For the second year in a row, palladium was the best performing commodity with the best 10-year return for all commodities. Once regarded as a mere by-product of platinum mining, it is now breaking new records, returning 18.59% last year, ending up 56.25% from 2017.
To kick off 2019, the spot metal reached
an all-time high above $1,400.00 a troy ounce...yet still it coasts under the radar of most investors. Demand for palladium has been exceeding its supply for seven consecutive years.
Now for the first time since 2002, palladium costs more than gold in response to a massive deficit of supply. The white metal’s value was sparked once catalytic converters hit the market in 1975 to cut pollution from gasoline vehicle exhausts. Now more than 80% of the world supply of palladium is used in its production. Palladium is seeing its higher price as jurisdictions around the world work to curb emissions from gasoline and diesel-burning vehicles.
Hybrid vehicles also require more palladium than traditional gas-powered vehicles. The number of vehicles that use a palladium catalyst is projected to jump from 76 million to as much as 90 million
over the next six years, according to commodity analyst firm Julius Baer Group Ltd.
(Stockhouse commodity chart - Palladium in blue, gold in red.)
Mineral exploration Company New Age Metals Inc. (TSX. V.NAM, OTCQB: NMTLF, Forum) is in the business of developing platinum group metals (PGMs) and lithium projects. The firm's projects include the River Valley Primary PGM Project located in Ontario, the Genesis PGM/Base Metals Project in Alaska and Lithium projects in Manitoba, Canada. The Company recently released an update to its NI 43-101 Mineral Resource Estimateon its wholly-owned River Valley Platinum Group Metals (PGM) Project in Sudbury, Ontario. It is North America’s largest undeveloped primary PGM Project located 100 kilometers from the Sudbury Metallurgical Complex, Ontario, Canada. Primary PGM deposits are rare outside of South Africa and Russia and global annual PGM production is 1/10ths of annual gold production.
River Valley Project
The Company is working to complete it’s Preliminary Economic Assessment by the end of Q2/2019 for the River Valley Project, this will be the project’s first economic assessment study. Over the last two years, the team has conducted several rounds of geophysical studies, these geophysics pinpointed a new high-grade mineralized area within the project dubbed the Pine Zone. Secondary objectives are to continue to explore and further develop the entire 16 kilometres of mineralization throughout the contact zone, the current established mineral resource, and test the new footwall discovery that has potential to extend throughout the overall project. NAM management and consultants are currently designing a complete drill program to be executed in 2019 for the River Valley Project. This plan will consider previously proposed drill parameters and will be based on the most recent geophysical assessment and consultant expertise.
River Valley Northern Portion Geophysical Results
The yellow band in the above map represents the footwall potential area of the River Valley Deposit based on the results of the Pine Zone where footwall mineralization was noted to extend 150 metres eastward from the Pine Zone/ T3 main deposit. This area of mineralization is focused in the northern portion of the property, and is the area where NAM is most likely to begin mining, alongside an Option/Joint Venture partner. A higher-grade of mineralization has been discovered in this northern portion of the project and is the most likely starting point for an open-pit mining operation.
A significant factor for investors to consider about this 16-kilometre stretch is that no deep drilling has been done on the project to date. The average hole depth is only 220m deep across more than 700 holes, which presents the case that there may be significant potential at depths beyond the average hole depth. A company that has seen success with its palladium projects is North American Palladium (TSX:NAP), which has drilled deep into the earth’s crust to mine minerals far beneath the surface. This company ships its concentrates to the same Metallurgical Complex in Sudbury that the River Valley Project is located within 100 road kilometres of.
Manitoba Lithium Projects
The Company’s Lithium Division, Lithium Canada Development, is engaged in a joint venture with Azincourt Energy (TSX.V: AAZ, OTC: AZURF), advancing eight lithium projects in the Winnipeg River Pegmatite Field, located in southeast Manitoba.
Together, they have gotten two projects to the drill stage. Management believes an application to drill the Lithium One and Lithium Two Projects should be approved by February 2019 to drill before the end of Q1 2019.
- Lithium One - Located roughly 125 Kilometers (78 miles) northeast of Winnipeg, this project is in a lithium-rich area where field surface sampling yielded assays up to 4.33% Li2O, 2.08% Rb2O and 0.04% Ta2O5
- Lithium Two - Located 20 Kilometers (12 miles) farther northeast, this project is also rich in lithium, with field surface sampling yielding assays for the Eagle Pegmatite up to 2.44% Li2O and assays up to 3.04% Li2O for the FD No. 5 Pegmatite
Genesis PGM
The latest acquisition for New Age Metals, this project was brought into the Company’s portfolio in April 2018. This road-accessible PGM / base-metal project boasts a substantial size at 48.5 square kilometres (12,000 acres), located in Alaska. The Company had an NI 43-101 Report conducted on the project over summer months and early fall that recommended a three-year exploration plan. The principle objective this year is to utilize the prospector-generator model to secure an Option/Joint Venture Partner to move the Genesis Project forward and capitalize on its substantial PGMs and robust mix of base metals.
Looking Ahead
2019 is shaping up to be a busy year for New Age Metals, due to the numerous projects at different stages of the exploration and development cycle. Company Chairman and CEO Harry Barr is preparing to travel to South Africa. There, he will attend two 1-2-1 style conferences with more than 25 pre-booked meetings with mine finance companies, major mine companies, institutions, stock brokers, and high net worth individuals. Company management has been attending these trade shows for several years to increase and maintain NAM’s profile among the group of explorers and producers of PGMS. The Companies that operate in Africa have a better understanding of the PGM industry compared to financiers in North America. Investors and executives in the mining space from all over the world come together for this leading deal making forum. It is such a significant conference that this year’s keynote speaker will be the President of Ghana, Nana Akufo-Addo.
Being the largest producer of Platinum, Africa is one of the top PGM producers globally. As CEO Barr told Stockhouse editorial in a sit-down interview, the understanding of PGMs in North America is still elusive. There are but two main producers:
Sibanye-Stillwater Limited (NYSE: SBGL) in Montana and
North American Palladium (TSE: PDL) in Thunder Bay. There isn’t the common knowledge surrounding PGMs like there is for gold, even within the mining industry. Products that require PGM’s such as catalytic converters are often widely understood, as is the fact that PGM’s are mainly mined only in South Africa and Russia. Investors who familiarize themselves with the industry now will likely have a leg-up on their peers when it starts to become a household topic.
The idea is to present their project s to people that understand the financing of such projects and have been involved in many of the operations over there in terms of financing. The main objectives are to bring corporate awareness of NAM and its projects to secure Option/JV Partners and look for financing through private placements.
Palladium prices are projected to rise as supply deficits continue. Double-digit gains are impressive on their own. Compare these impressive gains to the recent struggles of gold, silver and even platinum, all of which declined in 2018, palladium’s success is even more impressive, especially in this bear market.
Roughly 80% of global palladium is split between South African and Russian operations and New Age Metals is confident it can capture some of this market share. To become a player in this market would be to capitalize on a resource that has barely scratched the surface of its transformative potential.
newagemetals.com
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.