Company Interviews

Interview with Oliver Turner, Executive VP of Karora Resources (TSX: KRR).

Our previous interview: https://www.cruxinvestor.com/posts/karora-resources-tsxkrr-a-deep-dive-into-their-gold-nickel-expansion-plans-3951

Recording date: 26th October 2023

Karora Resources is a gold and nickel producer based in Western Australia. In the recent quarterly update, the company produced around 40,000 ounces of gold, bringing year-to-date production to around 120,000 ounces. This positions Karora well to meet its full year production guidance of 145,000-160,000 ounces. The company continues to see input cost pressures, but expects to remain within its all-in sustaining costs guidance range of $1,100-$1,250 per ounce for 2022. Karora had $84 million in cash at quarter end, with cash continuing to grow.

While gold prices have held up well, gold mining equities have struggled amidst rising interest rates and inflation. However, this challenging environment presents an opportunity for investors who believe gold will come back into favor. When capital rotates back into the gold sector, companies like Karora that have strong assets and balance sheets stand to benefit disproportionately as early favorites.

Karora continues to add resource ounces at its flagship Beta Hunt mine at very low discovery costs of around $35 per ounce. The company will announce an updated resource by year-end, which is expected to show further growth. Exploration results this year have demonstrated potential for higher grades than currently being mined. Three new ventilation raises being completed by year-end will increase capacity, supporting a ramp up to annual production of 165,000-180,000 ounces from Beta Hunt alone by 2024.

While Karora needs to keep investing in exploration and growth to maintain assets and extend mine life, the company is also building up its cash reserves. Guidance for 2023 is around $100 million in capital spending, mostly focused on development and exploration to bring additional production online. Karora's growing production profile, long mine life, and tier one jurisdiction in Western Australia differentiate it from many peers. The exploration results not yet incorporated into resources, along with the potential for higher grades, mean there is significant fundamental value still to be realized.

In summary, despite share price weakness, Karora continues adding value through exploration, development, and production growth. The company believes it is well positioned for when sector sentiment improves given the quality of its asset base. Continued strong drill results and anticipated resource additions provide further upside potential.

View Karora Resource's company profile: https://www.cruxinvestor.com/companies/karora-resources

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Interview with Peter Doyle, Managing Director & CEO of Evolve Power Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/evolve-power-pioneering-hydro-energy-storage-in-alberta-3435

Recording date: 25th October 2023

Evolve Power Ltd (formerly Montem Resources) is an Australian energy company previously focused on coal assets and now has shifted its focus to renewable energy storage projects.

Evolve has partnered with TransAlta Corporation (50/50 JV) on a pumped hydro storage project at Tent Mountain in Alberta. Evolve is raising $1.5 million pre-IPO at an implied valuation of $78 million CAD. It expects to IPO at a significantly higher valuation, and Evolve expects to make an investment decision by 2025/2026 after further de-risking the project. 

Evolve is developing industrial battery storage projects to reduce electricity costs for large industrial customers. The company sees a significant growth opportunity for battery storage due to market volatility in Alberta. Evolve aims to sign the first customer by end of 2022 and rapidly expand the battery storage business, forecasting it will be more valuable than the pumped hydro project within two years.

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Interview with David Smithson, Senior VP of Exploration of Li-FT Power Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/li-ft-power-cselift-drilling-to-continue-inferred-resource-estimate-next-august-4224

Recording date: 24th October 2023

Li-FT Power Ltd (CSE: LIFT) is a lithium exploration company focused on the Yellowknife Pegmatite Field in the Northwest Territories, Canada. Dave Smithson, Senior VP of Exploration, has extensive experience in gold and base metals with Newmont. He was attracted to join Li-FT Power based on the scale of the lithium opportunity.

The exploration target at Yellowknife is 100-150 million tons of spodumene grading 1-2% lithium oxide. Drilling has revealed both dikes and sills, indicating both high tonnage potential and low strip ratios. Assay results to date show grades exceeding 1% lithium oxide. The mineralization occurs in shoots within the dikes.

The drill program is targeting 40,000 meters with the remaining 8,000 meters postponed due to wildfires but will be completed over the winter. Further drilling is likely beyond the initial program as resource modelling begins.

Upcoming catalysts include ongoing drill results and initial resource estimation. The large scale of the pegmatite field provides significant exploration upside for Li-FT Power.

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View Li-FT Power's company profile: https://www.cruxinvestor.com/companies/li-ft-power-ltd

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Interview with Sapan Ghai, Chief Commercial Officer, and Frank Eagar, Managing Director of Sovereign Metals Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/sovereign-metals-asxsvm-40m-secured-from-rio-tinto-to-develop-worlds-largest-rutile-deposit-3294

Recording date: 24th October 2023

Sovereign Metals Limited (ASX: SVM, AIM: SVML), a mineral exploration company, is developing the Kasiya rutile and graphite deposit in Malawi which is the world's largest rutile deposit, and one of the world's largest graphite deposits.

The Kasiya deposit contains over 18 million tonnes of rutile and 23 million tonnes of high-grade flake graphite. Based on the company's pre-feasibility study it has the potential to produce 222,000 tonnes of rutile per year, and 244,000 tonnes of graphite per year over a 25 year mine life. This represents potential revenues of $16 billion over the life of mine based on conservative price estimates. 

Recent export restrictions on graphite imposed by China are expected to cause graphite prices to increase. This would significantly benefit Sovereign Metals given its scale and cost position.

Key upcoming catalysts are advancing permitting, optimizing the pre-feasibility study, and completing the definitive feasibility study. A positive definitive feasibility study and permitting approval would derisk the project and likely drive significant share price upside.

View Sovereign Metals' company profile: https://www.cruxinvestor.com/companies/sovereign-metals

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Interview with Jeremy Wright, CFO of Portofino Resources Inc.

Recording date: 23rd October 2023

Portofino Resources Inc (TSXV: POR, FRA: POTA) is focused on exploring lithium brine projects in Argentina. The company recently acquired 100% of the Yergo Lithium Brine Project in Catamarca province which has high lithium grades up to 373 mg/l with very low impurities. Portofino is also awaiting the results of a tender process for the Arizaro project in Salta province where it has identified a significant lithium-bearing aquifer. 

The company plans to drill 4 holes at Yergo by year-end 2023 with the goal of establishing an initial resource estimate. Portofino is well positioned with prime lithium brine assets and provides investors with low-cost entry to the lithium sector. Upcoming catalysts are the tender results for Arizaro and initial drill results from Yergo which could revalue the company.

View Portofino Resources' Company Profile: https://www.cruxinvestor.com/companies/portofino-resources

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Interview with Michael Wood, Executive Chairman of Sendero Resources Corp.

Recording date: 23rd October 2023

Sendero Resources is a newly listed copper-gold exploration company in the Vicuña District of Argentina that started trading in October 2023. The company is led by Executive Chairman Michael Wood, CEO Hernan Vera who has built three major mines in Argentina, and renowned geologist David Royale on its technical team. The company recently raised nearly CAD$6 million and obtained drill permits, with plans to start drilling in January 2024.

Sendero's 12 sq km land package sits on the Vicuña Belt, a unique geological formation with rapid uplift and erosion that has pushed porphyry bodies closer to surface. Sendero will be drilling initially to depths of 350-500m on outcropping mineralization targets and another area just 80-100m below surface with potential clustering porphyries. The goal is to hit copper-gold mineralization starting near surface and deliver over 100+ meter intercepts of 1%+ copper equivalent which would validate that Sendero's land package hosts a cluster of porphyry deposits like others in the region.

With permits granted, contracts signed, and targets delineated, Sendero is fully ready to start drilling in early 2024. The company aims to advance quickly with supportive investors and capital markets, as it explores a proven but underexplored part of a copper-gold district seeing intense interest globally. Initial results will dictate the next steps, but the long-term goal is a 10,000-15,000 meter drill program to delineate an initial mineral resource estimate within 12 months.

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View Portofino Resources' Company Profile: https://cruxinvestor.com/companies/sendero-resources

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Interview with Michael Carrick, nominated director for the board of AVZ Minerals

Recording date: 16th October 2023

In an exclusive video interview, Michael Carrick, the Chair of RTG Mining and now a nominated director for the board of AVZ Minerals, discusses pressing concerns within the company as part of the Make Manono Great Again (MMGA) initiative. Carrick addresses key issues such as corporate governance breakdowns, opaque disclosures, changes in Exploration License PR 13359 ownership, and concerns regarding the company’s extensive litigation proceedings.

The interview probes the recent Lubumbashi High Court ruling, revealing concerns about AVZ's transparency and urging a timely report to shareholders. Carrick touches on share sales by AVZ executives and risky aspects of AVZ's international arbitrations, stressing the need to restore stakeholder relations with Dathomir, Cominière, and the DRC government.

Looking forward, Carrick outlines the nominated directors' vision, calling for improved transparency, litigation strategy reassessment, and value rebuilding. The interview serves as a comprehensive overview of MMGA's plans, urging shareholders to watch and stay informed via MMGA's website.

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Learn more: https://cruxinvestor.com/companies/avz-minerals

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Interview with Stephen G. Ronan, President & CEO of Global Atomic Corp.

Our previous interview: https://www.cruxinvestor.com/posts/global-atomic-tsxglo-business-as-usual-while-negotiations-continue-3819

Recording date: 19th October 2023

Global Atomic Corporation (TSX:GLO) is a uranium development company with projects located in Niger, Africa. The company has uranium exploration permits covering over 5,000 km2 and operates the Dasa Project, which is currently under development. President and CEO Stephen Roman provided an update on the company's operations amidst the recent coup d'etat in Niger, and the project has strong government support as operations are continuing.

Dasa is a significant uranium deposit, with over 100 million pounds of indicated resources at a grade of 5,000 ppm U3O8. The company is working on an updated reserve estimate and mine plan which is expected to show a substantial increase in reserves. First yellowcake production is now anticipated in 2026.

The uranium market fundamentals remain strong, with spot prices over $70/lb again. Global Atomic represents a compelling investment opportunity, with its advanced asset, expanding resources, and potential alternative financing arrangements. Key upcoming catalysts are the updated reserves and mine plan, progress on financing, and a resolution of the political situation in Niger.

View Global Atomic's company profile: https://www.cruxinvestor.com/companies/global-atomic-corp

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Recording date: 19th October 2023

*What’s been happening*

Spot uranium is back through US$70/lb after dipping into the $60s. The market has digested Kazatomprom’s plan to increase production in 2025 and realized supply is still going to be hard to come by.

The world has been very distracted by the Middle East and Gaza the last 10 days. Even though there are no direct effects on the uranium sector that are immediately apparent, it has added to investor uncertainty. This uncertainty affects sentiment more broadly and has put a pause on uranium stocks.

*Winner of the week*

Bangladesh this week celebrated becoming the 33rd nuclear power producing country in the world as they received their first batch of uranium fuel for their first ever nuclear power plant.

Plans for a nuclear power plant in Bangladesh were proposed back in 1961. In 2007 the proposal of 2 units at Rooppur Nuclear Power Plant was put forward. By 2009 the government approved a Russian proposal and 2 years later in 2011 an agreement with Rosatom was signed to build at Rooppur.

Construction of the first unit commenced in 2017, with commissioning in 2023 and the second unit in 2018, with commissioning in 2024. Russia has financed 90% of the project costs.

https://www.dhakatribune.com/bangladesh/327151/bangladesh-receives-russian-uranium-to-join
https://world-nuclear.org/information-library/country-profiles/countries-a-f/bangladesh.aspx

*Bungle of the week*

Despite EU member states’ (including Germany) finally agreeing on the reform for the bloc’s electricity market, the German Greens party are still trying to derail the whole deal for the sake of preserving their sense of relevance maintained through irrational, unscientific opposition to nuclear power.

https://www.cleanenergywire.org/news/france-and-germany-claim-eu-deal-electricity-market-success-despite-unresolved-nuclear-questions

Interview with George Ogilvie, President and CEO of Arizona Sonoran Copper Company Inc.

Our previous interview: https://www.cruxinvestor.com/posts/arizona-sonoran-copper-ascu-low-risk-heap-leach-sxew-plus-growth-upside-2673

Recording date: 18th October 2023

Arizona Sonoran Copper Company (ASCUF) is developing the past-producing Cactus copper project in Arizona. The project includes multiple deposits with 7.4 billion pounds of copper resources. Approximately 5.2 billion pounds are amenable to heap leaching and solvent extraction electrowinning to produce copper cathode. 

Pre-feasibility study targeted for early 2024 is examining a 25+ year mine life producing 45,000-50,000 tons of copper cathode annually. There is potential to expand resources and production through exploration drilling between the known deposits. The company is working with new technology, Newton Column test, for enhanced leaching of primary sulfides which could further boost recoveries and mine life. 

With copper prices expected to remain strong long-term, Arizona Sonoran offers leverage to higher copper as the project advances towards a construction decision, targeting first production before the end of 2026.

View Arizona Sonoran Copper's company profile: https://www.cruxinvestor.com/companies/arizona-sonoran

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