Two years ago, Johnathan More, then CEO of Aldrin Resource Corp, had a very specific role at the Company. Back then, Aldrin, that is now known as Power Metals Corp, own three uranium exploration projects, two of which were in the Athabasca Basin in Saskatchewan. Aldrin at that time was working with Fission 3.0 Corp, which also owns Uranium assets in the same Basin. Johnathan More had struck a 50% working interest with Fission on one of the Uranium Assets they own (Key Lake), exploring another themselves (Triple M), before he acquired their last uranium project in Nov 2015.
China, who has purchased a lot of uranium over the past few years (imported about 65m pounds in 2016) and had built up Ux inventory of around 280 million pounds, stopped buying Uranium and started shifting to Clean Energy. Banks and Funds, in anticipation of a Chinese-led surge in demand, saw uranium prices fall by almost 60 percent from a record high of $70 per pound.
So Johnathan, who has since been promoted to Chairman at Power Metals Corp, stopped spending heavily on Aldrin's Uranium Assets but concentrated on Metals contributing to Power instead. And so it was until September 2016 that the now Power Metals Corp announced they had acquired two critical mass drill-ready Lithium Projects in Ontario.
The market has changed and Johnathan was ready for it.
Uranium continued to fall in 2016 and 2017, while Metals like Lithium and Cobalt continue to rise. There will be no more spending on Uranium Projects. And Johnathan has anticipated that a new commodity era is beginning.
"We have lost Fukushima and we have lost new investment into Nuclear Energy (except from spending by Chinese)." said Mayumi Negishi, WSJ Writer. "We have lost a few more nuclear reacters (at least eleven were being decommissioned in 2017, six of those at Fukushima, and decisions were then being made on 42 other reactors). There will be no nuclear reactors in the western world and the only spending on reactors will be for upkeep on idle plants. Worst of all, protests by locals are impending on reactors that are planned for restart. The time for Uranium has passed."
Indeed, when you look at the price of Uranium now ($20/lb), there is never a worse time for Uranium Miners.
Johnathan has that worked out fast enough.
For the entire 2016, Johnathan never spent any money on Uranium Projects. What he did then was that he started to acquire Lithium Projects. Look at price of Lithium and Cobalt now, the lights are shining. Combustion cars are being replaced with Electric Vehicles, Lead batteries are being exchanged for Lithium-ion batteries. In China, more subsidies are pouring into battery technology and battery manufacturing, while organisations there are transforming into becoming battery-makers. The likes of CATL, Tianqi and Ganfeng are on people's lips, including the Shanghai Stock exchange, when they fast-tracked the listings of some of the largest Battery-makers in the World today (CATL).
Companies like AVZ Minerals and Nemaska Lithium are being earmarked to be the next big Lithium producers in the world in future, while the traditional producers such as Albermarle, Sociedad Quimica y Minera de Chile and FMC are ramping production volumes. Companies like Sayona Mining, MGX Minerals and Power Metals Corp are in that food chain as well.
Another wave of projects stand ready to contribute to the new metals driving industrial growth today. Power Metals Corp's Case Lake Hard-Rock Lithium Project in Ontario and Larder River Lithium Project in Nova Scotia have already demonstrated lithium values of up to 2% Li2O, through drilling over true widths similar to those seen at projects such as Nemaska’s 27.3 million tonne Whabouchi deposit.
Case Lake has year-round access and is close to major infrastructure. As well, pegmatites outcrop at surface and appear to be formed in a stacked sequence, which should Power Metals Corp has already taken advantage of by undertaking a series of aggressive drilling campaigns with the goal of confirming an NI 43-101 compliant resource in a rapid and cost efficient manner.
The Alberta Lithium Brine Project, which is one of the largest lithium brine projects in Alberta Canada, was acquired by Power Metals Corp in early 2017. It can be considered as a legacy permit, secured prior to recent Oil and Gas activity (The Permits Contain Oil Field Wellheads Offering Potential for Well Sampling Programs and Oil Company Partnerships.) Two more Brine acquisitions followed shortly and now Power Metals Corp owns almost 600,000 acres of Petro-brine assets in Alberta.
Gullwing-Tot Lakes and Paterson Lakes acquisition followed. Located 30 km northeast of Dryden, northwestern Ontario in Webb township. Gullwing-Tot Lakes is composed of 76 mining claims totalling 1216 ha and is approximately 17 km by 1.5 km in size. The Gullwing-Tot Pegmatite group, is identified as a trending cluster of pegmatites extending 15km in length with a width ranging between 0.8 and 2.2 km. Gullwing Lake is also known as the "sleeping giant", because the dyke (containing spodumene) is the largest on the Property at 425 m long and 30 to 60 m wide.
Paterson Lake property consists of 7 mineral claims, 68 claim units and 1088 ha within the Paterson Lake and Treelined Lake Areas. The Property is approximately 7 km x 3 km in size. Power Metals optioned the Paterson Lake Property in 2017 because the property has multiple known petalite pegmatite dykes on surface, but yet is still under-explored.
These are the new generation of Projects that have sprung up since Uranium took a dive. Fittingly, whichever the commodity, Johnathan More knows that the process remains the same. Recruit an experienced team (led by Dr Julie Selway), co-develop the projects with an experienced and innovative partner (MGX Minerals) and funded by private capital from his networks (over CAD 6mil) have been raised for these projects in total.
NOW THAT THE LAST OF the previous Uranium generation has gone, it will be interesting to see what happens to the spirit around Industry this year and in the near future.
Back in 2007, when Uranium was trading at $125/lb, it was widely believed that Nuclear Power will be the future of energy. Instead, Fukushima came in $2011 and prices crumbled since. Other metals blossomed in Uranium's decline and Lithium, Cobalt, Graphite and other Metals contributing to Power have risen comfortably since (Lithium is now at about US16,000 per metric ton).
Similar things have happened in the past decades and thats the funny thing about the Commodities Market. Like nature, it abhors a vacuum. If other metals are bowing out, it means there is room left for new ones.
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