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Queensland Pacific Metals Ltd (ASX:QPM) (“QPM” or “the Company”) is pleased to announce the results of its Advanced Feasibility Study (“Feasibility Study”) for Stage 1 of the TECH Project and a Scoping Study for Stage 2 expansion of the TECH Project.
Highlights
- Advanced Feasibility Study on Stage 1 TECH Project complete, facilitating formal commencement of debt funding with potential lenders and providing guidance to investors.
- Scoping Study on Stage 2 TECH Project expansion also complete.
- The studies highlight the strong financial metrics of the TECH Project:
- Nameplate production of:
- Lowest quartile operating cost (after co-product credits) on nickel cost curve
- Stage 1 development capex estimate of A$1.9b + contingency allowance compares well with the 2020 Pre-Feasibility Study estimate of A$650m, considering a 2.7x plant scale increase and global equipment cost inflation over the past two years.
- Capital estimate prepared by recognised engineering firm Hatch with support from other key vendors and consultants.
- Debt financing due diligence process, lead by advisors KPMG, will commence immediately and which will include:
- NAIF – Strategic Assessment Phase completed;
- Export Finance Australia – conditional commitment received of A$250m;
- K-Sure – formal expression of interest to participate on terms similar to Export Finance Australia; and
- Other export credit agencies and commercial banks who have provided formal expressions of interest.
- Feasibility Study presents the strong financial metrics of the TECH Project, which has already secured offtake agreements for 100% of nickel and cobalt sales for the life of the project with General Motors, LG Energy Solutions and POSCO, all three of which are also shareholders of QPM.
- Capex estimate has been undertaken at a peak in global inflation and equipment pricing – advice from key vendors is that they are seeing the cost of manufacturing reduce significantly, which will assist QPM when it is time to place formal orders.
- Ongoing work on some aspects of the TECH Project to improve estimate accuracy and value engineering initiatives to implement identify capex savings will take place over the next few months in parallel with the debt financing process.
Stage 1 Overview and Financing Strategy
Stage 1 of the TECH Project has been designed at a nameplate capacity to process 1.05m dmt (1.6m wmt) per annum. Key assumptions and operating parameters are detailed in the tables below.
The capital estimate for Stage 1 of the TECH Project currently sits at an accuracy range of –15% to +24% and is presented in the table below.
QPM and its debt advisors KPMG have made significant progress to date on procuring debt funding for the TECH Project:
- NAIF – Strategic Assessment Phase completed;
- Export Finance Australia – conditional commitment received for A$250m;
- K-Sure – formal expression of interest to participate on terms similar to Export Finance Australia; and
- Other export credit agencies and commercial banks who have provided formal expressions of interest.
As part of QPM’s ongoing discussions with these debt financiers, the Feasibility Study is sufficiently advanced to commence formal due diligence with an Independent Technical Expert (“ITE”). This body of work will begin imminently in parallel with QPM continuing to undertake engineering work on certain aspects of the plant to improve accuracy. These aspects primarily concern the KBR engineering package, which includes iron hydrolysis, aluminium removal and nitric acid recovery and recycle. QPM, Hatch and KBR are working as an integrated team to optimise the design and minimise technical risk in these areas. In addition, value engineering (cost reduction) initiatives will also be undertaken across the Project.
Contingency in the capital estimate has currently been assumed at 10%. Following the KBR engineering package work and value engineering, a detailed contingency estimate will be undertaken using the standard Quantitative Risk Assessment methodology.
In preparing the capital estimate, QPM believes it has been undertaken at the peak of global manufacturing pricing. This is based on discussions with key equipment vendors who are seeing significant reductions in international producer price indices.
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This article includes content from Queensland Pacific Metals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
QPM:AU
First Two Step-out Holes Extend High Grades at Horden Lake
Highlights
- High grade copper mineralisation extended down-plunge in hole HN-24-97, the first step-out hole reported from the 2024 drill program.
- 21.5m @ 0.98% CuEq1 (0.56% Cu, 0.12% Ni, 0.07g/t Au, 0.09g/t Pd) plus additional 0.03g/t Pt, 119ppm Co, 8.3g/t Ag from 266.1m
Including 7.2m @ 1.56% CuEq from 280.4m - Deepest hole in this zone, 80-110m diagonally down-plunge from the two nearest historic holes
- 21.5m @ 0.98% CuEq1 (0.56% Cu, 0.12% Ni, 0.07g/t Au, 0.09g/t Pd) plus additional 0.03g/t Pt, 119ppm Co, 8.3g/t Ag from 266.1m
- HN-24-96 extends downwards and infills high grade mineralisation in 130m gap between previously drilled holes.
- 17.1m @ 0.58% CuEq (0.25% Cu, 0.1% Ni, 0.03g/t Au, 0.06g/t Pd) plus additional 0.03g/t Pt, 95ppm Co, 3.9g/t Ag from 203m
Including 5.1m @ 0.95% CuEq from 206.6m - 11.9m @ 1.39% CuEq (0.42% Cu, 0.33% Ni, 0.03g/t Au, 0.13g/t Pd) plus additional 0.04g/t Pt, 230ppm Co, 4.8g/t Ag from 229.7m.
Including 7.8m @ 2.1% CuEq from 229.7m
- 17.1m @ 0.58% CuEq (0.25% Cu, 0.1% Ni, 0.03g/t Au, 0.06g/t Pd) plus additional 0.03g/t Pt, 95ppm Co, 3.9g/t Ag from 203m
- Mineralisation now defined to 200-230m vertical depth in the vicinity of these holes. This is less than half the ~550m depth that mineralisation has been defined to in the central part of Horden Lake.
- Significant gold, silver, palladium, platinum and cobalt metals delineated once again, which were not assayed in this part of the deposit during previous drill campaigns.
- Consistent news-flow ahead, including results from the remaining 5,780m / 28 diamond drill holes and downhole EM surveys to be released, followed by a mineral resource update and metallurgical test-work in H2.
Managing Director, Mr Fairhall said:
“Down plunge extensions are a key pillar of the significant upside story at Horden Lake. The southern flank of the deposit has only been drilled to around 200m, whereas mineralisation is defined to ~550m in the central portion. These high grade results in the south demonstrate the strong potential for resource growth at depth, with the deposit remaining completely open across its full strike extent. In addition, we anticipate increasing the metal content of the resource through inclusion of the significant palladium, gold, cobalt, platinum and silver assays we are seeing which were never before assayed for in this portion of the deposit.
We have a significant amount of news-flow in the pipeline as we release further assays and the results of downhole surveys as they become available.”
Overview
Horden Lake is a copper dominant Cu-Ni-Au-PGM-Co Project located 131km north-northwest of Matagami, in Quebec Canada. The Project hosts an indicated and inferred mineral resource estimate of 28mt at 1.5% CuEq, as a result of over 52,464m of drilling already completed on the property. Pivotal has recently completed a 7,097m / 34 hole diamond drilling campaign. 705m / 4 holes have been reported prior to this announcement.
The objectives of the drilling program were to infill missing by-product multi-element assay information, target resource expansion potential (which remains open at depth across its full extent) and collect a distribution of metallurgical sample for a complete test work program. Downhole EM surveys have also been completed to dimension future exploration potential and targeting.
Figure 1: Drill plan map of the Horden Lake Cu-Ni-Au-PGM Project
Drill Hole Discussion
Holes HN-24-96 and HN-24-97 were designed to test step out and infill the deeper extensions in the southern portion of the Horden Lake deposit. Table 1 contains the significant intersections, and Figure 2 is a longitudinal section showing the spatial distribution of historical and new drill hole pierce points.
Table 1: Significant intersections. Lower cut 0.3% CuEq over 1.5m (max dilution 5m). Higher cut 1.1% CuEq over 1.5m (5m max dilution).
Figure 2: Longitudinal section looking southeast through the Horden Lake deposit
Hole HN-24-97 is located 140m down-plunge from the 2024 hole HN-24-95 (refer ASX announcement 16 May 2024), and 80m and 110m respectively diagonally down-plunge from holes previously drilled holes H25315 and H26812. Mineralisation falls within one wide intersection of 21.45m grading 0.98% CuEq (0.56% Cu, 0.12% Ni) from 266.1m (Figure 3). Higher grade intersections include 7.17m grading 1.56% CuEq (1.10% Cu, 0.13% Ni) from 280.38m, which includes 4.53m grading 2.05% CuEq (1.48% Cu, 0.18% Ni) from 282.15m. Mineralisation between 266.1 to 282.85 occurs within meta-pyroxenites, meta-gabbros, and mafic dykes and one semi massive sulphide zone. The highest grade zone, 282.85 to 287.55 m occurs within the metasediments with one massive sulphide mineralisation and included a single assay of 4.08% copper over 0.66m at 282.85m. Whilst an inferred zone of mineralisation above 0.3% CuEq was interpreted in this zone, no higher grade zone extended to this area and this intersection shows very encouraging extensions of high grade mineralisation at depth.
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This article includes content from Pivotal Metals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Grid Battery Metals
Overview
Grid Battery Metals (TSXV:CELL,OTCQB:EVKRF) is a Canada-based exploration company focused on high-value battery metals required for the electric vehicle (EV) market. The company, formerly called Nickel Rock Resources, changed its name to Grid Battery Metals in April 2023 and started trading on the TSXV under the ticker CELL.
Grid is focused on EV battery metals exploration through its highly prospective lithium and nickel properties in North America. Grid has three lithium properties in Nevada: Texas Springs, Clayton Valley, and Volt Canyon. The Texas Springs property, located in Elko County, covers approximately 2,500 hectares and is adjoining the southern boundary of the Nevada North Lithium Project owned by Surge Battery Metals (TSXV:NILI). Surge recently announced high-grade lithium of up to 8,070 parts per million (ppm) lithium on the Nevada North lithium project, which increases the likelihood of a large-scale high-grade lithium discovery at Texas Spring. Initial soil sampling at Texas Spring by Grid have shown high-grade lithium over 5,600 ppm as announced on February 7, 2024.
The company has completed the first phase of its initial exploration program at Texas Springs, which included a CSAMT geophysical survey and a detailed soil sampling on a 50-meter by 100-meter spacing. Results from these two exploration programs will be key to determining its 2024 exploration plan and possible drilling locations for clay-based lithium targets.
The 2,300-acre Clayton Valley property is immediately north of Albemarle’s (NYSE:ALB) Silver Peak lithium project, the only producing lithium mine in North America. The property has strong potential to host both lithium brine deposits as well as clay-hosted deposits.
Grid has filed the NI 43-101 technical report for the Clayton Valley lithium project, using the results of prior soil samples, geophysical surveys, and drilling on the property, to help identify structure and target areas favorable to lithium accumulation and determine next steps for its overall exploration plan. The company also commenced its 2024 exploration program for the property with Rangefront Geological to perform a detailed soil sampling on a 250 metre x 250 metre spacing, and to oversee an MT geophysical survey performed by KLM Geoscience.
The Volt Canyon lithium property features sediment-hosted lithium clay targets and has excellent accessibility, enabling exploration and exploitation throughout the year. Although limited exploration has been conducted in the immediate area, regional sediment samples in the region taken by the US government returned up to 108 parts per million (ppm) lithium near the property.
Shareholders should benefit from the company’s strategy of divesting its nickel assets into a separate public company. Grid announced plans to spin off its British Columbia nickel property into a new company (ACDC Battery Metals) which will be listed on the TSX Venture Exchange under the symbol ACDC.
Grid’s management and geological team has been actively exploring for EV battery metals in Nevada for over a decade. They have been successful in finding and funding new lithium discoveries and had a number of successful exits from companies, the most recent being Surge Battery Metals, where they were responsible for the discovery of the Nevada North Lithium Project. The management’s successful track record of lithium exploration in Nevada provides confidence about the company’s future.
The support from both the US and Canadian governments through subsidies and favorable legislation continues to drive EV adoption. In particular, both countries have committed to supporting the mining industry for key battery metals with legislation like the US Inflation Reduction Act, which provides both financial and functional support to the mining industry. Buoyed by government policy, US electric vehicle sales are projected to surpass 4.6 million units by 2030 (versus the 2023 estimate of 1.3 million).
Automakers cannot produce electric vehicles without access to battery metals such as lithium and nickel. Fear of missing out is pushing automakers to lock supplies of minerals for electric vehicle batteries. As such, we are seeing increasing partnerships between miners and auto OEMs. Automakers, including General Motors, Ford, BMW, Tesla and Stellantis, have committed large investments in direct financing of mines. We see more carmakers following suit as they strive to own the full supply chain from mine to product.
Company Highlights
- Grid Battery Metals is a Canada-based exploration company focused on high-value battery metals required for the electric vehicle (EV) market.
- The company has three highly prospective lithium properties in Nevada, USA: Texas Springs, Clayton Valley and Volt Canyon. In addition, it holds a nickel project under its wholly owned subsidiary, AC/DC Battery Metals called the Grid Nickel Group, based in British Columbia, Canada.
- As Grid focuses on its lithium projects in Nevada, Grid has entered into an arrangement agreement to transfer ownership of its interests in its nickel properties in British Columbia to its wholly owned subsidiary AC/DC Battery Metals Inc. (ACDC). ACDC will be listed as a public company on the TSX Venture Exchange (TSXV) in 2024. All three lithium projects are in the early stage with exploration planned for 2024. Grid commenced its 2024 exploration program at the Clayton Valley lithium project in March 2024.
- Grid has filed the NI 43-101 Technical Report for the Clayton Valley lithium project, dated March 4, 2024, prepared by Steven McMillin P.G. of Rangefront Geological.
- Grid’s management and exploration team has been actively exploring for EV battery metals in Nevada for over a decade, and has been very successful in finding and funding new lithium discoveries, the most recent being the discovery of the Nevada North lithium project.
- EV sales are booming with projections of 4.6 million units by 2030 in the US. Battery metals such as lithium are critical for EVs. Grid Battery Metals is well positioned to be a pioneering player in the battery metals market with a strong focus on lithium, and promising properties in the US.
Key Projects
Texas Spring Project, Nevada
The Texas Spring lithium project, located in Granite Range, Nevada, is 100 percent owned by the company. The project covers approximately 400 hectares (988.4 acres) of area with 34 full lode claims and 30 partial lode claims. It is adjacent to the southern boundary of the Nevada North lithium project, owned by Surge Battery Metals. Surge’s initial drilling efforts have successfully identified lithium-rich clay deposits. A recent discovery in September 2023 showed values of up to 8,070 ppm of lithium. Initial soil sampling at Texas Spring by Grid has shown high-grade lithium over 5,600 ppm as announced on February 7, 2024.
The proximity to Nevada North Lithium certainly increases optimism for the Texas Spring Project. On top of that, the key founders and members of Surge’s geological team are also the founding management team of Grid, which further increases confidence in the project. The project enjoys excellent infrastructure in terms of paved highways and country roads.
The company recently completed the first phase of its initial exploration program at Texas Springs which included a CSAMT geophysical survey and a detailed soil sampling. Together, they would help predict geological structure and possible drilling locations for lithium targets.
Clayton Valley Project, Nevada
The Clayton Valley lithium project, located in Clayton Valley Nevada, is 100 percent owned by the company. The project is spread over approximately 930 hectares (~2,300 acres) with 118 claims. The project is located approximately 344 kilometers (~214 miles) from Reno in the northwest and Las Vegas in the southeast. Moreover, the property is around 315 kilometers (~196 miles) from the Tesla giga-factory and features good infrastructure with excellent road access and a nearby electrical substation.
The project claims are adjacent to the Silver Peak lithium project of Albemarle Corporation, which is the only producing lithium mine in North America. Clayton Valley’s lithium is contained in both underground reservoirs (aquifers) in the form of salty groundwater (brine), and in clay-hosted deposits. Historic exploration work dating back to 2021, which included three reverse circulation holes, has inferred the existence of a graben that may be a sub-basin of the larger Clayton Valley basin and may represent a secondary trap for lithium brines.
Volt Canyon Project, Nevada
The Volt Canyon lithium project, located in Monitor Valley, Nevada, is 100 percent owned by the company. The project covers an area of approximately 635 hectares (~1,569 acres) with 80 claims and is located approximately 122 kilometers northeast of Tonopah, Nevada. It benefits from excellent accessibility that enables exploration throughout the year.
Although limited exploration has been conducted in the immediate area, regional sediment samples in the region taken by the US government returned up to 108 ppm lithium near the property. The deposit’s origin is thought to be similar to Clayton Valley clay deposits, located about 180 kilometers to the south.
The exploration program includes surface sampling, auger or push drill water sampling along with geophysical work to identify drilling sites for an initial drill test on the property. Subsequently, additional surface and subsurface sampling will be executed in the form of drilling.
Management Team
Tim Fernback – President and CEO
Tim Fernback holds a Bachelor of Science from McMaster University in Hamilton, Ontario and an MBA with a concentration in finance from the University of British Columbia. He also holds a Certified Professional Accounting (CPA, CMA) designation in Canada. He has more than 30 years of experience in finance with both public and private companies in Canada and is currently a director of several publicly traded companies.
Robert Guanzon - CFO
Roberts Guanzon holds a Bachelor of Science degree in accounting and has rich experience in finance, accounting and corporate strategy. He serves as the CFO of several junior resource companies listed on the TSXV and holds a certified professional accounting (CPA, CMA) designation in Canada.
Tina Whyte – Corporate Secretary
Tina Whyte has more than 20 years of experience in the corporate and securities industry. She is an expert in several areas including corporate governance, continuous disclosure, financing transactions and regulatory filings and compliance. She also holds corporate secretary positions with other publicly listed companies.
Jay Oness – Director
Jay Oness has rich experience in all aspects of corporate management including strategic planning, business development and investor relations for public companies. He has over 20 years of experience and has served as a director, senior executive and consultant to public companies in the resource and non-resource sectors. He is currently VP of business and corporate development of Southern Silver Exploration.
Robert Setter – Director
Robert Setter holds a degree in economics and has over two decades of experience in business development, marketing and research. Previously, he has served as the senior financial editor for Report on Mining. He currently sits on the boards of three other listed mining companies.
Ali H. Alizadeh – Director
Ali H. Alizadeh is a senior geologist possessing extensive experience in mineral exploration & project management. He has been responsible for several uranium, gold and base metal projects during his exploration career with various exploration companies. He graduated with a geology degree in 1991, a M.Sc. in petrology in 1995, and an MBA at Queen’s University in 2010. He is also a member of the Association of Professional Engineers and Geoscientists of British Columbia.
Jeremy Hanson – Geological Advisor
Jeremy Hanson is a professional geoscientist with a decade of experience in mineral exploration in Canada. He is also a founder of Hardline Exploration, a geological consulting firm focused on Western Canada.
Steven McMillin - Geological Advisor
Steven McMillin boasts over 35 years of hands-on experience in mineral exploration within the United States, particularly in Nevada, earning him widespread recognition as a seasoned exploration geologist. Currently serving as the field operations manager at Rangefront Geological, he spearheads the coordination and execution of drill programs. His role includes liaising with vendors and regulatory bodies, ensuring drill safety measures, overseeing drilling and sampling procedures, and managing site reclamation efforts.
