Gilbert Clark: Meridian Mining Nears a Major Financing Decision

0:17Trevor Hall: Welcome to the Precious Metals Summit in Zurich Mining Stock Daily, providing coverage over for the next three days and my duties as session chair and luncheon keynote on the first day are concluding. So we're actually launching our corporate updates with an old friend. Actually, we've been meeting quite often here, Mr. Gilbert Clark, CEO of Meridian Mining. Always, three, has this been three interviews in a row? We've done it in person? Yeah, I think so. It's been a fair few. Oh my God, it's like, we gotta keep this track record. Where are we going to do it next in two weeks? Where am I going to see it?

0:56Trevor Hall: Namibia? No, no, no. You won't see me there. No, hi, Trevor. How are you? Looking good, mate? Thanks, buddy. You published news this morning, actually, a little bit of an update on the financing from Kavosol. Things are moving along. Sounds like there's some offers on the table. You're rubbing your hands together. 20 proposals, it seems like, and several fully funding that$400 million US package. How fast do you get from a shortlist to a shortlist and a mandate on a term sheet here? Look, we're working through that on the project finance selection. We'll have that done. I think the candidate will be done before the end of the month.

1:43It's been really quite interesting. You've just got to look at how do the bankers look and how do we look. Just look at those headline numbers. The first five years we generate 400 million USD in net free cash flow. Our capex is 322. We pay it back and under 0.9 every year. So there's just that type of financial risk is taken out of the equation. Then you look at our owners team we've put together, mine builders, expanders, operators in Brazil so we're taking away that construction risk you know the next phase and then it's just not the engineers but we also look at the purchasing team, the resource team, IT, financial team that have incorporated into the company and this creates substance and for many years I've told our shareholders I'm very acutely aware about risk and so we're taking that risk away from the financiers but with at the end of the day when it comes to project finance you might not take the one the 400 million might take a lesser amount but you go for the one which has got the best partner associated which is going to be the best interest of the equity shareholders like me like all my other

2:56Trevor Hall: shareholders all right well I'm glad you mentioned finding the best partner because several packages do bundle debt over uncover equity and offtake if you Take one, do you give up control of who buys the concentrate, use Pish as a blending premium product at all? Actually, one of the larger presentations, proposals actually excluded the off-date. Oh, did? No, no, no. And then we've got some really great support from the trading houses. Of course, as we've demonstrated over the last six months, the quality of the copper concentrate in this market that has serious problems. We saw the announcement from the Cadelco from last week.

3:35if you're going to meet growth be it for infrastructure white goods

3:42computers anything you use day to day requires electricity, you need copper and we haven't got copper so this is where we're sitting that nice niche as the best blending copper concentrate and that's attracted the offtakers and certainly when say the banks look at the product well they know we're going to have no problems selling this concentrate. So that's a real key for us and that suite of proposals.

4:09Trevor Hall: Yeah, the premium in the concentrate is not the issue here. It's using that to leverage the best partner you can find. Yeah, absolutely. With the history of the project, being previously in production, taking that established flow sheet so you don't have the metallurgical risk and then you produce the concentrate, then you produce the blister copper, but as we have done, it's all about derisking that project finance and attracting the best partner for the next stage of the project. And that's what we've really been focusing on. A lot of companies go, look, shiny drill coal, a bit of arm waving.

4:46But what we've said is we have got a two-pronged approach, getting CaboCell into production and expanding our exploration activity. And then eventually, in the very near term, funding that exploration, not through equity, but through cash flow. Yeah, yeah.

5:02Trevor Hall: A couple of weeks ago, and you and I last chatted, I'm pretty sure I asked you equity versus debt in that final investment package. You've got$90 million in the Treasury. In this news, you mentioned$400 million U.S., but it's only$322 million CapEx, right? So there's obviously, you mentioned using more cash for exploration, right? Yeah. For Santa Elena. I guess my question, let me get into my question. Is there a path to building Cabosol with no equity, just straight out debt? No, we'd never have 100 % leverage. I just couldn't see it happening. That's too, because, you know, don't forget, first ranking is on the asset level.

5:43No, we will take a mixture of, some of the proposals on the equity size are incredibly large, combined with debt, combined with off-takes. Some of those, you know, basically we're done if we choose to. But we're into that. There's still another growth phase coming to our equities. So we're going to manage that. Everyone, essentially, a lot of people say, oh, you know, dilution, dilution, dilution. The great thing about equities is you grow equities with certainty. So we've gone from PEA, PFS, DFS, the installation license, FID. and I think prior to the installation license you'll see that the project finance will be completely done.

6:29You'll have a CP for that. So it's all about growing the value. So today we're trading it. The October dip is over. It's fairly obvious. We had the Brazilian election. We had the US midterms. And now we're going to see, it's not my skill set, but I guess we'll see money moving out of AI into probably some will get exposure into mining stocks it's a very nice sweet situation but we want to grow our current discount to nav so trading about 0.32 grow that project finance 0.6 0.7 reduction like many other comparables 1.2 1.3 to nav at the same time we've got that massive exploration portfolio for the long-term growth of the company okay uh really important news you did

7:18Trevor Hall: a point is it AFRI is that AFRI to work with your EPCM committed almost 31 million dollars I mean that's pretty good chunk of money again getting closer and closer that final investment decision but what has to happen before the board can really make the leap to make that full that the real decision the FID will come with the installation license in Q1 next year we're working closely with the authorities for the passage of that application. I don't see any red flags in it. I'm very confident in what the correspondence that we've had. But certainly, that's the FID.

8:03The power line, so we'll start off by building a 35 kV line to site, then we'll upgrade that to 138. That's already been granted. The installation's license there, the access agreements have been paid, the compensation has been paid, we're now going through looking at upgrading the roads, all with the roads, drainage, bridges, upgrading the bridges, building new bridges, we're very well advanced in all of this. It's just not the shiny numbers, nice core that creates a company, it's the bricks and mortar that happen in the back of the show that people never see and we always communicate paid about it and people give it not a little value but actually is that work we've done over the last 18 months two years which is going to propel us to being a production company that will propel the equities to be one times x to now that's the that's the fundamental asset we've

8:56Trevor Hall: been building in Brazil okay uh one big update that happened since you know like two weeks ago when you last chat was the uh political situation uh Lula won that runoff and Bolsonaro I I is he contesting it from the US. I don't know exactly what's happening there but but licensing in this is a state matter in Mato Grasso so that not necessarily huge deal for Capasol but is there anything the federal agency maybe touches with this project? Both Bonsolaro and President Lula today they were bipartisan in mining's place within the Brazilian economy. They've got no problems with the end result results the election they've been certified and President Lulu is a president of Brazil.

9:43What we can say is going forward for the Cabo Sal to get to FID, that's at the provincial level. That's with the state of Matagroso. And we saw the mayor's been re-elected. The governor's been re-elected. We're very happy with that. Many previously, great supporter of the project. So for us, very much status quo.

10:04Trevor Hall: Okay. What kind of conversations are you having here in Zurich? You have a bunch of paperwork and a bunch of terms on the financing to go through. I'm just curious, balancing those type of discussions with investor one-on-one meetings, where's the most priority right now for your time? Well, meetings so far today have all been on the equity side. Sometimes you have people who will do one or two styles of investment. they want to come in at a 20 cent raise and where's that that five times grade you know uplift uh you know it's their business well and good and then some equity said look we're looking at it as at the as the asset level we're a long only fun we like where you're going we want to get exposure to cash flow so there's you know we have gone through that junior phase and we've gone up and down like i guess you can give an analogy to the song curve and for me where we are is that We've gone through the pivot at the base and we're just starting now to accelerate up into that Lasson curve.

11:07So we want to see that three, four, five multiple from our share price going forward.

11:11Trevor Hall: Okay. What's the next six weeks happening in store for you before the end of the year? Every year we have a strategy session in England with our full board and executive. I think I'm going to be in London for mines and money. I haven't decided yet. Then I'm going down to Brazil for the end of the year. It's the last week before we close off, so I always go down. For me, it's really just to get focused. Everyone, okay, we're shutting down for Christmas, but guys, safety's first. Monday, Saturday, the last week, I'll be there. Doing some marketing in Sao Paulo, some marketing in both Rio and I think Belo Horizonte.

11:55We're getting a lot of interest coming out of Brazil now. Okay, great. Great.

12:01Trevor Hall: I can guarantee from you that you have a full commitment to the mustache until that final investment decision because this shaving it off and removing it and then growing it back is really throwing me off the last month here, Gilbert. I need a full commitment at least until the FID. It's November, mate.

12:21You'll never see a man this brave this far away from his wife.

12:28I'm going to try and win it at the end of the strategy session, but I think Bruce has got a head start on this. Okay.

12:35Trevor Hall: All right, everybody. That's your update from Meridian Mining, trading on the LSC and the TSX with MNO, and also on the OTCQX with MRRDF. Gilbert, try to do this in person in December. I don't know how we're going to do it, but thanks so much. Thanks, Trevor. happy to be here. And as always, if you've got a query, just reach out to me on info at meridianmining.net.net. Brazil. Come straight to me and I always follow up. Thank you. Thank you. The information presented should not be considered investment advice. Mining Stock Daily and its affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein.

13:13Trevor Hall: Please do your own research or speak with a licensed financial representative before making any investment decisions. Thank you.