Latest / WTR Small-Cap Spotlight / Critical Metals Corp. (CRML): Building a Western Rare Earth Supply Chain as Tanbreez Advances Toward Development

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Critical Metals Corp. (CRML): Building a Western Rare Earth Supply Chain as Tanbreez Advances Toward Development · WTR Small-Cap Spotlight

• 0:01
  SPEAKER_01: Welcome to the WTR Small Cap Spotlight Podcast.
• 0:04
  SPEAKER_01: I'm your host, Tim Gerdeman, Vice Chair and Co-Founder and Chief Marketing Officer of Water Tower Research.
• 0:11
  SPEAKER_01: In today's podcast episode, I'm being joined by Tom McNamara, Director of Corporate Development and Investor Relations at Critical Metals Corp.
• 0:19
  SPEAKER_01: NASDAQ Ticker Symbols, CRLML.
• 0:22
  SPEAKER_01: Critical Metals Corp is a critical minerals company focused on developing world-class rare earth and lithium assets that support defense, advanced technologies, and electric vehicle applications, as well as playing a key role in the global energy transition movement.
• 0:39
  SPEAKER_01: With its flagship Tanbre's rare earth project in Greenland and growing lithium portfolio, the company is working to build secure Western supply chains for materials that are essential to the future economy.
• 0:51
  SPEAKER_01: Also joining is my WTR equity research colleague, Dimitri Silverstein.
• 0:56
  SPEAKER_01: Good morning, gentlemen, and thank you for joining.
• 0:59
  SPEAKER_02: Good morning and thank you.
• 1:00
  SPEAKER_02: Good morning, Tim.
• 1:01
  SPEAKER_02: Glad to be here.
• 1:03
  SPEAKER_01: Tom, the last few months have been unusually active for Critical Metals Corp.
• 1:07
  SPEAKER_01: And the company has issued a number of press releases highlighting Critical Metals Corp accomplishments.
• 1:13
  SPEAKER_01: Can you please start by giving us a big picture overview of the company, the opportunity you see in the market, and the long-term vision for what the company is building?
• 1:21
  SPEAKER_01: And as a quick follow-on, at a very high level, if investors only remember three key takeaways from all these recent announcements, what three would you want them to remember?
• 1:32
  SPEAKER_00: Thank you very much, uh, Water Tower.
• 1:35
  SPEAKER_00: I really appreciate it.
• 1:36
  SPEAKER_00: Uh what distinguishes Critical Metals Corp is one Tambrize, which we've just consolidated 100% interest in.
• 1:44
  SPEAKER_00: It's the largest known rare earth deposit outside of China or anywhere else.
• 1:51
  SPEAKER_00: And importantly, about a third of it is heavy rare earth, which is the most important needed for the West for all of our endeavors to make a new supply chain.
• 2:02
  SPEAKER_00: And with all our announcements, we are also uh consolidating our other positions in Greenland and outside.
• 2:09
  SPEAKER_00: So there's much more focus on Tambrize advancing it.
• 2:12
  SPEAKER_00: So it's streamlining, it makes it much more simple to get things going.
• 2:17
  SPEAKER_00: And our press releases are showing that we're very active in Greenland.
• 2:22
  SPEAKER_00: We're uh we announced a capital program of 30 million this year.
• 2:25
  SPEAKER_00: We're deploying five rigs right now, and our other activities of building our core shack, core lab, and most importantly, our pilot plant installation, which is on the ground right now in Greenland being assembled or erected.
• 2:39
  SPEAKER_00: So just keep an eye out.
• 2:41
  SPEAKER_00: We're very active, we're growing very quickly.
• 2:43
  SPEAKER_00: And what distinguishes us is one, the asset, two, our consolidating our position, and three, that we're beginning pre-construction construction activities very actively right now as we're developing the asset, trying to make it the solution for the uh whole supply chain endeavor for the West.
• 3:01
  SPEAKER_01: That's a great overview.
• 3:03
  SPEAKER_01: Thank you for that.
• 3:03
  SPEAKER_01: Uh very exciting times in an exciting industry.
• 3:06
  SPEAKER_01: So, with that, I'll turn it over to Dimitri.
• 3:08
  SPEAKER_03: Thanks, Tim.
• 3:09
  SPEAKER_03: Uh Tom, welcome back.
• 3:11
  SPEAKER_03: Uh, glad to have you here in the program.
• 3:13
  SPEAKER_03: Uh, one of the things you mentioned is uh what I would consider to be one of the most significant milestones here this year is the consolidation uh by critical metals of the ownership of the Tabriz project.
• 3:24
  SPEAKER_03: Can you walk us through why increasing your stake in Tabriz was such an important achievement and how it changes the economics, the decision-making authority and overall value proposition of critical metals going forward?
• 3:37
  SPEAKER_00: Uh Dimitri, thank you for having me again.
• 3:39
  SPEAKER_00: It's great to be back.
• 3:40
  SPEAKER_00: The consolidating our position or getting to 100% is one was important from us to go to a majority standpoint, and now 100%.
• 3:49
  SPEAKER_00: If we successfully take over our um European lithium, which we're working on.
• 3:55
  SPEAKER_00: Also, it streamlines the entire um process we're going through developing the mine and building it, because otherwise we'd have kind of too many bakers in the kitchen, so to speak.
• 4:09
  SPEAKER_00: It just makes it much more simplistically to streamline it, be able to get one presentent, you know, one representative to the Greenland government as their industry is growing.
• 4:19
  SPEAKER_00: This will be probably the biggest investment in mining to date in their country.
• 4:24
  SPEAKER_00: We take that very seriously.
• 4:25
  SPEAKER_00: So we're trying to simplify it for everyone to make it go forward.
• 4:29
  SPEAKER_00: It has no bearing on economics.
• 4:32
  SPEAKER_00: We still have the same economic license within Greenland.
• 4:35
  SPEAKER_00: So it's more of an efficiency endeavor to try to make things go much more smoothly as we're ramping up all of our activities in Greenland.
• 4:44
  SPEAKER_03: Understood.
• 4:44
  SPEAKER_03: Understood.
• 4:45
  SPEAKER_03: So I was thinking, you know, going back to my days when I worked briefly in in venture capital, one of the things that we hated to see from a company that we were evaluating is a complicated ownership structure.
• 4:58
  SPEAKER_03: Um and I'm sure the banks and and the investors that are looking at your company and you're trying to assemble your investment debt, your deck, and your capital deck are probably approaching it much the same way.
• 5:09
  SPEAKER_03: So having a simplified ownership structure, I think, would go a long way uh to to helping you raise the the capital that you need to advance these projects forward.
• 5:19
  SPEAKER_03: Exactly.
• 5:20
  SPEAKER_03: Yeah, understood.
• 5:22
  SPEAKER_03: So investors often say that uh a resource is only as valuable as the market demand behind it, uh, which is why you your recent announcement of a long-term off-take agreement with RE alloys uh attracted so much attention, I believe.
• 5:35
  SPEAKER_03: Uh how should investors think about the significance of this agreement and what does it say about the commercial potential of Tabriz uh and the demand outlook for rare earths products going forward, particularly the ones that aren't coming out of China?
• 5:49
  SPEAKER_00: I I would in the context of overall, I'll just like to reiterate our strategy, so to speak.
• 5:55
  SPEAKER_00: We we are one of our distinguishing features corporately is to participate all the way through our supply chain.
• 6:03
  SPEAKER_00: Uh RE alloys is a very important uh partner in that endeavor.
• 6:07
  SPEAKER_00: Uh it was great to um make our contract finalized.
• 6:12
  SPEAKER_00: I think the timing of it all is really speaks more of a bigger picture issue because if we look at all the endeavor to try to reposition entire supply chain, there's one noticeably absent thing, and that's heavies, which really people need to remember that this contract is going to be a third heavy, so to speak, with Tambri's flow.
• 6:34
  SPEAKER_00: So that's an important aspect of the contract.
• 6:37
  SPEAKER_00: And it would be the first of its kind, of the largest of its kind, so to speak, for uh non-domestic sources of heavy railroads to be distinguishedly processed here.
• 6:47
  SPEAKER_00: And keep in mind it's only phase one of our concentrate coming out of Tambriz.
• 6:53
  SPEAKER_00: There are going to be at least one more phase, and the size of the asset, we could triple or quadruple the size of it and still be around for 50 plus years.
• 7:03
  SPEAKER_00: So the the asset size is, I think the more important thing in the context of it all, our Romanian and Saudi, if you look at our concentrate output for phase one, 75% of it goes through our own supply chain.
• 7:19
  SPEAKER_00: So that speaks to the asset itself.
• 7:21
  SPEAKER_00: Tambrize warrants its own supply chain.
• 7:23
  SPEAKER_00: One, the utilite really makes it uniquely as it is.
• 7:28
  SPEAKER_00: And two, that's our um our whole strategy to participate all the way through the entire supply chain, all the way down to the end products, as much as we can, because to that would be more the value of the asset for which we think it is.
• 7:42
  SPEAKER_00: So that in all that together, we've been very active on that.
• 7:45
  SPEAKER_00: It's great to get the RE alloys kind of finalized, and we look forward to getting all of our customers' uh batch samples of concentrate material by the end of this year.
• 7:56
  SPEAKER_03: Understood.
• 7:57
  SPEAKER_03: That's uh that's a very good overview.
• 7:58
  SPEAKER_03: Thanks for that.
• 7:59
  SPEAKER_03: Um, just moving on, you mentioned this already.
• 8:02
  SPEAKER_03: Uh, you know, many investors know critical metals primarily through uh your rare earth strategy.
• 8:08
  SPEAKER_03: Uh the proposed European lithium transaction expands the company's exposure to another critical commodity that is central to electrification and energy storage.
• 8:17
  SPEAKER_03: What is the strategic rationale behind this transaction?
• 8:19
  SPEAKER_03: And how should investors think about the value it could create as part of a company's uh broader growth strategy?
• 8:27
  SPEAKER_00: The uh our current focus right now is Tambri's.
• 8:32
  SPEAKER_00: That's the most important thing in our mind.
• 8:34
  SPEAKER_00: Clearly, consolidating European lithium is very important to us.
• 8:39
  SPEAKER_00: Uh financially, it's very beneficial.
• 8:41
  SPEAKER_00: Again, streamlining and having one management team at the other side of all of our partners makes it a much more simpler um operating environment and progressing environment.
• 8:52
  SPEAKER_00: Uh, lithium does fit in what we would consider that basket of strategic metals.
• 8:58
  SPEAKER_00: Obviously, a different asset.
• 8:59
  SPEAKER_00: Uh, Wolfsburg is obviously a different asset and then a different life cycle than where Tambrize is.
• 9:04
  SPEAKER_00: Tambrize has moved a little faster up on it, so that is where all of our focus is.
• 9:10
  SPEAKER_00: But it's a very important asset to us, and uh, we're still trying to get that deal across the line, and that's really all I can say on that at this point.
• 9:19
  SPEAKER_03: Understood.
• 9:19
  SPEAKER_03: Understood.
• 9:20
  SPEAKER_03: Okay, well, let's uh go back to your Tam Breeze project.
• 9:23
  SPEAKER_03: Uh, a key focus for investors in in any development stage mining company is understanding the size, the quality, the growth potential of its resource base, which makes your recent announcement of a 10,000 meter drilling campaign particularly important.
• 9:37
  SPEAKER_03: You already referenced the fact that you can ramp up production there in subsequent phases and still have a multi-decade mine.
• 9:43
  SPEAKER_03: But what are the primary objectives of the program, of the drilling program, and what would success look like from both a technical and a shareholder value perspective?
• 9:54
  SPEAKER_00: For the program specifically, in my mind, there are two important things.
• 10:00
  SPEAKER_00: We're doing tremendous amount of definitional drilling.
• 10:03
  SPEAKER_00: So we're really model drilling, we're defining inline infill drilling, so to speak, for block modeling our ore body or two distinct ones, fjord and hill.
• 10:16
  SPEAKER_00: Um, so those are kind of live figures going into our models.
• 10:20
  SPEAKER_00: Uh, and again, keep in mind our feasibility studies working all above this as we're going through all the things we're doing, all of our testing, etc.
• 10:29
  SPEAKER_00: So the definitional drilling is going to be very important.
• 10:31
  SPEAKER_00: There's going to be better outlines of where we start and how we're thinking intermediately about developing both ore bodies.
• 10:39
  SPEAKER_00: And uh importantly, um condemnation drilling.
• 10:43
  SPEAKER_00: Uh, not sure if people are familiar with that.
• 10:46
  SPEAKER_00: There's so much ore around uh Tambries, we're having trouble finding places where to put things.
• 10:52
  SPEAKER_00: So condensation drilling is hopefully we don't find too much ore where we can uh really think about building our critical uh buildings and infrastructure that we're gonna need on land at Tambri.
• 11:05
  SPEAKER_00: So uh definitional, and there'll be lots of updates again with our core shack and um ore handling and core handling and analysis abilities on land, we'll be very quick around with what we're up to and better defining uh the ores and our modeling at Tambri so.
• 11:23
  SPEAKER_00: So stay tuned for that.
• 11:25
  SPEAKER_03: Excellent.
• 11:26
  SPEAKER_03: Looking forward to that information.
• 11:27
  SPEAKER_03: Um, as exciting as recent announcements have been, uh, investors ultimately want to understand the path from development to production and cash flow generation.
• 11:35
  SPEAKER_03: So looking ahead over the next uh, let's say 12 to 24 months, what are the key milestones that investors should be watching as debris moves closer to becoming an operating asset?
• 11:47
  SPEAKER_00: I think the the important ones are the uh, in my mind, from an operating standpoint, uh having the pilot plan up and running and getting material bulk sample amounts to our off-take partners and potential other uh end users.
• 12:04
  SPEAKER_00: We're not speaking about grams, we're speaking about tons of material that will be going through their processes, uh, all in Romania, uh Arialloys, as we've mentioned, and also UCor, and again, some others.
• 12:19
  SPEAKER_00: So that's a very important thing to again.
• 12:23
  SPEAKER_00: Uh as Dimitri, as I'm sure you know, there's still a uh utile, anti-utilite crowd out there, which is you know going to prove which we have and which has been audited by multiple third parties.
• 12:34
  SPEAKER_00: Utilite can be processed to produce rare earth metals, uh both light and heavy.
• 12:40
  SPEAKER_00: So that's very important, we think, not only for us and our partners, but also for the industry that you have an asset backing it that could literally replace China over time if needed.
• 12:53
  SPEAKER_00: So that's a very important aspect for us.
• 12:56
  SPEAKER_00: Also, tying up our financing.
• 12:58
  SPEAKER_00: Um, we really don't need any capital for the foreseeable future, but we're still in talks with both sides of the Atlantic governments to some kind of financing and participation, but there's nothing to report at this point.
• 13:12
  SPEAKER_00: And uh the feasibility with all of this, nothing is contingent on the feasibility, but a feasibility study, but we uh we realize the market wants it and we're working to deliver it as soon as we can.
• 13:24
  SPEAKER_03: Understood.
• 13:25
  SPEAKER_03: Okay.
• 13:26
  SPEAKER_03: Well, the critical elements sector uh has attracted significant capital in recent years, um, and certainly uh significant attention.
• 13:33
  SPEAKER_03: Uh yet many projects continue to struggle to advance due to challenges related to financing, permitting, infrastructure, or commercialization.
• 13:41
  SPEAKER_03: Uh, what do you believe differentiates critical metals from its peers uh in in the you know mine development world and positions the company to successfully execute on its vision?
• 13:53
  SPEAKER_00: I think uh with respect to all that, the mining is uh the I don't want to say simple, but the mining is the most straightforward aspect of the project.
• 14:07
  SPEAKER_00: The port, billing the port, we're not breaking any new ground here.
• 14:10
  SPEAKER_00: There's nothing unconventional about it.
• 14:12
  SPEAKER_00: Ore is literally at the surface, the mining is easy, the climate is not nearly as Arctic as people think.
• 14:20
  SPEAKER_00: So that all operationally, clearly, we're going to pay attention to doing it and doing it right and as methodically as we can.
• 14:27
  SPEAKER_00: But that is is very fairly straightforward.
• 14:30
  SPEAKER_00: Consolidating our ownership makes that much more simplistic.
• 14:34
  SPEAKER_00: And as I noted, our financing, we we could finance most of what we need to do ourselves.
• 14:40
  SPEAKER_00: Our biggest finance, one of our biggest financing questions, is who do we say no to?
• 14:45
  SPEAKER_00: So we're not looking for billions and billions of dollars, hoping that somebody comes shows up.
• 14:50
  SPEAKER_00: We're well suited for all of that.
• 14:52
  SPEAKER_00: And for us on a daily, daily basis, it's execution, just executing with what's ahead of us and um doing what we say we're gonna do.
• 15:02
  SPEAKER_03: Well, that's that's great to hear, Tom.
• 15:04
  SPEAKER_03: It certainly is not common to in in this space to run into a company that uh is not uh falling over itself trying to find financing to advance the next stage of its uh development work.
• 15:14
  SPEAKER_03: So great to be in that position and obviously a great differentiator for investors.
• 15:18
  SPEAKER_03: One final question I I think I have to ask you before I let you go.
• 15:23
  SPEAKER_03: Uh, the company has made substantial progress over the past several months through acquisitions, financing activities, commercial agreements, and project development initiatives.
• 15:31
  SPEAKER_03: When we sit down together a year from now, what do you hope investors will view as the most important achievements of critical metals during that period?
• 15:41
  SPEAKER_03: In other words, imagine we're talking a year from now and you're looking back on the last 12 months.
• 15:46
  SPEAKER_00: What do you hope that critical metals has accomplished that you can brag about that we have every intention of bringing Tambries into a full-blown the best mine I think I'm ever gonna see in my career and the best rare earth mine known out there, the cleanest, the greenest, and the most prolific in what it can deliver to what's needed in the world.
• 16:09
  SPEAKER_00: A year from now, I think the question is gonna be how big can it get?
• 16:14
  SPEAKER_03: Very good.
• 16:15
  SPEAKER_03: High class problem to look forward to.
• 16:17
  SPEAKER_03: Thank you, Tom.
• 16:19
  SPEAKER_01: Thank you.
• 16:20
  SPEAKER_01: Dimitri, thanks and Tom, thank you so much for joining us today.
• 16:23
  SPEAKER_01: Nice reconnecting, and we appreciate uh getting the update on Critical Metals Corp.
• 16:27
  SPEAKER_01: Have a great day.
• 16:28
  SPEAKER_00: Great.
• 16:28
  SPEAKER_00: Thanks, WTR.
• 16:29
  SPEAKER_00: Take care.
• 16:30
  SPEAKER_00: Bye.
• 16:31
  SPEAKER_01: Thank you for listening, and don't forget to subscribe, as well as visiting www.watertowerresearch.com to stay up to speed on the company's small cap written research reports, podcasts, fireside chats, industry specific symposiums, and conference schedules.
• 16:48
  SPEAKER_01: We will see you next time for another edition of the WTR Small Cap Spotlight Podcast.
• 16:53
  SPEAKER_01: Finally, a special thanks to the producer and editor of the podcast, Christoph Fitzpatrick.