Company Interviews

Interview with Tim Harrison, Managing Director of Ionic Rare Earths

Our previous interview: https://www.cruxinvestor.com/posts/ionic-rare-earths-asxixr-european-recycling-and-african-production-4944

Recording date: 30th April 2024

Ionic Rare Earths (ASX:IXR) is positioning itself to become a key supplier of critical magnet rare earths through its pioneering recycling technology and the development of the Makuutu heavy rare earths project in Uganda.

The company's primary growth driver is its 100%-owned Ionic Technologies business, which has developed a unique process to recycle end-of-life magnets into new magnetic materials. With £3.5 million funding secured from the UK government, Ionic Technologies is currently operating a demonstration plant in Belfast and working towards a commercial-scale feasibility study.

Ionic Rare Earths is targeting first production from a commercial recycling plant in Belfast by 2026, with an initial output of 200 tonnes per annum of magnet rare earth oxides. This would be sufficient to supply a significant portion of the UK's rapidly growing EV motor manufacturing sector. The company is also in discussions with potential offtake partners in Europe.

The company is also pursuing similar partnerships in the U.S., Asia, and Brazil to expand its recycling business globally. A recently formed joint venture with Viridis Mining and Metals aims to establish a rare earths refining and recycling business in Brazil, a key growth market for EVs and renewable energy.

Importantly, the recycling process developed by Ionic Technologies can produce the full suite of magnet rare earths, including the highly valuable heavy rare earths dysprosium and terbium. These elements are essential for high-strength permanent magnets used in EV motors and wind turbines, and are projected to be in deficit as electrification accelerates.

In parallel with its recycling initiatives, Ionic Rare Earths is advancing the 60%-owned Makuutu project in Uganda, which is considered highly prospective for heavy rare earths. The company is currently producing a mixed rare earth carbonate from a demonstration plant for evaluation by potential offtake partners.

The investment case for Ionic Rare Earths rests on its exposure to the exponential growth in demand for magnet rare earths, driven by electrification and decarbonization. With a proven recycling technology, first-mover advantage, and a clear path to commercialization, the company is well placed to become a major supplier of recycled magnet rare earths outside of China. In addition, the Makuutu primary development project provides direct exposure to critical heavy rare earths, diversifying the company's supply sources and mitigating development risks.

Key catalysts for Ionic Rare Earths over the coming year include the completion of the Belfast commercial feasibility study, the signing of offtake and funding agreements for both the recycling and primary development businesses, and further progress on global expansion opportunities. With a strong macro tailwind, experienced management team, and government and industry support, Ionic Rare Earths represents a compelling opportunity for investors to gain exposure to the rare earths sector and the global energy transition.
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Interview with Terry Holohan, CEO & Managing Director of Resolute Mining.

Recording date: 1st May 2024

Resolute Mining, a gold producer operating in West Africa, has undergone a transformative three-year turnaround under CEO Terry Holohan. Despite inheriting significant operational challenges at the company's flagship Syama mine in Mali, Holohan and his team have systematically worked to stabilize and optimize the asset, positioning Resolute for profitable growth.

When Holohan took the helm in 2021, the Syama underground mine and sulphide processing plant were struggling with inconsistent performance. Suboptimal mine sequencing and design issues had hampered a transition to automation, while the processing plant battled frequent roaster instability due to variable ore feed. Holohan's first priority was assembling a team of technical experts to tackle these issues head-on.

"We had to essentially rebuild the plant over a quarter," Holohan recounted. "It was back to basics and joined up thinking required."

With the operation stabilized, Holohan turned to aggressive exploration to drive organic growth. Resolute has added 3 million ounces of gold reserves over the past three years, bringing the total to 10 million ounces. This reserve growth has underpinned an expansion project at Syama that will lift annual production from 200,000 ounces to over 230,000 ounces, utilizing latent capacity in the mill.

Crucially, this growth is being self-funded by Resolute's improving cash generation. The company has eliminated its debt balance and is generating net cash even after funding $20 million in annual exploration. As Syama's expansion lifts production, unit costs are forecast to continue trending lower, significantly expanding margins.

Holohan's turnaround strategy has not been without risks, including a dilutive equity raising early on. However, he emphasized that the raising facilitated vital investments and attracted key North American shareholders who "really bought into the idea that we've got a growing asset here." Holohan sees further potential to scale Resolute into a larger, multi-asset producer over time.

"Over the next five years, everybody internally and with the fund managers and the shareholders, we all know that there's a tier one mine in the making," he stated, referencing the industry's classification for mines producing over 500,000 ounces annually.

Resolute also appears well-positioned to navigate the challenging jurisdictional landscape in West Africa. While Mali has suffered instability and terrorism threats in recent years, Resolute's operations are located in the far southwest of the country near the Cote d'Ivoire border, an area that has remained secure and calm.

While Resolute's turnaround is not yet complete, the company has already demonstrated its ability to deliver operational consistency, with 11 straight quarters of improving production and costs. As it brings additional production online at better margins, Resolute is well-positioned to create value for shareholders in the coming years.

With a proven management team, robust balance sheet, organic growth pipeline, and long-term optionality for further value-accretive M&A, Resolute presents a compelling opportunity for investors looking to gain exposure to an under-the-radar gold producer in the early innings of an operational turnaround.

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Interview with Sean Roosen, Founder & CEO of Osisko Development Corp, and Oliver Turner, Executive VP of Karora Resources Inc.

Recording date: 30th April 2024

The gold mining sector presents a compelling investment opportunity currently, based on the perspectives of two highly successful mining executives - Sean Roosen of Osisko Group and Oliver Turner of Karora Resources.

The key argument for gold miners is the disconnect between the strong performance of the gold price and the lagging response of gold mining equities. With the gold price at high levels, gold miners are poised to generate significant free cash flow. However, this improvement in fundamentals has not yet been reflected in the share prices of gold mining companies.

Roosen and Turner believe this disconnect provides an attractive entry point for investors. They expect the upcoming quarters to demonstrate the cash flow growth potential of the sector as high gold prices flow through to the bottom line. As this fundamental improvement becomes more apparent, they see the potential for generalist investors to return to the sector and drive a positive re-rating of gold mining equities.

To capitalize on this opportunity, they advise investors to focus on miners with high-quality assets and proven management teams. Roosen stresses that "it starts with the quality of your project. If you don't have a good asset, the cost of capital is not going to be there for you." Turner similarly emphasizes the importance of acquiring assets that have true operational synergies.

Another key element is backing management teams with a track record of value creation. Roosen uses the analogy "you need a good jockey. A fast horse is not enough", to illustrate the point that the best assets still require the right team to deliver shareholder returns. Turner points to the strong returns his team previously generated at Klondex Mines, Karora and new lithium spin-out Kali Metals as evidence of this principle.

Importantly though, both emphasize the need to take a long-term, multi-year view to allow the investment thesis to fully play out. Part of this means being willing to go against market sentiment to acquire fundamentally attractive assets during downturns when valuations are more compelling. Roosen and Turner have successfully applied this approach with Canadian Malartic, Beta Hunt, and Higginsville.

At a macro level, the outlook for gold appears constructive. Increasing central bank purchases, the prospect of a Fed pivot, and constrained global supply growth are all seen as supportive of a strong gold price going forward. When combined with the margin expansion and free cash flow growth a high gold price enables, the stage appears set for a significant re-rating of gold equities as this fundamental improvement becomes more apparent.

In summary, the combination of an attractive macro backdrop for gold, robust underlying fundamentals that have not yet been reflected in valuations, and the proven ability of companies like Osisko Group and Karora Resources to create value from these conditions makes gold miners a compelling opportunity currently for investors with a multi-year time horizon.

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Learn more: https://cruxinvestor.com/companies/karora-resources

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Interview with Gregory Martyr, Executive Chairman of Capital Metals PLC

Recording date: 1st May 2024

Capital Metals (AIM:CMET) is an intriguing investment opportunity in the mineral sands space, with its high-grade Eastern Minerals Project located on the east coast of Sri Lanka. The project boasts a resource of over 17 million tons at an impressive grade of 17%, making it one of the highest-grade mineral sands projects globally.

The company aims to produce ilmenite (50% of revenue), zircon (20% of revenue), rutile, and garnet through a four-stage process, with a modest capex of approximately $80 million for the first 10 years. The project's economics are compelling, with a base case valuation of $155 million and an upside case of $235 million, compared to the current market cap of just $15 million.

Despite recent challenges, including a dispute with a former minister and the economic crisis in Sri Lanka, Capital Metals has persevered and strengthened its position. The company is now well-funded, with $2.5 million in the bank, and is in advanced discussions with potential partners, LB Group and Sheffield Resources, to secure funding for the project's development.

The agreement with the chosen partner will involve a 50% stake in the project in exchange for funding Capital Metals into production. This deal is expected to be announced by mid-May 2024, with the goal of reaching a final investment decision (FID) by Q1 2025 and commencing production in the first quarter of 2026.

Capital Metals has a lean corporate structure and a strong shareholder base that has supported the company through recent challenges. The company's management team, led by Executive Chairman Greg Marr, brings extensive experience in the resources sector and is focused on delivering value to shareholders.

The Eastern Minerals Project benefits from a simple, well-established mining process and strong demand for its products, particularly ilmenite, which will be sold primarily to pigment producers in China. The company is committed to maintaining its social license to operate and has plans to contribute to local communities through job creation, infrastructure improvements, and education initiatives.

In conclusion, Capital Metals presents a compelling investment case, with a high-grade, long-life mineral sands resource, a clear path to production, and significant upside potential. As the company secures funding and advances the Eastern Minerals Project, investors may be well-positioned to benefit from the growing demand for mineral sands and the project's attractive economics.

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Jon Bey, CEO of Standard Uranium Ltd. (TSXV:STND) and Wayne Heili, MD of Peninsula Energy Ltd. (ASX:PEN)

Recording date: 25th April 2024

The uranium market is poised for significant growth, driven by increasing global demand for clean, reliable nuclear energy. As the world seeks to combat climate change and meet rising electricity needs, nuclear power is emerging as a critical part of the solution. This creates a compelling opportunity for investors to position in high-quality uranium companies that are advancing projects towards production.

Two companies that stand out in this regard are Standard Uranium and Peninsula Energy. Standard Uranium is a project generator focused on the prolific Athabasca Basin in Canada. The company has assembled a portfolio of drill-ready projects and is actively advancing them using a capital-efficient model. By partnering with other companies to fund exploration, Standard Uranium is able to minimize dilution while retaining upside exposure to potential discoveries.

As CEO Jon Bey explains, Standard Uranium's approach is to extensively de-risk projects before seeking partners. This includes staking prospective ground, identifying drill targets, securing permits, and signing agreements with First Nations. The result is a turnkey operation that is highly attractive to partners and investors alike. With four projects set to be drilled this year using other companies' money, Standard Uranium offers multiple shots on goal for a major discovery.

Peninsula Energy, meanwhile, is focused on bringing its Lance project in Wyoming into production. Lance hosts a robust resource of 54 million pounds, with the potential for significant expansion. The project benefits from existing infrastructure, a licensed production area, and a supportive jurisdiction. Peninsula is currently investing in a plant expansion that will enable it to produce up to 2 million pounds per year, with initial production targeted for late 2024.

As CEO Wayne Heili points out, Peninsula's all-in sustaining costs are expected to be in the low $40s per pound. With the uranium spot price currently around $90 per pound and long-term contracts being signed at even higher levels, Lance is well-positioned to generate strong margins and cash flow. The company has a clear path to production and a management team with a track record of delivering results.

Both Standard Uranium and Peninsula Energy are led by experienced executives who have a deep understanding of the uranium market. This is critical in an industry where expertise and relationships are essential for success. With a combined decades of experience in exploration, development, and operations, the management teams at these companies are well-equipped to navigate the challenges and opportunities ahead.

From a macro perspective, the uranium market appears to be in the early stages of a prolonged bull market. Years of low prices have led to supply cutbacks and underinvestment, even as demand has continued to rise. This has created a structural deficit that is only now starting to be reflected in the market. As utilities scramble to secure long-term supply and financial players enter the market, the potential for further price appreciation is significant.

In this environment, investors should look for companies with high-quality assets, experienced management teams, and a clear path to value creation. Standard Uranium and Peninsula Energy check all of these boxes, offering exposure to both exploration upside and near-term production. While patience may be required as the uranium bull market plays out, the potential rewards for positioning early could be substantial.

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Learn more: https://cruxinvestor.com/companies/standard-uranium

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Interview with Jeff Quartermaine, Chairman & CEO of Perseus Mining Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/perseus-mining-asxpru-poised-for-growth-in-africa-beyond-5246

Recording date: 24th April 2024

Perseus Mining, an Australian gold producer focused on operating mines and development projects in Africa, continues to deliver solid performance while executing a balanced growth strategy. The company's recent quarterly results showcase its operational strength, while the acquisition of OreCorp's Nyanzaga project in Tanzania project will provide a clear path for future growth.

In Q1, Perseus produced 127,471 ounces of gold at an all-in sustaining cost of just over $1,000 per ounce, generating a robust margin of $934 per ounce. This translated to a notional cash flow of US$19 million for the quarter, further bolstering the company's already strong financial position. With over US$700 million in cash and no debt, Perseus is well-positioned to fund its growth initiatives and navigate potential market challenges.

The acquisition of the Nyanzaga project will mark a significant milestone for Perseus. On April 17th, Perseus passed 90% ownership of OreCorp, and on April 18th, the company commenced compulsorily acquiring all outstanding shares in OreCorp. The offer closed on 19 April 2024. Perseus’s senior management team has engaged with senior government official, key stakeholders and employees in Tanzania, all of whom have confirmed their strong support for Perseus’s investment in Tanzania and their commitment to helping Perseus achieve its aim of commencing commercial production of gold from the Nyanzaga Gold Mine.

In addition to the Nyanzaga, Perseus is actively reassessing optimization opportunities at its existing assets, particularly the Edikan mine in Ghana. By re-evaluating past decisions in light of the current high gold price environment, the company aims to enhance margins and returns from these operations.

Perseus has articulated a clear growth strategy, targeting a portfolio of at least four long-life mines with an ore reserve inventory of 10 to 12 million ounces. The company will pursue this goal through a combination of exploration, acquisitions, and development, funded by its strong cash position and ongoing cash generation from operations.

Investors should also take note of Perseus' disciplined approach to capital allocation. The company aims to return surplus cash to shareholders through dividends, with a current policy targeting an annualized yield of 1% and the potential for additional bonus dividends. However, Perseus remains open to other capital management options, such as capital returns or share buybacks, and will carefully evaluate these alternatives to maximize shareholder value.

With a consistent track record of operational performance, a strong financial position, a clear growth pipeline, and an experienced management team, Perseus Mining presents a compelling investment case in the gold mining sector. As the company continues to execute its strategy and unlock value from its assets, investors may find Perseus an attractive opportunity for exposure to a growing, financially robust African gold producer.

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Interview with Morgan Poliquin, President & CEO of Almadex Minerals Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/almadex-minerals-dex-north-american-gold-silver-exploration-2196

Recording date: 24th April 2024

Morgan Poliquin, President and CEO of Almadex Minerals, discussed the company's unique approach to mineral exploration and value creation during an interview with Matthew Gordon. Almadex Minerals is focused on early-stage exploration, primarily targeting large copper and gold porphyry deposits in the Western United States. The company's strategy is to generate new exploration opportunities through a combination of big-picture geologic ideas and advanced exploration techniques.

Almadex Minerals differentiates itself from other prospect generators by having sufficient capital and its own diamond drilling capacity, which reduces the cost of the most expensive and critical stage of exploration: drilling. This allows the company to test their projects independently without giving away the upside potential through joint ventures or option agreements, unless strategically beneficial.

The company's exploration approach involves identifying areas that have been overlooked or under-explored due to the historical focus on near-surface oxide gold deposits in the Western United States. By utilizing advanced exploration techniques, such as the Terespec instrument, Almadex Minerals can quickly and inexpensively identify the most prospective targets for porphyry copper-gold deposits. This enables the company to efficiently allocate resources and minimize the risk of wasting time and money on less promising projects.

Almadex Minerals' current portfolio includes several early-stage projects that have been carefully selected based on their potential to host large mineral deposits. The company plans to aggressively advance these projects to the drill stage while also drilling at least one property, called Paradise, where they have identified a well-defined target indicative of a porphyry system.

In addition to its early-stage exploration projects, Almadex Minerals holds a portfolio of securities valued at around CAD 1 million and several early-stage NSRs (net smelter returns). The company also has a legacy zinc-silver project in Southern Yukon with a 43-101 resource, which could be monetized in the future when zinc prices improve.

Investors can expect updates on the advancement of Almadex Minerals' early-stage projects, with several potentially reaching the drill target stage this year. The company also plans to commence drilling at its Paradise Project in Nevada, pending permitting and logistics. If successful in making a discovery, Almadex Minerals would seek to partner with a developer or major mining company to further advance the project, as the company's focus remains on early-stage exploration and discovery rather than mine development.

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Interview with Hayden Locke, President & CEO of Marimaca Copper Corp.

Our previous interview: https://www.cruxinvestor.com/posts/marimaca-copper-tsxmari-metallurgical-test-reduces-operating-costs-dfs-in-2025-4378

Recording date: 22nd April 2024

Marimaca Copper presents a compelling investment opportunity as it advances its flagship Marimaca oxide copper project in Chile towards production. With a robust project, experienced leadership, and exposure to an increasingly supply-constrained copper market, Marimaca is well-positioned to deliver significant shareholder value in the near-term.

The wholly-owned Marimaca project is a shallow open pit oxide copper deposit with low technical risk and modest capital requirements. A Definitive Feasibility Study (DFS) is expected by Q4 2024 and will further refine the project's economics, with management targeting sub-$500M initial capex – a rarity in an industry dominated by multi-billion dollar developments.

Marimaca is taking a proactive approach to permitting and project execution to minimize risk and establish a clear path to construction and production. They are building an experienced owners' team and have partnered with top-tier engineering firm Ausenco to instill confidence in their ability to deliver.

Exploration work will continue in parallel with project development, providing opportunities to further expand the resource base and extend the mine life through regional targets. With strong cash management, Marimaca is able to simultaneously advance its flagship asset while testing compelling greenfield targets to build out its long-term growth pipeline.

The company is operating against an extremely favorable copper market backdrop. A dearth of new mine supply, declining grades, and growing demand from electrification are expected to sustain a structural deficit and support strong prices in the medium-term. CEO Hayden Locke believes copper has "one of the best setups of any commodity" with the potential for "spectacular price appreciation in the next 5-10 years."

As one of the few projects capable of delivering production by mid-decade, Marimaca is poised to capitalize on this window of opportunity. Near-term catalysts for the stock include the delivery of the DFS, submission of permits, conversion of resources to reserves, and exploration results. Investors should also watch for potential strategic partnerships or financing agreements as the company seeks to secure funding through to production.

In summary, Marimaca Copper presents a derisked path to near-term copper production, with a management team, asset base, and market setup that is well-aligned for success. As the company looks to transition from explorer to developer to producer in the coming years, it offers investors a unique opportunity to gain exposure to a critical metal of the future and the potential for significant value creation.

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Interview with Dr. Mike Jones, MD of Impact Minerals Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/impact-minerals-asxipt-surging-demand-for-hpa-investment-4477

Recording date: 22nd April 2024

Impact Minerals (ASX:IPT) is an emerging player in the high purity alumina (HPA) market, developing the Lake Hope project in Western Australia. HPA is a critical material for the global energy transition, with applications in lithium-ion batteries, LEDs, sapphire glass, semiconductors, and catalysts. As the demand for clean energy technologies continues to grow, Impact Minerals is well-positioned to capitalize on the increasing need for HPA.

The Lake Hope project boasts unique advantages that set Impact Minerals apart from its competitors. The deposit is located in the top two meters of a salt lake, allowing for simple and cost-effective mining operations. The fine particle size of the clay at Lake Hope provides a high surface area, enabling efficient processing and extraction of HPA. These natural advantages, combined with the company's innovative processing routes, position Impact Minerals to become one of the lowest-cost HPA producers globally.

Impact Minerals has developed two cutting-edge processing routes: the sulfate process and the low-temperature (LTL) process. The sulfate process, designed by the company's geologist, Rolland Gottard, uses sulfuric acid to extract HPA from the clay. This process formed the basis for the scoping study released in November 2023, which demonstrated Impact Minerals' potential to achieve industry-leading low production costs. The LTL process, a more recent development, utilizes a different set of reagents and has the potential to further reduce capital and operating costs by eliminating one stage of the production process.

The global HPA market is expected to experience significant growth in the coming years, with a projected compound annual growth rate (CAGR) of 20% by the end of the decade. This growth will be primarily driven by the increasing demand for LEDs, which Impact Minerals plans to target as its primary application for HPA. The LED industry is expanding rapidly, fueled by the adoption of energy-efficient lighting solutions, smart screens, and displays. Government regulations, such as the ban on incandescent light bulbs in the United States, further support the growth of the LED market and, consequently, the demand for HPA.

Impact Minerals is making steady progress in advancing the Lake Hope project. The company is currently conducting feasibility studies, with the pre-feasibility study (PFS) expected to be completed by the end of 2024. The PFS will include a decision on which processing route to pursue for the 10,000 ton per annum HPA plant. Following the PFS, Impact Minerals will commence the definitive feasibility study (DFS), with completion targeted for the end of 2025. In parallel, the company plans to initiate marketing efforts by mid-2024, engaging with potential end-users in the LED industry to secure off-take agreements and partnerships.

Investors seeking exposure to the growing HPA market should consider Impact Minerals for its unique advantages, innovative processing technologies, and strategic focus on the expanding LED sector. With a strong management team, led by Dr. Mike Jones, and a clear path to low-cost production, Impact Minerals is poised to become a significant player in the global HPA supply chain. As the company continues to advance the Lake Hope project and approach commercial production, it presents a compelling investment opportunity in the critical materials space, offering the potential for substantial returns in the years to come.

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Interview with Louis-Pierre Gignac, President & CEO of G Mining Ventures.

Our previous interview: https://www.cruxinvestor.com/posts/g-mining-ventures-tsxgmin-producing-gold-by-year-end-4938

Recording date: 23rd April 2024

G Mining Ventures, led by President and CEO Louis-Pierre Gignac, has announced a merger with Reunion Gold to acquire the Oko West project in Guyana. This strategic move aligns with G Mining's goal of becoming an intermediate gold producer, targeting an annual production of 500,000 ounces.
The Tocantinzinho mine, currently under construction by G Mining, is 89% complete and expected to start producing gold within the next three months. With an average annual production of 175,000 ounces, Tocantinzinho is projected to generate over $200 million in cash flow per year. The merger with Reunion Gold will enable G Mining to redeploy this cash flow towards the development of Oko West, minimizing shareholder dilution.

Gignac and his team have conducted extensive due diligence on the Oko West project, including site visits and meetings with the President of Guyana. The Guyanese government has expressed strong support for the mining industry and the swift development of Oko West. G Mining's management expertise, coupled with the financial backing of major shareholders La Mancha and Franco, who have committed $25 million each to support early works, positions the company well to advance the project rapidly.

Despite concerns about the "Venezuela factor" and a longstanding boundary dispute, G Mining remains confident in the stability of Guyana's mining sector. The dispute is expected to be resolved through international courts, with support from key players such as Brazil, the United States, and European nations.

The merger between G Mining and Reunion Gold is expected to close in the beginning of the third quarter, following a shareholder vote. As part of the transaction, a spin-off company will be created to hold Reunion's exploration assets in French Guiana and Suriname, with G Mining retaining a 19.9% stake and the option to maintain its pro-rata share in future funding rounds.

Gignac sees potential for the Oko West project to produce 200,000 ounces of gold annually, with a combination of open-pit and underground mining. The company plans to refine the trade-offs between the two mining methods and optimize the timing of underground development. The high-grade underground resource, with an average grade of 3 grams per tonne, is expected to complement the open-pit operation and create significant value.

G Mining's institutional shareholders have responded positively to the merger announcement, recognizing the strategic fit and the company's ability to leverage its expertise and systems in developing the Oko West project. With a strong track record of building mines in the Guiana Shield and a network of experienced Guyanese expats, G Mining is well-positioned to integrate the Reunion Gold team and advance the project seamlessly.

As gold prices continue to rise, reaching nearly $2,400 per ounce, the timing of this merger and the anticipated start of gold production at Tocantinzinho appears to be ideal for G Mining Ventures and its shareholders. The company's strong financial position, experienced management team, and strategic partnerships place it in an excellent position to capitalize on the growing demand for gold and create significant value for investors in the years ahead.

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