First Phosphate's Torque Moment: How Export Credit Could Kill Dilution - CEO John Passalacqua

0:00You are listening to Mining Stock Education. It's Mining Stock Education. I'm Bill Powers and in today's show, we're getting an update from our sponsor who newly trades on the NASDAQ. That's first phosphate. Ticker symbol is P-H-O-S. That's been the ticker on the CSE in Canada, but it also trades as an ADR now in New York. John, welcome to the show. We're gonna get to your NASDAQ bell ringing last month, about 30 days ago or so, but first you put out another press release, how you're building the capitalization stack to finance the mine build, assuming a positive feasibility study and financial investment decision by your board. It says today that you have got a commitment for $212 and a half million USD for the purchase of Swiss machinery and equipment for your igneous phosphate mine Quebec as well as for your processing facility.

1:00Walk us through this. What does this mean and how did this come about? Yeah, okay, all good, very good question. So it means a lot for the company. As you know, the CAPEX for the build out of the mine is about $475 million USD. We already had a commitment for about $200 million from the Danish sovereign fund and export import bank. And now with this one from the Swiss insurance and export credit agency, it takes the total CAPEX already committed to over $400 million, $400 million out of almost $500 million that's needed. So that's almost 80, 85% of the CAPEX required to build the mine that's already spoken for. So it's tremendous in the sense that the dilution will be significantly lower here for shareholders when we have to go and build the mine. In the PEA, you have about a 20% contingency factor in your estimated CAPEX, is that right? Yeah, correct. So even at that $400, that $500, around $475 to $500,

2:01a number, that itself has a 20% contingency in there. So given these export credit agencies from the EU coming to the table and our work with the G7, it looks like the capital in very friendly, a non-dilutive manner is already almost all spoken for in terms of actually building out the mine. If listeners hear some feedback or noise in the background, John, is at a conference right now, do you wanna say where you are, John? Yeah, I'm at the Arxdon Kingwoods, Kingswood Global Investment Summit. It's coming right after the Global Investment Summit that was I'd taken place here in Toronto at the Prime Minister's request. So you have sovereigns that are lined up to help you fund this. Obviously we're talking about the Swiss here. Other entities in your potential capitalization stack, could you review those for us? Yeah, so again, so the Swiss export fund, the Danish sovereign and export fund, like I said, committed for up to 400 million USD

3:04of debt financing for equipment, for the CapEx, for the mine. We've also had the Canadian government at the table for almost $21 million. That's a little bit different, that's a non-refundable and non-dilutive contribution to the company to get through the feasibility study. But usually when they start like that, they'll also be there at the time of funding and build out. So it's starting to look very good, and the government of Quebec is at the table with a fast track process on environmental, and which affects the permitting. So those two governments as well will be helpful. We assume when it comes to actually building out the capital stack. So we're looking at a very friendly capital stack right now with sovereigns that is nation-state governments that usually give out the best form of interest rate. And they are sort of financiers that are there to see your success. I think that's really important to note for everybody. You know, you can have different financiers at the table, but when you have somebody that wants your success that's non-toxic, and their only real ambition is

4:06to see the project developed, to get jobs going, to get supply chain settled, you know that you're dealing with the right capital that has a patience and the tolerance and the good terms to build the mine with you. The company first phosphate is only four years old, and if you have a positive financial investment decision, you're anticipating production in about 2029, is that right? Correct. Okay, so what are the next steps? Is it feasibility study and then the FID? Yeah, so the feasibility study is projected for Q1 of 2027. That's no more than three, four months away from here. And then after that is permitting, after hoping for by the mid to early end of 2027, and then final investment decision will be at the end of 2027, as you know, as the announcement from today shows, you know, the capital stack is already getting very close to build out here for that final investment decision. And then after that, we have to go into buildouts, and then we're hoping to have the mine and production

5:07somewhere near the tail end of 2029. So you've been trading on the NASDAQ in New York as an ADR for about a month. So recap for us what that experience was like for you. Oh, well, you were there, Bill, right? You were there with your son. I was there with my son and my family. And it was amazing, right? I'm sure you felt the same energy I did. I didn't expect it. I was just expecting a co-there and do business and get the company exposure. But yeah, it was profoundly significant to my life, because I got to stop for like two minutes and actually, wow, you know, this is pretty good what we've done here today. Right, only 200 companies a year get listed on NASDAQ. Or one of them. And you know, I've worked all my life and technology and financial markets. So, you know, it's a lifetime achievement award. It's something you feel really good about. Look, it's not an end in and of itself. It's a step along the way, but you know, a very heartfelt one. And we also appreciate, you know, the great support we've had from US investors, global investors, US markets since we listed. We've traded more stock in the last month. Then we had traded in the whole entire previous

6:08genesis of the company. So just great, great acceptance down there in the US. And you self sponsored too. This is a key point. You didn't deal with a lot of the investment banks that a lot of Canadian juniors have to deal with in order to get to the big board in New York. What was that process like? Yeah, look, we had the self reflect. We had to measure five times and cut once, as I say. So we basically raised the capital in Canada on the Canadian stock exchange. We raised an additional 17 million. We had a, I think about close to 30 million as we were listing on to NASDAQ. So that was very helpful. We also had the contribution from the federal government in the amount of 21 million. So there was access to over 50 million, five zero million dollars of capital listing on to NASDAQ. We were able to do that on our own without a sponsor, without a capital raise, without consolidating shares. Because the ADR obviously is a factor of 10 to one in the common shares. So it all worked out really, really well. I think it was well thought out.

7:09It was unique. It was the first time it was ever done. And it worked and it only did work, but it worked in spades. But above all, we thank the American markets, the American investor for taking hold of this. I think we showed great respect when we came down there and they showed equal and a very warm reception for first phosphate in this NASDAQ listing. And are you the first ADR that was previously listed on the OTC markets that actually made it to the NASDAQ? Yes, that's true. We were the first. Yeah. And we were the second Canadian ADR to have a trade on NASDAQ. The first one traded some months ago, but they did a capital raise along with the listing. We did not. ours was six, double unique. And I think you had some other Canadian junior salivating when they saw your success, especially out of the game. You know, it's not that easy. Even what we did, it's not that easy. You have to be MJDS eligible. You have to have certain liquidity criteria. You have to meet a lot of criteria from the NASDAQ. They were great, but they do have lots of criteria,

8:11which obviously, there's only 200 companies a year, more or less, the list on NASDAQ. There's a list of mile long to try to get on there. So, you know, we went through all of that. It was careful. It took a long time. I think it was about nine months from beginning to end. And a lot of little things that we had to do along the way, but it's great. Yep. So, you trade, as I mentioned, at the outset, excuse me, P-H-O-S on NASDAQ and the CSE. You still have that OTC, that kind of legacy OTC QX ticker, FRSPF. What are you planning on doing with that now that you're on the NASDAQ? You know, everything's going to stay exactly the same. We have great shareholders and great relationships with all those exchanges on the OTC QX, on Frankfurt, on the Canadian securities exchange, and on the NASDAQ. And it all seems to be working very well and synergistically together. So, it's going to all stay out there. And it's just all more eyeballs and more ability for different investors of different kinds to get involved. OK.

9:11Well, John, have a great conference. And thank you for coming on the show for an update. Yeah, thanks, Bill. It's been great. Appreciate it. Thank you for listening to Mining Stock Education. Please subscribe and share this show with like-minded investors. Connect with us at MiningStockEducation.com and sign up for our email list to stay in touch. Much success to you as you learn about, invest in, and profit from Mining Stocks. The mining business is one that generates gigantic wealth. You know, a good drill hole that converts, might cost $50 or $100,000. And it might discover something worth a couple billion. There is no sector that I know of that has offered up as many predictable circumstances where there was the possibility, certainly not the certainty, but the possibility of 10-for-one returns, as there is in small cap and micro cap Mining Stocks. Concomitant with that, if you don't do the work,

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