could any potential American stock market listing potentially be a contentious issue now in the future given recent develop with America listing be desirable as most based on a more multiple world. I think Mark is inspired market probably in Australia, probably in Europe. I think the U.S. when you look at the valuation being given to rare earths companies, there's no doubt the U.S. has been the best market. It's true though that most companies going public in the U.S., the project is a little bit more advanced than ours, perhaps with a pre-feasibility or even a feasibility study. But once you're there, valuations are far greater than in other markets, and it's something I personally see with great eyes. But ASX can be a jump in stone to that. You can start on ASX, you can finance this first leg of development up to a pre-feasibility study. And then you move on to NYSE or NASDAQ as a way for you to raise your equity component for a project finance transaction. And also important to highlight, there is a lot of appetite in the U.S. to finance also from like government banks, U.S. government banks and projects to finance rare earths, other question here. Would the roads need revamping to accommodate for the increased traffic of trucks in addition to those from Verde? That's a good question. The short answer is no, absolutely not because different to what we do at Verde where we ship several tons -- when you look at Oby, you're concentrating it into kilograms. So the final mass of what you sell is a fraction of what we do at Verde where everything we extract gets crushed, grinded and then sold as a fertilizer. So no, I don't see that as a problem. The other question here is for ethical reasons is a huge factor. Can you talk about how environmental standards will factor into any part to ownership and development eventual running of the mine? So Mark will make sure the same very stringent operation requirements, operation procedures are in place with anything done in the region. We will carry on protecting and making sure things are done properly. And we need to do that. There's no other way for you to do -- to operate in Brazil. You need to really operate by laws. You need to exceed the rules. You need to be seen as an example to society, an example to regulators. That's really the only way working with requirements even greater than what the legislation is, you need that. Another question, how does the ASX compare to other global stock market mining companies to list as a preferred market in terms of development success of the company's listing. I'll let you answer that one as well, Andrew.

So yes, look, the ASX, I mean, Australia does mining well. We are an experienced mining country. We have a very experienced and well-developed capital market in Australia, which regularly facilitates capital raisings and listings. Probably the most efficient venture capital mining exchange in the world, I think, probably that of Canada would be the 2. And as such, we have investors, brokers and a network and infrastructure that is attuned to raising money and developing projects. Of the 2,300 listed companies on the ASX, approximately 800 are mining companies. So it's kind of 1/3 of our exchange. And there's a very well-trodden path of Australian companies raising capital, acquiring assets globally all around the world, developing those, bringing them to PFS scoping studies, feasibility studies and then either bringing them forward to mines or being purchased by a major somewhere in the world. And it's kind of listed venture capital is the way to describe it. And I think -- and it works very, very efficiently in Australia. We have investors and brokers who have the risk appetite for these types of projects. And that's one of the reasons we look at it in Australia. Is that -- any other questions on that? Yes. No, that's a good answer. I would add to that, Andrew, to say that when it comes to rare earths, no other capital market has funded as many rare earths companies as Australia has. And arguably, that's also where the most successful companies are banks and analysts who understand it really well, banks, investors. So it's a great jurisdiction, great jurisdictions for rare earth. It's all cyclical, as you know, with commodities, with mining, it's all cyclical. I do think we are in -- it might be changing. It might be recovering now with what we're seeing. We're starting to see the share price of some Australian listed rare earths companies running in the last few days. So it might be starting to turn. And -- but it's a great market. It's a great market, great people and great retail follow-on that's very interesting.

Please explain -- please explain, Andrew, the situation with the superannuation funds and the government, what the government does to make sure money gets reinvested in resource stocks and the incentives people have to do that both from funds and retail investors because I think that's something Canada kind of missed the boat more recently and perhaps the younger generation in Canada is more focused on Bitcoin and tech than mining. But explain why this wasn't the case, Andrew in terms of those programs you have in Australia.

Yes. So probably the biggest one is we have compulsory superannuation in Australia. So that means that I think it's -- correct me if I'm wrong, it's about 10.5%, I think, or 11% of your salary has to go into a superannuation fund. And you can choose to have a self-managed superannuation fund or alternatively, you put it into a large global fund and they invest it for you. But that means that effectively, all Australian employees are compulsory saving and that capital gets reinvested into our economies and it gets invested in a whole raft of different economies. One of the benefits of those investments is ASX-listed securities. Most of the superannuation funds have mandates where they can purchase ASX-listed securities. So that allows the capital to go effectively from your salaries back into capital markets and be reinvested, which creates has created over the last 20 or 30 years since it has brought in huge wealth in this country. And that one of those -- that investment often fuels investments into small mining stocks, people that have their own superannuation funds. You can tap into those. And as a part of their portfolio, they will invest in these types of projects.

It's different. As Andrew said, it's different in Canada when you instead of having to invest on TSX, you end up just investing across the border and the money doesn't -- the companies in the exchange just don't get as much money. So -- and I think the other beauty of Australia is the fact you have BHP and Rio Tinto the world's largest mining companies as the largest companies probably listed in Australia. And so there's lots of commentary and you don't have the influence of having the U.S. as a neighbor as well. So it's great. I think there's no doubt it's a great, great jurisdiction. Okay. The next question here.

Cristiano, can I just add to that? Of course, Mike, please. Yes. I think the Australian -- because of the strength and size of the Australian junior mining company, we'll call it, group in Australia and the investors that follow that. There's an acutely -- there's a very well educated investor market about minerals and resources and more recently, rare earths amongst them. And the other thing is that there's an increasing interest in investing in rare earth projects from high net worth individuals who have been made their money in the resources sector. and resource companies such as coal mining companies and petroleum and gas companies, investing in rare earths and other things in order to broaden their base. So there's a large capital base that sits in oil and gas, coal, iron ore and gold. But it's interesting to see that of the 2 Australian listed large -- the 2 largest by capital -- by market capitalization, rare earths companies in Brazil are both listed in Australia. That's Brazilian rare earths and meteoric resources. Both of those companies have attracted to their register. People who've made money in the big end of town in the resources sector. And that gives them a stability on their register. And certainly, we've seen over the last couple of months, the volatility in those companies has been significantly less than the average volatility in the market because I think they know well, we've got a strong investor base that's committed to the company. And so the small investors stick with them. And the other thing is that more recently was the announcement that Cristiano alluded to earlier in his presentation that China has said it will no longer -- it will ban export of rare earths. Now China produces 95% of the refined rare earths product in the world. They control the market. They caused the price to drop last year. There's no question about that in order to kind of slow down the competition. But they're now saying the word out of China is that their low-cost mines are running out of production. They want to use -- they want to weaponize their control of the market against America. And all of that bodes very well for rare earth companies in strong, stable jurisdictions like Brazil. And that's why I'm very excited by the prospect of working on a Brazilian-based company that produces what will be a growing market outside China, one of necessity. The rest of the world will not let China control rare earths in the future the way it's controlled in the past, simply because rare earths will become more important in future-facing industries. I know Cristiano is very excited and has got me excited about the rare earths market in robotics. Every robot has rare earths in it. They're essential to producing the magnetic -- the magnets that actually control the motion of the various components of the robot and enable them to pick things up, have bare heavy loads, and it's -- there's no question that, that's a market which is going to grow. It's going to grow rapidly. And it has the potential to take away the control of the market from China and make investors more likely to invest in rare earth projects in stable jurisdictions elsewhere in the world.

Next question here is a very good one. It's a very good one. It's a very good one. Okay. So the question is how... I personally will be able to manage my time between this new project and Verde considering time, intellectual resources and how I plan to find the balance as well as maintaining my own well-being. It's an important question, and I thought a lot about it before telling the Nautica Board of Directors that I would be able to help and lead Oby on this development alongside leading Verde Agritech. I thought a lot about it. And it's a situation where I can comfortably say that as of now, I can do it. Now I can do it. The way Verde Agritech is set up, the way we're operating, the way we're having a phenomenal year, the way everything has fallen into place now, the way we work very efficiently, the way the sales are growing really, really rapid and the way things are going , I'm comfortable with it. Oby, the stage the company is right now, I'm equally comfortable with it. I started doing what I'm doing now 20 years ago. So everything with Oby is very familiar. It's very familiar. And I think I was lucky that I was able to start it when I was in my early 20s and now to be 44 and have had all those previous years of experience. So I feel very energetic and I feel in control of it. Having said that, I've told both boards, both members that they are the ones who will always have the ultimate say on that. And it's down to them to be representing shareholders and making sure things are being run at the sort of level you all deserve at the sort of level we should be performing in terms of leading those companies. And if there's any point in time when either Board feels like the situation isn't ideal anymore and isn't working, I will more than happy to be able to resolve the situation and make the adjustment. So it's not an issue. So that's the short answer, and it's a situation that will get monitored very closely by both Board members, both boards, and we'll see how it plays out. I also think that given everything that's going on, especially with Oby and all of those potential transactions and all of those developments and everything else, I think there might be some interesting development. Something else with Oby. We have a phenomenal Chief Operating Officer in Country Manager, who I'm really hoping that he will join us. He's visiting -- has done a lot of diligence. He's visiting this asset tomorrow. So it's going to be tomorrow visiting the asset. And we hopefully we're going to be able to announce him as well joining the team, phenomenal metallurgical engineer operator. And hopefully, he will join. So that's my answer to that question. And again, if I'm sounding a little bit tired because I am because it's quite late for me here right now. The next question is -- do you have any idea at this stage of the capital required to reach full production? We did an in-house scoping study looking at a scalable approach, 2 phases, Phase 1, $5 million, second phase, an additional 10 million tonnes. The upfront CapEx from that in-house noncompliant, non 43-101 compliant was about $400 million. Next question. I own a lot of VNPKF, which is the ticker for our U.S. listing in the Ameritrade brokerage in the U.S. And please reach out to me directly. We can look into it with -- in more detail. But usually, a U.S. broker will have a correspondent broker in Canada that will hold your shares. So it wouldn't show up as Ameritrade in Canada. Usually, it's TD or one of the big banks, they will be the ones that will be holding the shares for Ameritrade. Next question, how stable is the political environment in Brazil? It's very stable as far as being a democracy is concerned. With elections and the rule of law. So we're going to have elections pretty soon now. And people don't think Lula, the current President will be a candidate for reelection. There is a guy who is the governor of Sao Paulo, who at the moment seems to be the favorite one and he's a phenomenal engineer who's been doing a phenomenal job in Sao Paulo as well as there are other names. So it's quite stable. I wouldn't worry about that. Question, how supportive are they of TGIS type of development? Sorry, I don't know what TGIS type of development is. I don't know if you know what TGIS is, Mike or Andrew. But if not... If you could clarify, it's probably a typo of somehow. Next question. How much time would be needed to reach steps if everything worked fine, pre-feasibility, the definite feasibility permitting construction. I think we will in the next deck, try to put together like a timetable forwards [indiscernible] construction and production. But, you're looking at 3 to 4 years from where we are to ramp up and production. Could there be any future freight benefits in terms of cost economics of scale for both Verde and working together at some future point? No, not really. It doesn't -- as I said earlier, it's -- I can't see any logistical benefit. So the answer would be no. Can Mike, please talk about potential recovery and the potential ultimate size of the reserve? Mike, would you like to answer that one?

No. It's too early. You will notice in the slide deck that the resource is categorized as an inferred resource, which is the lowest confidence category in resources in both Australia and Canada. And that simply reflects in this case, the spacing of the drill holes. And -- but what we know about the geology of this deposit is that it's a bit like there's just a layer, and you might have noticed on those cross-sections that all of the intersections were at about the same level on the cross-section. There's a layer of sediment in through -- running through the whole of the tenements, which contains the high-grade rare earths. So one can be geologically quite confident that if you drill more drill holes, it would have -- it would improve your -- the confidence and lower -- yes, it would improve your confidence but not necessarily reduce the amount -- total amount present. But ahead of -- in neither Canada nor Australia, can you publish a mine plan with a production forecast based on inferred resources alone. You need to have some -- enough indicated and measured resources in order to do that. And that's one of the first things that the company will do as it goes through the next year or so is improve the confidence in at least part of that enormous resource, improve the confidence level in part of it at least so that one can generate indicated and measured resources in that part and then build a plan to develop that part first. And if you go and look at Meteoric resources, for example, that's precisely what they're doing. They've got, I don't know, it must be nearly 10 different projects outlined in the tenement package, but they've now focused down on one where they have the best ionic clay hosted mineralization, and they're going to develop that first and just bring the others along as they come. And that's probably what will happen here. We'll find a bit -- the part of this deposit where the ionic clay treatment works best and start the project there. Then you can move on and categorize different parts of the deposit according to what sort of processing streams that you might develop in the future. I'm going a bit around the question because of my initial answer was no. But it's just a, it's not -- in the jurisdictions that we want to work in, one is not allowed to talk about reserves based upon inferred resources. Reserves has to be based upon indicated and measured resources, and we will be working to get at least part of the deposit up to that level of confidence. But as an experienced geologist, the geology is really simple in this deposit. And that's one of the things that attracted me. It's really simple. It's a layer. It's in flat sediment package. It's a bit like a coal mine -- a coal deposit and that it's just one seam, if you like, that cuts through all those hills. And you can confidently say it will occur between the existing drill holes. But the exchanges with whom we must work require us to do more sampling in order to increase the confidence in that and then build indicated and measured resources and then reserves. But the other answer to the question is one I gave Cristiano when I first looked at this deposit, and I said to him, you do realize, of course, that your inferred resource is equal to 20 -- I think I said 20 to 40 years of total global production of rare earths. You don't need any more. You just need to work out which are going to be the -- what pathway is going to be the best pathway to progressively develop what you've got.

So the 2 last questions here, I'll answer them together. So Alan, thanks for clarifying. So yes, so Brazil is very supportive of the development of rare earths and mining. It's very important for the economy. And a statement, a proof of that is a question from Magnus who is 1:20 a.m. for Magnus or 2 a.m. for Magnus right now. So Magnus is saying, I read that DNDS and FEP launched a $1 billion fund to boost the strategic mineral project and position Brazil as a global leader in rare earths elements and other critical minerals. Are you in contact with these? Yes. Or are there chances of getting funds here instead of diluting shares in the company? Yes, Magnus. So as a matter of fact, before this call, I was just reviewing our application for this grant. So we have an application, which was put together over the last few weeks and we're going to be doing the filing. The deadline is the 30th of April, and we've been able to assemble a very good team of local scientists and research institutes, which you need for that submission. And we're excited. We're excited about that possibility of accessing that capital from the Brazilian government to develop rare earths projects in the country. It's phenomenal what's going on there. They would be a longer conversation. But yes, we're doing it. So I would like to thank all of you who joined our very first presentation on Oby as an independent company. It was a great pleasure. I look forward to more webinars like those where we can be updating you and taking some questions. What I usually tell Verde Agritech shareholders that those questions are always very good. They also help us reflect on the business. So thank you for your interest. And if -- some shareholders have already approached us saying they're interested in participating and investing in the company. If you are not one of those and if you're interested or if you know someone who might be interested, please do reach out either to myself or to Andrew, and we will be happy to talk to other potential investors. So thanks again, and enjoy the evening and the rest of the day. Bye-bye.