Deer Horn Capital

Overview

Deer Horn Capital (CSE:DHC, OTC:GODYF) is a Canadian exploration company developing the Deer Horn property in west-central British Columbia. Deer Horn is the only known silver–gold–tellurium property with an NI 43-101 tellurium resource and the company is focused on providing minerals to the growing green energy industry. Silver and tellurium are crucial elements for photovoltaic energy and new battery storage technology.

In May 2018, the California Energy Commission released a mandate stating that any homes built after January 1, 2030, must include solar panels. This order aligns with the state’s efforts to cut carbon emissions by 40 percent by that year. Cadmium-telluride solar panels, on a lifecycle basis, have the smallest carbon footprint, lowest water use and shortest energy payback time of all solar technologies. According to the National Renewable Energy Laboratory, cadmium-telluride is the second most-utilized solar material in the world next to silicon.

Aside from its use in solar panels, tellurium is also used in a variety of products including mobile phones, LED displays and projectors, wearable electronic devices, gaskets, lighting, thermo-conductors and phase change memory chips. As a result, the global tellurium market is expected to grow by a CAGR of three percent between 2018 and 2022. However, tellurium is one of the rarest metals and makes up only 0.0000001 percent of the earth’s crust. In 2017, the US Geological Survey (USGS) calculated that approximately 90 percent of the world’s tellurium supply depends on copper mining, where tellurium is produced as a byproduct of copper electrorefining. As copper grades decline, miners are employing different refining methods that exclude tellurium recovery.

Deer Horn Capital is focused on advancing its silver-gold-tellurium property into production to help address the global need for tellurium. The company owns 50 percent of the Deer Horn property with an option to acquire up to a 75 percent interest. The property has an indicated resource of 414,000 tonnes grading 5.12 g/t gold, 157.50 g/t silver and 160 ppm tellurium and an inferred resource of 197,000 tonnes grading 5.04 g/t gold, 146.50 g/t silver and 137 ppm tellurium. Deer Horn Capital completed a preliminary economic assessment( PEA) on the property in June 2018, which reported an after-tax NPV (five percent) of $36.5 million and an initial rate of return (IRR) of 42 percent. The PEA also outlined an open-pit mine life of nine years and an expected return on initial capital costs of $28.3 million in 1.6 years after taxes.

Deer Horn has secured strategic partnerships with a cleantech company as well as a First Nations’ owned mineral exploration company. Deer Horn’s partnership with Fenix Advanced Materials concerns the potential for future tellurium extraction and purification and a vital step toward achieving a vertically-integrated enterprise for cleantech metals. The company’s First Nations partner Cheona Metals signed an agreement with a major, US-based environmental and social NGO to target historical placer gold mine sites for re-mining and restoration of fish habitat using sustainable techniques in British Columbia and Yukon Territory.

Deer Horn Capital’s Company Highlights

• Developing Canada’s first NI 43-101 silver-gold-tellurium resource.
• Tellurium is a critical metal used in solar panels and in a variety of technologies and manufacturing.
• Tellurium is produced mostly as a copper electrorefining byproduct.
• Once in production, the Deer Horn property is expected to provide a consistent source of tellurium.
• Exploration potential with copper and tungsten porphyries indicated on the property.
• Indicated resource of 414,000 tonnes grading 5.12 g/t gold, 157.50 g/t silver and 160 ppm tellurium.
• Inferred resource of 197,000 tonnes grading 5.04 g/t gold, 146.50 g/t silver and 137 ppm tellurium.
• After-tax NPV (five percent) of $36.5 million and IRR of 42 percent.
• Initial capital costs of $28.3 million.
• Nine-year open-pit mine life
• CEO and family notably own approximately 23 percent of the company’s shares.