How did the story of Lomiko Metals start and what is your vision for the future of the company?
When we came together, we recognized that there was a localization that is going to happen for the new energy transition we are in. It is as much about reducing greenhouse gasses by putting EVs on the road, as it is about moving away from the China axis. That being said, when we approach the way that we do our work, we are calculating our Scope 1, 2 and 3 emissions. Unfortunately, there is still heavy investing in traditional cash flow businesses, including oil, because the interests are high and we are in a recession. However, oil & gas does not have a 30% year over year demand growth profile, and what we are offering is a never-before-seen opportunity over the next ten to fifteen years. Finding players willing to invest in earlier than pre-feasibility projects is no easy feat and it takes a lot of time but we are keen on continuing to show this is the path that we need to take for a sustainable feature. Hopefully, we will begin to see improvements towards the end of this year once capital is going to be deployed into projects like ours. We are led by the desire to impact communities in a positive way and we know that by working with our allies we can make a difference in processing minerals and creating a brand with a premium price for graphite.
Why do you think the market and society are not realizing the urgency of this transition?
It is easy in terms of people's philosophy to have accepted that the mining process is taking place elsewhere but the truth is that we need 97 new graphite mines to fill the increasing demand over the next five years. If some society members identify as climate activists, they have to acknowledge that extraction in the U.S. and Canada is far more ecofriendly than the other options on the table. In Canada we have a reconciliation process with our First Nations and everything that is going to be developed has to be done justly and responsibly, with them as partners. However, building trust and moving away from suspicion and past legacies to establish a partnership model takes time.
How promising is your La Loutre project?
After an updated mineral resource estimate, we effectively tripled the in-situ graphite at one of the deposits, going from 23 million tons indicated to 68 million tones. When you combine this with the metallurgical studies conducted over the last few months, the result is ideal both for SPG graphite and for anode. Since we are in Southern Quebec, we have the opportunity to develop a project at just over CAD 200 million, and with a minimum 15-year mine life in a hydroelectric infrastructure system. Consequently, the NPV relative to CapEx is two times multiple at today's prices.
Why is graphite going to be crucial in the years to come and what other materials have an equally great potential?
Natural flake graphite represents 95% of the battery anode and, at the moment, all automakers are completely dependent on Chinese resources that are being blended with synthetic graphite which does not perform as well and is using petroleum coke, leading to five times more emissions.
Graphite extraction is a fairly simple process and it is done by floating it to the top of the circuit with three cycles of washing, the purity obtained being of up to 99,7%. For the last ten years, the market has been stable, with 1,4 million tons per year, because there were only 5% EVs on the roads. Now, with ICEs being phased out and more electric projects being developed, there is going to be a shortage of 8 million tons a year by 2040.
When we started Lomiko Metals, we looked at all the 31 strategic minerals with which Canada is endowed. Besides La Lutre, we also have an early-stage lithium project, in the Nemaska Lithium area, that is in the geochemical sampling phase right now. The rare earth opportunity is abundant in different areas, but these materials are also suitable to be extracted from waste coal stockpiles, offering metallurgical coal companies a new view on doing business.
What is the current situation regarding policy in Canada? Do you feel supported in the development of your projects?
There is the Canada Growth Fund consisting of CAD 15 billion of investment but its focus is more on downstream technology aspects, so we may say that there is still a funding gap to move from resource to reserve. The U.S. has now considered graphite and many other minerals as domestic, and, as a result, we could tap into that alternative financing source. So far, federal and provincial governments have been very helpful in connecting us with automakers and keeping an open line of dialogue with other institutions. We hope that in the future we will be met with even more support, especially in the investment side.
