Engineering, procurement, and construction management

And that is really, if you think about that, when we look at organizations that we diligence at ARA, people process tools and systems, the structure.

looking at how are people thinking about the repeatable and scalable of this technology with respect to its commercial offtake, as I mentioned, with respect to its project delivery platforms, the process tools and systems that they have in-house, who are they outsourcing to? Is that an outsourcing partner that can represent a multi-plant platform? For instance, like in the United States, if you're building your first of a kind plant and you have a 10 plant potential, you know, is your first partner that you're building a regional contractor or a regional EPC that sits in the Southwest that can't build for you in the Northeast? You got to look at that and say, okay, maybe there's a partnership that serves a multi-plant purpose as an example.

And all of them things we look at when we seek to scale our technologies in multi-plant platforms.

Where do you see these, I mean, it's going to vary to some degree, depending on the technology, but where do you see these technologies? In whose hands do you see these technologies finally ending up being? So they're going to pass through private equity.

At the moment, on your own, it's actually, even at the scale of Aura, it's quite difficult to develop that critical

mass.

Absolutely, because even in the, let's say, let's talk about the engineering world, how we want the EPC or the engineering world to exist for us.

There's a high sense of ambiguity in developing a new platform, developing technology.

So that's basically taking half a step back.

We've got an EPC contractor that they're engaged to build the project overall.

So them and our owners team, and we've done a lot of work over the last few months getting a very experienced owner's team together, guys that have been there, done that, built these things before.

They're all engaged out by the company as well as the EPC supplier, Monford.

So both of us and them, we landed at sites a couple of days ago.

Effectively now over the next sort of two months, we start doing the site preparation work.

Yeah, good question.

So the way that we have put the contracts in together for this project, we effectively done what's called free issue.

We get involved early from the conceptual phases of the project.

We help develop the engineering, the planning, and help try to move those along a front-end engineering approach to detailed design, and then look to execute this project as an engineering procurement and construction, or as known, EPC in the industry where those abilities exist.

Happy to be on the call and talk more around what I do and, and, and give a, a, a side here or an overview of what the market is looking like these days.

Great.

A- and also, this is important because process efficiency and operation longevity are important factors in making sure that the right technology is implemented from the beginning, either if it's a new or an existing facility, right? In the industry, we're talking about gas processing and, and such.

These are more brownfield-type application, but there are more new facilities coming online as there is this, you know, high demand for gas, natural gas now, as the data centers require all that for power generation.

As an EPC, we're also interested in finding a technically viable and commercial-ready partner, so the evaluation of technology takes even more importance as we're looking to, for us and the client, to find a committed party that is thinking of those commercial agreements ahead of time, is ready to negotiate, and can be considered bankable as we look to achieve that FID, as mentioned earlier.

Okay.

They looked at our skill sets and asked us if we were interested in actually taking over a project.

And that was really the beginning of the transition from what we had originally thought to becoming a fully-fledged EPCM company.

You operate now in a few industries.

You started out in mining, or at least the ambition put you in mining initially.

But as the project transitions and there's, you know, maiden resources done and then you have to start moving into technical studies and metallurgical work and then all the costing and the permitting.

I think that's really where, you know, mining engineers really come into the fore and, you If you have a mining engineer that also has good business acumen and good management skills, they're certainly capable of taking the company through EPCM and construction development and ultimately running and managing an operating mine.

You could even argue beyond that, however, as the organization continues to grow, does the mining engineer actually have the business acumen to manage multiple assets in multiple jurisdictions? In a lot of instances, that's not the case.

And it's incumbent upon the individual to be able to recognize that and hand over the reins.

so you laid the foundation by the way because you know yeah we knew there were other areas where our sarco had drilled and had mineralization and if we had put drills there we would have been able to duplicate those results and increase that resource but it we were already at close to 20 years ultimately, which obviously for a copper porphyry, you know, is a good start.

But I think more copper is going to be discovered there, but it had absolutely no impact on the financial and economic model.

And at the end of the day, we were just really throwing dollars down the drain when it was better needed on, you know, getting into the feasibility study and ultimately EPCM and putting deposits on long lead item equipment.

Yeah.

and areas with Rio.

Worked across into the supplier space with companies like Orica, F.L. Schmidt, equipment supply, EPCM projects all over the world from Kazakhstan, Mongolia with project plants as well.

Moved into the mining services space with companies like Perenti running their African businesses, mostly focused in West Africa, covering Burkina Faso, Mali as well.

and then moved to capital.

And so I think Russell and Andrew will touch on some of the M&A landscape that we see forthcoming.

We do see many more of these large contractors moving towards more of an EPC, looking for some specialty services as well from contractors.

undergrounding and high voltage work especially i think too we're also seeing this in the procurement space as well and how these owners and contractors are having to procure traditionally these projects were managed in a very sequential fashion you planned them you engineered them you procured against that engineering, and then you built them.

And with some of the constraints that we're seeing, which we can maybe talk about here in a minute, it's really challenging that traditional approach where parts of these projects are having to be engineered earlier or procured earlier in order to get ahead of lead times.

Our regulators and our PUCs are increasingly demanding that we use those information systems to justify regulatory recovery in more and more complex ways.

That information is also being partnered with how we contract both in larger relationship-based programs of contracting, as Evan mentioned earlier, moving from project by project by project really into these longer term, much broader relational contracts.

Important on both sides of the fence, from owners and from the EPC or other contractors stepping into the utility contracting space here, you have to deliver excellence both on your relationship and in the quality and safety of each of your projects.

And what that's taking is often a new way of thinking about how we organize our teams and organize the cross-team flows of information, of materials, and of accountability, and making sure there's transparency in terms of who's on first at each stage of the project lifecycle as these evolve through iterative engineering and procurement stages, and how we as a company de-risk our entire portfolio in a rather risky environment.

We didn't have a good infrastructure.

We didn't have EPCM companies close.

We actually brought two EPCM companies from Brazil, the number two at the time.

And they had other projects in Africa, but very far, like Mozambique.

So it was very hard to bring equipment.

So it's...

Maybe the difference is tax rates that you can explain because of our finance.

But if the difference is, oh, my EPCM contractor created a claim because of this and that, and that's the difference.