Dean Braunsteiner

So gearing up for another engaging panel discussion. We’ll explore how accelerating demand for critical minerals is transforming the industry. The conversation will delve into how companies are adapting their capital allocation strategies, balancing growth, decarbonization initiatives and ongoing collaboration with indigenous communities. We'll also examine what these shifts mean for the future, especially as demand for key resources like copper and lithium is set to outstrip supply.

Joining me for today's session is Anthony Vaccaro, a recognized leader in the mining sector. As president of the Northern Miner Group, Anthony oversees prominent mining media outlets such as The Northern Miner, Canadian Mining Journal, and mining.com. Throughout his career, he has been a steadfast advocate for strategic mineral development and the advancement of Canadian mining, consistently emphasizing the importance of resource independence.

Anthony's leadership and expertise have not only shaped industry dialog and influenced policy, but have also earned him a place on the board of the Canadian Mining Hall of Fame. Anthony, welcome.

Anthony Vaccaro

Thank you very much, Dean, for that kind introduction. It's always nice to see you. So, yeah, what, what are we going to dive into today?

Dean Braunsteiner

Yeah, well, let's get right into it, Anthony.

We're in unprecedented times, I'll say. You know, global trade is being reimagined, there continues to be a rising demand for critical minerals. You know, how are these shifting geopolitical dynamics across the Americas shaping mineral exploration?

Anthony Vaccaro

Yeah, listen Dean, you said it. This is my 20 plus years in the sector. This is the most exciting time. That is for sure. The most challenging, the most complex, whether you want to be euphemistic or not about it, it is, it's definitely a time for all of us to sharpen up our minds and really dive into what's going on.

In terms of policy and what's, how things are shaping up in the Americas. And I think the key thing is, it’s policy, right? Whereas when I entered the sector, it almost felt like the world was an exploration company’s oyster, you just, companies were just chasing geology. It didn't matter what part of the world it was in, whether it was in China, Mongolia, DRC. It was just about where's the next great deposit. And I think that is fundamentally changed now. I guess in some ways you could say policy maybe it's the new geology in terms of now it's about, you have to follow the policy, right. I think that is the really key thing to be cognizant of. Of course, projects with strong geological advantages are still going to be favored, and explorers are still hunting for them, but they can't do it blind to policy anymore. This is so critical.

I mean, we have a recent case right here in Canada with SolGold de-listing in Toronto to just take a London exchange list because of Canadian policy around not wanting Chinese investment in terms of Canadian listed companies, right. They have a big copper porphyry in Ecuador. Copper porphyry are notoriously very, very expensive to drill and develop billions of dollars. They needed financing. They weren't able to find it from Western companies. They felt their last avenue was a Chinese company. That meant de-listing in Toronto, right. We are seeing things that we have not seen before.

This is very, very interesting things. I mean, I think you look at another one to, for the viewers to consider, is the U.S. clean vehicle.

Now they are crediting only minerals that come into the battery supply chain from approved countries. So that's hard wiring the supply chain, right. That’s saying that unless you have a free trade agreement with the USA, it's going to be hard to get your minerals into the manufacturing base, which America, as we all know, is trying to really build up.

I mean, that goes, in terms of numbers, that's, right now, I think it's about 50% critical minerals have to come from favored nations. That's going to go up to 80%. Eighty percent of minerals in American produced batteries are going to have to come from companies that are considered to be friendly to the United States. So that is just, again, just a monumental change from what we're used to.

And then for investors, I think there's an investment component to this. And this is when you start to put this all together, you want to, it's about companies that do have mineral security partnerships. So when you have public finance and diplomacy, when they're allied together, they're doing that to kind of crowd in private capital for projects that are the preferred ones.

So you're seeing this and then you have an equity revaluation, right. You've seen this with MP Materials, right, our perpetual resources, both of them with big deals with the American government, both of them with massive revaluations on the stock price. So these are kind of becoming the new winners. And we're going to have to kind of redefine what we think of as a winner.

Now that's the stock market piece to it. But then you also have to look at when you're talking the Americas and you're talking LATAM, Mexico and Chile, right. They're actually going with a bit of a hybrid where they're nationalizing, Mexico's nationalized it's lithium. So and Chile's also done certain things along those lines. But then in Argentina, of course in Malay you're getting more privatization.

So it's a bit of a mixed bag. But everyone's kind of waking up to the fact that there's no longer policy happening on one's own, and mineral development and private investment in the other. The two are more interrelated than we've, than we've ever seen. And then how does that kind of, how do exploration projects kind of align into the refining piece?

That's what that's also what's new. Twenty years ago, the Northern Miner, mining.com, we didn't talk much about refining. It was about finding the deposits and developing them. Now, that refining piece is absolutely huge for the same reason, right. The geopolitical spheres, US sphere needs to be able to secure that whole supply chain. We're having more holistic conversations, and we're looking at how those deposits line up with refining capacity, which then brings in things like cheap power, and how do we build out this refinery. So it is a bit of a web and it's very interesting. And, it's more important than ever to stay on top of what's going on in geopolitics, and talk about what's happening in the sector.

Dean Braunsteiner

No, no, for sure. And Anthony, there's a lot to unpack there. And maybe I'll dive into just a couple of the comments that that you made.

And one is just around the financing, because the industry is going to need a lot of capital to bring projects to fruition. And as you said, that will create some interesting partnerships. So do you think there's a broader role for whether it's an indigenous community or a government to play in joint ventures or other ways to kind of participate where they wouldn't have done so in the past?

Anthony Vaccaro

Yeah, yeah, yeah, great point, Dean. The answer is yes. I mean, absolutely. But we're going to have to rethink about what that model looks like. So the indigenous pieces is absolutely massive, right. And that is the point I think that everyone's thinking on, and the smart minds in the industry and in government are, is thinking on because you can have the most mining-friendly policy. But at the end of the day, if you don't have the communities, if you don't have specifically, your question, indigenous communities on board, that's always going to be the bottleneck. So how do we really make it beneficial so that indigenous communities don't just tolerate mineral development, but actively get excited about it and want to be a part of it?

And we're moving away from these kind of very transactional impact and benefit agreements, IBAs. And it is going to have to be, I think, a co-ownership model. And the government signaling this, right. There's more loans available to indigenous communities. They've doubled out and they're up to like $10 billion in federal loans that are going to be available.

And that's smart. I think that's smart policy, right. It lowers the cost of capital for indigenous communities to get in. These are lower, lower priced loans. But you want everyone in the economic project, you want everyone to have a stake in it, right. It's not going to work otherwise for anybody. You want everyone to have stake in it. You want everyone to benefit from it going forward. So I think that is, that is the key. I think we are going to see much more of that.

BC has done well on this. They have their DRIPA law and that's all about kind of getting into where there's shared decision making between the indigenous governments, bringing them in on that planning level. And the idea there is if you can bring, if you can get this going, then the relationship isn't on, based on like just mitigating and it's not just vetoing something that comes down the line. It gets much more transparency early on, gets that early buy in, then gets everyone in a much better spot. So that's the trend. And I think that's a positive trend.

Dean Braunsteiner

No, absolutely. Great, great insights on that. And then the other point I just wanted to pivot back to, because you've raised it. And I know that there's been an acknowledgment that there really is insufficient processing and refining capacity outside of China. And lots of countries have talked about securing a supply chain. And so, the old model of, as you said, pull the stuff out of the ground, ship it overseas isn't going to work any longer.

How do you think government can encourage the development of more refining and processing capacity onshore here in the Americas? It seems to be a struggle at the moment.

Anthony Vaccaro

Yeah, you're right, because it's easy to say and then it's difficult to do. There's a lot, there's a lot there. I think one of the, but if we're going to kind of distill it down to the big kind of chunks, I think the biggest chunk is energy costs, right, at the end of the day.

So lower costs, energy jurisdictions, so places with good, clean, cheap power. So Quebec, B.C. hydropower are going to be in a very good position to receive. The government's got to spend more, number one. Government's got to spend more. Absolutely. Where is it gonna spend more? Can't do it willy nilly. It's going to have to go to low cost energy, low cost energy and clean energy jurisdictions.

So that is absolutely a big piece. I think it was a bit of a game changer when Indonesia banned all nickel ore exports back 15-20 years ago. And I was a reporter at the time for the exact date. But that was a complete game changer, right. Because that some ways to set the model, right, in terms of thinking about refining capacity and how this gets built out.

And, you know, the EU is definitely thinking a lot about this. EU ran studies where something like 40, they calculated about 40% of costs with their speaking specifically of aluminum, comes down to energy cost. So again, that's, I think that is the biggest piece to this is identifying where these are going to go. And then from there getting the community buy-in, getting the social license to operate.

And once you have those in place, think you can start to accelerate this a little bit more. I will say we did, we've been running something over the last few months, which has been a fun project and kind of looking at these geopolitical spheres of control, Russia being one, China being one, USA being one, kind of Western Europe, Canada, Australia, Japan being another one.

And then where does all these critical minerals, where do they sit in terms of reserves and resources, but also refining capacity. So it'll be no surprise to listeners. And once you get to refining capacity, whether it be copper, or rare earth, or antimony or any of these critical minerals, largely China. Okay. But when we were talking about the actual reserves, what's in the ground and the mining extraction, then the West is looking pretty good and I would rather be in that place.

I'd rather actually be sitting on top of the minerals, because you can build out refining capacity and we will see that, but it will take big dollars from the government, which we are starting to see, and it will take community buy-in, which that piece still remains a little bit of an open ended question I have to say.

Dean Braunsteiner

So, so then if we kind of bring that piece together, you know, what really is then the long- term impact on countries that have that abundance of critical minerals and what can government do today to encourage responsible investment, shape and develop a kind of a thriving mining industry that really serves all the stakeholders?

Anthony Vaccaro

Yeah, that's a, that's a big question. I mean, I'll point to a few things, right. In Canada, we have the critical mineral exploration tax credit, the CMETC, which builds on the METC, which was for precious metals.

So that's, at the exploration stage and to really encourage actually finding the materials in the country is a great way to do that because it takes the government out of trying to pick the winners. We all know that usually doesn't go that well and lets the investors do it, but they’re tax advantaged and incentivized to do it that way.

It's a 30% tax credit in the case of critical minerals. So smart tax policy I think is absolutely critical to it. Consent forward permitting is very, very important. So when you're dealing with your communities, you're getting that consent well ahead of time. We're seeing more offtake-backed financing, very important as well, to give kind of security to the project.

And then just getting that local workforce and the business participation into it. And you only do that when you're able to really show the environmental standards are top notch, right. And I think, again, within this conversation, the West is actually in an advantageous position there, right. Western companies generally are abiding to a higher environmental standard.

And given everything we just talked about, Dean, that only gets better. If we're saying that the projects that are going to be favored are ones that secure some kind of minimal security pact with the government, some kind of funding, well, the governments are only going to give those if the highest environmental standards are being met. So it starts to become, what's been set for the last 10-15 years that it's been a disadvantage to Western company having higher environmental standards than Chinese competitors, there's a way here to play this that actually becomes an advantage, right, where show communities and show the world that we are the leaders in the environment and get everyone on board. All of a sudden, a lot of the resistance to mining can go away and we can actually get these projects, well, I won't they go away, but be dealt with in a in a more amenable manner to everybody, and get things moving in the right direction.

Dean Braunsteiner

Right. So, so critical is sort of government policy around taxation, permitting process, and the West, as you said, has the, I guess, the ability to enforce higher environmental standards, which is, which is critically, critically important.

Maybe we'll just pause here for a moment, Anthony, and I’ll ask a polling question.

As we look forward, you know, to growth and expansion, it's important to understand the challenges that the industry is facing, maybe the viewers can take a moment and share their perspectives. You know, what is creating the biggest pressure on your organization's ability to really scale and expand?

And kind of while people are responding to that question, I think I'm going to switch gears a little bit here because we've talked about kind of what government can do. But then there's also just the general public and how do we, how does the industry kind of bring them along and understand the importance of mining? And I know, Anthony, the Northern Miner, along with industry advocates have developed this interesting campaign called The Great Canadian Treasure Hunt.

And for those of our viewers not familiar with this initiative. Maybe you could just spend a couple of minutes talking about what the inspiration was behind the challenge. And talk about why that's so critical.

Anthony Vaccaro

Yeah. Thanks, Dean. We think that we're on to something really fun here. And, we've enjoyed great industry support early on.

So our partners on this, include Agnico Eagle. They’re contributing a million dollars in gold coins that is actually made, come from one of their Canadian gold mines and minted in gold. Sprott Money is contributing gold coins as well. We're getting support from EY, from Alamos, from Kinross Gold, from the World Gold Council.

A lot of really strong partners on this. Mining Matters is supporting this as well. And what we’ve, the genesis of this is that Canadians are hearing more and more about critical minerals. They're hearing more and more about how mining is so important to this country, to our sovereignty, really, and to our future. But there's still a little bit of a disconnect.

I mean, a lot of Canadians, well they're not as, Canadian’s generally aren't as resistant to mining as some might lead people to believe. There's been enough polling on this and, Canadians are a little bit more favorable than other countries, the general public; but it's still not something they generally get overly excited about. You know, they hear very rational arguments about why mining is important and they accept those, but it's a bit of a ho hum, especially when you get into the younger generations. They don't really say that, you know, getting into the mining sector is one of their preferred sectors. So we thought, well, how can we start to change this conversation, get people excited because it is an exciting sector. I've been in it for 20 years.

I've traveled the world. I've met incredible people. I've seen incredible projects being done in the most environmentally responsible way, which is the norm, not the exception for this industry. So how do we do that? So the idea was treasure hunt, right? If there's one thing that is an emotional connector with the average Canadian, is they love the idea of finding treasure.

And treasure is gold in our industry, or is metallic, and our industry is all about metals. So okay, that's what we're going to do. We're going to have a treasure hunt. So we basically bury a physical treasure chest. It's only, it has a code in it. We're not actually putting the coins in yet. Get the treasure, get the codes, then you'll get your million dollars in gold coins.

We're also buying another 12 of them, worth $25,000 in gold coins somewhere across Canada. So 13 in total. The 12 municipal ones will tell people what municipalities they are in. And then the really fun part, Dean, is the clues to find this stuff are in stories written by the Northern Miner staff and professionals within the industry that have clues embedded in the stories.

And those stories are going to be about the great history of mining. So Canadians can feel some of the pride in the heritage of how mining built this country up. But they're also going to be about future opportunities, how the mining sector connects to the future economy, to the greener economy, because everything that is not carbon based is metal based.

So yeah, we're gonna have a lot of fun with it. And I think at the end of the day, it's all about connecting emotionally with Canadians, so they have a more emotional, excited reaction to this industry. And, we'll see where it goes from there.

Dean Braunsteiner

Well, as you mentioned, I mean, the industry is critically, critically important to Canada. And I think, as you said, bringing the population along to really understand it's importance, not just here, but do you think it'll have global reach as well, where it really demonstrates to Canadians it's not just about what happens at home, but how we're developing abroad as well.

Anthony Vaccaro

Well, there's that international aspect to it. This one is, is for Canadians only. But of course, we'll be telling the, to your point, right, what's really cool about the Canadian in mining industry is that it's the global leader in so many ways, in many aspects, right, in terms of technological expertise, in terms of valuation expertise, in terms of capital support, traditionally, although we could use a little more capital support.

But Canada is a world leader in mining, we’re and I always say to people, we’re, as Canadians we're very good at hockey. We all know that. We're proud of that. For a long time we produced a disproportionate amount of great comedians. We're pretty funny and we're proud of that, and we know that. But the other thing that we're great at in the world is mining. And we don't always celebrate that, and we're not always aware of that. So this is a way to celebrate that.

But even more than that, Dean, there will be an aspect of this that, we'll be awarding one international student and all expense paid trip, to the PDAC or the CIM to learn more about how mining is done in Canada as part of the treasure hunt as well. So we'll be flagging little international things. And who knows, maybe we'll think about doing, a treasure hunt outside of Canada for the international audience after we get this one wrapped up.

Dean Braunsteiner

Yep. No, no, that that sounds amazing. And I'm sure you've got a lot of uptick on that process. And, no that's a great, great initiative. Just finally, I thought I would touch a little bit on the fact that you are a board member of the Canadian Mining Hall of Fame, and historically, that's a very much a backward looking, you know, awarding those who were trailblazers within the industry to kind of acknowledge that and that's a great thing to do.

How do you think the Mining Hall of Fame is going to pivot or transition or think about how do you impact the future? So one thing is to look backwards, but is there an opportunity for the Mining Hall of Fame also to think about the future and how, you know, we continue to generate notoriety for the mining industry?

Anthony Vaccaro

Yeah. I don't know if it's a little bit out of the mandate. I think there's other groups and there's lots of great things that can be done. And I would say it's a great springboard to when you really celebrate greatness in the industry, that that's a springboard to inspire people, you know, to do great in their careers and to innovate and to be that next person.

I've been honored to be the emcee for the last five years, and in doing so, I get to interact with the audience every year. So there's a big gala event in January, every year in Toronto. Many of the industry's great leaders come to Toronto, even though it's terrible here in January, they still come for it.

So there's a lot of chance to interact. And I'll tell you the amount of stories, the amount of people that come up that are inspired by the stories of the members that go in and see themselves in that. I think that's really the juice. I think it's about, that's the mandate. I mean, you got to watch with overreach, with these sorts of things.

I think our mandate here is to really, our job as board members is to really find true greatness. It's tough. It's contentious. There's a lot of incredible candidates each year, and the nature of it is we're only selecting a small sample of that larger sample. But to the best of our abilities, if we get that right, I think that inspiration is there.

I will point out too, though, that, I'll just draw attention to you, there's five categories by which people can be inducted into the Hall of Fame. This is not always understood because the big company builders who rightly are celebrated, sometimes people think oh it’s only, you know, you have to build a company to get it in, and you don't. The five categories are exploration. So excellent, greatness in exploration. The second one is building the corporation, which I think everyone understands. Third one is technical contribution. So the idea of a future looking in innovation, you know, if you know someone that's really been innovative by all means bring them, nominate them. And the more people we get that are true innovators, that inspires the future innovators. And the last two, our supporting contribution. So this is an idea if you're supporting the industry in a great way through educational initiatives, for example, or in other ways like that public policies, government policies, that's equal right to building a corporation. If you're great, if you demonstrate greatness in that.

And the last one is mining in society. So is it someone that's really enhanced the image or the awareness of the mining sector in the general, in the general public, right, so public awareness.

So those last two categories aren't always understood. And I think to your point, maybe those are two ones that, you know, we would certainly, as board members, love to see more nominations come in on those two.

Because they are, and although they are people that have done greatest in them, they also are very forward looking, because supporting the industry and mining and society are critical to the mining future, the mining industry’s future success. So yeah. Yeah.

Dean Braunsteiner

No. That's great, Anthony. It sounds like there is a touch of that that does think about the future, and so there is an opportunity for folks to really think about how they're engaging and impacting the future of the industry, which does get recognized. I know we could continue the conversation for hours as we normally do, but, unfortunately, we've got a time commitment today. And, so, Anthony, thank you for such an engaging discussion.

As always, your thoughtful perspectives are greatly appreciated and bring immense value to today's session and our viewers. And, I'm looking forward to seeing how the great Canadian treasure hunt unfolds. And those types of initiatives I think are really essential in helping future generations understand the significance of mining, you know, both within our communities, but also, as you touched on, just that broader global impact.

So again, thank you.

Anthony Vaccaro

Excellent. Thank you, Dean, very much for having me. And, for all the great work EY does as well, and supporting the sector and getting the word out and engaging the general public as well to get excited about the sector, because Canada's future, in a lot of ways, depends on it staying, staying lively and staying energized.

Kaki Giauque

Thanks to our panelists for helping us understand what it takes to invest with confidence in today's dynamic environment.

The last session of the day is focused on precious metals, and how companies are rethinking their strategies to respond to declining ore grades, rising costs, and the absolute need for innovation. This session is moderated by Amanda Kraus, EY US Climate Change and Sustainability Services Leader.

The floor is yours, Amanda.