Company Interviews

Recording date: 1st September 2023

Same comment as our last call - Nickel continues to bounce along the bottom of $20,000-$22,000 ($9-$10/lb) range where it's been since early June and has only briefly broken $9/lb.  LME inventories remain near multi-year lows.

China is still split on 2 key markets – sulphate for battery continues to tread water, while stainless continues to edge higher, again despite lots of noise on Chinese weakness with both stainless prices and NPI prices moving higher once again. 

Things are quiet here in summer, however

SPC Nickel, who consolidated property in Sudbury from Vale, hit some interesting intervals.  Talked in the past about a good exploration team that is in the same neighbourhood as Magna Mining Sudbury property.

Hole WG-23-047, intersected a high-grade section that returned 1.27% Ni, 0.47% Cu over 18.00 metres from 245m to 263m within a thick zone of nickel and copper mineralization grading 0.70% Ni, 0.32% Cu over 50m from 221m to 271m.

Canada Nickel made Mann Northwest announcement - is another major discovery 

One of 11 targets larger than Crawford – target geophysical footprint of 6km2 is more than triple the size of Crawford footprint.
The first 8 holes drilled at Mann Northwest intersected well-mineralized, multi-hundred-metre intervals of mineralized peridotite and minor dunite across a combined strike length of 2.7 kilometres  - all holes were largely mineralized across the entire core length.  Initial mineralogy samples showed well-serpentinized material with heazlewoodite and pentlandite dominant nickel minerals.
Target remains open in all directions.
The big thing to talk about this week is Chalice Mining PEA – market cap has fallen by +30%.  They are the big boy with a pre-announcement market cap of $1.8 billion (which was already higher), so we need to say it like it is – particularly as PEA had some “offensive/aggressive” assumptions. Headline numbers all look great – but the market quickly realized some very aggressive assumptions.

Chalice Mining just published a PEA, a month earlier than Canada Nickel will be publishing their Feasibility Study (FS) on Crawford – their deadline for FS is 2.5-years from now.

Their biggest issue is the price deck:

Palladium price (over ½ revenue) was $2,000 – today’s price is $1,200. Remember palladium's main use is now being phased out as EV market reduces the need for catalytic converter
Nickel price was $24,000 –($11/lb) – we’ll probably be looking at the $20-$21,000 range. 
Copper price was $11,000 ($5/lb) – copper prices have NEVER been this high
When looking at the value at today’s price deck – you get to a value somewhere between negative and $500 million – Remember their market cap is still $1.3 billion!!

Chalice and  Canada Nickel are interesting comparisons.  Gonneville was discovered about the same time as Crawford so a good yardstick – the focus was nickel initially, but it turned out to be mostly PGE deposit with a scale about 1/3 less than Crawford and half the mine life.

Another thing that is interesting is capex – we’ve indicated our capex will likely be in $US1.8-1.9 billion range, Chalice is getting 1/3 bigger mine/mill operation, a leach plant, a hydromet plant for 10% LESS cost than Canada Nickel in a higher cost jurisdiction.

When the price deck is crazy aggressive, raises questions around what of the other 300-400 assumptions in there are also very aggressive! Will need a reset of expectations, and more than likely, a new owner who can take advantage of this fall from grace.

I’ll State it Again

We have talked about it in the past, but want to make sure watchers are very clear on this point.

A PEA IS ONLY AS GOOD AS THE ENGINEERING FIRM WRITING THE REPORT.  REMEMBER THERE ARE ENGINEERING COMPANIES THAT ALMOST NEVER BUILD PROJECTS, SO WRITING REPORTS IS THEIR BUSINESS AND IF THEY DON’T GIVE MINING COMPANIES THE ANSWERS THEY WANT, THEY DON’T GET THE BUSINESS.

MOST FRUSTRATING FOR ME, WHEN INVESTORS SAY WHY NOT PROJECT HAVE MID-20% IRR?  REALITY IS THAT WITH VERY FEW EXCEPTIONS – ONLY GET THOSE RESULTS FOR SMALLER, HIGH-GRADE DEPOSITS IN TOUGH JURISDICTIONS, GENERALLY WITH A COMPARATIVELY SHORT LIFE OF MINE.  IF BUILDING A MINE IN PLACE THAT GOVERNMENT WON’T TAKE IT AND A SCALE MAJORS WANT, BASE METALS PROJECTS ARE EITHER SIDE OF MID-TEENS IRR.

Recording date: 1st September 2023

What’s been happening

Brandon has been in Namibia this week for the annual Namibian Mining Expo.  We chat through what has been happening in Namibia. Offshore oil & gas and green hydrogen starting to ramp up in the country.
 
Winner of the week

Uranium sector as a whole - Spot price has risen above $60/lbs  & ETF’s have continued to see a substantial inflow of funds.

Bungle of the week

Friends of the Earth for their failed lawsuit that looked to block the state’s largest utility from seeking to extend the operating life of the Diablo Canyon Nuclear Power Plant.
https://www.washingtonexaminer.com/policy/energy-environment/judge-dismisses-lawsuit-close-diablo-canyon-nuclear-plant#:~:text=A%20California%20judge%20dismissed%20an,Diablo%20Canyon%20Nuclear%20Power%20Plant
 
Question of the week

UEC has done a couple of acquisitions in the last week, what does this mean for the sector?
 
https://www.marketscreener.com/quote/stock/FORUM-ENERGY-METALS-CORP-49477430/news/URANIUM-ENERGY-CORP-PURCHASES-60-INTEREST-IN-THE-HENDAY-PROJECT-ATHABASCA-BASIN-SASKATCHEWAN-FOR-44690603/
 
https://www.prnewswire.com/news-releases/uranium-energy-corp-acquires-portfolio-of-canadian-uranium-exploration-projects-in-saskatchewans-athabasca-basin-from-rio-tinto-exploration-canada-inc-301906379.html
 
Tweet of the week

Ia Aanstoot for her campaign asking Green Peace to drop their opposition to nuclear energy.  In her first ever Tweet she got just under 500K views in 24 hours.

https://twitter.com/ia_aanstoot/status/1696375089598771522?s=20
 
Moonshots & Fizzers
Oklo and Centrus Energy Sign Memorandum of Understanding set out to solidify HALEU fuel cycle, trade advanced nuclear power & fuel.  Could this synergy become the answer to HALEU production in the US?
 
https://www.prnewswire.com/news-releases/oklo-and-centrus-energy-sign-memorandum-of-understanding-for-fuel-components-and-power-procurement-to-support-the-deployment-of-advanced-fission-technologies-in-southern-ohio-301911056.html
 
https://www.powermag.com/centrus-oklo-set-out-to-solidify-haleu-fuel-cycle-trade-advanced-nuclear-power-and-fuel/

Interview with Simon Clarke, CEO of American Lithium Corp (TSX-V:LI) 

Our previous interview: https://youtu.be/yFsZ658LG5M

Recording date: 30th August 2023

American Lithium is actively working on the expansion of large-scale lithium initiatives in mining-friendly areas across the Americas. The company is presently concentrating on the ongoing development of its TLC Lithium Claystone Project, situated in Nevada's resource-rich Esmeralda lithium district. Additionally, efforts are underway to progress its Falchani Hard-rock Lithium Project and Macusani Uranium Project in southeastern Peru. Preliminary economic assessments for TLC, Falchani, and Macusani projects have shown promise, indicating strong potential for expansion and enjoying widespread community backing. Pre-feasibility studies are nearing completion at Falchani and have kicked off at TLC.

Interview with Bob Katsiouleris, CEO & Managing Director of Andromeda Metals (ASX:ADN)

Our previous interview: https://youtu.be/nNkN50aWSGc

Recording date: 31st August 2023

Andromeda Metals is an Australian mineral exploration company developing its 100% owned Great White Kaolin Project in South Australia, which has a large high quality kaolin and halloysite resource. The company recently completed an updated 2023 Definitive Feasibility Study (DFS) for the project, which showed improved economics compared to the 2022 DFS, including a 65% increase in NPV to $1.01 billion and 59% increase in average annual EBITDA to $130 million. The DFS outlines a 4-stage development plan to ramp up production capacity to 300,000 tonnes per annum of high value kaolin products over 28 years. Andromeda has secured offtake agreements for its key halloysite and kaolin products and is progressing funding discussions to start construction on the first stage by end of 2023, with first production targeted for October 2024. The company aims to capitalize on the tightening global supply and growing demand for high quality kaolin.

Pan Global Resources is a mineral exploration company focused on discovering copper, tin and other metal deposits in southern Spain. The company's flagship project is the Escacena Copper Project, located in the prolific Iberian Pyrite Belt near Seville. This region is known as one of the world's premier districts for volcanic-hosted massive sulfide deposits. The Escacena project covers approximately 5,800 hectares and has significant exploration potential. Pan Global is also actively exploring the Águilas Project near Cordoba in northern Andalucia, covering about 16,000 hectares. The company continues to acquire additional mineral rights in Spain to further expand its exploration footprint. Pan Global Resources was incorporated in British Columbia in 2006 and is listed on the TSX Venture Exchange under the symbol PGZ. The company is also quoted on the OTCQX Venture Market under PGZFF.

Interview with Clive Line, Finance Director of Serabi Gold (LSE:SRB, TSX:SBI)

Our previous interview: https://youtu.be/_prvXychjwc

Recording date: 30th August 2023

Serabi Gold plc specializes in gold exploration and production, focusing on the assessment and development of gold resources in Brazil. The company primarily owns the Palito Mining Complex in its entirety and has recently added the Coringa Gold Project to its portfolio; both sites are situated in the Tapajos area of northern Brazil. The Palito Mining Complex currently produces around 40,000 ounces of gold annually. Meanwhile, the Coringa Project is expected to yield an average annual production of 38,000 ounces once it is operational.

In this eye-opening video, we sit down with renowned gold market expert Ronnie Stöferle to discuss the intricacies of gold investment and why it matters in today's volatile economic landscape. Ronnie, the author of the annually published "In Gold We Trust" report, shares his valuable insights on the future of gold, its role in wealth management, and the macroeconomic factors affecting the gold market. From beginners to seasoned investors, this interview is a treasure trove of information that you won't want to miss. Ronnie breaks down complicated subjects into easy-to-understand explanations, offering actionable advice for anyone interested in safeguarding their financial well-being.

Latitude Uranium is advancing two promising uranium projects in mineral-rich regions of Canada. The company's flagship project is Angilak, located in Nunavut. With its exceptionally high grades, Angilak is considered one of the world's premium uranium deposits outside of Saskatchewan's renowned Athabasca Basin. The goal at Angilak is to significantly expand the current resource base.

Latitude's second key project is the CMB Project in Labrador, situated next to the significant Michelin uranium deposit. The large CMB Project exhibits potential for uranium, copper and IOCG-style deposits. By exploring and developing Angilak and CMB, Latitude Uranium aims to uncover major new uranium resources in these proven Canadian districts.

Interview with Bryce Crocker, CEO of Jervois Mining (ASX: JRV)

Our previous interview: https://youtu.be/b7_oredCTEg

Recording date: 25th August 2023

Jervois Global is a comprehensive cobalt enterprise, establishing the sole cobalt mine in the USA and spearheading a specialized cobalt chemical production in Jervois Finland. In addition, they possess notable nickel and copper assets, refining capabilities, and avenues for expansion.