foreign my guest today is Richard Pierce CEO of southstar battery metals and we're talking about the company's graphite projects in Brazil and in Alabama good to see you again Richard I'm Marilyn nice to see you yes let's start our conversation the last time we spoke you gave us an update on construction work that's being done at your Santa Cruz project in Brazil could you provide our audience some you know the latest developments in that project and where is it at right now
banging away at it so we're about 70 percent complete uh on our construction foundations are just about done they were putting the last lifts on on a bunch of walls um like I said most of the foundations are done equipment is basically starting to get loaded onto foundations and electrical mechanical assemblies I'm getting wrapped around it so we just recently on our on our LinkedIn and other bits of social media we put out uh the time lapse through the end of August so again on schedule basically to
be commissioned in that commercial uh Phase One commercial production at the end of this year um so for the most part advancing well on the construction on target was kind of our our planning and budget and things like that and look forward to getting material into the marketplace and and developing those long-term commercial relationships that are so important to us we're also uh just waiting for comments on our licensing and permitting for phases uh two and three at Santa Cruz so all the documentation has been submitted uh we
have responded to several rounds of questions and and comments so far both on the money licenses as well as the environmental licenses for for phases two and three uh and look uh to continue to be on schedule basically for around the end of this year or you know worst case scenario first part of next year we'll have our licenses and permits for phases two and three in hand um you know and we can get moving on on engineering and advancing the financing for for that development um and then in terms of you know the
overall plan we'll be drilling uh at the end of this year uh to look to expand our resources and reserves uh we're finding some nice surprises as we push into the into the pit area um with regards to you know even some mineralization that we didn't know was there so um you know we're looking to expand our resource and reserve base and get a feasibility study out that incorporates the expanded reserves plus uh phases two and three are our pre-feasibility basically was phases one and two our
feasibility will incorporate everything we've learned basically on this build um six months of operations uh and then Chase three so we'll get that out basically at the end of 2024. uh and scale as as quickly as possible I think that's an important um one of the things that from what you said that struck me was um you know your project going as scheduled you know and I think that's a that's a incredible accomplishment given you know what's going on in the market with Supply challenges and and those
types of things so you're you're targeting um uh completion and start production by the end of the year so what can the investor Community expect after that uh to watch from the company once you start production I think that's really you know it's it's an accomplishment for the team um and it's been done with zero lost time accidents which again is always the goal is zero um and we've been very fortunate blessed in that sense that you know they're very focused every day on on safety
um has the company migrates from development into an operational asset and then scales I'm there after there's there's lots of um exciting um Catalyst that will be coming out we'll have drilling results we'll have um commercial agreements announced will have additional Network battery tests um Etc so I think really over the next 18 to 24 months coming out of Santa Cruz um really exciting times for us as we expand our resource and reserves we get material into the marketplace and
actually have sales and cash flow which is a novelty so I think if you you look around the space it's you know not a lot of new production is coming online and Santa Cruz really will be the first new production brought online in America since 1996 so we're super excited about that transition from development into production I've been working on the project basically since 2010 so um you know it's been 13 years in the oven and uh finally happy to see it pop off the paper and and get in production
and and then looking to scale as as the uh the markets and clients are asking us to produce more so I think it's it's exciting times for for Santa Cruz and and uh I think there's going to be a lot of of uh really positive things that come out of the next 18 to 24 months particularly on the commercial front and and as well as on our resource or Reserve expansion I mean the guys ran across uh you know a 40 meter wide package of of ore that we didn't even know was there and it was kind of
trending 10 to 14 uh CG um we found samples that grayed out at 20 CG you know so I I think the more we get into our deposit the better we understand the controls of mineralizations how it processes um we are doing some testing work as well for some new equipment uh that should help us get to even better grade than 94.96 with just mechanical uh concentration and then we're also basically getting into the next round of battery tests so we initially did coin cells and ran those out for 120 Cycles or or
thereabouts I was just in the U.S and uh we we went around to various labs and various different equipment manufacturers Etc so our next round of testing we'll be looking at chemical purification and thermal purification we'll be looking to build cylindrical cells uh very similar to what you would put into EVS you know be a Tesla 4 gym Etc and then doing some log recycle testing on that so we're really looking to go to the next phase of testing looking at the reality looking at the dispersion of how it goes
on to the Copper how it performs both with synthetic as well as with silicon and then run that out for uh you know a longer life cycle so we can actually sit down with suppliers with a clear understanding of how our material performs compared to benchmarks that are currently available in the marketplace so lots of good news to be coming out over the next 18 to 24 months including production and then scale and then at the same time happening you know back in North America is another project that you're uh you just you know
uh drilling right now could you talk a bit more about that and that's the the one in Alabama sure so Obama star is uh you know a a historic producer it was producing back in the the 30s um really uh we just met with the landowners and and one of the landowners uh was was telling us about what it was like when she was a little girl uh going out to this mine that her grandparents were running and she hated it of course because she had to leave the city and and go out to the country uh but she was just talking about uh
you know the production back in the 20s and 30s and here she is you know decades later telling us what her remember her memories were with with regards to that production so it's it's kind of cool to see uh historic production that's been in one family for for a long amount of times and and we're advancing it so we had our our Maiden resource put out in in March of this year really good results uh to support the Pea we've done an additional uh it'll be you know around 1900 maybe 2 000 meters of
drilling they should be wrapping up here in the next day or two uh then we'll be basically putting that into an updated resource that we'll be putting out and q1 basically March of next year 2024 will be looking to put out rpea which will basically be Bama Star and Santa Cruz both producing concentrates and the value add plants somewhere in that Southeast Corridor that's produced in 60 or 70 000 tons of value-add material including battery anode materials so again that'll be a big step up for us in
terms of you know profile as we transition from a company that has phase one or two in Bama Star to two mines producing you know a hundred thousand tons of con plus sixty or seventy thousand tons of value add material so again I think uh in the U.S there's really three deposits that have a known resource and reserve and we're one of those um I think we're well positioned to take advantage of the knowledge in in commercial success that that Brazil has from selling and you know producing and
selling graphite for 80 plus years transfer that knowledge to the US and then be able to scale those operations as required so I think our approach is really sound it's a phased approach to production it's all a modular build so that we can scale these things quickly um what we're doing in Brazil is 100 applicable and similar to what we'll be doing uh in in Alabama so this allows us to scale quickly um most of this stuff will be pre-mounted in controlled environment on skids and we'll drop it in place on
foundation so again we'll be able to stack these things up um fairly quickly and easily with very good quality control and again I think our team has done a magnificent job of being on time with safe operations and we'll look to transfer that as well to to Alabama so again Alabama will have vertically integrated production uh scheduled basically for 2027 and uh again I I suspect will be one of the first if not the First new new producer in in the US so exciting times for us and again lots of catalysts
in terms of drilling results met work uh battery testing results Etc so uh really a lot of good news coming out over the next 18 to 24 months and I think we're well positioned to to deliver to the market uh both the First new costume Americas as well as one of the first uh new Midstream or Downstream supplier of better anode materials so you know you have your hands rolled for between these two projects uh that are proceeding I'm curious to know um is the company is your company uh just focused on
um graphite for an hour you know is something in the works or you know somewhere along the future are you also looking at other um battery metals that will be needed for you know as we move forward go uh electrification and decarbonization based on on graphite and we've got our our plate full um obviously we're we look at a lot of projects and a lot of opportunities we get you know decks into us all the time um right now I really want to I want to stick to our our home cooking and making
sure that we deliver on time and on budget and and uh get our operations up and running um if if you look at kind of just what we're looking at you know we're talking you know somewhere in the range of you know 350 to maybe a half a billion dollars investment and you know a company that potentially would be three 400 million dollar gross revenue over the next five to seven years um so I think we're really focused on delivering that um as promised to the marketplace and and really stick to our knitting but
obviously we're looking constantly at new projects and and new opportunities but you know our Focus truly is on delivering that five to seven year strategic Vision uh to the marketplace but you know obviously if something comes up that is worth us taking some time to look at we're able to do that and interested in doing that but you know focus and job number one is safely getting into production scaling these operations and you know strategically looking at some new opportunities as they as they come along
but we're going to stick really to our strategic Vision uh and and deliver that as quickly as possible and as safely as possible to to the markets when we talk about graphite I guess we in the past in in our previous interviews we've talked about you know um graphite's role in the in electrification and Battery metals and and and you know the emerging uh markets for for these uh are you see that are you seeing this continued with graphite um you know with the use of graphite and um as we move forward in the near future
yeah I think it's something that you know we're we're basically in a perfect storm for for battery metals and graphite is one of those those critical elements you know I think if you look out across the space obviously lithium is is well understood and fairly valued uh in the markets I think graphite is one of those battery Metals critical Metals in general that that is yet to be appreciated and understood it's essential really to the battery uh Metals story so that it doesn't happen
without graphite and and I think if you look out across the different battery designs be it nmc or lfp or NCAA or whatever um graphite is agnostic it's in all of those battery types um it may be that there's a blend of synthetic with natural flake it may be there that you throw in a little bit of silicon into that mix but really uh the electrification revolution doesn't happen without graphite you can't have a battery without an anode in it you know currently uh there's a pre you know I
think whatever it was I think at the beginning of the year there was something like 320 different gigafactories in some stage of planning uh or construction and now I think the last number I saw it was over 400 so we're in a situation where there's an exploding demand coming a constrained Supply um really it's a perfect storm as it relates to to graphite the average mine takes you know 10 to 12 years to bring online in terms of the engineering the licensing the permitting the build um having the team to actually deliver
on that so I think overall the macro setup is is fantastic and nothing is really going to change that be it in terms of mobility and EVS or be it in terms of stationary storage and the revolution that's going on there towards more Renewables and you know an overall decrease in our in our carbon footprint so I think really were were ideally situated um obviously the the macro environment is challenging right now Rising interest rates central banks across the globe um are are um you know trying to control
inflation but I think the macro setup is us that we're not going to move away from the electrification theme um there's nothing out there that is going to substitute graphite at least in the next seven to ten years all the money that were the trillions of dollars that were sinking into this every battery Factory that's being built right now is all based on traditional sorts of chemistries and design so again uh exciting times for us uh as we'll basically be bringing the First new
um graphite production to the Americas and I think when you look at this the global situation um and the trends that are happening now you've got geopolitics playing a really big role um deglobalization as opposed to globalization uh and really looking at the Providence uh and the security of Supply I think when you look out across what happened because of the pandemic um you see a fragile supply chain in in many ways and I don't think Europe or or North America is going to put themselves
in a situation that compromises the economic well-being or security of of those countries and and jurisdiction so uh again I think provenance is going to be super important the IRA that the U.S set up you know basically over the next five or six years you go from 40 or 50 percent you know made in America to 100 made in America for you to qualify for the for the 7 500 tax credit so again having multiple assets that are scalable in safe stable jurisdictions uh situations as well to be able to meet those needs as as they
grow over time uh and I also think that there's just not a lot of options out there if you look at the supply chain today Asia accounts for a vast majority I think China has about 65 percent of the graphite concentrate production uh and Asia certainly has about a hundred percent of all the Midstream and the downstream processing so I think as we move through the next five to ten years um there'll be a real focus on onshoring bringing production back to Europe the U.S Canada Mexico Etc and really I think uh you know South
star's position to take advantage of those um trends that aren't going anywhere so I I think um graphite is a fantastic place to be um it has yet to kind of get the the wind into sales that lithium has so there's some real um opportunities uh out there and we look to be one of the first producers so I think it's an exciting time for us over the next 18 to 24 months yeah and you mentioned uh the importance of team I know that you've recently announced new uh addition to your team
sub I'd like you to maybe uh talk a little bit more about them to for our for our viewers who may not be familiar with what they bring to the table and what their backgrounds are sure again nobody does anything big on their own so we're always looking to uh bring in new folks that can help us move faster better you know build a better widget so uh very fortunate to have Roger and Ty come on board um Roger is a gentleman that I've known for about the last six months we've been talking for you know
once a month or so and you know more recently but um has a very deep knowledge that it relates to Capital markets and specifically um the energy transition and the electrification revolution that's ongoing so he ran his own uh he was a portfolio manager for for many years ran his own fund uh for many years really focused on that theme uh and it's been gracious enough to join our board um so been having a great uh working relationship both as a board member but also as a special advisor so he's been
helping me out on on certain themes and aspects particularly as it relates to the U.S markets uh he's a Canadian that got lost in San Francisco and has been there for a couple decades so he's got a really good uh Road exit that we look forward to introducing ourselves to and again I think one of the main things that we are able to do as we have a strong Foundation under us and we are transition from a development company to a producing company is the story sells itself we've got a great story uh with a
great team and and you know we just keep kicking through our our action items and delivering value to the marketplace a little bit of love from U.S investor goes a really long way and I think Roger's going to be key to helping us get in front of uh more U.S institutional High net worth family offices in the U.S and helping us get that story out to the U.S investor as general and in general and then Ty again uh was introduced to me at a conference a couple months ago and is uh a batteries graphite specialist so the guy
just has a passion for graphite and how it works in lithium and batteries nickel lead nickel uh sorry lead acid batteries alkaline batteries um any kind of battery so um he has a passion for graphite and his applications for Batteries he's been doing this for a really long time uh technically he's just been a world of help to me as we try to put out and design our testing program and then get in front of of uh you know companies with somebody who deeply understands the battery space I'm a guy that digs holes
in the ground and you know likes to stand up mines Ty is bringing that next level of expertise and know how to as it relates to um you know graphite for for Batteries uh and has really been uh key in helping us lay out our designer experiment uh how we're going to go about testing uh and getting us in front of companies so two fantastic additions to the team I couldn't be more pleased with uh you know just the interaction we've had to date and really excited about again the next 18 24 months how this develops uh
our strategic Vision faster so we're going to be basically trying to go as fast as we can possibly go and as fast as clients want us to move and I think we're well positioned with current team to just keep delivering our own Milestones of catalysts well thanks for sharing your company updates today and some of your insights on the market I think it's safe to say the next time you speak you'll be a producer so looking forward to getting more uh more news from that from your company
no absolutely and thanks for taking the time today and again I think southstar is really a a watershed event we've got you know scalable assets and multiple jurisdictions a team to deliver on it I think the global setup is such that you know it's a great time to be involved in Badger metals and and certainly uh graphite and I I think with the geopolitical setup as well just Providence of supply and be able to deliver um material from safe stable jurisdictions uh as we kind of de-globalize is is going to be a
differentiator and I think companies that can provide Midstream and downstream products within that context you're going to trade at your premium so uh just really uh anxious and and excited to see how the next 24 months play out for us but it should be fun Rick again thanks for joining us today and thanks everyone for watching join us again next time for another engaging conversation on CEO insights if you like this video subscribe to our YouTube channel and turn on notifications so you don't miss any new updates and
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