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Magnesium, This Critical Mineral Opportunity has Nowhere to Go But Up

Stockhouse Editorial
2 Comments| April 13, 2021

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(Project map via West High Yield Resources.)

Investors eyeing opportunities in the hot gold, silver, and rare earth element (REE) markets may have a lot of options, but few check as many boxes as West High Yield Resources Ltd. (TSX-V: WHY, OTC: WHYRF, Forum) when it comes to quality projects, solid results, and stable share structure.

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The publicly traded junior mining exploration Company is focused on the acquisition, exploration, and development of mineral resource properties in Canada with a primary objective to locate and develop economic gold, nickel, and magnesium properties.

WHY Resources’ flagship operation is its Record Ridge Project, located 2 km north of Washington State in the well-established mining region of Rossland, British Columbia. It is an advanced stage magnesium exploration project and is considered to be a world class magnesium mine by the Company, given discoveries of global significance, due to its high tonnage and Mg-grade.

Having seen more than 10,000 metres drilling with 77 holes, all mineralized, Record Ridge remains open along strike and depth covering an area of 600 metres by 1 km of mineralization inside a 7.5 square kilometre ultramafic outcrop discovery. Measured and Indicated Mineral Resources include 43 million tonnes averaging 24.6% Mg, using a 21.9% cut-off, totaling 10.6 million tonnes contained Mg. Based on the step out drilling reflected in the resource map, it indicates similar grade though out the total ore body reflecting the potential of an inexhaustible supply potential.



To fully extrapolate the potential of its assets, WHY Resources has developed a proprietary hydrometallurgical process to produce over 99% purity MgCl2 / MgO / Mg(OH)2 products, in addition to added values of Ni and Si saleable by-products leaving less than 1% waste. A key feature of the HCl acid-based process is efficient recycling of the principal reagent, HCl, using commercially proven technology. This reduces the overall level waste products from the process and the remaining waste streams could be treated using standard chloride processing industry practice. The process has little to no Co2 emissions and is environmentally friendly.

Another near-term project under the Company generating strong cash flows in parallel with its magnesium projects are its Midnight Gold Project and Gold Rejects Project located in the Rossland Gold Camp in British Columbia. The project boasts more than 200,000 metric tons grading at average 2.5 ppm Au, for a total of more than 18,000 ounces of gold, greater than $30 million in value.

Stockhouse Editorial caught up with West High Yield Resources President and CEO Frank Marasco Jr., to find out more about these potential cash-flow generating projects and their place in the overall commodity markets ….


SH: Thank you for taking the time to speak with us and tell us your story. To begin, can you bring us up to speed on your proprietary hydrometallurgical process and how it benefits your business?

Thank you for your interest and I am delighted to share with you more about our green process. China produces more than 85% of the worlds magnesium supply and uses a silicothermic process “Pidgeon Process” generating a high level of Co2 emissions and pollution. Our highly effective process uses a closed loop hydrometallurgical system that is environmentally safe and produces little to no green house gas emissions while extracting 99% pure MgO, NI and Si leaving less than 1% waste. This process is very green based on the limited emission process and the 99% utilization of the ore.


SH: On the EV front, General Motors unveiled a new modular EV platform with an improved battery pack called Ultium about a year ago, the composition of which sees a reduction in cobalt content by 70%, what do you make of these batteries and the possible movement away from Li-Ion as the load-bearer for this power?

While battery research continues many fronts, the mass adoption challenge for EV’s continues to be increased capacity and driving range, reduced battery costs with stability and safety a top priority. As some of your readers may be aware there are some safety and stability challenges with some battery formats.

GM Ultium battery incorporating magnesium is being designed with the ability to be a safe and flexible modular pouch, reduce input costs and wiring complexity, increased voltage and range and fast-charging capability. The result is a safer, less expensive, and higher capacity longer range energy source. In addition to GM, VW has announced a similar type of battery which is extremely positive for WHY Resources.

Another exciting energy source being developed in Germany at the Fraunhofer Institute for Manufacturing Technology and Advanced Materials is a power paste using magnesium that when mixed with water creates a hydrogen fuel source. This zero-emission energy source has several interesting applications and work is underway on the production and scalability.

Magnesium is becoming a major component used in the evolution for safer, higher capacity, longer range, fast charging, and lower cost energy cells.


SH: Magnesium and Nickel are high on Canada’s list of critical minerals, what type of federal, or provincial collaboration have you seen that could help WHY Resources promote Canada’s competitiveness as a global supplier of choice?

The fact that the governments have recognized the strategic importance of critical minerals is a great leap forward. Canada, while as a resource rich nation has the potential to become a world class provider of several the new energy products being created rather than just an exporter of raw input materials. The impact of the global covid pandemic and the reliance on one country as the main source of rare earth and critical minerals has brought to the forefront the need to develop ones own domestic resources for the stability of manufacturing supply chains. This recognition has increased investment interest in critical minerals development projects specifically as it relates to clean energy and the EV movement. The Governments at various levels are taking beginning steps to support new projects however the pace of support needs to accelerate to match the aggressive net- zero emission targets that have been set. Magnesium is one such critical mineral that is of monumental importance for the globe to meet its carbon emission reductions.

Early stage to intermediate advanced stage project debt funding is required in offset the lack of cash flow during the development stage. The permitting process to development is an important but costly journey and not for the uncommitted. To-date WHY resources has expended just under $30 million dollars and 12 plus years of time to navigate the exploration and permitting process. Assistance from government in expediting this process while ensuring the relevant and required work is done will assist in more projects becoming viable.


SH: Do you feel that the US views Canada as a of “51st State” for mineral supply purposes and what do you make of our government’s recent move to tighten foreign investment rules to protect its security of critical mineral supply chains?

Personally, I believe this is a very positive step as we have a trading partner with a growing critical mineral need for the safety and security of the US and North America. The recognition by the respective governments of the supply source and development need are key to economic growth, secure supply chains, and self reliance as a respective nation and North American continent. Bringing jobs back home, manufacturing sustainable net-zero emission products, and leverage domestic resources will drive a self reliant sustainable economic future.


SH: What sets magnesium apart from other minerals, considering its use, composition, and availability?

Beside the fact that mankind would not exist without magnesium as it is involved in hundreds of biochemical reactions in your body, there are so many other advantages and uses for magnesium, providing many market verticals to support. There is an exponentially growing global need for high-grade purity magnesium. With the human and environmental positive benefits delivered through magnesium variants, this is a green product that will support many verticals. A critical element that is important in the physiological well-being and sustainable future of mankind as well as a key input in the advancements of green industrial manufacturing of enhanced products such as Pharma grade magnesium, Crop Nutrient, Electric batteries, and Aerospace/Automotive components.

The EV race has kicked into another gear and magnesium is used in the de-weighting of the vehicle and in the EV batteries. Magnesium is the lightest of all structural materials 33% lighter than aluminum, 75% lighter than steel with a high strength to weight ratio. It can be die-cast, cold pressed and used as a material for 3D printing. This magnesium advantage spans transportation industries that seek to reduce emissions using lighter material and require less energy to propel.

Aerospace, military, domestic and commercial vehicle, ships, trains etc. all benefit from weight reductions.

Magnesium is used in infrastructure build as cement, construction materials such as magnesium wallboard and panels, which are fire, mold, mildew resistant and can absorb Co2. Magnesium is a fertilizer and required to replenish soil nutrients in agriculture.

While there are many other verticals, the main advantage is that WHY Resources has a high grade, high purity magnesium that can address the need of any of the multiple vertical supply chains and products requiring magnesium.


SH: Gold and silver prices are trending higher and higher, and some experts predict more records could be broken this year, what kind of comment can you provide on this positive news?

While Gold and Silver prices continue to garner interest and speculation, WHY Resources has a strong history with significant amounts of gold historically produced on the company claims. The company has received a permit to drill an additional 22 holes to augment the 26 previously drilled holes. The company has plans to target a deeper source which we believe to be motherload for the previously mined and extracted gold. We are building on assay results of prior drill holes that have shown values of up to 6 ounces/ton. With gold and precious metals prices predicted to climb, the Company is well positioned to generate increased shareholder value through this opportunity.


SH: WHY Resources recently extended and upsized its private placement to $3 million (CAD) until April 28th, 2021, what was the reason for this and what will these funds be earmarked for?

As you may sense from our discussion, mining is not for the faint of heart and requires patience, commitment, perseverance, and financial resources. The Company has judiciously managed it capital having spent just under $30 million dollars to date and having a share float less than 70 million shares. This limited amount of dilution is reflective of minimized G&A, few employees and the use of qualified top tier consultants as required.

The funds to be raised in the near term will be used in order of priority to fund the final steps in the Record Ridge Mine permit process, complete the process and pilot plant feasibility work currently underway, drill gold holes as funds allow, and for general G&A required to maintain the public Company.


SH: For those who are still eager to get involved, what are some key standout reasons to invest into WHY Resources that separates it from other exploration companies?

That is a great question and one that sets us apart. As the rush for critical minerals has accelerated, several companies have entered the race with good prospects and potential. These companies have much work ahead of them to obtain a permit and becoming a producing mine. The average number of years from exploration to permitting as noted by a BC journalist is 13 years, not to mention the funds required to do so.

WHY Resources has already spent the time and financial resources over the past 13 years to become a producing mine in short order. With the funds being raised we will be able to finalize a permit within 6-9 months and start mining and cash following shortly thereafter. This is critical for an investor who is looking for an investment with a short horizon.

The company has a verified resource with a NPV of over $1.3 billion, is in the final stage of permitting, has a long-life asset 43 plus years, a high-grade high purity MgO product that can support numerous verticals and products, has over $1 billion of proximate infrastructure in place, is shovel ready as an open pit mine, is in a mining friendly jurisdiction, and has a critical mineral product that is key to the world achieving its carbon emission targets. Based on the work completed to date on the property, the Company’s claims are all current and good through to January of 2030.


SH: You have a deep background in the industry, and the management team is also highly experienced, what are some career highlights you would like to share about the team?

Personally, I am gratified by knowing the Companies resource has been recognized as critical to the security and safety of North America. I am proud that the Company can produce a product that has so many positive impacts on the health and well being of society and is a large contributing factor to the reduction of green house gas emissions. While initially prospecting and exploring for gold, the Company had the good fortune to identify this critical mineral resource and has been committed to bringing it into production since. I am proud of the team and the many supporters, shareholders and consultants who have propelled us to where we are today.


SH: With such a tight share structure, what advantages would this pose for investors, current and new to the WHY opportunity?

At the advanced stage of development that our Company currently is, we have a small share float relative to the work completed and the fact we are on the threshold of mining and cashflow. With low dilution, the increase in shareholder value upon commencement of mining and processing will reward all shareholders as profits are realized over a small shareholder base.

Companies at similar stages of development have had to issue substantially more shares to generate similar or lessor results.

Why Resources has substantially de-risked this project and is extremely optimistic about the future that lies ahead.


SH: Looking six months to a year down the road, what can people expect from WHY Resources as you advance your projects?

With successful subscription of our current private placement and other sources of funds, the milestones to complete over the next six months are obtaining the mine permit for Record Ridge, complete the design and initiate action on the development of the pilot plant, and continue with interested party offtake discussions.


SH: Thank you again for telling us about your Company today, anything further to add?

The company is excited to move forward at an optimum time for critical minerals/magnesium demand with a project that is unrivaled for its green process and contribution to the reduction of greenhouse gases.

Thank you to our shareholders for their patience and continued support, the Board and the committed skilled team of advisors, consultants and employees for their daily perseverance and efforts.
ONWARD!

For more information on this Company, visit whyresources.com.


FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing


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Comments

Very good interview. Great points, this is very underrated right now on the market.
(3)
April 21, 2022

Good presentation. Frames the potential of Why in the fast growing green economy. Could have spoke a little more about the world class infrastructure already in place.
(24)
April 14, 2021

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