Afleveringen
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Interview with Robin Dunbar, President & CEO of Grid Metals Corp.
Our previous interview: https://www.cruxinvestor.com/posts/grid-metals-tsxvgrdm-50-million-plan-to-unlock-high-grade-lithium-mine-4516
Recording date: 30th May 2024
Grid Metals Corp. (TSXV:GRDM) is a compelling investment opportunity in the critical minerals space. The Canadian exploration and development company is advancing two highly prospective battery metal projects in mining-friendly Manitoba.
Grid's flagship asset is the Donner Lake lithium project. Donner Lake hosts a 7 million tonne spodumene resource which is modest in size but boasts strong grade consistency and favorable mineralogy. The real opportunity lies in Donner Lake's proximity to existing infrastructure. Grid is pursuing toll milling agreements with nearby facilities as an alternative to constructing a concentrator on site. This strategy could slash years off the development timeline and save hundreds of millions in capex.
Permitting is a key near-term catalyst for Donner Lake. Grid expects to secure an advanced exploration permit imminently, allowing for development activities. The company is targeting a full mining permit in H1 2025, positioning it to move quickly into production in a recovering lithium price environment.
While Donner Lake is the near-term focus, Grid's MM nickel-copper project offers significant upside. The MM Project has a 47.7Mt resource with 317 million pounds of copper, 263 million pounds of nickel and 452,000 ounces of combined palladium, platinum and gold, with an estimated $4 billion worth of metals in-pit. Grid sees potential to expand the resource to 80-100Mt, which would make it attractive for a major mining company to get involved.
Upcoming catalysts for MM include exploration results from drilling planned for late summer/fall 2024. Grid will also look to bring in a strategic partner to help develop the asset once it reaches critical mass.
The company's projects are located in Manitoba, one of the world's top mining jurisdictions. Manitoba boasts excellent infrastructure, a streamlined permitting process, and a long history of mining. This combination of asset quality and jurisdiction safety is a key competitive advantage for Grid.
Importantly, Grid's assets are a fit for the times. The global transition to clean energy is driving unprecedented demand for critical minerals like lithium, nickel and copper. Localizing supply chains has become a priority for western governments and automakers. Grid aims to be part of the build-out of a North American battery metals supply chain to meet this need.
Grid Metals currently has a market capitalization of just C$15 million. This valuation appears far too low based on the quality of the company's assets, the strength of its management team, and the significant upside potential offered by upcoming catalysts. As the company advances its projects and proves out their potential, there is strong potential for a re-rating of the stock.
In summary, Grid Metals offers investors a unique way to play the critical minerals boom. With two quality assets in a top jurisdiction, a pragmatic development approach, and multiple near-term catalysts, the company is well positioned to create value in the rapidly growing battery metals space. As CEO Robin Dunbar stated, "The industry and market are going to wake up to this." Grid Metals may just be one of the best-kept secrets in the junior mining space, but it likely won't stay that way for long.
View Grid Metals' company profile: https://www.cruxinvestor.com/companies/grid-metals-corp
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Interview with Robin Tolbert, VP Exploration, and Sam Lee, President & CEO of NorthIsle Copper & Gold Inc.
Our previous interview: https://www.cruxinvestor.com/posts/northisle-copper-gold-tsxvncx-leveraging-the-rising-copper-gold-market-on-path-to-production-5205
Recording date: 29th May 2024
NorthIsle Copper and Gold is advancing a significant copper-gold porphyry project on northern Vancouver Island in British Columbia. The project boasts an impressive resource base, with over 4.9 million ounces of indicated gold resources and approximately 2.5 billion pounds of indicated copper resources. This forms a strong foundation to build upon in a rising commodity price environment.
With copper and gold prices at attractive levels, NorthIsle is taking steps to grow the project further and optimize the potential development scenario. The company is currently undertaking trade-off studies to determine the optimal path forward, with a focus on delineating a potential starter pit operation on the higher-grade Red Dog and Northwest Expo zones.
CEO Sam Lee highlighted the opportunity in a recent interview, stating, "We obviously saw recent highs on not only copper and gold, it's to grow the project right, it's to make it bigger, it's to make it obviously better, and that's what we are doing through the drill right now."
This year's 10,000 meter drill program is following up on successful programs in 2022 and 2023 and will target high-grade zones that could enhance the overall project economics. VP Exploration Robin Tolbert sees big potential, especially at Northwest Expo.
"At Northwest Expo, we have of course the resource in there, which is where those red drill holes are," said Tolbert. "What we find is the mineralization to the south, which is to the left, is very high grade but that currently is in the inferred category. We are planning to drill seven holes through this red area which is the high grade, and that will increase the grade and tonnage of high grade."
A key advantage for NorthIsle is the existing infrastructure in the area, including power, roads, and port facilities, thanks to the historical BHP Island Copper mine that operated in the 1970s. This is a major benefit that could allow the project to be advanced efficiently. While a lot of work is going into expanding and upgrading resources at known zones, NorthIsle also sees tremendous blue sky exploration potential on the wider property package. Initial drilling at the Pemberton Hills target indicates a very large porphyry system could be present, and this area will see more drilling in 2024.
For investors bullish on copper and gold, NorthIsle presents a compelling opportunity, with a large existing resource base in a top-tier jurisdiction, ongoing drilling to expand high-grade zones, and district-scale upside potential. With demand for copper forecast to grow significantly in the coming years, NorthIsle is well positioned to create value as it continues to advance and de-risk this major project.
View NorthIsle Copper & Gold's company profile: https://www.cruxinvestor.com/companies/northisle-copper-gold
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Zijn er afleveringen die ontbreken?
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Interview with Todd Ross, MD & CEO of Nordic Nickel Ltd.
Our previous interview: https://www.cruxinvestor.com/posts/nordic-nickel-asxnnl-pursuing-high-grade-nickel-in-finland-4675
Recording date: 24 May 2024
Nordic Nickel (ASX:NNL) is an emerging nickel explorer focused on developing projects in the Central Lapland Greenstone Belt (CLGB) of Finland. With the EU aggressively pushing to build a domestic battery metals supply chain to feed its booming electric vehicle (EV) industry, Nordic appears well positioned to help fill the looming nickel gap.
The company's flagship asset is the Pulju project. Pulju already hosts a resource of over 400 million tonnes grading 0.21% nickel, 0.01% cobalt, for over 1,000,000 tonnes of contained nickel and 47,000 tonnes of contained cobalt. Notably, mineralization starts at surface and remains open, offering potential for further growth.
Nordic is actively advancing Pulju along the development curve. Key near-term catalysts include metallurgical test results to optimize recoveries and concentrate grades, along with a scoping study to define project economics. In parallel, Nordic is conducting regional exploration to make additional discoveries in this fertile nickel belt.
According to CEO Todd Ross, the company is also pursuing strategic initiatives to build out its portfolio and create shareholder value. These include prospect generation to acquire additional battery metal assets in Finland, potential spin-outs or joint ventures for non-core projects, and selective earn-in deals.
The investment case for Nordic is underpinned by the powerful macro tailwinds driving nickel demand. Europe in particular is facing a structural shortage of the metal as it looks to ramp up EV production. The EU is targeting 30 million EVs by 2030, which will require nickel supply to increase more than tenfold from current levels. However, Europe has limited domestic nickel production today, leaving it heavily reliant on imports. To address this, Brussels is enacting policies like the Critical Raw Materials Act to spur local mining of battery metals. The EU is backing this up with billions of euros in investment support.
This combination of rising nickel demand and a concerted policy push has sparked a race to launch new nickel operations in Europe. As one of the few nickel explorers with an established resource in a top tier jurisdiction, Nordic appears well placed to capitalize.
Key potential catalysts for Nordic over the coming 12 months include: Metallurgical test work results (Q2 2024), scoping study on Pulju project (H2 2024), exploration results from regional drilling and sampling programs, further delineation of nickel targets across project portfolio, and potential strategic partnerships or offtake agreements.
While still an early-stage explorer, Nordic offers investors leveraged exposure to the themes of nickel demand growth, security of supply, and the European battery metals rush. With a large resource base, prospective land package, and active work programs, the company appears to be laying the groundwork to create value on multiple fronts. As such, Nordic may be worth a closer look for risk-tolerant investors seeking to gain exposure to the accelerating EV story.
View Nordic Nickel's company profile: https://www.cruxinvestor.com/companies/nordic-nickel
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Interview with Timothy Froude, President & CEO of Sokoman Minerals Corp.
Our previous interview: https://www.cruxinvestor.com/posts/sokoman-minerals-sic-moosehead-drilling-gold-kraken-li-drilling-in-q2-2992
Recording date: 24th May 2024
Sokoman Minerals Corp. (TSXV:SIC) is positioning itself for a major new gold discovery in Newfoundland, Canada. With high-grade drill results from its flagship Moosehead project, a large drill program about to commence, and an innovative approach to bulk sampling, Sokoman offers investors a compelling exploration story in an emerging gold district.
Moosehead has consistently delivered bonanza-grade gold intercepts, including recent results of 10.25 meters of 84.7 g/t gold and 12.4 meters of 44.1 g/t gold from the Footwall Splay zone. To efficiently extract a bulk sample from this high-grade zone, Sokoman has partnered with Novamera Inc. to utilize their proprietary technology. This innovative approach will surgically extract the high-grade core of the vein with minimal dilution and environmental impact.
An 8,000-10,000 meter drill program is set to begin at Moosehead in the coming weeks. Priority targets include the Footwall Splay and the recently discovered 552 Zone. The company also plans to test the deeper potential of the gold system with several 800-1000m holes. Sokoman believes these could be "game-changers" for the project.
Meanwhile, exploration is ramping up at the earlier-stage Fleur de Lys project. 2024 prospecting uncovered numerous angular, gold-bearing boulders up to several meters in size, which points to a nearby bedrock source. An initial 2,000m drill program aims to make a new discovery here starting in July.
Sokoman is well-funded for its 2024 exploration plans with over 10,000m of drilling across two projects. The company's prospective land package in the emerging gold district of Newfoundland, proven management team, and depressed valuation provide the right ingredients for a potential re-rating on exploration success.
The broader market backdrop appears supportive for gold exploration companies. The gold price remains near all-time highs despite recent volatility, incentivizing miners to replace reserves and grow production. Many view Newfoundland as an underexplored region with strong geological potential.
In this environment, Sokoman Minerals offers investors leveraged exposure to new gold discoveries in a premier jurisdiction. Steady news flow from drilling and bulk sampling should provide plenty of catalysts in the year ahead. With a proven ability to discover high-grade gold, an innovative approach to exploration, and a strong treasury to fund its plans, Sokoman is well positioned to create significant value for shareholders.
View Sokoman Minerals' company profile: https://www.cruxinvestor.com/companies/sokoman-minerals-corp
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Interview with Fabian Baker, MD of Kingsrose Mining Ltd.
Our previous interview: https://www.cruxinvestor.com/posts/kingsrose-mining-krm-bhp-backed-team-scandinavian-nickel-assets-cash-2952
Recording date: 22nd May 2024
Scandinavian-focused explorer Kingsrose Mining (ASX:KRM) has emerged as a compelling battery metals investment opportunity following the announcement of a landmark exploration alliance with global mining giant BHP. The deal will see BHP sole fund up to US$30M over four years for Kingsrose to explore for new nickel and copper discoveries in the highly prospective but underexplored regions of Finland and Norway.
The alliance adopts an innovative three-stage structure which aligns the interests of both parties while overcoming many of the drawbacks of typical junior-major joint ventures. BHP can earn up to a 75% stake in selected projects by sole funding an additional US$36M, but Kingsrose will retain majority ownership and operatorship of any projects BHP does not earn into. This provides Kingsrose with substantial funding to undertake systematic regional exploration for battery metals, with no near-term dilution and significant project-level control and upside.
The BHP deal evolved out of Kingsrose's participation in the major's "Xplor" accelerator program which sought to combine the agility and technical capabilities of high-quality juniors with the funding and expertise of a major to drive new discoveries. Kingsrose was one of just seven companies globally selected from hundreds of applicants, underlining the strengths of its technical team and geological concepts.
In parallel with the BHP alliance, Kingsrose is advancing two high-grade, 100%-owned projects in Scandinavia. The Penikat PGE project in Finland hosts a 25km outcropping zone of shallow, high-grade mineralization with multi-million ounce potential. Kingsrose is finalizing permits for first drilling after recently completing key environmental surveys.
In Norway, Kingsrose is earning up to 80% of the Råna nickel-copper project, which covers a formerly producing high-grade mine with very limited modern exploration. Initial drilling has hit significant new zones of massive sulfides outside the historic mine, with a 1.6km prospective horizon and multiple untested EM conductors highlighting the potential.
The combination of advanced, 100%-owned projects and the BHP-backed exploration initiative positions Kingsrose as one of the ASX's most attractive pure-play battery metals explorers. With a market cap of just $40M and around $10M in cash, the company appears significantly undervalued given the scale of its opportunity and the backing of the world's largest miner.
Europe's rapidly growing need for local, secure supply of the raw materials crucial to the energy transition is expected to put a strong premium on projects which can meet this need. Kingsrose's assets in the Tier-1 mining jurisdictions of Finland and Norway are strategically located to supply the European battery supply chain, with excellent infrastructure, low sovereign risk and strong government support.
Led by a proven management team and now with the financial backing and technical endorsement of BHP, Kingsrose is well placed to deliver significant shareholder value as it builds a leading battery metals exploration business. With multiple near-term catalysts expected from both its wholly-owned projects and the BHP alliance, Kingsrose stands out as a compelling investment opportunity in the high-growth battery metals space.
View Kingsrose Mining's company profile: https://www.cruxinvestor.com/companies/kingsrose-mining
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Interview with Justin Reid, CEO of Troilus Gold Corp.
Our previous interview: https://www.cruxinvestor.com/posts/troilus-gold-tsxtlg-charging-ahead-with-resource-expansion-and-restart-4245
Recording date: 23rd May 2024
Troilus Gold Corp (TSX:TLG) offers investors a compelling opportunity to gain exposure to a large-scale, advanced-stage gold-copper project in the top-tier mining jurisdiction of Quebec, Canada. The company recently released a positive feasibility study on its wholly-owned Troilus project, outlining a robust 22-year mining operation with strong economics and free cash flow generation potential.
The study envisions a 50,000 tonne per day open pit mine producing an average gold production of 244,600 ounces, 17.3 million pounds of copper and 446,700 ounces of silver annually over a 22-year mine life. All-in sustaining costs are estimated at $1,148/oz AuEq, putting Troilus among the lower half of the industry cost curve. The initial capex of $1.08 billion is reasonable for a project of this scale, with a chunk of the costs already covered by existing infrastructure.
From an economic standpoint, the feasibility study delivers a base case after-tax NPV5% of $885 million and 14% IRR at $1,950/oz gold. While the IRR is on the low end, CEO Justin Reid argues that the market is undervaluing the true long-term cash flow potential of the asset. Over the life-of-mine, Troilus is estimated to generate a cumulative $2.2 billion in free cash flow at conservative gold prices and over $3.5 billion at spot prices, with annual FCF averaging $150-200 million. This FCF profile is very attractive for a company with a current market cap of just $150 million.
To fund mine construction, Troilus is pursuing multiple avenues including potentially bringing in a strategic partner, securing offtake and stream financing, and tapping debt from Quebec government institutions. Management believes they can raise a significant portion of the required capital while limiting equity dilution. They are already in active discussions with several interested parties.
The Troilus project benefits from its location in the Frotet-Evans greenstone belt, a prolific mining district that hosts several large gold and base metal deposits. As a past-producing mine, Troilus already has extensive infrastructure in place including power, roads, and a tailings facility. This reduces both capex and development risk.
Importantly, the current mine plan and economics are based on only about half of the project's 13 million ounce resource base. Management sees good potential to further expand the resource and extend the mine life through additional drilling, providing production and cash flow upside.
With a multi-decade production profile, substantial free cash flow generation potential, a strategic land package, and a depressed valuation, Troilus Gold offers a compelling risk-reward proposition for long-term investors out of its large-scale, low-cost mine to deliver significant returns to shareholders.
View Troilus Gold's company profile: https://www.cruxinvestor.com/companies/troilus-gold
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Interview with Dev Randhawa, Chairman & CEO of F3 Uranium Corp.
Our previous interview: https://www.cruxinvestor.com/posts/f3-uranium-fuu-10m-inflow-high-grades-keep-coming-3100
Recording date: 21st May 2024
F3 Uranium (TSXV:FUU) is an exploration company focused on making the next world-class uranium discovery in Saskatchewan's prolific Athabasca Basin. With a management team that has already delivered three significant discoveries - the J Zone, Triple R, and JR Zone - F3 is well-positioned to create value through the drill bit.
The company's flagship Patterson Lake North (PLN) project is located on the western side of the Basin, an area that has seen less historical exploration than the eastern side but is now attracting attention from major players like Denison Mines. F3's initial discovery at PLN, the JR Zone, has returned impressive uranium grades over hits 42.4%, 55.4% and 66.8% uranium oxide U3O8. While the JR Zone is a promising start, F3 is focused on finding additional mineralized pods in close proximity to build out a larger deposit footprint. Management believes the JR Zone has the potential to be part of a multi-pod system, similar to other large Athabasca deposits like Denison's Wheeler River.
To fund this exploration, F3 has a strong treasury of approximately $40 million. Notably, $15 million of this came from a strategic investment by Denison Mines, which was attracted to F3's dominant land position and discovery potential on the western side of the Basin. This investment provides capital and serves as a vote of confidence from a knowledgeable industry player.
F3 also plans to spin out its non-core assets into a new vehicle (F4) while retaining a significant ownership stake. This transaction will allow F3 to focus entirely on its key projects around Patterson Lake North without the distraction of managing non-core properties.
The company is also well-positioned to benefit from a rising uranium price environment. With the world increasingly focused on decarbonization and energy security, nuclear power is experiencing a resurgence. At the same time, uranium supply remains constrained after years of low prices. This has created a structural deficit that should support higher uranium prices going forward.
For investors, F3 Uranium offers a compelling mix of exploration upside and uranium market exposure. With a proven management team, prospective geology, a strong treasury, and supportive market fundamentals, the company has the key ingredients for success. While exploration is always a risky endeavor, F3's track record and potential make it a company to watch in the Athabasca Basin.
View F3 Uranium's company profile: https://www.cruxinvestor.com/companies/f3-uranium-corp
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Interview with Martin Stein, CFO of Altech Batteries Ltd.
Our previous interview: https://www.cruxinvestor.com/posts/altech-batteries-asxatc-2-feasibility-studies-due-q4-batteries-and-anodes-4125
Recording date: 22nd May 2024
Altech Batteries (ASX:ATC) is an emerging player in the rapidly growing grid storage industry, offering investors an attractive opportunity to gain exposure to the global transition to renewable energy. The company is commercializing an innovative sodium-ion battery technology that provides compelling advantages in safety, sustainability, and cost compared to incumbent lithium-ion solutions.
Altech's batteries utilize abundant, non-flammable materials like sodium chloride (salt), avoiding the supply constraints and price volatility associated with scarce metals such as lithium, cobalt and graphite. The company's proprietary solid-state design enables fire- and explosion-proof operation across a wide temperature range, with expected lifespans exceeding 15 years. These attributes make Altech's batteries ideally suited for grid storage applications.
The market for grid-scale batteries is expanding at a rapid 28% compound annual growth rate, as intermittent renewable energy sources like wind and solar require storage capacity to align supply with demand. Altech is initially targeting utility providers in Germany that are at the forefront of the energy transition. The company aims to secure offtake agreements for 100% of production from its 120 MWh solid state sodium chloride battery production facility to produce 1MWh GridPacks for the European grid energy market, laying the groundwork to scale up to multi-gigawatt-hour capacity.
To fund the approximately €170-180 million required to construct this initial facility, Altech intends to pursue a mix of equity, green bonds, and government grants/subsidies. The company has already raised A$3.7 million from its existing shareholders to advance its commercialization plans, and is making steady progress towards a final investment decision. Construction is slated to begin in 2025, with first battery shipments expected in 2027.
While Altech is laser-focused on the utility-scale opportunity in Europe, management sees substantial potential to deploy its batteries across diverse applications and geographies longer-term. The company envisions replicating its modular production facilities in other markets like the U.S., and notes that wherever renewable energy is generated, batteries will be needed to store it. Altech has already received inbound interest from sectors ranging from agriculture to real estate.
Investors should weigh several key risks, including Altech's ability to secure binding offtake agreements and assemble the full financing package for its initial plant. Bringing new battery chemistries from concept to commercial scale is also a complex undertaking. However, management has substantially de-risked the technology and is making tangible progress on the critical milestones to reach first production.By scaling up its novel sodium-ion battery production capacity ahead of the competition, Altech can drive down costs and entrench a strong market position as the inevitable shift to renewables-plus-storage accelerates. With an addressable market projected to reach well over 100 GWh annually by 2030 in Europe alone, Altech's upside potential is compelling for investors with a long-term horizon.
View Altech Batteries' company profile: https://www.cruxinvestor.com/companies/altech-batteries
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Interview with Michael Konnert, President & CEO of Vizsla Silver Corp., and Dan Dickson, CEO of Endeavour Silver Corp.
Recording date: 22nd May 2024
*Silver: A Shining Investment Opportunity*
Silver has long been valued as a precious metal, but its growing industrial applications make it an increasingly compelling investment. With silver prices on the rise, driven by strong demand from East Asian countries and the rapid expansion of the solar energy sector, now may be an opportune time for investors to gain exposure to this versatile metal.
Mexico has emerged as a global silver mining hotspot, accounting for nearly a quarter of world production. The country's rich mineral endowment, mature mining industry, and competitive operating costs make it an attractive jurisdiction for silver miners. Despite some perceived geopolitical risks, mining executives remain bullish on Mexico's potential under its new government.
Two silver-focused mining companies that stand out are Vizsla Silver (NYSE:VZLA) and Endeavour Silver (NYSE:EXK). Both are well-positioned to capitalize on rising silver prices through their robust Mexican project portfolios.Vizsla Silver is developing the Panuco silver-gold project in Sinaloa, where it has consolidated a historic mining district for the first time. An aggressive 400,000-meter drill program has delineated a high-grade resource of over 200 million silver-equivalent ounces, with substantial exploration upside remaining across the district. With a preliminary economic assessment expected in the third quarter of 2023, Panuco has the potential to rapidly become a major low-cost silver mine.
Endeavour Silver is an established mid-tier producer with two underground silver-gold mines in Mexico. The company is nearing completion of its largest and lowest-cost mine yet, Terronera, which is expected to double production to 15 million silver-equivalent ounces per year while halving unit costs. Beyond Terronera, Endeavour has a robust project pipeline to potentially become a senior silver producer this decade.
The investment case for Vizsla Silver and Endeavour Silver is strengthened by the structural supply deficit emerging in the silver market. With demand outpacing supply for three years running and limited new mines in development globally, silver inventories are dwindling rapidly. This could provide a further tailwind for silver prices and mining equities in the medium to long term.
While investing in mining stocks carries inherent risks, both Vizsla Silver and Endeavour Silver have experienced management teams, strong financial positions, and significant asset value to underpin their growth prospects. For investors seeking leveraged exposure to the silver market, these two stocks merit consideration.
Investors can easily buy shares of Vizsla Silver and Endeavour Silver on the New York Stock Exchange under the ticker symbols VZLA and EXK, respectively. As with any equity investment, however, it is important to conduct thorough due diligence and consider an individual's risk tolerance and portfolio allocation before investing.
In conclusion, silver's unique dual role as a monetary and industrial metal make it a compelling investment opportunity for the years ahead. With strong demand fundamentals, constrained supply, and attractive mining jurisdictions like Mexico, silver appears well-positioned to outperform. Against this backdrop, silver-focused mining companies like Vizsla Silver and Endeavour Silver offer investors a pathway to participate in the potential upside while diversifying their portfolios with exposure to a key "green" metal of the future.
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Learn more: https://cruxinvestor.com/companies/vizsla-silver
https://cruxinvestor.com/companies/endeavour-silver
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Interview with Ian Tchacos, Executive Chairman of ADX Energy Ltd.
Recording date: 16th May 2024
ADX Energy is an Austrian-focused oil and gas company that has positioned itself to capitalize on Europe's pressing need for new energy supply. By acquiring a large and well-understood asset base from major producer RAG Austria AG, ADX has gained a strategic foothold in the heart of Europe's integrated energy market.
The company's near-term growth engine is the Anshof oil discovery in Upper Austria. Since drilling the discovery well in January 2022, ADX has rapidly progressed the field from exploration to production, with current output around 140-150 bopd. The planned multi-well appraisal program aims to boost production to over 1,000 bopd within 12 months.
With operating costs of $21/bbl and a realized oil price of $82-83/bbl, ADX Energy wells are highly economic. At the target production rate of 1,000 bopd, Anshof would generate over US$20 million per year of operating cash flow for ADX (70% net interest).
In addition, the real prize for ADX is the giant Welchau gas-condensate prospect, where the company made a significant discovery in March 2024. The Welchau-1 exploration well encountered a 115-meter hydrocarbon column and flowed gas/condensate to surface, significantly de-risking the prospect. ADX plans to test Welchau-1 in late 2024 or early 2025, followed by additional drilling and fast-track development.
The company's agreements with RAG provide access to critical infrastructure, enabling a potential new discovery to be brought onstream within 12-18 months. Other milestones for ADX include securing a farm-in partner (Xstate Resources) to fund appraisal drilling at Anshof and completing an oversubscribed A$13.5 million placement to institutional investors. The funds ensure ADX is well capitalized to execute its upcoming high-impact drilling campaign.
ADX offers investors a rare opportunity to gain exposure to a European pure-play E&P with a rapidly growing production base and multiple large-scale exploration targets. The Anshof oil development provides low-risk, near-term growth, while the massive upside potential at Welchau could be transformational for a company with a market cap of just A$40 million.
While ADX carries the inherent risks of any small-cap oil and gas company (exploration failure, operational issues, funding constraints), the potential rewards far outweigh these risks at the current valuation. As the company delivers on its operational milestones and the strategic value of its Austrian portfolio becomes better understood, ADX Energy should be a standout performer in the junior E&P space.
View ADX Energy's company profile: https://www.cruxinvestor.com/companies/adx-energy
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Interview with Gregory Martyr, Executive Chairman of Capital Markets PLC
Our previous interview: https://www.cruxinvestor.com/posts/capital-metals-aimcmet-high-grade-long-life-mineral-sands-resource-5310
Recording date: 16th May 2024
Capital Metals (AIM:CMET) presents a compelling investment opportunity in the high-growth mineral sands sector. The company's flagship Eastern Minerals Project (EMP) boasts a large, high-grade resource in Sri Lanka with substantial expansion potential. With a strategic partnership with experienced developer Sheffield Resources and a clear path to production, Capital Metals is well-positioned to create significant value for shareholders.
The key attraction of Capital Metals is the quality and scale of the Eastern Minerals Project. EMP hosts a 17 million tonne JORC resource at a high grade, outcropping from surface along a 60km strike. Remarkably, the current resource only covers 10-20% of the company's total tenement holdings, highlighting the immense upside potential. Executive Chairman Gregory Martyr believes the resource could easily triple in size with further drilling, making it a district-scale mineral sands opportunity.
Capital Metals is fast-tracking EMP towards production, with a Pre-Feasibility Study (PFS) underway and targeted for completion in early 2025. The company aims to make a Final Investment Decision shortly after, putting it on track for first production in 2026 at an initial rate of 650ktpa. EMP benefits from a low cost, simple mining and processing route, with a plan to produce a heavy mineral concentrate from surface mining and mobile wet concentration plants.
The project is strategically located near the Oluvil Port in eastern Sri Lanka, providing a simple logistics pathway to market. While the port requires dredging to accommodate larger vessels, it provides a low-capex solution for the early years of operation. Capital Metals is also evaluating other potential logistics options as production grows, including access to larger ports by road or rail.
A significant recent development is the strategic partnership with ASX-listed mineral sands developer Sheffield Resources. Sheffield has taken a 10% stake in Capital Metals with an option to increase to 14%, and is in discussions to potentially fund 50% of the project capex to earn a 50% interest in EMP. Sheffield's involvement provides a strong endorsement of the project and adds significant mineral sands development expertise. It also opens up the potential for an accelerated development timeline and expanded production scenario.
The mineral sands market is experiencing strong tailwinds, driven by rising demand for titanium dioxide pigment, zircon and high-grade titanium feedstocks. With limited new supply in development globally, projects like EMP are well-positioned to benefit from the constructive commodity price outlook. Sri Lanka is a proven mineral sands mining jurisdiction, with several operations in production since the 1960s.
Capital Metals is led by a highly experienced management team with a strong track record in mineral sands development. Executive Chairman Greg Martyr has over 20 years of experience in the sector, including as CEO of Mineral Deposits Limited where he oversaw the development of the Sabodala gold mine in Senegal.
With a district-scale, high-grade mineral sands project, a strategic partnership with Sheffield Resources, and a clear path to production, Capital Metals presents a compelling investment opportunity. The company's current £18.8m market capitalization provides an attractive entry point, with significant potential for re-rate as it advances EMP through the development pipeline. For investors looking for exposure to the high-growth mineral sands thematic, Capital Metals is a company to watch closely.
View Capital Metals' company profile: https://www.cruxinvestor.com/companies/capital-metals
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Interview with Lauren Megaw, Investor Relations of Reyna Silver Corp.
Our previous interview: https://www.cruxinvestor.com/posts/reyna-silver-tsxvrslv-advancing-high-potential-crd-silver-projects-in-nevada-mexico-5134
Recording date: 14th May 2024
Reyna Silver Corp (TSXV:RSLV) is an emerging precious metals exploration company with a portfolio of high-grade, district-scale projects in the world-class mining jurisdictions of Nevada and Mexico. The company's flagship asset is the Gryphon project in Nevada, where drilling is set to commence this summer to test multiple gold, silver, copper, and zinc targets.
Reyna Silver's management team has a proven track record of success in exploring for carbonate replacement deposits (CRDs), which are known for their potential to host large, high-grade ore bodies. The company's CEO, Jorge Ramiro Monroy, was a key member of the MAG Silver team that discovered the Juanicipio CRD deposit in Mexico while Peter Megaw, Reyna Silver's Chief Exploration Officer, is a world-renowned expert on CRDs and has been involved in multiple major discoveries over his career.
In addition to the Gryphon project, Reyna Silver has three other wholly-owned projects that offer significant exploration upside: Medicine Springs, Nevada: A carbonate replacement deposit target with strong potential for high-grade silver, lead, and zinc mineralization; Guigui, Mexico: A large, district-scale CRD play in the heart of the Santa Eulalia mining district, the world's largest known CRD system; and Batopilas, Mexico: A historically productive, high-grade native silver district with excellent potential for additional discoveries.
Reyna Silver is well-funded to aggressively advance its projects, having recently raised C$4.6 million through a private placement. The company has a tight share structure and management owns approximately 20% of the shares, ensuring strong alignment with shareholders.
The macro backdrop for precious metals is highly favorable, with negative real interest rates, unprecedented monetary and fiscal stimulus, and rising geopolitical tensions all supportive of higher gold and silver prices. Silver, in particular, stands to benefit from its dual role as both a monetary and industrial metal. Silver's use in solar panels, electric vehicles, and 5G technology could drive strong demand growth in the coming years.
Reyna Silver offers investors a compelling opportunity to gain exposure to the bull market in precious metals through a company with high-quality assets, a proven management team, and multiple near-term catalysts. With drilling set to commence at the flagship Gryphon project this summer, the company is well-positioned to deliver exploration success and create significant shareholder value.
The key risks to consider include the inherent exploration risk in the mining sector, as well as the potential for permitting delays or challenges in the company's operating jurisdictions. However, Reyna Silver's experienced team and diversified asset base help mitigate these risks.
In summary, Reyna Silver offers a unique investment opportunity in the precious metals space. The company's focus on high-grade, district-scale CRD deposits, coupled with its strong management team and robust financial position, make it well-suited to capitalize on the bull market in gold and silver. With drill rigs set to turn at the Gryphon project in the coming months, investors would be wise to keep Reyna Silver on their radar.View Reyna Silver's company profile: https://www.cruxinvestor.com/companies/reyna-silver
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Interview with Simon Clarke, CEO & Director of American Lithium Corp.
Our previous interview: https://www.cruxinvestor.com/posts/american-lithium-tsxv-li-poised-to-charge-higher-on-world-class-projects-5072
Recording date: 22nd May 2024
American Lithium is emerging as a premier investment opportunity in the booming electric vehicle (EV) supply chain. With large, low-cost lithium projects in Nevada and Peru, the company is strategically positioned to benefit from surging demand and increasing government support for domestic critical mineral production.
The U.S. government is taking action to reduce reliance on geopolitical rivals like China for key battery metals. Recent legislation includes funding for lithium projects, with a focus on companies that can produce battery-grade materials entirely within North America. American Lithium's ability to generate high-purity lithium chemicals on site using an acid leaching process gives it a distinct competitive advantage in accessing this support.
CEO Simon Clarke sees the potential for even more aggressive government intervention, including offtake agreements that could guarantee minimum prices for domestic producers. "If they were prepared to guarantee lithium prices at $20-25,000 per ton, that would make a huge impact," he noted. Such moves would dramatically derisk American Lithium's projects.
While lithium prices have pulled back from record highs, the demand outlook remains robust as EV adoption accelerates globally. Benchmark Mineral Intelligence forecasts a major lithium supply deficit emerging in the mid-2020s, even with all currently planned projects moving forward. American Lithium's TLC and Falchani projects rank among the largest undeveloped resources globally, positioning the company to help fill this gap.
Importantly, both projects have low estimated operating costs that should make them profitable even at current lithium prices. "On a combined basis, we have a top three global lithium resource," Clarke stated. "Even at current lithium prices, you would make a reasonable return." As higher-cost marginal producers fall by the wayside, American Lithium will be well-positioned to capture market share.
In the near term, investors can expect a steady flow of catalysts as American Lithium advances its projects. The company is completing a pre-feasibility study at TLC and progressing environmental permitting at Falchani. Management is also committed to spinning out its uranium asset to unlock additional value for shareholders, with exact timing dependent on market conditions.
At its current valuation, American Lithium offers a compelling risk/reward proposition. The stock trades at a discount to peers on a resource basis, despite the company's strategic positioning and near-term growth potential. As the U.S. government rolls out additional support for the domestic lithium industry, American Lithium should be a prime beneficiary.
With a large, low-cost resource base and leverage to the most powerful trends in the global economy, American Lithium is a stock for the future. The recent pullback in lithium equities provides an attractive entry point for long-term investors to gain exposure to the accelerating energy transition. As the EV revolution kicks into high gear, American Lithium has the scale and strategic positioning to emerge as a major player in the domestic lithium supply chain.
View American Lithium's company profile: https://www.cruxinvestor.com/companies/american-lithium
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Interview with Patrick Cruickshank, Director & CEO of Nine Miles Metals Ltd.
Recording date: 20th May 2024
Nine Mile Metals (CSE:NINE) is a junior exploration company focused on discovering copper-rich volcanogenic massive sulfide (VMS) deposits in the world-class Bathurst Mining Camp (BMC) of New Brunswick, Canada. With a dominant 100 square kilometer land position, a target-rich environment, an aggressive exploration program, and a management team with significant skin in the game, Nine Mile offers investors a compelling opportunity for outsized returns through discovery.
The BMC is a premier jurisdiction for VMS deposits, hosting 45 deposits with an estimated 70% of the district's potential remaining to be unlocked. Nine Mile has consolidated key ground in this camp and identified 11 high-priority VMS targets to date using a combination of advanced geophysics, artificial intelligence, and boots-on-the-ground fieldwork.
Nine Mile's flagship Wedge project is the most advanced, where ongoing drilling is demonstrating expansion potential along strike and at depth. Highlights include upper zone 15.50m assaying Cu-Eq of 1.98% and lower zone 3.12m assaying Cu-Eq of 2.29%. Upcoming catalysts include borehole EM results to refine follow-up targets and an updated geological model incorporating 183 historical drill holes.
Proof-of-concept drilling at the nearby California Lake project hit visible VMS mineralization in 8 out of 11 holes, confirming the potential of Nine Mile's exploration methodology. The No.6 target at California Lake is a high-priority target for 2024 which may represent the source of this mineralization.
New Brunswick is a top-tier mining jurisdiction and confers significant advantages for VMS exploration. Drilling costs are very low at less than C$100/meter, enabling rapid and cost-effective advancement. Management is aligned with shareholders, with insiders owning approximately 34% of the company. Nine Mile is well-funded following a $1.5M flow-through financing in early 2024.
The macroeconomic picture is also highly favorable for copper explorers like Nine Mile. Copper demand is expected to surge due to electrification and the global energy transition, while supply faces structural deficits from years of underinvestment, declining grades, and scarcity of new development projects.
In a world desperate for new copper supply, Nine Mile Metals offers investors excellent exposure to a company making exciting discoveries in a Tier 1 jurisdiction. With a proven exploration model, a skilled management team, and multiple shots on goal across a district-scale land package, Nine Mile is well positioned to deliver significant shareholder value in the near to medium term. Near-term catalysts will be ongoing drill results from Wedge and California Lake, as well as geophysical survey results to refine additional targets in the portfolio. Investors can look forward to a high-impact exploration program over the balance of 2024 as this compelling story continues to unfold.
View Nine Mile Metals' company profile: https://www.cruxinvestor.com/companies/nine-mile-metals
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Interview with Mark Selby, CEO of Canada Nickel.
Our previous interview: https://www.cruxinvestor.com/posts/canada-nickel-tsxvcnc-advancing-a-world-class-nickel-sulfide-project-5048
Recording date: 16th May 2024
Canada Nickel is advancing the Crawford nickel sulfide project, which is already the world's second largest nickel sulfide resource and reserve. They are also unlocking the potential of the Timmins nickel district in Ontario, Canada which could become the world's largest nickel sulfide district.
With $35 million in funding secured in early 2024, Canada Nickel is executing on plans to grow the resource. Recent drilling at their Reid property suggests it has potential for a much larger, lower-strip ratio resource than their flagship Crawford deposit. Over the next 12 months, the company aims to publish 7 additional resources (totalling 8, including Crawford) with the potential for 6 additional discoveries in the district.
Preliminary metallurgical testing at two other properties (Reid and MacDiarmid) using the same flowsheet as Crawford achieved the targeted 58-59% nickel recoveries and concentrate grades. This suggests the company can replicate the Crawford process at other deposits. From initial resource to full feasibility study at Crawford, it took just over three years—this timeline could be reduced for their other projects.
Canada Nickel expects to have the Crawford project fully permitted and financed by the end of 2024. A feasibility study showed a robust 18% after-tax IRR for Crawford inclusive of carbon capture credits. Although the nickel grade is relatively low, the scale (40+ year mine life), location and existing infrastructure make it highly economic. The after-tax NPV was US$2.5B (C$3.5B) compared to the company's C$250M market cap.
Anglo American, Glencore and Samsung SDI are cornerstone investors in Canada Nickel, validating the company and project. Canada Nickel is partnered with Ausenco, who have a strong track record of delivering base metal projects on time and budget, significantly de-risking the project.
The Timmins region has significant infrastructure advantages (skilled labor, low-carbon grid power, highway and rail access) that enable development of large, lower-grade nickel deposits. Selby believes the district could produce the equivalent of 5 Crawford-sized mines over the next 10-15 years to meet the explosive growth in nickel demand from EVs.
With the U.S. and Europe looking to secure domestic critical mineral supply chains and reduce reliance on China and Indonesia, Selby sees bifurcation of the nickel market, with consumers demanding "green" nickel. Canada Nickel is well positioned to help fill the supply gap for clean, ethical nickel in the coming years.
The nickel price has performed well, reaching near $20,000/t - Selby sees potential for further gains as most analysts are underestimating demand growth which has been over 10% annually so far this decade.
In summary, Canada Nickel offers compelling exposure to rising nickel demand, with a large, scalable and well-located nickel sulfide resource in a Tier 1 jurisdiction. Near-term catalysts include financing/permitting of Crawford, resource growth, and new discoveries.
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Learn more: https://cruxinvestor.com/companies/canada-nickel
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Interview with Nic Earner, Managing Director of Alkane Resources Ltd.
Our previous interview: https://www.cruxinvestor.com/posts/alkane-resources-asxalk-growing-gold-production-and-advancing-copper-gold-project-3936
Recording date: 15th May 2024
Alkane Resources (ASX:ALK) presents a compelling investment case as an established Australian gold producer with a robust growth pipeline. The company's flagship Tomingley Gold Operations in New South Wales has been producing for nearly a decade, with a clear path to grow production to over 100,000 ounces per year at all-in sustaining costs below A$2,000/oz.
Alkane is nearing the end of a significant investment phase at Tomingley, with key expansion projects including a paste fill plant and flotation circuit due for completion in Q4 2024. As Managing Director Nic Earner explains, this positions the company for a step-change in production and profitability: "December quarter for us should be the inflection point of spending versus cash build again"
The potential for near-term cash generation and shareholder returns is complemented by Alkane's exceptional exploration upside. The company's Boda prospect at the Northern Molong Porphyry Project in NSW has delivered some of the world's best porphyry gold-copper drilling results in recent years. With a maiden resource of over 10 million gold equivalent ounces, Boda is shaping up as a globally significant discovery with potential for large-scale, low-cost development.
While Alkane has the technical capabilities to develop Boda independently, the scale of the opportunity may require a larger balance sheet. Alkane is completing a scoping study to assess throughput options and is open to strategic partnerships to help fund and develop the project. As Earner notes, the company will pursue transactions that recognize the value of exploration work to date and maintain an achievable development timeline.
Alkane's management and technical teams have a strong track record of discovery and development in NSW. The company has delivered several projects from exploration through to production over the past decade and has secured more mining approvals in the state than any of its peers. This in-house expertise reduces execution risk for Alkane's growth projects.
From a macro perspective, the outlook for gold is constructive with a weaker Australian dollar and persistent inflation concerns likely to support the gold price. Australian gold producers are trading at attractive valuations relative to their North American peers, with Alkane's enterprise value around A$350 million or just 0.7x its consensus net present value (P/NAV).
In summary, Alkane Resources offers a rare combination of near-term production growth, world-class exploration upside, and a proven management team. With a market capitalization of just A$359 million, the company is undervalued relative to its peers and the quality of its underlying assets. As Alkane delivers on its growth objectives and advances its exploration pipeline, there is potential for significant share price appreciation.
View Alkane Resources' company profile: https://www.cruxinvestor.com/companies/alkane-resources
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Interview with Michael Hodgson, CEO of Serabi Gold PLC
Our previous interview: https://www.cruxinvestor.com/posts/serabi-gold-lse-srb-advancing-brazilian-gold-assets-towards-60000-ounce-potential-5221
Recording date: 16th May 2024
Serabi Gold is positioned to deliver significant production growth over the next two to three years while minimizing capital requirements by utilizing an innovative development approach at its Coringa project in Brazil. In a recent interview, CEO Mike Hodgson outlined the company's plan to leverage ore sorting technology to produce a high-grade concentrate at Coringa which can then be trucked to Serabi's existing Palito processing plant. This approach eliminates the need to construct a new plant at Coringa, greatly reducing capex and accelerating the timeline to production.
The ore sorting and trucking strategy is expected to yield a step-change in production, nearly doubling output from 38,000 ounces this year to 60,000 ounces within the next 2-3 years. Importantly, this growth will be entirely funded by internal cash flow. As Hodgson stated, "We're not looking for money. We can fund it ourselves - we're just better utilizing the Palito plant. That's the beauty of it - it's a really cheap, capital-light way of literally nearly doubling our production."
Several key catalysts are on the horizon as Serabi moves to implement the Coringa plan. A new preliminary economic assessment (PEA) is underway incorporating the ore sorting and trucking scenario, with results expected in July or August. Additionally, the ore sorter has already been shipped, the crushing plant for Coringa is being renovated, and civil works are underway. Hodgson expects the ore sorter to be commissioned and operational by the end of September, setting the stage for a significant grade and production increase beginning in Q4 2024.
Beyond the near-term growth from Coringa, Serabi sees substantial exploration potential at both Coringa and its Palito mine. The company is investing $2 million in brownfields exploration this year, funded by operating cash flow, with the goal of expanding resources. Coringa, which currently hosts 500,000 ounces of gold, is seen as particularly prospective. "Coringa is a completely undrilled deposit," noted Hodgson. "The resource can be doubled. When you double that resource, you can increase the production rate even more."
Longer-term, Serabi has outlined a pathway to grow production organically to the 100,000 ounce per year level through a combination of resource expansion and incremental plant optimizations. With multiple production growth drivers and a proven management team at the helm, Serabi appears well-positioned to deliver shareholder value in a rising gold price environment. As Hodgson summarized, "When people see the PEA coming in, they see that ore sorter working, they see Q4 and what it's really doing to the grades...We are going to go from our current plan this year of 38,000 ounces to 60,000 ounces in the next 2.5 years."
For investors, Serabi offers a compelling mix of near-term catalysts, fully-funded organic growth, and significant exploration upside. With a market capitalization of just £55 million, the company's shares appear attractively valued relative to the growth potential. As the Coringa development plan advances and the company continues to derisk and expand its production profile, Serabi has the potential to re-rate significantly higher.
View Serabi Gold's company profile: https://www.cruxinvestor.com/companies/serabi-gold
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Interview with Elaine Ellingham, President & CEO of Omai Gold Mines Corp.
Our previous interview: https://www.cruxinvestor.com/posts/omai-gold-mines-tsxvomg-restarting-high-grade-gold-mine-in-guayana-5015
Recording date: 14th May 2024
Omai Gold Mines Corp. (TSXV:OMG) presents a compelling investment opportunity as it advances the past-producing Omai gold mine in Guyana towards renewed production. With a substantial 4.3 million ounce resource, a positive preliminary economic assessment (PEA), and significant exploration upside, Omai is well-positioned to create value in a rising gold price environment.
The company's flagship asset is the Omai gold project, a past-producing mine with existing infrastructure and a large resource base. The project hosts 4.3 million ounces of gold across two deposits – the open-pittable Wenot deposit and the Fennell underground deposit. Omai's recent exploration efforts have focused on the Wenot deposit, which contains 2.4 million ounces and forms the basis for the recent PEA.
The PEA demonstrates the Omai project's robust economics and provides a blueprint for restarting production. The study outlines a 13-year open pit operation producing an average of 142,000 ounces of gold per year at all-in sustaining costs of US$1,009 per ounce. At a gold price of $1950, the project generates an after-tax NPV5% of US$556 million and an IRR of 19.8%. Importantly, the PEA only considers the Wenot open pit deposit, with the Fennell underground deposit and other exploration targets providing additional upside.
Omai's large resource base provides the foundation for a long-life mining operation, with significant potential to expand the resource through exploration. Infill drilling below the Wenot PEA pit is expected to upgrade a further 500,000 ounces for inclusion in future economic studies, while step-out drilling aims to extend mineralization to the south. The Fennell underground deposit adds a further 1.8 million ounces not considered in the PEA, with thick zones of mineralization and a relatively shallow depth providing an attractive underground mining target. Several near-surface targets around the Wenot pit could also add higher-grade feed in the early years of mining to enhance economics.
Omai benefits from its history as a past-producing mine, with existing infrastructure and a wealth of historical data providing a head start on development. The company is taking a dual-track approach, conducting infill and expansion drilling to grow the resource base while concurrently advancing engineering and permitting to fast-track the project to production. Management aims to move directly from the PEA to a pre-feasibility study, targeting a streamlined path to production.
The Omai project is led by an experienced management team with a track record of successfully advancing projects. CEO Elaine Ellingham, a geologist with over 30 years of industry experience, has assembled a strong technical team including a country manager who previously worked at the Omai mine. The Guyanese government is also highly supportive, eager to see the economic benefits of restarting production.
Omai represents a unique opportunity in the junior gold space, combining a large resource base, robust economics, and a clear path to production in a mining-friendly jurisdiction. With a rising gold price driving increased M&A activity, the company's 4.3 million ounce resource and potential for further growth make it an attractive acquisition target. Yet Omai trades at a significant discount to peers and the project's NPV, providing a compelling entry point for investors. As the company advances the Omai project and grows its resource base, it is well-positioned to re-rate and create significant shareholder value.
View Omai Gold Mines' company profile: https://www.cruxinvestor.com/companies/omai-gold-mines
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Interview with Jon Bey, CEO of Standard Uranium Ltd.
Our previous interview: https://www.cruxinvestor.com/posts/standard-uranium-tsxvstnd-project-generator-model-with-extensive-exploration-5128
Recording date: 16th May 2024
Standard Uranium is an attractive opportunity for uranium investors, with a prospective project portfolio in Saskatchewan's Athabasca Basin, a top global jurisdiction for high-grade uranium discoveries. The Canadian junior explorer has assembled an enviable land package, headlined by its flagship Davidson River project, and recently shifted to a savvy project generator model which minimizes dilution while allowing for steady news flow from a pipeline of partner-funded projects.
CEO John Doe has positioned Standard Uranium for an active and catalyst-rich 2024. With $1.4 million in the treasury and an ongoing $3 million capital raise, the company is well funded to execute on its ambitious plans. Out of 11 total projects, 7 will see exploration this year including 4-5 drill programs. The key focus will be on Davidson River, where Standard sees potential for a basement-hosted deposit analogous to NexGen Energy's Arrow discovery. A 5,000-6,000m summer drill program is planned to vector in on that Tier 1 potential.
Meanwhile, the project generator portfolio provides multiple shots on goal via partner-funded drill programs. Previous drilling at Atlantis hit uranium mineralization in 5 out of 5 holes, an impressive hit rate, while the Canary and Sun Dog projects will also see first-pass drilling funded by JV partners. These partners can earn a 75% stake by spending $6-7 million over 3 years, with Standard receiving cash and shares plus a 10-12% operator fee for managing the projects.
This unique model allows Standard to focus its own raise dollars on Davidson River while bringing in $100,000-$200,000 per month in partner payments to cover overhead. It's a smart strategy for weathering the junior resource bear market and provides a platform for growth as the uranium market heats up. With the global push for carbon-free energy accelerating post-COVID, uranium prices look poised for a significant run as demand outstrips supply.
For investors, Standard Uranium offers a compelling combination of discovery potential, a savvy business model, strong funding, and a tight share structure. Speculative resource investors can initiate a position ahead of first-pass drill results from Atlantis, Canary and Sun Dog as well as a potential major discovery at Davidson River. Any one of these could serve as a significant catalyst against a backdrop of rising uranium prices as nuclear energy sees a global renaissance.
The key risks relate to the early-stage nature of the projects and the possibility of disappointing drill results. However, these are mitigated by the multiple projects being advanced simultaneously, the proven uranium endowment of the Athabasca Basin, and management's strong technical acumen. With a market capitalization of just C$8.5 million, Standard Uranium is an attractive, well-rounded way to play the unfolding uranium bull market with significant upside potential.
View Standard Uranium's company profile: https://www.cruxinvestor.com/companies/standard-uranium
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Interview with John Cash, CEO of Ur-Energy Inc. and Mark Chalmers, President & CEO of Energy Fuels Inc.
Recording date: 13th May 2024
The uranium market is in the early stages of a powerful resurgence that is capturing the attention of investors globally. The bullish investment thesis is underpinned by two key factors: accelerating demand for carbon-free nuclear energy, and intensifying challenges to scaling up uranium supply. The collision of these two forces sets the stage for a sustained period of higher uranium prices, creating a compelling opportunity for investors to gain exposure to the space.
On the demand side, the growth outlook for nuclear power has rarely been stronger. Governments worldwide are increasingly turning to nuclear energy as a critical tool for meeting ambitious decarbonization targets. The urgency of the climate crisis is overriding longstanding public and political opposition to nuclear power, resulting in a wave of new reactor construction and life extensions for existing fleets.
China is leading the charge, with plans to expand its nuclear capacity from around 50 GW to 120 GW by 2030. India, Russia, and South Korea also have ambitious buildout plans. Even in the U.S. and Europe, where nuclear growth has long been stagnant, there is a growing recognition that reactors will be needed to displace coal and gas generation.
All told the International Atomic Energy Agency expects global nuclear-generating capacity to nearly double by 2050 in its high-case scenario. This translates into substantial demand growth for uranium, which fuels the nuclear reaction process. The World Nuclear Association forecasts annual uranium demand rising from 79.6k tonnes in 2021 to 112.3k tonnes by 2035, a 41% increase.
However, the uranium industry faces daunting challenges in scaling up supply to meet this projected demand growth. The bear market of the past decade saw exploration and development spending plummet as low prices made new projects uneconomic. Now, companies are grappling with chronic labor shortages, cost inflation, heightened regulatory scrutiny, and exorbitant capital requirements that make it exceedingly difficult to bring new production online.
As Ur-Energy CEO John Cash explains, "Everyone's facing challenges post-COVID with manpower shortages, shortages of supplies, that just really tend to draw out the time it takes to get into production. We're seeing them virtually with every producer around the world. Ultimately, that is going to affect price going forward."
Energy Fuels CEO Mark Chalmers echoes this sentiment, noting, "It's a new gear here and unfortunately, in the mining business as a whole, it is hard to deliver projects on time, at capacity, and at costs where you're profitable."
Indeed, most industry estimates suggest the uranium price needs to at least double to incentivize enough new mine supply to close the impending deficit. And even then, permitting and construction timelines stretching out 5-10 years or more mean it will be a long time before those new pounds hit the market in meaningful quantities. The recent U.S. ban on Russian nuclear fuel imports after the Ukraine invasion has only exacerbated the tightening supply picture.
This widening disconnect between rising demand and stagnant supply will likely force utilities to more aggressively compete for the limited uranium available in the market. Ultimately, the clearing price will need to rise to levels that incentivize new production, a process that could take years to play out.
In the meantime, investors will likely reap the benefits as uranium equities rerate higher to reflect the strengthening fundamentals. The key is to focus on companies with proven, low-cost production capacity that can be scaled up quickly. Firms with strong balance sheets, permitted projects, and exposure to rising long-term contract prices are particularly well-positioned.
While risks around global growth, capital availability, and the pace of nuclear energy adoption remain, it's hard to ignore the potency of the uranium bull case. The world needs more carbon-free baseload power, and nuclear is the only answer at scale. As the uranium supply-demand imbalance comes to a head, investors who are along for the ride stand to generate substantial returns in the years to come.
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Learn more: https://cruxinvestor.com/companies/energy-fuels
https://cruxinvestor.com/companies-ur-energy
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