Nick Snyder and Pete Thomas - VP of Zaner Precious Metals.

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Nick Snyder:
Okay. Welcome everybody.

Pete Thomas:
All right.

Nick Snyder:
We are in episode number one. I'm sitting here with Pete Thomas. If some of you have watched some of our Metal Monday, this is going to be highlighting catalytic converter markets, the PGMs, or I call it Cat's Corner.

Pete Thomas:
Oh, cool.

Nick Snyder:
But, I try to do a weekly update. I'll most likely bring some of our other team members in to talk with you as well. Pete, and we'll probably bring in some other experts.

Nick Snyder:
So, Pete, can you give our viewers and myself, a little insight what the PGMs are doing right now?

Pete Thomas:
This is a very, very interesting time, and I'm very flattered to be invited to do number one.

Pete Thomas:
Look it. Guys pushing gears here, jamming gears, driving rigs, delivering product, delivering auto cats, using your new system, which is being shipped by boxes, which I happen to think is fantastic. All of that. They want to know what their product is going to cost. Is it going down in the future? We've seen some pressure recently. And so, what I'm going to do is fill you in. Look it, anywhere from 70 to 87% of the platinum out there is from South Africa. I happen to have been friends, and am friends, with the group there in Impala, and a number of other places, so I have a good finger on the pulse, which is why Nick gave me a shout. He said, "Hey, what's going on with the fundamentals? With the [ore 00:01:31] that is being crushed? With the product's that is being moved out, to make auto cats work?"

Pete Thomas:
So-

Nick Snyder:
So, 70... Just so I understand, so 70 to 80% of the new platinum palladium rhodium are coming out of African mines?

Pete Thomas:
That is correct. Yeah.

Nick Snyder:
Okay. Got it.

Pete Thomas:
That is correct. The other, of course, is [nor 00:01:49] nickel, which is Russia, as we all know. And, that's your other real big supplier. And everyone else should really be considered tributaries, as they're called, which is not a full blown mine, it's a slower production.

Nick Snyder:
What is the... Do you have a number on how much the scrap catalytic converters make up for the market? Is it just...?

Pete Thomas:
Well, you know what? I'm going to tell you, the numbers are incredibly significant. What you guys are doing is so critical to this country, and it is so overlooked. And, I've seen numbers as high as 30% of consumption comes from recycling, and that includes copper by the way.

Nick Snyder:
Okay.

Pete Thomas:
Yeah.

Nick Snyder:
So, do you got a outlook on where the PGMs are going to go? I know it's hard to predict, but are you thinking it's going to- [crosstalk 00:02:41] sideways for a while, or are we going to see some ups? Are we going to see some downs? What are you thinking [crosstalk 00:02:46]?

Pete Thomas:
Well, we are always going to see ups and downs, you know? That's... There's never... I mean, it's a trading market. But, right now what's holding this market up, is a lot of the mines are selling reserves. And, you can only reserves for so long, and then all of a sudden there ain't none, as we say.

Nick Snyder:
Yeah.

Pete Thomas:
So, we're going to see a little bit of chopping around, and then it's going to be a skyrocket straight, up in my opinion, if they don't get these mines working. And, I can tell you...

Pete Thomas:
Let me give you an example. I'm talking to two guys in South Africa, and he goes, "Oh, wait a minute. I've got to dig in here." He goes, "Oh, we're having a blackout." And I said, "Excuse me?" He goes, "Oh, the government created some software for us for when we're going to have a blackout." I go, "They created an app, so that you would know when you're not going to be working?" He said, "Yeah." I go, "Why don't they fix it?" He goes, "Oh, it's been in committee for two or three years. They're getting close." So, last week, which is why it's such a critical week, they said that they're going to create 50 megawatt solar base, and a 250 megawatt wind base. So, now that it took them three years to decide they were going to do this, now they're going to start to do it.

Pete Thomas:
And, they're also, and this is important, they're also going to do what China's doing, which is start shifting over to hydrogen powered trucks. But, oh, by the way, you have to use a lot of platinum and palladium, both, when you shift over to hydrogen, and the creation of hydrogen. When you start cracking atoms to get the O2 and H off, you know, you need to use PGMs. So, it's a yin and a yang. They're going to have more power, but they're going to be releasing a little less platinum, palladium.

Pete Thomas:
Secondly, the riots that are taking place, as I have it, the trucks that are going to the urban port, which is where all of the... Whereas a lot of the unrefined product goes, and then is shipped up, could be closed. We're we're waiting to get a solid word on that. But, right now, it appears that the issue from the mass riotings has closed the retail industry, the industrial sides, rail and ports, as well as telecommunications. So, you have no way of calling someone to tell them they even have a load coming, or what your estimates are. Right now, today, deaths are right around 212 people. So, human beings are being killed during these riots, and it's just a mess.

Pete Thomas:
And, you guys that are running PGMs, to answer directly, now that you have a little of a wider brush as to what's going on from production, I would not be selling product. I would be buying cats on dips, and I would be aggressively a buyer, because I think that we're getting very close to a bottom in here. Now I'm not a trader, I'm a hedge. I buy for consumption and usage, and if I had... If I was the COO of, let's say, [FRAM 00:06:08], and I was making those little diodes that go on spark plugs?

Nick Snyder:
Mm-hmm (affirmative).

Pete Thomas:
And I saw a nice break, I'd be a buyer.

Nick Snyder:
Gotcha. Okay. Well, that kind of tells us, and we'll keep kind of getting into some of this, and sharing more info with our customers.

Pete Thomas:
Sure, absolutely.

Nick Snyder:
And getting people just a little more insight of the PGM world.

Nick Snyder:
Well, Pete, let's do this again in a week, okay?

Pete Thomas:
Absolutely. My pleasure. And, listen, guys, stay tuned. These guys put out a great show, and they have a lot of information, and hopefully to make your business a little stronger.

Nick Snyder:
Appreciate that, Pete. Thanks [inaudible 00:06:41].

Pete Thomas:
All right.