Chairman's Message - Winter/Spring 2020
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 2020.
In January, the Company announced that it engaged IBK Capital Corp. to assist the Company in evaluating strategic alternatives to maximize shareholder value. The Company closed a $2,000,000 financing on February 3, 2020. Eric Sprott, a renowned Canadian junior resource investor, became a strategic shareholder and now owns approximately 18.56% of the Company’s current issued and outstanding shares on a post conversion beneficial ownership basis. Part of the proceeds from this financing are being allocated to the Phase One exploration and development program on our 100% owned River Valley Project which is focused on following up on recommendations from the 2019 Preliminary Economic Assessment (PEA), see a press release dated February 27, 2020 for more information about the three-phase exploration and development program.
In 2019 we were able to complete two major objectives for our River Valley Project. An updated NI 43-101 Mineral Resource Estimate and our first economic study on the project, a Preliminary Economic Assessment. Management was proud to publish the Project’s first PEA, on August 8, 2019. The study concluded that there is a case for an open pit mining scenario at River Valley with 14 years of mine life with an estimated annual average payable Palladium Equivalent production of 119,000 ounces. Recommendations were made to proceed with project exploration and development activities with the objective of advancing the project on to a Prefeasibility Study.
NAM’s 2020 plan for River Valley focuses on following-up on the recommendations of the 2019 PEA. Management has developed a three-phase exploration and development plan for the balance of 2020. Phase One will focus on drilling to expand the boundaries of the Pine Zone discovery and to generate rhodium data for future mineral resource estimations. Phase Two will involve drill testing further geophysical targets in the Northern area of the project, identified in the 2017/2018 induced polarization surveys. The target areas to be drill tested in this program are outlined in Figure 1 below. Finally, Phase Three will be focused on metallurgy – with the primary objective being to improve process recoveries of Platinum Group Metals, particularly palladium and including rhodium. We plan to start Phase One in early Q2-2020.
Figure 1 : Northwest portion of the River Valley project with superimposed 2018 merged IP at -100 level. Retrieved from River Valley geophysical review by Geoscience North (Alan King, P. Geo, M.Sc.) Black circles indicate potential drill targets.
Longer term plans include continuing with Induced Polarization programs throughout the 16 kilometres strike of the project to potentially identify new exploration targets similar to the Pine Zone footwall zone, and drilling deeper to test the open-ended deposit at depth.
This message will also provide an outlook on Platinum Group Metals (PGMs), a summary of our exploration and development plans for the Alaskan Genesis PGM-Cu-Ni Project and finally, we will review our plans for the exploration and development of our eight Lithium and Rare Element projects in Manitoba for 2020. All NAM’s Lithium and Rare Element Projects are 100% owned and controlled by the company.
River Valley PGM Deposit, Sudbury, Ontario
We are encouraged about the economics surrounding PGMs as analysts continue to see ongoing deficits being forecasted for Palladium. As of February 27, 2020, the spot price of Palladium is US$2,665/oz which represents a 78% increase in the past year. It is important to note that the River Valley Project’s PEA used a Palladium price of US$1,200/oz. 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 reduce toxic gases and pollutants in exhaust gas from an internal combustion engine into less-toxic pollutants by catalyzing a chemical reaction) are precious metals like gold and silver, and as such, are therefore also considered a store of value.
Due to improving metal prices for PGMs, more specifically Palladium and Rhodium along with projected favourable supply and demand factors in precious and base metals (Gold, Nickel, Copper, Cobalt), 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.
North America’s only two Primary PGM producers have been acquired by large South African companies in the last 3 years. On October 7, 2019, North American Palladium announced a $1 billion bid by Impala Platinum to acquire the company. This news paired with Sibanye’s acquisition of Stillwater in 2016 are very important for the industry. These deals signal the major South African PGM players interest in diversifying their operations into safer socio-economic jurisdiction, as well as solidifying their long-term belief in PGM’s.
Exploration Plans for Lithium Division 2020
The Company has eight Lithium and Rare Element Projects in the Winnipeg River Pegmatite Field, located in South East Manitoba and situated around the Tanco Mine. The world-class Tanco Pegmatite is a highly fractionated lithium-cesium-tantalum (LCT)–type pegmatite that has historically been mined (Tanco Mine) since 1969 for Li, Ta, Cs, Rb and Be ores.The Tanco Pegmatite is a very rich tantalum and cesium deposit with it being the world's most significant and richest known source of cesium representing more than two-thirds of the world's reserve.
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).
The Company has recently received the approval and drill permit for the Lithium Two Project and expects a drill permit for Lithium One before the end of Q1-2020. The Company continues to solicit an option/joint venture partner to continue the development of its Lithium division.
Figure 2: Map showing the eight Manitoba, 100% owned Lithium and Rare Element Projects.
Genesis Platinum Group Metal, Base Metal Project, Alaska
The Genesis PGM PGM-Cu-Ni Project is an under explored, highly prospective multi-prospect drill ready property. On October 8, 2019 the Company announced that the summers exploration efforts had doubled the strike length of prospective mineralization at the Project. The work program contributed to a new total of 23 exploration targets on the project and recommendations for next stages of work include further prospecting, geologic mapping and geochemical sampling followed by prioritization of target areas for future drilling.
NAM management is actively seeking an option/joint-venture partner for this road accessible PGM-Cu-Ni 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, and development.
Figure 3: Location of the Genesis PGM-Cu-Ni Project, Nelchina Mining District, 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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