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25:31And if we don't get it, we're going to be shutting down. So the Pentagon in July provided a$6.2 million award to Golden Metal Resources. It's the U.S. unit of your company to perform a pre-feasibility study for a tungsten mine near Hawthorne, Nevada. Is this is this all the financing that you will need? Will you need more from the DOD? Will you need more from the government? Will you need to raise more? Yeah, so it's part of the puzzle for sure. So that$6.2 million award that we've received from the Department of Defense, which obviously we're very grateful to the current administration for that award, will cover some of the key engineering work streams as part of that PFS study.

26:11But you're right, there are other expenditures associated with bringing that project and our projects into production. but concurrently with that award from the Department of Defense, we raised$21 million U.S. dollars, predominantly with existing shareholders, almost all institutional. So we use those funds to then cover the other additional costs and all the funding combined. Really, the focus is on delivering two key tungsten mines to the U.S. market, of which it's a metal the U.S. has not mined for over a decade. Do you need government support when it comes to this project? no we don't um and you know for instance we acquired pilot mountain which is a project that's received the award from the department of defense almost five years ago so it was a much different market then the landscape was much different and even at that time we acquired it because we felt like it would be an economic uh tungsten operation at previous pricing norms which is around 300 what's called a metric ton unit or about 30 000 a ton that being said the price you fast forward five years, China has completely banned the exports of all tungsten to the U.S.

27:17market. The price is closer to fifty thousand dollars a ton right now. But even at historic norms, you know, this project and our projects, we believe, make sense. But obviously, you know, the tailwinds we're seeing now across the federal funding landscape, but also permitting, gives us that much more confidence to push these projects forward and deliver mines in America to the U.S. industrial base and defense partners. Oliver, let's talk a little bit about China. you brought it up here. How do you see China's dominance in the rare earth processing, shaping your strategy here? Yeah, no, it's a really good point, Nora, and I'm glad you brought it up because what sort of sets tungsten apart from, you know, the antimonies in the rare earths, as we've discussed, is the fact that the downstream processing capacity actually fully exists on U.S.

28:01soil. It's one of the kind of the very few critical metals of which the U.S. has the ability to actually take what's called a tungsten concentrate and turn it into actual usable finished products for defense and for industry. So the benefit that we have is that the only thing missing in the U.S. right now is a domestic mine source. You know, we import in the U.S. all of our concentrates from other countries. And just to give you a data point, China, Russia, and North Korea combined represent 90 % of total global supply of tungsten. I mean, just let that kind of data points it in. But the thing that's missing right now in the US is the mine supply.

28:39The processing is there. So as soon as we can plug in our two Nevada-based tungsten mines, you have a fully circular tungsten supply chain that exists within the bounds of the United States of America. So where do you see demand for rare earth materials and all of that just more broadly over the next, say, five to 10 years? Yeah. So tungsten specifically, we're seeing very, very healthy compounded annual growth rates across the different sectors that need it. Defense is certainly leading the charge right now. We're seeing the EU and NATO and the US, defense budgets are up across the board. So that drives the demand for tungsten, as you can probably imagine.

29:20But also, we mentioned automotive, aerospace. These are all other sectors that are, the demand for tungsten is increasing quite considerably. So we're seeing healthy growth across the different growth areas. And another use case that many of your listeners probably are not aware of is nuclear fusion. So not to be confused with nuclear fission, but effectively trying to harness the energy of the sun here on Earth. And the only metal with a high enough melting point to contain a nuclear fusion reactor is tungsten. So we see longer term considerable demand growth from this very important energy supply, excuse me, technology that should be coming in line in the next couple of years here, next baby decade.

30:03One of the most read stories on the Bloomberg Terminal this week was about the Trump administration or President Trump's new brand of economic statecraft. Deals like, you know, we might see with Intel, for example, or the Department of Defense deal with MP Materials. I mean, you could throw other companies into that as well. AMD and NVIDIA with 15 percent of certain chip sales in China going to the government, maybe even U.S. Steel with that so-called golden share that the U.S. government has with U.S. Steel. What's in your view, because you've taken some money from the government this year, what's the difference between a deal like the one that MP Materials got in which the DOD will take a stake and the stake that the Trump administration is contemplating taking in Intel?

30:46Do you see a difference in those deals? Yeah, for sure. So the MP Materials deal is pretty groundbreaking for the sector. And I think this is really a strong signal to the U.S. critical middles industry that, you know, the administration is serious about mind in America, which is really encouraging to see. So the NP materials deal, there's lots of different parts to that. One of them is the price floor, the direct investment, and also the federal award as well. So we've received just an award. So this is money that we can go and use to fast track key engineering steps as part of our project. But what I'll say is that, you know, there's speculation that some of these unique and new sort of benefits that MP has had with this deal could be applied across the sector.

31:33So effectively, the doors have opened up for this type of deal to be done across the defense supply chain, but also the critical metal supply chain. So anyways, I think all in all, it's a really strong signal to the market. It's a really strong signal to myself as a CEO of a critical metals company that the U.S. administration is serious about mining America. And that obviously means that we have these projects at exactly the right time and try and deliver this key metal to the U.S. market. We're speaking with Oliver Friesen, the CEO at Guardian and Metal Resources. It's a London-based metals exploration and development company that's looking to bring production of tungsten back to the U.S.

32:07Oliver, you mentioned the door is open. is your door open for an investment from the U.S. government where the government or the Department of Defense would actually take an equity stake in the company? Would you welcome that? Of course. Yeah, we'd be we'd be we'd more than welcome that. Like I said, we all we have right now is the award from the DoD, which is incredibly important for the business. But, you know, we're our goal here is to deliver these mines to the U.S. market. So anything that we can do to help get support from the current administration and across the industry, we will absolutely have that conversation.

32:42But the time is so critical right now. Like I said, the U.S. has no domestic mine supply. And we believe that we are the leading company when it comes to tungsten exploration development. So we're absolutely looking to have any conversation that will help us get to our goal quicker. Are you having conversations right now about that? I can't speak to that. What I can say is that, you know, the award that we received from the Department of Defense was only about three weeks ago. So we're now really focused on getting that money and focusing it in the ground and towards creating U.S. jobs at our projects.

33:15So that's the focus right now. But obviously, you know, we're looking to tap into any tailwinds that can be available to defense and critical metals companies that are focused on U.S. projects. Oliver, how do you navigate trade tensions and resource nationalism in markets where you operate? Yeah, I mean, we try not to get too focused on that. You know, it's there's a lot of noise out there. There's a lot of movement across tariffs and, you know, trade relationships right now. I think the main signal to our company and to myself as the CEO is that there's a huge push for mines in America. We want to see these metals actually being mined on American soil.

33:52So we try not to get too kind of caught up in the day to day. You know, we have a job here, which is to deliver these projects to the U.S. market. But it's encouraging to see some of these things that I think really, once again, point to the fact that the current administration is very focused on mines in America and nowhere else in the world. So that's obviously a huge benefit to us as owners of two key tungsten projects that are both on U.S. soil and also in the great state of Nevada, which is a very mining friendly place to be operating. Oliver, yes or no, how quickly or can I should say the U.S.

34:25become rare earth independent from China? Oh, man, that's a good question. I mean, yes, we can. I mean, there's some great geology here. We need a huge amount of support from the administration, which we're seeing now. We have to carry through. That's the biggest thing. We can't stop, start, stop, start. If we have this same sort of support, push forward over 5, 10, 15 years, the landscape will look a lot different. And the U.S. will become a lot less reliant on unfriendly countries for these key input metals. Oliver Friesen, CEO at Guardian Metal Resources. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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38:02It's been a big week of retail earnings and it's telling us a lot about the state of the U.S. consumer. Home Depot sales missed expectations. Walmart reported a rare miss on profit expectations. Target delivered a discouraging full year sales outlook. And the list goes on and on. But we've got two wonderful reporters here to shed light on this and a lot more this afternoon. Jeanette Newman, Bloomberg News consumer reporter, and Jennifer Bartoschus, Bloomberg Intelligence consumer team leader and senior retail staples and packaged food analysts are here to discuss. That is a long title. Sounds like she does a lot here.

38:36But Jeanette, I'll start with you. What are the latest retail earnings telling you about the state of the U.S. consumer right now? I think overall that the U.S. consumer is actually doing OK. I think there's a note of caution looking forward because a lot of what's been sold in the last couple of quarters, price increases has not hit those goods. And so there's concern about when price increases really do start to flow through, how consumers will react. But despite some of what you mentioned, Nora, with the results, I mean, Walmart did have a profit miss that's very rare. That had to do with some claims, but they actually raised their sales guidance for the year, which was already pretty high.

39:18So that shows that they do have some confidence in the consumer in the year ahead. Hey, Jen, come on in here, because we spoke earlier with the CFO of Kava. Trisha Tolliver joined us, and she said last week, and she kind of reiterated today that there's this fluid macroeconomic environment. These are her words. She said it creates a fog for consumers. And during those times, they tend to step off the gas. Would you say that that's the view you have at Bloomberg Intelligence about the consumer, that it's foggy? And as a result of that fog, consumers are pulling back a little bit. Yeah, I think that's a pretty good insight.

39:55You know, when we look at the consumer and you look at sort of the bigger numbers in terms of the economy, the consumer is hanging in there. But the consumer has been conservative for a long time. It really started when we had high food inflation. And as soon as that started to roll back, we had pressure from tariffs. And there's just uncertainty. And when that consumer is uncertain, they still buy the things that they need to buy. They're still going on vacation, but they're just being a little bit more prudent. And until we have a little bit more clarity, we're not expecting that to really change.

40:28Jen, what is the bifurcation that you're seeing at Bloomberg Intelligence when it comes to consumers, those at the higher end of the income spectrum versus what those at the lower end of the income spectrum are doing? And we've talked a lot for years about the K-shaped recovery, and it kind of sounds like we're still there. Maybe it's even more pronounced. It's pretty pronounced. You know, lower income consumers continue to be pressured. When you look at retailers that really have a lot of those customers in their base, and that would be the Walmarts of the world, it would be Dollar Generals of the world.

41:02You see that the spending and the average ticket and the traffic into those stores, in some instances, is a little bit pressured. At the same time, higher income households are almost kind of going along as normal. They're still seeking value, but they're taking advantage of all the value that's being offered out to the broader economy. And they're saving money that way. So it's an interesting thing to track and how those two different parts of the consumer base are really behaving a little bit differently. And everybody loves a deal, right? And Walmart has actually, you know, to what Jen's saying, Walmart has benefited from everyone loving a deal and is attracting increasingly more higher income consumers.

41:46And that's part of what's helped boost its sales. And that's been a strategy. You know, a lot of those consumers went to Walmart during the pandemic to get groceries and then have increasingly kind of bought more and more. Walmart is stepping up, you know, its clothing offering. And so that's also, you know, that's helping that's helping Walmart. Are those consumers sticky with Walmart? Yes, they are. They are sticky. And that's been that's been part of the that's been part of Walmart's success because they go the grocery they go and they get the groceries and then they see, oh, actually, like Walmart has great genes now.

42:16Walmart has knows that these consumers are coming in. american eagle reference wasn't it we're no we're not gonna get we're not gonna get we're not gonna get talking about the sydney sweeney ad okay please do not moving on okay sorry go ahead next chapter next chapter and that that also is you know um walmart has been seizing on that and target has been missing out target has not been doing well they obviously just appointed a new ceo he's an insider he was an intern it's an amazing story it is an amazing story it is an amazing story, but the market's not that impressed though. Yeah. So we're seeing, but I mean, you also come for companies like Estee Lauder.

42:54We talked about Walmart. Of course, we know that has a lot of those consumer staples opportunities there, but when we look at Estee Lauder and a lot of competitors like that on the more luxury end, what are the contours of consumer spending in that space right now? You know, beauty overall is, is doing okay. Again, kind of still slowing down a little bit, but still riding a post-pandemic boom when we all got into, you know, lots of different lots of different beauty beauty products at one at one time. But Estee Lauder is not doing that well. So that's kind of like even though the consumer right now is OK, a little bit conservative, like like Jen said, but Walmart is doing overall really well.

43:30Target is not doing great. That's also because of differences with with the two companies and how they're run. Similarly, L 'Oreal, huge beauty company, obviously, is actually doing really well. Estee Lauder, no, their sales in the most recent fiscal year that just ended were down 8%. And those are kind of internal problems that they've been dealing with. Jennifer, I want to bring you back into the conversation here. Are we seeing any sense of consumer fatigue right now, especially when we know inflation is super high? And if you were to ask the average person, they do think that things are kind of tight right now.

44:01I don't know that we're seeing a lot of fatigue. I think people have sort of adjusted to what is sort of almost a new normal. And that's a little bit post-food inflation. They've seen prices come down in different ways, especially on the grocery side and some of the general merchandise like entry-level fashion. And so I think that gives the perception of a little bit of relief. So I don't think people are really pulling back anymore, but they're not also simultaneously really loosening the purse strings. It seems like we've sort of settled into kind of this new normal range. One other note on Walmart that I think is pretty interesting, when you're talking about retention, you can't not talk about Walmart Plus, which is a huge loyalty program and they're generating a lot of incremental revenue off of it.

44:52And people who get in there, they keep renewing and it just locks in loyalty and locks in spending. And we're seeing that across all income cohorts. Wait, wait, wait. Can you talk a little bit more about that? And I think I think what this is not an ad for American Express, but I will say if you have a certain American Express card, you can get a free membership to the program. Which one do you want to? I think it's the platinum card, I believe. Yeah, I believe that's what it is. Thanks, Nora, for calling me out. We actually just completed a survey of a thousand Walmart Plus subscribers. And what's really interesting is that 83 percent of Walmart Plus subscribers also have an Amazon Prime membership.

45:31But that doesn't stop them from maximizing their Walmart plus value. And so I think it really illustrates how Walmart has very uniquely carved out a service and a recurring revenue stream that is really pretty remarkable. And the fact that a lot of the people who are in that program are making digital orders, that's driving their digital revenue for advertising. And it's really adding to just the overall flywheel of Walmart. So there's a lot of really interesting things happening that are really stemming from some of these intelligent decisions they made maybe five years ago to introduce that Walmart Plus program.

46:11That's a fascinating thing to hear because it was always sort of an also ran when it comes to Amazon Prime. So it's interesting to hear that. Jen, Jeanette, I want to bring you back in here and talk a little bit about Target. You mentioned the CEO change, the news we got earlier this week. You said investors didn't love it. A lot of the conversation around Target over the last couple of years, well, actually really over the last year or so, has had to do with backlash against DEI efforts. And to what extent, in your view, that actually affected company sales or the image of what that looked like for consumers?

46:44What do we know about this? The company executives at Target have said that the backlash, like black consumers not shopping at Target, has had an impact on sales. They have not quantified that. And so we don't really know these kinds of boycotts don't often have a huge effect. But they have said that it had that it had an effect. And I think also more more importantly, even in some of the analysts notes and you hear investors talking about the staff at Target, we we've had some reporting. It's nearly 60 percent of staff at Target are people of color. And so the staff itself has been, you know, upset by everything that's been going on with with Target pulling back on on DEI.

47:26And that that is that is something that some people think is kind of behind some of this tumult with with staff. A job in retail is so difficult and you need especially now, especially now. And you need great staff and you need people who are going to stick around and they know how the stores work. So that has also been a problem, whereas you don't hear those same complaints from staff at Walmart, for example. They've also been increasing the salaries that they're paying their top employees. So that is also an issue at Target is the issue with staff. Well, we love talking retail and the consumer with both of you.

47:59Thank you so much for joining us. Jeanette Newman, Bloomberg News consumer reporter and Jennifer Bartaschis, Bloomberg Intelligence consumer team leader and senior retail staples and package food analyst. Check out Jeanette's reporting on the Bloomberg Terminal and Jennifer's research on the Bloomberg Terminal. Also, of course, at Bloomberg.com. This is the Bloomberg Businessweek Daily podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app.

48:35You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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