Interview with Mark Selby, CEO of Nickel Explorer, Canada Nickel Corp. (TSX-V:CNC)

The newest nickel story on the block, with a trebled share price since we last spoke with them around the time of their IPO. Highly impressive. EV/battery metals investors, take note.

Mark Selby is a renowned mind in the nickel space; his experience at Inco and the helm of RNC has given him plenty of experience with large nickel projects: in particular, the Dumont Nickel-Cobalt project. Can he develop the Crawford Nickel-VMS Project in a faster, more capital-efficient fashion? The aim is to complete a PEA/scoping study (C$4M) by the end of 2020, with an FS (C$20-30M) following a year later. This is an accelerated monetisation event for nickel investors.

Canada Nickel just announced some encouraging drill results with an exciting PGM upside: 2.6g/t. Canada Nickel has managed to create the 11th largest nickel sulphide resource globally in just 6-months for just C$4M, and it is little surprise the market has cottoned on to this value proposition. Selby believes we are on the verge of the start of a new nickel supercycle at the start of this new decade, and he believes having one of the world's few large nickel projects outside of Indonesia will stand Canada Nickel in good stead. The CAPEX is a whopping US$1B+, but he claims the sheer scale of Crawford will be enough to attract a major to take it out, despite it not having the "sexy high grades." In order to hit the upcycle, Selby wants to move fast. Canada Nickel has its skates on and it doesn't appear anything is going to stand in its way.

Canada Nickel recently completed a private placement of c. C$4.5M. The original aim was to raise C$2.5M, and now with the share price tripled, Selby feels this has shown the confidence of investors in the EV narrative, even if COVID-19 has distracted. It's incredibly impressive that Canada Nickel's share price is up 5X on its February IPO in a COVID-19 market scenario.

What sets Canada Nickel apart from the swathe of other nickel juniors?

A.) This is a new nickel sulfide discovery: something of a rarity right now.

B.) The potential scale of Crawford: big enough to attract a major, and Selby claims Canada Nickel has only just scratched the surface.

C.) The team's experience demonstrated at Dumont has given investors confidence, taking something from resource to fully-permitted project.

Selby reveals that from the first two step-out holes from its latest drilling operations have more than doubled the strike length already registered. Exciting. Perhaps most importantly, the first assays from the first drill hole were the highest grade nickel intersection in the main nickel dunite area: 55m at 0.42% nickel, with 0.2g/t palladium+platinum. What will capture the excitement of investors is the prospect of filling the mill with as much high-grade ore as possible, and Selby is clear reticent of this. The third highlight is that Canada Nickel has hit a PGM zone 100m outside of its main nickel resource, and the company has managed to hit it consistently, across several hundred metres down to 500m depth. It has been hit in 2 different spots a whopping 1.2km apart from each other. It is clear that Crawford is shaping up to be a really exciting nickel/PGM project.

What has the impact of COVID-19 been like for Canada Nickel, and what will it continue to be? In Ontario, mining was deemed an essential service, so there has been minimal disruption for the company. The assays have slowed down a little, but other than that, Canada Nickel has mitigated the impacts well and has kept employees safe.

Selby will put out another resource update in July, then another in October, in addition to a whole series of drilling/mineralogy results. these will be the key derisking events. We have no doubt Selby will continue to hit his deliverables. This could be exciting news for nickel investors. 

Company Page: https://canadanickel.com/

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Interview with Bradley Rourke, President & CEO of Scottie Resources Corp. (TSX-V:SCOT)

Scottie Resources Corp. is an exploration stage company engaged in the acquisition, exploration and evaluation of gold and silver properties located in the “Golden Triangle” area of British Columbia, Canada. Sprott is involved, having invested C$2M. A second placement for another C$2M was announced today, which should allow the company to deliver on its drill programme for 2020.

The project is the past-producing Scottie Gold Mine. Scottie produced from 1981-1984, producing 0.5oz/t. What is the game plan for Scottie Resources going into Rourke's fifth year? In 2015, a powerline was built going right through the property. Rourke's focus, up until the last year, has been consolidating a difficult property. He now thinks he has completed this consolidation. In 2019, ideas were implemented for the first time in a small drill programme. This revealed 3 unique zones of "extraordinary" mineralisation. Going into 2020, Scottie Resources Corp. is a "pure exploration company." A lot of surface work has been conducted.

Rourke himself is a businessman and serial entrepreneur who has always worked in mining. He has plenty of experience in the mining service sector in BC and claims to have orchestrated the second-largest IPO in the history of Canada. Impressive. However, this is Rourke's first mining deal that he has had total control of. He now claims to be fully immersed in the world of junior mining.

Rourke claims to have mostly self-funded the project for the first few years. Rourke says he has C$800,000+ net investment in the company. He claims he pays his geologist more than he pays himself right now. He had a strong technical team from Equity Exploration carry out the modelling and technical work based on historical data, but in 2018, one of the consultants, Thomas Mumford, who worked on the re-logging programme, became the VP Exploration of the company.

The intention is to show a pathway to a multi-million-ounce deposit in 2020. Scottie Gold has a permit and a mill, but it's clear Rourke isn't too keen on heading into production. He has a district-scale piece of property that he thinks has exciting geology. Will it be an exciting takeout target? Rourke thinks so.

The C$2M raise will be used for carrying out the drilling programme in 2020, but what makes Scottie Resources stand out from the swathe of gold explorers out there? This year, Scottie Resources will do 5000m of drilling. 2/3 of that drilling will follow up on zones already hit last year. A third of the drilling be on the domino zone, where surface work has shown a possible connection to the Scottie Gold Mine.

Lastly, looking at the tailings situation, Rourke claims there is a large quantity of recoverable tailings that aren't currently his liability, but that he could claim, in a nearby lake. He has conducted 2 seasons of work: over 100 samples, all the way to the bottom with a volume estimate and independent benchmarks. Rourke is not in the tailings business but he'd "love to clear it up." He isn't interested in liabilities, but he has submitted applications and is working towards it. He believes the average grade is 2.2g/t and is 6g/t at the very bottom of the pile. He believes 80% is recoverable, and that there is a volume of c. 160,000t to recover. He has already been speaking to buyers in Taiwan.  

Company Page: https://scottieresources.com/

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Interview with Kiril Mugerman, President & CEO of Geomega Resources (TSX-V:GMA)

Geomega Resources: 'leaders in rare earths recycling.' Is recovering rare earths from magnets a niche in the rare earths space? Mugerman claims that magnets provide the most easily available and highest grade concentrate available. He wants to demonstrate to the world that his recycling model is viable.

Geomega Resources is based in Quebec and has just completed a pilot plant. Now, the focus is on building a demonstration plant. Geomega was originally an exploration and development company but segued to rare earths recycling after struggling to raise capital to develop their large Montviel Deposit. Mugerman is candid: unfavourable market conditions would have sunk Geomega Resources if he hadn't pivoted, just as it has been the ruin of so many juniors before him.

The plan was to kick start with cash flow to capture the interest of investors, and Mugerman immediately latched onto this. He investigated a variety of possible ventures, but settled on magnet recycling as the most profitable.

Geomega Resources claims to have proprietary rare earths recycling technology that is more green than the currently most popular process. He claims his company used totally different reagents than the hydrochloric acid used in China. He doesn't want to be involved in such pollution. 70% iron has to be dumped into tailings as a consequence of the hydrochloric leaching process. Geomega Resources' proprietary process does not destroy the reagent, so the company is able to reuse 95% of it for further recycling. It has been designed in such a way that absolutely no tailings are created. Smart. Mugerman hopes the demonstration plant will show this process can be effective on a commercial scale. It will be running 8 hours a day and processing 1.5t magnet scrap per day.

Geomega Resources is fully financed "based on the model presented and developed in the last 6 months." The demonstration plant is c. C$2.7M. Geomega Resources has raised C$1.72M in debt, C$1.2M in equity, and c. C$1M in different grants. Mugerman does not have the figure sat in front of him right now, but claims he has enough for all G&A activities until the plant is built. The facility will be 14,000 square feet in total. The plant may eventually go to 24 hours per day.

Geomega Resources has signed agreements with some partners, but nobody guarantees anything in the recycling industry. Several of Geomega's partners have given positive indications, but it will be interesting to see how these develop once things are up and running. It doesn't appear Mugerman is in control of the front end cost of the battery recycling process, because there will be other parties bidding for the material. Does he have access to individuals who can guarantee Geomewga feedstock at a set price so he can control his margins? He claims he is always working on it. Will this be problematic to investors?

Geomega's targets are $10M in sales at a 20% margin. This would provide a proof of concept ahead of Geomega's step to full commercialisation.

In terms of a timeline for production, what is Mugerman looking at? There is no fixed date on when the first shovel goes in the ground at the demo plant, but the building is already built with a long-term lease, and he expects to get things started this year. He wants to deliver the construction as soon as possible and expects to be producing oxides by the end of this year if all things go well. As soon as possible, he'd like to triple the size of the plant to prove the commercial viability of Geomega's proprietary process.  

Company Page: https://ressourcesgeomega.ca/

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Interview with Doug Ramshaw, President of Minera Alamos Inc. (TSX-V:MAI)

Minera Alamos is a gold development company that is aiming to become a gold producer in 2020.

The company has a portfolio of Mexican gold assets, including the 100%-owned Santana open-pit, heap-leach development project in Sonora currently under construction (expected first gold production in Q1 2021). Minera Alamos' other project, the 100%-owned La Fortuna open pit gold project in Durango, appears to have a 'robust' PEA and is nearing the end of the permitting process. A construction decision on La Fortuna could be made in late 2020 or early 2021. Minera Alamos' team have together brought 3 mines into production over the last 12-years. The aim is to get Santana into production quickly, then finance La Fortuna out of cash flow. Ramshaw claims that Mexico as a jurisdiction and the nature of the projects will Minera Alamos to maintain a very low CAPEX across its 2 projects. Clever. Let's unpack this further...

What are the numbers saying? Since bringing Santana and La Fortuna together in 2018, the company has raised some capital: C$5M at the start of 2019, a C$6 equity raise plus a royalty package at the end of 2019, and another raise in 2020. The total is around C$11M in equity over the last 15 months, plus the royalty package with Osisko Gold Royalties. This has allowed Ramshaw to avoid any warrants and options. Minera Alamos has c. C$14M cash right now, and is fully-funded to bring Santana through to production. The aim is to construct a 25,000-35,000oz gold mining operation for a CAPEX of C$10M. In year one, as Minera Alamos ramps up, the company will be looking at the "low-US$900/oz" region for AISC. Ramshaw expects the AISC to fall to the low $800s, or even the low $700s as the project is ramped up to 45,000-50,000oz per year. Very impressive economics. Santana should have a life-of-mine that stands at 6 to 7-years initially, but brownfields exploration upside could add to that. Ramshaw has no issue starting off work on a "modest asset," provided there is an eventual window towards a 1Moz - 1.5Moz resource.

Ramshaw has recently been selling bus shares ar Prime Mining because he has a clear message to the market: Santana and La Fortuna are the focus. Los Reyes had too many expenses attached to it.

What about La Fortuna? It's a higher-grade operation but is a similar kind of breccia pipe. Minera Alamos came out with a PEA in 2018 stating a 5-year mine life on a starter pit. It was based around a 3.5 to 4g open-pit with a 6:1 strip ratio. Roughly 50% of the gold is recovered by gravity, but the other 50% requires a milling operation, which is clearly different to Santana. Minera Alamos already owns a 2,000t per day mill. The PEA called for a 1,100t per day throughput, so this mill is very helpful. With the mill in place, the company is looking at a higher CAPEX than for Santana: US$26M, but it is sub-1-year payback at US$1,250/oz gold, and Minera Alamos can then look at exploration upside.

Minera Alamos is "without a doubt" looking at M&A and is constantly looking for new acquisitions. The company calls itself an "asset number: 3" company, and Ramshaw is keen to solid this statement rather than it being purely aspirational.

How much skin in the game does management have? Ramshaw says he has put his money where his mouth is, buying 3.3M shares out of the market in the last 1.5 years, which is 3.5 to 4 years of his salary into the stock. The rest of the management team appears to have done similar. Ramshaw is paid roughly US$120,000 per year, which is very reasonable.  

Company Page: https://www.mineraalamos.com/

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A Conversation with Brandon Munro, CEO of Bannerman Resources (ASX:BMN)

Kazakhstan is easing emergency restrictions in some towns but what does that mean for the resumption of production of uranium at KazAtomProm. Munro explains. Also we discuss what pressure KazAtomProm may be under and from where? Plus how is Russia coping.  

The US Govt is trying to get their seat back at the uranium table, after years of neglect. Will SMR technology be their saviour, and if so how long will it take. This week saw a bug announcement with regard to their ongoing Advanced Reactor Demonstration Programme. Big numbers being thrown around. Bigger the US Dept of Energy has indicated.

And what are the Chinese and Russian SMR technologies capable of. We talk about use cases and applications on land, and on sea.

Cameco has restarted their Port Hope facility, which was expected by most, but some selling in the market means that perhaps not everyone was pleased with the news.

And final a sober statement by the European Atomic group, EurAtom warns of lack of trans[port hubs to accept nuclear shipments, lack of investment in conversion facilities and a permanent reduction of uranium and withdrawal from uranium exploration. And commented on that utilities must diversify supply and continue to maintain appropriate 3-years of strategic inventory levels. We discuss what they mean.

Company page: https://www.bannermanresources.com.au/

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