Speaker 1The following interview is sponsored by Eastport Critical Metals. Please do your own due diligence before making any investment decision. This is the Commodity Culture Podcast, where we interview prominent investors, fund managers, analysts, and company CEOs to give you an edge when it comes to investing in the commodity space. Hello, everybody. Welcome to Commodity Culture. My name is Jesse Day. Today is October 15th, and my guest today is the CEO of Eastport Critical Metals, a critical minerals development company advancing six projects in Botswana. It's Daniel Major. Great to have you on the show.
Speaker 2Thank you very much, Jesse. Good to see you again.
Speaker 1Good to see you as well. And I want to kick things off with discussing the uranium market, because the sector has been taking quite a beating so far this year, deeply underwater compared to the S&P 500. And more recently, experiencing a major drawdown over the last several trading days. However, the fundamentals behind the sector continue to strengthen. Why do you think this disconnect exists? And what do you think it'll take to turn things around?
Speaker 2Yeah, it's an interesting one. And I still have my Govix and now Atomic Eagle shares, and I'm watching those go down. And like, this does not make any sense to me. I mean, that company as well got back the Manuela project, doubled its, tripled its resource. And has gone down rather than going up despite that. So it's a good example of one that just makes no sense out there at all. When you look at the, as you say, you look at the fundamentals, uranium price keeps going up. You know, the long-term price keeps going up. The spot price keeps going up. But I think the problem I think the industry has, and it's been a problem for a while, it is a small sector. And I think the. It needs to trigger the whole time, we know. And it needs the spot price as its trigger. I was chatting to a CEO earlier this week, and he was just highlighting, you know, 35 million pounds of long-term contract in the last month or something. I mean, incredible amount of material just contracted. But the problem is that most retail investors don't see that coming through. What they're looking for is that spot price move. And that spot price is just not doing anything. I mean, it's just range. It's just range trading around the mid-80s, despite the fact the long-term price just keeps creeping up slowly, slowly. So I think, you know, my problem here is that most of the utilities, this is a point I was making to the guys, that most of the utilities keep covering themselves for the next two years. So they've got no incentive to be in the spot market. And we're kind of looking for something, I think, that shifts that spot market and makes it really happen. And I don't know what that is. You know, is it spot coming? I'm not looking for an aggressive buy-in, but I think the problem is spot is that it's coming and everyone backs away the moment they turn up. So you end up with a bit of a spike and then it goes forward. But I do think we're coming to a point. I think the fundamentals are great from a supply-demand point of view. I think we will get a move in that spot price. Hopefully, it's something that breaks, you know, well over in the 90s. I think that will bring people in. I think the other problem is anyone who likes the uranium story is probably sitting on the uranium shares saying, I'm playing the long game. And, you know, and they're just waiting. The true believers are waiting and you need that something to come in. And having been in that sector for a long time, you know, people do go out, they go and find other stories to play for a while, you know, look at some of the other commodities, look at tech, you know, people go play in other commodities for a while and say, well, I'll just leave uranium alone until there's something there for me to get in. I've got, I've got a base load and I'll come in when I'm ready. And, and I think that's its problem. It's just waiting for that price trigger. What's going to do it? I don't know. But we've seen this before. It only takes one offtaker to suddenly say, hell, I need material come into the market materially. Spot price moves.
Speaker 1Yeah. I'm one of those true believers. I think my portfolio is about 30% uranium at this point. I've been a buyer of some of these suppressed prices. I think the fundamentals, I mean, it's painful to be sure, but, but the fundamentals are just so strong. If you realize the supply deficit and the difficulty with bringing you production online, it's just a bath problem that eventually, you know, I hate to be cliched, but you know, it's the old Ben Graham saying in the short term, the market is a voting machine in the longterm. It's a weighing machine. I think that is going to play out for the uranium sector. I'd like to move on to the sector that has fared much better this year, which of course is copper having recently hit all time highs just a few weeks ago, currently sitting at around $6.70. We've got major supply side challenges and growing demand. Do you think we're still in early days here or is the metal perhaps accurately reflecting its true value at present prices?
Speaker 2Yeah. I mean, look, I'm a total believer in the copper market. I mean, it's a bit like the uranium market. I can see the longterm potential for it. I suppose the problem sits with, you know, once you start seeing metals hitting all time highs, you know, you've got to be concerned. What got you there? Is it the longterm fundamentals or is there some short term fundamentals in there? My gut is we've probably got a bit of downside before we go back up again, is probably what's going to happen. I mean, we've had that whole tariff issue of moving material to the US, inventory just coming from slightly invisible to fully visible going through. Copper is obviously driven strongly by growth and there has to be concerns out there on economic growth. There's a lot of concern around the growth around the world. The world at the moment continues to surprise us, but obviously we've got US elections coming up in November. You know, how does that feed in China, you know, is that getting back onto a solid footprint going back for growth? I think, you know, we've got to be watching that and from a position of a very high price, those are going to be the, you know, there's, there's risk, more risk now to the downside than there was in the past. My gut is probably some sideways. I think probably for a while. It's more consolidation. We've come up, it needs to consolidate where it is and then move, we'll move back up. I think we're still stuck with the problem that there aren't actually that many big copper projects out there still to come on stream and that your most analysts are predicting a substantive supply deficit going forward. And I think, you know, that is a bit like the uranium sector as well. You, you, you, you've got the two parts that you've got the demand side. You've got the demand side and the supply side in the uranium one. I had some concern earlier on this year that the demand side didn't seem to be there. You know, there was a lot of talk about the demand side, but you didn't see it. But you know, more recently you've seen more and more announcements of reactors moving forward. SMR is moving forward. These coppers are the same. It's like, you know, there's this big demand predicted AI, you know, obviously is a trigger for that. You've seen a lot of nimby. Ism and push back on AI data centers while that's a small thing, it is a sentiment issue that sitting out there that people will look at and go, well, if you know, they're not building the data centers. But I think the point made on a lot of these nimby data centers, they're in areas that don't have them anyway, whereas in other areas in the U S where they've got them, they're building more of them. So I think there's a, I think it's a period now for consolidation. It's a good price. I mean, who's going to be complaining up here and over $6. On the uranium price, I think the long-term looks great. But I think there is a period of consolidation required in the pricing.
Speaker 1Let's pivot now to rare earths because Eastport has made a very exciting discovery. We're going to dive into that a little bit later, but first I'm wondering what the main trends you're currently watching are when it comes to rare earths markets that you think investors should be paying attention to.
Speaker 2Yeah, I think the overriding strategy remains solid on rare earths. And it's this bifurcation issue, this China versus the U S and where that goes to and how that is going to impact long-term prices. And I think behind that as well, though, you've got the fundamental growth argument that's sitting there. I mean, when I read the IEA report, critical metals report earlier in this year, I mean, they're forecasting something like between 50 and 90% growth, depending on the commodity within the rare earths that you were looking at between now and 2014. So, I mean, really doesn't matter who's fighting with who, we need a lot more of the rare earths as we go forward. And this ties back to the electrification of everything, which is kind of why we've got copper and all these other things. So I think in the short term though, we're going to be still continue to be driven by that in the background. But how does the West deal with this difference and political control over the supply stream? That continues to be the play. And I think we're going to see that continuing to drive the flow of money. And those who align, whether you're aligning yourself with the East or aligning yourself with the West is going to be the driver. I think the biggest concern obviously would be how does that supply from China come into the market, if at all, if it suddenly decides to do what it's done in the past and open the flood gates. I mean, I saw this month, it was what, 7% up in supply out of China. into the West over the same period last year. So there is material coming. out um but small amounts um you know i think the risk would then sit on price um and is there that you know you got this three to five times price differential um being somewhat underpinned uh for the for those that are getting tied with the u.s government by floor pricing to try and help protect that situation going forward um but i think that's probably the the risk but i think with this 50 to 90 growth coming through there's so much space um and then the other problem that we we have as an industry still remains the downstream which is you know where do you put your downstream material where do you take the mind material and certainly for us that has got to be one of our issues to consider for a for the semarula which is okay you know as we as we think about it as a mining exploration company you know we you know you naturally think about resources and how do i process this thing but at the same time you've got to be going all right i'm going to process it but what am i producing and how the hell am i going to get rid of it when i produced it um and so i think that's the difference that you've got between a rare earth company and and a copper company um is all right i can sell the copper easy peasy how do i get rid of my rare earths or where do i tie myself into uh i mean i think one of the good things for our project is that you know and i think that still remains the target is the rare the magnetic rare earths can you fit into that basket um so i think long term we'll see pricing come down as more and more projects go in um but it's still going to continue for a very long time this the west has to create its own pipeline and build its pipeline and that's not just the us the europe's got to get on the same boat um and i was reading something today the other day with caresta you know they're building this processing unit up in france their big problem is again securing supply for their process um and particularly things like dysprosium uh going from and then you've got the japanese competing in that market as well so there's a lot going on in the rare earth market more complex it's and i think the fundamentals with that growth demand coming forward just remain really robust i think there's a lot of space but we've got to see how that development goes forward of the downstream pipeline and how we all fit within that or you make your political choice at the end of the day is it commercial is it political yeah you mentioned
Speaker 1conflicts obviously this is a big driver for rare earths demand because they're needed for the permanent magnets and drones and missile guidance systems and we're obviously in a new era of warfare where drones are extraordinarily prevalent um what what are your thoughts there and and how much of a premium do you think should be placed on x china rare earth supply chains because obviously we have this bifurcation as you mentioned between east and west and it doesn't make a ton of sense to be sourcing your rare earths either the the minerals themselves or the processing capacity uh by china you know depending on where where you stand these geopolitical alliances can shift um how do you view that whole scenario the the not the x china rare earth supply versus china rare earth supply and how that will all impact the
Speaker 2market yeah i mean i mean we had an example this morning and we've got this whole kerfuffle with starlink um you know who is your friend at the end of the day i mean just because somebody alludes to be your friend doesn't mean they are your friend um and you know with starlink apparently having you know restrictions on how fast ukrainian drones can fly you know where do you put your lines from a security point of view and it doesn't just relate to that there are other services clearly out there that you've got to i think it's become very much clearer to the world in general that you know we're not getting we're moving to a more difficult global situation um you know we still we have ukraine we have iran now and who's to say we don't get you know things going on with taiwan etc in the future um and so you know where who you know and you've got a u.s at the moment that isn't behaving like we're used to the u.s behaving with europe etc so who who are your friends um and do you always trust them i think has got to be one of those questions so i think it it is something that you know when you've got something that is that critical to your componentry and what you sell and who would have thought you know something we all have for our wi-fi it suddenly becomes a major issue um then you do need to have control of your pipeline for that um you know and we're seeing it in in other things i mean it's a bit of a squabble now out there with with gas you know diesel and access to diesel access to gas i mean there are many other components so i think countries are now going to have to you know and you and i look discuss this at the beginning of this before we came online how the world is is becoming you know less global in many ways it is becoming it's it's i've got to look after the me um and our politics is sort of kind of moving to the right around the world um and it's the me i worry about but having to deal with with left-wing problems um of rising debt um immigration all of these things and how do governments you know work around these and i think critical minerals is is very much part of that problem um and uh it's going to you know if you need it you're going to pay for it and the other thing to remember i think as well on a lot of these it's such a small part the amount that you've been i mean it's a bit like a lot of the it's a bit like the argument with uranium on how much does uranium cost in the power output side it's small rare earths are the same um yes it might cost you a bit more but it's not like if you suddenly had to pay three times as much for aluminium how much more cars would cost you know a little bit of electronics within your car it's not gonna make a big difference
Speaker 1well as i alluded to earlier eastport critical metals made a major rare earths discovery at the semarula project in south central botswana last month break down the details for us and how this informs your next course of action
Speaker 2there yeah i mean just before i dive into semarula i mean i think we've had a a great year as a company um you know we have listed in november we've we've discovered you know the semarula we've done incredible work and drilled out and shown the potential at matsutama on the copper you know we followed the soil anomaly at the match next metals project next door and then we've added the the uranium discovery stuff in at foley so i mean hell for small company incredible amount of stuff and but we've come back to semarula um we've had an eight hole drill program we were waiting for the results on big cyanide plug sort of 15 square kilometers um and it is an exploration project and we've got to remember that um but we've ended up long intersections um here like 300 over 300 meters averaging 0.2 percent of which 28 percent is the magnet so it is these are massive structures um they've got high grade cut parts to them um hole five um ran at 0.64 for almost 48 meters hole seven is um 0.5 roughly over 14 and a half meters um and we got another triangulation point when we were looking at hole one which we didn't drill i was actually drilled by the bgi and interestingly um our md gomatang that was the last thing she did was cite that hole before she left the bgi to join eastport and that one hit high grade um rare earths right at the surface again um you know at 11 meters they were hitting 3.6 percent t reo and so you've got a triangle already sitting there you know um equidistant triangle at 600 meters and drilled down to 300 meters so massive from that point of view um it's clear that there's an anomaly sitting to the southwest as well if we follow their trend which was to go after the the the soil anomaly then we got a big anomaly there i think the other thing we've proven is we can now see the high grades are with the mafix um as well we can see which of the cyanide sources we are after and how it fits together um and as i was explaining to someone the other day you're looking like an onion uh as you come in at each of these pulses come in it spreads out and as it cools the bit that cools the slowest which is the middle is where your highest rare earths are being and we've really clearly found the beginning of that we've now got to figure out totally where that core of that onion is but at least we've got some some triage of that and we've got to figure out where that core of that onion is but at least we've got some triage of that onion is but at least we've got some triage of that onion is but at least points to get us back to it now so the next stage is we've got some mineralogy work to come back just to confirm what we believe is our where our minerals are associated current indications are we've got nothing radical everything's doable um and that will allow us then to go to the metallurgical test work as we commented earlier it's very much part of a rare earth project how you're going to get yourself into the pipeline on the downstream here uh and then we've got to and then then some drilling um really to start to sort of give this thing a sense of scale um you know one of the interesting appointments which we had of people this year other than myself um it was a guy called rob bowell who joined us who's actually an advisor to the pentagon um on critical metals um so obviously you know we need to get a story together here to be able to go back into the political side of what we do to explain, you know, where this project would fit within that scope as well.
Speaker 1You've also been uncovering copper and nickel deposits at both Matsutama and Celebi East projects with the latest results coming out last week on multi-kilometer nickel-copper anomalies at Celebi East. Walk us through those discoveries and what the plans are to capitalize on them.
Speaker 2Yeah, so let's start with Celebi East. That was the last one you put there. Celebi East is right next to Next Metal's Celebi mine. This is the old Celebi Pickway. There was like over 40 million tons mined in the past from that one, running at about half a cent copper, half a cent nickel. I mean, it's a fantastic mine. They got hold of it. They've been drilling. They used EM to target. They've been drilling down, putting in some incredible intersections. And I think they've just increased part of it. So there's a lot of potential there. We have been right at the very beginning of the exploration play, doing soil sampling. We've got multiple targets now that are sitting on the amphibolites, which is what they're targeting on their drilling. Next step for us on that one is to go and do some EM, chase the sulfides, figure out where the sulfide targets are, and then we're going to drill for that. So that'll be what we're looking for in the next 12 months, is to go through that process. And there are multiple ones of these sitting out there. So, you know, really excited. Matsutama, it's a massive license area. It's like almost 2,000 square kilometers up there with different target areas. The work to date has really been focused on an area called Nacalaquana. It's a known resource, the qualifying document to list related to that resource. We've shown extension to that over 10 kilometers. We've shown 100 meter intersections of copper. There's copper everywhere on this project, as I kind of point out. But there's only a small part of the total license, and we really haven't done anything over the rest. We've got the Moana copper mine to the Moana area up there. And you've got within our license and mine area called Takadu, which ran at about 2%. So, you know, we're going to go back high. We're going back to geophysics on this property to really mainly look at an area called La Pache and the snake. That is over 30 kilometers long. I mean, again, we've done it. We're just at the end or almost at the end of a 300 square mile, over that soil anomaly that's sitting there and the folds and the structures and everything. So we're kind of hoping that gives us a, you know, our belief is very much that that will give us the targets we want, certainly with all the right things you want for an intrusive copper project sitting up there. We'll go to EM and then drilling on that one as well. So those are our next targets for those ones. So, you know, I'm very excited about Matsutama. I think it has got real potential. Having two mines, having a resource as well, sitting there, you know, this can't be it. There's something else sitting up at Matsutama. We've just got to find it.
Speaker 1And ultimately, what's the end goal for the company when it comes to these projects? Are you looking to bring them into the development stage yourself? Are you looking to de-risk and delineate as many resources as makes sense and then potentially attract a major, a bigger player to acquire you? Are you open to joint ventures? Are you keeping your options open? What are your
Speaker 2thoughts? All of the above. It would be the simple answer to that. Look, you know, we come from a background of people doing, I've worked in companies and run companies where you end up with almost too many projects and they're weighing you down and they become a millstone around your neck and you're trying to figure out what to do and how to spread your capital. You know, you can't be all things to all people. That is very clear. I mean, unless the market valuation just roars through the roof, but you always then get caught by that anyway. But I think the key for us though is to see what makes sense. You know, we have a range of different commodities here. You know, we're not the normal company, we're not a copper company or a gold company or one of these. We've got six different commodities here. But at the same time, we are at the beginning of the exploration where your costs are quite low, but your potential to leverage a find and massively boost the value on one or more of the projects is there to completely game change. Just one of them. And we've got six of them. So, you know, if you got, and I keep saying to people, it's a bit like your share portfolio. You know, you don't just buy one share and shove it in the corner, even one sector. You spread it around. You have different commodities, different companies, different. There's no different to us. And you take a view on each one of them. I either got to hold it for the long term or I'm going to sell it out and put my money somewhere else. And we think about it in exactly the same format here. I mean, Semarulo is a good example. You know, it's starting to hang together. You know, and the one thing I realized as well, being on a board for a rare earth company as well, is that your approach is different as well. The CEO of a rare earth company has a different approach to his project than a CEO for a copper company. Completely different mindset. You're thinking about that downstream more than you're thinking about how can I get that thing into production? And then when I got my downstream, I figured I had to get into production. It's kind of a slightly different way around. So, yes. That one would probably spin it out into a vehicle on its own, you know, with or without the uranium to be decided. A uranium project. I mean, it's kind of it's not going to get the value sitting inside of Eastport. Do we put it in its own vehicle so it can run or do we sell it to somebody else at the uranium market runs and place that forward? So we look at all of these. Always open to joint venture. A lot depends, just as you know, on the scale of your project. I mean, if you get lucky and you've got a beast on your hands, then as a junior mining company, you're going to need some firepower to come in and support you and get that development going as well. So, you know, you've got to be looking at these options all of the time. You know, someone nicely put it to me. What you do not want is geological constipation, you know, where you just hold on to projects and you just don't quite do anything with them and you get stuck and you won't let go of them either. You've got to keep moving forward in the same way an investor would look at their portfolio and say, well, I can't have 50 shares any longer. I've got to cut that back to 20.
Speaker 1Is there anything else that we haven't yet discussed today or anything that you think it's important to emphasize to potential shareholders of Eastport Critical Metals?
Speaker 2Yeah. I mean, the one thing we didn't talk about today is obviously jurisdiction. I mean, we're in a fantastic jurisdiction in Botswana. I mean, it's one of the highest rated mining jurisdictions globally. A great infrastructure, power roads, well-educated, workforce out there as well. All these are key to taking projects forward. And I think, you know, when you look at it, I go back to the point that we were just making is you're not buying a company with one asset. You know, I'm not a copper exploration company with one project in the Yukon. You know, and there are a few of those out there, you know, where they can only work from May until September and then they will kind of have to back off for a while. I'm in a country that wants mining, wants exploration. I'm in a country that wants mining, wants exploration, wants development. We've got projects that are right at the beginning of the Lausanne curve individually and multiple ones here that can all suddenly shift. You just imagine what we would get if we get a decent drill hole into Silibe East that mirrors what they're getting over at Next Metals. Or we get a decent drill hole into Matsutama up at La Pache. That game change, each one of those on their own game changes it. And already with Semarulo, I think we're already pulled together a potentially a massive rare earth project, you know, which investors would have the benefit of whichever way we take it forward. So I think that's the way you have to look at an investment in the Eastport. You're getting that portfolio benefit across the whole
Speaker 1thing. Well, I'm going to put a link in the description below to the Eastport Critical Metals website, as well as social media for people who want to follow along with the company. Daniel, as always, great chatting with you and thanks for coming on the show.
Speaker 2Thank you very much. And thanks for the questions.
Speaker 1Great questions. Commodity Culture is a podcast that covers investing in commodities and natural resources. If you'd like to hear more, be sure to subscribe so you are always alerted of the latest episodes.
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