Imperial Mining

Scandium Exploration in Quebec

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Overview

Imperial Mining Group Ltd. (TSXV:IPG) is a Canadian multi-metal exploration and development company focused on advancing its gold, copper-zinc and scandium-niobium-tantalum-rare earth properties in Quebec. Imperial Mining believes they have the only high-grade, bedrock-hosted scandium project in North America to serve as a potentially important contributor to the supply chain of this critical aluminum alloying agent.

The Crater Lake scandium property contains high concentrations of scandium and rare earth elements (REE). Previous diamond drilling on the property returned up to 167.8 meters grading 260 g/t scandium oxide (Sc2O3) and 1.18 percent REE including 62.8 meters grading 304 g/t Sc2O3 and including 27.6 meters grading 351 g/t Sc2O3 and 1.72 percent REE on the Boulder Zone and a 19-meter interval grading 0.506 percent Sc2O3 on the TG Zone target. Additionally, grab samples grades of between 0.20 percent and 1.42 percent niobium pentoxide (Nb2O5) and up to 3,020 ppm tantalum (Ta) were returned from the property. Moving forward, Imperial Mining’s objective is to deliver a 43-101 resource estimate for the property in early summer 2019 to be used in a Preliminary Economic Assessment (PEA) to be tabled by the end of 2019 or early 2020.

Imperial Mining’s other projects in Quebec include Opawica Gold, Carheil-Brouillan Copper-Zinc and La Roncière Gold. The Opawica and La Ronciere gold properties are both located near the past-producing Joe Mann and Bachelor Lake mines and the important Osisko Windfall Lake Gold project development. The Opawica property has seen little exploration since 1985 but shows excellent gold potential at depth below 100 meters and to the west from the previously-defined Central Zone. Historical drilling from the Central Gold Zone returned up to 6.9 g/t gold (Au) over 3.8 meters and 87.7 g/t Au over 1.5 meters over a strike length of 350 meters. The company will be drilling to expand and evaluate the known areas of high gold exploration potential during the summer campaign.

The company optioned the Carheil-Brouillan base-metal property to SOQUEM Inc. in August 2017, which can earn a 50 percent interest in the project by spending $3.75 million over four years. Both companies believe that the stratigraphy from SOQUEM’s B26 deposit continues onto Carheil-Brouillan and can been traced for over five kilometers in strike length. The B26 deposit contains an indicated resource of 6.97 million tonnes grading 1.32 percent copper (Cu), 1.80 percent zinc (Zn), 0.6 g/t gold (Au) and 43 g/t silver (Ag), and an inferred resource of 4.41 million tonnes grading 2.03 percent Cu, 0.22 percent Zn, 1.07 g/t Au and 9.0 g/t Ag.

Imperial Mining and SOQUEM jointly own the La Roncière property. The Mariposite gold deposit has a historic resource of 470,000 tonnes grading 2.75 g/t Au and 211,000 tonnes grading 4.11 g/t Au, as well as several gold showings. No decision to explore the property has been made at this moment.

Imperial Mining is led by an experienced team of mineral exploration and development professionals with a strong track record of mineral deposit discovery in numerous metal commodities. Contributing to that success is Imperial’s Technical Committee Chair Mac Watson. He is the former-President and CEO of Freewest Resources Canada and is a recipient of numerous industry awards. Mac is also an inductee to the Canadian Mining Hall of Fame. Insiders currently hold 27 percent of company shares.

Company Highlights

  • Expected increase in scandium production to 1.8 million kilograms by 2035 due to its increasing use in lightweighting in electric vehicles (EV), internal combustion (ICE) vehicles, and the aerospace sector as well as in Solid Oxide Fuel Cells (SOFCs).
  • Drilling a 19-meter interval grading 0.506 percent Sc2O3 on the TG Zone target west of the previously known Boulder Lake scandium zone at Crater Lake.
  • Historical drilling on the Boulder Zone returned 167.8 meters grading 260 g/t scandium oxide and 1.18 percent including 62.8 meters grading 304 g/t Sc2O3 and including 27.6 meters grading 351 g/t Sc2O3.
  • Carheil-Brouillan is being jointly developed with SOQUEM due to its proximity to the B26 deposit.
  • B26 deposit stratigraphy thought to extend onto Carheil-Brouillan and has been traced along strike for five-kilometers.
  • Opawica and Roncière gold properties located near past-producing mines and in proximity to the Osisko Windfall Lake gold development project.
  • Historical drilling from the Central Gold Zone at Opawica returned up to 6.9 g/t gold (Au) over 3.8 meters and 87.7 g/t Au over 1.5 meters over a strike length of 350 meters. All drilling was above the 100 meters vertical level.
  • Led by an experienced management and Board team with a track record of exploration and development success.
  • Insiders notably hold 27 percent of company shares.

Scandium Uses and Market

Scandium, is a silvery-white non-toxic transition metal, often associated with REE, together with yttrium, tantalum and niobium. Scandium is often found in trace amounts in other REE deposits and occurrences and has been mined as a by-product in a few uranium and REE mines in the world, for example in the Zhovti Vody deposit, Ukraine and at Bayan Obo, China. Primary, hardrock scandium deposits of enough size and grade to be economically important are scarce and Crater Lake represents one of the few such opportunities in the world.

Scandium acts as a grain-refiner and hardener of aluminum alloys. Aluminum-scandium alloys combine high strength, ductility, weldability, improved corrosion resistance and a lower density. The combination of all these properties makes aluminum-scandium alloys well-suited for the aerospace, automotive and defense industries. Scandium-modified aluminium alloy (EV and ICE) is highly valued as an important lightweighting material as it is one-third the weight of steel and is 60 percent of the weight of titanium alloys.

The broader adoption of scandium in the aluminum alloys sector has been primarily constrained by the limited availability of scandium in western commercial markets, today estimated to be 10 to 15 metric tonnes per year. This has resulted in much higher prices for scandium compared to competing alloy materials, such as titanium, and has limited its broader use. The current price of the metal oxide published by USGS (2017) indicates that scandium oxide trades at approximately US$3,700/kg for 99.99 percent purity for small lots (tens to hundreds of kilograms) and US$2,500/kg for large lots (greater than one tonne).

The scandium market has the potential to grow to 1.8 million kilograms by 2035 (Bloomberg, 2018) once a sustainable supply of the commodity becomes available to consumers. EV sales, a potentially important consumer of scandium aluminum alloy, grew 54 percent in 2017 from 2016 to about 3.1 million vehicles and is expected to grow to 125 million vehicles by 2030 (IEA, 2018). Use of scandium-modified aluminum alloys in chassis lightweighting applications would allow for extending battery range in EVs. In parallel, the aerospace industry believes that scandium has the potential to produce lighter commercial aircraft with high fuel efficiencies and will lead to more cost-effective aircraft production, particularly through 3D laser printing or Additive Manufacturing (AM) of parts. Together, these factors will continue to spur demand for scandium.

Crater Lake Scandium Property

The 27.8-square-kilometer Crater Lake project resides in the southwestern region of the Mistastin Batholith. The property is 200 kilometers northeast of Schefferville, Québec and is accessible by fixed-wing aircraft or helicopter.

Historical exploration

In 2007, a previous operator completed a regional evaluation program and collected a sample that contained high concentrations of iron oxide and REEs. Quest Rare Minerals Ltd. then assumed control of the property and the information led to a discovery in 2009 of significant grades of REE up to 23.9 percent in association with a large Alkaline Intrusive Complex.

Between 2009 and 2014, Quest has completed geochemical and geophysical, prospecting, mapping and drill programs on the property. In 2014, Quest discovered a significant zone of scandium and REE over a strike length of 225 meters and to a vertical depth of 200 meters, known as the Boulder Zone. Drilling at Boulder returned up to 167.8 meters grading 260 g/t Sc and 1.17 percent REE including 62.8 meters grading 304 g/t Sc and including 27.6 meters grading 351 g/t Sc and 1.72 percent REE. Drilling also returned a further 19-meter grading 0.506 percent scandium over a target 3.3 kilometers southwest of the Boulder Zone. Additionally, 250 meters west of the scandium finding, Quest recovered grab samples that assayed between 0.20 percent and 1.42 percent niobium pentoxide and up to 3,020 ppm tantalum.

In 2018, Imperial Mining conducted metallurgical testing on the scandium-rich ore and completed prospecting, detailed mapping and a drill program on the western half of the property.

Ongoing exploration

Moving forward, Imperial Mining will be completing definition drilling at the TG zone to develop a NI 43-101 resource estimate for the property.

Imperial Mining’s goal is to become a vertically-integrated key player in the scandium-aluminum alloy and value add aluminium alloys markets. Currently, the company is in discussions with partners in Europe and the UK to conduct development programs on a variety of products and processes in scandium, primarily for the automotive industry which will be announced later in 2019.

Opawica Gold Property

The 7.82-square-foot Opawica project consists of 14 contiguous claims 20 kilometers east of Desmaraisville, Quebec. The property is also located 90 kilometers east of the past-producing Joe Mann mine, which produced 4.8 million tonnes grading 7.56 g/t gold, and 20 kilometers west of the past-producing Bachelor Lake mine, which produced 870,000 tonnes grading 4.66 g/t gold. The property is accessible by Highway 113.

Historical exploration

Since 1985, the property has seen minimal exploration and development. Previous operators identified a 350-meter long gold-bearing zone, the Central Zone, within a 100 meters wide structure with a strike length of over 1.5 kilometers on the eastern part of the property. This early work had not penetrated below the 100 meters vertical level. Although open geologically, no exploration work was conducted west of the Central zone.

In 2018, Imperial Mining conducted a 3D-induced polarization and magnetic survey and extended the structure a further 1.7 kilometers to the west.

Ongoing exploration

Moving forward, Imperial Mining will validate data and expand the Central zone. The company will also be evaluating new gold structures to the west, north and south of the Central zone. A 1,500 meter drilling program over this western extension as well as deeper on the Central Zone drilling is planned during the summer of 2019.

Carheil-Brouillan Copper-Zinc Property

The 53.7-square-kilometer Carheil-Brouilan project consists of two contiguous claim blocks. The property is 120 kilometers north of La Sarre, Quebec and five kilometers southwest of the former Selbaie mine, a base metal producer with historical production of 53 million tons grading 1.0 percent copper, 2.0 percent zinc, 0.6 g/t gold and 41 g/t silver. The property is accessible by Highway 393 and forestry roads.

In 2018, SOQUEM released a resource for their B26 deposit, which contained an indicated resource of 6.97 million tonnes grading 1.32 percent copper, 1.80 percent zinc, 43.0 g/t silver and 0.60 g/t gold and an inferred resource of 4.41 million tonnes grading 2.03 percent copper, 0.22 percent zinc, 9.0 g/t silver and 1.07 g/t gold.

Imperial Mining entered into an option agreement with SOQUEM in August 2017, who can earn a 50 percent interest in the property by spending $3.75 million over four years. Imperial Mining and SOQUEM believe that the stratigraphy hosting the B26 deposit extends for several kilometers onto Imperial Mining’s property.

Historical exploration

In 2009, NQ Exploration Inc. discovered a silver-rich zone named the AG1 polymetallic zone, which has a historical estimate of 4.5 million ounces silver. This zone also contains zinc, lead, copper and gold mineralization and shows potential at depth.

In late 2017, SOQUEM completed approximately 117 kilometers of gridding and 97 line-kilometers of 3D-IP geophysics was completed on the northwestern part of the property to cover the interpreted western extension of SOQUEM’s B26 base metal horizon across the property. Multiple anomalies were detected by the survey work and constitute high-potential B-26 type copper-zinc targets.

In the winter of 2018, SOQUEM completed 2,000 meters of diamond drilling on the D2 polymetallic target west of the previously-described geophysical grid. The drilling returned 31.4 g/t Au and 132.52 g/t Ag over 1.45 meters and 8.92 g/t Au over 5.1 meters.

imperial mining map

Ongoing exploration

Moving forward, Imperial Mining and SOQUEM will spend $1 million to conduct a 3,500-meter drill program that will test targets in the B26 base metal horizon and to further evaluate favorable geology and known historical base metal targets.  

La Roncière Gold Property

The 25.1-square-kilometer La Roncière project is owned 50/50 by Imperial Mining and SOQUEM. The property is 35 kilometers east of Desmaraisville, Quebec and accessible via Highway 113. The property is also 75 kilometers east and 35 kilometers west of the past-producing Joe Mann and Bachelor Lake mines, respectively.

Historical exploration

Opawica Explorations Inc., Consolidated Mining and Smelting, Camchib Resources Inc. and Minnova Inc. have all conducted exploration on the property and are responsible for identifying the Mariposite gold deposit. Mariposite has a historic resource of 470,000 tonnes grading 2.75 g/t gold and 211,000 tonnes grading 4.11 g/t gold, as well as the Espoir, Track, Relique and Serem gold showings.

Recently, Corporation Miniere INMET, Serem, SOQUEM and NQ Exploration tested the extensions of known gold showings and discovered a new northeast-trending gold Serem showing north of the Mariposite deposit.

Ongoing exploration

At this point, Imperial has not made any exploration plans for the La Roncière property and continues to evaluate the gold potential of the property.

Management

Peter J. Cashin, P.Geo. — President & CEO and Director

Peter Cashin is a respected minerals industry executive with over 35 years of experience in the Canadian mining exploration and development sector. He obtained his Bachelor of Science in Geology from the University of New Brunswick in 1979 and a Masters of Science degree in Mineral Exploration from McGill University in 1985. He has been a practicing professional geoscientist with the Association of Professional Geoscientists of Ontario (APGO) since 2008.

Prior to joining the company, he was the President and CEO of Peak Mining Corporation and President and CEO of Quest Rare Minerals Ltd. While at Quest, Cashin and his team were credited with the discovery of the Strange Lake B-Zone heavy rare earth deposit in northeastern Quebec in 2009. It’s considered to be the largest deposit of its type in the world outside of China. He led the company through the advanced development stages of the deposit and was acknowledged for this success by the Quebec Mineral Exploration Association who named him Quebec Prospector of the Year in 2010.

Martin Nicoletti, CPA, CGA — CFO and Corporate Secretary

Martin Nicoletti is a certified public accountant with 28 years of experience. He graduated from Quebec University in 1987 with a Bachelor’s degree in Business Administration with an option in Accounting. He is the president of SKTM Financial Corporation Ltd. He currently serves as the CFO for several public mining companies.

Pierre Guay, P.Geo. — VP of Exploration

Pierre Guay is a geologist with over 25 years of experience in all aspects of mineral exploration and project development for base metals, gold, nickel and technology metals. He worked for Inco/Vale for 20 years in roles of increasing responsibility for domestic and international projects. During his last four years at Inco/Vale, he worked as an Area Geologist with the Sudbury Basin Exploration Group on several projects, including the newly-discovered Kelly Lake deposit, the Stobie mine and the Garson mine.

He also gained significant worldwide laterite nickel-cobalt deposit experience while with Inco. In July 2009, he joined Quest Rare Minerals Ltd. as the Manager of Exploration and led the exploration team to the discovery of the Strange Lake B-Zone heavy rare earth deposit in northeastern Quebec. He holds a Bachelor’s degree in Geology and Geological Engineering from the University of Quebec in Chicoutimi.

Board of Directors

Don S. Bubar, P.Geo. — Chairman of the Board

Don Bubar is a geoscientist with 40 years of experience in mineral exploration and development in Canada. He is a graduate of McGill University (B.Sc.1977) and Queen’s University (M.Sc.1981). From 1984 to 1994, he worked for Aur Resources Inc. as Exploration Manager and later VP of Exploration, where he was involved in gold and base metal exploration on numerous projects in the Abitibi region of Quebec. This was highlighted by Aur’s discovery of the Louvicourt copper-zinc deposit in Val d’Or in 1989.

Since 1995, he has been President and CEO of Avalon Advanced Materials Inc., a mineral development company with a primary focus on technology metals, including lithium, tin, indium and REEs. He has served as a Director of the Prospectors and Developers Association of Canada (PDAC) for nine years and Chair of its Aboriginal Affairs Committee since its creation in 2004. He retired from the PDAC board in 2013.

Steven Brunelle — Director

Steven Brunelle is a graduated from Queen’s University with a Bachelor’s degree in Geological Sciences. He has over 30 years of exploration and management experience with Canadian and international exploration projects. He was an officer and Director of Corner Bay Silver Inc. and played an integral part in the discovery and assessment of the Alamo Dorado silver-gold project in Sonora, Mexico. Corner Bay Silver merged with Pan American Silver Corp. in 2003.

Brunelle was a founder, officer and Director of Stingray Copper Inc. which took the El Pilar copper property in Sonora to feasibility. Stingray was acquired by Mercator Minerals Ltd. in December 2009. He is currently a Director of Rio Silver Inc., Duran Ventures Inc., Klondike Gold Corp. and Eagle Graphite Inc.

Philippe Cloutier, P.Geo. — Director

Philippe Cloutier holds a Bachelor’s degree in Geology from the University of Montreal and a certificate in Human Resource Management from the University of Quebec. He has over 25 years of experience in mining exploration and development. He is currently the President & CEO of Cartier Resources Inc.

He has previously worked for industry leaders such as Noranda Inc., Aur Resources Inc. and Soquem. He has played a significant role in the discovery and delineation of the Bell-Allard South copper-zinc mine in Matagami, Quebec. Since September 2002, he has been a member of the Order of Geologist professional inspection committee.

Siri Genik, LLD — Director

Siri Genik has over 25 years of experience working on major capital projects around the world. She is a lawyer, member of the Bar of Québec and a qualified mediator. She is fluent in English, French and Spanish. During her career, she has worked throughout the Americas, Asia, Australasia, as well as Canada and the Arctic.

She brings on-the-ground experience in the integration of international workforce, local and indigenous communities, aligning governments, industry and civil society. She has consistently worked with the board and project delivery teams to bridge gaps and create vision through strategic leadership. Her experience with Corporate Social Responsibility (CSR) and stakeholder negotiations will be particularly valuable as community engagement becomes a critical component of Imperial’s exploration and development work.


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