Transition Metals on the Rise

Competition in the electrification race

With the transition to green energy and electrification, copper and nickel are in the spotlight. Conquest Resources' key exploration target is high-grade massive sulphide copper. Tom Obradovich, president and CEO of the company, came across the Copperfields mine, which resembled a Sudbury-style deposit, and has focused on the unusual mineralization found in the Temagami magnetic anomaly ever since.

“I have been accumulating land in the area for approximately 20 years under my private company and the last piece I needed was owned by Conquest Resources, so it was agreed with John Kearney, the director of Conquest, to merge both companies,” said Obradovich.

The company now controls over 350 sq. km in the area. There is evidence to sustain that the Temagami magnetic anomaly could indeed be related to Sudbury’s Igneous complex, where the world’s second largest nickel camp was formed. Sudbury aged rocks were found following a 2.2 km drill hole at 19,189 meters deep into the anomaly. “Inventus, a company we are associated with, recently made some significant discoveries in the Rathburn area and found nickel, cobalt and gold deposits in and around the area east of us and west of Sudbury,” added Obradovich.

With Kirkland Lake Gold investing US$1.3 million for exploration, Conquest Resources has raised over US$5 million through an IPO to continue operations.

Stefan Spears, chairman and CEO of Inventus Mining, the Ontario junior which focuses on gold and battery metals, spoke about the company’s Sudbury 2.0 project, which has “identified hitherto unknown exploration opportunities right to the east of the Sudbury mining district.”

Spears revealed that Inventus’ projects are situated above one of the largest positive magnetic and conductive geophysical anomalies in the world, the Temagami Magnetic Anomaly. “We have multiple polymetallic showings ranging from super high-grade palladium-platinum-gold-copper with samples grades up to 31% copper equivalent, and another area with a 44 m mineralized intersection of gold-cobalt-nickel in drilling.”

Magna Mining raised C$7 million concurrent with its reverse takeover public transaction to develop the Shakespeare deposit and surrounding land package. The past producing Ni-Cu-PGM project is in one of the most recognized nickel mining districts in the world, about 70 km south west of Sudbury. Around C$2 million have been allocated for a 9,000 m drill program predominantly around the project’s gap zone.

In September 2021, Magna announced success at the PGM nickel-copper deposit, which is 5 km from the Shakespeare deposit. Magna has launched a C$3 million charity flow-through with PearTree Securities to fully fund its 2022 exploration targets. “One of the options we are looking at is the restart of the toll milling operation used a decade ago when the project went into production, which would be a very low-cost, fairly near-term potential cash flow generator. We hope to have some resolution on that sometime in Q1 of 2022,” said Jason Jessup, Magna Mining’s CEO.

Before the rise of base metals in 2021, palladium had been the star of 2019 and 2020, experiencing an astounding price move from US$966/oz in February 2018 to US$2,800/oz in February 2020. While the price has hovered around a very healthy US$2,000/oz mark for most of 2021, palladium’s shine has been dimmed to some extent when viewed in comparison to copper.

Palladium is used as a catalytic reactor within the motoring industry and the metal is now being used in fuel cells to power vehicles. Both palladium and platinum are coveted as a part of gasoline engine auto catalysts that lower carbon emissions. With the former metal being in a current supply deficit, and rising demand to meet carbon emission standards in Europe, China and India, palladium is bound to rise again.

Certainly the rise of electric vehicles will impact catalytic convertor demand, but palladium is projected to play a role in the shift away from hydrocarbons. Renewable-sourced hydrogen used to produce electricity via fuel cells is now in the spotlight and will require PGMs for catalysts.

“Clean Air Metals has shifted its focus towards platinum because it is only with platinum that water is the waste byproduct in fuel cells,” said Abraham Drost, CEO of Clean Air Metals.

With other metals, the residue is hydrogen peroxide. Clean Air Metals’ 43-101 mineral resource statement stated a 1.8 million oz palladium equivalent resource at its Thunder Bay North project.

Generation Mining completed a FS in Q1 2021 for its Marathon palladium-copper project in northwestern Ontario, with attractive results for both metals. “Results demonstrated a 30% Internal Rate of Return (IRR), a C$1.07 billion NPV and a 2.3-year payback at a US$1,725 palladium and US$3.20 copper price,” said Kerry Knoll, executive chairman of Generation Mining.

The Marathon mine requires an initial capex of C$665 million to be built, and with palladium and copper trading well above the metrics used in the company’s feasibility study, there should be appetite for financing the project. The Marathon airport is located within the project’s property and the Trans-Canada Highway traverses it. A C$1 billion investment by the Ontario government to build a northern power line in the province also means that the power line goes right over the Marathon project. “This allows us to make use of the grid, which only has a 4% carbon footprint,” added Knoll.

New Age Metals’ flagship River Valley palladium property, sitting about 100 km northeast of the Sudbury metallurgical complex, is now a multi-million oz primary palladium resource. With a PEA completed in 2019, it aims to have a FS completed within five years to move into production. “Tesla has already bought into a mine in Nevada, something you normally do not see — where automakers come down and actually get into the development and mining of lithium,” said Harry Barr, New Age Metals’ chairman and CEO, who views Canada as a key destination for lithium projects, given the proximity to manufacturers.

The Timmins mining region saw exploration programs rise in the fall of 2021, as a huge drive to develop a new generation of mines. Canada Nickel Company has continued proving up the Crawford nickel sulphide project - just north of the region. Its PEA projects a mine-life of 25 years. It is clear that new technologies and innovation are making waves in previously-explored land to reach new discoveries.

Northern Ontario hosts an abundance of critical metals needed for the transition economy. Government, associations and companies are working in tandem to transform the province into a significant player in the EV market by generating mineral supplies nearer to assembly plants. The US has also expressed an interest in bringing supply chains closer to home, and the Canada-US Joint Action Plan on Critical Minerals Collaboration has emerged to solidify both nation’s manufacturing supply chains moving forward.

Images courtesy of Conquest Resources and Novamera