Goldman Sachs ActiveBeta Emerging Markets Equity ETF Price & Performance (GEM)

We had an underlying EBITDA of 2,600,000.0 loss This is excluding the effect of €2,400,000 non cash gain on the company's share incentive program. So this run rate is very much in line with previous guiding. Cash by the end of the quarter was slightly above SEK 3,000,000, and this is to be compared to 3 through to 11,700,000.0 by the end of fourth quarter last year. Highlights for the quarter. The first license round was very surprisingly notably delayed by twelve months. I will get back to that. But this happened, surprise lies in that there is an 80% majority in the parliament and a clear go ahead. The government to start deep sea mining in Norway. And the delay actually happened as part of budget negotiations. With the social left, which I will get slightly back to. But it's a highly surprising pivot as it lets the far left socialist into both Norway's industrial policy and also defense politics, actually. It's through NATO and NATO's ability to source these critical minerals. Green minerals has responded swiftly we have been able to secure runway extension. And this is and thereby maintain the optionality in in the company. We've done this through deep cost cuts and a guaranteed rights issue.

And the cost cuts have been done in such a way that we maintain competency while we reduce [indiscernible] The authorities preparations towards the first license run-in Norway continues unabated. There was 150,000,000 allocated to exploration in the 2025 budget. This is up five times versus previous years. Hearing run on regulations was initiated in the first quarter of this year with expected finalization in the second and third quarter this year. And we expect the license round to be opened in the fourth quarter this year with awards in the second quarter next year. Subsequently, after the end of the quarter, I think it's important to note that WWF lost a high profile deep sea mining opening case against the Norwegian authorities This happened just a few days ago. And this happened the same week actually as New Zealand said that it's considering withdrawing its ban on DSM. Due to opposition based on what they said was shrill environmental alarmism. So With this, we are seeing more and more countries moving towards opening for for deep sea mining globally. Before we go back to the company and our positioning, what we've been doing after the the December 1 decision Just want to look at a couple of key market variables.

One is gap between investments into copper what you actually get out of that exploration. So you will see that the mineral exploration budgets have increased five or six times. For copper over the last two decades. While the outcome of this exploration that is new copper deposits that have been found, is steadily decreasing. So that means it's increasingly marginal resources that is being explored on. And meanwhile, demand for copper is continuing to increase. And indeed, the green energy transition, the electrification of societies globally, adds to this demand. So without any new copper being found, We are now approaching a situation where we see peak copper that is peak copper supply in absolute terms. And probably on the two or three more years, so in 2728, this situation will occur. Demand continue to increase. How this equation will be solved? Will be interesting to see. Normally, the price mechanism, at least to some extent, will be involved. And here, I need to remind you that Green Minerals sits on one of the world's foremost copper resources that has the ability to make up some of this shortfall at least. When it comes to the geopolitics of advanced energy, it's certainly adds to this picture.

So one is that it's very [indiscernible] And if we look at the process in Kalam to begin with, you will see the Chinese flag all over that column, no matter which mineral you look at. And of course, the reason for this the reason that China has been able to secure processing within Mainland China is the fact that they control also to the left of that column. That is the The mining column. So while the flags are showing where the deposits are found, they Green not showing who is actually controlling them. So China is definitely present in several of these countries and of these minerals. Other than rare earths, amongst others, I think many will know that in the DRC, China is a dominant force. So this poses This poses security issues, of course, for the West.

As As we are deeply dependent on these minerals, not only for high-tech industries, but also for our defense industries. I won't go through all of this, but you will see also to the right, within the battery value change, within, solar and wind, you have the same situation with China being present and a very competitive force in all of this. So this has now become a major issue for The U. S. And Europe. And in that respect, considering that Norway sits on the second richest find of deep sea minerals after Fiji. It's particularly notable, I think, this short term pivot by the Labour Party and the Prime Minister to give away the licensing round that was where the licensing paper papers was ready with the energy department, to be to be distributed to the industry. So we leave it there and go to the company Green minerals is one out of two deep sea mining players listed globally. [indiscernible] we are going to take this call this opportunity on this call to go a bit Back into the fundamentals behind the company and this resource on the Norwegian continental shelf. So Norway opened up for deep sea mining on the 01/09/2024, and with that being the first country in the world with a full opening for deep sea mining.

And as I said, we were ready to receive the license papers in December. The area in question here is the one that you see within the green lines. On the map to the right. So this is between Norway and Greenland Green. Norway is up and up for 280,000 square kilometers within the lines that you see there. And these contained the Mons and, Ecknipovich Ridges, where the Mons Ridge is the one of initial interest. The ambition for green minerals is based on this world class copper resource that Norway sits on to become a license holder in in this resource with the lowest use of capital possible. And subsequently, to deliver 1,500,000 tonnes of world class quality ore for offtake. Strategy to get there has always been throughout the journey. Partnership model and an asset light approach. So The status on the project, as I said, opening on the January 9.

The company is the only one in the world, that has a harsh environment, deep sea mining, production concept in place. Which is a major differentiator between Green minerals and our peers. And also, we have done a world first study on joint processing with our SMS with terrestrial ore and proven that these indeed can be jointly processed. I think this and this understanding of of the value chain and these results These two bullets, if you like, is something that is really important to understand green minerals, to understand green minerals position, to understand the industrial value that we add to any deep sea mining project, and therefore our position with the mining industry at large, which I think is is a really important take away from this. Further, we were invited by the authorities to nominate areas of interest in the second quarter twenty twenty four, and we were very pleased to see that our three top priority areas were all included in the first licensing round. The company is on route to deliver our stated ambitions, license holdership, as I said, a little over a year. Expect first ore from pilot production in 02/1930 and we expect or we will show you a little bit later on that the company indeed will have an unmatched capital efficiency versus traditional onshore mining, which we think is a major [indiscernible] And something that will something that will have to spur interest from the traditional miners.

When it comes to license, we hold $50,000,000 worth of exploration data, which is about I don't know, 10 times or so the market capital of the company. At the moment. And, interesting to note, is that this delay this year will probably mean that we will add another $15,000,000 or so to to the worth [indiscernible] that data. So more than $65,000,000 exploration data by the end of 2025. [indiscernible] With this, we believe the company is well positioned, very well positioned for a license win. And we are ready to execute on any awarded acreage. [indiscernible] So to take you back to the resource then, this is really what adds to the surprising pivot by the Prime Minister a couple of of months ago. This is a resource that is big enough to actually mean something in terms of global production within several types minerals. If you look at copper first, it's 38,000,000 tonnes.

Estimated by the Norwegian Petroleum Directorate. And this is to be seen against a global end of production of of 21,000,000, 22,000,000 tons.

So this is 1.8 times the global annual production of copper. To put that in perspective, it's almost the same the same resource size as China as China has.

When it comes to cobalt, as we have said, there's no guarantee that we will be able to process cobalt from this. We have not tested it. But we are going to try. And so there will be a second round processing on cobalt. And here, we're talking about the resource size that is six times annual global production. So [indiscernible] very meaningful resource indeed on the global scale. It comes to candidates for mining, as I said, we have received a lot of data. And then just back to this, so everybody understands. The nature of the public private partnership context that we operate within. In Norway, it is such that the authorities is fronting their exploration costs, if you like, for the industry by doing extensive research on the Ridge and have been doing so for many, many years ahead of the opening. The data that the Shell Directorate that they gather is made available to the entire industry. So not only green minerals, but for every single player, it means that you have a saved exploration cost to the same extent. So using this data, we have a pretty good picture of the ridge, and you will see some arrows here.

Pointing to particular interesting areas. And concrete deposits of interest that is [indiscernible] our exploration planning. For major discoveries, I can mention the deep insight which was discovered in 2023. I think it's the most notable one. It's at 1,100 meters of depth We are talking about an average between 4,000 meters, in these waters. This one on 1,100 meters depth the size is quite typical, 300 by 300 meters. So a couple of football fields in size. And the copper values that have been proven through cores have been up to 13% in this deposit. On one meter average zone, the copper values have been proven around 5%. And then a little bit later on in 2024, the Green Tura deposit was discovered is around 1,200 meter debt, slightly smaller, 150 by 150 meters wide. And [indiscernible] to deep insight and confirms the cluster theory that we've had on this resource. So when it comes to the first licensing round, The yellow areas is the area that has been proposed or that has been recommended for opening. [indiscernible] these are three eighty six blocks that are included. The public hearing deadline was finished on 09/26/2024. All our priority areas in the nomination are included in this area.

And from this area then, we expect the license round to start in the fourth quarter this year with awards in the second quarter twenty twenty six. And again, I think it's interesting that the authorities with the same budget that was used to To delay the opening round, they have actually quickly toppled the allocation to exploration for marine minerals. To $15,000,000 for the year. So ironically, while we are waiting, while we have a year wait, to get going with our own with our own exploration.

We We are building value to an extent in exploration data to the tune of $1,515,000,000 dollars for the year. So of course, these are data that will be implemented in our models throughout the year and that will actively be used to improve our exploration planning further ahead of the ahead of the licensing route. Yes, I will not go into further details on this, but this is a bit of a detail on the the various institutions and areas that have been explored. Yes, this shows allocation to to marine minerals in the 2025 budget. And as I said, it's up around five times from previous years. Before we head into how we are going to extract these minerals from the the seabed. I think it can be interesting to To take a look at [indiscernible] perception versus reality, if you like, in terms of the environment, that we are diving, down to. To the left, you can see would say, what is a typical picture, more or less, of what you will see from call it, to put it in the same words as the New Zealanders, the environmental alarmism about what deep sea mining is all about.

And what areas are going to be affected. This is not of course, a reality The reality is what you see to the right. This is a collapsed chimney on an extinct SMS from the Mid Ocean Ridge. This is done by the Shell Directorate. Most important to note there is, of course, we are not going to be exploring. We are not going to be producing at all, of course, from active gymnasts. We're not going to be producing from areas with temperature. We will be producing from areas with with and that you typically see that the formations have even collapsed. And what you find is is purely rubble. That will be chewed mixed with sea water and sent up to them. To the surface. [indiscernible] We have formed what we call a partnership for responsible production. We have done so together with all states. Who is leading the consortium. Together with ourselves, And amongst others, SMD is part of this consortium. A couple of other companies that will remain unnamed until we get closer to putting the system into production Here, We will take a look at the how the production was done. Okay. So to the benefit of new Listeners, we showed you the production system.

And I think what's important to take away from this, and this is why I wanted really to put it into the environmental section, is is the lack of disturbances on the outside environment. From the production concept. That we have created together with OSI. And our partners. What you're seeing here is then a semi closed loop system There is There are no [indiscernible] along the riser The noise of the system at any point is lower than the natural noise. In the environment around us. And the only thing coming out of the system is filtered seawater from the bulk carrier that you see up there. So the ore is then going or the slurry is then going to the bulk carrier. And it's being drained and fiftured and pumped back down. To where it came from. The filtered seawater is the only emission [indiscernible] from the system that So we are very pleased with the solution. And we believe this in itself a strong argument against the environmental alarmism. If you compare this production system would say to anything, that you will find terrestrially, It, I would be happy to take any views on your views then?

After such an exercise. What's adding to this? And I think it's important because there's been an impression out there that for example, the EU is against this. We are seeing EU countries opening up for this. Belgium, amongst others, in May said that they would be taking a science based approach, the same as we are doing to see if deep sea mining can be done. And I can add there that the more you look at it, the deeper you get into the science, the clearer it gets that, yes, this is, this is definitely something that can be done. So Drucker report on the future of European competitiveness that was delivered to the EU a few months ago, had a statement in it when looking at deep sea mining. Which I will read. And what Ragh is saying is that the EU should also carefully explore the potential of environmentally sustainable deep sea mining. Estimates suggest that the deep the seabed holds large multiples of the non land based reserves. For example, for copper, titanium, manganese, cobalt, etcetera, etcetera.

And yes, this is indeed a nine with what we ourselves have found and I believe what Norwegian authorities have have found. So when we say that the world not just Norway, but that several countries in the world are moving towards deep sea mining, This is only one one report underpinning the drive to do this. When it comes to our blendability study, I'm not going to go through this in detail again. But to the benefit of new listeners, we did a World four Hour study Improving blendability between our deep sea SMS with [indiscernible] And this has great industrial value, as it means that we can I jointly processed our ore with with the terrestrial ore rather than being a new processing plant for that? That doesn't mean that it will be done or that the new processing plant won't be built. It just means that we have the potential, to add this great industrial value to any other mining projects. So any, for example, if you look in the Nordics, you will find copper mines that are down to as low as 0.16%. Ore grades producing for 2025 One of these are producing more than 40,000,000 tons of ore at only 0.16% ore grade.

So it's of course, we can both improve the ore grade by mixing our ore in there, and we can also improve the life of mine for for mines like that. So we are we were really happy happy to see the results of of that study and a study that was necessary to do and that we took the responsible responsibility to do for the first time [indiscernible] Now getting into the economics of of deep sea mining or let me say SMS mining because we haven't tested for deep sea mining at large. We have tested for mining of SMS deposits with a harsh environment, deep sea mining system in Norway. But what we find is indeed superior financial metrics, superior enough to say that they are disruptive to the economics of traditional copper mining. An important reason for this is that no infrastructure investment is needed. We simply take our equipment, we put it out on the deposit we want to produce, produce to the level that we like. And then we pick up the equipment and go to the next site. And this ability to optimize our production in terms of ore grade is also sometimes unique to deep sea mining.

Compared to terrestrial mining. So we will never produce a deposit down to 0.66% as you do terrestrially. Where the quantum freight is, I will I will not say, and it will be different from deposit to deposit. But whether that cutoff rate is at 2% or 1% copper, whenever we get there, we will have the ability, to pick up the equipment and move to the next site without any any large costs to speak of. This is a major [indiscernible] Of Deep Sea Mining, keeping average or grade production at a high level. The CapEx per tonne of equipment naturally is much lower than what you see onshore. So we're talking about $17,000 per ton versus $30,000 per ton onshore. In addition to this, as we've said for some time, we will introduce [indiscernible] Offshore Oil and Gas Services business model to grid minerals operations. Which peaks well for capital efficiency and returns in the project, which I will get back to. On the environmental side, I showed you the production system. I don't think we going to penetrate this any further. Just just add to what I showed in the on the production system that of course the deep sea ore.

A sharply reduced overburden compared to what you find onshore, which means less waste, and less tailings. So the starting point is really, really good with such an exceptional quality on the ore. And then the production system, the way we extract it, simply adds to this. [indiscernible] And it shows you the the expected drawdown of up to or down to, if you like, dollars 35,000,000. While we are While we are preparing ourselves for the licensing round and thereafter for some exploration. Exploration, basically, or the most important part of that is environmental and biological monitoring.

Anyway, it needs to be done for our to get our production concept allowed. And thereafter when in production, and this shows only one system, producing 1,500,000 tonnes, of ore and with a 5% ore grade around 75,000 tons of copper. On current metrics, on current copper prices, that means a steady state EBITDA of between $150,000,000 and $200,000,000 for the company. And mind you, this is one production system. There's nothing here that prevents us other than access to capital that prevents us from putting out two systems, three systems, five systems and so on. Three systems would mean that the company would have 1% global. Annual copper production. For example, So it's a significant resource and it's we have the ability to ramp up equipped quickly, much quicker than what you see onshore, where typically a new mine. Will take twelve to fifteen years. Actually, the twelve to fifty years is increasing steadily as we go. So now probably in the in the very high end of that, while we can we can right from the get go, we can get our equipment out there in a remarkably short period of time. Say Green to four years, [indiscernible] start producing meaningful amount of of [indiscernible] Average peer mining group multiple is six to nine times, So for those who have a spreadsheet, it's It's not too difficult to start to bear with these numbers.

I think when it comes to the multiple What I can add is the the asset lightness of of this company and the flexibility in our production and also the environmentally friendly way we are doing it means that it could be that we will see a multiple for companies like this that are a bit different from the traditional miners as well. So I mentioned capital efficiency, asset light partnership a couple of times already. And I'm going to show on this slide what this means in practice. This is done. The CapEx and, the CapEx versus funding, I would say, in in a partnership model and how it has worked for us so far. So CapEx item number one is the production concept. It's a significant item. It has It has had a zero funding requirement from green minerals and this concept is now ready. In place. We have performed two research cruises on the Atlantic Mid Ocean Ridge. The CapEx is, of course, significant for these cruises, Anyone with knowledge of this, we know that we talk about at least $10,000,000 maybe a little bit more. And the funding need from Good Minerals has been negligible. In this respect.

These cruises have all been finished. Or both been finished. When it comes to exploration data, I mentioned PPP model that we operate under Norway at the moment. Exploration data with projected cost at or estimated cost at slightly more than $50,000,000 with the funding need from Green minerals. [indiscernible] And as I mentioned, this year, the authorities are out there continuing the work [indiscernible] to this number. So by the end of twenty twenty five, that number will be above $65,000,000 The status on that is ongoing. Then, the blendability project that we did together with GTK, it's a fairly low CapEx on that project. And indeed, our costs for that project are also being very low. But important project to have done nevertheless. Then we are doing we are doing a model that we've called DeepMine X with the low CapEx and the zero funding need also from our side. This is project is in progress. This is deep sea mining decision slash gating type of of model. Then we look at The projects in the end here which is really the ones that are remaining. For Grundyen and Roesen that has, of course, the highest CapEx attached to it.

It is, the remaining exploration program, before our production application. And it is a production system itself. These are significant items on exploration. We believe We believe that we over a two year period, will need around $25,000,000 for that CapEx or that the project will need $25,000,000 We estimate that Greenminer's funding needs for the project will be zero. Just as what we've seen in the previous projects that we've done. There's no guarantee for this. Nothing has been signed yet. But this is what we are working towards, and I think this is This is really important in terms of understanding potential future dilution of our shareholders [indiscernible] to ready the company for production. Then when it comes to the production system, we're talking about CapEx of around $1,000,000,000 here. And this is something that we're aiming to put outside of of our balance sheet There.

And again, the two last items are both pending, but we have a pretty good track record at least on what we said we would be able to achieve so far. And indeed, putting that to bed.

Now, back to the the delay, the unexpected very surprising delay that was caused by our prime minister. And the Labour Party on the December 1. It warranted a response, of course, from the company as simply we had taken all the costs. We were ready [indiscernible] to file an application having received all the all the terms in the in the licensing papers, of course. And so what we have done Given the solid position that the company has, we're only waiting for the authorities to push the button. Is that we have decided to reduce our costs deeply. So we are taking costs down with 80%. This is the run rate costs. As of the end of this quarter. And the annual run rate cost for the company is then around 10,000,000 per year. So by extending the runway with three years, [indiscernible] in kind commitment from the founders then who will run the company this way is around DKK 24,000,000. So the calculation is DKK 10,000,000 with an DKK8 million cost saving over three years, adds up to 24 a £24,000,000 in kind commitment. What we are doing at the same time is that we're increasing the business development activity.

The reason simply being that we have really everything in place that we can get in place. At this time, Green Minerals is ready to go. On any awarded acreage. And so as such, on that basis, we think sort of unique position that the company has in terms of how we have looked over the entire value chain in this business. This increased activity is warranted And any any further news or future news from this? Will be announced, of course, as they happen. The ecosystem of potential partners is expanding. [indiscernible] on the heels of this. And Also, in order to change the call it the model of affiliation then of our of our team to the company. We are also doing an option scheme of up to 15% of the company.

To a team of six people the strike price for this this option scheme will be the same as in the private placing. That we have announced. So this is SEK 2 per share. The vesting period will be on average two years, and there will be a five year total period that one can hold these options. So if you look at the dilution for our shareholders from this, pending the size of the offering then. It would be around SEK 5,000,000 a year dilution for the shareholders. [indiscernible] that is to be compared to a €24,000,000 cash saving then on the annual run rate cost over three years. Importantly, the company will maintain and retain its competency. So we are changing our workload capacity from being fixed to being flexible, This will happen through board directorships, and consultancy contracts. Yes. And As I talked about the cost, of course, another important pillar of of the reset business case for the company is a guaranteed rights issue. That we announced this morning. And here, The minimum amount, in the right tissue has been guaranteed. By a group of large existing shareholders and also some new shareholders. The maximum amount of of that rights issue will be €1,000,000 This is for legal this is a legal requirement, prospectus requirement in Norway.

So we keep the issue then between 5,000,000 and a maximum of NOK1 the NOK equivalent of €1,000,000 What it means is up to 5,500,000.0 shares to be issued. This will take the runway. To the numbers that you see above in the low end of the offering and then some runway extension on top of this, if we get to the higher end of of the announced offering. The subscription date there, you can read it all in the press release, but the offering is expected to commence. On the February 25, and to end on March 11 twenty twenty five. [indiscernible] And yes, that's it. I think there are more details in the press release and that's for anyone to to to read up on. Consortia, maintained, like I said, the technical work in terms of has, of course, is ready. It's finished. So we are just waiting to push the button to move on to engineering and production phase. When it comes to our license the first round license application it has a high readiness level we can say, already in this quarter. So the company is borrowing some final adjustments, of course, when we receive the license papers.

We are largely done, even with our license application. So don't want to put an exact percentage of that, but if you say that probably eight to nine tenths of the work has already been done. So we will be ready to swiftly respond the license papers from the authorities when they arrive.

Yes.

And then I mentioned the exploration data being added this year, a major advantage of the PPP partnership. We are We are getting significant additions to our to our exploration data this year and and these are continuously being worked into our models. And improving improving the exploration planning in the company. So definitely more work to be done, but looking at what we have developed in parallel projects previously, of course, less than previously while waiting for the license papers.

Yeah.

And with that, I will sum up the presentation. And I think the main Main takeaway here from this presentation is that Green Minerals is building value. While we are increasing our runway significantly. So So I'm really, really happy on behalf of the shareholders that we have increased effectively increased, the optionality in the green minerals business case. A lot over the last two months since we got this pricing announcement by the labor government. So in that sense and in the sense of adding $50,000,000 of exploration data, the company could well be viewed as being actually in an even better position, at least with more optionality Green our runway then what we have previously what we have previously been able to make visible at least to U. S. Shareholders.

The 01/09/2024 opening derisked the business case. We nominated areas in the second quarter and as I said, they were all included in in the hearing round for the first licensing round. And we are in pole position for a license win. [indiscernible] developed together with globally leading partners and is ready. We have done the VMS SMS processing study. Confirms our business plan and adds significant industrial value I would say not only to the project, but also to the industry. And are some interesting discussions to be had here. With with potential partners going forward. Mining infrastructure in The Nordics is well developed. Offtake agreements can be expected closer to First Dorr. As I showed the economics, in deep sea mining is really superior to traditional terrestrial mining. We have gone through our business model and the economics of that and also perception versus reality in terms of what this production system will do to to the environment around this. [indiscernible] investment case financially is unusually strong. It's 100 and than $17,070,000,000 dollars in annual EBITDA, from one harsh environment deep sea mining system on current copper prices.

Leaves us with a Green tax cash return on investment of more than 300% pro no more than four months.

So with this, I'm happy to say that long term optionality has been secured through the in kind commitment, the significant in kind commitment by the founders, and the guaranteed rights issue. And with that, I will leave it for Q and A. Yes, there are no questions in the Q and A so far. So I guess that means everything is It's clear then Just give it another second. See if something shows up.

No.

I think with that, it was an extensive presentation. [indiscernible] everything was was answered Yes, here there is a question about [indiscernible] So, [indiscernible] opportunity is still there. Just sort of the work is on this. It's, of course, that these licenses are held by nation states. In need of a commercial miner to take the project further. What we are seeing though is that things are taking [indiscernible] in the Green small group of nations, that is included in the license that [indiscernible] we have this MoU on. And it is really hard. There are certain mechanisms that need to be resolved between these nations, but it's hard for us to estimate the timeline. On that. So Well, This is the reason why we are not going more in that into that license. We really want to see that situation being solved within the current owners of the license. So that the transfer of rights can start to to green minerals. And soon as we see some movement there, we will get back to you.

But then just repeat, it's a it's a really, really large license. $40,000,000 of exploration has been put into it. And the resource looks to be above hundred million tons of of wet nodules. And this is over an area of more than 70,000 square kilometers. So it's truly, truly large. And [indiscernible] for the company. We We just need to be patient and take the time to get things sorted out in, with the current owners. Of the license.

Yes.

With that, I think we will end the prepared presentation and thanks all for your attention. And And we will see you again in a quarter or so. Thank you.