A triple play deal for battery materials between Canada and Korea prove critical minerals incentives work

When we started writing the Dean’s List series back in late July to highlight the burgeoning government support for critical minerals, supply chain and EV battery manufacturing, I had no idea how quickly that support would start turning into tangible deals for producer supply agreements. Sure, the first big facility announcement was way back in March with the Stellantis, LG Energy Solution C$4.9 billion electric vehicle battery plant in Windsor, Ontario, and there have been numerous deals announced in the interim both North and South of the 49th parallel for various multi-billion dollar facilities. But what happened on September 22 and 23 appears to have taken things to another level for the producers of the materials that go into EV batteries.

The aforementioned South Korean LG Energy Solution Inc. (LGES), a leading global manufacturer of lithium-ion batteries for electric vehicles, mobility, IT, and energy storage systems, announced three agreements in a span of 24 hours with Canadian miners to source materials required to make batteries for EVs. It appears the Inflation Reduction Act, which requires that 40% of battery components be sourced from factories in the U.S. or its free trade agreement partners and that Chinese components and minerals be phased out beginning in 2024, has lit a fire under those who want to lead the charge to manufacture EV batteries for North American built vehicles. Given where demand is forecast to go over the next 5 to 10 years, these three deals could just be the tip of the iceberg as other manufacturers follow suit.

The first “winner” of the LGES battery supply lottery was Electra Battery Materials Corporation (TSXV: ELBM | NASDAQ: ELBM). Electra is a processor of low-carbon, ethically-sourced battery materials who is currently commissioning North America’s only cobalt sulfate refinery. Their deal is a three-year agreement to supply LGES with 7,000 tonnes of battery grade cobalt from 2023 to 2025. Electra will supply 1,000 tonnes of cobalt contained in a cobalt sulfate product in 2023 and a further 3,000 tonnes in 2024 and 2025 under an agreed pricing mechanism. Cobalt sulfate provided under the term of the contract with LGES will be sufficient to supply up to 1.5 million full electric vehicles. In addition to the supply agreement, Electra and LGES have agreed to cooperate and explore ways to advance opportunities across North America’s EV supply chain, including, but not limited to, the securing of sustainable sources of raw materials.

Next up for LGES was a pair of lithium supply deals. We’ll explore the Avalon Advanced Materials Inc. (TSX: AVL |OTCQB: AVLNF) news first, mainly because it was the first company highlighted on the Dean’s List, so indulge me while I pat myself on the back. Avalon is a Canadian mineral development company specializing in sustainably produced materials for clean technology. Avalon is currently focusing on developing its Separation Rapids Lithium Project near Kenora, Ontario while continuing to advance other projects, including its 100%-owned Lilypad Cesium-Tantalum Lithium Project located near Fort Hope, Ontario. The Company signed a non-binding memorandum of understanding (MOU) with LGES to supply battery-grade lithium hydroxide starting in 2025. The MOU would see Avalon commit, for five years initially, to provide LGES with at least 50% of its planned initial lithium hydroxide production from its Thunder Bay facility (11,000 tons per year), with the potential to increase production as demand grows.

The second lithium, and third overall deal for LGES in a 24 hours span was with Snow Lake Resources Ltd. (NASDAQ: LITM). Snow Lake is committed to creating and operating a fully renewable and sustainable lithium mine that can deliver a completely traceable and carbon neutral product to the North American electric vehicle and battery markets. The Thompson Brothers Lithium Project now covers a 55,318-acre site and contains an identified-to-date 11.1 million metric tonnes indicated and inferred resource at 1% Li2O. Snow Lake signed a non-binding MOU with LGES to supply lithium hydroxide (20,000 tons per year) over a 10-year period once production starts in 2025. The deal between the two entities will see them collaborate to explore the opportunity to create one of Canada’s first lithium hydroxide processing plants in CentrePort, Winnipeg, Manitoba.

It should be noted that the Electra deal is a binding term sheet, while the other two are non-binding MOUs. Investors need to understand that there is a lot more certainty to the Electra deal than the other two which is likely why, as of yesterday’s close, Electra was still up 2% versus where it was trading before the LGES announcement while Avalon was down 6% and Snow Lake down 18% versus pre-LGES announcement trading. Not to take anything away from the non-binding deals, they are still very important and a positive sign for these companies, but the market isn’t very forgiving these days so there is definitely value in certainty. For Avalon that certainty is anticipated to come with a definitive supply agreement, which is intended to be finalized in no later than 6 weeks. I could not find confirmation of timing to firm up commitments in any of Snow Lake’s press releases.

Power Nickel is building a nickel sulphide resource in Canada ready to potentially supply a new EV metals supply chain

Canada as an EV metals supply and processing hub for North America

One of the biggest upcoming trends for 2023-25 is the establishment of Canada as an EV metals supply and processing hub for North America. The past few months have seen numerous announcements by battery and cathode manufacturers planning new facilities in both Quebec and Ontario, Canada. Some examples from the past 6 months include:

Even Tesla appears to be strongly considering Canada for their next gigafactory.

The main reason for all this excitement towards Canada as an EV metals supply and processing hub for the U.S is that Canada has all the EV metals and is close to USA, where permitting can be much more difficult. The Canadian government is also making great efforts to support this. It is also the case that the U.S is rushing to develop their own EV supply chain, independent of China and Russia. The Inflation Reduction Act mandates escalating battery critical minerals requirements (40% for a vehicle placed in service before 1 January 2024 rising to 80% for a vehicle placed in service after 31 December 2026) to qualify for U.S EV tax credits, with a key basis being that the battery metals will need to be sourced from North America or U.S free trade countries.

This puts Canada right in the box seat.

Power Nickel Inc.

Power Nickel Inc. (TSXV: PNPN | OTCQB: CMETF) is a Canadian junior miner with an option to acquire 80% of the NISK nickel sulphide Project in James Bay, Quebec, Canada. Power Nickel already has a solid initial NI 43-101 Compliant Mineral Resource Estimate on the NISK Project of more than 2.5 million Indicated tonnes at 1.20% NiEq. and 1.4 million Inferred tonnes at 1.29% NiEq. NISK has valuable bi-product metals such as copper, cobalt, palladium, and platinum.

Power Nickel 2022 N43-101 Resource estimate

Source: Power Nickel company presentation

Some exciting parts about the NISK Resource are: the resource is well located in Quebec, is sulphide ore (easier and cheaper to process than laterite ore), has significant expansion potential from the current total ~4 million tonnes I&I Resource, the site benefits from a major highway adjacent to it and a Hydro Quebec major substation across the road, and a nearby airport. The local Cree Nation community are generally pro-mining. With regards to the expansion potential CEO Terry Lynch is optimistic the Company can expand the resource size towards 8-10 million tonnes and potentially larger over time. Similar geological ultra mafic style deposits in Canada include Lynn Lake (~22M tonnes) and Voisey’s Bay (~50M tonnes).

The only negative, according to my experts is that some of the Resource is underground which typically is more expensive to mine.

NISK Resource model showing potential open pit and underground resource

Source: Power Nickel company presentation

A second round of drilling is currently underway at the NISK Project, so investors will need to wait to see if the promising drill results can continue at NISK. CEO Terry Lynch recently stated:

We are very excited to get back to drilling and building on our resource at Nisk. The initial round of drilling was done largely to verify the historic resource and allow us to post the inaugural NI 43-101 Technical Report and MRE. This round, based on what we’ve learned from the MRE study, will enable us to better explore and we hope to expand the resource as we look to demonstrate Nisk has the potential to become Canada’s next Nickel Mine. The plan is to drill around 5,000 metres but will adjust that to opportunities on the ground. We would expect the drilling program to continue into December and we will provide updates as progress dictates.”

With nickel currently trading at US$23,130/t and 3 month LME nickel future contracts at US$24,562/t you can see why nickel is such a valuable metal and why Power Nickel has plenty of potential.

A growing nickel sulphide resource, easy road access, and access to abundant low-carbon hydropower, makes Power Nickel look like a potential future ESG winner to supply nickel from Canada’s emerging EV metals hub.

Due to the early stage, the current market cap is only C$9 million. A very exciting early stage nickel junior and one to watch closely in the months ahead.

Disclaimer: The editor Tracy Weslosky is both a shareholder of Power Nickel and a supporter of the CEO Terry Lynch’s Save Canadian Mining, which was created to stop predatory short selling. Tracy is the founder of InvestorIntel.com but she is not an investment advisor, and is neither licensed to make any buy or sell recommendations. For more information, she recommends SEDAR.com for you to do your own due diligence.

Patriot Battery Metals is marking its territory as a lithium explorer for Quebec’s Battery Valley

The province of Quebec appears to be going “all in” on powering the electric vehicle revolution. The bet is being placed in Becancour, a small town along the shores of the St. Lawrence River about midway between Montreal and Quebec City, which is rapidly emerging as a center for producing the advanced materials needed for lithium-ion batteries. Companies including General Motors, POSCO Chemical, and BASF are setting up shop to produce cathode active materials and lithium battery recycling in this strategic Quebec locale.

But what is the attraction to this particular location? Becancour offers an inviting combination of highly efficient logistics for delivering battery materials to both North America and Europe, and it has ready access to hydroelectricity that will lower the carbon footprint of products produced there, an advantage that can be passed on to the battery and EV sectors.

It also doesn’t hurt that Quebec happens to be in a region that is rich in the minerals and metals needed for battery material manufacturing. With the support of the provincial and federal governments, Becancour is looking to become Canada’s “Battery Valley.”

Given the commitment is already there, both from government and the private sector, who have announced billions in capital spending, one now needs to look upstream to see where they plan to source the raw materials for this battery hub. As we discussed in the Dean’s List, lithium is on the critical minerals list and a key battery component. Quebec appears to be blessed with an abundance of hard rock lithium or pegmatites which can contain a lithium bearing mineral known as spodumene. One company attracting a lot of attention in the lithium space is Patriot Battery Metals Inc. (TSXV: PMET | OTCQB: PMETF), a mineral exploration company focused on the acquisition and development of mineral properties containing battery, base, and precious metals.

Patriot Battery Metals’ flagship asset is the 100% owned Corvette Property, a 214 km2 land package situated along a ~50 km lithium pegmatite trend, located in the James Bay Region of Québec. The high number of well-mineralized pegmatites in this core area of the trend indicates a strong potential for a series of relatively closely spaced/stacked, sub-parallel, and sizable spodumene-bearing pegmatite bodies, with significant lateral and depth extent, to be present. Located only 15 km from the high voltage power lines connected to one of the largest hydro power schemes in the world, there is potential for the Corvette Property to produce ‘green lithium’.

There are two things that have attracted my attention with respect to Patriot Battery Metals. First is the abundance of impressive results to date and the fact that there is a lot more coming. The core area includes an approximate 2 km long corridor hosting numerous spodumene pegmatites, highlighted by the large CV1 and CV5 pegmatite outcrops, and has returned drill intercepts of:

  • 1.65% Li2O and 193 ppm Ta2Oover 159.7 m (CV22-042)
  • 1.22% Li2O and 138 ppm Ta2Oover 152.8 m (CV22-030)
  • 2.13% Li2O and 163 ppm Ta2Oover 86.2 m (CV22-044), and,
  • 2.22% Li2O and 147 ppm Ta2O5 over 70.1 m, including 3.01% Li2O and 160 ppm Ta2O5 over 40.7 m (CV22-017).

A total of three drill rigs are currently operating at the Corvette Property – two targeting the CV5 pegmatite corridor and one targeting the CV13 pegmatite cluster. As of September 15, 2022, a total of approximately 19,199 m over sixty-five (65) holes have now been completed over the 2022 drill campaign with drilling anticipated to continue through to mid-October, at which time the 2022 drill program will conclude with final core processing on site and shipment to the lab for analysis.

Source: Patriot Battery Metals Inc. Sep 19, 2022 Press Release

As you can see from the illustration above, there is still a lot of outstanding assays pending for the summer drilling program. But perhaps even more intriguing is the Company’s latest capital raise to fund drilling for the foreseeable future. I’ve seen a lot of flow-through share offerings in my time and even participated in several but I have never seen anyone command a price representing a 109% premium to the last traded share price prior to the offering. I know the Federal Government’s 30% Critical Mineral Exploration Tax Credit has added a little more incentive to flow-through shares but this premium is astounding (at least to me). Perhaps PearTree Securities Inc. is wildly bullish about lithium in Quebec and is more than happy to spend C$20 million on 1.5 million shares at C$13.27 when Patriot’s stock price was at C$6.35. I know it’s made me pay a lot more attention to this stock.

However, Patriot Battery Metals is not a cheap stock at present. It, along with many of its lithium peers, are trading at or near all time highs despite what most of the rest of the market is doing. Granted lithium seems to have better economics right now than most other metals, meaning the value creation for investors can be very steep on a successful asset. With that in mind, the Corvette Property doesn’t have a resource estimate or PFS as of yet, which means there could already be a lot of optimism built into its C$580 million market cap… or not.

Nickel 28 Capital focuses on cash-flow positive nickel PNG mine and royalty portfolio that includes Mitsubishi JV

Nickel 28 Capital Corp. (TSXV: NKL) is an innovative battery metals investment vehicle with a focus on metal streaming and royalty agreements. They focus on exposure to metals integral to key technologies of the electric vehicle and energy storage markets. Nickel 28 is led by an experienced team of mining executives and financial professionals under Nickel 28’s Chairman, Anthony Milewski, with a track record of value creation in the natural resources sector.

One of the company’s main assets is its 8.56% interest in the Ramu Nickel Cobalt Mining Operation, located near Madang on the north coast of Papua New Guinea and operated by the Metallurgical Corporation of China. The company’s interest in Ramu increases to 11.3% following repayment of Highlands’ attributable Ramu construction and development loans. Nickel 28 recently announced the second quarter results of the Ramu project. Production at the Ramu Nickel Mine in Papua New Guinea was consistent in the second quarter of 2022, with a production of 8,128 tonnes of contained nickel and 695 tonnes of contained cobalt during the quarter. Nickel sales were also consistent in the second quarter, with 6,624 tonnes of contained nickel sold.

The mine is currently generating substantial free cash flow. The company has repaid all of its operational debt and is now receiving cash flow distributions from the project. Nickel 28 has significant leverage to Nickel and Cobalt prices, which should continue to support strong cash flow generation from the project.

The second quarter looked extremely promising as sales improved due to increased demand for lithium-ion batteries. However, the continued conflict in Ukraine, the continued pandemic’s effects, and the suspension of nickel trading on the LME in March, were significant challenges. Ramu has been able to successfully navigate through these challenges due to the consistent and stable production at the company. This level of production has allowed Ramu to maintain a position of strength in the nickel market despite the challenges that have arisen.

In addition to their main project, Nickel 28 also has a number of royalties. Streams and royalties have some key advantages as commodity investment vehicles. They provide exposure to the resource’s underlying earnings and dividends rather than capital costs. This strategy means that they offer investors the potential to participate in both resource growth and production growth. In addition, streams and royalties avoid direct exposure to the many risks associated with commodity production, such as increasing capital, operating, and environmental costs. As a result, they can provide a more stable and predictable return profile for investors.

These royalties are likely to pay off for Nickel 28. Recently, they announced an update on their 2.0% Net Smelter Return royalty from Giga Metal’s Turnagain Nickel/Cobalt deposit. This deposit is a world-class nickel-cobalt deposit, and metallurgical test work indicates that a clean concentrate grading 18% nickel and 1% cobalt is achievable using proven technology.

On August 15, 2022, Nickel 28 announced the formation of a joint venture for Giga with Mitsubishi Corporation. This joint venture will investigate the Turnagain Nickel Deposit in British Columbia, Canada, for the potential of nickel and cobalt. Mitsubishi has a long history of investing in high-quality mining projects all over the world. The backing of a massive corporation like Mitsubishi in a joint venture is good news for both Giga and Nickel 28. If the joint venture successfully develops the deposit, it could provide a significant source of battery metals for anticipated electric vehicle growth over the next decade.

The formation of the joint venture is just the first step in what is sure to be a long and complex process. However, it is an important step that increases the chances of success for all involved. Nickel 28 is in a solid position to continue to benefit from both the Turnagain and Ramu projects.

Troy Boisjoli of Murchison Minerals talks about drill results and expanding the Barre de Fer zone

In this InvestorIntel interview, host Tracy Weslosky talks to Murchison Minerals Ltd.‘s (TSXV: MUR | OTCQB: MURMF) President, CEO, and Director Troy Boisjoli about the recent portable x-ray fluorescence (pXRF) results from their second diamond drill hole at its Barre de Fer zone in its HPM (Haut-Plateau de la Manicouagan) Project in Quebec.

In the interview, which can also be viewed in full on the InvestorIntel YouTube channel (click here to access InvestorChannel.com), Troy tells Tracy that this second drill hole has returned its best results to date, with a pXRF estimate 121.2 metre interval of 1.39% Ni Eq (or 4.14% Cu Eq), including 21.0 metres at 3.43% Ni Eq (or 10.25% Cu Eq). “HPM is a nickel-copper-cobalt project, Troy says, “so it’s a magmatic sulfide system where the sulfide mineralization contains nickel, copper and cobalt, all of which are critical minerals the world is desperate to find.”

Troy goes on to say that “what we’re seeing from this hole is not only the strength and the grade profile,” but also that it extends “the strike length of that strength and mineralization.” He goes on to say that he feels Murchison’s HPM project “certainly has camp scale potential, but what we’re focused on right now is our Barre de Fer zone of mineralization.” With results pending from eight more drill holes, Troy says that this is part of a larger exploration program aimed at defining a mineral resource early next year.

To access the full InvestorIntel interview, click here.

Don’t miss other InvestorIntel interviews. Subscribe to the InvestorIntel YouTube channel by clicking here.

About Murchison Minerals Ltd.

Murchison is a Canadian‐based exploration company focused on nickel-copper-cobalt exploration at the 100% – owned HPM Project in Quebec and the exploration and development of the 100% – owned Brabant Lake zinc‐copper‐silver project in north‐central Saskatchewan. The Company also holds an option to earn 100% interest in the Barraute VMS exploration project also located in Quebec, north of Val d’Or. Murchison currently has 218.2 million shares issued and outstanding.

To learn more about Murchison Minerals Ltd., click here.

Disclaimer: Murchison Minerals Ltd. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp. (IIC) does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain“forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken,  as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at info@investorintel.com.

InvestorIntel Week-in-Review for the Week of September 12-20, 2022

Week-in-Review for the week of September 12-19, 2022 —InvestorIntel Corp. would like to welcome new production managers to our team, Samantha and Riley Klatt, effective today. Also, if you haven’t signed up for an InvestorTalk.com with Pat Ryan Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF) for Wednesday, September 21st from 9:00-9:20 AM EST – click here. On Thursday, September 22nd we have Robert Vallis from Signature Resources Ltd. (TSXV: SGU | OTCQB: SGGTF | FSE: 3S3). To register for this, click here.

Speaking of registration, get ready for the Critical Minerals Summit on Wednesday, November 9th and if your not already a member of the Critical Minerals Institute, click here to find out more! PS 21 days to a new InvestorIntel website….

The Top 10 Trending Columns on InvestorIntel.com for the last 30-days include:

  1. To M&A or not M&A – that is the question
  2. Neo Performance and Hastings – Will Wonders Never Cease?
  3. Is Putin’s war in Ukraine destroying Russia’s economic future?
  4. Are we slaves to Russian uranium processing?
  5. American Rare Earths triples the Halleck Creek exploration target in Wyoming
  6. Florida’s Ron DeSantis declares war on ESG
  7. Mining our way to the Green Revolution
  8. Maritz Smith of Alphamin Resources talks about its updated tin resource at its Mpama North Mine
  9. The Critical Minerals Institute to host the Critical Minerals Summit 2022 – “Delivering A Mission Critical Supply Chain” Event in Toronto, Canada
  10. John Cash of Ur-Energy talks about renewed support for uranium producers and nuclear energy

InvestorIntel Interviews to WATCH:

InvestorIntel Columns to REVIEW:

ii8 System News Releases for the Week in Review for September 12-19, 2022:

Jack Lifton talks to Ian London about Canada’s challenge to China’s rare earths dominance

As Executive Chairman of the Critical Minerals Institute I recently was able to talk to Ian London, Executive Director of the Canadian Critical Minerals and Materials Alliance (C2M2A), about the changing world of non-Chinese rare earth supply, processing, and end use product fabrication. Specifically, we talked about Canada’s very important role in the future of the rare earth industry and the Canadian government’s commitments to a national critical minerals policy of adequate funding and regulatory support for the domestic industrial production, refining, and use of critical minerals.

Canada, Australia and Europe are rapidly moving to the adoption of industrial policies to manage their needs for critical minerals. The future of the developed world is dependent on secure supplies, of sufficient size, of the critical minerals of all types necessary to support a technological society. China, in my opinion, is miscast as a “developing country”, because in terms of secure supplies of critical minerals for high technology industries, it is already there. Non-China needs to urgently prepare for self-sufficiency in critical minerals.

Ian London said that “Canada is perfectly positioned” to supply critical minerals and to process them into end-user forms. He spoke about the recent visit of the German Chancellor and the head of Volkswagen to Ottawa to enter into a collaboration between Canada and Germany on the supply of the critical minerals for batteries as a positive move. He suggested that Canada should look to not just producing battery grade lithium from mines, but should also look to the value-added manufacturing of battery components and batteries domestically to supply not only Europe but also the Canadian OEM automotive assembly industry. “Canada,” he said, “has the skills and industries to do the job. There is a great future for Canada,” he continued, “in not only producing the critical minerals but also the critical engineered materials and components necessary for today’s technological society.”

I believe that China’s domestic demand for critical minerals to produce, for example, rare earth enabled products, such as electric vehicles, wind turbine generators, aircraft, household appliances, and military equipment is booming. As a prime example, the current Chinese five-year plan calls for the nation’s capacity to manufacture rare earth permanent magnets to double by 2025 to 300,000 tons per year. This will entail and require a vast increase in mining, refining, and fabrication capacity. China is already importing nearly 40% of the rare earth ores it processes, so the competition for such ores is now fierce.

China is not pursuing this vast increase in magnet production capacity for export markets; it is doing so to be ready for a massive domestic push to raise Chinese standards of living to or beyond North American levels. Of course, if and when called for, such production capacity can also be used to further Chinese policy overseas. I predict that LOW-COST Chinese EVs, suitably “Americanized”, will soon arrive on these shores just as they are also appearing in Europe. I also predict that China will raise its imports of the truly critical minerals for building a world class nation, iron, aluminum, and copper. We in the non-Chinese world ignore these “mature” industries at our peril as we concentrate on the scarce technology metals even as we flail about trying to find them, mine them, process them and fabricate end user products enabled by them. before Chinese industry breaks out to dominate that space.

You can watch my discussions with Ian London by clicking here.

To see other videos on the InvestorIntel YouTube channel, click here to access InvestorChannel.com. Don’t miss other InvestorIntel videos. Subscribe to the InvestorIntel YouTube channel by clicking here.

About The Critical Minerals Institute

The CMI is an international organization for critical mineral companies and professionals focused on battery and technology materials, defense metals, and ESG technologies in the EV market. Offering listings for experts and companies that offer a wide range of B2B service solutions, the Critical Minerals Institute hosts both online and in-person events designed for education, collaboration, and provides professional and human capital opportunities around critical mineral and EV supply chain challenges.

Molten Metals sees opportunity in bringing antimony projects back into production

Molten Metals Corp. (CSE: MOLT) is a relative newcomer to the world of antimony (Sb) and tin (Sn). Formed by Christopher Ecclestone in 2021 to look at near term production of lesser-known battery material antimony, the focus of the company is to look at previously operating mines to develop non-Chinese sources of material.

Molten Metals’ first target was the historic West Gore antimony/gold mine in Nova Scotia, Canada, that produced antimony and gold from the 1880s to 1917. From 1915 to 1917 operations were expanded, and over 35,000 tons of ore were milled yielding 7,761 tons of concentrate at 46% antimony. The total amount of gold obtained from the deposit up to 1917 was 6,861 oz. According to reports, high grade material (46% Sb) was shipped to England but lower grade material was kept on site, which would be readily available with no mining cost. The mine site is located one hour by road north of the provincial capital, Halifax.

Molten Metals’ second move was to incorporate a company in Slovakia, Slovak Antimony Corporation. Slovakia was the key source of antimony for the Soviet Union. They have purchased a processing plant in July in Eastern Slovakia. It is planned to process material from the tailings from their Tienesgrund project. Samples from this project show antimony levels of 39.4% and 9.69 g/t of Au.

I am a strong believer in looking at ex-producing mines or mine tailings as new sources of raw material. Typically, they have infrastructure and possibly tailings that were processed using old technology which can be economically recovered with today’s improved processes.

The largest applications for metallic antimony are in alloys with lead and tin, which have improved properties for soldersbullets, and plain bearings. It improves the rigidity of lead-alloy plates in lead–acid batteriesAntimony trioxide is a prominent additive for halogen-containing flame retardants. Antimony is used as a dopant in semiconductor devices. It is increasingly important as an essential element in high-capacity molten metal batteries. Antimony production in 2016 was 130,000 tonnes with China producing 100,000 tonnes. A recent report from the USGS shows that total global production of antimony fell to 110,000 tonnes in 2021, and Chinese production dropped to 60,000 tonnes, with Russia in second at 25,000 tonnes and Tajikistan at 13,000 tonnes. Some of the reduction in China was due to COVID production problems and China’s focus on environmental issues. As a result, antimony prices rose from an average of $2.67 per pound versus $6.65 per pound in October of last year.

A growing fear is that China can use rare earths as a weapon against the USA by throttling back or even banning rare earth exports to the USA. However, I believe there would be a more direct and immediate impact on American industry if China curtails shipments other key minerals like antimony, which would result in problems for the manufacturing of bullets and electronics plus lead-acid batteries. The USA buys components and assemblies with rare earths in them but not much of key rare earth oxides/carbonates. However, antimony goes directly into manufacturing companies like East Penn, which is the world’s largest lead-acid battery producer. It is not hard to imagine the consequences of a sudden reduction in bullet manufacturing and batteries for new vehicles.

On the corporate side, Molten Metals recently announced additions to their advisory board. An impressive group has been assembled including Donald Sadoway, an inventor of the liquid metal battery for large scale stationary storage and Professor Emeritus in the Department of Materials Science and Engineering, Massachusetts Institute of Technology (“MIT”). Also on the board is Anthony Balmmeis who is active in both private and public companies and David Henderson who is very familiar with opaque markets and critical materials over his 35-year career. The fourth member is Alon Davidov, an Angel investor in several companies in the construction-tech, FMCG, natural resources and media industries.

There is much to applaud in Molten Metals’ enlightened approach to pursuing opportunities in some of the less-followed elements. I am sure there are other opportunities out there in tailings and old mines which traditionally have been shunned by the markets just waiting to be recognized for their potential.

Ucore Rare Metals is building its rare earths Field of Dreams with RapidSX

To misquote the famous line in the 1989 movie ‘Field of Dreams, “if you build it, they will come” (the actual line from the movie is he will come – referring either to Kevin Costner’s character’s father or shoeless Joe Jackson or perhaps both). Making a giant leap from that to the world we find ourselves in today, where 80% of the worlds rare earth resources are controlled by China, if you build it, or at least can process the raw materials into rare earth oxides (REOs), then arguably everyone will come. OK, maybe that was a bad segue but you’re just going to have to live with it. The point is, there are billions of dollars being invested over the next couple of years on EV battery manufacturing facilities in North America and the U.S. has recently implemented legislation (the Inflation Reduction Act), which requires that 40% of battery components be sourced from factories in the U.S. or its free trade agreement partners, and that Chinese components and minerals be phased out beginning in 2024. On-shoring is the name of the game as we transition to a lower carbon future.

There are numerous rare earth explorers pursuing processing capabilities but perhaps no one is closer to commissioning than Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF). Ucore is focused on rare- and critical-metals resources, extraction, beneficiation, and separation technologies with the potential for production, growth, and scalability. Ucore has an effective 100% ownership stake in the Bokan-Dotson Ridge Rare Earth Element Project in Southeast Alaska. Ucore’s vision includes disrupting the People’s Republic of China’s control of the U.S. rare earths supply chain through the near-term development of heavy and light rare-earth processing facilities — including the Alaska Strategic Metals Complex in Southeast Alaska. And to that end Innovation Metals Corp., a wholly owned Ucore subsidiary, has developed the RapidSX separation technology resulting in the production of commercial-grade, separated rare earth oxides at the pilot scale.

Sounds promising but what exactly is RapidSX? The process combines the time-proven chemistry of conventional solvent extraction (SX) with a new column-based platform, which significantly reduces time to completion and plant footprint, as well as potentially lowering capital and operating costs. SX is the international rare earth industry’s standard commercial separation technology and is currently used by 100% of all rare earth producers worldwide for bulk commercial separation of both heavy and light rare earths. Utilizing similar chemistry to conventional SX, RapidSX is not a new technology but represents a significant improvement on the well-established, well-understood, proven conventional SX separation technology preferred by rare earth producers. As an investor, I prefer disruption of existing technology versus reinventing the wheel as it is typically more capital efficient and quicker to market, unless of course, it’s cold fusion type of disruption, in which case I’m all ears.

As for the progress of RapidSX, Ucore announced in mid-July that it had upscaled its rare earth Demonstration Plant capabilities and streamlined the RapidSX commercial deployment plan. In early 2022 Ucore received very positive results from the independent RapidSX technology evaluation, including the conclusion that a RapidSX production plant can potentially have a 2/3rds smaller footprint than a conventional SX facility with the same throughput. The team then received buy-in from all stakeholders to expand the design and construction of the Demo Plant. Ucore’s enhanced Demo Plant will be able to process: tens of tonnes of mixed rare earth concentrate on a per annum basis; many feedstock sources, including planned light and heavy rare earth element feedstocks for the Strategic Metals Complexes; and all RapidSX splits required to produce individual praseodymium, neodymium, terbium, and dysprosium. Ucore has planned product qualification trials in Q4-2022 for prospective North American metal/alloy makers and original equipment manufacturers (OEMs).

All this is only one aspect of Ucore’s business, they are also a rare earth explorer with the advanced Bokan-Dotson Ridge rare earth deposit. Highlights at Bokan include a NI 43-101 Preliminary Economic Assessment, with a resource estimate that remains open down-dip and on-strike with further drilling planned. The project can be “near shovel ready” for construction in less than 30 months after receipt of the next stage of development funding. And the Company boasts that Bokan is the highest grade NI 43-101 HREE resource in the U.S. But we’ll save digging further into the details on Bokan for another day.

Bottom line, Ucore is very close to churning out rare earth oxide material at its Demonstration Plant which could lead to supply offtake agreements with EV manufacturers and/or other downstream customers. This could be huge for Ucore in light of the fact that on-shoring is going to be a high priority for the foreseeable future. With a market cap of C$34 million, there could be a bright future for Ucore if all the pieces fall into place.

Murchison Minerals explores camp scale potential for nickel and zinc at HPM and BMK projects

Murchison Minerals Ltd. (TSXV: MUR | OTCQB: MURMF) has recently announced results of its summer exploration program at its wholly owned HPM (Haut-Plateau de la Manicouagan) property. This included an aerial geophysical survey of the 648 km2 (250 square miles), ground prospecting and diamond drilling with the plan to produce a maiden resource early 2023. The original discovery by Falconbridge of a Nickel-Copper-Cobalt mineralization dates to 1999.

What is interesting about the location is that it is only 8 kms (5 miles) to the rail line from Fermont/Labrador city and Port Cartier:

Source: Company website

As you can see it is also close to hydro-electric power which gives this opportunity two very important and strategic advantages over a lot of other potential mining opportunities in the Canadian north. It should also reduce CAPEX and OPEX as power will not have to be generated on site and material can be shipped in and out with relative ease. It is also 40 kms (25 miles) from the provincial Highway 389.

Two years ago, the Quebec government started the Quebec Action Plan on Critical Materials, which this deposit would fall under should the project move forward. The Quebec government is very supportive and proactive in the mining industry and the development of projects, particularly in the northern part of the province.

There are several targets of interest at HPM, the key one being their Barre de Fer target which reported an intercept of 43.15 meters grading 1.74% Ni, 0.90% Cu and 0.09% Co. By comparison, Voisey’s Bay on average was 1.63% nickel, 0.85% copper and 0.09% cobalt. On September 7th Murchison reported the pXRF results from a new 404 m drill hole that intersected four broad zones of Ni-Cu-Co sulphide bearing mineralization totalling 130.00 m of composite thickness, and returning 18.05 m estimated at 1.98% pXRF Ni Eq. (89.95 to 108.0 m) including 8.1 m at 3.45% pXRF Ni Eq., and 69.90 m estimated at 0.68% pXRF Ni Eq. (267.0 to 336.90 m) including 16.1 m at 1.4% pXRF Ni Eq. This ongoing exploration, the company says, is aimed at completing a maiden resource on Barre de Fer by early Q1 of 2023. The question is will they approach the 141 million tonnes of ore of Voisey’s Bay, which made it a world class discovery.

The other project Murchison is working on is the 100% – owned Brabant McKenzie (BMK) zinc‐copper‐silver project in Northern Saskatchewan, located about 170km northeast of La Ronge. This is a VMS (volcanogenic massive sulphide) Zn-Cu-Pb-Ag-Au deposit which was originally prospected in the 1950s and 1960s. In September 2018 there was a NI 43-101 upgraded report with an indicated resource of 2.1 million tonnes at 9.98% zinc equivalent and an inferred resource of 7.6 million tonnes at 6.29% zinc equivalent. This was based on 138 drill holes with a cutoff of 3.5% zinc equivalent.

VMS deposits are widely distributed with major deposits in Canada being Kidd Creek, near Timmins, Ontario, and Bathurst in New Brunswick. The Kidd Creek mine, which has operated since 1966, is run by Glencore and is the deepest base metal mine in the world at 2,735 meters (8,973 feet) below sea level. The Bathurst mine suspended operations last month and the owner, Trevali, has delisted its shares from the TSX. The following table compares the Murchison deposit to Kidd Creek:

Tonnes Zinc % Copper % Silver g/t
Kidd Creek 2020 5 million 3.60% 1.80% 44.0
Murchison indicated 2.1 million 7.08% 0.69% 39.6
Murchison inferred 7.6 million 4.46% 0.57% 18.42

Murchison’s Brabant Lake project has a maintained road – Saskatchewan Highway 102 – and existing power lines running through the property, which again points to management looking at projects with strong infrastructure. The drive from the local community of Brabant Lake to Saskatoon is about six hours. Last year’s preliminary metallurgical work produced a 50% zinc concentrate with an 85% recovery.

Both projects are early stage but have promising potential and looking forward to additional results. Certainly worth keeping an eye on this company as more updates come out on these properties.