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CRITICA LTD (CRI) - How Critica is Shaping Australia’s Rare Earth Future with Managing Director, Philippa Leggat

• Andrew Musgrave

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Join us as we dive deep into the world of rare earths with Philippa Leggat, the Managing Director of Critica Limited. This episode explores Critica's groundbreaking achievements, including the discovery of Australia’s largest clay-hosted rare earth resource at the Jupiter project. Philippa shares the exciting journey of how Critica has utilized innovative exploration methods to uncover this significant resource, highlighting the remarkable scale of 1.8 billion tonnes and a high-grade component that positions them uniquely in the global market.

We discuss the impressive technological advancements in metallurgy that have enabled an astonishing upgrade in rare earth concentration while simultaneously lowering overall processing costs. The pressing need for sustainable and efficient rare earth sourcing is underscored, particularly in light of increasing global demand for technology and renewable energy shifts. With a vision set on international partnerships and strategic funding, Critica is not just a participant in the rare earths market; it's poised to lead.

Andrew Musgrave Host

Welcome back to another episode of ASX Briefs, where we bring you the latest updates from Australia's upcoming companies, and today we have the pleasure of speaking with Philippa Leggat, the Managing Director of Critica Limited. Critica has been making significant strides in the rare earth sector, particularly with its Jupiter project in Western Australia, which has just been confirmed as Australia's largest and highest-grade clay hosted rare earth resource. Philippa, thanks for joining me today and welcome to the ASX Briefs podcast. 

Philippa Leggat Guest

Hi, Andrew, thanks for having me. 

Andrew Musgrave Host

Now, Philippa, for investors who may be unfamiliar with Critica, can you just start by giving us a brief overview of the company? 

Philippa Leggat Guest

ASX listed company. We've got assets largely in Australia. We're all in Australia and our primary focus is the Jupiter and Brothers projects, which are rare earths, clay-hosted projects in Western Australia, and we've just released our maiden resource right there and it's given us the largest, highest-grade clay-hosted resource for rare earths in Australia. 

Andrew Musgrave Host

Yeah, and that announcement which sort of told us about Jupiter and how big it is. Can you just take us through the significance of this milestone? 

Philippa Leggat Guest

It is quite something. I think I might go back a little bit because it's a brand-new discovery. I've had brokers calling me and saying where did you buy this thing? We didn't. We found it. We used public data, and our team went hunting around like little magpies and picked the eyes out of all this public data, which was then cross correlated with an exploration incentive grant. One of those co-funding things that the government puts out and the correlation of that data gave us the comfort to go drilling. Off the back of that we did a joint venture and earned up to 70%. 

Based on the extraordinary results we've had, which delivered numerous Australian records for grade and intersections, we bought the rest of the asset, so we now own it outright and it's become the flagship of the company. So, we now have 1.8 billion tonne at 1,700 parts per million total rare earths oxides, as a global resource. But within that, the high-grade component sees us having 520 million tonnes at 2,200 ppm, and that's the bit that we're focusing on. It puts us in league with the best of the Brazilians. We have broad, broad zones of very high-grade mineralization, an incredible amount of infrastructure. We're on a highway, with power to the front door, with a gas pipeline, we've got electric power just around the corner, so huge amount of infrastructure, and on that highway that leads to Geraldton there's obviously a port at the end there. So very well positioned, with high grade, large scale strategic location. And then, of course, we've made some pretty significant strides with our metallurgy too. 

Andrew Musgrave Host

Okay, and the exploration program has been incredibly successful, with five satellite discoveries already identified near Jupiter. So, what's the broader potential for the Brothrs project? 

Philippa Leggat Guest

Well, you're right about that. I mean, look, we don't really need more tons. What we have is high-grade and enormous, so why would we be looking for more? It's about value upscale. So, you'd want the best of the high-grade, the best of the magnet rare earths, the best magnet rare earth ratio to your total rare earths oxides, or something that delivered some meaningful uplift, a more attractive product that is easier to process metallurgically, et cetera. 

Because our exploration costs are so very cheap and we're talking about quick air core drilling campaigns that we're out there for two to four weeks and we've got in the last 18 months from nothing in our discovery all the way to 40 kilometres done. You know we're able to do that very cost effectively. The seven discoveries that we made we did for $100,000 worth of drilling, and that's all off the back of the IP that we've developed to really understand this terrain. So, what we've done within that is lock up the entire province. As we see it, all the clay-hosted areas with the same geophysical and other signatures that we have discovered match what we're after and we have managed to demonstrate the ability to correlate those two discoveries, which is quite exciting for us. 

Andrew Musgrave Host

Okay, and the initial metallurgical results showed an 830% upgrade in rare earth concentrate, with a 95% mass reduction using simple flotation at room temperature. So how does this impact your potential processing costs and project economics? 

Philippa Leggat Guest

Yeah, well, critical right, I mean, and I think I'd like to start with the mass reduction. If you're starting with a deposit the size that we have, reducing the mass means a much smaller capital outlay for the plant and obviously smaller operational costs your OPEX because you're having to process less material. So, if we can take out 95% of the gang and take the grade up by almost 10 times within that you've got a far higher value product going into a smaller plant for your next stages of processing. And that is incredibly attractive with something as complex, metallurgically complex, as all rare earths projects are in nature. So, it gives us a really good leg up. 

Andrew Musgrave Host

And at more of a macro level. The rare earths market is highly competitive, with supply chain shifting globally. So where do you see Critica fitting into the emerging supply chain, particularly in Australia? 

Philippa Leggat Guest

Yeah, look, it's an interesting space at the moment. And there's, you've got the hard rocks, you've got the clays. Nobody else in Australia has a clay project like ours. It is far and away the largest, the highest grade, and we have extraordinary infrastructure. So that stands us in very good stead. 

I think the fact that we are actually a second mover gives us the advantage to see where others are learning, because, let's face it, in the Western world we are all learning about these things because the Chinese have controlled the technology for so long and it is about positioning yourself in a way to deliver the most viable products to that next stage of processing the separation facilities. There are some outside of China, there's some in Vietnam, there's actually some one in the UK. The US are obviously pushing quite hard for that. So, at our stage it's all about optionality. We've demonstrated the ability to create a concentrate very cost effectively, which gives us optionality. Is that going to be processed here in Australia? Lynas has built extra capacity where they are Eneabba's building a plant, but we also have the port at Geraldton, so can we ship things out and very low thorium and uranium, which gives us the ability to ship things right, and a lot of these projects have enormously high radioactive content, and we simply don't have that. So, it's a real advantage to processing and moving the material around. 

Andrew Musgrave Host

And just looking at the financials, the company currently has $5.8 million in cash and is well-funded for exploration and metallurgical test work. So, what's the roadmap for funding as you move towards potential development that investors can look forward to? 

Philippa Leggat Guest

Look, that's an interesting question and at this time our focus is very much on advancing that metallurgy and then proving up a bit more comfort around the resource so that we can move aspects of that, especially the higher-grade component, into reserve so that we can start to do studies and wrap some economics around this thing long term. Because it's at that point that you get more interesting funding. And I think when we say interesting funding, it's more cost effective because a lot of its ground funding and because of the strategic imperatives, the importance behind rare earths in that global supply chain, particularly related to defensive technologies. You're seeing the US and the Europeans wanting to get a foothold onto these supply chains. So, I think a lot of the funding that you're seeing is coming out, for example, of the US Department of Defence. You're seeing grants come out of that. You're seeing even the Australian government putting out huge grants which they haven't done in other areas to the same extent or the same magnitude. So those opportunities are really exciting and with the project, the scale, grade and strategic location of ours, I think that stands us in very good stead to get some of that money in the future. In the interim, R&D funding is an extraordinary incentive and we certainly are very grateful to the government for that initiative. 

And then on from that, ideally its strategic investors, those people with a long-term vision as to where they see opportunities in this space. The pricing market is not hugely attractive right now and, let's face it, the global politics are making the world just a little bit challenging and there's a lot of uncertainty in the world right now. But that aside, if you look at what's happening in this space, I think that Wesfarmers tried to take over Lynas a couple of years ago. They weren't successful. They are now pegging ground for exploration in WA, specifically for rare earths. Sumitomo did an MOU for offtake future offtake with our neighbours Victory just up the road. 

You have seen Andrew Forrest get into Hastings more heavily recently, shift that and, looking at downstream processing. Gina and Hancock have got into how many projects. So, she must have five or six investments in rare earths. And then more recently you've seen Jeff Bezos and Bill Gates start funding a rare earths project in Africa. There is a long-term strategic imperative here that people see the potential for and out of that comes that sticky money that drives the change necessary for technological progress. And, as far as I'm aware, there are no substitutes for permanent magnets and these minerals are going to be required, so people are trying to lock them down. That's going to tie interesting funding into the right projects long term. 

Andrew Musgrave Host

Okay, and now just to wrap things up, you've built momentum very quickly at Jupiter. So where do you see Critica in the next two to three years and what's the ultimate vision for the company? 

Philippa Leggat Guest

Ah, good question. Well, at the moment, this project remains our focus, and I think it's justified that that remains the case. It's about moving that forward, which is everything to do with metallurgical advancement, and taking it towards the development stages. That means giving it comfort and taking it to a broader context, because it is a global project. It is a tier one project, so we have the ability to play into strategic investors and off-takers at a global level. So, it'll be a lot about investing time and energy into potential partnerships across the world as to where we see the best opportunities to deliver future products. 

Andrew Musgrave Host

All right, Philippa. Well, thanks for your time today. It's been great to chat, get an update on what's happening at the company, and we look forward to further updates from Critica in the upcoming months. 

Philippa Leggat Guest

Thanks, Andrew, good to chat. 

Andrew Musgrave Host

That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.