(Image via New Age Metals. Click image to enlarge)
The mining landscape is constantly changing in terms of what’s current. Junior explorers have experienced probably what is the longest downturn in mining history, with the result a lack of future and current supply for many different metals, evident in all-time price highs in palladium and other metals.
Investors have a lot to consider from management teams, the demand for and prices of metals, the stage of a project’s development, and even changes in public perception and new technologies lifting some metals above others.
One of the biggest point-getters in today’s market is sustainability. The production landscape has shifted focus to products that are sustainable in nature and the metals that help develop those products. At the same time, jurisdictions are increasingly putting pressure on operators to mine in a more sustainable fashion as a response to public attention on protecting local environments.
An epitome of this focus is in the automotive industry and vehicle production. Higher standards for emission reduction are causing companies to develop gasoline and hybrid vehicles which are more gas-efficient and emit less pollutants, while at the same time raising the demand for electric vehicles that are more efficient and capable than earlier models.
That puts upward pressure on two “opposing” metals, palladium and lithium. Palladium is one of the primary precious metals used in catalytic converters that gasoline vehicles use to reduce the emission of the pollutant nitrous oxide. Lithium, meanwhile, is a well-known staple of the EV and energy storage industries.
In no uncertain terms, demand for both is increasing. Palladium prices have especially
started turning heads as the price has quietly skyrocketed, and even though the metals support “opposing” sections of the market, there is a surprising amount of crossover potential.
On one hand you have an increased demand for lithium as more automakers and countries look to grow the number of electric vehicles in the market. On the other hand, even if the amount of gasoline vehicles in circulation fall, rising emission standards globally are causing the demand for palladium to increase through higher loadings of the metals in catalytic converters.
A strong position in both markets is a smart move, and exactly what
New Age Metals Inc.(TSX-V:NAM, OTC:NMTLF, Forum) is creating. The diversified exploration and development company has projects in both platinum group metals and lithium, perfectly placing the company and its resources to potentially supply the respective markets no matter which types of vehicles are being produced at the time.
(Image via New Age Metals. Click image to enlarge)
Stockhouse Editorial interviewed the Chairman and CEO of New Age, Harry Barr, about the Company’s unique positioning. During the interview, he highlighted that the Company’s diverse portfolio can take it a long way.
“Palladium and Platinum, in ever-increasing quantities are used in your cars’ catalytic converter, but some believe electric cars are going to suppress the market for internal combustion engines (ICE) within five years. Based on extensive research, we believe it’s going to take many years longer to establish the appropriate charging infrastructure and develop sufficient driving ranges that will shift consumer sentiment.
In the meantime, ICE and hybrid electric vehicles still require PGM’s in their catalytic converters and going forward, fuel cell technology which requires PGM’s is gaining traction. For lithium, energy storage devices like batteries will increasingly be used for not only electric cars but also most portable electronics. Our company may seem to have opposing metal divisions, but I can assure stakeholders this approach is by design.”
Stockhouse has
previously covered the Company’s strategic portfolio in-depth. By diversifying into three projects at varying stages, New Age is positioned both for the long-term and a quick pivot if needed. Located in Canada and the US, each of the projects is in an ideal jurisdiction, both for mining and for the current market sentiment favoring North American sources.
New Age’s flagship River Valley PGM Project is just outside of Sudbury, Ontario. Located right in a historical mining area and nearby ideal processing facilities, the PGM project is one of the largest undeveloped primary palladium resources in North America.
(Click image to enlarge)
In the sustainability game, a palladium operation in Sudbury is a strong draw. The largest palladium producing countries are Russia and South Africa, and both are noted for their high levels of pollution. In August,
NASA satellites tracking sulfur dioxide emissions found that Russia’s Norilsk (home of the world’s leading nickel and palladium producer) was far and away the largest polluter.
But mining is first and foremost a feasibility game, and the River Valley Project is already far along in its evolution. Over the summer, New Age completed a Preliminary Economic Assessment of the project and
filed the related NI 43-101 report. The findings were positive,
supporting a large-scale open pit mining operationwith 14 years of production.
Even using conservative estimates, the results were significant. With an annual average payable PdEq (Palladium equivalent) production of 119,000 ounces at assumed prices of US $1,200/oz Pd (well below the current market price of $1,600/), the economics of the project including all metals
show undiscounted cash flow of $586 million.
(Image via New Age Metals. Click image to enlarge)
As promising as River Valley is, the project is just the tip of New Age’s PGM iceberg. In Alaska is the Company’s Genesis PGM project, which, aside from being in one of the most well-known jurisdictions for mining, is also one of the few US-based PGM projects.
Though the project is in its early stages compared to River Valley, its attributes are impressive. Located within 3km of a paved highway and transmission lines, the property has a drill ready reef style target
with surface assays that have been up to 2.4 g/t (grams per tonne) Pd, 2.4 g/t Pt, 0.96% Ni and 0.58% Cu. It also has a separate outcrop reef identified for 850m along strike with a 40m true thickness, and the known PGM mineralization in the area has been traced over a range of 9 km across the project.
On July 25, New Age
announced the field work program it had engaged in to assess the Genesis project further. The program aims to define better drill targets through a combination of ASTER imaging and interpretation, Landsat TM imagery processing and Interpretation, and airborne magnetics and electromagnetic reinterpretation.
New Age Metals’ second division is focused on Lithium. With seven holdings in southeast Manitoba, it is the largest claim holder in the underexplored Winnipeg River Pegmatite Field. In total the Company holds 11620 hectares in an area that hosts numerous lithium-bearing pegmatites, including the Tanco Mine which was
recently purchased by Sinomine Resource Group Co. from Cabot Corporation (
NYSE:CBT). Initial communications and correspondence from Sinomine point towards the development of lithium projects and production in this unexplored and highly prospective region.
(Image via New Age Metals. Click image to enlarge)
Currently the Company is focused on working with a partner in the area to focus on two of its especially prominent claims. Lithium One, the bigger claim 12km south of the Tanco Mine, contains over 40 pegmatites that need further exploration. Previous field work in the claim showed 4.33% Li
2O and two of the pegmatites have a planned 1500m drill program.
On the northern side of the Tanco Mine is Lithium Two, where the historical Eagle pegmatite was drilled in 1948 and not explored further. At the time, a historic, non 43-101 compliant estimate of 544,560 tonnes of 1.4% Li
2O was published and the project is also open to depth and along strike. Recent surface sampling yielded assays up to 3.8% Li
2O, and New Age has also designated the project for a diamond drill program.
The companies three projects, which operate in favorable, North American jurisdictions, are a major advantage. In his interview with Stockhouse Editorial, CEO Barr pointed out that very early in his 35-year career he realized the importance of a projects’ location.
“There are places you don't want to explore and mine in, and there are places you really want to be. Sudbury is a mining center with generations of people that understand the value and importance of mining. We can take our concentrates and process them right there in the city. Manitoba is a jurisdiction where we already have deals with the local native groups and where you can get something done. Alaska is a great place to do work, and I’ve had the pleasure of working there since I was 28. Our divisions are appropriately diversified, and our projects are in different stages of development creating a strong portfolio.”
Over the last few years, a development in the mining industry has been a shift in focus to North American exploration and production.
Things kicked into high gear last year when the US shifted policy to lessen its reliance on foreign entities like China and Russia. Last year, the country’s
declaration of critical metals important to its security and economy included lithium, palladium, and platinum. For major operators looking to react to the changing market dynamic, New Age’s holdings are ideal.
The story of the current New Age Metals, then, is one of positioning. By focusing on sustainable metals and mining, the company’s vision and mandate is relevant. With its projects located in Canada and the US, the company is in the right place. Palladium prices and demand are both breaking new highs, and lithium’s importance as a metal crucial to the electrification of transport has only just begun.
(Video via New Age Metals. Click image to play video)
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.