EDITOR: | May 14th, 2018 | 6 Comments

Pancontinental bets on nickel-cobalt project in Ontario beating Congo sources

| May 14, 2018 | 6 Comments

Layton Croft gets the difficulties of developing a massive mining project in a frontier jurisdiction. He held key positions in the development of the massive Oyu Tolgoi copper mine in Mongolia, which billionaire mining investor Robert Friedland sold to Rio Tinto. The project only saw the light of day after years of complex talks with the Mongolian government over taxes.

Since leaving Mongolia, Croft has watched how Friedland’s mining company Ivanhoe Mines has been developing a huge copper deposit in the Democratic Republic of Congo (DRC). The government of Joseph Kabila earlier this year announced an unexpected tax rise that shook investors in Ivanhoe and of other companies working in the African nation to develop the world’s largest cobalt reserves.

While Croft has watched from afar, he does so with particular interest as Chief Executive Officer of Pancontinental Gold Corporation (TSXV: PUC), the developer of a nickel-cobalt-copper project in Ontario province. Croft knows better than most that jurisdiction is critically important to the success of a new mine. Pancontinental’s most recent project, McBride, sits 25 kilometers to the south of the town of Bancroft, close to power lines and a railroad that could be used to transport nickel ore to the long-established smelting complex of Sudbury.

Long Lac Minerals Corp. was planning to bring McBridge into production in the 1970s, carrying out a resource estimate of 5.1 million tons of nickel bearing ore at the site. Of that resource, a North Zone holds 3.9 million metric tons of ore containing 0.82% nickel, 0.054% cobalt and 0.25% copper. The South Zone has 1.2 million tons grading 0.3% nickel, 0.03% cobalt and 0.14% copper. Long Lac was preparing to develop a mine before the death of a key senior executive halted its development. The company didn’t place a value on the cobalt mineral content in the ore back in the 1970s, because it was a much less strategic metal back then, Croft said.

“The company was going to mine it in 1971 but the CEO of the company passed away,” he said. “It’s a mineable asset, and that’s when cobalt was nothing.”

The cobalt resource at McBride “is about $USD690M in contained metal value in the ground based on current prices today…” he said. Cobalt prices reached over $40 a pound in March, the highest value since 2008, as investors began to fear that the new taxes announced in the DRC will discourage mining companies from developing the African country’s vast cobalt resources.

The bullish scenario for nickel, the McBride deposit’s main money earner, may be even stronger. About 58% of lithium-ion batteries will contain nickel in 2025, compared with only 39% in 2016, according to the Nickel Institute. Tesla CEO Elon Musk famously quipped that lithium-ion batteries should be renamed nickel-graphite batteries because of the proportions of each mineral contained in the battery.

Derek McBride, a renowned geologist who spent decades exploring this deposit, will hold the role of chief geologist. Pancontinental entered into an agreement with McBride’s privately-held Hastings Highlands Resources Limited earlier this year to earn up to 76% interest in the project. Pancontinental holds Montcalm, a similar project in Ontario with a nickel, cobalt and copper geology, and a gold project in the southeastern U.S. that might be divested to focus on the Canadian properties.

Croft is hopeful that resource estimates can be improved at McBride through utilizing technology that wasn’t around in the 1970s. The company plans to carry out a modern airborne gravity test and electromagnetic (VTEM) geophysical surveys, besides starting a new drilling program this year. He’s optimistic that the results will show that its far better to be sat on a McBride in Ontario than a cobalt hoard in the DRC.


Matt Craze works with New York-based management consultancy 10EQS and is the founder of Spheric Research, a firm dedicated to global seafood industry research. Matt ... <Read more about Matt Craze>

Copyright © 2019 InvestorIntel Corp. All rights reserved. More & Disclaimer »


  • Mike Hirschberger

    Given the arbitrary and likely punitive motives lurking behind the policies of the DRC, why in goodgodd’s name take the risk? Any Ni/Cu/Co project-esp those in favourable jurisdictions such as Canada with similar findings should get a detailed review. While there may well be a disruptive change in battery configuration–its in the long term-if ever. Nothing disruptive appears imminent. Further, large Cap Ex in place or being rolled out act as their own barriers to entry.

    May 15, 2018 - 8:53 AM

  • A. Genovese

    The subject mine property in Ontario happens to be located in cottage country right next to several fresh water lakes, the nearest with about 200 lakefront properties. Notwithstanding the possibility of pay dirt, the ecological impact may be the larger hurdle to overcome.

    August 22, 2018 - 9:39 PM

  • Monica

    Obviously Pancon did not take into account Ontario’s numerous Environmental and Endangered Acts. DRC does not have such protective measures, neither are the peoples voices valued as they are in Ontario.

    August 23, 2018 - 7:08 AM

  • Michael G

    This project is in the watershed area of many lakes. There are threatened species on the project lands. Within 8 km there are approx 11 occupied cottage lakes that will be affected severely. Given the above information and strong local community opposition there is a major battle forming to stop this project

    September 11, 2018 - 5:33 PM

    • Tracy Weslosky

      I have left your comment on to set an example of what happens to people who make ii their vehicle for non-investor information platforms. Note that we can, and we do check commentators IP addresses. Our research indicates that your not someone who supports entrepreneurs in the Canadian markets, so allow me to take this opportunity to asset that Layton is deemed to be an incredible leader, and is securing a great deal of respect from one of my mentors since 2001: I think your allegations are incorrect. This said, we do not shy away from the truths of others, so I will have Layton do an interview addressing your concerns as I suspect there is a significant disparity between yours and those of Pancontinentals.

      September 14, 2018 - 11:49 AM

  • Monica LACC

    With all due respect, Ms. Weslosky, Mr Croft has already made his views and comments public, which differ greatly from First Nations and social reality. https://miningwatch.ca/news/2018/9/10/first-nation-citizens-oppose-pancontinental-resources-mining-project-sensitive

    September 16, 2018 - 7:59 PM

Leave a Reply

Your email address will not be published. Required fields are marked *