Imperial Mining Sets Comprehensive 2021 Plan at Crater Lake after $2.6M Financing

After a positive summer drill program at its flagship scandium-rare earth Crater Lake Property in northeastern Quebec, Imperial Mining Group Ltd. (TSXV: IPG) successfully closed a $2.6 million financing in December to accelerate the project forward in 2021.

Imperial Mining plans to use the proceeds to complete definition drilling at Crater Lake’s “TG Zone”, and to deliver both a 43-101 Resource Report and a Preliminary Economic Assessment (PEA) by the end of June 2021.

Last trading at $0.16, Imperial Mining Group has a market cap of $20 million and a PEA could re-rate the company, shifting it closer to the $175 million market cap of NioCorp Developments Ltd. (TSX: NB | OTCQX: NIOBF) that has a Feasibility Study at its Elk Creek niobium-scandium project in Nebraska, United States.

Peter Cashin, President & CEO of Imperial Mining Group, recently commented, “I am very pleased of the positive response that the market has shown for our private placement. The financing was oversubscribed, and we believe that it was motivated by the recent significant announcements in the critical metal space, in particular for scandium and the rare earths.”

Scandium Alloys at Home and in Space

Manufacturers in many industries, including automotive, aerospace, and defense, recognize that scandium-modified aluminum alloy materials could become a critical input into their production processes.

With the push for lighter and stronger materials to make vehicles more fuel-efficient and the need for tough and durable metal alloys for the resurgence in space activity, scandium-aluminum “superalloys” have been already used by NASA and the European Space Agency (ESA).

In a March 2020 speech at the Satellite 2020 Conference, Elon Musk, founder of Tesla (NASDAQ: TSLA) and SpaceX stated that the aerospace engineers at SpaceX were going to switch to a different alloy “pretty soon” to replace the current stainless-steel alloy, known as 301.

Scandium-aluminium alloys are highly valued as an important lightweight material and are one-third the weight of steel and 60 % of the weight of titanium alloys.

Scandium-aluminium alloys are also corrosion-resistant and can be used in a variety of industries, including aerospace, automotive, and consumer products, such as baseball bats, bicycle frames, and golf clubs.

A small percentage of scandium alloyed with aluminum enables aluminum to be effectively welded to another piece of scandium-aluminum alloy, without the need for heavy hardware to join the pieces together.

Scandium-aluminium alloys are currently being used by California-based Relativity Space, a private aerospace manufacturing company. Relativity Space’s massive 3D printer can create a rocket from raw material to flight in 60 days.

The automotive industry could be a large market opportunity for scandium. With scandium-aluminum’s self-welding abilities, engine blocks could be constructed using 3D printers.

In addition, according to a recent report, the average passenger vehicle contains over 150 kilograms of aluminum and the average light truck contains over 230 kilograms of aluminum. If only 1% of the traditional aluminum used in the approximately 17 million light vehicles (cars and light trucks) produced in the United States each year, switched to scandium-aluminum, that impact would create a demand for 35 tonnes of scandium each year.

With current scandium production estimated between 25-35 tonnes per year as such, this type of demand would immediately double the current supply requirement.

Scandium

Scandium is an element, sometimes classified as a rare earth metal, and currently, there are no primary scandium mines. Supply comes from the by-product of other mineral extractions from deposits in China, Russia, and more and recently, Australia.

Scandium is not traded on any metal exchange and the price is negotiated between buyer and seller. According to the most recent USGS data sheet on scandium, over the past five years, the price for scandium-oxide has averaged $4,560 per kilogram.

Scandium and other “critical metals” were thrust into the spotlight last year when President Trump signed an Executive Order addressing the threat to the United States’ supply chain from relying on “critical minerals” from “foreign adversaries”, specifically identifying China. The 35 mineral commodities deemed critical under the definition included aluminum, gallium, graphite, lithium, manganese, niobium, the rare earth elements group, and scandium.

Crater Lake Property – Scandium & Rare Earth Metals

The 100%-owned Crater Lake Project is located 200 kilometres northeast of Schefferville, Quebec, and covers 2,780 hectares (approximately 6,900 acres). The project hosts three zones of mineralization (Boulder, TG Zone (TGZ), and STG), determined by scandium-rich outcrops, boulders, and recent drilling.

Highlights from the summer drill program included Hole #CL20037 from the TGZ that returned intervals grading up to 253 grams per tonne (g/t) Scandium Oxide (Sc2O3) over 29.14 metres (m), including 9.3 m grading 299 g/t Sc2O3 and 21.69 m grading 271 g/t Sc2O33 including 9.16 m grading 299 g/t Sc2O3.

Importantly, the true thickness of the scandium mineralized zone is estimated to be up to 110 m and is open at depth and along strike.

The company sees major positive factors with the project, including:

  • The resource is exposed at the surface, so it is amenable to a low-cost open-pit operation.
  • The deposit is high grade relative to its peers and could reduce the CapEx to develop the mine and the OpEx to run the mine.
  • The preliminary metallurgy showed strong scandium mineral recoveries.
  • The project is in the mining-friendly jurisdiction of Quebec and supported by Quebec’s recently launched $90 million “critical minerals” development fund and Plan Nord, Quebec’s economic development strategy to develop natural resource extraction in northern Quebec.
  • The deposit is located in close proximity to the 9 aluminum smelters and one alumina refinery in Quebec.

Final Comment

Look for the definition drill results, 43-101 Resource Report, and the PEA to potentially lift the stock price higher this year.




Tesla competitors currently sourcing lithium for their power plants in Canada

Lithium supply is paramount to the future of clean energy. As long as demand for vehicle propulsion systems and portable electronic devices continues to increase, the world will continue to look for new sources of their component parts. International Lithium Corp. (TSXV: ILC) (“ILC”) is superbly placed to meet this demand, having positioned itself with solid development partners and acquired high-quality grass roots projects at early stages of exploration, ILC aims to be the investor’s choice and is currently battling the Canadian winter for that very title.

On 1st December 2016, ILC commenced a diamond drilling program at its Mavis Lake lithium pegmatite project in Ontario, and soon after shelved the drill until January. The retreat was ordered by a freak rain event that rendered the ground unsuitable for drilling and the team were forced to wait until the new year for the earth to freeze; the delay will result in the process being more efficient and overall environmental impact being reduced.

Thankfully, this is the Canadian mid-winter, and so an extreme cold warning is never far away.

ILC’s rare metals pegmatite properties in Canada (the Mavis and Raleigh projects) and Ireland (Avalonia project) complement the company’s lithium brine project in Argentina. The Avalonia project is under option to long-term strategic partner, the global lithium giant Ganfeng Lithium, and the Mavis project with strategic partner Pioneer Resources Limited.  The Mavis and Raleigh projects together form the basis of the company’s newly created Upper Canada Lithium Pool designated to focus on acquiring numerous prospects with previously reported high concentrations of lithium in close proximity to existing infrastructure.

I’m excited about Mavis et al. It seems like there are endless brine evaporation operations crawling towards production, and even though their Argentina brines are ILC’s main focus, there’s really nothing like smashing open a good pegmatite. The granite-like rock is formed as the final stage of magma crystallisation and is characterised by its very large crystals; it frequently contains sizeable precious stones and a variety of rare-earths from which ILC hopes to extract both the lithium and caesium that have been identified.

When rare-metal pegmatites solidify, the host rocks adjacent to the pegmatite may be enriched by the associated fluids, and what is known as a dispersion halo forms around the pegmatite body. Normally the extent of the rare-metal alteration halo is within a few meters of the pegmatite, but notably, the pegmatite belts at Mavis and Raleigh exhibit alteration halos in the order of tens of metres wide, representing some of the broadest and strongest host-rock lithium anomalies observed around the world.

A previous drill returned lithium concentrations as high as 3.08% in the Mavis Lake pegmatite, and we are hoping for further good news as the arctic temperatures at the site begin to subside this week, permitting work to continue. The budgeted exploration expenditures will be wholly funded by Pioneer as part of their earn-in on the project, and a $1 million budget has been allocated across both the Mavis and Raleigh projects.

Automakers with facilities in Ontario like GM, Ford, Toyota and Chrysler are all developing EV’s to compete with Tesla, and are currently sourcing lithium for their power plants. ILC’s focus on the area is no surprise then and with an established global lithium giant serving as advisor they are more likely to survive the winter than most.