Lomiko Metals CEO Paul Gill is optimstic about Quebec as a mining jurisdiction and says it could play a key role in the graphite industry.
In the interview below, Lomiko Metals CEO Paul Gill describes his optimism regarding Quebec as a friendly mining jurisdiction. Gill’s company, Lomiko Metals, is in development of a graphite mine 117 kilometers northwest of Montreal in southern Quebec, an area favored by a number of graphite producers.
Gill believes graphite is essential to the future of the electric vehicle industry, and his company’s location in Quebec has provided it with a unique opportunity to establish itself as a premier graphite producer. Gill cites a mining-friendly Quebec government as one of the many reasons Lomiko’s La Loutre flake graphite property has the potential to become an essential part of the global graphite supply chain.
Below is a transcript of our interview with Lomiko Metals CEO Paul Gill. It has been edited for clarity and brevity.
Investing News Network: Paul Gill. Welcome back. It’s good to see you. You’re here with Lomiko. Tell us a little bit about your company. First of all, we’ll start with your symbol and the exchange that you’re on. And then we’ll, we’ll dig down into the details because you’ve got some exciting news.
Paul Gill: Yeah, Lomiko Metals trades on the TSX Venture under the symbol LMR and on the OTCQB, under the symbol LMRMF.
INN: And you’ve had a bit of activity on your stock lately. What’s going on?
PG: Yeah, we started to drill on our property in Quebec, which is the most exciting time for any company to add value to the property. So we’ve been drilling for the last three weeks and we’re coming up to results.
INN: So tell us what you’re looking for. Because there are people who haven’t seen you, haven’t met you before. So what are you going after and what are you expecting to find on this property?
PG: Yeah, we’re involved in the electric vehicle battery materials industry. So what we’re looking for specifically is the material flake graphite, which is used in the anode of an electric vehicle battery. So it’s very important aspect it cannot be economically replaced. The only other good replacement is lead or gold and no one’s going to use either of those in a battery. So we think that we’re onto something with our Quebec property. In 2016 and 2017, we drilled the property and came up with some very good results. And the tantalizing result right at the end was 110 meter hole of fourteen and a half percent, which is compared to the operating mine that’s near us double the grade, but we couldn’t drill anymore. That was the end of our permit. So now we’re drilling again and we’re of course focusing on that area and stepping out every 50 meters each way to find more and more of that high-grade material. So what we do know now is we’ve already intercepted lengths of 60, 70 and 80 meters around the actual very high-grade hole so that’s very exciting news for us.
INN: It was a pretty positive result at this point. So let’s go back just a step further. What was it initially about this site that made you say we believe this is a rich environment to explore in?
PG: Yeah the main thing that we saw was that there is a mine north of us about 53 kilometers called Imerys Graphite & Carbon, and obviously mineral trends run for hundreds of kilometers so you just have to find a good at surface location and you’ll find some good mineralization. So immediately around us to the southwest is Northern Graphite, which now has an offtake agreement with a Chinese company to supply graphite. To the northeast is Nouveau Monde, which has an off take agreement for 25,000 tons of material with another group. And to the north of us is a mine, so we’re on a perfect location.
INN: That is operating.
PG: It’s completely operating. So we found this particular location a few years ago because it had so much at surface mineralization. So we were hoping to add some real depth to that and define a very, very nice high grade body.
INN: One of the other benefits of being in such an active mining area is that infrastructure is pretty much in place, isn’t it
PG: Yeah, it’s very important to have a port nearby. The port of Montreal is an international port, less than an hour and a half away from the property. We have roads accessing the property. We have water and power in the area. So it’s perfect because it’s not very populated there. In fact we have to watch out for people doing hunting and snowmobiling. Because it’s in the backwoods, but other than that we’re in a perfect location to develop a mining operation, and Quebec is one of the best jurisdictions on Earth.
INN: You anticipated my next question. A lot of people may not know much about Quebec as a mining jurisdiction. Tell us a little bit about what it’s like as far as its welcoming mat for mining and history.
PG: Yeah, I think there’s a lot of support in the ministry of mines, they’ve really fast-tracked projects. They have First Nations groups that will work with you in order to develop the project and they have knowledgeable people in the area that know that mines create jobs. I think that’s the main thing, the people want to be employed there. They know they have a rich history of mining in gold, and they understand what’s going on there. When you compare it to some other jurisdictions, the other jurisdictions graphite is found in are places like Madagascar, Sri Lanka, Africa, you just don’t want to be in these places. When you’re putting together a 20-year mine, it’s not the right way to go. I mean, you need to be in Canada where there is a stable government, a stable jurisdiction and safety.
INN: So you touched on First Nations relations in the area. We don’t hear that there is the tension in Quebec the same way as there might be in other jurisdictions. What is it about the way that those relationships with First Nations and indigenous peoples in the area have helped to ensure that ongoing stability with mining.
PG: Well, I think it’s the fact that wealth creation has been shared and jobs have been created for everyone. I think that’s the most important part, that the communities have been developed. It’s gone on for a long period of time. And I think that other jurisdictions could learn from the fact that if you have continual support of a particular industry, you’re going to create a lot of good feelings in people because they create well-paying jobs, there are no well-paying jobs being created anywhere else in Canada. I mean, really, you look at all the retail sector, it’s not well-paying jobs. Mining creates well-paying jobs, and that’s the main thrust of what the Quebec government understands and what we understand.
INN: Right. I think it is fundamentally important that if you are developing one of the minerals that is required for a green economy, you also have that commitment to the relationships within the communities that you’re functioning in.
PG: Essentially you have to say what you mean and do what you mean. And I think that’s what we’re able to do because I think Quebec has a future here in the electric vehicle industry. They have a large trend of hard rock lithium that can be converted to lithium hydroxide and graphite which is one of the other key materials and lots of rare earth as well. So I think the industry can grow in that particular location.
INN: So you’re just wrapping up current drilling now. You expect results when?
PG: Our results should be out by the middle of March. Right now we’re wrapping up the drilling program. It’s pretty much completed at this point. So we know that we have those intercepts on the property around a very high-grade whole. We don’t know what the grades of those particular intercepts are yet, but I think it’s a pretty good indication that they’re around a very high-grade area. So we’re really happy with the results so far. We’ll see what the details tell us. And then next is the resource.
INN: Okay, let’s assume that you get positive results. Where do you go from there? What are your next steps?
PG: Well, the main thing to understand about the graphite itself is that it’s not just the results in the ground, you have to look at the metallurgy to see how you can recover the material which we have, we actually have good recovery. We also have to look at the carbon content of the mineral as well, and the flake size because flake size also adds value. So there are all these things to consider and a few other tests to go through. But I think we’re on the right track. And initial results indicate that we have the metallurgy recovery potential and the flake size. So now that we have an upgraded resource we’re going to put that into the books and then go on and do a pre-economic assessment, which is the main focus of any mining company because it essentially gives you something that you can put on your audited financial statements. Obviously we’re going for something much larger than our 5 billion market cap. So we’re hopefully going to produce some value there. When you look at the kinds of projects that are around us, they’re all hundred and fifty to two hundred million dollar projects. Whereas our project is, has zero value right now because it hasn’t got a PEA. So ones that PEA is done will add a lot of value.
INN: So before we wrap up let’s just talk about the market, because you know it’s ever-expanding but not everybody knows what that market is and what kind of relationships can be developed. What would be your primary target should you get through to production? Where do you foresee the market for this in the next couple of years?
Paul: Yeah it’s a very interesting situation, we have over 71 lithium-ion factories being built across the world today, that’s amazing–
INN: Those are under construction right now?
PG: Under construction. One or two are operating right now providing batteries to the Nevada facility of Tesla. It’s a huge facility that can suck up a lot of graphite and a lot of lithium. Now just think of this, your next car. Everyone’s thinking, could it be electric? I think everyone’s had that thought. And if everyone makes that decision, you’re going to have a huge spike in the sales of EVs electric vehicles and a huge spike the requirements for the materials needed to create the batteries, so that’s where we’re going.
INN: So with 71 new factories in production, is there enough supply at this point? Or will the demand be such that it will drive up the price and make the whole process (or this sector) that much more attractive?
PG: Yeah, when you see that kind of demand coming into a small market, like the graphite market, which is about 150,000 tons of material. That 150,000 tons can be chewed up by one factory. So we’re going to have to find a lot more material. We’re going to have to have a lot more mines. You can’t go out and find mine and produce a million tons of graphite a year. It’s just not possible. There’s not enough, you’d have to go through 10 million tons of material. That’s a huge operation. What you need is many mines producing graphite, and we want to be one of those mines. So we think there are 15 or 20 new mines coming on stream over the next five years, and we want to be one of them.
INN: Wow. So the green economy is really going to rely on the resources of Mother Earth to be able to produce the kind of power and electricity storage that we want.
PG: Yeah, absolutely. I mean, you think back to our history in technological history in the last few years. In 1980, no one had a computer, by 1990 everyone had one. 1990 no one had the internet. By 2000, everyone had one and by 2000 no one had a smartphone or even a cellular phone at that point and then it changed very quickly, in 2010 to 2015. What we’re seeing is that opportunity right now in electric vehicles, we’re going to see a massive change in the way people consume automobiles. And we are right here as investors able to participate in it by creating those companies and those opportunities in the stock market. Like, Lomiko.
INN: Thank you very much.
PG: Thanks, you Sir.
INN: All the best and we’ll look for further updates in the future. From you.
This interview is sponsored by Lomiko Metals (TSXV:LMR,OTCQB:LMRMF, FWB:DH8C). This interview provides information which was sourced by the Investing News Network (INN) and approved by Lomiko Metals in order to help investors learn more about the company. Lomiko Metals is a client of INN. The company’s campaign fees pay for INN to create and update this interview.
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