[Music] [Music] in this episode of in CEO talks we're talking about graphite a bit about the market and how graphite is a core element in the green energy TR transition uh with southstar battery medals CEO Richard Pierce Richard uh welcome steart great to see you thanks for taking the time and really appreciate the opportunity to be here you know I touched on the fact that we'll uh talk a little bit about how important graphite is but I think that what is most important for viewers right


now is you've got some pretty exciting news that you've just released about where you are uh with your Santa Cruz project yeah you know just trying to put one foot in front of the other and and keep things moving forward so you know on the construction front will be the first new graphite producer in the America since 1996 uh so all the equipment is basically on site except for our Mills and we're looking to basically get those shipped the middle of February and then we'll have uh basically 60 days to do


the Electrical uh and mechanical and hydraulic assemblies around that so again we are looking to basically be commissioning uh at the end of April substantially complete with construction and starting commissioning we've got about a 45 day commissioning schedule um as a you know positive note we just had our environmental um permits and licenses for phases two and three so phase one is 5,000 ton perom of concentrate production our name plate uh production is actually 13,000 so as soon as we get


our mining permit we'll be able to step up to 13,000 tons phase two then is an expansion to 25,000 tons and phase three is a total of 50,000 tons everything is is modular um so as we expand we basically just copy paste 25,000 ton perom uh module so we basically are are still looking to produce 5,000 tons of concentrate in 2024 and sell those to clients uh and how we've kind of sequenced it out is that initially we'll be producing about 420 tons a month which is the equivalent of 5,000 tons as


soon as we get our mining uh concessions finalized and approved for phases two and three then we can increase to our name plate capacity which would be about a th tons a month and so with that step up in production we're able to still produce 5,000 tons which was our our plan all along uh and and then for 2025 we would be producing basically 13,000 tons and based on current cost current pricing um that should generate about a half a million us a month in free cash flow U that goes into a lot of


our studies and things like that that we're looking to do so excited about really where we've come uh and what 2024 uh holds for us but again delivering the First new graphite production in America since 1996 at a time when really there's uh a lot of pressure for production and lots of of jurisdictions and companies are looking to diversify their supply chains um onshoring and near Shoring is is a real um thing that's happening in the market and maybe it's not you know a full Second Industrial Revolution in the


west but there's a lot of money time and effort being spent on onshoring uh particularly around critical metals and processing uh on Shoring those capabilities to to the us as well as uh you know Canada Europe Etc so again exciting times and we look forward to making that transition uh from a development company into producing company uh and and all the good things that come along with that so you're still in that pre-revenue stage how are you stage for uh available cash right at the moment to be able to see yourself


from here through to production yeah so at our last reported uh financial statements we had 11 million Canadian basically sitting in the bank um we're on schedule with regards to our budget um we are just finalizing we announced a $5 million Canadian raise that we then upsized to7 million dollars had lots of of interest beyond what we initially um were thinking about so again we should be closing that here in the next days and then Bic say again when when we close that private placement um very strong


participation from a couple new institutions and funds uh and again we should have 11 plus million sitting in the bank with production starting uh and by Q4 this year again what we're looking to basically be able to do is is spit off about a half a million us a month in cash after we pay everything uh so again strong financial position to be able to expand so uh with the approval of those environmental licenses uh a lot of those areas have already been those those solicitations been sent to the the ministry of mind


and energy um in the next you know 60 to 90 days we hope to get all of those approved for phases two and three so we'll have all our permits uh in place we are St starting uh we're planning about a 4,000 meter um drilling campaign uh we will look to upsource upsize our our resource and Reserve Base to extend our mind life and incorporate that phase three so we'll take our PFS and take that to 50,000 ton per an production uh and then feed that into the Strategic plan which is to upgrade


that material in the Southeast Corridor along with our our production at So based on your known reserves and your estimates what do you estimate is the life of this uh mining site ah I'll you know and in my belief Santa Cru is is an infinite mine there's other mines on strike from us that have been operating for 30 40 years um I've always been tried to be very conscious of shareholder money and and how it's spent and having a 50-year mind life really doesn't get you much so again we've got


a 13-year mind Life currently we're looking to you know this next drilling campaign to basically double our our reserves which again would give us you know with 50,000 tons you know somewhere in that range of 15 to 20 year mind life ideally uh and and that you know the idea is that we just picked up 7,000 new hectares so we have an absolutely massive land package 19,000 um hectares total of which we're scratching you know about 3% of that you know we're really only plan on about 3% of that land package and you just can't


throw a rock without hitting graphite out there so lots of upside and again I think that's one of the beauties of our portfolio projects is we've got scalable assets that are very low Capital intensity excellent infrastructure first quartile of of Opex that you know can be SC failed as clients ask us to in tier one jurisdiction so again lots of Blue Sky ahead of us but it it is a you know I believe it to be probably one of the most prolific graphite districts uh in the world at a trend that basically has


proven itself to be the lowest Opex and most profitable operations you know globally so again I think it's very competitive environment also tell me um as far as critical U minerals uh are concerned in the United States what's your relationship there uh what status have you been granted so again we've got our our second project which is in Alabama called Bama Star um we were very fortunate and blessed to be awarded uh Department of Defense title title three um a DPA award for 3.2 million us so


basically the idea there is that we will um use half that we will we'll use that money to basically pay for half of our feasibility study so the way we approached this with the dod was we'll deliver a pea which is in process on the back of that paa we submit it to them and then it's basically a dollar for do match on the feasibility study so we we completed our second round of drilling we just recently got all those results uh back will basically uh update get a new estimate on our resource and Reserve


Base be incorporating that into a preliminary economic assessment with the you know estimates of capex and Opex as well as incorporating a third facility uh which would basically be a a value ad plant producing everything from purified Micron eyes to you know coded SBG so again the the objective of the company is to have two mines each producing 50 60,000 tons of of concentrate and feeding a good portion of that into a third facility which is a value ad plant somewhere in that Southeast Corridor of the United


States we're going to run out of time here in a moment but what's the most important message that you would like investors uh to hear from this interview what's the takeaway that you I think in the yeah I think in the grand scheme of things you know I think graphite is really misunderstood and mispriced and graphite companies obviously haven't had similar runs to you know lithium and and and other metals so you you don't have half a battery right you you don't have a battery with just a cathode so when


within the grand scheme of the macro environment uh there is a real need for production of critical metals and certainly graphite outside of of China uh and not all graphite is the same so I think when you look out across the space first movers like South will have a huge Advantage uh and an operational team that has experience in building and operating Minds again there's just not that many of us uh out there so when you look out across the space and all the different projects again southstar was


the best performing graphite of the 40 plus companies that we keep in our database uh and termed to share price in 2023 we're delivering on our Milestones we've got an executive management team that is very experienced mine Builders and mine operators we've proven that we can raise money and build mines and put production in place and we look to scale those operations quickly with very low Capital intensity uh and and very profitable operations so again I think we've got an extraordinary uh portfolio


of assets looking to expand production as quickly as the markets ask us to and ideally our clients are helping us finance that by borrowing their balance sheet with off-take agreements uh and and moving quickly so again we we look to be a fully integrated graphite producer in the next few years uh and be one of the first ex China that that are doing it from graphite con all the way through to coded SBG for lithium ion batteries a very interesting time to be looking at southstar uh you got exciting


times ahead of you thank you for your time today thank you st appreciate it have a great day [Music]