Name: One Theme, Many Materials: Capturing the Critical Materials Opportunity
Uploaded: 2026-11-05T19:31:14.612Z
Duration: 1 h 1 min 24 s
Description: One Theme, Many Materials: Capturing the Critical Materials Opportunity

Transcript for "One Theme, Many Materials: Capturing the Critical Materials Opportunity": Hi. And welcome to today's webinar, One Theme, Capturing the Critical Materials Opportunity. I'd like to first introduce our two speakers today. We have Steve Schofstall from Managing Partner, Head of ETFs at Sprott, and Sanjana Prabhakar, Senior Specialist, Nasdaq Index Insights. There are a few quick housekeeping items I'd like to review before we kick off. First, CE credits. For live attendees, we have received your CFP or CEMA number from the registration page, and and we'll process it after the webinar concludes. For on demand viewers, please answer the 10 question CE quiz. There are materials related to today's presentation available to download on the console or on the right, so please look, whenever you have a chance. There will also be a survey towards the end of the webinar that would... We would appreciate your attention to as it only makes these events better and more relevant for you going forward. We will try to leave room for questions, so please use the q and a box on the right to enter your questions. Now I will pass it over to Steve to get us started. Thank you. Hey. Thanks, Sarah, and, good afternoon, everyone. Today, we'd like to take a little bit of time and and talk through, the critical materials opportunity. And, for those of you that aren't familiar with who Sprott is, we're Canadian, based asset manager. We have offices, throughout The United States, and we're listed both in the, Toronto Stock Exchange as well as in The United States as well. We're probably most well known for our physical trust. It makes up about, you know, the largest portion of what we do at Sprott. We have about 57,000,000,000 total on assets across all product lines, including 13 US listed ETFs. Our focus is, specifically on precious metals and critical materials, whether that be from physical exposure or mining equities, which we'll talk through here today. We also have a managed equity sleeve as well as private strategies available, to some some clients as well. So, today, we'll take some time and we'll talk through some of the different demand drivers and supply considerations, as it relates to critical materials. We'll also take a a bit deeper dive to uranium and copper specifically. And then before we talk about the, index strategy, we'll also talk about the, SCTM, which is the Sprock Critical Materials ETF, which is the focus of today's webcast. When you start looking at the, critical materials opportunity, a lot of what the demand driver really boils down to is increased demand for electricity. If you were to look at how economies are changing, whether that's from emerging economies where we see increased standards of living in in more developed countries, it's, looking at things like electrification and we're seeing energy diversification. What that really points to is much higher, electricity demand going through the middle part of this decade. It's, expected to approach about a 160% growth, relative to what we've we've, seen since 2023. One of the, key drivers to this is, you know, when we start looking at economic growth and that will come from emerging economies and and particularly from China and India, is that their demand for energy is rapidly increasing. And and one of the things that we like to say at Sprott is that, you know, you can't have a low energy, country, and also be rich at the same time. When we start to look at the electricity growth that we've seen from China in particular, you know, it's closed in on 700%, for the first, twenty five years to start the century here. India about 265%. In in developed economies, which have much more robust energy systems, much more moderate growth. A lot of the growth that we saw, throughout the twenty tens was offset by efficiency standards, but we're now in a period where we're seeing increased growth even coming from developed, nations. When we look at, copper and and how important this is to the the overall economy, it's it's really one of those metals that that really touches all aspects of a global economy. And, basically wherever you see electricity, you're likely to see copper being used. It's the second most conductible metal behind silver. One of the areas that the International Energy Agency points to as a growing demand driver for copper is, if you were to look... And this is, you know, just looking at, emerging economies. If you were to look at, you know, a good example of the increased standard of living would be in India, for example, where we see that 97% of the country has electricity, yet only 8% of the country has, air conditioning. That's just one kind of real world example of how important, copper is and and some of these other critical materials to emerging economies. So the growth in electricity is one aspect that... That's really important for, demand drivers for, critical materials. When you look at, energy security, this is a, another area where we've seen a lot of attention paid to pretty much since we saw, the Ukraine war start, with Russia several years ago. When you look at China, this is really an area where they're leading in clean energy. They're making up about a third of global clean energy, output. In our view, they're not doing this largely for environmental reasons. It's more for energy security. And as we look here at the next slide, we can see that a lot of the critical materials that are are critical to either the generation, transmission, or storage of of energy, are, you know, very much controlled by what China's doing. So for example, we see in copper markets, whether it's from the mine or the, smelting capacity, they're going to control about 44% of the copper market. When you start to get to some of these, smaller market but very important type metals, like rare earths, we see that their grip has grown, you know, pretty substantially over the last three decades. For example, for rare earths, they're going to control about 70% of the mining. But when we start looking a little further downstream into separation and magnet production, that's where you're gonna see that they control about 90 to 95% of the market. This is a, one of the metals that we won't do a deep dive on today, but is included in the the critical materials basket. So it's it's been an emerging area of focus for for governments around the globe over the last, you know, twelve to twenty four months. And when we look at some of the other critical materials, the the other five we have list... Listed here are focused around batteries and and energy storage. They're controlling vast amounts of of these metals. One that really sticks out if you were to look at kind of the breakdown would be nickel. This is one where on this group of metals, they're actually the smallest, holder of that market. They do, however, process and mine a lot of that metal even though a lot of that's happening in Indonesia. So this has been a growing area of focus that we've seen from governments around the world. When we start looking at some of the, actions that governments are taking to secure supply chains, you know, a lot of these have been in the news, very front and center now over the last twenty four months or so. We won't go through everything on here, but the main takeaway on the box on the right is that we're seeing that China is using a lot of these leadership positions in a lot of these critical materials to really put on export restrictions, whether it's in, rare earths where they have very onerous export restrictions, which have been postponed now until January, at the the latest meeting between, China and The United States. But it's, an area that's becoming increasingly concerning for, you know, not only economic security but national security. What we see is, from a lot of governments, they're taking a lot of action to really, shore up these supply chains as quickly as possible. If you look at the Pentagon, for example, they're they're looking to stockpile, you know, about $7,500,000,000, of of, critical materials, and that includes investing in the supply chain as well stockpiling the individual metals. Project Vault was, a project that was announced a while back. And, you know, a few weeks ago, we we got some more details on that project. So that is moving forward. It's a, a public private partnership with the US government and private industry, that are critical to economic security, putting in up to $12,000,000,000 to secure a stockpile of critical materials. And something that we've seen that's really been different than, you know, past commodity cycles is the willingness of governments to start to invest directly in domestic supply chains. We have a few examples listed here, whether it's with rare earths, lithium, or copper. This has been a move where we've seen the government not only either fund projects directly or start to build out infrastructure, They're doing so in addition to taking equity stakes in a lot of these miners. Some of what we're seeing in some of these agreements, particularly in the rare earth space, is where we've seen price floors that have gotten acted in some of those markets. Typically, these price floors have been higher than where the current traded prices were for these metals. They're also, in many cases, stepping into, guarantee a 100% of the output for up to a decade, which is giving these miners a lot of, certainty as they're looking to make these investment decisions and build out infrastructure. And then also, around infrastructure build out, whether that's, you know, in Trilogy Metals case where they're looking to build some infrastructure to help access a copper mine in in Alaska or, you know, helping to make the the permitting process a little less, lengthy, which they're looking to get down to... Closer to that one to two years to to start permitting a lot of these mines as opposed to what could drag on for many years. We see other jurisdictions, taking similar actions, whether it's, you know, Australia or Canada or some of the other tier one mining jurisdictions. Another area where we're we're really seeing a lot of growth, coming into critical materials is what we're calling strategic investments. So these would be, you know, kind of those areas of the economy that fall outside of those, core economic uses. The first of these that that we'll look at would be AI and associated data centers. And and, yeah, I know we're in a a chip sell off here today. We'll talk a little bit about how much that means to the critical materials. Investment thesis, I I think many will be surprised to see it's not necessarily as big of a driver for critical materials, though critical materials are extremely important, for the AI build out. But what we see from, data center electricity growth is by the time we get out to 2030, it's expected that it'll make up about three and a half percent of overall electricity demand. To put this in perspective, that's going to, exceed the the total energy requirements or electricity requirements, that we see out of Japan. So a lot of very energy intensive applications coming from artificial intelligence, consuming massive amounts of copper, and increasingly relying on nuclear energy, to meet these, baseload energy requirements. Sticking with the AI theme, just to to kind of put that in perspective, if we look at all the investments that were planned for 2026 from the major hyperscalers, we're expected to see about a $750,000,000,000 investment in 2026 alone. This is, you know, considerably higher than the $400,000,000,000 that we saw last year. And as I mentioned, nuclear energy is is, becoming increasing, increasingly important aspect of, you know, keeping these data centers up and running and and managing the electricity and energy needs, for these complex computing capabilities that these data centers require. Kind of the, second level of, strategic growth and and demand that, we're looking at would be the energy transition. Some people wanna call it energy addition or electrification. What this really focuses on is really, the change in way in which we're producing electricity. If you were to look at just the investment last year alone, it was about $2,300,000,000,000 just last year. For the first time in 2021, we broke a trillion dollars and we've been, increasingly in, seeing increased investments in these spaces. This covers things around nuclear energy, electrification, whether that's from EVs or building out the electric, infrastructure needed to power all things electrification, as well as, you know, looking at some of the other clean energy sources like wind and solar, as well. So a very important aspect of fundamental, demand that's being built in for a lot of these critical materials. It's not something that we see slowing down anytime soon as it's really starting to dovetail quite nicely with what we're seeing from an energy security standpoint as well. And then finally, kind of the the third leg of our our three legged stool here around strategic investment demand would be defense spending. So this is, you know, an area of the economy which is not cyclical in nature, generally. If you look historically, what we're spending on a global basis as a percent of GDP is, quite low, actually. We we did just see, you know, within the last year or so that NATO has actually come out and agreed to to raise their defense spending from two and a half percent of GDP up to 5% of GDP. This is an area with... You know, given what we're seeing in Ukraine and the ongoing conflict with Iran, where we continue to see upward pressure on defense budgets. All told on a global basis, we're looking at about $2,600,000,000,000, to be spent, this year, with no signs of slowing down here in in in the near term, as we see, not only economic security, but national security is is is going front and center, for, you know, political interests and and geopolitical interests. When we kind of put these three factors together, so that would be AI, energy transition, defense, what we saw last year was, over $5,000,000,000,000 of spending just in a single year. Again, in our view, these are aspects of the economy that we tend, to think of as non cyclical and and tend to be very well supported, not only from a government perspective but also from a corporate policy perspective. Because of this, what we expect to see is that the demand for critical materials would remain robust, despite what's going on in, the broader global economy, and this can have upward pressure on a lot of these critical material prices, as as we move through the the coming decades. We have a few points, particularly as it relates to the copper market, where we can really talk through, what that looks like from a practical and investment perspective. So a couple of things to think of when we think of critical materials is, you know, how do they really fit into this, overall strategy, particularly as we're talking about these strategic areas of growth. We tend to, you know, look at the three pillars if we think about the energy, national defense, and artificial technology. We've identified nine different critical materials that, we feel have a favorable long term investment thesis as well, are are those metals that, you know, are are subject to maybe, you know, supply chain disruptions and things like that. Those would be uranium, copper, silver, rare earths, and then also, five battery metals, which we have listed here on the page as well. I'll I'll I'll take the time to say now that, you know, these are the metals that that we've, you know, that we're tracking as it relates to, the critical materials opportunity. Each nation maintains its own list of critical materials or, you know, on the EU's case from a European block. And typically, what you'll see is those are much larger lists. You know, they can have dozens of metals on there. You know, there's a bunch of different reasons why we won't, include investments in all those different metals. You know, but the the main thesis is that these are metals that are, you know, necessary for economic and national security and subject to supply chain risk. That's typically how we see metals get added to these changing, lists that are are published by nations. About a year ago, we saw silver and copper by the, US Geological Survey get added to the The US critical materials list. So, it... It's, an evolving landscape and one where we keep seeing more metals get added. But when you look at the the specific metals that we're tracking, this is one way where we like to illustrate, you know, how important they are to other aspects of the economy. What you'll notice is electric vehicles, for example, and and and we'll talk through this practically, a little later. You know, they really use, outside of uranium, all of these critical materials in large quantities. And I think the other takeaway from this slide is if we were to look at copper, this is a great example of how important such a common metal is. Right? Copper has been mined for pretty much all of human history, but for all of these aspects of the the new economy where we're seeing, electrification play an important role, we're continuing to see copper, be be increasingly important and the demand for that continue to rise. When we take a look at some of the, different critical materials and and what's expected for growth rates, when you look at the the various markets, the size of the market is going to have an impact on, you know, growth rates. So if we were to start on the right hand side, it would look like copper is not expected to see, a relative growth rate similar to other metals. That has to do with how large that copper market is. Whereas something like lithium, which is becoming increasingly important in battery storage, applications, EVs, we see it used in, defense for powering, you know, guidance systems and things like that, very much, a higher growth rate of of lithium. That being said, all of these markets are expected to see significant growth and and different supply and demand, drivers as we head throughout the next, couple decades. When we look at The United States and and where our electricity capacity is, I think this is is something that often gets, lost on on US investors is that, you know, we are, a majority, you know, clean energy country at this point. Solar is gonna make up about 50% of our energy. And and, when you start looking at, you know, nuclear and some of the other forms of energy, they're they're becoming increasingly prominent, very much, online with what we're seeing with countries around the globe as energy security, continues to be important as these clean energy sources don't necessarily have the same supply risks that we see out of fossil fuels, and that's being demonstrated with the ongoing conflict in Iran. EVs is, one of the areas where we're seeing some significant growth, you know, much... Admittedly, much lower levels than I think the most optimistic, projections that we saw maybe maybe three or four years ago. But we're still seeing very considerable growth expecting to see over 23,000,000, EVs bought this year. Typically, where you're going to find those would be, you know, China's gonna be the largest EV market, followed by the European Union, where you'll see a lot of the, different markets within Europe, are actually kind of over that that that mass adoption phase, where, you know, the EVs are now outpacing, gas powered cars. In our view, if we were to look at adoption within The United States, we would expect that, you know, hybrids would kind of be that intermediate step between full adoption. A lot of that has to has to do with, you know, geographically how we are set up as a nation. We're much less urban, compared to Europe and and some other, cities in in China. So what you look at when you start looking at a hybrid type vehicle is, you know, it it takes much more material and metals than what you would see out of a gas powered car, but it's not quite to the same extent that you would see out of EVs. To give you a a sense of of what, you know, a typical EV looks like, as far as its metals makeup versus the, gas powered car, typically, you're gonna see, you know, if we were to convert this, you know, call it 420 pounds or so of, metals being used in your typical EV versus, you know, about 70 pounds or so, in your, typical gas powered car. So a lot of different metals being used. Copper is extremely important. We see rare earths are used in the, the motors for EVs as they're they're gearless and the permanent magnets are used there. So very important and growing sector, you know, as we're looking at the the coming decades here. If we were to look at some of the, modern defense uses of, of critical materials, and and we won't run through all the metals on this page, I I think a few I would draw your mind to. One would be copper. That's kind of the orangest line, the darker orangest box that we see here. Again, that's used pretty much throughout all applications within modern defense. Rare Earth Elements, the REES, that we have displayed here. This is becoming increasingly important as we look at things like drone technology, missile interceptors, all those types of technologies that have been in the news as the conflict has waged on. A very important aspect of what we're seeing. And if you were to think of rare earths as a, a percentage of, you know, how much rare earths is needed for a lot of these different technologies. If you were to look at the industries where rare earths is critical, it supports about a $6,500,000,000,000 worth of industrial uses. Although the demand for any one application doesn't tend to be very large, often they can't be substituted away given their chemical properties. That's what makes the rare earth so important to a lot of these applications. We see it used in the guidance systems, drones, fighter aircrafts, whether it's in the alloys of the fighter jets or within their radar systems that they have. Also in consumer electronics, the thing that makes your phone vibrate is rarest materials, your display, microphones, all of those aspects are using rarest. Very important part of our daily lives and I think becoming increasingly important as we see the supply chain continues to come under attack. If we'd, you know, take a a few moments here to to shift gears and and and look at, a couple of the critical materials, I I think two that are probably most relevant at the moment, would be uranium and copper, so we'll spend some time on on each one of those. If you were to look at uranium, you know, this is the fuel that's going to power nuclear energy reactors. It's, you know, very important because if you were to look at the capacity factor, so how much electricity it's it's able to produce, it's it's by far and away, the most reliable baseload form of energy that we have. And if you look at how clean it is, so where that's important, whether it's to hyperscalers that tend to have clean energy mandates or or certain, certain governments where that's a huge concern. We see increasing adoption of nuclear energy, particularly, throughout Europe. And and, this is an area where it's the most reliable, but it's also the most, clean form of electricity generation that we have. And the great thing about nuclear energy, it's it's one of those where, you know, every eighteen months or so, you have to shut down the reactor and refuel a reactor, but then you get back up and running and you're operating at a very high capacity rate, which makes it, so important for something critical like, AI infrastructure. So speaking of AI, there's, been a a large support for nuclear energy by a lot of the hyperscalers. We won't run through all of these. This is just several screenshots of different news articles that we've seen, where we've seen you know, Amazon, for example, buying a warehouse next to a nuclear power plant so that they can, you know, quickly access nuclear energy to fuel that that data center. We see, you know, a lot of the other, hyperscalers are working with, utilities in order to either extend the life of a lot of these nuclear power plants or in the case of what we've seen with Microsoft in 3 Mile Island to bring back that nuclear power plant which was shut down several years ago and now it's in a process of being restarted. And and we're really at a point now where most of the, nuclear reactors that were either planned to be shut down or were already shut down are in some way, shape, and form either on a path to be opening back up or have their life extended, if possible. And and that's that's really a testament to how important, energy and that reliable baseload power has become. When we look at, you know, kind of the global nuclear fleet, this is an area where we've seen, across the board, 439 nuclear reactors are currently running. Currently, there's 79 under construction. Most of those are in China at the moment, and there's another 121 reactors that are planned. To to kinda put that in perspective, if we were to look here on this, slide, I I think the the biggest thing to point out here, if we were to look at the the large, Chinese box that we have there, this is, you know, a government that's really been focused on building out nuclear energy capacity. The red box is, showing how much are actually under, construction at the moment. China's gotten really good at building nuclear reactors quickly and on budget and on time. And with that, we've seen a massive expansion, to the point where they're expected to be, the largest nuclear power in the coming decades as it relates to energy purposes. This is an area where, you know, they're they're proving between six and ten reactors a year. What you'll see from a lot of these other smaller, represented countries here, is, you know, they're looking now for the first time, to actually start building out reactors. If you were to look at, Poland, for example, which is, near the top middle there, a lot of proposed reactors. They actually have some that are going through a planning phase now, looking to get involved in nuclear energy for the first time. We're now up to about, almost 40 countries now that have signed on to triple nuclear energy capacity out through 2050. That includes, United States and UK that have actually said they're looking to quadruple, their nuclear reactor fleet. So a lot of emphasis being placed on nuclear energy, as a way to, power the globe moving forward. And if we were to look at kind of the the shift in sentiment that we've seen, a lot of that has come, not only from Southeast Asia, but but in Europe as well, where we had the... You know, just, earlier this year, the European Commission president came out and said that it was a strategic mistake, to turn against nuclear energy. We see similar comments coming out of Germany. One of the things that we have to illustrate is looking at how that sentiment has changed, particularly throughout Europe because we have seen a groundswell of changes. On the bottom part of this slide, we look at all the countries that already have nuclear reactors or have already have stated goals for nuclear reactors. Just a look at what they're doing to expand, whether that's in UK's case of quadrupling. But I think what's probably the most telling is if we look at the top half of this chart. I mentioned Germany, they're no longer going to stand in the way of nuclear energy being included in EU clean energy rules. I think, you know, Italy is also kind of a a great case on on how the sentiment has changed, for many European nations where, they approved a law to, overturn a forty year ban on nuclear energy. This is something that as they've gone through energy shots now, you know, at least twice now in the last three or four years, with the ongoing conflicts, that they've really understand how important nuclear energy has become for for a national security perspective. And and we're seeing a lot of sentiment change, a lot of assets, being invested in this space. So that leads us to, you know, kind of the, you know, know, what's the case for nuclear energy? We have all this expected demand. We have new nuclear reactors being built. What's that mean from a mining perspective? If if we were to kind of look historically, you know, what what we would have seen was that there was, a peak in uranium prices about fifteen years ago. Then we had the Fukushima accident that we saw nuclear prices spend about a decade, pretty much languishing at low prices into the $20 per pound range. With that, we didn't see a lot of investments in uranium mining specifically. A lot of the mines were put on care and maintenance, so they weren't producing uranium any longer. Now we're at the point where we find ourselves where we have a growing nuclear fleet, sentiment is changing around nuclear energy, billions of dollars being invested. At the same time, mines are struggling to keep up with the expected, demand of uranium. If we were to look out through, 2040, we're expected to see about a cumulative deficit of about 1,300,000,000 pounds. To put that in perspective, global requirements are somewhere around a 170,000,000 per pounds annually. So very significant shortfall expected. This is including, you know, current mines that are operational and restarting, some of the mines that are already on a path to restarting. So we do have to work quite diligently to get more uranium, up and running, so that we can continue to expand, the the the global economy. One of the things I I I like to talk to when we talk about what... What's kind of the the more near term opportunity here and and, you know, typically, when we talk to investors about critical materials, you know, we mentioned a focus on the medium to longer term, because, you know, this is an industry, the the mining industry that is, that isn't able to quickly turn on and turn off production. So as we do see demand, you know, come along, we tend to need to see that demand stick around for a while so that these mines can get comfortable with making those investments, knowing that the demand is not going to be short lived. One of the things that, when you think about the uranium market, you have the spot market where we see uranium prices right now about $92 a pound, so up pretty significantly over the last five years or so and up, you know, 10 to 12% this year so far. But one of the the things that that we also see is that a lot of the volume happens in the contracting market. So this would be more like a forward market. Typically, you have a base price. Currently, that base price in the contracting market is right around $100 per pound. And within within these contracts, they have a floor and a ceiling on the prices. We're seeing floors now around $70 per pound. But real... What really shows is is what we're seeing and expecting on the upside is that, you know, we're starting to see these mines, under our right contracts where the ceiling is up around a $160 per pound. So what that tells us is there's some bias to the upside for uranium prices, over the medium to longer term. If we were to look at the the coverage ratio of utilities and how much uranium they have on hand to run their reactors, you could see, you know, this year, both Europe and and US are, you know, for the most part, expected to be fully covered, with their secondary supplies. So this would be uranium that they've already contracted or that they already have on hand. But the interesting piece of this as we start to go through the early part of next decade, we could see this coverage ratio for the EU falls from to about 25 to 35%. But in The United States, it falls to about five to 10%. So what this tells us is that, before we start getting to the early twenty thirties, these utilities need to start contracting uranium, in the not too distant future here. We expect that to be supportive of higher uranium prices and be supportive of the miners that are responsible for fulfilling these contracts. That's a quick ten minute overview on uranium, and we'll take a few minutes just to to pivot to copper here. It's, again, the same underlying themes as it relates to those those strategic uses that we see and, you know, outside of those, core economic uses that we've come to know. But when we look at the copper market, this is one where we've pretty much mined copper for most of human history. What we tend to see though is about every twenty five years, the demand for copper doubles, and that's something we've seen played out, here in modern history as well. One of the things that's that's really changed in the copper market, if you were to go back through the early 2000s, you would see that a lot of that build out was coming from the industrialization of China and then building out the economy and looking to build a 100 cities. Where we've really seen this demand change here now over the last couple of years is around that electrical infrastructure. So if you were to go back and and look at, you know, 2020, you would see about 24% of the, copper was used for electrical infrastructure. Now in 2025, it makes up about 30% and has surpassed construction uses, surpassed, consumer electronics and consumer goods, and is expected to grow and continue to surpass these traditional areas of copper demand that we've seen. To put that in graphical form, if we were to look at the copper demand for 2024, if we look at those strategic uses, that would be the smaller piece of the pie made up about 32% of overall demand. That 32% is expected to grow to about 45% for AI and data centers, defense and energy transition investments. Again, these are aspects of the economy that, we expect to see continued investment regardless of of, you know, how how healthy an economy is at that point in time. You know, if you look at the core economic uses, about a one and a half, 1.6, increase in in demand expected over this time period. You look at something like defense and energy transition, you know, we're seeing many multiple growth rates of that expect. So if we were to look at kind of a practical perspective, what does this mean for, copper and and, you know, copper miners as an investment? You know, this is a chart that that I think demonstrates very well kinda how the demand has shaped the price of copper over the last, you know, ten or eleven years. If we were to go back, you know, to about, 2015, 2016, and all the way up through 2020 and early twenty twenty one, what we what we would see is that the physical copper prices were very much highly correlated to Chinese equities. You can see that they're they're performing almost, almost in lockstep over that time period. At least directionally, there's a high level of, directional movement there. If you think back then to early twenty twenty twenty one, this is where we started to see that energy transition spending pass a trillion dollars for the first time. We start to see defense spending pick up. Now over the last, you know, two or three years, we've really seen that, AI infrastructure build out start to tick up. We've really seen that copper prices now, have very much deviated from the, you know, Chinese equities and using that as a barometer for, you know, health of the, of the Chinese, Chinese economy. So this has been an area where we've seen a market shift, in in how this is, how copper is performing relative to what has been, you know, for the better part of a twenty five year period. You know, it... It's most closely related anchor and and how that's worked out as well. If we were to look at copper, this is a, in the supply and demand, picture, this is an area that, you know, is is likely to shape up similar to what we're seeing out of uranium where, you know, last year, we were in a, a slight deficit, for copper. This year, I think expectations have this at a small surplus. But once we start getting out to the end of this decade, it's expected that we'll be in a prolonged supply deficit. And a lot of that has to do with just kind of how copper's been used over the years. So, you know, this is something that we mined for for thousands of years, and and, you know, we're now at the point where most of the easy to get to copper has been mined out. And what we're seeing is, oil grades that have declined, pretty significantly over the last, over the last decade or so or even before that. We're seeing many less, large discoveries being made for copper mines. So it's making it very difficult to increase copper production. One of the things that miners are doing is they're having to extend the life of their largest mines. Oftentimes, that leads to, you know, moving more ground and digging deeper, and we've seen some evidence of issues with that. Sometimes we've seen seismic activity that, you know, we saw with the Kamaa Kakua mine in in, Africa, which was a top five, copper mine. They had a, you know, seismic event that, you know, triggered, some production cuts there as well. Typically, this is an industry where we're gonna see about 5%, production disruption on any given year. The Grasberg mine, had, you know, the world's second largest copper mine. Last year suffered a pretty catastrophic mudslide. They're still working to get production back up and running and get that, you know, anywhere close to where they were, pre mudslide. We also see disruptions whether it's from, you know, labor perspective. A lot of a lot of the copper is mined in South America or in Africa where labor disputes can be much more prevalent than what we might see out of, you know, localities like The US and and and Canada. So this is an area that's very subject to disruption. And because of that and and how long it takes to get a new mine up, it can take, you know, fifteen years or so, from discovery to production. It's not very easy to increase supply, and as we start going out through the end of this decade and, you know, the the the two decades to follow, it's expected that we'll be in a, a prolonged copper supply deficit there. And, you know, I think one of the biggest questions we get asked around copper is, you know, it's it's it's been trading, you know, at or near all time highs, for the better part of all of 2026, is about substitution. And and, you know, from, you know, what we've gathered from industry experts and from our own research, you know, a lot of the own... A lot of the easy to substitute, copper has already happened. So a lot of the, demand that we're continuing to see is expected to be very, robust and very, not easily, substituted away like we might see with some some other applications. So it's a very, very important part of what we're seeing for, you know, demand perspective. But then when you start looking at some of these clean energy uses, we already touched on EVs, but when you start looking at, like, natural gas and and coal and and what's needed for, you know, like wind farms and solar farms, generally, you're gonna see somewhere between two and a half times to up to, you know, five to seven times the copper needed for clean energy sources as opposed to fossil fuel sources. So as we continue electrification, as we continue to focus on energy security, this is an area that's becoming increasingly, reliant on copper. With with that, I'll I'll take a pause and, Sarah, I'll kick it back to you so we can talk about the index. Perfect. Thank you, Steve. And now I'd like to introduce, Sanjana from from the Nasdaq index insights team. Thanks everyone, for taking the time to join us today, and thank you, Steve. That was a great overview and really helps set the stage, for, why critical materials have become such an important theme. From here, I'll walk through how we translate that opportunity into the index, starting with the construction. I'll provide an overview of the index and explain how it's designed to capture to capture companies across the broader critical materials value chain. As Steve mentioned, critical materials are tied to several long term structural theme... Themes, including electrification, energy security, and the expansion of advanced technologies. Rather than concentrating on a single commodity, the index seeks to provide diversified exposure across materials, companies, geographies, and market cap, segments. So let's start by looking at how the exposure is distributed across individual companies in the index. The first point to emphasize is that the index is relatively balanced at the constituent level. Its largest position, Freeport McMurray, represents 5.2% of the index as of 09/30/2026. So the top 20 holdings collectively account for 65.3%, while the remaining constituents still represent a meaningful 34.7%. So this provides exposure beyond the most recognizable companies in the critical materials ecosystem. And if you take at the lead... Look at the leading holdings, they span different parts of the value chain. For example, Freeport McMurray provides copper exposure. Cameco, a National Atomic Company, provide uranium exposure, and Linnaeus rare earths and MP Materials provide rare earth exposure. We also see exposure to lithium through companies such as PLS Group and Albemarle as well as broader mining exposure through companies such as Tech Resources and First Quantum minerals. So the biggest takeaway is that the portfolio is not dependent on the outlook for one company or one material. Its composition reflects multiple sources of critical material demand. So the constituent mix gives us one layer of diversification. This breadth also extends across companies and company sizes. If you take a look at the slide here, you can see, geographically, the largest allocations are to Canada at 35.5%, The United States at 23.2%, and Australia, 20.888%. So these are all established mining markets with significant public company ecosystems. At the same time, nearly 41% of the index is allocated outside North America and includes exposure to countries such as Australia, Chile, The United Kingdom, Peru, and Indonesia. So geographic diversification reduces volatility and drawdowns compared to single country allocations, given, geopolitical and regulatory disruptions may have may have outsized supply chain impacts. Cross jurisdictional diversification becomes a key risk management consideration. If you look at, the top holdings, you see Canada and Australia, which dominate due to their large well developed mining sectors with significant copper, uranium, lithium, and rare earth deposits combined with very, stable regulatory environments and deep capital markets that support publicly listed companies. We also have Chile and Peru, which reflect South America's outsized rule in global copper and lithium supply. And on the market cap side, the largest allocation is to companies between 2,000,000,000 and 10,000,000,000, representing 45.4% of the index. The segment can include established producers that may still have meaningful growth potential. The index also maintains 22.9% exposure in companies above 20,000,000,000 and 17.7% in the 10 to 20,000,000,000 range, providing exposure to larger and potentially more established businesses. A further 13.9% is allocated to companies below 2,000,000,000, so these smaller companies may provide exposure to emerging producers in future supply development. What I'd like for you to take away from this slide is the tilt towards mid caps, which I think reflects the nature of the critical materials universe. Many of the most relevant producers operate at a scale below mega cap, having moved past exploration into active production. If you look at the mid and small cap companies and materials, they tend to offer greater sector specific exposure compared to large caps, which often carry diversified business lines that dilute, pure play exposure. Geographic and size diversification are important, but investors, also care about which economic activities are driving this exposure. So if you look at the industry and subsector allocation at the broad industry level, you see 98.5% of the index is classified within basic materials. That illustrates the portfolio's targeted exposure and limited sector drift. If you look at the subsector diversification, you can see that it reduces commodity specific risk. No single commodity subsector dominates. So you see general mining representing 3031.6%, nonferrous metals, 22.5%, and copper at 21.9%. So taken together, these categories form the core of the index, but they're all connected to different supply and demand dynamics as Steve alluded to earlier. And the current allocation appears broadly favorable from a structural standpoint with each major subsector underpinned by durable demand drivers. And if you look at the subsector mix, it maps directly onto the materials required for the energy transition. So you'll... You have copper for wiring and EV infrastructure, nonferrous metals for bat... Battery cathodes, and general mining for a range of critical inputs. The portfolio also includes 11.7% in platinum in precious metals and 6.6% in diversified chemicals. Gold mining represents only 4.2%. This relatively modest allocation helps distinguish the index from a broader precious metals or traditional mining portfolio. So the key takeaway here is you have targeted exposure at the industry level combined with diversification across several strategically important materials at the subsector level. The medium term outlook for metals remains bullish due to the support of macroeconomic conditions, persistent geopolitical tensions, and structural supply tightness. And the index's broad subsector spread means no single commodity downturn is likely to impact the broad portfolio. Now that we have established what the index owns, the next question is how these companies are selected and weighted. This slide compares the methodology of the Nasdaq's broad critical materials index, NSETM, with the MVIS Global Rare Earth Strategic Metals Index, which underlies the VanEck Rare Earth and Strategic Metals ETF. The most important difference begins with the investment universe. So as you can see, NSETM covers the broader critical materials value chain, whereas the Vanik, whereas the MBIS Global Rare Earth Strategic Metals Index is focused more specifically on rare earth and strategic materials. NSCTM incorporates Sprott's sub... Subject matter expertise into the security selection process. It requires a minimum 50%, intensity score for inclusion. So this intensity score helps identify companies with meaningful exposure to the critical materials team. We have also outlined the buffer thresholds. I'm not going going to go into all these details, but these entry and maintenance thresholds can help reduce unnecessary turnover when an index constituent moves modestly below an initial eligibility threshold. Diversification is also built into the weighting methodology. No individual constituent may exceed 4.75% at rebalance, and the aggregate weight associated with any specific critical material may not exceed 25%. By comparison, MVREM XTR index applies an 8% maximum constituent weight. So as you can see, NSCTM has a lower constituent cap, which is designed to reduce dependence on the performance of an individual company. The broad conclusion is that NSCTM combines thematic purity with explicit controls around investability, liquidity, company concentration, and material level concentration. So these methodological differences become more tangible when we compare the resulting portfolios. And in my final slide here, I'd like to highlight the limited overlap between the two indexes and the materially different sources of exposure. If you look at the overlap between SCTM and REMX, it's strikingly narrow. Just 11 shared constituents, out of, combined universe of one eighty two holdings. What's particularly interesting is the characteristic of the overlap. Sorry. That would be 10 shared constituents. All 10 shared names are lithium or rare earth focus names, including Albemarle, SQM, among others. So the two indexes converge only on rare earth and the lithium subtheme, and SCTM's differentiation lies entirely in its copper, uranium, and broader mining exposure, none of which appears in REMX. REMX's 22 unique holdings are heavily weighted towards Chinese rare earth producers, giving REMX meaningful China specific regulatory and geopolitical exposure. And REMX is the ETF underlying the index, the competitor index. There's also minimum... Minimal overlap by weight. So if I measure it by portfolio weight, shared constitutes represent 9.5% of SCTM, meaning 90.4% of SCTM's weight is attributable to holdings that are not shared with REMX. For REMX, the same shared companies represent 48.3% of its weight, while 51.6% is unique. And SCTM's differentiation comes from its exposure to areas such as copper, uranium, nonferrous metals, and broader mining. By comparison, some of the larger companies unique to REMX include China Northern Rare Earth Group, and Xiamen Tungsten Rare Earth companies. SATM also has six times larger investable universe. So if you look at the total market market capitalization represented by SATM, it's approximately 800,000,000,000 compared with approximately 132,000,000,000 for REMX. The unique exposure is not driven by smaller names. If you look at the average company size, it's more similar at approximately 5,100,000,000 for SCTM and 4,700,000,000 for REMX. Anchor names also matter. So if you look at Freeport McMurray, Chemico, and London Mining, three large liquid well covered names unique to SCTM. These illustrate the caliber of companies that are not present in REMX. So from an allocation perspective, SCTM may be viewed as a broader critical materials exposure, while REMX provides a more concentrated rare earth and strategic metals exposure. We have also highlighted some of the unique holdings, to the right. So if you look at the unique holdings of, NSCTM, they include Freeport McMurray, which we highlighted earlier. It's the index's largest holding and the world's premier pure play copper producer. We also have the likes of Kamiko, which is the most compelling long term structural story of the three. And we also have London Mining, which offers, a differentiated risk return profile relative to the other two, securities... Other two companies. Taken together, these results show how the index seeks to balance thematic relevance with diversification across companies, materials, geographies, and market cap segments. To summarize, the Nasdaq Sprott Critical Materials Index is defined... Designed to offer broad exposure across the critical materials ecosystem. As we highlighted, its distinguishing distinguishing features include company level diversification, exposure across major mining jurisdictions and market cap segments, and diversification across multiple critical materials. So the result is an exposure that extends beyond rare earths lithium to include copper, uranium, non ferrous metals, and the wider materials chain. And with that, I'll turn it over back to, Steve, to go over the ETF. Yeah. Thank you. And, thanks for that that great overview of the the index. We'll just take the remaining couple of minutes here and just run through, where SCTM kind of fits in, what Sprott's doing and kind of, you know, what that could mean for an investor portfolio and perspective. So SCTM is, you know, one of our leading critical materials ETFs. We have eight different critical materials ETFs, available to US investors. SCTM is taking that basket approach. It's going to be a pure play structure, As, St. Jenna mentioned about, you'll have a 50 revenue cutoff or asset cutoff for nonproducers. What this is going to do in our opinion is give you a a much, cleaner exposure to critical materials, but also given the caps that we have, included in the index methodology, you're not going to be overweight. Some of the underlying metals like you might see some... From some other competing ETF strategies. If we were to look at kinda how this index breaks down, typically, you're going to see, you know, you're gonna see that about 25% is... That's going to be the cap for individual, stock or metals exposure rather. Typically, you'll see copper, uranium, and and and lithium are up around that 25%. Largely uranium and copper are always there. Sometimes lithium's a little bit less, 20% or less. But when you look at SCTM, this really is kind of the one ticker solution, for critical materials exposure. You know, it it helps smooth out some of the ride if one metal's, you know, outperforming another. And we we find that investors, particularly advisors that might only have, you know, one spot for one ticker, in their models or might not necessarily feel comfortable managing individual metals, have gravitated toward SCTM. And we also do have a lineup of individual metals exposure, whether that's kind of an all cap strategy, or junior minors in the case of your NJ and COPJ. We also have, you know, an actively managed version of SCTM, little bit different, provides some little bit different exposures in METL as well. When we look at, you know, at SCTM, I I I think, you know, when we look at the the pure play aspect and we look at the, you know, really that cap on the the largest, metals within the index, What it really provides is a a much different, outcome and and makeup than what you might see from some of the larger, competing ETFs in this space, which as Sanjana mentioned, could be, you know, 30%, 30% China, could have weights of, you know, 40 to 50% on one individual, commodity, whether that's lithium or or or rare earths, for example. And and typically what you get out of, you know, SCTM is we tend to see that, while we don't allow Mainland China exposure, so no China a shares included in the strategy, we do tend to have very minimal exposure to, Chinese equities. I believe that's about 1.5% right now. So you tend to see a a much lower Chinese exposure. If you were to look at kind of your broader based, mining funds, typically what you're going to see is they tend to overweight things like steel and coal. We can see that, you know, on occasion where, you know, gold, steel, and coal miners can make up, you know, 70% or more of some of those more diversified type strategies. So typically, if you're invested in a, a diversified strategy, you're 10... You're going to likely be underweight to your critical materials exposure. And I think just one one last point here, and we'll flip forward to kind of the the breakdown of of the individual metals and and, country markets here. When you start thinking about tax planning and, you know, obviously, always always consult, you know, a tax professional and understand your exact, tax, perspective. But we're in that time of year where where, tax loss harvesting can be an option. And we would, you know, say SCTM is, you know, in our view, a great way to stay invested in the critical materials theme. You might be able to, realize some losses from other strategies while staying invested. It is a, a differentiated project, product as we were talking through. And, we just have, two, compliance related slides to flip through here. And, Sarah, we'll pass it back to you for, any questions that might have come in from investors. Thank you both so much. That was that was incredible. I do have two questions. Steve, I think they're both gonna be aimed for you, but, I did wanna go ahead and get get those answered. So the first one, how does the outcome of the midterm elections potentially impact the critical material minors in The US? Yeah. It's a great question. I I I think if, you know, with the time we have here, if you you were to kinda look at it broadly, you know, nuclear energy is one that, you know, beginning under the Biden administration, we really saw kind of a bipartisan level of, realization that nuclear energy is going to be an important aspect of our nuclear... Of our energy mix going forward. And I think, you know, it's different than what we saw twenty years ago where maybe one party favored nuclear energy and the other didn't. At this point, it feels like both of those parties are kind of bought into nuclear energy as being important for national and economic security. When you look at something like rare earths and and, you know, it tends to lead to the question of, well, how are data centers, going to be impacted and what's that going to do to critical materials? I think probably the prevailing thought is that, the new Congress coming in might be a little less open to data center expansion. But But I think once you start looking at the individual critical materials like rare earth as an example where it's expected to only account for about 3% of of overall demand for the metals out through, you know, 2030. So very small proportion of the individual metals, and and something that if you were to go back three or four years, when we launched this fund, wasn't really, you know, in the realm of of the investment thesis in any meaningful way. So a lot of the underlying fundamentals that we talked through all predated what we saw with the AI expansion. We expect that to, to continue, regardless of what's happening with, artificial intelligence and adoption moving forward. Thanks. And one, slightly related question. How does recent variable sentiment on data center development affect potential critical material demand? Yeah. And, yeah, I mentioned, you know, how, for some of the metals, how it's a small small piece of the pie. I think, you know, the next question then is, well, what's that mean for nuclear energy? And, you know, what we've seen is that, we're continuing to see hyperscalers invest directly, into the utilities that are providing nuclear energy, whether it's through offtake agreements, looking to extend the life of, of different, nuclear reactors or as we talked about, three mile and looking to bring that reactor back online. I think what we're seeing from these long term offtake agreements and where we're at from a country where we need additional energy, regardless of what happens from the AI, standpoint. I I think there's a, a very strong case to be made that, again, AI is a a piece of the the puzzle. It's not the prevailing piece of the puzzle. And, you know, from where we stand, we don't see that changing, regardless of who's empowering congress, you know, over the next couple of years. Well, that wraps up our webinar today. Any unanswered questions will be sent to our teams and someone will reach out. Just a reminder to please fill out the survey. We would love to hear your feedback. Thank you again, Steve. Thank you, Sanjana. This has been an incredible conversation, about a very important topic and, I appreciate your time today and the audience's time as well. Thank you.