As best I can render it - for my friend, Anatagamu, and anyone...

As best I can render it - for my friend, Anatagamu, and anyone else interested, here is a full transcript of the Magnum Investor Webinar.

Magnum Mining and Exploration CEO, Neil Goodman, interviewed by Evan Smith, Advisir, 12 February, 2024:



Q. Neil, you have been quite busy since we last had you on a webinar, being October last year. What have you been up to?


A. Well, it’s been pretty full-on, Evan. Spent most of last year trying to convince Investors to invest in the project at Buena Vista, and we have succeeded in convincing eight investors to access our data room and perform due diligence on Magnum.

So this means that every day we get a raft of questions about various contracts, agreements, studies, financial modelling, etc - and they were produced over the last few years.

And as well as electronic reviews, some of the investors need to do physical due diligence. And so we've taken some potential investors to visit the port in California a couple of times and also to visit the mine site in Nevada which we did recently in mid-Winter.

So the feedback from these visits is very positive. The investors are very impressed, especially that we are shovel-ready and can start construction immediately after receipt of funds, because all of our environmental and other permits are actually in place.

These investors, they’re used to having two to three years of environmental impact statements, native title agreements, etc., all have to be performed before construction can start. It's different for us in Nevada and this is one of the major differentiators between us and other projects.

Then most recently we were asked to meet with the Saudi government face to face to discuss the MidMetal green Pig Iron projects. I'll talk about that later.

But while we were there in the Middle East we took the opportunity to talk to other DRI producers in the area - and we knew from various reports and studies that DRI production was going to double in the Middle East.

So we were very surprised to hear that one steel maker is not going to double production …he's actually going to increase it by more than tenfold! So he's going to go from 5Mt a year of steel to 60Mt a year! And so this means that just this one steelmaker in the Middle East will need another 50 to 60 million tons of DRI grade Iron Ore.

And this is just one of several steel companies in the Arabian Gulf. So this means that the Middle East steel industry is planning to explode.


Q. It was announced in November that a feasibility study was being undertaken. In the most recent Announcement it was labelled as an engineering study, without showing any of the financial modelling. Why was this?


A. So the intent of the Company was to complete a Feasibility Study jointly with MidMetal to the level required by MidMetal to present to the Saudi government. So this study was completed on schedule and after review was accepted by MidMetal as meeting their standards for a Feasibility Study. Upon our review of the study, it was clear that didn't meet Australian standards for a Feasibility Study and therefore the release stated it was an Engineering Study that had been completed and under ASX guidelines, financial modelling cannot be announced as part of an Engineering Study.


Q. Are additional studies needed to secure funding for DRI concentrate production considering the positive Scoping Study released in August with over 35% accuracy?


A. So this will depend on the requirements of our equity and debt investors. Some of the potential investors are satisfied with the level of Studies performed to date - and remember we did a Feasibility Study way back, and we've done various pre-Feas and other studies over the years. But other companies have indicated that updated estimates need to be obtained mainly because of the high level of inflation for equipment and labour pricing in the US.


Q. Are there immediate plans for company monetisation, considering Pig Iron is still a few years away?


A. So monetisation will occur at different times for the various products – so Biochar, Iron Ore and Pig Iron. And that depends on the time needed for funding and then construction.

So probably the first cab off the rank should be Biochar because the capital cost is the lowest for Biochar, construction times are the shortest, and we could be in production around 12mths after receiving funding for the Biochar.

Probably next would be Iron Ore concentrate in Nevada. CapEx is going to be higher than the Biochar, the equipment lead times got to be longer, but we plan to be in production 18 months after receipt of funding.

The Pig Iron plant, that's going to take the longest. It’s got the highest CapEx, it requires significant environmental permitting wherever we build it. Therefore, revenue from Pig Iron could start approximately 24 to 30 months after financing.


Q. Were you expecting a binding offtake agreement to take a few months to secure? Are Magnum any closer to securing a mining offtake agreement right now?


A. Yeah we were expecting this to take only a few months, and we targeted the end of last year for the first offer. We received indications that we would, but unfortunately we didn't.

However, both Mitsubishi and Anglo continue to work with us, and they’ve both indicated they are working on offers to us.

In addition, we've been approached by two other trading companies in the last few months, and they wish to offer offtake agreements. So they now are performing due diligence on Magnum as we speak.

So these offers are obviously very important for small companies like Magnum, but we're not high priority to these large companies. So we are just going to have to wait for them to go through their due diligence, through their internal systems, get their approvals, and then get an offer to us.

So their due diligence has been pretty thorough. For example, last month one of the trading companies wanted to confirm the port and mine visually and they sent three engineers from overseas to the US for a week. Another trader has just asked for 100 kilos of concentrate to be sent to them for testing, and so we had to send our team in Nevada in Winter up to the mine, dig and crush several hundred kilos of ore by hand and then be sent to a lab for grinding and magnet separation testing.

So it's ongoing …and in conclusion, we've got four trading companies looking at it. We expect offers soon. But I can’t confirm when they’ll be received, unfortunately.


Q. What reassurance can the Board provide to investors that they are capable of delivering this project?


A. Well I'm not the Board, so I can't speak for them, but I assure you I am working as hard as I can to land investors for the Iron Ore mine, the Biochar plants and the Pig Iron plants.

We’ve received positive responses from many investors and as I said we've got eight companies now in our data room performing due diligence. And these investors include off-takers, which we've discussed, equity investors and debt providers.


Q. What is the strategy to fund the Buena Vista iron project?


A. So the strategy is first, let’s land an off-take agreement - which we’re working on with the four companies. Then we’ll follow by - there’s your royalty streaming, equity investors and finally some debt funding.


Q. How does the board plan on raising future funds without considerable dilution given the share price is half of the last raise?


A. Yes, it's obviously an issue. The Board’s aware that raising capital at this present share price would be very dilutive, and so they are pursuing options that will not be overly dilutive. And these include the use of the convertible note facility that was already in place.


Q. What is the current time line to produce DRI?


A. So we won’t ever be producing DRI. We plan to produce iron ore concentrates that will be supplied to a customer that will pelletise these concentrates to produce high-quality pellets that will then be fed into a DRI furnace. So we're not producing DRI - it's iron ore concentrate into the DRI market.

So timeline is as I said earlier for the concentrates, we hope to be in production around 18 months after receipt of the funding.


Q. What is your long-term vision for the company?


A. So my long-term vision is to be a fully integrated supplier of raw materials to the world steel industry by owning several small Iron Ore mines and converting the ore into green Pig Iron. The reason for this is that the bulk of the profit in steel making is not captured by steel makers, it’s captured by raw material suppliers. This is shown by the large profits that Rio Tinto, BHP, Vale, etc make on their Iron Ore sales. But steel companies, they barely break even on average. They can make a profit in a good year but also make huge losses in bad years. And on average, they don't make a lot of money. Meanwhile, the raw material suppliers they keep making large profits. So the money is in the raw materials.

Today all the good, large low-cost finds have been bought by Rio, BHP, Vale, etc and so we’re left with smaller mines that generally are uneconomic for the direct sale of ore. Therefore, a different approach is needed to monetise these smaller mines, and the best way to do that is to produce a higher-value product such as DRI-grade concentrates or Pig Iron.

The Buena Vista mine is the first of several projects we’re investigating, and this model we can replicate it many times in several parts of the world. We’re looking at projects in east part of the US, South America, Europe, North Africa, West Africa, South Africa, the Middle East, Asia and even Australia.


Q. Can you provide some more information about who MidMetal are and who is behind the company?


A. Yeah sure. So MidMetal is a Saudi registered company that’s owned by executives from Hadeed and Maaden. Hadeed is the largest steel company in Saudi Arabia, and Maaden is the largest mining company. So MidMetal has good relations with Hadeed, and they have signed an LOI with them to supply their DRI and steel plant wastes to MidMetal. MidMetal has also received certification from the Saudi government’s new SGI initiative that funds projects that will build and decarbonise basic industry in the Kingdom.

So I joined MidMetal last week in our first meetings with the Saudi government (which included their National Industry Council and their Ministry of Investment), and the Saudi government is very keen on our project which will clean up environmental waste while producing a green product and creating new jobs.


Q. What has to be achieved prior to being able to list on the NASDAQ?


A. Well this is quite a lot of work at the moment. So we’re in the middle of an audit by US auditors who are going through the accounts over the last few years from scratch. They don't take previous audits and accounts as given. So go through everything over the last few years – contracts, accounts, everything. So getting emails every day from them asking for more details for everything we've done. It’s pretty hectic, but they expect to be complete in the next 3 months or so. And when this audit is complete, their report will be sent to NASDAQ and then we can proceed to the next step which we aim to complete by the end of the year.


Q. Can you provide an update with MOU's sitting with MidMetal and Mitsubishi?


A. Yep. As I said earlier, we continue to talk with both MidMetal and Mitsubishi. As I said, with MidMetal we were in Saudi last week meeting them to discuss the Saudi government's 50% funding of the HIsmelt plant. The next step is to extend the discussions with other steelmakers in the Gulf to discuss supply of waste materials, the off-take of the Pig Iron and potentially equity investment.

So for Mitsubishi we continue providing them with information arising from their due diligence. We hope to receive an off-take offer from them soon.


Q. Can you provide an update regarding the US Appropriation Committee approval process?


A. Yeah. It's all been very quiet on that. The bad news on that is our supporter was Senator Manchin from West Virginia. Senator Manchin has now announced that he has resigned. So a major supporter has disappeared from that, which is not positive. So we're not holding out too much hope on that at the moment. But I'll focus away from West Virginia now to Saudi Arabia.

So the West Virginia efforts we’ll put on the back burner. and we’ll concentrate on Saudi Arabia.


Q. What do you have to say to uncertain investors?


A. Well it’s an uncertain industry. But I think you’ve got to look at the big picture, the fundamentals. The fundamentals are there. The growth in DRI is massive - as we found out, it’s even bigger than we thought in the Middle East. To go from 5Mt to 60Mt, that's not a small increase. That’s to go from …you know, Australia produces 5Mt. They are going to build 12 Australia's in the next 10 years! That's one steel company!

So the fundamentals will drag us there over the next few years. It's going be a different industry than the Chinese blast furnace grade ore. It is going to be all about DRI in the next 10 years.

So we have the right product. We have a short time to monetisation much shorter that other magnetite mines. So the fundamentals are there. The critical thing now is timing - you know, can we get the funding in time to get things moving. That's the critical point.

So yeah I would concentrate on …that's what I'm focusing on. I don't focus on the share price. I need to get investors as soon as possible and get this thing built.


Q. Any final comments from yourself, Neil?


A. I think I've said it all. We continue to work hard. I have the full support of the Board.I pivoted this Company from DSO to DRI-grade concentrate and Pig Iron, and each time I’ve changed, the Chair, Anoosh, Matt Latimore the other Director, very positive – Athen Lekkas, the third Director, more than positive. He's been actively involved. Been a great support to me in the financial world. We make a good team together. So as I said, myself and the Board are working hard to conclude this and get value for all the shareholders.

And y’know, the Board are major shareholders themselves. They’ve got skin in the game. So they’re working hard to satisfy the shareholders, as am I.