When the founders of Kuya Silver (CSE:KUYA) first came across the Bethania Mine in the Peruvian Andes, the idle site brought to mind assets that some of the world’s top silver companies had put into production when they were small and growing.

One of those founders, now Kuya President and Chief Executive Officer David Stein, saw the potential right away, drawing on nine years of experience as a Bay Street mining analyst and seven years in private equity.

Knowledge of what investors want to see in a successful company gave Stein the confidence to make the acquisition of Bethania in 2017 and build assets around the flagship project to achieve an attractive corporate profile.

Bethania was on care and maintenance when Stein and Christian Aramayo, Kuya Co-Founder and Chief Operating Officer, first encountered it. At the time, the mine was owned by a Peruvian family and had just two shareholders.

“What I liked about Bethania was that it really reminded me of the early days of some of the big silver mining companies, like First Majestic, which started in Mexico with a single mine,” says Stein, who recalls being the first analyst to cover First Majestic in the early 2000s.

“So, I knew what kind of business model and value could be created with a high-grade silver mine like this. And you had all the hallmarks of a great mine, including good grades, which mean your costs are going to be low, and tremendous exploration potential. The previous owners did not do any real exploration – they were just following veins that are very obviously open.”

Stein and Aramayo sensed that modern exploration techniques had a high chance of proving up a significant deposit at the property and that the exploration could take place in tandem with production.

“In my view, the best junior mining companies give the market two things: production growth and resource growth, at the same time ideally,” says Stein. “Those are the companies that will outperform their peers, and I felt like Bethania had the opportunity to do that by starting up production and then growing it incrementally, with exploration potentially offering huge resource upside.”

A lot of the needed infrastructure was already in place. And Peru, of course, is a country where many of the world’s top mining companies run successful operations.

Following an initial investment and earn-in deal as a private company, funded mainly by Stein, Kuya went public and raised enough money to buy all of the shares of Bethania’s Peruvian owners at the end of 2020, giving Kuya 100% ownership.

The company added to its local land position soon after, with the project eventually reaching a total of 4,300 hectares. The mine itself sits on about 15 hectares, says Stein. “It’s only a tiny portion of this huge land package that has not been explored by drilling.”

Under Kuya’s control, Bethania has transitioned from sitting dormant to once again being in production, with operations restarted in May of this year and the first sale of silver-lead concentrate completed in October.

While Kuya is leveraging a toll milling model to process its ore, it has all the permits it needs to establish its own mill. A company-owned mill will likely have to wait until 2027, though, as Kuya first intends to build up its production rate and operating cash flow.

As an initial target, Stein and Aramayo aim to increase throughput to 350 tonnes per day.

Stein expects that current all-in sustaining costs will be around US$15 per ounce factoring in the cost for toll milling. This is higher than the sub-$10 estimate in Bethania’s preliminary economic assessment (PEA), but with silver prices north of $30, there’s plenty of headroom.

“When we hit our target run rate, you’re looking at 1.5 million ounces of silver production per year and some pretty meaningful cash flow,” says Stein. “It’s looking in the order of almost US$2 million a month at current silver prices.”

Plans call for allocating cash flow from mining sales to growing the deposit via exploration.

In addition to the 4,000-plus hectare site in the Andes, Kuya has also been building a potential district-size asset in Northern Ontario, which it calls the Silver Kings Project.

Here, the company has 13,000 hectares located in one of Ontario’s most prolific silver mining camps, near the historic mining town of Cobalt.

“My experience when I was an analyst was that the market is always looking for growth,” says Stein. “And if you don’t have it now, you have to buy it later and usually pay more for it. Silver Kings is an attractive risk-return for us in that sense.”

Exploration remains central to Kuya’s growth story with so little of Bethania explored to date, and Silver Kings being an earlier stage project.

While the market is not attributing significant value to the Ontario asset yet, the team made the acquisition and has consolidated more land because they see high-grade silver potential.

Geologically, Silver Kings is very different from Bethania, right down to the by-products, which in Ontario would include cobalt.

The district has seen little to no silver exploration for over 40 years, but Kuya’s geologists have identified dozens of targets.

And because it is in Canada, Kuya can minimize dilution by taking advantage of flow-through financing to fund exploration.

“I feel like it’s always a good idea to line up a company’s next growth opportunity,” says Stein.

“As we grow in Peru with Bethania for the next five years, people will start to wonder what’s next, and the nice thing is we already have the next thing potentially with the Ontario project.”

As for growing Bethania, the initial focus is enlarging the resource. There has only ever been drilling to a depth of about 200 metres from surface, and veins are open both at depth and along strike.

Exploration drilling will initially focus on three nearby zones with historical mining activity.

“We feel these have the potential to add significant tonnage in the future,” the CEO says, adding that Kuya could conduct US$20 million to US$30 million in exploration in the district over the next several years “and really show that there’s a much bigger project there.”

If current plans come to fruition, there should be enough money in the bank to start exploration in the second quarter of 2025.

“Once we start, the drills will never stop. We’ll keep drilling and exploring these various targets for many years to come,” explains Stein.

And building a mill in a few years would lower costs and risk, improve recoveries and allow expansion beyond 350 tonnes per day.

Environmental, social and governance (ESG) practices will also be incorporated in Bethania’s expansion.

As an underground mine, Stein says Bethania’s environmental footprint is relatively small, while the mill has been designed to recycle water and comes with plans to connect to Peru’s hydroelectric grid for clean energy.

On the social side, Kuya maintains strong ties with the local community, providing jobs and sharing economic benefits. “The community has been very supportive,” Stein notes.

With silver prices showing upward momentum, rising from US$23 per ounce at the start of 2024 to around US$30 lately, Kuya could benefit from market dynamics as well as its own actions.

“If silver prices rise to $50 or $60, the upside is enormous,” Stein concludes.

This story was featured in Canadian Securities Exchange Magazine.

Learn more about Kuya Silver at https://www.kuyasilver.com/.

CSE Issuer Stories, Magazine

Uniquely Positioned With the Only u.s. Mine Permitted to Produce the Critical Mineral Fluorspar

March 12, 2025 Angela Harmantas

Most people have never heard of a mineral called fluorspar, but they’ve most definitely benefited from it. We all have, in fact, as some of the electronic devices so ubiquitous in our daily lives would not exist in their current forms without it.

Fluorspar is an important commercial source for a chemical element called fluorine, the lightest of the halogens and thus in a league of its own for a variety of industrial applications. Fluorspar is also found in things such as cement and steel, not to mention camera lenses and other optical products. It is classified as a critical mineral in the United States.

James Walker understands that part of his role as Chief Executive Officer of Ares Strategic Mining (CSE:ARS) is to educate the public about the case for fluorspar, especially as Ares is currently the only U.S.-based fluorspar company with a permitted mine.

“It’s no surprise if you haven’t heard of fluorspar – honestly, most people haven’t,” Walker says candidly during a mid-November interview with Canadian Securities Exchange Magazine.

The U.S. once had a thriving fluorspar sector, but this was years ago before China grew its presence and flooded the market with cheap product. As a result, the U.S. fluorspar industry has been virtually nonexistent for decades.

That could change if Ares is successful in producing fluorspar from its Lost Sheep Mine in Utah.

The company went on a search some years ago for projects that it could bring into production quickly, required modest capital spending and contained something for which there was clear customer demand. Fluorspar wasn’t on Walker’s radar at first, but one day his team came across artisanal miners in Utah who were digging it out of the ground, bagging it and selling it directly to steel mills. Walker was intrigued, to say the least.

Lost Sheep was a lucky find, according to the CEO. “One of the geologists I was working with at the time had experience with fluorspar, having worked on Europe’s largest fluorspar mine. When he brought it to my attention, my first reaction was the same as most people’s: What’s fluorspar? But from there, everything started to fall into place.”

With a relatively low capital outlay, Ares seized the chance to build a modern, efficient industrial process to produce significant amounts of fluorspar domestically. The team viewed Lost Sheep as an opportunity to revive the U.S. fluorspar industry and claim significant market share. “With this fluorspar project, the material coming out of the ground was already about 50% of the final product, so the processing required was minimal,” Walker explains.

Ares inherited Lost Sheep’s permits with the purchase of the mine. Even more compelling was that the Lost Sheep Mine was part of a much larger fluorspar anomaly, stretching around 16 kilometres along an area in Utah called Spor Mountain. Fluorspar was everywhere, with showings breaking through to the surface and pipes in multiple locations. “It was fascinating,” says Walker.

Lost Sheep had never been professionally developed so Ares started by conducting geophysics, including LiDAR and electromagnetic surveys, to pinpoint where the anomalies were. From there, the Ares team began drilling, collected samples and conducted metallurgical testing.

Ares also engaged international partners to design the infrastructure for processing the fluorspar. With their help, the company designed plant layouts and, thanks to fluorspar’s critical mineral status, secured federal support in the form of a United States Department of Agriculture loan. This enabled Ares to purchase a 50-acre industrial site with existing infrastructure, including buildings that could be used for a processing plant.

A three-storey lumps plant is already on site, and Ares is now working to construct a flotation plant with support from the state of Utah. The facility is designed to produce higher-grade fluorspar for chemical manufacturers and defence contractors. There is critical infrastructure, including a rail spur for efficient transportation of the fluorspar, heavy mining equipment and an advanced ramp system to access the ore bodies.

Geologically, Lost Sheep is a pipe system that consists of non-contiguous pipes clustered together. This structure allows Ares to install a ramp system – a corkscrew-like framework – that intersects multiple ore bodies. Based on this setup, Ares reports that it should be able to extract around 130,000 tons to 140,000 tons of earth annually, which could translate into around 50,000 tons of final product per year for sale.

“When we first ran our estimates, we based them on a high-grade flotation product priced at about $500 per ton, which would result in roughly US$30 million in annual revenue,” Walker says. “However, given the upward trend in fluorspar prices, those numbers could be higher.”

Another advantage is relatively low operating expenses. Unlike many mining operations, Lost Sheep doesn’t require a large workforce.

Ares has agreements lined up with end users of fluorspar and has been forging partnerships with entities such as the Department of Defense and the Department of Energy, which are actively seeking domestic supply sources.

For example, the U.S. produces around 80 million tons of steel annually, requiring about 20 pounds of fluorspar per ton. And with aluminum production using about 60 pounds of fluorspar per ton, these two industries alone create a significant domestic requirement.

That growing demand isn’t limited to traditional industries like steel and aluminum, however. The rise of lithium-ion batteries is set to become a major driver of fluorspar consumption, reshaping the market’s dynamics.

And this brings us to acid-grade fluorspar, or acid spar, which undergoes additional chemical refining to achieve a purity level of 97% calcium fluoride (CaF2). Currently, there is no operation in the U.S. producing acid spar, marking a substantial opportunity for producers.

“If we have our plant up and running, we’ll be able to serve about two-thirds of the U.S. fluorspar market,” Walker explains. “By producing acid spar, we can cater to a much larger portion of the U.S. fluorspar market and meet the needs of these key industries.”

International demand for fluorspar is increasing too, as China’s fluorspar reserve has suffered due to excessive mining. The Chinese government tightened its control over the material, leading to a decline in fluorspar exports. Official customs data reveals a steady drop in China’s fluorspar exports over the years, accompanied by a surge in imports, particularly in 2023. Now that China is facing these challenges, the pressure they once placed on the market is gone. This creates an opportunity for other countries to step in.

These factors mean it is a good time to be transitioning from exploration to production. But shifting from a junior mining company to a manufacturing company brings challenges from both operational and financial standpoints.

Walker is counting on his experience in nuclear engineering and project management to lead the company into its next phase. In the past, the Ares CEO has helped to build large manufacturing facilities such as for reactor cores for submarines – billion-dollar projects that required hundreds of personnel.

“I have had extensive exposure to large-scale project management, cost control and the implementation of manufacturing and processing operations, which has been invaluable in how I approach managing new manufacturing operations at Ares, overseeing processing and organizing the team,” Walker says.

Fluorspar demand is expected to grow by 2.76% annually over the next five years, according to Mordor Intelligence. Given this outlook, Walker sees a lot of potential. In five years, the CEO is looking beyond the Utah operation toward untapped potential across the entire continent.

“There used to be a thriving fluorspar industry in the U.S. before it moved overseas, and effectively, we’re working to bring it back.”

This story was featured in Canadian Securities Exchange Magazine.

Learn more about Ares Strategic Mining at https://www.aresmining.com/.

CSE Issuer Stories, Magazine

A Model of Balance as Production in Colombia Designed to Support Exploration in the Yukon

March 5, 2025 Angela Harmantas

For junior mining companies, the path to generating revenue, let alone achieving profitability, is often a long and winding road. But if Forge Resources (CSE:FRG) continues to reach the objectives it has set for its flagship assets, it might just become a member of that exclusive club.

The assets in question include a Yukon gold project named Alotta, located near Western Copper and Gold’s renowned Casino deposit, and the La Estrella coal project in Colombia, a fully permitted asset poised for revenue generation (Forge holds a 40% interest and can acquire up to 60%).

Canadian Securities Exchange Magazine spoke with Forge Chief Executive Officer PJ Murphy and Chief Operating Officer Cole McClay in early December to learn more about the company’s goals and how Forge has positioned itself to build value and minimize dilution at the same time.

It is rare to see a junior resource company on the cusp of funding its own exploration. Can you tell us how this all came together?

Cole McClay (CM): We initially acquired the Alotta project after stepping away from our previous exploration efforts in Mexico. After evaluating several prospects, Alotta stood out due to its strategic location just 40 kilometres from Western Copper and Gold’s Casino deposit, within the same geological setting.

In November 2023, we negotiated an option agreement with Strategic Metals to acquire 60% of the project and commenced our maiden drill program. The property was previously undrilled, and our first hole revealed 211 metres of 0.46 grams per tonne gold near surface, which was very promising. Following that, we drilled two holes in late 2023 and another four between May and July 2024, all of which showed near-surface porphyry-style mineralization.

While still in the exploratory phase, we’re gaining a clearer understanding of the project’s structure. Our next phase of drilling is planned for May 2025, once weather conditions in the Yukon are favourable.

As for the La Estrella coal project, it came to us through a colleague in Colombia. The project was already fully licensed, with production and environmental permits in place, which made it an attractive opportunity. We negotiated an option to acquire and have since obtained the surface rights and conducted additional drilling to update the 43-101 report. Currently, we’re conducting underground bulk sampling to further refine our understanding of the resource.

It sounds like you’ve got a busy year ahead in 2025. PJ, could you share the strategic focus for the company over the next three to six months?

PJ Murphy (PJM): Right now, our primary focus is on Colombia. Cole, a few team members and I just returned from overseeing construction of the portal and the start of underground operations at the La Estrella property. It’s an exciting stage for Forge.

To get into production at La Estrella, initially we don’t have to go very deep, only about 50 metres underground to reach our first cross-cut, which allows access to six of the eight large coal seams. We’re moving forward with a bulk sampling program, and we have an offtake partner for that coal.

The bulk sample alone is expected to be revenue-generating, which is a crucial step toward full production. The property is fully permitted for 180,000 tonnes of coal production annually with the potential to scale up to 360,000 tonnes per year. According to a historical SRK Consulting NI 43-101, we are sitting on an estimated 22.5 million tonnes of coal – measured, indicated and inferred – in the ground and a mine life of about 45 years. The project has significant potential.

For now, our focus is on advancing the Colombia asset to a revenue-generating stage, which would help us to self-finance our exploration work in the Yukon. For a junior mining company, reaching a point of profitability and positive cash flow is rare. It’s even more uncommon to be able to self-fund exploration, but that’s exactly what we’re aiming to do with the Yukon project.

Speaking of the Yukon, we’ve already drilled six holes there and hit mineralization in every one. As Cole mentioned, we’ve identified where the next drill holes should go for the upcoming season. If La Estrella is revenue-generating as anticipated, we’ll be well positioned to fund a more extensive drill program and further define the resource.

We’ve reviewed the initial six drill results and the property’s geological signature. With that information, we can strategically target shallow drill holes to maximize value and further prove the Yukon asset’s potential. Though it might seem unconventional to have both a gold-copper project in the Yukon and a coal project in Colombia, there’s real synergy between the two.

Profitability is a term we don’t often hear in the junior mining space. Could you walk us through Forge’s path to profitability?

PJM: Our immediate focus is on developing the underground infrastructure for a bulk sampling program. Initially, we estimate that we can extract 20,000 tonnes of high-grade coal for sampling and analysis. The key here is that we can also sell the coal we extract for analysis purposes. We already have an offtake partner lined up, ready to take that coal Free on Truck. This bulk sampling program is a significant step toward generating revenue and moving closer to profitability.

There’s talk of the world moving away from coal, but demand, particularly from Asia, India and Europe, tells a different story. Could you explain where the demand is coming from and why Colombia is positioned to help meet it?

CM: The demand for both thermal and metallurgical coal has never been higher, and I think global demand will remain strong for decades.

As long as the world needs concrete and steel, metallurgical coal will be essential. Similarly, thermal coal will continue to be required as long as countries build coal-powered electricity plants. What’s particularly advantageous about this project is that we have access to both high-grade thermal coal and metallurgical coal at depth, positioning us to meet a wide range of global demand.

PJM: Globally, coal demand remains strong, especially in Southeast Asia, where up to 43% of electricity is coal-derived. Despite this, rolling brownouts and blackouts persist due to insufficient power generation, highlighting the ongoing need for coal.

Colombia, with coal as its top resource export, provides a favourable regulatory environment and access to world-class coal miners and engineers. At La Estrella, we’re progressing toward our bulk sampling phase, where we anticipate extracting coal at a total cost that we expect will help us to maintain favourable margins. We’re noting that metallurgical coal currently commands a strong spot price, and assuming that remains the case, it gives us reason to be optimistic.

Moving to Canada, there seem to be similarities between the Alotta property and the Casino deposit. Can you talk about these and how that might be shaping your next steps?

PJM: The Alotta property shows striking similarities to the Casino deposit, which is incredibly encouraging. We’re just 40 kilometres away and based on what we’ve staked and the geological signature at Alotta, we’re very encouraged. The initial results from our first six drill holes have been very promising and are driving us to move forward with more extensive exploration to truly prove out the asset.

Finally, what makes Forge a unique proposition at this stage?

PJM: When you look at Forge Resources as a small-cap junior mining company, we are on a unique path moving toward potential revenue generation through a bulk sample program, progressing to full production, and potentially self-financing our drilling exploration in the Yukon. This combination is incredibly rare.

Forge has consistently set clear goals and benchmarks, and we have delivered on what we’ve promised every step of the way. This track record not only cements our credibility but also sets us apart in the industry. It’s an exciting journey for both us and our shareholders, and we are committed to continuing to deliver value.

This story was featured in Canadian Securities Exchange Magazine.

Learn more about Force Resources at https://www.forgeresourcescorp.com/.

Magazine

Canadian Securities Exchange Magazine: The Mining Issue – Now Live!

February 26, 2025 CSE Blogger

Welcome to the latest issue of Canadian Securities Exchange Magazine, your source for in-depth stories of entrepreneurs from a wealth of different industries.

While divisive and inflammatory rhetoric might dominate media coverage and skew perceptions of Canada’s stance in the world, the reality is that there is no question among seasoned business leaders worldwide that Canadian mining, exploration, and capital markets expertise is second to none.

In this issue of Canadian Securities Exchange Magazine, we feature six Canadian companies that are leaning into innovation and expertise to meet global demand for strategic minerals, precious metals, and greater energy supply. Plus, we spotlight exclusive insights from top mining experts and CSE Director of Listings Development Phillip Shum, who shares his journey to the Exchange, views on capital markets, and tips for companies going public.

The companies featured in this issue are:

Forge Resources (CSE:FRG)
Ares Strategic Mining (CSE:ARS)
Forte Minerals (CSE:CUAU)
PTX Metals (CSE:PTX)
Kuya Silver (CSE:KUYA)
Quebec Innovative Materials (CSE:QIMC)

Check out the Mining Issue of Canadian Securities Exchange Magazine here:

CSE Issuer Stories, Magazine

Clean Energy From an Unlikely Source Catches on Across North America

January 8, 2025 William Farrington

Vancouver is a city known for its beautiful natural surroundings, rich history and a location that today serves as a gateway to the Asia-Pacific region.

Few people would rank wastewater management on a top 10 list of the city’s best features, but it deserves recognition nonetheless, as there is plenty to deal with, and municipal officials view wastewater not only as an item for mass disposal but also as a valuable resource.

In 2023, Vancouver sought to expand a system that, at the time, heated 5 million square feet of properties, including the 1,100-unit Olympic Village mixed-use community.

The goal it had in mind was to increase that square footage to a total of 22 million, in part by capturing heat from sewage wastewater and recycling it back into the system via a process called wastewater energy transfer, or WET for short.

It was the largest WET project in North America at the time, and a local company by the name of SHARC International Systems (CSE:SHRC) played a central role. SHARC secured a deal to supply and commission five of its WET systems to perform sewage screening for the False Creek Neighbourhood Energy Utility, marking its biggest sale to date.

“We’re part of a system in Vancouver that provides heat and hot water to 22 million square feet of property that includes apartment buildings and stretches for about 2 miles (3.2 kilometres) along Second Avenue,” explains SHARC President and Chief Executive Officer Lynn Mueller.

“Most buildings in that area are connected to the False Creek Energy Centre, which is powered by our system. We also have a project that covers 250 acres in Denver, so the scalability is definitely there, and the systems are only getting bigger as demand increases.”

The benefits of WET technology are easy to understand. The world needs more energy than ever, and millions of potential megawatts in the form of heat flow down drains with regularity. After spending huge amounts of money to heat water, letting it flow down the drain and into the ocean or local watersheds when an alternative to recapture it exists is a wasted opportunity, if not irresponsible.

Now, what if we could capture some of that heat and cycle it back into local heating networks? This is the concept that makes SHARC such an intriguing company.

“Many people think we generate electricity, but what we actually do is move thermal energy,” explains Mueller. “Our systems are thermal energy networks, so we measure in megawatts the amount of heating or cooling we can move. For instance, the system in downtown Vancouver is around 10 megawatts. The big advantage is that we’re reusing the same thermal energy day in and day out. You give people hot water, they use it, throw it away, and we recover that heat from the wastewater. It’s a circular economy at its finest.”

Wastewater, such as sewage from residential or commercial properties, is typically around 15 degrees Celsius to 16 degrees Celsius due to daily activities such as showering and doing laundry. SHARC systems tap into this heat source by diverting a portion of the wastewater into a heat exchanger.

Utilizing the WET approach, the SHARC system extracts the thermal energy from the wastewater and transfers it to a building’s heating or cooling loop. The energy can then be used to heat spaces, provide hot water, or even cool buildings by reversing the process.

Once the heat is captured, the wastewater is returned and the system can extract energy from the next batch of wastewater. The opportunity to reduce dependence on natural gas and other carbon-intensive energy sources, thereby lowering both energy costs and greenhouse gas emissions, is obvious.

By design, SHARC systems are scalable, with solutions available for individual buildings or even entire districts, making them a sustainable solution for urban areas.

The company markets two systems, one named SHARC and the other, PIRANHA.

“They are similar in function but very different in design,” Mueller notes. “The SHARC system is much larger and is meant for institutional-sized applications – think municipal or district-wide systems. The PIRANHA is designed for single-building use, like a residential or commercial property. But the concept behind both is the same.”

As far back as 2015, SHARC installations were commissioned for use at the Sechelt Water Resource Centre not far from Vancouver.

In 2020, the company put its technology to use for a multi-family residential project spearheaded by Morgan Creek Ventures in Boulder, Colorado.

And today, SHARC technology can be found in residential complexes and campuses across North America.

The company’s revenue for the first half of 2024 reached $1.56 million, nearly matching the total for all of 2023. In the second quarter alone, revenue was $780,000, a 72% increase compared to the same period the previous year.

And as of late August 2024, SHARC’s order backlog stood at $2.7 million.

Clearly, there is demand for the company’s approach to sustainable heating that should only grow as the concept becomes known by more developers and communities. And as it grows, SHARC is virtually guaranteed a large portion of it.

“The market is huge – easily in the billions,” says Mueller. “There are really only two companies in the world that do sewage heat recovery, which would be us and one based in Germany. Every city is starting to look at this technology as a serious alternative to traditional energy sources. When I first got into this, no one had even heard of sewage heat recovery. Now, every major city is exploring it as a way to reduce their carbon footprint.”

Looking ahead, SHARC is targeting large markets, such as California and New York, that already lean toward clean technology on multiple fronts.

Among the projects for which it has secured orders is one involving four PIRANHA T15 WET systems for a mixed-use development in Berkeley, California. That project, the largest yet for the PIRANHA line, underscores the growing demand for SHARC’s WET solutions in the U.S.

In New York, meanwhile, SHARC will be part of a US$1.2 billion redevelopment project in Brooklyn.

Hearing all this, one gets the sense that the potential for this technology is as untapped as the renewable resource being released into our sewers.

“We’re seeing a lot of growth, and our sales pipeline is the largest it’s ever been,” says Mueller. “We used to get one strong lead per week, but now we’re getting two or three every day. It’s really exciting to see how far we’ve come and how much potential lies ahead. The opportunities are enormous, and now that people are coming to us, rather than us having to convince them, it’s incredibly rewarding. We have a great team in place, and I’m confident we’ll continue to lead the way in wastewater energy transfer.”

This story was featured in Canadian Securities Exchange Magazine.

Learn more about SHARC International Systems at https://www.sharcenergy.com/.

CSE Issuer Stories, Magazine

Growing Demand for Natural Fertilizers Sets the Stage for Major Capacity Expansion

January 1, 2025 Peter Murray

Humans could live without cars if they had to, computers too and, yes, even their mobile phones. You could arguably get by without modern forms of shelter as well, but food is non-negotiable – we all have to eat.

Replenish Nutrients (CSE:ERTH) utilizes a natural approach to formulate fertilizers for the farmers who grow our fruits and vegetables. Its products are designed not only to feed the plants in farmers’ fields but to nurture and repair those fields as well. “Treat the soil with respect and it will respect you back” is one way to summarize the company’s way of thinking, and if demand for Replenish products is any indication, it’s working.

Replenish Nutrients Chief Executive Officer Neil Wiens spoke with Canadian Securities Exchange Magazine in early September about business to date, feedback from the farming community and expansion plans designed to take operations to the next level.

The essence of your business is using natural methods over industrial ones to serve a sector we rely on every day: agriculture. Tell us in your own words what Replenish Nutrients does and why you started it.

Replenish is a natural fertilizer company using biochemistry, rather than chemistry, to liberate nutrients from mineral fertilizer sources. We use non-leachable fertilizer products that hang out until biology does what it is supposed to, which is to liberate these elements and make them available to the plant in the right place at the right time.

Let’s use a phosphorous product as an example. We use rock phosphate, just like any phosphate fertilizer company. But instead of putting it through a chemical process, adding sulphuric acid and creating waste, we utilize the full rock phosphate mineral. When we do that, not only phosphate reaches the soil but also calcium, magnesium and iron, so the plant is getting the micronutrients it needs.

Essentially, we are adding micronized sulphur and solubilizing bacteria and fungi that will give the phosphate, calcium and magnesium full availability when the plant needs it the most.

Our products restore soil health while also reducing the sector’s overall carbon emissions by as much as 200,000 CO2 equivalent tonnes annually via a low-emission manufacturing process that produces a low-salt alternative to synthetic fertilizers.

What feedback has the farming community provided along the way that was unexpected or helped you to further refine your products?

I am an animal nutritionist by trade and so I always look at treating the soil as the world’s largest feedlot. You have billions of microbes in the soil, and if you feed it the same as a human – give it a balanced diet – the soil reacts as our bodies would.

I would say the biggest feedback we get from farmers is that they see good things such as ladybugs showing up on their crops and also less fungicide use. These were things I was not anticipating originally; we were just trying to fertilize the plants and get a better nutrient density. But the farmers brought us consistent feedback that they were getting beneficial microbes and beneficial insects that they had not seen on their plants for 10 or 15 years.

What is the economic case for farmers using your products? Do Replenish products offer a greater yield increase per dollar, for instance?

As far as the economics are concerned, we basically say that you are not going to lose yield. You could gain it, but you won’t lose it. So, you are as good as conventional methods.

On the other side, it goes back to my previous answer where farmers are realizing that their crop inputs have decreased. They are not using as many pesticides or fungicides as they typically would, and so that all of a sudden creates a better ROI. And that’s as early as a year or two into the program.

How about product distribution? Farming is a long-established industry. How does a soil replenishment company market its products? What does the sales cycle look like?

We market in two different buckets. Our main bucket has thus far been a blended type of product that we went direct-to-farm with because logistically it was hard to manage. With a blended product, we have all the ingredients to bake a cake, if you will, and we’ve mixed them, but we haven’t put them in the oven.

On the other side of distribution, which we really focus on and believe will eventually show in our results, is that we have spent a lot of dollars and effort on our IP and how we actually bake the cake. We’ve figured that out – we have these ingredients and we know they work together. Now we have to put it in a form that all the farmers are used to using, which is a little granule. It also has to be able to keep microbes alive and play nice with the existing chemical fertilizer because nobody is going to go 100% off of that way of thinking.

So, we utilize that granule and distribute it through our partners who are independent fertilizer dealers such as CropMaxx or AgroPlus.

Our main focus has been Alberta because it is our backyard. But we have moved into Saskatchewan, Manitoba and, most recently, the Fraser Valley in the Pacific Northwest. The Fraser Valley market will probably expand the fastest for us because you have all of these phosphorous regulatory rules in place there, and our product fits what they require. Plus, blueberries and strawberries and vegetables just love our products.

Repeat orders are an important indicator for investors trying to understand the strength of a business like yours. Do customers tend to stay loyal to the brand?

If you look at our financials, we have been pretty consistent around the $15 million per year sales mark for the last few years because we have not expanded our granulation facilities, and those are the same customers every year. So, as repeat business, it has been awesome. And this is that initial product that I was talking about, the blended product. It is static business and repeat and consistent.

On the granulation side, this is where our growth is coming as we plan to expand to 2,000 tonnes of production per month. This is what the independent dealers are after, and another name I will mention, especially in the Fraser Valley, is TerraLink, who has been using a lot of our granules. Our dealers go through the granules like crazy, and now it’s just a matter of supplying them with what they can sell.

You just mentioned facility expansion. Can you share more detail?

One thing we have done, and unfortunately it’s about a year later than we’d hoped because of technical challenges, is spend the past six to eight months refining the process to the point where we are now in expansion mode at our Beiseker facility, which was our initial commercialization plant. We were at about 2 tonnes per hour capacity potential, and by the end of November or beginning of December, we are looking at expansion to 5 tonnes per hour.

Replenish released quarterly financial statements in late August and revenue was on the soft side. Was that just seasonality that works itself out through the balance of the year?

The main improvement will be that fall is a better time of the year, so Q3 and Q4 are always stronger, and you are going to see those numbers increase.

A lot of farmers had great crops this year, particularly in zones that we have been targeting in the past two years. These farmers have cash flow and liked their product over the past year because it did well for them. So, that will help that end of things.

And really the main thing that is going to guide us into 2025 is going to be that 5-tonne-per-hour capacity, which equates to 2,000 tonnes of granulation per month. That is our main target for our revenue expansion.

Is there anything we have missed?

We’re proud to be a partner of Emissions Reduction Alberta and the Alberta Government. We’ve received a $7 million dollar grant to replicate Beiseker in DeBolt, Alberta. And we have further plans for expansion, too. There are good jobs in rural communities to be had from what we’re up to.

We also haven’t mentioned that our main product is a zero-waste product, non-chemical and we thrive on small footprints. As a result, the IP we have developed can be replicated anywhere on the globe. So, take that as you will as for what our plan is. But what I will say is that it gives us the optionality to go and do this in Africa, in India or in areas of the Pacific Northwest where being local makes for good logistics. We are potential exporters of made-on-the-Prairies Canadian ingenuity.

This story was featured in Canadian Securities Exchange Magazine.

Learn more about Replenish Nutrients at https://replenishnutrients.com/.

CSE Issuer Stories, Magazine

Savvy Business Model Leverages North America’s Race to Build Renewable Energy

December 25, 2024 Oliver Haill

While Europe gets much of the credit for leading the global push to adopt renewable energy, the United States and Canada are actually among the world’s top power producers from clean sources, thanks in large part to an abundant water supply for hydroelectric stations.

But solar and wind feature more prominently than most people probably realize, particularly on a total output basis in the United States. In both countries, multiple forms of renewable energy play a role in shaping the supply profile for regional power grids.

The stage is thus set for viable new renewable projects to help North America meet its increasing need for electricity, and NU E Power (CSE:NUE) is playing a role with an early focus on solar opportunities in Alberta.

NU E Chief Financial Officer John Newman spoke with Canadian Securities Exchange Magazine in mid-September about Canada’s renewable energy market, the company’s business model and near-term plans for growth.

Let’s begin with a look at why NU E Power was first established.

NU E was founded in 2021 by Devon Sandford, an electrician who specializes in the construction of utility-scale solar facilities and is also an entrepreneur. His vision was to develop a solar-to-hydrogen model, which was the initial business plan of the company. Back when we were looking for the capital to develop these projects, we were introduced to Low Carbon out of the U.K. and were able to strike what I think is a very unique joint venture with them.

Can you tell us how the joint venture with Low Carbon Investment Management works?

NU E is responsible for sourcing and developing solar projects in North America. We source the projects, we move through the regulatory process to get approval, and Low Carbon is responsible for funding all of the construction and development costs.

Once it gets to the investment decision date, we undertake a third-party valuation and the development is sold by the joint venture to a specific special purpose vehicle (SPV) set up for the purpose of constructing and operating the solar farm.

At the end of the day, NU E ends up with a 25% share of each SPV. So, for us, it’s basically a free carry on 25% interest in the solar farm. It’s a very unique situation and that’s something we want investors to understand – that this is really a very attractive venture for us as a company.

How long does the process take from beginning to end?

It’s a fairly lengthy regulatory process; from start to finish it can be 12 to 18 months. We source access points into the grid, we source available land, and then once we find suitable locations, we commence the regulatory process. We have a couple of developers on staff and Low Carbon pays 100% of their costs, as well as some of the management costs, and they basically pay 50% of our general and administrative expenses, excluding any kind of public costs and things like that.

Tell us about the joint venture’s first project.

Lethbridge One is an 8.75 MWac (MWac denotes nameplate capacity for a solar power facility) project that should go live this month. The cash flow generated from this project will be used to pay down the financing costs, so in terms of cash flow directly to NU E, it is expected to be $10.4 million over the next two years, meaning 2025 and 2026. Essentially, we’re building asset value at this stage.

As we look to the future, we will see cash flow coming from the sale of developments from the joint venture to the specific operating vehicles that are set up to construct and operate solar farms.

What’s coming up after Lethbridge One?

We’ve got four other projects in the development pipeline, around 500 megawatts worth that are in various stages of regulatory approval. That pipeline is probably worth $750 million to $1 billion of investment into Canada before taking into account investment tax credits or other incentives that the government has put in place to encourage renewable energy development.

Lethbridge One is quite small, but it was good for both Low Carbon and NU E to embark on a project like this just to understand the process. I think we’ve got all of that stuff ironed out, and we’re looking to much larger projects.

Can you talk about the energy market in Canada, the appeal for investors and what levels of government support and subsidies there are?

Our primary focus in Canada is Alberta. We have probably the most sunshine per year of anywhere in the country, so it’s an ideal place for solar farm developments. The preference at this stage is to operate in Alberta because it’s a deregulated market too.

Once you go through the approval process you can access the grid. What I think makes the renewable energy space ultimately attractive for investors is that you’ve got a lot of support from the government, both federally and provincially, in the form of investment tax credits on capital expenditures on renewable projects. For example, if we’re spending $1 billion, we could see up to $300 million of investment tax credits, so it’s a significant impact on project economics.

Another incentive is that Canada is no different than other countries in imposing a carbon tax, which is currently around $80 a ton and I think rising to $170 a ton by 2030, so there’s a big incentive for people to utilize renewable energy.

And when it comes to energy pricing, Alberta is a deregulated market and the price does go up and down, so we look to try and put in place power purchase agreements where we can establish an economic price for our power, which helps with financing and all sorts of things surrounding project economics. We’re also looking at the possibility of putting in place battery storage, so you can store energy and then release it into the grid when the prices are right.

Having gone through the regulatory process once, what’s the expected timeline for the rest of the pipeline?

Alberta went through a bit of a moratorium on approving new power projects that started last year and ended earlier this year. That’s delayed the approval process and seen some new rules around renewable energy put in place. So, it has impacted the timing to some extent, but I believe in the next 12 to 18 months that we will have approval on certainly the next two projects, Lethbridge Two and Lethbridge Three, which is around 150 megawatts of solar.

Does working with a U.K. renewable energy company set you apart in Canada?

Low Carbon is a significant player in the renewable market in the U.K. and Europe, so it gives us credibility that they’ve chosen to work with us and are prepared to operate the joint venture under the terms we have, which I think are very favourable to us. And I think it’s positive not only that we have a funding partner but also that they’re a well-recognized player in the renewable sector.

Is there opportunity for NU E to expand outside of the Low Carbon deal?

The joint venture is fairly well defined, and if there are projects that we bring to the table that they’re not interested in then we have the ability to pursue those opportunities ourselves.

We do have a couple of opportunities that we’re working on outside of the Low Carbon deal. The original business plan behind NU E was the production of green hydrogen through solar energy and that remains one of our key targets. We’ve actually just acquired 49% of Diloo Energy, a majority Indigenous-owned and -operated green hydrogen developer in Canada. We need to look as well at opportunities that will generate cash flow in the nearer term.

This story was featured in Canadian Securities Exchange Magazine.

Learn more about NU E Power https://www.nu-ecorp.com/.

CSE Issuer Stories, Magazine

Product Quality and Local Manufacturing Are Just Two of the Key Advantages This Battery Maker Enjoys

December 18, 2024 Peter Murray

Batteries have been around since 1800, when Alessandro Volta employed zinc and silver discs, among other components, to create a device (the voltaic pile) that generated electrical current. Well over two centuries later, Volta’s invention is more important than ever, with battery technology continuing to evolve at a breakneck pace.

Hybrid Power Solutions (CSE:HPSS) is an Ontario-based company with a home-grown take on the power storage industry that is proving to be a good match for today’s competitive landscape.

The company’s focus on batteries that operate to extremely high standards, thanks in no small part to domestic manufacturing with North American components, has won it a list of clients of which any entity would be proud. Colony Hardware, the United States Armed Forces, plus major power utilities and mass transit systems are all part of the customer base. It reflects a commitment to understanding user needs and delivering top-quality products that completely fulfill them.

“When I started Hybrid Power Solutions, the focus was on how to use batteries to transform the way the industrial and commercial sectors operate,” explains Hybrid Chief Executive Officer Francois Byrne. “What I mean by that is better performance, better safety, better ROI and zero compromise to what you are doing.”

A review of product specifications helps to illustrate this concept. Hybrid’s products operate in greater temperature ranges than those of its competitors, most of them from China, which is important given that many of its customers use products outdoors or in environments where operating conditions can reach extremes.

The Hybrid lineup comprises batteries from 3,000 watts up to 150,000 watts, with the ability to go even higher based on client requirements.

“We can power your welder off this battery, your crane off that one and your trailers off these ones,” says Byrne, highlighting a construction site scenario. “We bring the hybrid side as well with solar power generation. Essentially, we are transitioning our customers to a clean future without having to say ‘clean’ or ‘green’ or any of those things. We are selling clean technology based on performance and cost savings, and the side benefit is that we are sustainable and a better option.”

The Hybrid Power Solutions concept traces back to when Byrne was racing hybrid cars as a student while earning a degree in Carleton University’s Sustainable and Renewable Energy Engineering program. It was clear to Byrne that the torque performance characteristics that worked so well for race cars could be applied in commercial settings and meet industrial standards.

“We made a conscious decision early on that we were not going to be a consumer-grade product. Our focus has always been on manufacturing to a professional standard. Essentially, you are making your living using our product, and if it goes down it is dollars lost, not just an inconvenience,” says Byrne.

That commitment to understanding quality from the customer’s perspective is bearing fruit, with multiple users placing repeat orders after having a good experience with their initial deployment of Hybrid batteries.

Byrne tells the story of a California-based utility that contacted Hybrid after seeing a product review on YouTube.

“They bought a unit and six months went by and we hadn’t heard anything. We contacted them to see how things were going, and they said our battery worked phenomenally and was the only one that did exactly what they needed it to do. We received a second order, and then about three months ago they came back with a third order, this time for 105 units.”

Estimates of the size of the battery energy storage market vary, but one guideline, a recent report published by Fortune Business Insights, suggested US$114.05 billion by 2032, representing a compound annual growth rate (CAGR) of 20.88%.

With so much at stake, competition is sure to increase. It is going to be the companies that combine effective marketing with modern technology that succeed in the long run, a concept not lost on Byrne.

“Innovative technology is at the forefront of our strategy, but that will only get you so far,” says the CEO. “I’ve seen incredible technology that never gets into a revenue-generating company because the sales process wasn’t there. This is where we differentiate ourselves – our partnerships with large distribution channels and tier-one clients will enable us to scale in a way that other companies cannot.”

And given the geopolitical state of the world, where new global alliances are drawing battle lines that directly threaten the status quo, regional security concerns are playing a role in shaping the future of technology and the opportunities available to the corporate sector.

Byrne says that consumers don’t seem to care that much about where their products are made, whereas attitudes on the commercial side have shifted noticeably over the past few years. Business leaders increasingly feel that the West would be well advised to learn to fend for itself, so local manufacturing is taking on greater importance and becoming more appealing to purchasing managers.

“A lot of our products have parts not only from Canada but from the U.S. as well,” Byrne observes. “And while I’m not saying that it isn’t a challenge, as North America is lagging in certain manufacturing capabilities, we are seeing a transition. It is all leading to a holistic and North American-based manufacturing ecosystem.”

Clearly, Hybrid has established a strong base from which to support management’s longer term plans to aggressively scale the business. The market is there, the technology is there, not to mention accolades from an expanding list of customers.

As with many young companies, now Hybrid mostly needs time to grow to the level of operations it has in mind. And that is one of Byrne’s key messages for the investment community.

“This is a real company with real technology, and our door is open to our investors to come and see what we do,” Byrne says in offering some final thoughts. “How we take a raw cell and build it into something that will power your welder for three shifts straight. That kind of thing is difficult to do, but we’ve done it and we expect this company to grow to new heights. We need investors to believe in what we do in the same way our customers believe and help us scale this to a level where every construction, railway, mine and military site out there is using our product.”

This story was featured in Canadian Securities Exchange Magazine.

Learn more about Hybrid Power Solutions at https://www.investhps.com/.

CSE Performance

Canadian Securities Exchange CEO Richard Carleton’s Year-End 2024 Interview

December 17, 2024 CSE Blogger

One of the reasons financial markets never lose their vast audience is that they constantly evolve. Whether the change makes investors happy or not, there is always something new taking place, and one day is never the same as the next. It is a dynamic that was on full display once again in 2024.

Large-cap stocks remained strong, with broader indices setting dozens of daily closing records. And while not fully keeping pace, small-cap stocks finally caught a break in 2024, with those in the Canadian market benefiting from several months during which it seemed like gold was reaching a new all-time high every day. Retail trading staged a resurgence in the second half of the year, and institutional investors returning to the Canadian junior market became a frequent topic of conversation.

The Canadian Securities Exchange continued its evolution as well, and in May, celebrated its many successes over the 20 years since it became recognized as a stock exchange by the Ontario Securities Commission. The Exchange also undertook policy and other adjustments to business lines, joined an important global organization for exchanges, and went into the end of the year positioned to take advantage of renewed interest in cryptocurrencies and other digital assets.

With 2025 just around the corner, Richard Carleton, CEO of the CSE, shares his thoughts on Canadian market performance during 2024, the outlook for the year ahead, and previews important new initiatives that issuers and investors will surely want to watch.

In 2024, the CSE celebrated its 20th year as a recognized exchange. Issuers raised more than $26 billion in capital over the course of those two decades, and the CSE became one of the fastest-growing exchanges in the world. What does this milestone mean to you and to the broader CSE team, many of whom have been with the Exchange for a large part of their careers?

Our team takes a lot of pride in the success that the organization has experienced, and particularly in the last 10 to 12 years. It’s fair to say that the first 10 years were quite challenging, as we fought to become a meaningful part of the Canadian capital markets.

We are extremely pleased, not just with the achievements of the organization itself but those of CSE issuers as well. Companies have raised more than $26 billion through the facilities of the CSE, and being part of that means we have helped to foster the creation of new industries in Canada, the United States, and beyond.

The CSE has been part of several key investment themes over the last 10 to 15 years, whether it was the development of the cannabis industry in Canada and the U.S., or as is the case in the current market, the mining industry. The mining industry is vibrant, both in the so-called battery metals sector, which hopes to provide the needed materials to support the decarbonization of the economy as well as the precious metals group, which is riding the wave of record highs in the price of gold this year.

We’re very happy that we have made it this far, but our work isn’t done by a long shot. We look forward to continuing to help Canadian entrepreneurs, and entrepreneurs from around the world, tap into the Canadian public capital markets.

In June, the CSE announced that it had been recognized by the World Federation of Exchanges (WFE), the world’s foremost group for exchanges and clearing houses. What benefits do you anticipate membership will bring?

I’m actually just back from the annual meeting and general sessions of the World Federation of Exchanges in Kuala Lumpur, Malaysia, so I’ve had a chance to witness the organization operating first-hand.

Our move to join the WFE reflects the reality that a lot of our issuers are looking beyond Canada for capital. We see issuers going to the United States, the U.K., Europe, Australia, and South Asia for money. Raising money locally is a challenge in Canada.

As our issuers look beyond Canada, we need to be out there ahead of them to explain to local investors and investment funds that we are part of the Canadian capital markets framework, and one of the aspects of that is undergoing the process we did to become a member of the World Federation of Exchanges.

Our policies, procedures, and rules were vetted by three exchanges: the Warsaw Stock Exchange, B3 in Brazil, and the Johannesburg Stock Exchange, to ensure that we meet global standards for issuer regulation and investor protection. That provides overseas investors looking to trade or invest in companies listed on the CSE the assurance that we meet the standard that the WFE represents.

CSE issuers have been noticeably more active raising capital in 2024. Which industry sectors led the way, and have investors shifted priority with regard to the sectors they are most interested in?

As I mentioned before, the mining industry, and in particular precious metals exploration companies, have been the leaders in terms of the number of financings completed. They tend to be on the smaller side because the needs of early-stage exploration companies are certainly not the same as companies looking to do significant expansions, so they are not looking for hundreds of millions of dollars at one time.

We have also seen some interest in companies that have integrated artificial intelligence solutions into their product offerings. Of course, with the increase in the price of a number of cryptocurrencies over the last six to 12 months, a lot more interest has come back into the blockchain and crypto space.

The big numbers continue to come out of the cannabis sector, but in terms of the number of financings completed, it is the mining exploration group that is leading the way at this point.

Many market participants believe the second half of 2024 provided a more encouraging operating environment for smaller Canadian public companies than the first half. What were the factors behind this and how did they influence the broader operating environment for issuers and for the CSE itself?

I would say that it was the first three quarters that really weren’t very good, from either a trading or capital formation perspective. And I think it is fair to say – and I am not being controversial in any way – that the federal government’s approach to capital gains inclusion was a significant negative for companies looking to raise capital in Canada. I mentioned earlier that we are seeing our companies go out from Canada more and very much looking to the United States, in particular, for capital.

I don’t think there is any doubt that the decrease in interest rates beginning earlier this year helped fuel both the opportunity for companies to raise capital as well as secondary market trading activity. We were at a very low ebb for the first three quarters of the year, but recently there has been about a 50% jump in trading activity across Canada, and certainly, the CSE has more than done its part in contributing to this increase in activity. The interest rate picture is one aspect of it, and the volatility we have seen in the marketplace around the U.S. election and since has been a factor.

I hope it is sustainable into the new year, as it tends to be a leading indicator of more activity on the listings and capital formation front. As entrepreneurs see more trading activity, and thus more interest in the junior capital markets, they, and investors, are far more likely to support new companies coming into the market.

The CSE’s trading and data operations are closely related but also can be viewed as separate business lines. How has each performed in 2024?

People often ask about the relationships between the different business lines at the Canadian Securities Exchange, or any stock exchange. First and foremost, it begins with the issuers. If you don’t have interesting companies that are making progress toward achieving their goals, it is unlikely that people are going to trade the stocks or be interested in the market data related to those companies. So, where it really starts is having a group of companies that investors in Canada and beyond are interested in owning.

With that, as I mentioned earlier, trading levels on the CSE and other Canadian markets have been very low, and I mean levels that we have not seen since 2013 and 2014. It was a very challenging environment.

During that time, we made some changes to our market data policies. Effectively, we have increased some prices for the first time since 2016 in the market data segment. It was a significant bright spot for the results of the organization over the course of the year, and in fact, as the team worked to implement the new pricing and policies around connectivity and access to some of the Exchange’s services, we identified additional customers. As a result, the performance of the market data business has been very strong in 2024.

The CSE welcomed Rektron Group as its second Senior Tier issuer in 2024. What has the overall pace of new listings been? And how does the CSE’s new listings activity rank within the broader Canadian exchange landscape?

The pace of new listings has been quite slow. In fact, not since back into the earlier teen years of this century have we seen such low levels of activity. It has picked up somewhat but delistings over the course of the year exceeded the number of new issuers we welcomed. Unfortunately, we are in a position in the business cycle where the overall number of companies listed on the Exchange at the end of the year will be smaller than what we started with.

That said, we have seen a pickup in activity, particularly since September. Over the last two quarters, we have been listing about half of the companies coming to market in Canada, which is close to historic norms. Perhaps we did a little better in 2022, and particularly in 2021. But, as I say, I am encouraged that we are seeing an increase in the number of companies coming in, and more importantly, an increase in the number of applications that our team is receiving, indicating that we should see a little bit of strength in the new year.

It is clear from CSE press releases that the Exchange’s team has been on the road quite a bit in 2024, attending conferences and meeting foreign executives and industry leaders. The United States seems to be a particular focus. Can you discuss the strategy for international outreach at the CSE?

One of the things people need to appreciate is that a Canadian reporting issuer can access the same prospectus-exempt capital formation techniques that a U.S. reporting issuer can use in the United States. What that means is that without becoming a company that is a reporting issuer with the SEC or listing on Nasdaq or the New York Stock Exchange, you can actually do private placements in the U.S. with U.S. investors using only your Canadian Securities Exchange listing. And the same is true for the other Canadian exchanges.

Given that the U.S. is the largest capital market in the world by a substantial margin – I believe the number is currently something like 62% of the world’s equity market capitalization – it means companies listed on the CSE have a tremendous opportunity to raise money in the U.S. without the significant additional cost that would be undertaken if they were to list on one of the national market system exchanges there.

That has definitely become a real focus for us. As I say, things have been a little tough in Canada over the past year and a half, whereas the U.S. markets have been significantly more robust. There is more risk capital available in the U.S. for entrepreneurs as well. U.S. investors are very interested in the battery metals and the energy metals, and they have been supporting that investment theme for the last two or three years.

But our companies have also gone further offshore. For example, companies in the gold exploration sector, in particular, have always attracted a strong following from Germany and Switzerland. We see our issuers going there for capital formation, as well as to engage in investor relations roadshows and other activities. Many also ensure that their website and continuous disclosure materials are available in the German language.

So, again, that means that we have to be there making sure that local investors understand who the Canadian Securities Exchange is, that we are a material and meaningful part of the Canadian exchange landscape, and that they are not assuming additional risk by investing in a CSE company versus one that is listed on another Canadian exchange.

Bitcoin’s price is near a record high as we head into the end of the year. Does this signal anything about the potential for change in how capital markets operate? Are there businesses that the financial community should be taking a closer look at?

That’s an interesting question because it appears that Bitcoin and other cryptocurrencies are here to stay. And what we increasingly are seeing is those markets being pushed by the regulators in many respects to use the framework and structures that are familiar to those of us in the equity world. So, whether that is the idea that participants in these markets should be members of self-regulatory organizations like the Canadian Investment Regulatory Organization (CIRO) in Canada or that the instruments themselves should be considered securities and the distribution of those securities be done in accordance with the existing securities legal framework, there is an understanding that as these instruments become more mainstream, the traditional finance infrastructure is going to take care of a lot of the concerns people have had about participating in those markets.

It may not mean that they are listed on an exchange, but certainly that there is organized clearing and settlement and that there are regulated parties working in the space in an attempt to reduce some of the criminal aspects that we have seen with some of the companies involved in the crypto space.

As time goes on, it is likely we will see more use of tokenization or digitization of securities and utilization of some of the technologies fundamental to cryptocurrencies to facilitate clearing, settlement, and other processes underlying securities trading in North America.

It has taken a little longer than I thought it would – we were talking about this four or five years ago – but my sense is that progress continues. I think we will see some interesting initiatives in 2025.

In August, the CSE announced approval to introduce a market-on-close (MOC) facility designed to concentrate liquidity, reduce volatility, and enhance execution sizes at the close of trade each day. It comes in reaction to increasing fragmentation of trading activity across a growing number of execution venues. Can you talk about the MOC framework and its importance?

The market-on-close framework is complicated and I don’t expect people to go into the nuts and bolts of how it operates. Basically, the reason we are launching a market-on-close facility is to ensure that entities managing certain types of products, particularly exchange-traded products such as ETFs with CSE companies in them, have the opportunity to manage them in a way that ensures the tightest tracking of their portfolio to the underlying cash market.

This is a critical piece of infrastructure that we need to have in place for the CSE to both have ETFs listed on the Exchange and to make sure that our issuers have the opportunity to be in more ETFs, whether they are listed on the CSE or elsewhere. That is really the motivation – to support our move in 2025 into the ETF listing space.

What other plans does the CSE have for 2025? Can the financial community expect anything else new or different next year in the CSE marketplace and how the Exchange operates?

I’ve telegraphed that we expect ETFs containing CSE issuers to list on the Exchange at some point over the course of 2025. We think it is a great initiative because it will improve liquidity for component companies and increase the visibility of those companies as manufacturers of the ETFs market them to investors. We think there will be real interest from our issuers in wanting to be part of those ETF products, and we will be partnering with a variety of entities to bring them to market. So, this is certainly a big development that investors can anticipate next year.

We are looking to make some further adjustments to our pricing on the trading side with a view to ensure we can cut trading costs for the dealer community as much as possible, while promoting liquidity for companies listed on the Exchange or other-market securities that also trade on the CSE. We made some minor adjustments in October that led to a doubling of market activity in TSX and TSX-Venture stocks traded on the CSE. We think there is more to come in that direction as well.

And while I think it might be premature to go into detail, the Exchange has made some outside investments over the last few years. We are particularly interested in Tetra Trust, which is Canada’s first and leading custodian for digital assets. At this point, it is providing custody services for a number of Canadian and international financial institutions in Bitcoin, Ethereum, and other cryptocurrencies.

We believe there are more services that Tetra Trust can provide to support the continued development of digital assets, in particular, to make access to trading services for those instruments more widely available to retail accounts, particularly through the traditional brokerage community. I think we will see some interesting developments in that regard next year.

CSE Issuer Stories, Magazine

Carbon Removal That Powers Itself Is A Step Toward Saving The World

December 11, 2024 Emily Jarvie

With the urgent need to remove billions of tonnes of carbon dioxide (CO2) from the atmosphere annually by 2050 to mitigate the impact of climate change, BluSky Carbon (CSE:BSKY) is stepping up with a cutting-edge solution designed to store carbon for thousands of years while at the same time producing low-cost energy.

Carbon removal is set to become a huge business, according to BluSky Co-Founder and Chief Executive Officer William Hessert, who spoke recently with Canadian Securities Exchange Magazine.

“There’s quite a bit of money being poured into this industry, and this is catalyzing it and creating opportunities for reputable suppliers like BluSky,” Hessert explains. “Carbon removal will likely generate more revenue in 2050 than many major tech companies put together.”

Hessert sees governments pivoting to a compliance market for carbon dioxide in coming years, with the U.S. government set to essentially become a carbon credit consumer when tax credits become technology-neutral.

“There are 66 gases regulated in the U.S., and carbon dioxide will become number 67,” he says.

“The companies building the voluntary market like BluSky are the bridge to the compliance market. That is how carbon removal becomes a multi-trillion-dollar market.”

BluSky captures carbon through the pyrolysis of biomass such as organic waste, which involves heating the waste to a very high temperature with low oxygen levels.

When undergoing pyrolysis, the waste splits into a char and a gas. The char, known as biochar, can store carbon for thousands of years. Meanwhile, BluSky’s pyrolysis process produces enough gas to power itself, thus making it self-sufficient.

The company’s biomass pyrolysis pilot system, the Vulcan II, was successfully commissioned in January 2024 and is designed to remove up to 800 tonnes of CO2 per year.

BluSky is now developing Vulcan Heavy, described by Hessert as the “crown jewel” of pyrolysis, which will convert 5 tonnes of waste per hour into biochar.

Surplus energy from the pyrolysis process is used to power BluSky’s Kronos system, a direct air capture process that removes more CO2 from the atmosphere.

“Typical direct air capture systems can be north of 2,000 kilowatt hours for a tonne of CO2. It affects the net amount of CO2 captured,” Hessert points out.

Adding a third dimension, BluSky’s Medusa carbon mineralization system captures the CO2 from the bioenergy’s exhaust. The Medusa then converts the CO2 into stone as a replacement for underground storage wells. The company completed a Medusa prototype in January 2024 with a larger version currently under development.

BluSky has been able to keep the cost of its system down when compared to other carbon removal technologies due to its feedstock of choice, which requires minimal input costs.

“It’s waste products like wood chips. The American forestry industry is buried in wood chips right now,” Hessert says.

The company’s hybrid carbon removal process was designed to be capital-efficient and scalable to effectively address climate change.

“Our focus has been on building something that can essentially be copied and pasted over and over again to take advantage of different geographies and that can add to economic development,” says Hessert.

This includes being able to “mass-produce’” site selection, feedstock selection, permitting and so on.

“Everything we envision should be coming off an assembly line because to remove billions of tonnes of CO2, we need to be deploying millions of tonnes of capacity every week,” Hessert adds.

“For example, the Medusa and Kronos systems are essentially going to be massive stainless steel towers that are going to remove CO2 both from the bio exhaust and from the atmosphere and then ramped up with the ability to accredit carbon credits and be mass-produced over and over again.”

BluSky aims to have a facility capable of removing more than 150,000 tonnes of carbon per year in 2025.

He compared this to Climeworks’ industry-leading Orca plant in Iceland, which uses direct air capture to remove about 4,000 tons of CO2 from the atmosphere each year.

BluSky expects to achieve initial profitability from equipment sales and the sale of carbon credits from the production of biochar.

It has already secured a US$686,155 contract to build pyrolysis machinery for the City of Minneapolis, Minnesota.

And in late September of this year, the company announced an agreement with a purchaser based in the United States to sell biochar over a 10-year term with a total value of US$105 million.

On the carbon credits side, the company is forging partnerships with various entities that have experience selling carbon removal credits to major companies in the technology, energy and industrial sectors.

Hessert highlights the importance of communicating to enterprises the difference between carbon removal, which involves taking CO2 out of the atmosphere, and carbon offset, which could involve avoiding deforestation or other activities.

“Quite a few of the largest companies, such as Microsoft, are pouring money into carbon removal, and it’s looking like they’re only going to increase their investments. So having partners that can communicate in a way that allows us to grow and remove more carbon is better for shareholders and better for the planet.”

BluSky has also partnered with Cula Technologies for data verification services to ensure transparency for carbon credit certification.

Cula tracks machines, feedstock inputs, output quality and shipped products to verify that one tonne of carbon removal is truly equal to one net tonne of carbon. It uses sensors inside biochar machinery to monitor the temperature of the reaction, confirming its quality. Higher temperature pyrolysis creates higher carbon biochar.

“It creates a level of transparency that is truly unmatched,” Hessert says. “It gives greater assurances to a carbon removal credit buyer. The more assurances they have, the more comfortable they’ll feel purchasing carbon removal credits.”

As a carbon removal pioneer, BluSky will benefit from new opportunities as major players enter the space, bringing their own capital and connections.

“What they are missing is the technology provider and subject matter experts, which paves the way for joint ventures or partnerships,” Hessert notes. “That’s going to allow us to scale even faster.”

While the rate of carbon removal required to achieve climate change goals is daunting, Hessert believes BluSky’s team is positioned to tackle this challenge.

“We’re trying to save the world here,” he says. “We operate like a sports team. This is the major leagues. The championship we’re fighting to win is billions of tonnes of CO2 removed from the atmosphere. We’re sprinting toward it and this is the team to do it.”

This story was featured in Canadian Securities Exchange Magazine.

Learn more about BluSky Carbon at https://www.bluskycarbon.com/.

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Official Blog of the CSE – Canadian Securities Exchange