Maurice Jackson: Joining us today is Michael Rowley, president and
CEO of Group
Ten Metals Inc. (PGE:TSX.V; PGEZF:OTC), which is known for platinum,
palladium, nickel, copper and cobalt in the Stillwater district in Montana.
In our last interview we discussed the results you released in the second of a
series of news releases with high-grade and bulk tonnage targets in the
Chrome Mountain and East Boulder areas of the 25-kilometer Stillwater West
project. Since then, Group Ten Metals has released news from the flagship
Stillwater project, and also announced results and updates from its Yukon and
Ontario projects. Mr. Rowley, for someone new to the story, who is Group Ten
Metals and what are your targets and focus?
Michael Rowley: Group Ten has been acquiring and consolidating
quality projects in known mining jurisdictions since 2012, so we were able to
acquire and build world-class assets in three top-tier mining districts—in
Montana, in Ontario, and in the Yukon—on terms that reflect the market's
discount at the time. Since the acquisition of our flagship Stillwater West
project in 2017 we have been increasingly focused on monetizing our other
assets in order to focus on Stillwater, which we see as having the potential
to rapidly advance as a world-class PGE-Ni-Cu-Co project. As a result we are
positioned with 100% ownership on large and highly prospective land positions
in known mining districts at a time when the markets are turning positive and
the appetite for acquisitions is returning. So that really is the point—we
are receiving increased interest on our non-core assets in the Yukon and
Ontario at a time when deals for these assets will help drive our efforts in
Montana at Stillwater.
For the benefit of our readers I'll give a short summary of the Yukon and
Ontario projects before we focus on our flagship Stillwater project and the
most recent news there. In the Yukon we have the Kluane PGE-Ni-Cu project,
which is geologically similar to the Stillwater project, being a layered
magmatic system. The Kluane belt is well known for PGE-Ni-Cu deposits and the
most advanced is the Wellgreen Deposit now being advanced by Nickel Creek
Platinum. That one is 6 billion ounces of PGE+Au and 4 billion pounds of
Ni-Cu, with significant Co as well. We have the strike extension of that
deposit on our ground, plus known showings and a similar geological setting
across our 255 square kilometer land position in the Kluane belt. The project
is at an earlier stage than Stillwater, but is highly prospective and is attracting
interest from the industry.
In Ontario we have the Black Lake-Drayton gold project, which adjoins and
shares geology with First Mining's Goldlund project and Treasury Metals'
Goliath project. Both are high-grade gold resources that share geology with
our project, however our ground has seen much less exploration since 2000 for
various reasons. Our most recent news reports a small till sampling program
that, for the time, demonstrated the gold potential of the large middle area
of the project where pervasive ground cover has limited past exploration
interest. This is compelling because over 10 million ounces of gold has been
discovered using this till sampling method in the area, and the hits we are
getting correspond to geophysical anomalies.
We also announced completion of the final earn-in at Black Lake–Drayton
and that, together with the success of the recent till sampling program, has
brought increased interest from industry, which we are now following up on.
Maurice Jackson: Thank you for the overview of your other assets.
Mr. Rowley, on to the main event, the Stillwater West project in Montana.
Please provide a summary of that project, and the thesis you are attempting
to prove.
Michael Rowley: We have a fantastic asset in the Stillwater West
project, and we are excited about the targets and potential we see there. As
you know, Group Ten is alongside the Stillwater Mines in the iconic
Stillwater Igneous Complex. The district is well known as the highest grade
major PGE district in the world, and the largest by far in the Western
hemisphere. Sibanye bought the Stillwater mines for $2.2 billion in 2017,
around the time we were making our acquisition there. Our ground was
historically owned by Stillwater, and has been mined for a number of
commodities including high-grade nickel and copper, as well as PGEs and
chrome.
We are the first to systematically consolidate the land package, database
and team to target Platreef-style platinum-palladium-nickel-copper deposits.
These are 100+ Moz PGE deposits with significant values of other metals, in
particular nickel and copper, but also rhodium, cobalt and chrome, found in
the northern limb of the Bushveld Complex in South Africa. The Bushveld and
Stillwater complexes are both large igneous complexes, and there are many
known parallels between the two. Developments in the 1990s and 2000s led to
the discovery and development of the Platreef mines in South Africa, but that
progression was essentially interrupted at Stillwater. Based on everything
we've seen, we see the potential to discover massive PGE-Ni-Cu deposits of
this type at Stillwater. That thesis took a big step forward late last year
when Ivanhoe's Dr. David Broughton, a key member of the discovery team at
Ivanhoe's 112 Moz Flatreef PGE-Ni-Cu project, joined our team and confirmed
that potential. We acquired the project in 2017 and have now begun a series
of news releases to reveal what we have found to date, and lay out our plans
for 2019.
Maurice Jackson: Mr. Rowley, in our previous interviews you alluded
to a possibility of mine closures in South Africa as a potential catalyst for
Group Ten Metals. We may have some interesting developments coming from SA.
What can you share with us? As reminder for our audience 78% of Pt comes from
South Africa, they are not earning their cost of capital, and there are
number of geopolitical concerns there as well.
Michael Rowley: There are basically two types of platinum mines in
South Africa: narrow, high-grade reef-type mines and the bulk tonnage mines
on the Platreef in the north. Many of the high-grade producers have been
sub-economic for years and have been underfunded as a result. This is partly
because narrow, high-grade mining is always more expensive per tonne that
bulk mining, and also because these mines are getting deep and hot and unsafe
as well. As a result, analysts are predicting the closure of a number of
South African high-grade platinum producers in the coming year or two, and
that is expected to be a significant driver of platinum price as a result of
decreased supply.
By contrast, the Platreef district is known for its thick mineralized
intervals that are very amenable to bulk mining. Anglo American operates the
Mogalakwena mine in the Platreef district and it is currently producing
platinum at less than $400/oz from four pits, along with palladium, nickel,
copper and other metals. Ivanhoe's adjoining Platreef Mine is now in
development and will have similar economics.
We have had a lot of interest from the industry in finding the equivalent
"Platreef in Montana," and to date we have every indication that it
is there at Stillwater.
Maurice Jackson: Michael, let's move from South Africa and go to
your flagship project the Stillwater West, which is located in Montana, to
discuss the latest press release regarding the Camp Zone Target Area.
Michael Rowley: The Camp Zone target area is the fifth of 14
kilometer-scale target areas across the 25-km Stillwater West project. Eight
of those 14 are "Platreef-type" targets. Like past news releases
detailing the west side of the project, we have high-grade PGE
"Reef-type" targets in the north of the claim block, higher up in
the layered stratigraphy, and bulk tonnage "Platreef-style" targets
in the lower portion and basal zones of the complex.
The Camp Zone target area has a lot of historical drilling by AMAX in the
late 1960s and early 1970s, which successfully targeted nickel and copper
sulphides in the basal zone, and resulted in the delineation of a continuous
zone of nickel-copper sulphide mineralization in the Basal Series ranging
from 15 to 110 meters in thickness over approximately 1.5 kilometers strike
with average grades of 0.42% nickel and 0.23% copper. We also have platinum
and palladium assays that were completed as composites over select intervals
only. These demonstrate thick intervals of PGE enrichment, running up to 1.4
g/t palladium plus platinum.
Maurice Jackson: Mr. Rowley, overall how would you grade the
results thus far from the first five target areas?
Michael Rowley: The first five "Platreef-style" target
areas have demonstrated that the conductive highs we are seeing are in fact
nickel and copper sulphides in both rock samples and drill core, and that
they are generally enriched in PGEs, cobalt and chrome and other commodities.
This is essential insight to have.
The results at Camp Zone in particular position it as one of the three
most advanced target areas at Stillwater West. We have an enormous land
position and a large number of compelling targets across 25 kilometers of
strike, so using that historical data to vector in on areas that can be
advanced rapidly to resource delineation stage is essential. The known
mineralized zone at Camp Zone, like the Hybrid Unit mineralized zone
announced in February, provides us exactly that—a starting point to build
upon. Both are substantial mineralized zones, drilled with shallow holes
without geophysics or optimization, and open for expansion in terms of both
grade and size.
AMAX's work at Camp Zone also included valuable basic metallurgical
results which show that standard 1970s-era flotation techniques can be used
for effective nickel and copper sulphide recovery, along with a significant
PGE component.
Maurice Jackson: Can you comment on the price moves we have been
seeing in palladium and platinum, we are in unprecedented territory.
Michael Rowley: Palladium has indeed been on a tear due and is
nearly doubling platinum in price. The price, of course, is driven by supply
and demand, and the supply of physical palladium has been dwindling for years
now while consumption of both palladium and platinum, driven mostly by the
automobile sector for use in catalytic convertors, has been rising steadily.
In addition, palladium was less affected by the switch away from diesel
vehicles as palladium is generally used more in gas applications while
platinum can be used in both diesel and gas engines.
We've talked about gold and silver ratios in the past and how they
historically stay within a certain range. The same is true of palladium and
platinum, and at some point auto manufacturers will switch back to platinum
and the prices will shift. Add to that the expected closure of platinum mines
in South Africa and you have a very bullish case for platinum!
At Stillwater we have both platinum and palladium, and also rhodium, plus
also the technology metals nickel, copper and cobalt.
Maurice Jackson: Sir, before we close what is the next unanswered
question for Group Ten Metals, when should we expect results, and what
determines success?
Michael Rowley: Next up in our series of news releases is the Iron
Mountain target area, which is the most advanced area on the project, so we
are looking forward to making that release and discussing those results.
In addition we are finalizing our targets and exploration plans for 2019
across the project, and will be releasing those in the coming weeks as well.
The project is at an exciting point where the only unknowns are the good
unknowns. We have brought together a remarkable land position, database and
team, and our exploration programs in next two or three years will show what
we actually have in terms of size and grade.
It's early days; we have a $10 million market cap, a great team, and our
neighbour was bought for $2.2 billion. I think it will be a banner year.
Maurice Jackson: Finally, what did I forget to ask?
Michael Rowley: Funding and exploration plans are usually on
people's minds, so let's touch on that.
In terms of funding, we raised $1.2 million late last year and have about
$2.7 million of in-the-money warrants that we can call any time to top that
up. We also had some very good meetings at recent trade shows in Vancouver
and Toronto. Those conversations are on-going with an eye to driving our best
year yet at Stillwater West, and we look forward to making further
announcements as the weeks progress.
Maurice Jackson: For someone listening that wants to get more
information on Group Ten Metals the website address is www.grouptenmetals.com.
And as a reminder Group Ten Metals trades on the TSX-V: PGE and on
the OTCQB: PGEZF. For direct inquiries please contact Chris Ackerman
at 604-357-4790 ext. 1 and he may also be reached at [email protected].
As reminder Group Ten Metals is a sponsor and we are proud shareholders
for the virtues conveyed in to today's interview.
And last but not least please visit our website provenandprobable.com,
where we deliver Mining Insights & Bullion Sales, in form of physical
delivery, offshore depositories, and private blockchain distributed ledger
technology. You may reach me at [email protected]
Michael Rowley of Group Ten Metals, thank you for joining us today on
Proven and Probable.
[NLINSERT]
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