FPX Nickel: Baptiste Gains Strategic Importance for Canada

0:17Mining Stock Daily: Moving right along here, let's head back up to British Columbia and talk some nickel exploration and development. with an old friend of ours, Mr. Martin Turin from FPX Nickel. They do trade on the Venture Exchange with FPX and on the OTCQX with F-P-O-C-F. Martin, I always love when you're coming here, talking a little nickel at a precious metals conference. How are you? How have you been? Yeah, things are good. Thanks. Good to see you, Trevor. And yeah, nickel's not on the top of everyone's mind these days, but counter-cyclical opportunities are where a lot of money can be made in the sector, right?

0:55Mining Stock Daily: Yeah, absolutely. Give us maybe a glimpse of where we're sitting here at this nickel market. It had a little bit of a glimmer of hope here earlier this year. Yeah, I think the direction of travel is actually quite positive after many years of negativity. In short, the Indonesian supply build-out just flooded the market with nickel units for several years. What's very obvious right now is the Indonesian government wants to turn the taps down there on supply growth. And so as you look out, looking ahead, nickel demand is going to continue to be 5 % to 6 % per year, year over year for the next many years.

1:31And we see that nickel supply could end up being probably closer to flat from here on out. And so we expect that 2027, they'll actually be the first deficit in the nickel market for the first time in many years. and those deficits should continue and expand in 2020, 2028 and beyond. And so the policy wins in Indonesia are all pointing towards they need a higher nickel price. As the dominant supplier, they're in a pretty good position to make that happen. And at the end of the day, I think what's interesting, one of the things that I always think about is the ratio of the nickel to the copper price.

2:11Traditionally, if you look back 20, 30, 40 years, that's been about two and a half times to one. So nickel price being about two and a half times the copper price. We're getting close to almost parity right now between the nickel and copper price. So how does that resolve going forward? Does it mean the copper price goes down or does it mean the nickel price goes up? I would put my money on the ladder.

2:32Mining Stock Daily: Very interesting. Yeah, I didn't know that ratio was so important to be keeping tabs on. Let's do talk about Baptiste. It actually made a little bit of headlines last week, I think it was. Baptiste was included in Canada's Investment Summit prospectus. What does that actually mean beyond the headline here, Martin? What do you know? Yeah, I mean, I think, listen, it's part of a broader move by the Canadian government and to some extent by the BC government to want to attract capital to Canadian projects. So, you know, being in that prospectus means it's a relatively short list of mine projects in BC that were included.

3:07So that's great. And it really follows on the announcement by the BC government in the spring that Baptiste is viewed as a major priority project by the province. We're the only junior company with a critical minerals project that has achieved that kind of recognition or status. And, you know, that follows on being included in the province's critical minerals office. So these are all coordinated activities that the provincial and the federal government are doing to ensure that environmental assessment processes, mine permit authorizations, and the funding landscape are all getting aligned to be able to draw that private capital that needs to be put to bear to bring these projects to fruition.

3:49Mining Stock Daily: Is it tangible at this point, tangible pathways? I mean, they're not putting money in your pocket. Or, you know, is it more than just a headline right now? So on the money side, what we have seen is in our can, you know, between money that's been provided to us under grant programs and money provided to First Nations involved in our project, almost$10 million from the federal government has flowed to our project to support its advancement through the EA process. So that's not insignificant. That is money on the table that's been put out. From a BC standpoint, our inclusion in the Critical Minerals Office and our designation as a major priority project means that we meet with the province on a weekly basis to discuss the status of the currently ongoing EA process, to work to resolve issues, to ensure that our applications never kind of sit gathering dust on the side of someone's desk.

4:46And so this prioritization of activities by the bureaucrats helps to ensure that the process advances through the various stage gates, which it has to date and which we continue to expect to see. We are just one among several projects that have either recently entered the EA process in BC or will soon do so. So Thesis is another. We expect companies like Surge Copper, Northout Copper and Gold to enter the process in the not too distant future. the proof will be in the pudding of how those projects mature through the EA process. We are the test cases to see, to your point, how this is actually going to work in terms of streamlining, making these regulatory processes more efficient.

5:30And to the extent that the proof can be demonstrated in the pudding there, to me, that's when private capital will react.

5:37Mining Stock Daily: I mean, despite, you know, a subdued nickel price, but because of this push in the critical mineral space and Baptiste being, you know, directly implicated in this, has it become more valuable strategically, you know, as a project and for secure supply? And where does where do you find that value? You know, kind of almost seems like it's hidden right now. In a way. Yeah, I think we've already benefited from that, not through any actions of governments in Canada or in BC, but really through the actions of some of the strategic investors we have in our company already. So a few years ago, Otakumpu, which is the largest stainless steel company, invested in us.

6:21They took a 9.9 % stake, and we gave them a small slice of offtake. Why did they do that? It's a European stainless steel company. It's been traditionally reliant on Russian nickel as part of their feedstock. They cannot rely on Russia anymore. They need to look further afield, and they want to see nickel units coming out of places like Canada to serve their supply chain. And they're willing to put capital to work to make that happen because if they don't have the nickel, they go out of business. So this is an existential need for them to invest upstream. We've benefited from that. Similarly, Sumitomo Metal Mining.

6:57They previously had activities and projects in Indonesia. They have no interest in being reliant on the Chinese-Indonesian matrix of supply for stainless steel and for EV batteries for Japanese industry. So similarly, a few years ago, they invested in us in order to get a little bit of offtake with a potential for more strategic investment in the future. so in order for these European and Japanese industrial groups to continue to have the security of supply over the metals they need they've demonstrated with us the ability and the willingness to make upstream investments they will in my view continue to do so in the future and that will bring the capital to bear that is required to bring projects like ours to life so it's been demonstrated to date I think like you say it's a little bit lost in the shuffle.

7:50But when we think about capital sources going forward, we don't need to think about the conventional sources on the street. Those strategic sources will be there for us.

7:59Mining Stock Daily: Baptiste's of Warioite obviously has some crazy good advantages to it. One of those is it eliminates conventional smelting and refining. How significant is that advantage when you are talking not only to your own government, but also international institutions and new partners, such as ones you just described coming in. Is that a big critical factor in their investment thesis? It absolutely is. So the Aware White Concentrate simply stated it plugs into the downstream much more readily and into many more downstream options. It's got great optionality to go into producing stainless steel, specialty alloys, or EV batteries without having to go through any intermediate smelting stage.

8:44so that means we have a wider access to more markets more customers more competitive tension to be able to to yield a higher payability for our product um and and ultimately that higher payability means higher revenue than if you're producing a nickel concentrate that does need to go into a smelter so it has real commercial implications okay i know that uh i think the last

9:06Mining Stock Daily: time you and i talked you have been on the hunt for baptiste look-alikes uh where how's the exploration kind of looking within with your partners and where you at anything that looks kind of juicy that you're excited about I mean it is unique unique mineralization you're going after but where do you stand with all this right now yeah so super excited in some ways that's the sort of the sexiest part of our story right now is that exploration work that we've been doing with jog mech so the with the Japanese government for the last three and a half years now so we have been scouring the world looking for other Baptiste look-alikes.

9:43The first project that we have formed under that joint venture with Jogmec is a project in Newfoundland called Advocate. So we have put together a very large land package there. We have identified four quite large-scale targets with very, very strong aware white nickel grades at surface. And as we speak, we're about halfway through our first drill program there at two of those targets. So one is called Birchie North, the other is called Wolverine. It's a minimum 4 ,000 meter drill program we may end up actually going beyond that and you know not a lot we can say right now but very excited about the potential for the discovery of a new major nickel deposit in Newfoundland and something that you know if we do make that type of discovery this year we know with this type of mineralization the The experience we've gained from Baptiste would allow us to move it not just from a discovery hole, but actually getting to a mineral resource estimate potentially by the end of 2027 and then into a scoping study very quickly thereafter.

10:47So we're quite serious about moving quickly on these opportunities and really leveraging that first mover advantage we have in a were-a-white nickel.

10:54Mining Stock Daily: Well, and that's a follow-up to that. I mean, what kind of potential is there with Advocate to maybe, if this is a representative of a Baptiste 2.0 type thing, where it's not just an anomaly, but then you actually structure you and your team as a unique nickel exploration model here. This is just not one thing you stumbled on that looks like Baptiste, but maybe there's some sort of code that you have cracked where you can go find it somewhere else that somebody else has looked over. That's right, and there's nothing to say that there isn't potentially a deposit out there that's better than Baptiste, bigger or higher grade.

11:33And we are uniquely positioned to do that. So I think we've done a lot of work to de-risk the technical and the economic basis of Baptiste. And I think if we were going to be sitting here at this conference in five or ten years, there could be a dozen Baptiste analogs out there around the world. And we'd like to have our hand in as many of those as possible.

11:54Mining Stock Daily: How do you determine the spending with your exploration right now, also with what needs to be happening at Baptiste? Yeah, so one of the nice things about the joint venture with Jogmec is that it has provided exposure to new nickel discoveries for our shareholders at very limited cost. You know, the spending at Advocate right now is borne 60 % by Jogmec, 40 % by FPX, so it's relatively de minimis to our balance sheet. And that was part of why we kind of centered our exploration efforts It's in partnership with Jogmec. Exploration can be expensive. We know there's a winning model there to partner with world-class partners, provide that upside exposure to discovery while really minimizing any kind of dilution or cost to shareholders.

12:43Mining Stock Daily: Martin, I hope it's not another 12 months until we speak again, but really what is the most important things on the horizon here for the company, not only for the beginning of the year but into 2027? Yeah, so on the exploration side, definitely is those drill results from Advocate, which we're super excited about getting those to market, ideally by the end of October or so, at least for the first batch. And again, two targets there that we're equally excited about each. Beyond that, it's really heads down, continuing the normal course of moving through the stage gates of the environmental assessment process for Baptiste.

13:18Typically, investors can expect that every four to six months we will have updates on where we are in the process, what we've achieved and what the next steps are towards ultimately what we expect to be bringing the project to an FID by 2030. Beyond that, you know, listen, we have very constructive conversations with a number of strategic parties about the next steps to inject additional funding into FPX either at the corporate level or potentially at the asset level to ensure that Baptiste is well and fully funded all the way through to an FID by 2030. So, you know, that kind of transformational news around strategic transactions in respect to Baptiste is something that is always a bit of a wild card that people can position accordingly around.

14:11Mining Stock Daily: Okay, all right. Well, good to see you. It's been far too long, man, needed this update. I don't even remember the last time you and I got together and did the last update here on MSD. So it's long overdue. I'm glad we could get it in here. FBX Nickel Trades on the venture with FBX and on the OTC QX with FBOCF. Have a great rest of your week, Marty. Thanks, Trevor. See you next time.

14:36Mining Stock Daily: The information presented should not be considered investment advice. Mining stock daily Yen's affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein. Please do your own research or speak with a licensed financial representative before making any investment decisions.