Chairman's Message - Summer/Fall 2019
On behalf of the management and directors, I am pleased to update you on the key milestones completed to date and the goals and objectives for New Age Metals (NAM) for the balance of 2019.
This message will also comment on other key corporate goals and milestones including our Preliminary Economic Assessment (PEA), our first economic study on the River Valley PGM Project which the results of were released June 27, 2019.
The results were positive and our plan for River Valley going forward is as follows:
In order to enhance the Project, the PEA has outlined a phased work approach to completing a Pre-Feasibility study. This includes advanced metallurgical testing to improve / confirm process recoveries and more accurately estimate concentrate grades, geotechnical logging of drill core, with new geotechnical holes to create a 3D geomechanical block model and estimate pit wall angles, hydrogeological studies that will estimate water inflows to the open pits and generate a site water and management plan. The Pre-Feasibility study will update the Project study to a higher level of precision.
NAM plans to continue to improve the River Valley Project’s value proposition by drill testing geophysical anomalies found during the 2018 geophysics campaign, continuing the geophysical program throughout the 16 kilometres of the contact mineralization adding significant potential to find new deposits, drilling near the defined open pit shells to increase the mine life, drilling deeper to test the open-ended Deposit at depth, and re-assaying existing drill core for Rhodium in order that Rhodium may be added to the Project’s metal suite.
This message will also outline our exploration and development plans for the Alaskan Genesis PGM and Base Metal Project. Additionally, we will review our plans for the exploration and development of our 8 Lithium and Rare Metals projects in Manitoba for 2019. All NAM’s Projects are 100% owned and controlled by the company, however the Lithium Projects are subject to an option-joint Venture agreement.
Due to improving metal prices for PGMs, more specifically Palladium and Rhodium along with projected favourable supply and demand statistics in precious and base metals (Gold, Nickel, Copper, Cobalt) sector, management believes that investor’s sentiment is beginning to change. Investors with interest in both the common shares of Junior companies with advanced stage projects like River Valley and others who would purchase the physical metal are beginning to take notice of these changing economic indicators. The long-term consensus for the palladium, rhodium, cobalt, copper, nickel and lithium markets continues to forecast a physical metal deficit. PGM demand is increasing with the cause of this attributed to significant supply risks from declining South African production combined with a growing demand picture.
River Valley PGM Deposit, Sudbury, Ontario
River Valley is the largest undeveloped primary PGM resource in North America. During the next year the company’s exploration & development objectives are as follows:
- Complete the re-stated resource calculation (Q1 2019, completed); ✓
- Complete the Projects first economic study, PEA (Q2 2019); ✓
- Complete surface exploration on additional target areas based on recommendations of the updated 43-101 and the 2017/2018 geophysics (slated for Q3-Q4 2019);
- Arrange additional funding for continued development of the project (ongoing);
- Conduct a 5000-metre drill program focusing in the northern portion of the Project;
- Solicit a strategic partner to aid in further exploration and development of the Project. Potential major partners are waiting for the PEA results to complete additional due diligence on River Valley.
River Valley PGM Project PEA Underway
NAM commissioned both P&E Mining Consultants (P&E) and DRA Americas (DRA) to complete the Project’s first economic study, a Preliminary Economic Assessment (PEA) in August 2018. The PEA objectives were to look at the River Valley resource as defined in our most recent 2019 Resource Update and design conceptual mining scenarios for open pit mining, and specifically outline the projected mine life, metal production rates and processing routes for our River Valley Project. Capital and operating costs to be incurred are to be included in the report that incorporates all of the above information into a financial model to provide total cash flow, pre-tax net present value (NPV) and pre-tax internal rate of return. The full PEA report will be filed on SEDAR within 45 days of news release PEA summary date of June 27, 2019.
2019 Mineral Resource Update
On January 9, 2019 NAM filed its latest Mineral Resource Estimate on the River Valley Project. The May 2018 Resource Estimate presented a global mineral inventory. The January 2019 Resource presents a pit constrained mineral resource that shows reasonable prospects for eventual economic extraction. Figure 1 below shows a map of the Project with the corresponding resource numbers. The results of the updated Mineral Resource Estimate are tabulated in Table 1, page 3 (0.35 g/t PdEq open pit and 2.0 g.t PdEq underground cut-off). This 43-101 Technical Report is available on SEDAR.
Figure 1: Global resource of River Valley. Note: A 0.35 g/t cut-off grade was used as that was approximately the open pit cut-off of Canada’s only PGM producing mine, North American Palladium’s Lac des Iles.
Table 1 : Results from the amended 2019 NI 43-101 Mineral Resource Estimate.
- CIM definition standards were followed for the Mineral Resource Estimate.
- The 2018 Mineral Resource models used Ordinary Kriging grade estimation within a three-dimensional block model with mineralized zones defined by wireframed solids.
- A base cut-off grade of 0.35 g/t PdEq was used for reporting Mineral Resources in a constrained pit and 2.00 g/t PdEq was used for reporting the Mineral Resources under the pit.
- Palladium Equivalent (PdEq) calculated using (US$): $950/oz Pd, $950/oz Pt, $1,275/oz Au, $1500/oz Rh, $2.75/lb Cu, $5.25/lb Ni, $36/lb Co.
- Numbers may not add exactly due to rounding.
- Mineral Resources that are not Mineral Reserves do not have economic viability
- The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
Qualified Person Statement
The resource above is the result of a new 2019 NI 43-101 calculation, which was completed January 2019 by WSP Canada Inc. (WSP) under the supervision of Todd McCracken, P. Geo.
Platinum Group Metal Applications
We are encouraged about the economics surrounding PGMs as analysts continue to see ongoing deficits being forecasted in both Platinum and Palladium. As of June 27, 2019 the price of Palladium has increased 22% since January 2, 2019 to (US)$1544, which at a 1.35 USD/CAD is CAD$2084 per ounce. The automotive industry will drive increases in demand for palladium and platinum due to the ever-increasing loadings of these precious metals in gasoline and diesel vehicles. The use of auto catalysts is mainstream in developed countries but their need has recently been mandated by more stringent regulations surrounding emissions in China, India and Brazil. Platinum and Palladium, outside of their extensive uses in catalytic converters (which convert harmful gasses from hydrocarbon emissions into less harmful substances in vehicles) are precious metals like gold and silver, and as such are therefore also considered a store of value.
Exploration Plans for Lithium Division 2019
The Company has eight pegmatite hosted Lithium Projects in the Winnipeg River Pegmatite Field, located in SE Manitoba. In 2018 NAM conducted surface exploration programs on our Lithman East, Lithman North, Lithium One and Lithium Two projects. The programs consisted of reviewing, characterising and sampling all of the known surface pegmatites. Samples were taken from the Eagle and FD5 pegmatites on Lithium Two and returned results of up to 3.8% Li2O. On Lithium One, samples were taken from the known Silverleaf and Annie pegmatites and not only returned significant Li20 assays of up to 4.1% but heightened levels of Rubidium Oxide (Rb2O).
In 2019, the Company plans to drill on both Lithium One and Lithium Two. Drill permits have been applied for and the company is awaiting approval from the province.
Figure 2: Map showing the 8 Manitoba, 100% owned Lithium Projects, which are under an Option/ Joint-Venture with Azincourt Energy (AAZ)
Genesis Platinum Group Metal, Base Metal Project, Alaska
The Genesis PGM Project is an under explored, highly prospective multi-prospect drill ready Pd-Pt-Ni-Cu property that warrants follow-up drilling, additional surface mapping, sampling to expand the known footprint of mineralization and to determine the ultimate size and grade of the layered mineralization outlined to date.
NAM management is actively seeking an option/joint-venture partner for this road accessible PGM/Multiple Element Project using the Prospector Generator business model. The stable land status, ease of access and superb infrastructure make this project prospective for year-around exploration, development and production.
Figure 3: Map of the Genesis PGM/ Base Metal Project in Alaska.
I would personally like to acknowledge our Directors, Management Team and Technical Team for their ongoing hard work and dedication to our Company. On behalf of our board of directors, I would like to thank you, our shareholders and interested parties for your continued interest and support.
Chairman & CEO
NEW AGE METALS INC.
Harry Barr, Chairman & CEO
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