What to look for in a mining company - with Eric Desaulniers

hey i'm zach and i'm jesse and this is a special disruptive investing channel uh interview that we have with eric desalnier who is the founder president and ceo of nouvemon graphite up in canada thank you so much for joining us today eric thank you very much zach thank you jesse all right so we've been doing episodes now on lots of ev tech companies um and because everyone's writing to us nowadays saying how can i get into this evtech revolution and this episode is all about how to get into ev tech but through something you might not have considered which is mining companies and that's why we've got you here you are the president of a mining company you know everything there is to know about mining but we don't know a lot about it so let's get into it here if i was new to mining and i was originally a couple years ago my first thought was i'll get into some big mining companies so i can't go wrong so i invested in like albemarle and vale and sqm because i was like they're multi-billion dollar companies what do you think of that strategy i think they are not a mining company really they are chemical companies so that's the complexity so now we're getting into the battery material space uh the mining part of it it's you know it's way through it so albert marley sqm are more like chemical companies so there's a lot of processing that need to be understood and and all as well as the mining need to be understood everything needs to be working right so that's even more challenging to invest in the battery material space okay so that i feel good because as i started to learn i was like yeah this doesn't seem like the best way to play this so then i started getting into what i consider mid-size mining companies things like uh piedmont uh nouvemond karora namaska and so forth and these are companies that are you know in my evaluation from 100 million dollars to say uh 500 million dollars and so they seem to be actively uh starting up their minds they're not junior mines they're not just thinking about mining they're actually starting to do it but it's pretty complex for me because i don't know all the chemicals that go into a battery i know about lithium and that's about it what should i be thinking about yeah i think the for mining the if you want to invest in mining the biggest minerals out there it's probably nickel nickel is really uh big in mining it's bigger than the typical lithium or graphite so nickel is is very interesting there's large nickel company and the challenge in lithium and in graphite is there's no large mining company that are pure plays into a graphite and lithium there's only actually chinese companies so it's a it's different in nicole there are you know advanced large companions are mining nickels since a long time so it's a it's a bit more mining but the challenge for you probably is zach and jesse is just is it a real deposit or not so you need to make sure that yes you want to invest in the team and lithium but you need to make sure is there a resource and there are regulations on different stock exchanges so there's there is the jorg resource in australia on the asx exchange there is the 43-101 regulation in canada i would say in the u.s the challenge the the the reporting issuers in usa are not uh regulated under any of uh very strict mining regulations so it's a it's it's an added challenge for investors in the us i must say okay so the big chemicals then that i should be looking at the big minerals are lithium nickel you just said graphite and anything else that i should be thinking about to get into this play copper you know in an electric car there's much more copper than uh in an ice car but the copper market it's a much bigger market it needs more growth to move the needle so for a nickel it's roughly a 2 million ton a year market so now we're expecting a million tonne more needed of nickel by 2030 so it's a it's a 50 increase roughly so the it is significant for copper uh yes it's an interesting growth but it's not as much impactful compared on graphite for instance for flag graphite it's a 800 000 market today and we need 3.5 million ton more by 2030. so the impact of this revolution on graphite is tremendous same with lithium it is transforming this niche little market into something more commoditized and where really it will get bigger now my problem is i want to get into graphite but the only graphite mines i've been able to find have been in australia and yours in canada am i wrong is there anything else i'm missing there's actually only one graphite mine in north america in activity now it's operating since 1989 and it's closed depletion and that's the challenge it's owned by a conglomerate it's imreas graphite and carbon a french conglomerate and you know it's not a pure play in graphite this conglomerate imris is specialized in niche commodity so they can do as small as bentonite granite and graphite was a niche speciality in the past and there's no pure place in the western world for graphite the only pure play that i know fully vertically integrated pretty similar to what what we want to do at the vermont graphite it is the company btr new energy group based in china it's worth 3 billion us dollar market cap they are the largest producer of an old material they're selling today to panasonic meaning tesla and most probably some of the graphite we do have today is coming from them in our cars you know so that's the first mover pure plain graphite but it's based in china as a hundred percent of the graphite market going in batteries it is now based in china so you're right there's not much opportunities in the western world and that's our our opportunity is to be the first mover and take a big market share thanks to the fact that we're developing this asset since 2015 we've invested 60 million dollar in it and we're the most advanced the largest future graphite operation dedicated for lithium-ion but does not there we have not much competition only juniors and early stage startups that are not ready to deploy the capital and they are under staff and they're not they're not advanced as we are you know now can you walk me through what it would take if jesse and i for instance tomorrow wanted to start a mine um i guess the first step is to find the the right minerals underground how did you do that first of all you need to have resilience yourself and be ready for a long journey and the journey starts you know ourself my background is geophysics i have an undergrad in geology and master in geophysics graphite is conductive in the ground so in 2012 i had the idea let's find the next graphite mine because the one we have in north america is running out so we started by exploration so you what we did is exploring you know close to a million square kilometers square so very large territory in southernmost quebec surrounding the mind of femoris and making sure we're with this we are discovering a large deposit so from 2012 to 2015 we had very patient shareholders who really believe in the technical approach we had like the case the depot ftq and early stage speculative investors and then we discover many showings we call it a showing so you go on the ground and you find graphite and you get excited after having this surveyed it with a helicopter you have an anomaly you go on the ground but you don't know the size you don't know is the metallurgy good can i extract the flake graphite efficiently from the ground so you need to do trenches or drilling and just to see to figure out what is the size and while you're doing that you're doing also metallurgical testing making sure with the flotation circuit an easy process you can extract the flake so it's a long process so 2015 we discovered a deposit we've invested roughly 10 million dollar in drilling it in all direction for two kilometer every 50 meter we put a drill hole and we define a resource then we know the resource is big enough we do an economical study on it so we do a preliminary economic study in 2016 pre-feasibility study 2017 bankable visibility study 2018 and now you need permits so when you start doing the permitting it's a four or five years process so in 2016 we started to do all the characterization of the ground what type of frog what type of mushroom what type of trees what will be the and what is the characterization of the site and then after that what will be the impact of my mining project in that environment uh so it takes an awful lot of time it was about ten thousand ten thousand pages on four years a lot of modeling a lot of studies and we will get the permit pretty soon like after four years and a lot of investment and we started a small demonstration plan as well so we're now close to 70 million dollar invested in the project to prove that we can do the right methodology we can qualify our product with customer and also that we won't have a major impact on the environment on anything so that's that's quite a process actually so that's why actually companies like the cell makers i'm not sure they understand the level of challenge they will have in the next few years when there will be a bottleneck on on mining projects because us from 2015 to full scale production in 2023 it's eight years and it will be in quebec like unseen how quick it will be developed the average is more 12 years so it's quite quite a process and especially in the western world where the the laws are defined and it's uh really well understood environmental process it's a long process but it's understood especially in quebec where mining is uh is something with with a lot of experts you talked me out of it wow yeah well because i mean i think a lot of people think of mining and they think of you know the old prospector and he goes out there with a shovel or his uh pickaxe or his seeing rod or whatever and he goes and he you know and he goes i'm rich and he goes yeehaw and he goes i have the and then they mine it and then there's a big hole in the ground which the cowboys come and they shoot up um i think that's what a lot of people think of when they think of mining they don't think that it's this long process they either picture the shovel goes in the ground and the oil spurts out of the ground um or they think of the prospector it's it's not this idea that you're going to be you know drilling every 50 meters to establish where you know what the actual resource is i was a guy like that in 2012 actually jesse i was running around with my beat map we call it a beat map and when it it's beeping on the ground it means uh it means there's something there's something conductive so i was a prospector as you say but not with my hammer with a helicopter and with a beep map on the ground to you know and you know i'm a successful prospector it takes it will have 11 years since i started a company before we'll be in full scale production and i never stop and it's the quickest you can do it from exploration idea to uh to full scale production well and this is where i kind of want to clue in our investors who are watching right now because you're in a unique position if you understand what's going to happen with evs like we do we know it's going to explode and you understand what eric just said which is that they're going to need graphite okay and so there's only a couple plays in graphite right now and when everyone kind of realizes it it'll be too late because it'll take 8 to 12 years or whatever just to get a mine up and running right yeah i mean i think that that's the thing so many people are used to suppliers and you go we'll contact that supplier will contact this supplier and you know suppliers might have suppliers and suppliers suppliers might have more suppliers but at a certain point the buck stops somewhere and that's going to be where you're pulling the stuff out of the ground um and so you don't have a supplier you are the supplier and so there is no like oh we'll just talk to x y or z um it it's it's that you need a mine right and all the steps that you just outlined are the steps that you need to take in order to open a mine you can't just you know tomorrow in your backyard be like oh wow pure graphite like the chances of that happening first of all slim and then all the different feasibility studies and permits and capital that you need in order to have that happen really show i mean i think that that's such an interesting thing because most of the times when we talk about businesses we're not talking about mining companies we're just thinking about oh you have a company oh you need more things buy more things but when the stuff's coming out of the ground right that's a that's a much limiting factor yeah totally um i want to go to the fact of why we're so excited about your mind because a lot of people that watch us are like why are you guys into mining like we're against coal mines for instance uh but you guys mine differently than other mines can you tell us what's different about how you do your mining yeah in 2017 when we were developing the project and we realized we have a real asset like we'll get into that business of selling graphite into the lithium-ion battery so you know we started to look at the technologies available and all you know the the market was going into electric fleet especially for underground mining because underground mining actually the ventilation and the air quality it is super important so for underground mining uh all electric equipment was already getting available you know so the first all-electric mine is underground it's operated by gold corp in ontario it's bourdon lake it started i think two years ago so based on the technology available and the partner we're talking to we decided to start working on the first all-electric open pit mine and thanks to the fact that we do have very affordable very cheap i drew electricity right on site so we are and and also the fact that we're not uh we're not using 400 tonners like that that you see sometimes in iron ore mine or huge gold gold mine we're using 60 tons truck so it's feasible to do it there's already trucks available all electric prototype so we decided to do a null electric mine uh and have all the on-site all the hydroelectricity needed to power that fleet and produce a carbon neutral flag graphite and a carbon neutral transform material into battery so that's uh that's quite something and and in 2017 it was risky investors were not sure again but now they are super happy it sounds like it's their idea now i must say the customers are asking for it so especially the european customer like the car we are at the forefront of talking with the car makers in the past miners were not talking to car makers they didn't need to do that now they need because the car maker need to sell a reservoir full of minerals and this is key and the the quality of the car is the battery so so now the batch so they need to develop this expertise they need to uh and and the car car makers are selling to consumer who are the less amount of carbon footprint possible and it's translated by penalties in europe and i'm sure 100 it will be translated in penalties in the u.s soon enough when our new elected president mr biden a lot of experts believe he will be the greenest president ever i'm really looking forward to see that so when we talked to a customer in europe and now he is paying tons of penalties for all the icu cars selling to decarbonize his supply chain and we offer a carbon neutral product at the same cost than the chinese and localized in the western world to diversify his risk also in terms of diversification of procurement supply chain so we offer something very valuable to the customer and now our shareholder really like it so is this why you just set up offices in europe yeah exactly yeah so localization in europe is something important so for us we want to produce a hundred thousand ton in quebec you cannot move the deposit and deposit is right there and you want to produce using the most hydro electricity possible the the last final steps of the process to do battery battery grade material are not so energy-intensive so we can do it closer to the customer potentially and it is something that the the european customer are interested so we are evaluating making the first big capacity in quebec in bitcoin core not so far away from our mine site but then duplicate those modules in europe first and then potentially on the west coast in the u.s so i have modules that we can duplicate easily and quickly rather than a huge transformation plant all at the same place so that's why we've opened an office in europe exactly is to be in close contact with with our customer and especially during the covid i've been in germany during the covent once and then you're stuck two weeks doing the quarantine afterward here in canada so it's not super efficient in the future so rather and we've hired experts over there that were working for a major company in the past and they know all the customers so now we have a very good team in europe and that's the thing to do we need we need to be closer to the to the customer and i really believe in the lithium-ion battery space it will become a little bit like the lead-acid batteries it's still today the biggest battery market is the lead acid battery and the lead acid battery is recycled 99 percent it is very localized production because every penny counts and when you hear mr musk you see that every penny comes you need to develop a project that is the most lean and mean less cost possible and offer value to customers like carbon neutrality traceability good localization but be ready to to be low cost if you want to be successful you know that's the craziest thing i think i've ever heard you i'm sorry you're you're the you are making a mind where you're going to be uh you know creating graphite and you're saying that you want your materials that you're mining out of the ground to be recycled as opposed to you having to sell them new ones i mean most of the time you're not going to hear the producers of of products saying that you want them to be reused by the people who you've already sold them to yeah but you know if you wanna we need to electrify a billion car one billion car roughly that's what is on the road uh plus or minus a few million so a billion ev means a hundred million ton of graphite okay 100 million ton of graphite we can do it once maybe twice but we cannot do it more so if you want this to happen we need to recycle the the materials and the most successful producer in the future will be the one that will be able to integrate in their production line recycled material and we are in very advanced discussion with actually three different recycling companies where we can partner because the the process we are developing especially our purification furnaces using cheap hydro in quebec and also co-located with the largest chlorine supplier in the world because we need some chlorine in the purification process so it's much cheaper for the recyclers to do business with us and give us their black mass of graphite rather than themselves investing in all that infrastructure and that in that capital to purify and and reintegrate their their product into a final anode material so for the cat outside the recycler exists today only for the cattle side and all the fancy minerals in there they don't it's not a priority for them to work on the graphite so it's an opportunity for us to to be well integrated in that market and as i said earlier we're not only a mining company now we're also a chemical canadian we're an advanced material company so if the feed comes from my pit or the feed come from a recycled battery i don't care i will be able to process it greenly and resell it and then integrate it to my my product offers and you need to do that and if you're not doing it someone else would do it so it's our job to really do it efficiently so you had to know all of this well in advance you had to think that lithium-ion batteries were going to be the future because that was the reason you kind of got into graphite and then you're thinking okay i want my graphite to be basically powered through uh lithium-ion batteries and also you know that once they start to be recycled you're going to be able to do some of the recycling process in that space so how did you get so far ahead because you started really early what made you think that lithium-ion batteries were going to be the future back in you know 2015. actually in 2012 when i started the company it's the first time the graphite prices started to spike graphite prices were in the 3 000 a ton and today they are 1200 big so so it's it is it is still a small market and every fluctuation in offering demand is impactful so in 2012 speculators were already starting to talk about the eevee revolution and then you have in 2014 tesla announcing for the first time a gigafactory if you remember so investors started to be interested into into graphite you know so so since 2015 we're really talking with anyone interested into that market and we have a lot of expertise in quebec like i draw quebec here it's a state-owned company who's producing a hundred percent of our electricity which is hydro we have working in the last 30 years on lithium-ion technologies including recycling and including the anode materials they have over 800 patents so they are very advanced in the in the know-how so we've made the deal early in the project in 2017 we've made a deal with hydro quebec so we we we got to know a lot about the expertise needed to transform the material and also what is feasible and so we're really advanced now in the in the transformation into a node material and that's something quite important to position yourself properly with the customer i know i was a little confused after tesla's battery day um there was so much information thrown at us that i couldn't absorb it all obviously the 4680 cell we got that but when elon started talking about lithium and other things i think a lot of people walked away with kind of not the wrong message but maybe they missed a few messages what was your take on battery day it's phenomenal the amount of innovation that was proposed during the battery day it's phenomenal and you know i've read probably like you i've read a lot of books on elon musk and how tesla started with jb's trouble you know it started easy like it was okay let's put the cells and the in the 7000 cells in the car and it will work now they're getting in the real game you know they're they're trying to improve what is the uh what is stuff that very smart people are doing since already some decades you know so that now they're getting in the real innovation of manufacturing and we'll see if they are successful never bet against elon musk i agree with you but everything that we're proposing is something very difficult to achieve and very that that but that need to achieve and they have the right people and they have the right mindset to make it happen in regard to the anode side that was the you know the last part of discussion we were watching the battery day with some team members in the company and when he announced that the silicon will be more and more added to the anode material to improve range we start we all cheered said yeah that's a very good news for us guys yes sir everyone we're instantly happy because it means that tesla is not trying to change the technology in regard to the chemistry the chemistry will still lithium ion for a while and they are just reinvesting in it you know they are they have some strategy to diversify the cattle material to help on the procurement side because they have some worries on the nickel side so lfp there's no nickel so it's good to diversify the cat outside but the anode side will always be graphite with silicon today they're using five seven percent of silicon and they're they're planning to add up to 20 30 of silicon seriously as i said do do we do we want to produce a hundred million ton of graphite for the whole world to elect to electrify the whole fleet in the future or 70 million if we if it's 30 silicon doesn't really matter graphite will just incrementally be needed more and more and more in the future so it's a very good things that tesla is reinvesting restating that this is the technology for the future i want to go back to uh something that really attracts me to your mind and this might be you know superfluous to some investors but the fact that you i just saw a recent video that you're making biking and hiking trails around your mind so this isn't the typical like we're just going to destroy the earth this is like we're going to return it to as pristine as possible can you talk to me about like what came into that kind of planning now you know we're building a mine about eight kilometer from the town hall of this small municipality named same shell listen so same shell they say this little town is an industrial town but since 2007 the largest shop over there closed the forestry mill it closed and 400 jobs were lost so for them it used to be very industrial but since 13 years tourism became to be a bit more popular in the area there's a big lake the lac touro where there's a big hotel fire five-star hotel fantastic place on the opposite side of our mine so the tourism becomes something important in the area so it's our job when you come with the mining project it's not exactly the first thing that cottagers and tourists want to go see although on malartic in in quebec there's the largest gold mine malartic mine there's about 15 000 visit per year so it could be a touristic site very interesting one so there's a huge crown land that is not used close to our project and we were and there's a great mountain where you can do about two kilometer of downhill and i do a bit myself of mountain biking electric one obviously it's easier it's easier it's so fun to do electric mountain biking so i started to do myself some ride in the mountain and we've hired one top expert doing uh mountain biking trails here in quebec and he came and he said oh you have a very nice site so it's a small investment for us to attract a lot of the tourists who would like to see our mind from the air from the mountain and also start doing some mountain biking so for us it was a very good way to give back to the community and be helpful for tourism instead of being harmful and so that's that's really part of our integration plan to the local community and i'm very keen to to see it and go do some mountain biking there yeah i think i want to do that when we get the cyber truck we should head up to canada hopefully cove it'll be you know yeah over by then and we can come visit load it up with some uh some graphite well i think it loaded up with some graphite we'll we'll take it somewhere um the other part of this that i think a lot of investors don't fully understand is your new partnership with olin because i'm not a material scientist so i don't fully understand how that works can you explain how that partnership is going to help yeah i'm not sure if uh it's not the same type of investor probably not a lot of your of your audience probably are invested in all in all in is the largest plural kelly supplier in the world and also the largest small ammunition supplier to the us military it's winchester so it's a great corporation great partner for us they are located in quebec they have one plan there and they are producing chloral kelly so cl2 chlorine it's our primary chemical that we need and they are also producing naoh and h2 so they're taking salt basically electrolysis and they're producing those chemicals so for us we were looking for a site where we are the closest as possible to our chlorine supplier so there's no place closest to them than right in their infrastructure so we are building in a an old electrolysis all we're installing our two first commercial scale purification furnaces and we have direct access to the chlorine supply but also the naoh so that our reaction is the reverse reaction compared to the the reaction so we're raising temperature injecting chlorine and scrubbing it with naoh to produce a brine a salty water with impurities that we give them get that we give back to all in and that's they have all the systems to remove our impurities and use the brine as a feedstock and sell us back the chlorine and the naoh so that's really what we're developing with them it's all the r d necessary to to to pinpoint the process with them and make sure we develop a fully sustainable process and what i mean by sustainable it means also low cost and also you know sustainable environmental wise so we have secured the land across the street when will maxed out the capacity in their facility we will be able to expand across the street and we have secured the land because we will want to use a pipeline and be adjacent to their their facilities is very important so we're really fortunate by the agreement we have we have a five years uh exclusive agreement for uh for their for the location we're in and we're looking forward to deploy more capacity like that potentially elsewhere they are also producing chlorine you know that's the i think the true way to be fully sustainable now when i was watching your earnings call i didn't quite understand how you're basically increasing the value of the product you take out of the ground um how how is that possible like you you you take it out of the ground you refine it but then you're doing something else you're adding some other value to it what is that step so when you take it out of the ground you crush the rock you float it and the graphite is hydrophobic so with the flotation circuit you're able by a sequence of grinding and floating you get to 98 in our case purity so you have a flake graphite that's not what the battery maker wants so we can sell some of those those flakes and specialty graphite and refractory bricks and foil for iphone 5g e dissipator there's a lot of different application fuel cell vanadium redux batteries there's a lot of other application but if you want to sell into the lithium-ion battery space you need to you need to first purify your flake make it a hundred percent or 99.95 that's what we do at all in and then you need to shape your your flake you need to make a ball with it so you need to micronize ferrule nice and then do a small coating of carbon around it and then it's ready to sell to the customer currently the largest producer in the world is btr new material group in china and these guys are selling roughly sixty eight hundred dollar per ton so you take a product that was valued roughly fifteen hundred us dollar per ton when it was a flake and you can sell it sixty eight hundred dollar a ton to battery maker so in the you increase and our strength actually with all in is to have a three cents per kilowatt hour ijo electricity rate much cheaper than what the chinese can have and be co-located with our chemical supplier and have access to our mind that is very close to provide the flake at a very affordable cost so being fully vertically integrated like that it's the way to create value and have the best margin possible for for making the value added product so right now if i'm say tesla and i want to get graphite it doesn't look like i have too many choices it sounds like china is my big choice and they're not green they make you know their power is coal powered but now it looks like soon i will have nouvemond as a choice um what what advantage is that to auto suppliers in the world exactly that's that's the whole point that's quite interesting so currently they supply themselves 100 from china we are developing a project that can sustain the cost parity with the chinese but that's not what we want to do we want to give more value to our customer and how we do that we they need to diversify their supply chain and they need to diversify it with local suppliers like us that are providing a carbon neutral product but on top of it fully traceable so to to certify that it is coming from this pile of rock for instance and this is that carbon footprint that is certified so we are offering we don't want to be the providing 80 percent of the needs of tesla or all the the automakers in in the western world that's not what we want to do we want to be the second supplier that provides de-risking solutions for them fully carbon neutral solution bring more value to the supply chain so their supply chain is more resilient and it's more de-risk that's really our positioning and that's quite important the market is so big the growth is so important that we need to we need to find our niche and get it right for our shareholders so when you're talking about uh carbon neutral uh mine we're talking about the the trucks themselves they're going to have lithium-ion batteries in them and so not only does that mean like you had just said that the uh you know the companies that want to buy your product will have this traceable carbon neutral thing but how common is it for an open pit mine to be fully electric no it's a totally uncommon we are actually the first uh open pit project out there there's no other open pit project but the opportunity is not only for mining in our case it's also for quarries and construction site the type of truck we're buying 60 tons it is also the one used mainly in quarries and construction so the market is much bigger than typical 400 tonners that that the big iron ore mine can use you know so it and it's not only lithium-ion powered we are in the trade-off now to potentially use uh also hydrogen fuel cell powered uh solutions so we are in the request for bid as we speak to find all equipment supplier oems that are developing zero emission solutions so when the the the energy requirement gets a bit bigger the fuel cells are offering a lot of flexibility and could be quite interesting so we're open to listen at both solution as we speak but there's quite a few a few companies that are developing solution today that are public is the company e mining and um in switzerland are operating a 60 tons truck since a few years already in a quarry there is volvo or operatic and quarry in finland all electric as well so there's a lot of options available and we just want to make sure that we cover it all and all the 60 different pieces of equipment we'll use on our sites is fully electrified the easiest one was to order five cyber trucks so this is uh already in one rivien and the rivien it sounds like i did the configuration a few weeks ago and it sounds like next summer so i'm really keen to see that happening yeah we're getting one hopefully in june so yeah that would be we're excited about the rivien as well when we're looking at some of these mid-sized companies i'm looking at the stock price and i'm looking at their earnings and i'm like they don't have any earnings so like how do i judge normally i judge a company with a p e ratio and i see that okay they've got nice steady earnings or growing earnings but they're not uh it's not growing so like uh can you help me hear it all eric like what should i be looking for since i can't use that metric yeah actually a pro you need to look at the future earnings and how much capex is needed to get to get to that earnings and what dilution it will do on the the shareholders so that's what you need to look at when you look at mining project and also realistically when will it be in production permitting is key and sometimes permitting is overlooked by company and they do have a resource in the ground but they didn't start the permitting so you know for a fact that you know they won't be producing any time soon if they didn't start properly the permitting so there's quite a lot of few things to look at and for sure they will have zero earnings until uh until they are fully in production and then boom big earnings 100 million a year so that's uh that's uh that's a challenge when you're you're a newcomer in the mining industry now um there's a company um piedmont and there's a company leading edge materials and both of those are getting a lot of excitement um but let's talk about piedmont for example a lot of people are conjecturing that maybe like tesla will buy them out and so my question to you is what do you think does tesla interested in getting into the mining industry or is that they were just basically trying to get some excitement for investors to put money into mining um you know i don't know exactly what is the strategy of tesla obviously but when you look at it they cannot deploy capital in everywhere in the supply chain it is irrealistic you know they already have a lot of capital to deploy and to control the cell making that's already quite a challenge so i don't see them coming and finance a lithium mine a lithium conversion plant and graphite mine an anode conversion plant it's too much capital for a single company personally that's what uh that's what i believe i know those guys and also they want to rely on great technical team i know the guys that pin monkey lithium have built the right team there and they can't do it and i think that's what we've seen in the piedmont situation they were able to secure a long-term supply agreement and uh i believe that's that's what they should do they should be there in the supply chain offer the comfort that the investor need to write checks to build projects and that's what we see in month so uh so that i think they are playing their role there jesse and i are long-term investors right so when we invest i usually think five years ten years before i'm even going to think of getting out of a stock when i'm looking at mining companies should i have that same long-term view or should i just be looking at like getting in now and getting out next friday that's a good question actually sometimes it depends it depends sometimes there's a there's over excitement to early and mining projects and sometimes it's undervalued and it should not you know so it's difficult to gauge but mining investors the most successful one are the long-term investors especially the one we have in our company the palingers group is a good example these guys want to deploy hundreds of million dollars so when you deploy that kind of money you need to take your time and you need to do it right because mining is cyclical so you need to invest when anyone else and no one else is doing it position yourself in the supply chain when no one else is doing it and they're very smart about it they just purchase with the quebec government the nemascal lithium asset they've positioned themselves in our company and they are truly instrumental in making sure we do all the right steps they are true minds builder who did it numerous time in the past and they are thinking exactly like you zach they're thinking 10 years time frame when the cyclic the cycle will be much more interesting and then in the hype that will be the right time probably in 10 years from from now when the project will be fully uh producing at the best best evp ev ebitda possible and that's w when you exit so but you need it depends the amount of capital so you want to invest in and the size of the company that's all stuff you need to look you know now jesse and i have been really enjoying your latest uh publicity materials especially your fun ones with uh rick from rick and morty um and i got a question for you which is that you know at the end of some of those you're you're doing the funny routine where you're at your desk waiting for the phone call from elon have you gotten that phone call from elon yet obviously we cannot go in any specifics with the customer we were just using uh public information to make fun of of a situation but uh obviously this is uh elon musk is kind of a figure in the space i think he's doing a tremendous great work out there and it's great for us just to do um a bit of a clean day we say in french to uh to the to the work he's doing and hopefully that hopefully you saw my video i'm sure he has well thank you so much for joining us today eric thank you for all the advice i'm sure that our viewers are thankful to we'll be checking back in with you soon and hopefully in the not too distant future we'll be driving up there and taking a look at your beautiful space great thank you very much zach [Music] thank you so much for watching this episode of disruptive investing be sure to like the video and subscribe click the bell button to be notified when new videos come out

Channel: Disruptive Investing

Views: 8,647

Rating: 4.9815245 out of 5

Keywords: mining, investing, tesla time news, now you know, zac, jesse, news, update, elon musk, model x, model 3, model s, model y, supercharger, nyk, electric cars, ev, technology, science, funny, autopilot, electrek, roadster, next generation, tesla, tesla news, first look, red model 3, ev adoption, roadtrip, road trip, urban, charge, automobile, test, future, learning, farm, sustainable, living, farming, apples, tractor, machines, tech, electric, canada, graphite, mine, battery, invest, pencil

Id: Ht4rOjEMqlA

Length: 43min 39sec (2619 seconds)

Published: Fri Dec 11 2020