Market may be overlooking PLU's cesium potentialDuring the last days, shares of canadian company Power Metals (TSX-V:PWM) have taken off as a result of its decision to "focus on its high-grade Cesium discovery", announced through a press realease dated February 6th (1):
Power Metals Corp. (...) is pleased to announce the strategic review committee has decided to focus on our cesium mineralization in the spodumene pegmatites at Case Lake. Cesium is incredibly valuable as there are only three cesium mines in the world and Power Metals owns three of the five cesium occurrences in the province of Ontario: The Company's 100% owned West Joe, Tot Lake and Marko's pegmatites. Power Metals' West Joe Dyke at Case Lake was discovered in August 2018 at the end of a drill program. The 2018 drill program intersected high grade cesium mineralization in six drill holes at West Joe (...) The 2018 drill program was targeting lithium mineralization and Power Metals was excited when the cesium mineralization was also intersected in the same drill holes.
Cesium is extremely rare globally. The United States Department of the Interior included Lithium, Cesium and Tantalum on its list of Critical Minerals (...) There are only 3 pegmatite mines globally that produce cesium:
- Tanco, Manitoba, Canada (no longer producing)
- Bitika, Zimbawe (currently not producing)
- Sinclair, Australia (cesium ore is stockpiled)
There is a limited number of companies in the cesium supply chain. The Tanco mine and Sinclair's cesium ore stockpiles are both owned by Sinomine Resource Group Co., Ltd based in China. Pioneer Resources Limited entered into an offtake agreement with Cabot Specialty Fluids Ltd to sell 100% of the cesium ore extracted from the Sinclair Zone Cesium Deposit to Cabot (...). The Cabot Corporation's Specialty Fluids business including the Tanco mine was sold to Sinomine Resource Group Co., Ltd. (...)
Cesium is used as cesium formate brines to act as heavy mud for high pressure, high temperature offshore oil drilling to lubricate drill bits and prevent blowouts (...). The cesium formate mud is rented to oil companies and recycled after use. Cesium isotopes are also used in atomic clocks which are important in cell phone networks, internet, Global Positioning Systems (GPS) and aircraft guidance systems. Cesium clocks are accurate to about 1 second in 20 million years. Cesium bromide is used in infrared detectors, optics, photoelectric cells, scintillation counters, and spectrophotometers. Cesium is also used in the glass for night vision googles.
It seems clear that cesium is rare, but the questions remain: how valuable is it? is demand there for more cesium production? I'm wondering because from various Macusani Yellowcake's presentations it seems that Falchani's cesium resource, although lower grade, is much more homogeneous and probably bigger than PWM's. For example, on the July 2018 press conference, PLU's COO Laurence Stefan said (2) (mark 20:18):
When eruptions of this volcano finished, which we can call Macusani volcano (we had never seen a volcano like this) all these elements, one of the heaviest (uranium) and one of the lightest (lithium) were concentrated together. All the chemical elements of Mendeleiev's chemical table that did not accumulate to produce minerals thus accumulated, fractionally, and are together uranium, lithium, fluorine, chlorine, cesium, rubidium. For example, we now know that this area of Falchani, let's talk about this, has the largest cesium and rubidium deposit in the world. But we hardly talk about this because there are so many new things that we prefer to share them little by little.
... and at mark 28:01 he said:
We are in the process of evaluating resources. The highest grades are the hot colors, and in the upper and lower zone, this is very interesting, we have talked about cesium and rubidium. It's like a sandwich. Inside there is lithium, 80 meters of lithium, and in the upper and the lower parts there are very high contents of cesium and rubidium. I think Macusani has the second highest cesium content in the world and in terms of rubidium the volumetric calculations are somewhat impressive. There is more rubidium in Macusani than in all other deposits in the world.
More, recently, in a presentation at the Peruvian College of Engineers (December 2018), Macusani Yellowcake's Head of Geology Gregorio Tasayco said (3) (mark 1:01:10):
Apart from having uranium, which is what we started with, we have reached lithium, which is what we’re most interested in right now. And we see that there’s also cesium, of which we have quite significant amounts, we have reached 2000, 3000 ppm, but we have done some superficial sampling and we have also found in the last drill that we have reached up to 8000 ppm of cesium. Pretty high values. We have not done the cesium investigation yet, this is done by the engineer Pepe Malqui, who has not been able to be present today because he had another commitment. Then we see that there’s not only uranium, whose price I believe in the next year or year and a half should be improving, there is lithium, there is rubidium, which is present also with values above 2000 ppm, cesium which as I said has an average of 4000 ppm and now we are reaching almost 8000 ppm. And so ... I stop telling because I don't want to be too optimistic, but this is a very, very rich, excellent deposit, and I think it will be very significant for the peruvian economy in the coming years.
In fact, the PLU team is already doing the work to evaluate the potential for selling caesium (same as cesium) sulfate along with the other additional revenue streams identified in Falchani's PEA (4):
Revenue opportunities: further evaluation of additional revenue streams, not included in the PEA, such as SOP fertilizer (K2SO4), caesium sulfate (Cs2SO4) and rubidium sulfate (Rb2SO4). Preliminary metallurgical test work is currently underway.
If caesium sulfate (or any other cesium chemical) turns out to be in high demand, the first idea that comes to my mind, besides a higher NPV, is the possibility of making an offtake agreement with any interested party. Such agreement could not only help to finance Falchani's pre-production capex, as CEO Alex Holmes suggested recently (5), but could also include "early deposits" that would help to reduce dilution to close to zero until all Falchani's studies and testing are concluded. See as an example the agreement Panoro Minerals (TSX-V:PML) signed with Silver Wheaton Corp (NYSE:SLW) on March 2016 (6).
(1) [url=https://ceo.ca/@newswire/power-metals-to-focus-on-its-high-grade-cesium-discovery][/url]
(2)
https://www.youtube.com/watch?v=D_dUr7dCMlM (3)
https://www.youtube.com/watch?v=u8EsYydOMJE (4) [url=https://ceo.ca/@nasdaq/plateau-energy-metals-announces-positive-preliminary][/url]
(5)
https://plateauenergymetals.com/wp-content/uploads/2019/10/AAA-Oct-2019.pdf (6)
https://www.panoro.com/en/news/2016/panoro-minerals-announces-closing-of-early-deposit-precious-metals-purchase-agreement-with-silver-wheaton-for-the-cotabambas/