Tungsten's New Reality: Two Markets, Two Very Different Prices - Oliver Friesen

0:16Trevor Hall: All right, everybody, welcome back to Mining Stock Daily and our continued weekly coverage here of LME Week in the great city of London. But we are going to connect with Oliver Friesen here. He is a CEO of Guardian Metal Resources. So maybe stepping away from the precious and mostly base metals discussion, talking about what has been a lot of topic of conversation in the metals market, and that would be on tungsten. Quick note, Guardian Metal Resources does trade on the NYSE American with the symbol GMTL. They trade in London with GMET and also in the U.S., OTC QB markets with GMTLF. So Oliver, welcome.

1:00Yeah.

1:00Trevor Hall: Good to see you again. It's been an exciting LME week to be in the tungsten market. I'm sure each year has built and built where this metal has become more and more pronounced in supply and demand. Two years ago, no one talked about it here. So here we are. It's certainly not the commodity of focus, but it's, you know, there's a lot of chatter about a lot of different groups and groups who, you know, I never thought would be interested in tungsten. are interested. So that's certainly a good sign and a sign of the fact that the price has done quite well. And now it's becoming more mainstream, which is what the metal needs, honestly.

1:35So it's good.

1:35Trevor Hall: Yeah. There's a lot more commentary, obviously, in this space, more so now than ever has been, at least as I've been following metals in mining markets. But we've seen an extraordinary increase in those tungsten prices outside of China. But what I'm hearing, Oliver, is that those transactions within China are actually occurring at lower prices. Can you kind of maybe describe, is it a disconnect or is it just really kind of the separation of supply chains that we all need to account for moving forward? Yeah, what we're seeing in Tungsten is I think something that has been, something I think we've needed in this space for quite a few years now.

2:14And just to give a bit of historical context to the Tungsten space, typically there's been sort of one world price, right? So go back three years, four years, 10 years, 20 years, the world transacted on one price, which was effectively controlled by the Chinese. So one of the reasons why the world right now, if you look at where supply comes from, mine supply, China, Russia, North Korea account for about 90%. So if you were a Western world tungsten miner selling some concentrate five years ago, there was one price. The Chinese had a lot of influence. That's the price you sold at, right? Which led us to the position we're in now where we don't really have much allied Western world mine supply.

2:58So what we need to see in tungsten, and we're seeing it now, surely, and a lot of other metals is similar in that we've seen a bifurcation, right? And what kind of set that off was China announced an outright export ban of tungsten February of last year, right? So naturally, if China is going to remove themselves from the market, you need to find a new price that Western world consumers and miners and consumers of the metal can transact at, which is healthy for the space. So we've seen that bifurcation now. And you are right in that there's a discount within the Chinese price, which makes sense.

3:35Because if you're a Western world consumer, if you're a Lockheed Martin or a Raython or a Schlumberger, you can't buy at the Chinese price because there's no exports coming out of China. So there's a proper bifurcation now. It's very healthy for the market. I think investors probably get a little bit too strung up on the Chinese price. Yes, it is lower than the Western world price, but we can't transact at that price anyways. You know, there's probably going to be some sort of alignment between those prices. But as we've seen with other metals, there should be a disconnect and we should see a Western world price emerge that is materially higher than the Chinese price.

4:10And that's the price investors in the Western world should really remain focused on.

4:15Trevor Hall: Is having two distinct tungsten markets sustainable or a global market? Are we just looking at the bifurcation of something that we have to manage? Not just tungsten, but a lot of things. I think it is sustainable. And the reason for that is if you go back three years, and this is the case for a lot of different metals, we as a western world allied group of nations have been reliant on china for you know 100 % of our rares 100 % of our gallium 95 % germanium 85 % tungsten so if we want to now see a new world where the US Australia Canada Spain the UK are now mining metals to support their own industries you need to have two prices.

5:00So I think it absolutely is sustainable. And certainly what we're seeing now is the fact that the Chinese price has come off, but the Western world price remains incredibly robust still. And I think that will persist into the future. And if we want to see new Western world mines come online, there has to be another price, secondary price for us to look at and sell at.

5:21Trevor Hall: I do want to just clarify. Are we talking about the Chinese, is the Chinese export ban still in place or is it more of a, it is, but then there's a Western import ban of Chinese product. Yes. That's another fact. Is it a ban? I mean, is it a downright policy ban? Not yet. So you are correct in that there's an export ban out of China. So we've been monitoring the month to month export numbers. It's effectively been zero almost across the board from China, which is what we expected to see. So what we're seeing on the flip side is that I think the ban you're referring to is the DFARS import restriction ban coming to effect in January 1st of 2027.

6:05So effectively, as of January 1st, for defense procurement specifically, so if you're either the Pentagon or any defense prime building munitions, tanks for the Pentagon, none of that material can come from China, Russia or North Korea. So that's only of January 1st, but that deadline is real, which means that if you build things for the defense industry or for the defense industrial base, you actually are not even allowed to import, even if you could, which right now you can't, you're not allowed to import material from those three countries for anything you're building that supports the defense industrial base.

6:39That's kind of going both ways a little bit.

6:41Trevor Hall: So are the Western prices, I guess, are they reflecting more of a physical shortage in Western stockpiles? Or is it mainly, are the buyers effectively paying for geopolitical security knowing they can't buy from the East? I think it's probably the latter, but more than anything. I think the thing to note about tungsten that makes it somewhat unique is that it has very unique physical properties. So if I had a little cube of tungsten with me right now, it's the most dense metal on the planet, which means even in an environment where the price goes up, it's very hard for manufacturers to actually just replace that.

7:18So what that means is that if you're Boeing and you're building a 777 jet and you need it as a counterweight or for your propeller engine or your joysticks, if you can't get the tungsten, you can't just substitute it out. So what we've seen and the reason the price has done so incredibly well is we've seen that elasticity where consumers of the metal are saying, I just got to pay whatever price to make sure I don't shut down manufacturing. And a big and really good example of that is in the production of munitions. So the U.S. has really made it clear they want to build up, you know, stockpiles of munitions.

7:53And it's one of those things where if you look at the overall cost of building one of the interceptor missiles that's needed to protect major cities via the Iron Domes, the actual input tungsten price is relatively small. So if you imagine if you're a Lockheed or an RTX or some of the big munitions manufacturers, you have billions of dollars of backlog orders from the U.S. government. You're going to pay whatever price it's going to take to get that tungsten because you need the tungsten for the munition, but it's not a huge amount of the input cost. Okay.

8:22Trevor Hall: So we're seeing falling prices out of China. Does that reflect an oversupply on the Chinese side? Where do those numbers sit? Yeah. Well, so obviously when you lock in supply, you're going to see a bit of an oversupply, right? All of a sudden, China's gone from exporting, I think it was 30 or 40 ,000 tons a year, to that material staying in the country. So now, obviously, there's a bit of an oversupply situation. China on top of that is also importing material which is not something they've done extensively in the past. So if you can imagine they've locked all supply in and they're also importing material.

9:01So there's material coming from Kazakhstan from Africa as well which is a bit of a strange situation. People are trying to go well where's all this tungsten going? Well number one the prices come down which reflects an oversupply situation. but there's also sort of speculation as to where that sort of i wouldn't say missing but that sort of excess material is going i won't go into the details now on where that might be going i'm sure your listeners can probably have a few ideas but yes it's an oversupplied situation but also supply mine supply in china is also controlled by the ccp so effectively they have quota mining quotas that all the different miners of the metal have to adhere to on a quarterly basis so they control that's sort of the mine supply to manage domestic consumption requirements.

9:46So anyways, I think it tells you a little bit about the state of the Chinese market and the fact that they are not exporting material, but also importing material. So I think there's probably more demand there than maybe we are familiar with, or there's some other use cases of the metal within the country or within countries that are friendly to China that we're not fully privy to right now.

10:08Trevor Hall: Are they importing from their allies in Russia, North Korea, or any other? Yeah, that we don't know. If anything, I think the tungsten is probably flowing the other way, would be the assumption. But they are importing from Kazakhstan. We know that as a fact, and we've seen the import numbers, and also from some African countries as well. So that's the material flowing in. Where it's flowing out, it's hard to pinpoint exactly where that could be going. And the West, where is our supply at now of tungsten? And since this export ban from China, where is that supply? What's been coming in the last year?

10:50Trevor Hall: Where does that supply sit today? And obviously this will set up where the next generation of supply will come from. But where are we at today here? Yeah. So where we're at today, I don't have the exact numbers for 2026, but Western world mine supply in 2026 will sit somewhere between probably 10 to 15 ,000 tons of material. So as I mentioned, China, Russia, North Korea, historically, in at least the last year have accounted for about 90 % of mine supply. So you see somewhere between 10 ,000 to 15 ,000 tons coming from Australia, a bit from Spain, Portugal, Bolivia, a few African countries. So it's not a huge amount.

11:29And that's really a reflection of the fact that the price of tungsten has been very depressed and really tied to the Chinese market for so many years. The price hasn't been high enough to really sustain and encourage Western world producers of the metal. So here we are now where China's exports have been cut off and all the allied nations now have to sort of share and figure out how to divvy up, call it 15 ,000 tons of mine supply, which is why we've seen the price go up so much, is you have major consumers like the defense primes, tool bit makers who say, well, we have to have the metal or we shut down.

12:04So I would say probably closer to 15 ,000 tons. We've seen some new artisanal mining coming up in Africa. But once again, with the huge amount, multi-thousands of tons of material that are now not being exported, there still is a huge void and a huge gap that companies like Guardian need to bring production online to fill into. Okay. Yeah.

12:25Trevor Hall: So we have a bifurcated market. Correct. We can separate it between East and West. But on the Western side, and we have policies put in place in support of new tungsten supply, something online. And we can talk about where we're at with that. It's still kind of, there's a lot of headlines out there. I think there's a lot of people still kind of waiting to see you know the show me type of aspect but because you know where tungsten sits here and we have elevated prices in the west where's the sweet spot for western producers on those sensitivity tables where like tungsten cannot drop below a certain point or else you know yeah or else those companies have to stop production where where's that fine line yeah it's It's a great question.

13:09I mean, the price before the export ban was about$300 to$400 per MTU, which is$30 ,000 to$40 ,000 per ton. Okay. So at that price, there was not much Western world production because that was not a price that could sustain Western world miners, right? China is a country where we've seen in a lot of metals, there's subsidization of those domestic mines, which means it's very hard to compete with that. So I would say that price, if it gets that price again, which, you know, I'm very plugged into the industry now. I was at the International Tungsten Industry Association Conference a few weeks ago in Berlin.

13:51And typically, folks in the tungsten space have been historically very pessimistic because it's been a tough market because the Chinese have had so much influence. But even I would say the most pessimistic scenarios and pessimistic folks in the industry, you know, their view, and I polled a lot of different people, is that the prices eventually settle out at a price much, much higher than what was the historic norm. What does that price need to be? We don't quite know yet. And the reason for that is the price of the metal only started moving really, I would say, a year ago. So the export ban went into effect in February.

14:24There was sort of a six-month period where people went, is this real or is this not real? And most companies who consume tungsten will have between three to 12 months of stockpiles of metals to sustain production. So it wasn't until towards the end of the year that they've gone, oh, wait a second, we're out of tungsten. I got to phone my normal supplier and buy material. And that's when we saw the price start to really ratchet up. So the point I'm trying to make is that the price hasn't been high enough for long enough to now really support Western world projects to start to move forward. So what we've seen is a lot of companies, and I would say in the last six to nine months, are now talking about marketing tungsten projects that they've picked up.

15:09So the drilling is now starting. And most of the folks in the tungsten space are drilling for expiration, which is the first part of the cycle. But we're not at the part of the cycle where these companies have had three, four or five years to develop resources, put together PFSs. And only until that point will we know where the real cost curve sits in the Western world. The good thing about Guardian is that we started on our journey, specifically five years ago. So we took a longer term view, Trevor, five years ago that, hey, here's a metal that no one loves, which typically is the time you want to look at it.

15:45And certainly we went and acquired one and then another asset, both in the U.S., and pushed forward. And now we delivered a PFS study for our Pilot Mountain project back in June. And in the US, we are the only US-focused company to have delivered a SK-compliant PFS study, I think, in the last 10 years. So we don't have a full picture of the cost curve yet, but we're going to find out, I would say, two to three years from now, once we have more projects get to the stage that we're at across different jurisdictions. But I think, ultimately, we're going to need to see prices, certainly, materially above the 300 level.

16:23That didn't work, and we knew that didn't work. Where it lands out, we're going to find out. But certainly our projects we think are going to be very competitive at much lower prices.

16:31Trevor Hall: I definitely think that Guardian established somewhat of a competitive advantage because you were early to the game. For sure. You were – when this trade and resource kind of geopolitical battle started forming, you were in a good position and then shortly turned around and, as you mentioned, published that PFS. but it also is interesting i'm very curious with is it going to take more patience to get a better understanding of the price curve for tungsten because it's been a volatile 18 months in this metal and it's hard especially for financiers and institutions looking to maybe fund projects outside of the federal government i'd say you know they're going to want some sort of base case and obviously 18 months of volatility yeah is is pretty risky for them to provide you know to launch capital.

17:22Trevor Hall: So you mentioned kind of a time frame of like three to five years, I think you say, correct me if I'm wrong, but do we have three or five years to really get a grasp of the tungsten price curve? Or is this something that maybe needs to be addressed now through a federal backing that we saw as like price floors with like NDPR that they announced with Mountain Pass? Yeah, I mean, it's a great question. And I would say certainly price floors are quite useful when it comes to competing on a global space. Makes things a little easier. Makes things a little easier. And I'm sure MP Materials would agree with that.

18:00There is certainly discussions of tungsten price floors, given the fact that if you look and go back in history, there was multiple episodes where China flooded the market and made it so it was hard to mine tungsten in the Western. I think we've now seen a fundamental shift in the market. And the governments have recognized that we can't go back there. We can never go back to the point where we're reliant on other countries for a host of different metals. So to answer your question, can we wait? Absolutely not. I think the good thing is there's already, and I think certainly I'm going to plug my own company, but when you look at the current price on the screen, so the price right now, fast markets price, which is the price that the Western world buyers and sellers look at as a price that actually makes sense and is meaningful.

18:45the mid price is$270 ,000 per ton that's the current price it's come off a little bit the peak was just north of$300 ,000 per ton um so on a on a equivalent basis to copper it's it's much more valuable per pound than a metal like copper just to kind of put into context i think copper trades i forget what the ton rate it's gone up quite a bit maybe$15 ,000 a ton i forget what it I know on per pound, but effectively we're at$300 ,000 per ton. So it's many, many multiples, more valuable per pound equivalent effectively. So where we're at right now is it's come down a little bit to$270 ,000 per ton.

19:26The PFS that we just put out, the cash costs that we need is effectively$50 ,000 per ton. So what you have right now is the price up here and the price that we need to break even is way down here. So we have a lot of space between where it's at now and where we need to be. And also what we're doing right now as part of our FS is we actually think we can further optimize that number and get that down. And there's some things we're working on right now with Tempayu to even drop that even lower, which means investors can get confidence in the fact that, OK, as long as my most pessimistic bear case for tungsten is call it north of$1 ,000 or$100 ,000 per ton, then we have really good margin here to continue to support this project get them the money they need to build it and off they go so we're not going to sit around and go we need to see the full cost here before we start to support projects we have great amount of support we have some really good shareholders the government has come in invested in our business they understand that given the lead we have given the quality of our assets these are assets that we believe in a lot of our investors and the government believes will be long-term suppliers of tungsten concentrate to the domestic market and we can do it competitive at a lot of different prices let's talk about that

20:43Trevor Hall: pfs actually and break down the economic numbers uh comes with a 660 million dollar after tax and pv 60 irr yeah um that and you're right it assumed basically just under 200 000 per ton of tungsten in the correct yeah so obviously fairly resilient pfs here um yeah what when and i had a follow-up question you know when when that when does it become marginal but i think you you express that what price tungsten would have to be yeah uh to become marginal now about the same time that this pfs was published i mean the stock was flying i mean but sentiment was also So very, very high. For sure. It's come down.

21:28Trevor Hall: The stock has come down. Is this just a natural flow of the equities? Maybe the sentiment and critical minerals, that juice kind of coming off? Yeah, I think there's probably two parts of it. So number one, what we've seen with tungsten is it sort of went mainstream, right? So there was a lot, you would see, I got interviewed by Fox, right? There's a lot of mainstream media who are picking up. Louis Black, who's the CEO of Almonte, who's done a lot to get the tungsten story to the masses. So what we saw, and certainly with the trips that I do to New York, meeting different investors, we saw and we've seen a lot of generalists get into the story, right?

22:06As more of a, less a mining focus, more of a defense aerospace type narrative, which has been a really good trade, I would say. So as the generalists get involved, a lot of them can be sort of momentum driven traders, right? They're looking for where the momentum is. and certainly for you know i would say a better part of a year from the export ban until call it even a month ago momentum was up into the right and a lot of people can get on board and say that's a really exciting trade and then when the price rolls over a little bit they go well wait a second the momentum for the price is not up into the right anymore therefore this is not a trade i want to be in so it's the good and bad we need more generalists in the mining space everyone knows that and there's a lot of value there but it can i think exacerbate the price of things going both ways because there's a lot of momentum traders algo traders who can look at these things both ways so certainly i would say momentum has shifted a little bit and i think the macro markets across the critical metal space every name that i follow has been hit really hard but as we look at it now and looking at the valuations i'm going wait a second did we just all of a sudden solve all of our critical metals and tungsten issues, like if anything, it's gotten worse.

23:18So you could look at the price and go, the trade's over. But as I sit here as someone who's, you know, living and breathing this metal every day, I'm going, you know, the narrative's gotten even stronger. So obviously we kind of roll on. But also I think on top of that, I'm sure your listeners are familiar with the Lasson curve, right? The early part of that Lasson curve, it's the expiration, it's the fun, it's the excitement, it's new drill results. That's really exciting. There's a lot of, I would say, momentum there for companies who are doing it right we we rode that part of the song curve right we were drilling holes putting out tungsten intercepts when no one was that was three years ago two years ago right and and so obviously that's the part of the curve and then you come to the the top of that curve you put out a pfs and the numbers are great as you mentioned and we feel very confident in those numbers and the ability for the project to deliver long term but then it's a different set of investors right the investors we're talking to now are long-term mining really focused investors who go, wait a second, we know that from the bottom of the Lysand curve, if this company can get permitted, get the project finance, deliver offtakes, get the FS done, get to an FID and get to cash flow, there's a lot of value that can come with that.

24:29So I think you put those two things on top of each other and you can explain the situation. But now it's our job and we raised$68 million as part of our IPO back in March, our NYSC IPO. So we're in a great cash position, right? We raise extra money knowing that the markets ebb and flow. So the great thing is now we are in a position where we have the capital and the cash reserves to deliver on the FS, to deliver on the key objectives at Tempayu, to push the company forward with a view that eventually the market will go, wait a second, we actually still really need this metal. and here's a really viable homemade American solution that can deliver tungsten for many, many years to come to support national security.

25:12Trevor Hall: Are you continuing to do exploration and maybe try to extend that life of mine? That's part of what we're doing now. So the way we've looked at this, Trevor, is I think the key for us in the US is to be first to production. I think that's a hugely important thing for us to say, hey, we're the first to production. There's a few other companies pushing forward as well. We obviously have, we think, a head start. So what that has meant we've done as a company and as a board is we've really directed most of the funds we've raised towards engineering. If we want a permit, if we want to deliver the project during the current administration, which is what our target is, the drill rigs that you have on site, they're doing the unsexy stuff.

25:53They've got to go drill for metallurgy. They've got to drill for geotech. They've got to drill for hydrology. So really a lot of the resources around drilling have been focused on, number one, getting the resource to reserve status, which is what we've done. As soon as we accomplished that and had the spacing for the resource, it was geotech, engineering, metallurgy, you name it. So what that's meant is that we haven't had the ability to then go, okay, let's have FIRIGs going strong on exploration. Where we're at now is the drilling for the FS is effectively done. now finally those rigs can go okay here's all these other areas on the project that we can go target so that drilling is happening right now and on top of that we actually have two assets so the one we've talked about mostly today is just pilot mountain but if you go about two and a half hours south that's quite key they're quite close you get to tempayu which is actually the largest tungsten mine in the u.s in the 1980s so we're drilling with two rigs there right now for exploration technically.

26:53But that project has a lot of infrastructure in place. So there's been a lot of exciting things going on there. And the resources that we can build up there will go a long way to supporting the overall sort of mine life for the company. And then what we really want to do is start to support more resource drilling, but do that out of cash flow instead of going to investors to do that. So let's get to cash flow as quickly as we can. Within the margins, drill, increase the resources, increase the mine life. But the view is, as you know, many companies do, they get it built, they get cash flowing, and then they extend mine life, right?

27:28It's easy to do that when you're spending money on drilling from the money you're making from the selling of concentrate.

27:35Trevor Hall: The CapEx for Pilot Mountain, just under$300 million. And you mentioned the raise you did through the US IPO. That was obviously meaningful, but there's still a significant gap there, right? And so it's early days yet, but you have an ambitious timeline. So you don't, you got almost a little over two years here to hit those goals. So where are you at? What kind of conversations are you having? It's almost kind of like a public private partnership here because the federal government is so intrigued with what you guys are doing. So what does a potential financing FID look for for pilot mode. Yeah, we're in the middle of that right now.

28:20So I'd say the way that we look at it is, as you mentioned, the timeline is truncated, right? Because we need, in the US, we need new mine supplies, right? That's an urgent need for national security. So we have truncated timelines and tried a parallel path as much as we can. We've been very fortunate to receive funding directly from the Department of War through the form of investment to support the PFS at Pilot Mountain. So we obviously have a lot of good contacts and relationships with the various agencies across the U.S. government. They are obviously very interested in what we're doing, given the urgent need for this metal.

28:55So what I'd say is that we run sort of a parallel, two-pronged approach. Number one, we continue to work very closely with our contacts at the U.S. government. As everyone listening to this show knows, there's a lot of money available through the U.S. government, right? They're writing checks. They're probably the biggest financier for mining right now. So that's our, I would say, our A target, right? Getting the U.S. government, working with them to finance the actual project itself. And the great thing is the U.S. government is very nimble in terms of the ways that they can do that, right? There's the debt arm.

29:28There's the equity arm. There's the sort of the awards and grants you can still get. So what I would say is sort of our priority is to work with the U.S. government to try to deliver a package that is good for our shareholders and gets the mine built. So that's a very important part of what we're doing. I'm actually going to be in D.C. next week, lots of meetings, trying to push forward and figure out the best way to put together a package that works. Second to that, the government's been a great partner for us, but that is also a very truncated timeline. Certain agencies have been very clear they can't do due diligence in that period of time.

30:03Others have said, that's fine. We have the people, the resources to do that. So we're focused on the ones who've said they can do it. but we'd be remiss to just say, hey, that's the only path we're going to go down. We need to make sure that there's a backup. So what we're also doing is going to all the traditional finance banks and saying, hey, this is what the PFS looks like. This is what we think the FS will look like. The great thing is if you take the base case tungsten price for Pilot Mountain, the payback is one year, right? So that's a very, very short payback period, which means traditional finance banks, we talked about the long-term price of tungsten, what's it going to be?

30:38Well, if you believe that the price of tungsten can remain elevated for the next two, three, four years, that's the period we need to actually pay the project back. So they don't need to take a 10-year view on what the price is going to be. They just need to take a short-term view to say, hey, as long as the price stays above this level, these guys should be able to pay us back. So we're speaking right now, effectively, every major project finance bank we are also speaking to. So we're going to run both of those in parallel. Our goal, our kind of A1 goal is to do this with the US government, but we also understand given our timelines, we need to make sure there's a backup option available to us.

31:14Traditional, typical 70-30, 80-20 split equity to debt is kind of what we're looking at right here. But we feel very confident in the conversations we're having across government and private industry. And this is, I think, a very financeable project. It's in the US. It's a near-term solution. It has government support right now. Right. A lot of boxes.

31:37Trevor Hall: To nobody's surprise that you are not the only company Washington has started working with. Correct, yeah. And I'd love your perspective here because we are just kind of weeks away from the midterms. There's a lot of speculation. What happens specifically with the US critical mineral policy if there is a change in Congress or maybe even the Senate at the same time. Yet we see, again, speculation. But I think from your standpoint in the last two years, have we seen Washington simply as helping companies advance projects or are we beginning to see a willingness of them directly underwrite these projects?

32:21Trevor Hall: Because there is a huge difference between helping and pushing things through and then completely backstopping these things. Where do we sit here? Yeah, I mean, it's an interesting sort of environment that we operate in right within right now. And I think you made a good point, which is how does this change depending on where midterms go, right? I think one thing that gives us encouragement as a company is we do see bipartisan support for critical metals, right? Regardless of where you sit, Democrat, Republican, I think - Well, it started under Biden. You know, he had this critical mineral. It's the point I'm trying to point I'm getting to, which is exactly that, which is a huge amount of this actually started under Biden.

32:59You're absolutely correct. Perpetual Resources is a really good example. Before Biden left office, one of the last things he did was actually approve a record of decision for that mine to be built. And also there was a lot of money that was given to that project, including, I think,$3 billion of debt financing. And so we saw that momentum start under Biden. And actually, the investment that we received was originally applied for under the previous administration. It didn't quite get done in time, so it got passed over. But we look at it as effectively, it's been looked at and sort of approved by two administrations.

33:32because I think anyone, regardless of your political affiliation, can recognize that if we don't have domestic mine sources of critical metals, manufacturing across the board shuts down, right? If your goal is to build munitions or your goal is to build solar panels and wind farms, you need metals to do that, right? So we're seeing really good bipartisan support. And so where we sit right now, it's an interesting sort of space, and it's changing almost on a weekly basis. but it's been really encouraging i think in terms of the financing you know we're going through that process now so i can probably report more in a few months time next year next year absolutely next year i'm sure i can give you a much better answer but i think the thing that i think is really encouraging for us trevor as a company is outside of the financing piece which is super helpful permitting in the u.s has really started to change and just to be clear there's no steps being skipped whatsoever we're just seeing really good alignment across agencies and i was in carston city last week meeting with the blm meeting with the state folks and you go into meeting and i've worked in mining my whole career across lots of different jurisdictions 95 of the time you get to those meetings and they don't want you there they're trying to work against you and mining's tough enough as it is as we know but you go to these meetings now they're like hey how can we work to go safely and effectively and efficiently.

34:56That's still the main throughput, but there's just better ways to do this. And I would say the permitting side is where we've seen a ton of really good investments, which gives us a lot of excitement as a company going through the mine permitting process right now.

35:10Trevor Hall: Yeah. Do you have any concerns about, it feels like we're at the beginning of this critical minerals cycle. Obviously, tungsten plays a huge role in it. But if you fast forward five, 10 years from now, do we run a risk of oversupply on the Western side? Because as you know, there's a few more tungsten plays. Sure. Yeah. You know, aggressively looking for capital as well. Yeah. Looking for those government partnerships. And we're also starting to see, you know, tungsten make way and drill results from as a byproduct, right? Yeah, for sure. That's starting to be peppered into the news day in, day out.

35:54Trevor Hall: Do we run a risk of oversupplying our own Western tungsten supply? Yeah, I mean, a little bit. I think we're quite a few years away from that. Yes. Right? And honestly, you're going to really need to see sustained momentum in the tungsten price if you're going to see a true oversupply. Even what we're seeing right now is the market's rolled over and capital, I'd say, for tungsten right now is very hard to come by, which is why we raised the money we did to make sure we can sustain and push through. But if you're a company exploring and drilling for tungsten right now and you have to raise capital, it's probably going to be pretty difficult.

36:31So that gives me a little bit of belief that we're probably not going to really see the oversupplied picture that maybe you would think just based on what you've said. That said, there are other Western world minds coming online, which is needed. but once again if you look at sort of the i just gave you some very crude numbers but effectively if you call it 50 000 tons of material that china used to export if you assume that remains the status quo for a period of time you're going to need us who our target is three to four thousand tons of w03 a year you're going to need us plus a lot of other companies to fill that void and also if you look at the demand side and everyone that i talked to is like the biggest question is what's what's the price of tungsten going to go long term and i don't know that but i look at some of the data points and they certainly give me a lot of encouragement i think the two of them in general i want to share with you is number one the direct defense demand in the u.s specifically but also across i would say nato as well you know we are speaking to the major defense primes in the u.s looking at what their needs are going to be there's been billions of dollars of contracts awarded to these primes to build munitions, to restock, re-armor the country.

37:42And some of the numbers we've seen as projections from some of the folks that are going to be building the things that the Pentagon has asked them to build are well in excess of what I've seen in sort of across the normal market participants. So I won't quote any numbers right now, but well in excess. I mean, take it with a grain of salt. This is from folks that I've spoken to. but I think that defense demand is going to surprise people to the upside, which will suck up a lot of material from the market. And on top of that, and this is a bit more kind of blue sky, but nuclear fusion is a really interesting technology that I'm watching quite closely, and the whole industry is.

38:21I remember four years ago when I went to the Tungsten conference and you look at folks who are doing presentations on supply and demand, and at the end of it, the conclusion slide, it was always nuclear fusion question mark, right? What's going to happen with nuclear fusion? And so we actually co-funded a study with one of the leading nuclear fusion science material companies who actually builds all the different bits of gear for all the companies building fusion reactors globally. And we said, how much tungsten is going to be needed for nuclear fusion? We wanted to actually quantify it. And so we did a study looking at the various designs of reactors.

38:57And the long and short of it was right now globally we consume, I think it's about 130, 140 ,000 tons a year. One reactor, to build one reactor and sustain that reactor for 40 years, depends on the design. And I encourage you to go to our website. You can actually read the peer-reviewed report. We're talking about tens of thousands of tons of tungsten for one single reactor. And you would need to call it three reactors to power Chicago. So if fusion is the future, which if you talk to folks in the energy space, it's limitless, it's carbon-free, but you're going to need a lot of tungsten to do it so we're you know we're 10 20 years away from commercialization but what we've actually seen this year already trevor is the r &d scale is already ramping up and interestingly enough out of china we don't have many details but there was an article put out and there was a sort of a satellite image of a fusion reactor they're building in china and give china credit they are great they they they're very innovative and they they're building things fast.

39:58The reactor, the size of it, I asked my guys from Oxford Sigma, I said, how much tungsten would just this R &D reactor need? And we're already talking about thousands of tons of material just for these R &D scale reactors. So you look at an already supply constrained environment, you look at defense demand going up. Yes, new supply is going to come online, but we need that. And then all of a sudden you look at this picture and go, wait a second, maybe this market will sustain in this sort of position it's in now for a lot longer than people recognize it's going to ebb and flow it's going to be choppy for sure but you look at those data points and i think it supports a longer term more i would say constructive pricing environment oh man that's interesting yeah it's a really really good report a really good article you go to our website you just go to our our news and just type in oxford sigma peer reviewed it's in a nuclear fusion science journal we've sent it to all our government partners like hey just so you know you probably know how much tungsten is going to be needed in nuclear fusion.

40:52Trevor Hall: Yeah. Cool. Yeah. All right. Oliver, thanks so much. It's great to connect. It's been too long. I was trying to remember the last time you'd been on it. Then I was like a year. Well, it wasn't at a pub in London. So yeah. Well, the next time we'll have to be in a pub in London. Yeah, absolutely. We'll need a pie next time. We're never going back. Yeah, there you go. Right. Appreciate your time. Yeah. Best of luck the rest of the week. And hopefully, you know, you find some little bit of downtime here. Yeah. Appreciate it. Thank you. Thanks so much. All right, everybody. That's a wrap here with Guardian and Metal Resources, we will be back here with more coverage from LME Week in London.

41:26Trevor Hall: The information presented should not be considered investment advice. Mining stock daily and 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.