Is NICKEL Next to Go Parabolic? The Metal Nobody’s Watching (Yet)
Summary
Chris Showalter, CEO of Lifezone Metals (NYSE: LZM) thinks we could be on the cusp of a breakout in the nickel market, as the …
Transcript
Hello everybody. Welcome into commodity culture where our goal is to make you a better investor in the commodities sector. My name is Jesse Day. Before we dive in, nothing here is investment advice. Do your own due diligence. Today is December 9th, 2025, and my guest is the CEO of Life Zone Metals, a company committed to delivering cleaner and more responsible metals production and recycling through the application of their hydromeat technology. We're going to be diving into the company as well as the nickel market which is the ma main metal that life zone is involved with. It's Chris Shaalter. Great to have you on the show. >> Great Jesse, real pleasure to be here. So, thanks for your time. >> Absolutely. Let's kick things off with an overview of the nickel market from a kind of 30,000 foot view. Why is the nickel market an area that investors in the commodity space should be paying attention to right now in your view? >> Sure. So I think just to start uh nickel is notoriously one of the most volatile base metals and I think what you're seeing right now is you have a whole bunch of different uh commodities going in different directions. You're seeing um you know precious metals, gold, silver go on really historic runs. You're seeing nickel kind of uh hit you know relatively not all-time lows but really um being dramatically impacted by the control from Indonesian China. So, so what you're seeing right now from our standpoint is you you're seeing gold and silver in a run that um we're starting to see people starting to look for okay, what's the next commodity that's kind of been bottoming out going through its kind of supply demand structure structural kind of um you know uh fix. I mean you've seen that in platinum. I think a good example is platinum and platium where you've seen a lot of mine shut down. We've seen closures due to prices falling off and it's kind of worked through that cycle and you're seeing a lot of that in nickel right now. Now, however, nickel is very very tightly controlled by Indonesia and the Chinese. So, roughly um I think this year it's around 62% of the market share is controlled the production side by Indonesia which is really controlled by the Chinese and that is looking to hit upwards of 70% next year. So you're seeing an increasingly tightly controlled market share and I think rare earths gets a lot of attention right now and that's getting a lot of focus of how tightly that that whole entire supply chain has been controlled. And what's very important for people to understand is it's not just the it's not just the mining side. You know these are these are um processes that involve smelting, concentrating um refining. So it's a combination of all those sequence of events. And so really the downstream processing and refining is where you find the strongest chokeold. So really um rare earth is a great example of where you've seen a massive concentration of that downstream processing within one country and the nickel market you're seeing a replication of that as well. So nickel is becoming just as acute it already is of a concentration risk for western markets in terms of mineral supply chain security. So that's something where um life zone metals our flagship asset is the world famous Cababanga nickel project which is really the largest potential nickel sulfide deposit that's really development ready and so we've been working very hard getting it to the you know really production um well we're kicking into uh the FID phase and construction. So this is the next really big source of nickel that's poised to come online that would be outside of the sphere of influence of Indonesia and China. So we become a really strategically important deposit and that's where that's where we're getting a lot of attention right now. But that's that's that's really how we fit into the you know the dynamics right now in the nickel market. >> Great overview and I want to dive into both Indonesia's dominance of the nickel market as well as Life's Own Metals in a moment. But first, I want to go back to March of 2022 where nickel surged in a single day over 250%. The single most extreme single day move in commodity history, leading the LME to suspend nickel trading for over a week. Since then, as you mentioned, the price has fallen and it's been in a sideways consolidation for around a year now. What are your thoughts on that price spike? Was that a reflection of where nickel prices could ultimately end up? And do you think we're potentially tremendously undervalued at at these levels right now, if not at least moderately undervalued? >> Yeah, I mean, I'd love if that was reflective of future nickel prices. I mean, that price on, you know, really the u on that day, I think it hit almost $100,000 per ton. Um, I think that was a unique kind of black swan event what we saw and I think there's been a really good kind of triaging of the, you know, looking back at what actually happened and and that was a factor of um, you had the Ukraine Russian war really spooking commodity prices and what you had was you had a massive concentration of short positions from one of the largest uh, Chinese um, nickel players, Shing Shen. So you you add that in and you add in the fact that a lot of the the way that LM works it's it works best when you do a lot of the clearing through the you know the LE clearing process. Um a lot of the short uh positions that were put on by Shing Shen were done uh over the counter so the OTC market. So they weren't you couldn't track him as readily and so people were caught off guard and what really resulted was um just a a catalyzing you know short squeeze where margin calls were just being automatically triggered. If you have all these OTC positions with various uh third party banks, they're not acting in concert. They're all scrambling to cover those margins those margin calls. And so you just saw a self-fulfilling event that just sent the the price skyrocketing and there's not the depth of liquidity in the LME, especially for a single commodity like nickel that can can contain that if the clearing isn't all done centrally. So you really saw a fragmented um scenario where people were just caught off guard. And I think that's also look the LM has been criticized quite a bit, but that that's something that was a very unique event and shows the concentration risk of having that much of a position put on when it's not understood and controlled within that specific uh platform. >> Well, let's dive a little bit deeper into Indonesia's dominance of the of the nickel market, over 50% of the world's production. um and they have implemented an export ban on raw nickel since January 2020. Maybe dive a little bit deeper in terms of the impact that has on the nickel market and why it highlights the importance of bringing other sources of production online. >> Yeah. So, as I indicated, it's actually higher than 50%. It's it's it's really it's about just over 60 this year. And what's interesting is the the actual you have the production and the market share that Indonesia controls which is around 61% poised to go to 70 next year but you have the consumption being dominated by China as well and that's almost 80%. Um right now you have it's around 65% of the global demand for nickel is still stainless steel only about 15% is uh battery technology right now but that is growing at a much higher rate. So you're still seeing the predominant growth in nickel um really being driven by um stainless steel. So I think when you look at the the production overall um most of the well most of the growth will come from electric vehicles on a um on a year-over-year growth basis. And you're seeing most of that demand come out of China. So right now you're seeing um electric vehicle sales in the US um really in the back of the um the IRA tariffs um expiring. So a little bit of a spike in EV sales as people want to take advantage of the expiration of those credits um knowing prices go up. So you've seen really a fall-off in the US in terms of EV sales, but you're still seeing very strong growth year-over-year in Europe and China. So you're really seeing a a bifurcation of where the demand is really coming from. And I think what's matching up is Indonesia's been able to really dominate the sourcing of of nickel to satisfy those those those batteries. Um and I mean Indonesia they you know they went on a very very concerted policy um effort to to to increase supply and so it was a it was a very successful um policy because they have really decided that they wanted to incubate and control that nickel industry. um they brought in all the incentives to incur investment coming into the country and they made some very very strong decisions to to force local beneficiation which was pretty hectic. Uh I mean they you know they shut the borders pretty rapidly. Um but it has resulted in the evolution of the um you know high pressure acid leeching being a a phenomenally successful um development in the nickel industry and this caught everyone by surprise uh especially the majors. So what you saw was the really the high cost producers in Western Australia, they've all I mean I think there's only probably one or two mines still still open. Um so you saw the high cost producers of nickel the nickel mines in Western Australia just get absolutely bludgeoned by the advent and increase in supply so rapidly out of Indonesia. So so Indonesia now it comes with a very very high environmental cost. Um there are not environmental controls on the mining of uh in the methodology in Indonesia. We can talk about that some more as well, but it's it's probably the dirtiest methodology for mining and processing um in the in the mining space right now. >> Very interesting. I want to talk as well about the US administration's push for more critical minerals production that is from either friendly allies domestically sourced because they're starting to wake up to what you've been talking about this concentration of commodities production particularly in China when it comes to obviously as you mentioned rare earths is what's in the headline these days but a variety of critical minerals um talk to us about how you view that we've also got um the EU view, which is talking about critical raw material tariffs. It seems like countries around the world are starting to realize just how valuable it is to produce commodities, which is interesting because we've lived in this financialized world where hard assets have been very out of favor and now the tables seem to be turning and people seem to be waking up. What What are your thoughts on that and and how it could impact um both your project and the nickel market as well? Yeah, it's been fascinating to watch it kind of evolve because what we've seen in the previous administration, you saw the advent of the mineral security partnership. You saw a collaborative effort by the west to to align themselves uh and look at supply chain security through kind of a collaborative and that still is the case. But fast forwarding to this administration, they've taken a very um unilateral approach and been very very aggressive in some of their the roll out of their policies. So they've established, you know, really um very specific supply chain security um individuals within the government and you're seeing uh an example of several of the transactions that have been you know really announced recently. Uh MP materials was obviously one of the big highlight ones that was a probably a one-off because of the the really urgent strategic importance of securing a rarest project. um really the only major one within the US uh borders. And so that that was unique. But what that demonstrated in my view is that you're seeing a a much more creative, much more um fastmoving uh reactionary capability within the US government. There's various buckets of capital, whether it's from um the Department of War, whether it's from um Department of Energy, um commerce. So you're seeing a number of different buckets that are all being availed to go after some of these supply chain um you know high-risk commodities. And so so what the US has done is they they've expanded the list of critical metals and really methodically what I've seen is they're going through them one by one and trying to determine where can we back certain projects that will ensure that we are solving the supply chain risk for that specific commodity. And I think importantly for nickel where we kind of sit in this whole entire uh story um as an international project we fall really within the US development finance corporation is kind of our one of our key um partners right now within the US government. So we uh and this is public we've engaged them on project financing for the Kagango project and then also uh more immediate is the political risk insurance application we have in with the US development finance corporation. Um that's outstanding and and that should hopefully be going you know before end of this year to the you know to the board for a decision. Now what that does is that evidences that potentially we have the US government coming in to um really show a strong endorsement by underwriting um an international project and what they're going to require all these buckets of capital coming from the US will require offtake being directed to US and allied um what they call approved partners. So, so in one sense to your question, you have the Europeans, you know, looking to craft their own policy and whether it's the battery passport or it's um what we're really seeing is you're seeing collaboration in some areas, but you're also seeing each country unilaterally looking to go after their own domestic uh supply chain security, whereas the US is pretty much at the most aggressive uh stage of that. Um we also have anou with the Japanese um with jogmech which is really the government paristatal that's been around for quite some time to facilitate um the inputs for all the domestic Japanese industrial uh manufacturers and they have a very similar mandate where they're looking to secure uh supply chain. looking to secure minerals uh for the Japanese economy and and they provide liquidity and equity financing and returns. So so very similar. So it's it's it's a it's a dynamic. It's a fast changing um landscape right now, but there there is a lot of aggression out of the US uh to support projects like Kabanga uh not only just a domestic agenda anymore. They're looking to identify these strategic projects that are overseas with countries like Tanzania that can be allied in a bilateral engagement. I think we're we're we're very much in a very positive pathway to see that come to fruition. >> Well, let's talk about Life Zone Metals and the Cabanga project. Um could you start by giving us an overview of the company and maybe dive deeper into the Kabanga project and discuss you know infrastructure in place milestones achieved and plans to advance the project moving forward. So Lifetime Metals were a combination of our flagship cabang and nickel project which we've been discussing which is really the you know the hallmark nickel sulfide project globally that's poised to go into production um the quickest and then combined with that really our background and where we came from was our founders had a um really a hydromeergical uh background developing processes and flowheets to crack certain difficult processing um uh situations on typically on sulfidic or refractory uh or bodies. And so what that means it's it's really it's an alternative to the pyro metallergical smelting and burning. Um hydromeergical processes are used within the mining industry. But what our team has done is come up with a novel approach uh specifically in PGMs. Um that's really where we did a lot of our initial R&D. But what Lif Zone's really positioned and what we're looking to focus on right now strategically is identifying where we can apply our hydro expertise to generate a competitive advantage for some of these projects that have not been developed or that would benefit from a different processing route or engineering design. And so so we're a combination of a technology company and a mining company I guess is a very good way to put it. Um the big project Kabanga, it's based in Tanzania. We finished up at DFS uh in July of this year. And so what we've been able to really display to the market is outside of collapsed nickel prices and the firm control of Indonesian China, we've been able to put forward a 1.6 billion MPV project with a 23% irr. And this comes at just about a billion dollar uh capex buildout. and and these are numbers and economics that demonstrate that we are firmly in a position to compete against the the tight control of the Indonesian market. And that's that's that's absolutely where you have to be positioned if you're going to compete and bring a new nickel mine on online because as I said, the nickel mines in Australia are much higher up on the cost curve. The North American nickel mines primarily are lower grade and Cabanga benefits from being very large, very high grade and that puts us right there at the very bottom of the cost curve. And when you look at um you know the I mean uh we could use copper equivalent. So that's a good good metric people like to talk about. Kabanga in terms of its grade. I mean, we're 2% nickel, but on a copper equivalent basis, you you add in our byproducts, copper, copper, cobalt, we're at about a 4.1% copper equivalent. So, that puts us higher than Kimoa, that puts us higher resolution that's at about 2.5%. So, really, it's a superior grade of the Kabanga project that's so valuable. And that's why we've gotten so much interest from other strategic partners, um, investors and and and really, you know, the good thing is as well, we have a very strong relationship with the Tanzanian government. And so this is a project that's really blessed by the Tanzanians at the highest level. They want to see this move forward. They support it. And so we we we truly benefit from a a partnership with the host government and then strong support from the west specifically because this is a very strategic important source of nickel, copper and cobalt um for this supply chain world that we're living in. >> Well, a lot of people will hear Tanzania and think geopolitical risk fairly or unfairly. It's a common reaction to projects in Africa. Of course, we saw the coup in Nijair not too long ago, another coup in Benin recently. Um, so people tend to get a little nervous when mining projects are brought up in and around Africa. Could could you maybe dive a little deeper into that relationship you have with the local government, relationship with the local community, and are there any risks you see to operating in that part of the world? uh to start I think the the way the world's going and the the high demand we're going to see for critical metals going forward in this whole entire broader energy transition whether it's electric vehicles or battery storage or other new um uses that are still to be discovered there the the we're going to have to go find deposits new deposits and unlock some of these existing deposits in more difficult places a lot of the biggest easiest deposits have been discovered so so naturally um Africa with its mineral endowment is going to be one of the, you know, prime areas where you're going to see some of the newer, larger deposits, not only explored and identified, but also a lot of existing deposits that are there that have been known about like Kabanga that have not had the infrastructure to to really exploit the deposit as yet. But we're also seeing um really that the time has come for for countries like Tanzania. Now to your question on you know kind of the risk in an African jurisdiction is definitely a risk especially for I would say North American investors who are not as um you know not not as used to taking on Africa risk but that's where this application we have in with the US development finance corporation is is is critically critically important because what this shows is is the US government saying hey this is a product where we can come in and underwrite the sovereign risk of this project and by them stepping in and providing that risk product, that risk wrapper on the Kamanga nickel project. What that does is that underwrites the equity risk for institutional investors and and private investors. So, so that's a de-risisking element that a a government like the US can step in and provide that does unlock some of the risk factors and and so that is a a big endorsement, a big commitment. Uh, and that's going to be something that we, you know, we're, as I said, we're going to to the board with that application and hopefully we'll have some good news in the coming weeks. >> Well, let's discuss the company's cash position. You closed a $60 million bridge loan in September and a $15 million underwritten registered direct offering last month. How much cash do you now have in total? How do you plan to put that cash to work? And how much runway does it give you? So when we announced DFS in July, uh we made a a very important decision that we wanted to um we had exited BHP at that point in time. So we bought back uh 17% shareholding from BHP. And so what we decided to do is we were working with our um some some colleagues of ours over at Taurus Funds and we uh did a $60 million bridge facility. And what that bridge facility in terms of the liquidity does that's really allocated to the project level and that gives us sufficient capital to do a lot of the execution readiness the prefid work um and really bridge that period from the defined feasibility study and exiting BHP and getting us to that next FID step. So so that was very important. So between DFS and FID for the project to progress on time and in bud and on budget, we have that facility in place specifically for that. uh the smaller capital raise up at Life Zone is to focus on um really because that 60 million was focused on the project and that's us doing kind of an annual capital raise at life zone to cover our working capital requirements and needs and also we have some other uh projects including uh recycling in North America for autoc catalytic converters that we're in partnership with Glen Coron it's another application of our hydromeacc process um so in in parallel to this uh in terms of capital raising and liquidity we running a process with standard charter to bring in another strategic um investor or investors or consortium into the Kabanga nickel project at the at the asset level. So that's roughly that equity if we go to the DFS we're going to be looking at roughly a 1.3 billion capital raise 500 just over 500 or so of that's going to be equity with the balanced project financing. So, we're in a very advanced stage with Standard Chartered Bank, who are our investment bankers. Um, and we have made public announcements that we're kind of in the final stages of that. So, we're going to have a very large liquidity um event at the Cabanga level. Um, the bridge facility gets us from DFS to when we do we close those funds and then we have Sockgen on the project finance side appointed for the project financing and that's um gone very very well. So, um there's going to be a lot of interest just given the high cash flow that Cababanga generates. We're able to um to quite comfortably uh put in a project financing a debt piece uh for the project. So, so these are big announcements that are coming. I think when you look at Life Zone as a story, we we've got these big catalysts on the horizon. Um we've got the liquidity in place right now to bridge us to FID. Um, we've been conservative in terms of all the economic assumptions in the Kabanga project and and I think what's, you know, what investors and and what your listeners should be looking at is, you know, a story with a tier one asset. We've got a very big catalyst on the horizon. Um, and this is a strategic asset that's going to be, you know, very strongly supported by the West and and so that's a great story. And I think um you know tier one assets at the bottom of a cycle where nickel is going to be correcting in the coming years. You want to be building a mine at this point in time. You don't want to be selling nickel right now. So I think we timing wise I think we'll benefit from when nickel corrects um if you read some of the you know the research from uh as even you know Jim Lennon over at McQuary um you know in terms of 2028 he would forecast nickel gets back up to around $19,000 per ton. And that works for us because of where we are in the cost curve. We're about $7,800 per ton all in sustaining costs. So even at $15,000 nickel, you know, we're profitable and we're below the cost curve of where the Indonesians are. And at $15,000 per ton, about 40% of them are operating at a loss. So we're kind of bouncing around the bottom here. Um, so I think we're in a great position. So, so yeah, in terms of liquidity financing, we're firmly in place. in terms of the two capital raises we just did and we'll have big announcements coming on really the funding partners we'll have at the project and that's going to be the biggest catalyst that we'll be announcing uh um towards end of this year and early next year. >> Great. Well, I'll end by opening the floor to you. Is there anything we haven't yet discussed or anything you think it's important to emphasize that potential shareholders of Life Zone Metals should be focused on? >> I think I did cover the big one. I think we are, you know, if um, you know, if I'm an investor right now, you're looking for distress plays, um, where value is not properly factored into, you know, the stock price and I think we, you know, we we trade a material discount to the MPV of the Kabanga project from the from the DFS. So, I think if you combine that substantial discount, people can take a view of whether or not, you know, we're in a position to then bring in the funding. And I think people can, you know, I think they can take a view just based on some of the announcements, the strategic partnerships we've we've we've identified, uh, the applications and support we have from the US government. So, you can kind of see we're going in a certain direction. So, I think we're, you know, with I can't really say much more than that right now, but I think people can take a very strong educated um, view that we're probably at a point now where it's a, you know, very attractive time uh, to get into nickel at the bottom of the cycle. And you always want to get in in these tier one assets. And that's one of the things that uh you know, one of our early investors, Rick Rule, um who I think everyone knows quite well. I mean, Rick was very clear. He's like, "Look, I've known Kabang. I I visited the site 20 years ago. It's one of the best deposits in the planet. It's the bottom of the cycle and this is a tier one asset." So, his investment decision was, you know, didn't take very long. But tier one assets at the bottom of the cycle, those are really hard to time. And I think we're providing investors right now an entry point um exactly on that formula. So I think that's that's probably the last thing to kind of touch on. I think we're in a really really good position. >> Well, I'll put a link in the description below to Life Zone Metals website as well as social media so people can follow along with the company. Chris, this has been a fantastic conversation. Thank you so much for coming on the show. >> Thanks Jesse. Really appreciate it. Look forward to coming back again. Commodity Culture is a series on commodities and natural resources. 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Is NICKEL Next to Go Parabolic? The Metal Nobody’s Watching (Yet)
Summary
Chris Showalter, CEO of Lifezone Metals (NYSE: LZM) thinks we could be on the cusp of a breakout in the nickel market, as the …Transcript
Hello everybody. Welcome into commodity culture where our goal is to make you a better investor in the commodities sector. My name is Jesse Day. Before we dive in, nothing here is investment advice. Do your own due diligence. Today is December 9th, 2025, and my guest is the CEO of Life Zone Metals, a company committed to delivering cleaner and more responsible metals production and recycling through the application of their hydromeat technology. We're going to be diving into the company as well as the nickel market which is the ma main metal that life zone is involved with. It's Chris Shaalter. Great to have you on the show. >> Great Jesse, real pleasure to be here. So, thanks for your time. >> Absolutely. Let's kick things off with an overview of the nickel market from a kind of 30,000 foot view. Why is the nickel market an area that investors in the commodity space should be paying attention to right now in your view? >> Sure. So I think just to start uh nickel is notoriously one of the most volatile base metals and I think what you're seeing right now is you have a whole bunch of different uh commodities going in different directions. You're seeing um you know precious metals, gold, silver go on really historic runs. You're seeing nickel kind of uh hit you know relatively not all-time lows but really um being dramatically impacted by the control from Indonesian China. So, so what you're seeing right now from our standpoint is you you're seeing gold and silver in a run that um we're starting to see people starting to look for okay, what's the next commodity that's kind of been bottoming out going through its kind of supply demand structure structural kind of um you know uh fix. I mean you've seen that in platinum. I think a good example is platinum and platium where you've seen a lot of mine shut down. We've seen closures due to prices falling off and it's kind of worked through that cycle and you're seeing a lot of that in nickel right now. Now, however, nickel is very very tightly controlled by Indonesia and the Chinese. So, roughly um I think this year it's around 62% of the market share is controlled the production side by Indonesia which is really controlled by the Chinese and that is looking to hit upwards of 70% next year. So you're seeing an increasingly tightly controlled market share and I think rare earths gets a lot of attention right now and that's getting a lot of focus of how tightly that that whole entire supply chain has been controlled. And what's very important for people to understand is it's not just the it's not just the mining side. You know these are these are um processes that involve smelting, concentrating um refining. So it's a combination of all those sequence of events. And so really the downstream processing and refining is where you find the strongest chokeold. So really um rare earth is a great example of where you've seen a massive concentration of that downstream processing within one country and the nickel market you're seeing a replication of that as well. So nickel is becoming just as acute it already is of a concentration risk for western markets in terms of mineral supply chain security. So that's something where um life zone metals our flagship asset is the world famous Cababanga nickel project which is really the largest potential nickel sulfide deposit that's really development ready and so we've been working very hard getting it to the you know really production um well we're kicking into uh the FID phase and construction. So this is the next really big source of nickel that's poised to come online that would be outside of the sphere of influence of Indonesia and China. So we become a really strategically important deposit and that's where that's where we're getting a lot of attention right now. But that's that's that's really how we fit into the you know the dynamics right now in the nickel market. >> Great overview and I want to dive into both Indonesia's dominance of the nickel market as well as Life's Own Metals in a moment. But first, I want to go back to March of 2022 where nickel surged in a single day over 250%. The single most extreme single day move in commodity history, leading the LME to suspend nickel trading for over a week. Since then, as you mentioned, the price has fallen and it's been in a sideways consolidation for around a year now. What are your thoughts on that price spike? Was that a reflection of where nickel prices could ultimately end up? And do you think we're potentially tremendously undervalued at at these levels right now, if not at least moderately undervalued? >> Yeah, I mean, I'd love if that was reflective of future nickel prices. I mean, that price on, you know, really the u on that day, I think it hit almost $100,000 per ton. Um, I think that was a unique kind of black swan event what we saw and I think there's been a really good kind of triaging of the, you know, looking back at what actually happened and and that was a factor of um, you had the Ukraine Russian war really spooking commodity prices and what you had was you had a massive concentration of short positions from one of the largest uh, Chinese um, nickel players, Shing Shen. So you you add that in and you add in the fact that a lot of the the way that LM works it's it works best when you do a lot of the clearing through the you know the LE clearing process. Um a lot of the short uh positions that were put on by Shing Shen were done uh over the counter so the OTC market. So they weren't you couldn't track him as readily and so people were caught off guard and what really resulted was um just a a catalyzing you know short squeeze where margin calls were just being automatically triggered. If you have all these OTC positions with various uh third party banks, they're not acting in concert. They're all scrambling to cover those margins those margin calls. And so you just saw a self-fulfilling event that just sent the the price skyrocketing and there's not the depth of liquidity in the LME, especially for a single commodity like nickel that can can contain that if the clearing isn't all done centrally. So you really saw a fragmented um scenario where people were just caught off guard. And I think that's also look the LM has been criticized quite a bit, but that that's something that was a very unique event and shows the concentration risk of having that much of a position put on when it's not understood and controlled within that specific uh platform. >> Well, let's dive a little bit deeper into Indonesia's dominance of the of the nickel market, over 50% of the world's production. um and they have implemented an export ban on raw nickel since January 2020. Maybe dive a little bit deeper in terms of the impact that has on the nickel market and why it highlights the importance of bringing other sources of production online. >> Yeah. So, as I indicated, it's actually higher than 50%. It's it's it's really it's about just over 60 this year. And what's interesting is the the actual you have the production and the market share that Indonesia controls which is around 61% poised to go to 70 next year but you have the consumption being dominated by China as well and that's almost 80%. Um right now you have it's around 65% of the global demand for nickel is still stainless steel only about 15% is uh battery technology right now but that is growing at a much higher rate. So you're still seeing the predominant growth in nickel um really being driven by um stainless steel. So I think when you look at the the production overall um most of the well most of the growth will come from electric vehicles on a um on a year-over-year growth basis. And you're seeing most of that demand come out of China. So right now you're seeing um electric vehicle sales in the US um really in the back of the um the IRA tariffs um expiring. So a little bit of a spike in EV sales as people want to take advantage of the expiration of those credits um knowing prices go up. So you've seen really a fall-off in the US in terms of EV sales, but you're still seeing very strong growth year-over-year in Europe and China. So you're really seeing a a bifurcation of where the demand is really coming from. And I think what's matching up is Indonesia's been able to really dominate the sourcing of of nickel to satisfy those those those batteries. Um and I mean Indonesia they you know they went on a very very concerted policy um effort to to to increase supply and so it was a it was a very successful um policy because they have really decided that they wanted to incubate and control that nickel industry. um they brought in all the incentives to incur investment coming into the country and they made some very very strong decisions to to force local beneficiation which was pretty hectic. Uh I mean they you know they shut the borders pretty rapidly. Um but it has resulted in the evolution of the um you know high pressure acid leeching being a a phenomenally successful um development in the nickel industry and this caught everyone by surprise uh especially the majors. So what you saw was the really the high cost producers in Western Australia, they've all I mean I think there's only probably one or two mines still still open. Um so you saw the high cost producers of nickel the nickel mines in Western Australia just get absolutely bludgeoned by the advent and increase in supply so rapidly out of Indonesia. So so Indonesia now it comes with a very very high environmental cost. Um there are not environmental controls on the mining of uh in the methodology in Indonesia. We can talk about that some more as well, but it's it's probably the dirtiest methodology for mining and processing um in the in the mining space right now. >> Very interesting. I want to talk as well about the US administration's push for more critical minerals production that is from either friendly allies domestically sourced because they're starting to wake up to what you've been talking about this concentration of commodities production particularly in China when it comes to obviously as you mentioned rare earths is what's in the headline these days but a variety of critical minerals um talk to us about how you view that we've also got um the EU view, which is talking about critical raw material tariffs. It seems like countries around the world are starting to realize just how valuable it is to produce commodities, which is interesting because we've lived in this financialized world where hard assets have been very out of favor and now the tables seem to be turning and people seem to be waking up. What What are your thoughts on that and and how it could impact um both your project and the nickel market as well? Yeah, it's been fascinating to watch it kind of evolve because what we've seen in the previous administration, you saw the advent of the mineral security partnership. You saw a collaborative effort by the west to to align themselves uh and look at supply chain security through kind of a collaborative and that still is the case. But fast forwarding to this administration, they've taken a very um unilateral approach and been very very aggressive in some of their the roll out of their policies. So they've established, you know, really um very specific supply chain security um individuals within the government and you're seeing uh an example of several of the transactions that have been you know really announced recently. Uh MP materials was obviously one of the big highlight ones that was a probably a one-off because of the the really urgent strategic importance of securing a rarest project. um really the only major one within the US uh borders. And so that that was unique. But what that demonstrated in my view is that you're seeing a a much more creative, much more um fastmoving uh reactionary capability within the US government. There's various buckets of capital, whether it's from um the Department of War, whether it's from um Department of Energy, um commerce. So you're seeing a number of different buckets that are all being availed to go after some of these supply chain um you know high-risk commodities. And so so what the US has done is they they've expanded the list of critical metals and really methodically what I've seen is they're going through them one by one and trying to determine where can we back certain projects that will ensure that we are solving the supply chain risk for that specific commodity. And I think importantly for nickel where we kind of sit in this whole entire uh story um as an international project we fall really within the US development finance corporation is kind of our one of our key um partners right now within the US government. So we uh and this is public we've engaged them on project financing for the Kagango project and then also uh more immediate is the political risk insurance application we have in with the US development finance corporation. Um that's outstanding and and that should hopefully be going you know before end of this year to the you know to the board for a decision. Now what that does is that evidences that potentially we have the US government coming in to um really show a strong endorsement by underwriting um an international project and what they're going to require all these buckets of capital coming from the US will require offtake being directed to US and allied um what they call approved partners. So, so in one sense to your question, you have the Europeans, you know, looking to craft their own policy and whether it's the battery passport or it's um what we're really seeing is you're seeing collaboration in some areas, but you're also seeing each country unilaterally looking to go after their own domestic uh supply chain security, whereas the US is pretty much at the most aggressive uh stage of that. Um we also have anou with the Japanese um with jogmech which is really the government paristatal that's been around for quite some time to facilitate um the inputs for all the domestic Japanese industrial uh manufacturers and they have a very similar mandate where they're looking to secure uh supply chain. looking to secure minerals uh for the Japanese economy and and they provide liquidity and equity financing and returns. So so very similar. So it's it's it's a it's a dynamic. It's a fast changing um landscape right now, but there there is a lot of aggression out of the US uh to support projects like Kabanga uh not only just a domestic agenda anymore. They're looking to identify these strategic projects that are overseas with countries like Tanzania that can be allied in a bilateral engagement. I think we're we're we're very much in a very positive pathway to see that come to fruition. >> Well, let's talk about Life Zone Metals and the Cabanga project. Um could you start by giving us an overview of the company and maybe dive deeper into the Kabanga project and discuss you know infrastructure in place milestones achieved and plans to advance the project moving forward. So Lifetime Metals were a combination of our flagship cabang and nickel project which we've been discussing which is really the you know the hallmark nickel sulfide project globally that's poised to go into production um the quickest and then combined with that really our background and where we came from was our founders had a um really a hydromeergical uh background developing processes and flowheets to crack certain difficult processing um uh situations on typically on sulfidic or refractory uh or bodies. And so what that means it's it's really it's an alternative to the pyro metallergical smelting and burning. Um hydromeergical processes are used within the mining industry. But what our team has done is come up with a novel approach uh specifically in PGMs. Um that's really where we did a lot of our initial R&D. But what Lif Zone's really positioned and what we're looking to focus on right now strategically is identifying where we can apply our hydro expertise to generate a competitive advantage for some of these projects that have not been developed or that would benefit from a different processing route or engineering design. And so so we're a combination of a technology company and a mining company I guess is a very good way to put it. Um the big project Kabanga, it's based in Tanzania. We finished up at DFS uh in July of this year. And so what we've been able to really display to the market is outside of collapsed nickel prices and the firm control of Indonesian China, we've been able to put forward a 1.6 billion MPV project with a 23% irr. And this comes at just about a billion dollar uh capex buildout. and and these are numbers and economics that demonstrate that we are firmly in a position to compete against the the tight control of the Indonesian market. And that's that's that's absolutely where you have to be positioned if you're going to compete and bring a new nickel mine on online because as I said, the nickel mines in Australia are much higher up on the cost curve. The North American nickel mines primarily are lower grade and Cabanga benefits from being very large, very high grade and that puts us right there at the very bottom of the cost curve. And when you look at um you know the I mean uh we could use copper equivalent. So that's a good good metric people like to talk about. Kabanga in terms of its grade. I mean, we're 2% nickel, but on a copper equivalent basis, you you add in our byproducts, copper, copper, cobalt, we're at about a 4.1% copper equivalent. So, that puts us higher than Kimoa, that puts us higher resolution that's at about 2.5%. So, really, it's a superior grade of the Kabanga project that's so valuable. And that's why we've gotten so much interest from other strategic partners, um, investors and and and really, you know, the good thing is as well, we have a very strong relationship with the Tanzanian government. And so this is a project that's really blessed by the Tanzanians at the highest level. They want to see this move forward. They support it. And so we we we truly benefit from a a partnership with the host government and then strong support from the west specifically because this is a very strategic important source of nickel, copper and cobalt um for this supply chain world that we're living in. >> Well, a lot of people will hear Tanzania and think geopolitical risk fairly or unfairly. It's a common reaction to projects in Africa. Of course, we saw the coup in Nijair not too long ago, another coup in Benin recently. Um, so people tend to get a little nervous when mining projects are brought up in and around Africa. Could could you maybe dive a little deeper into that relationship you have with the local government, relationship with the local community, and are there any risks you see to operating in that part of the world? uh to start I think the the way the world's going and the the high demand we're going to see for critical metals going forward in this whole entire broader energy transition whether it's electric vehicles or battery storage or other new um uses that are still to be discovered there the the we're going to have to go find deposits new deposits and unlock some of these existing deposits in more difficult places a lot of the biggest easiest deposits have been discovered so so naturally um Africa with its mineral endowment is going to be one of the, you know, prime areas where you're going to see some of the newer, larger deposits, not only explored and identified, but also a lot of existing deposits that are there that have been known about like Kabanga that have not had the infrastructure to to really exploit the deposit as yet. But we're also seeing um really that the time has come for for countries like Tanzania. Now to your question on you know kind of the risk in an African jurisdiction is definitely a risk especially for I would say North American investors who are not as um you know not not as used to taking on Africa risk but that's where this application we have in with the US development finance corporation is is is critically critically important because what this shows is is the US government saying hey this is a product where we can come in and underwrite the sovereign risk of this project and by them stepping in and providing that risk product, that risk wrapper on the Kamanga nickel project. What that does is that underwrites the equity risk for institutional investors and and private investors. So, so that's a de-risisking element that a a government like the US can step in and provide that does unlock some of the risk factors and and so that is a a big endorsement, a big commitment. Uh, and that's going to be something that we, you know, we're, as I said, we're going to to the board with that application and hopefully we'll have some good news in the coming weeks. >> Well, let's discuss the company's cash position. You closed a $60 million bridge loan in September and a $15 million underwritten registered direct offering last month. How much cash do you now have in total? How do you plan to put that cash to work? And how much runway does it give you? So when we announced DFS in July, uh we made a a very important decision that we wanted to um we had exited BHP at that point in time. So we bought back uh 17% shareholding from BHP. And so what we decided to do is we were working with our um some some colleagues of ours over at Taurus Funds and we uh did a $60 million bridge facility. And what that bridge facility in terms of the liquidity does that's really allocated to the project level and that gives us sufficient capital to do a lot of the execution readiness the prefid work um and really bridge that period from the defined feasibility study and exiting BHP and getting us to that next FID step. So so that was very important. So between DFS and FID for the project to progress on time and in bud and on budget, we have that facility in place specifically for that. uh the smaller capital raise up at Life Zone is to focus on um really because that 60 million was focused on the project and that's us doing kind of an annual capital raise at life zone to cover our working capital requirements and needs and also we have some other uh projects including uh recycling in North America for autoc catalytic converters that we're in partnership with Glen Coron it's another application of our hydromeacc process um so in in parallel to this uh in terms of capital raising and liquidity we running a process with standard charter to bring in another strategic um investor or investors or consortium into the Kabanga nickel project at the at the asset level. So that's roughly that equity if we go to the DFS we're going to be looking at roughly a 1.3 billion capital raise 500 just over 500 or so of that's going to be equity with the balanced project financing. So, we're in a very advanced stage with Standard Chartered Bank, who are our investment bankers. Um, and we have made public announcements that we're kind of in the final stages of that. So, we're going to have a very large liquidity um event at the Cabanga level. Um, the bridge facility gets us from DFS to when we do we close those funds and then we have Sockgen on the project finance side appointed for the project financing and that's um gone very very well. So, um there's going to be a lot of interest just given the high cash flow that Cababanga generates. We're able to um to quite comfortably uh put in a project financing a debt piece uh for the project. So, so these are big announcements that are coming. I think when you look at Life Zone as a story, we we've got these big catalysts on the horizon. Um we've got the liquidity in place right now to bridge us to FID. Um, we've been conservative in terms of all the economic assumptions in the Kabanga project and and I think what's, you know, what investors and and what your listeners should be looking at is, you know, a story with a tier one asset. We've got a very big catalyst on the horizon. Um, and this is a strategic asset that's going to be, you know, very strongly supported by the West and and so that's a great story. And I think um you know tier one assets at the bottom of a cycle where nickel is going to be correcting in the coming years. You want to be building a mine at this point in time. You don't want to be selling nickel right now. So I think we timing wise I think we'll benefit from when nickel corrects um if you read some of the you know the research from uh as even you know Jim Lennon over at McQuary um you know in terms of 2028 he would forecast nickel gets back up to around $19,000 per ton. And that works for us because of where we are in the cost curve. We're about $7,800 per ton all in sustaining costs. So even at $15,000 nickel, you know, we're profitable and we're below the cost curve of where the Indonesians are. And at $15,000 per ton, about 40% of them are operating at a loss. So we're kind of bouncing around the bottom here. Um, so I think we're in a great position. So, so yeah, in terms of liquidity financing, we're firmly in place. in terms of the two capital raises we just did and we'll have big announcements coming on really the funding partners we'll have at the project and that's going to be the biggest catalyst that we'll be announcing uh um towards end of this year and early next year. >> Great. Well, I'll end by opening the floor to you. Is there anything we haven't yet discussed or anything you think it's important to emphasize that potential shareholders of Life Zone Metals should be focused on? >> I think I did cover the big one. I think we are, you know, if um, you know, if I'm an investor right now, you're looking for distress plays, um, where value is not properly factored into, you know, the stock price and I think we, you know, we we trade a material discount to the MPV of the Kabanga project from the from the DFS. So, I think if you combine that substantial discount, people can take a view of whether or not, you know, we're in a position to then bring in the funding. And I think people can, you know, I think they can take a view just based on some of the announcements, the strategic partnerships we've we've we've identified, uh, the applications and support we have from the US government. So, you can kind of see we're going in a certain direction. So, I think we're, you know, with I can't really say much more than that right now, but I think people can take a very strong educated um, view that we're probably at a point now where it's a, you know, very attractive time uh, to get into nickel at the bottom of the cycle. And you always want to get in in these tier one assets. And that's one of the things that uh you know, one of our early investors, Rick Rule, um who I think everyone knows quite well. I mean, Rick was very clear. He's like, "Look, I've known Kabang. I I visited the site 20 years ago. It's one of the best deposits in the planet. It's the bottom of the cycle and this is a tier one asset." So, his investment decision was, you know, didn't take very long. But tier one assets at the bottom of the cycle, those are really hard to time. And I think we're providing investors right now an entry point um exactly on that formula. So I think that's that's probably the last thing to kind of touch on. I think we're in a really really good position. >> Well, I'll put a link in the description below to Life Zone Metals website as well as social media so people can follow along with the company. Chris, this has been a fantastic conversation. Thank you so much for coming on the show. >> Thanks Jesse. Really appreciate it. Look forward to coming back again. Commodity Culture is a series on commodities and natural resources. 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