Categories: Energy
Topics: General Energy

Patriot Battery Metals (TSX-V: PMET)(OTC: PMETF) CEO Blair Way on Omnibus Plan, ASX Listing & The Most Aggressive Drilling at Corvette in 2023

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the all of a sudden greedy president and CEO of Patriot Battery Metals, Mr. Blair Way. Blair, what are you doing out there? You getting greedy on me? You giving away all our stock?

Blair Way: Oh my God, what a day. One of those days, and two days. Oh yeah, yeah. No, it's been a tough few weeks finalizing all this prospectus stuff. And certainly having seen the reaction to what was really just a change in the option plan has created quite a bit of confusion and we need to sort it out just so people understand there is no grab of free shares or some sort of thing like that. I understand the confusion. It was a bit of legalese in the document we had to put in there and we should have wordsmithed more around it so it was more clear. But certainly there is nothing being given away. This on the best plan, which is a strange word I'll have to admit, is really just the only option for us as a company in order to be able to increase our pool of options available to us for incentivizing new hires, new directors.

And as we've talked many times, the company is growing and we have to have mechanisms and tools in our toolbox in order to incentivize new hires and newcomers to the company. And options is the most sensible way to do that, but unfortunately the standard option plan of 10% has pretty much been maxed out and we needed to increase that pool. And unfortunately there's not a lot of choices. You do a 10% floating or a 20% fixed. So I will put a clarification out so everybody all and sundry can understand it. But I've seen, and heard and have many discussions the concerns and I've been able to certainly abate those concerns through discussion. But yeah, we need to clarify it and we will be doing that just so people can rest easy at night. And no one's getting anything for free.

Gerardo Del Real: Let me be serious here for a second. First off, the way that I understand it, the omnibus plan is mandatory, correct? This isn't something that you could have opted out of?

Blair Way: Well, what it is, is we had a choice. If we wanted more than 10% pool of options, and given the share structure is so tight, and that's only 10% of the issued that's standing, not at fully diluted. And so we're in a situation at present where we are a bit tight, so we don't have a big pool of options. And obviously we brought some new people on the board. So majority of those options are consumed. Not all of them, but in the interest of knowing, well, in essence we know we're going to bring new people, there'll be continued growth on the board and to the management team, and we want to be able to incentivize them and attract them properly. And we needed more.

We didn't need 9 million more, but it was either 9 million, which was sort of a rolling or floating plan, or 20% fixed. It doesn't mean it's 20% every year, it's just period. 18 million, 283, 343 options is the most we could ever issue. It's not saying we are going to use them all. We probably won't. But we want to have a pool. Probably only needed a couple million more to do the incentivizing we have down the track in front of us. But that wasn't a choice. We couldn't go to like 12 or 13%. It was to a 10 or a 20.

Gerardo Del Real: And that's exactly what I meant by mandatory. If you are looking to attract new talent and you're looking to expand the board of directors and or the technical team, you didn't have enough leeway there to keep it as it was structured currently, correct?

Blair Way: That's correct. Yeah. The interesting thing to even add more confusion to it is the fact that now we're going to be ASX listed on top of TSX listed. Both exchange and regulatory authorities have different ways that they treat options and how they can or cannot be issued. So as we become ASX listed, my understanding is that if we're issuing options to directors, that will still have to, even though this omnibus plan still has to be approved by vote at the upcoming AGM, also any options that are issued to directors and management also need to be approved in the future once we're ASX listed, those will have to be approved individually by vote. So that creates all kinds of challenges. You can award them, but then you'll have to have either at the AGMs, they'll just have to be voted across. So there's already a reasonable mechanism to ensure that stuff is not given away, even under the TSX regs. Well, the ASX layers on another layer of diligence to that whole process of not giving away free stuff.

So yeah, it's a very inflexible process. As I said, it's either 10% floating or 20% fixed. There is no 20% every year. We already have, as I said, around the nine odd million options issued now and we need access to another couple million probably for incentivization. And as we grow, there'll be more. But if we keep the stock as tight as we have and every financing we do right now on a 10% floating plan, if we issue another million shares, that's a hundred thousand options, which to be honest, is not a huge amount of incentivization for a professional that we're trying to attract to a project of this caliber. So it really just gives us the tools we need in our toolbox and that's it. We won't abuse those tools, we just need to have them available so that we can utilize them as we need them.

Gerardo Del Real: And that was going to be my next important point of clarification. There isn't an intent to immediately go out and go 15, 16, 17, 18 million, correct? We're looking at having the flexibility of adding a couple of million if that board of directors is expanded upon.

Blair Way: Exactly. But for us as a company, in the way we've identified what our options were in respect to increasing our option pool, this was the most sensible way. Obviously it's created confusion and we'll sort it out and do clarification. Plus it's still got to be voted in at the AGM.

And I've seen lots and heard lots of statement, oh, I'm not voting that thing in. And I get it. If they think were giving away 18 million free shares, I get it. I wouldn't be voting it in either. But that's not what it's about. It's about providing the right tools for management and the board to incentivize new people coming in or performance as we move through the program here. And options are the best way and they're certainly not free. I mean, you get options and they're 10 bucks when you actually exercise, and let's say you get half a million options at 10 bucks, that's $5 million that you've got to stump up in order to exercise those options. So these are not free. Nothing's free in this. And certainly for management and like there'll be vesting, there'll be KPIs tied to that vesting process. So again, nothing's being given away, and understand the confusion and we'll sort it out and clarify it.

Gerardo Del Real: Well, I've known you for over a decade now, Blair. I know options are your favorite way to incentivize talented management. With that, it sounds like you have an idea of potentially a board addition or additions that can be accretive in the sense of either technical acumen or just having additional options on the board as the company grows and works towards the multiple discussions that you're having with all sorts of companies, frankly, from what I learned.

Blair Way: Absolutely. And of course as we grow as a company, we need to add the various skill sets. And we probably have a high amount of technical capacity in order to demonstrate. We have the capacity to move this thing forward and get it into production. But of course, part of that production process is permitting and engagement with First Nation, with the Quebec province, with the Canadian Government. And those are the sort of directors that we are certainly exploring opportunities with respect so that we can bring that in. We've seen Critical Elements as have received their permit in Quebec. They're draining lakes, they're putting their facility into production or heading down that development cycle. So we've seen permitting as possible. And obviously in order for that to be done efficiently and effectively, we need to engage and have the right sort of network of connections in order to ensure that we don't make mistakes as we process through.

There have been a number of projects, not only in Canada, but elsewhere in the world where mistakes have been made in that early process of permitting. And we want to make sure we avoid that. So that's about seeking out the right sort of people to join the team to ensure we are doing the right thing. We're going to put together a great EIS. We'll have project descriptions. All those sort of things need to be in the right timing and sequencing and building the team around us in order to be able to ensure we achieve that. And the options are a key tool for attracting those sort of people. Because as I said, if you give a hundred thousand options and they're already at say five bucks, they want to see upside. Obviously they see the upside of where we've talked many times about where the share price should and could go. But they still, you need to be a meaningful number of options so that there's strong incentivization for everybody to get in and lean in together and push this thing forward to production.

Gerardo Del Real: Blair, I appreciate you taking the call on short notice. I have to ask you before you go, how's that ASX listing coming along? It's still looking like what we expected?

Blair Way: It is. It's going well. It is a painful process. And it's the bureaucracies of multiple exchange and regulations that don't quite line up. And this omnibus plan is an example of one of the challenges. And I'm spending many hours and we have our team here spending even more hours building prospectus geology reports, so many independent accounting reports. It's an IPO. We're IPOing the company, again, while we're an active, breathing living company. So I mean, as of course during any financing or IPO, well, certainly an IPO, but even during any financing we can't put material news out. And that's a pain. We have material news in the back on the back burner right now, and we hope to get this ASX thing through as quickly as we can. Once we're trading on the ASX, then news will start to flow again and then people can relax.

But the fundamentals have never and are not changing on the project. We've had this great drill program that's taken us all the way to just a few days ago when we stopped and the team are now preparing for a winter program. We're waiting for the ground to freeze. I mean, we have so much to talk about and so much news to share our drill program. I sort of put a teaser in this recent news release about the plans for the winter drill program, but I can provide more info on that and that doesn't impact our ASX process. So that gives people something to sort of chew on for a bit. But it is frustrating. I've maintained one news release a week almost continuously since we started down this path of exploring and defining the Corvette Project. And since this ASX listing, I've had a few handcuffs put on in the process.

And it's frustrating because news is good. People get it. You can see the people are understanding the story. So I'm looking forward to getting back to the new normal, which is getting press releases out on a timely and regular manner so people are not asking the questions that they shouldn't be asking because the news is out there. So we are getting closer and closer to that realization. And I hope the end of November, first week in December is where we can start to see normal life again.

Gerardo Del Real: I'm assuming you're going to put out a pretty robust press release clarifying exactly when Patriot Battery Metals starts trading on the ASX. As I know that there are whispers of, actually not whispers, I've seen it, but there is another company with a similarly sounding name that will be listing on the ASX right around the same time. So I trust that you, as the CEO of Patriot Battery Metals will be making sure that there's a clarification as to when Patriot Battery Metals starts trading. Is that accurate?

Blair Way: Yeah. We're not sure how that happened. I guess it's flattering to be sort of closeology played, but not a super fan of the closeology in naming. But for whatever reason, they were able to get the name through the processes down here. And as I said, each country and regulatory regime has their own sort of ground rules for what you can and cannot do. And obviously the naming has similarities, but not enough to trigger it. I think if you did that in the Canadian environment, you probably wouldn't get it through. I'm sure you wouldn't get it through. But be that as it may, we will definitely be clarifying. We'll be announcing the ASX. We'll be back on track for our assays being issued. And yeah, people will see, there's only one Corvette.

When I say there's only one Corvette Lithium Project, there's lots of Corvette's. But yeah, there's only one Corvette Lithium Project, and that's Patriot Battery Metals owns it and it's 100% ownership. We've talked about this at length and people will be getting on board. The ASX or the investors in Australia are very excited. The people we've spoken to, both institutional and retail are very excited about what we have. And we remain optimistic that this painful process of the ASX listing was worth it. And yeah, we look forward to be trading both in the ASX and the TSX together. And just again, lean in and keep pushing this thing forward with what I think is going to be the most aggressive drill program, lithium drill program ever in Quebec, or certainly at present. And yeah, we'll just keep building this thing out. And yeah, there's lots of news to come. People just have to be patient.

Gerardo Del Real: Looking forward to it, Blair. Can't thank you enough for the time.

Blair Way: Thanks, Gerardo. Happy to do the clarification. And yeah, we keep leaning in and pushing this thing forward, that's for sure. And again, we're not giving anything away here. I get criticized more for being too cheap and not even giving away a jacket now and then. So yeah, it's kind of a funny thing when I read this, like what the hell are they talking about? But anyway, it's all good. Everything's on track. We'll get through this ASX sort of dead time zone for news. And yeah, we'll be onward and upward as we go.

Gerardo Del Real: I look every day in the mail for my spodumene countertop. Have yet to receive it. Thank you so much again, Blair. We'll chat soon.

Blair Way: Sounds good. Thanks, Gerardo.

Gerardo Del Real: Bye now.

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