 Welcome back to Investor Intel. Today we have a new project to talk about in a very hot metal. We're with John Lee from Prophecy. John, welcome to Investor Intel. Thank you. Thank you. Vanadium is one of the hottest metals out there and you have what appears to be a large vanadium deposit. Yes Peter, Vanadium prices this bottom in 2016 and this year is really taken off. We believe it's in the third inning and it's a metal that has attracted the investments from Alexa Wauper Freeland and all in my finance. Oh, there's a billion dollar individuals and institutions. What's driving the demand for vanadium? Yes Peter, vanadium has always been around. It has traditional use in the steel rebar industry but recently it's really caught on the snitch of vanadium batteries and it is akin to lithium batteries except it's used and primarily designed and engineered for large-scale utilities storage batteries for utility grid. John, I understand that utility grade vanadium batteries are of interest also. Why is that? The vanadium redox battery flow batteries recently gather a lot of momentum and the key is to do with explosive growth in the renewable energy generating capacity namely specifically solar and wind. Today, solar and wind generating capacity amount to over 700 gigawatts. That's the equivalent of 70 Bruce Power nuclear power plants or 70 Hoover 10 hydro plants and the numbers come from less than 100 gigawatts seven years ago. So you look at a 700% in growth but unfortunately 30% of up to 50% of the time in parts of China the wind and solar energy gone unused because they're unpredictable in nature. So we thought that the interesting point here today is that the utility-scaled grid batteries only amount to 2 gigawatts. That's the less than 3% of this renewable generating capacity. There is a lot of room to catch up and authorities in this space such as GreenTech have predicted more than double digit growth on a yearly basis. You can have 500 to 700% growth in the next few years in this grid-scaled batteries. Very exciting space. There's not a dominant leader right now and we are positioning and we're seeing vanadium as it's been having a very bright future in capturing the market share of that space because of the unique nature of the scalability and the low life cycle of vanadium batteries to match the life cycles and renewables of wind and solar. So you're saying that the utilities could generate electricity off peak and release it from the battery on peak or during periods when solar and wind aren't functioning. Exactly and this vanadium batteries can go 8 to 10 hours discharged at a time. Again in terms of the utility demand and the demand cycle fits much better much more suitable than its lithium counterpart. Okay so you found a project down in Nevada. I love Nevada as a mining district but I didn't know they had vanadium. Well Peter you're right Nevada is being consistently ranked by the Fraser Institute as well known Canadian think tank as the fourth place for best place for mining investment in the world and is easily the best place to do mining business in North America. The project is situated in northeastern Nevada specifically and it's the Battle Mountain region where 80% of the gold the United States come from today and it's really what I call the 90210 premier zip code for for mining developments. Historically there is some lithium and vanadium and rare earth in Nevada it's just not as private as gold. Okay how close did you have Battle Mountain there in Florida Mountain? Love Lock where O.J. Simpson was in prison for eight years. Barrick is there up towards Winamaka roughly where are you located? The project is located in the south portion certain portion of Battle Mountain region 25 miles south of Eureka and you look at about only 120 kilometer 220 miles north southwest Cortez is 120 miles northwest from Chibirlini and you have also Neumann, Kinross, they're all within 200 miles from Chibirlini. You access it through Reno or maybe flying to Salt Lake and drive down? Either way you're correct. Okay and good answer. From Salt Lake it's about a three hour drive. So you're up in the north end you near Winamaka. To me Winamaka is the Timmins of Nevada right it's a mining railway town it's a night roughly the same population good mining infrastructure. You're in a good place. Can I ask for better? I mean the people that that that would be responsible for permittability is the same folks that are permitting the mega mines very transparent and very professional we couldn't ask for a better partner in terms of permitting. Now Prophecy picked up this asset relatively recently right? Yes the company Peter has been around for over eight years. I was the founder and we're listed on the Toronto Stock Exchange. We have other assets in the past there are tier one assets we still own but in the round zip code in the round jurisdiction in Bolivia in Mongolia and earlier 2017 we say hey look it's time to come home and we focus exclusively looking for new projects of Canadian projects in North America and Peter what we did is we went from the top down we looked at all the interesting vanadium projects in North America and we picked up what we believe is the best project of bar none and since then we have been focusing on this project solely and we started looking for vanadium projects where vanadium was about four dollars a pound in early 2017 and vanadium system has more than triple to to the high of 13 now settling back to about ten dollars a pound right now. So this is called the Gibrilini vanadium project. When did Prophecy buy Gibrilini? Yes the project is acquired through a leasing model is a 20-year lease that can be renewable at a 10-year increment and we began negotiating the project in January we officially closed the transaction in June five months ago. Right there was a credit facility taken out in relation to that but you've recently done an equity raise to wipe out the debt correct? Yes it's talked briefly about the share structure Peter. The company had a hundred to one rollback in 2016 right now is a very very clean structure six million years outstanding of which the management and key close associates own 50% of the stock. I myself had to put in three million dollars personal cash investment in the company and happy supporting the company in the last two and a half years through the thick and thin and recently the company closed the credit facility with myself and right now is debt free we closed the six point six point four million dollar financing while cashed up for all the programs designed for 2018 and at the same time looking for additional listings in North America and Asia to broaden our investor reach Peter. So the project itself in Gibrilini let's quickly take a look at that have you done drilling there? Well Peter Gibrilini has had it's a quite well known name on the streets in Toronto and the previous operator the name is American Vanadium they had raised over 20 million dollars and operated the project since 2000 and gave it in 2016 through that six years there's a 10 million dollar roughly into that going to project development not just drilling is about 20 30,000 meters drilling but also metallurgical study for flesh disability study and the other 10 million Peter is actually going to permitting so they were literally about quarter mile they were they were down to their last quarter mile to getting this project fully permitted. Wow and the feasibility study was 2010 2011? 2011 it was 2011. So I'd imagine that part of your work then would be freshening that data and updating the study. Yes Peter just briefly the American Vanadium especially in the resource industry and commodity market it's all about it's all about timing and American Vanadium has a great management team picked up this great project in the early going but unfortunately the road of Vanadium priced down from $12 to $2.50 since 2016. The feasibility study was published in 2011 when Vanadium was $11 a pound and it demonstrated excellent economics I'm not a liberator to discuss because of historical numbers but the the the report is available for a CDR if you search the American Vanadium. I mean the project was robust enough with well over double digit returns in IRR that enabled that company to raise over $30 million in total and did all the wonderful studies and permitting and unfortunately had to give to the project. One of the priorities Peter going forward for prophecy is you're right in updating the feasibility study and within that process it's a two-stage process two-step process first step is to update the resource numbers and once resource numbers are updated then we're moving on to updating the feasibility study but we do believe that Peter just on that note is that the feasibility study carried out in 2011 is still very very relevant today because the price assumption used in 2011 is the same as the price of Vanadium that is today so while there are some elements of inflation but there are some other elements of cost has come down such as financing costs. So the milestones this year will be updating the resource estimate for 2018? For the one the key priority is that updating the feasibility the resource estimate was published already so we're on an accelerated path and that new solution was put out in November 20 just less than a month ago it demonstrated a open pit deposit of over 120 million pounds of Vanadium in measure indicated category so it's a modest deposit but as I said it works at very advanced and then the other side of you know besides the feasibility engineering work the other half of our major effort is to initiate restart the permitting process and just briefly on that as I mentioned earlier over 10 million dollar and five years of work is going to permitting. One thing good about Nevada is the process is very transparent but the downside is it's not for faint-hearted as usually it's a long due process and the cost it doesn't it could be quite costly you're gonna typically five years and 10 million dollar. This very fortunate process as I said about 80% of the work is already being carried out and of the three major stages the first two stages which is environmental baseline study and a plet of operations both being completed and accepted by the Bureau of Land and Management so potentially we can represent ourselves into the last stage which is the EIS process now that will last maybe one to two years and then two to three million dollar affairs so we're sort of putting our team together and officially going to enter into the process 2018 so the feasibility study and the permitting is both going to go in parallel as something we're very very excited about. John all of that is fascinating we will be watching the project we'll be watching to see the milestones this year and best of luck in Nevada maybe we can have a beer and win a maca one day thank you for your time