The Northern Miner May 29 2023 Issue 11

Glencore bid for Teck faces stiff Canuck rules, pride as mining M&A activity triples

BY COLIN MCCLELLAND

New York, NY — Glencore (LSE: GLEN) faces an uphill battle to buy Teck Resources (TSX: TECK.A/TECK.B; NYSE: TECK) because of Canadian nationalism despite surging mergers and acquisitions in the critical minerals space.

The mining industry’s M&A activity is up 283% to US$66 billion so far this year compared with the same period last year while dealmaking across all industries is down 38% to US$1.2 trillion, according to Bloomberg data presented on May 10 at the Society for Mining, Metallurgy & Exploration’s eighth annual Trends in Mining Finance Conference in New York.

The sector is led by Glencore’s US$27.1-billion bid in April for Teck and Newmont’s (NYSE: NEM, TSX: NGT) US$20.1-billion offer for Newcrest Mining (TSX: NCM; ASX: NCM), which the companies came to an agreement on in May. The values, reflecting updated Bloomberg data compared with previously reported amounts, help nearly quadruple the value of M&A activity among miners yearto-date versus the same period in 2022 as companies seek gold near record prices and battery metals for the green energy transition. Action

in the diversified mining sub-sector that includes Teck is up 700%.

However, London-based Glencore’s proposed acquisition — rejected so far by Teck — faces tough scrutiny in Canada. The country would suffer a ding to national pride by losing one of its last large international mining companies. Federal authorities last

year introduced tough new guidelines in the name of national security for investments in virtually all mining except iron.

“We can’t comment on this particular transaction just because of our professional responsibilities, but we can say that it’s clear from the rhetoric around this transaction in Canada that there’s intense political scrutiny attached to it,” Steven McKoen, a partner with law firm Blake, Cassels & Graydon, which is doing work for Teck, told the conference.

The session heard that other trends in M&A activity include earlier investments by majors doing longer due diligence on projects, automakers such as GM with its US$650-million investment in Lithium Americas (TSX: LAC; NYSE: LAC) and Tesla shoring up battery metal supplies, the growth of deals based on environmental, social and governance standards, and more private equity and pension funds involved who’ll need mining expertise.

Timing for Teck

Panelist George Karafotias, a partner in the M&A unit of law firm Shearman & Sterling in New York, said Glencore timed its approach to See MERGER / 10

BY CECILIA JAMASMIE

Adecision by Chile, the world’s no. 2 lithium producer, to tighten control over the key battery metal sector has triggered speculation on details of the announced state-led public-private model and how it may affect the global industry.

To address market rumours and clarify aspects of the strategy described by some as “vague,” The Northern Miner’s sister publication MINING.COM spoke with Chile’s mining minister Marcela Hernando, who noted the country had announced a strategy, rather than a policy.

“It will become a public policy when it has legitimacy and it is supported by all the political forces of the country,” Hernando said.

Reaching the point of public policy, which includes the creation of a national lithium company (Enal), could take years.

Boric has, in the interim, enlisted two other state-owned companies — Codelco, the world’s largest copper producer, and state miner Enami — to determine how the private-public partnerships will operate.

Codelco will be initially in charge of negotiating for the state a stake in Albemarle’s (NYSE: ALB) and SQM’s (NYSE: SQM) operations. Enami, in turn, will sign up partners for new contracts. Their roles will eventually be undertaken by a national lithium company.

The government also launched a “Lithium and Salt Flats” committee on May 16 to coordinate the various ministries and other public entities as well as regional governments taking part in the lithium development process. The group will act as a technical advisory body, the Corfo development office said in the statement.

The Chilean state has always played a major role in the mining industry. A 1979 law declared lithium to be a strategic resource, stipulating that its development was the exclusive prerogative of the nation.

Only SQM and Albemarle are

currently licensed to produce lithium in the country, and in only one salt flat — the Atacama. The government wants to expand production both in Atacama and in any or all of the other 18 salt flats that have been identified.

See CHILE / 11

Teck Resources’ Highland Valley Copper project in British Columbia. TECK RESOURCES

Chile Mines Minister Marcela Hernando. TWITTER/CHILE’S MINISTRY OF MINES

“THE PHONE CALLS WITH THESE NATIONAL SECURITY BODIES ARE BIZARRE... YOU HEAR ALL THESE NUMBERS DIAL IN BUT THEY DON’T SAY WHO THEY ARE. THEY SIT THERE SILENTLY AND THEN SOMEONE FROM INDUSTRY CANADA ASKS YOU QUESTIONS.”

STEVEN MCKOEN PARTNER WITH BLAKE, CASSELS & GRAYDON

Chile to negotiate with lithium partners on case-by-case basis, says mining minister

POLICY | Creation of national lithium company ‘could take years’

Osisko cofounder Wares praises private equity, scolds debt financiers, nips NIMBYism

FINANCING | Asset managers increase stakes in mining as green metals advance

BY COLIN MCCLELLAND

New York, NY — Osisko

Metals (TSX: OM; USOTC: OMZNF) is part of a rising trend tapping private equity to help build projects, but it’s wary of the growing role of “predatory” debt financing.

Appian Capital Advisory, a London-based private equity firm with mining projects valued at US$3.6 billion, is investing $25 million for a quarter of Osisko’s Pine Point zinc-lead mine in the Northwest Territories.

Appian is to hold 60% of the project after spending $100 million as it covers costs until a final investment decision, Osisko chairman and CEO Robert Wares told The Northern Miner in an interview in New York in May at the Society for Mining, Metallurgy & Exploration’s eighth annual Trends in Mining Finance Conference.

“As a business model for a junior developer, quite honestly, I could do this repeatedly. Find good projects, drill them off, define a significant resource and private equity groups like Appian are often willing to step in,” Wares said.

“If we retain 40-50% free carried to mine build, what’s wrong with that? If I do that multiple times, I’m still building great value for shareholders and we’ve got partners who are going to finance the mine and spare shareholders excessive dilution.”

Osisko Metals, part of a group of companies including Osisko Gold Royalties (TSX: OR; NYSE: OR), Osisko Mining (TSX: OSK) and Osisko Development (TSXV: ODV; NYSE: ODV) started by the same team that developed the Canadian Malartic gold mine, now the country’s largest, is embracing private equity as a solution for junior base metals companies that may not earn enough support from equity markets.

Private equity investing in Canadian mining companies was just

$44 million last year out of $10 billion across all industries, according to the Canadian Venture Capital and Private Equity Association. But asset managers such as New York-based Orion Resource Partners with US$8 billion under management and pension funds like the Ontario Teachers with $247 billion in assets are increasingly structuring deals like private equity with dominant lender status, loans convertible to equity stakes and double-digit returns targeted.

Last year Orion invested US$375 million in Sabina Gold & Silver (TSX: SBB; US-OTC: SGSVF), which was recently bought by B2Gold (TSX: BTO; NYSE: BTG), and the pension fund is pitching in $200 million for Foran Mining’s (TSXV: FOM; US-OTC: FMCXF)

McIlvenna Bay copper project in Saskatchewan.

Osisko’s other main investment

is the Gaspé copper project in Quebec which it’s buying from Glencore (LSE: GLEN) in a deal expected to close next month. It’s another past-producing site with power lines and roads, plus access to a deep water port compared with a railway near Pine Point. Drilling up to 10,000 metres this year at both sites is continuing, with feasibility studies due on each by the end of next year, Wares said.

Pine Point boasted a town of 2,000 people on the south shore of Great Slave Lake around 90 km east of Hay River when Cominco, now part of Teck Resources (TSX: TECK.A/TECK.B; NYSE: TECK), mined about 10 million tonnes of lead and zinc from 1965 to 1988. The mine closed and the town was dismantled after zinc prices fell.

Osisko bought the property in 2018 and last year’s preliminary economic assessment shows the

project has a net present value of $602 million at an 8% discount rate with a 25% internal rate of return. Pine Point is expected to produce 329 million lb. zinc and 141 million lb. lead annually over 12 years. Total revenue after a royalty is forecast at $5.6 billion.

Pre-production spending is estimated at $653 million. Wares figures Osisko’s share will be about $280 million, but raising the cash from sales of new shares would be too dilutive because the market’s valuations of base metals projects are too low, he said. However, he’s finding debt financiers want the whole project as collateral when he just wants to borrow smaller amounts to start production.

“I’m not going to offer the whole project as a guarantee for $30 to $50 million. That’s absurd. I’ve been through this three times now,” he said. “These debt deals are preda-

tory and they put your entire project at risk. If you sign off on that you’re desperate.”

Earlier debt

The battery metals-driven surge of interest in mining has seen debt financiers increasingly offering to fund projects as early as feasibility studies when they used to wait for permits, Wares said. Juniors need to ensure the agreements prevent stock dilution, he said.

With brownfield sites come the risk of inheriting environmental problems. Wares says the territory has told him responsibility for some zinc and lead contamination of a former rail line at Pine Point lies with Teck and the government. He says he’s had experience with cleanups, such as Barrick Gold’s (TSX: ABX; NYSE: GOLD) legacy at Canadian Malartic.

“The tailings ponds were acidgenerating, so we integrated remediation into our disposal,” he said. “You’d be surprised, but on brownfield sites whatever additional remediation needs to be done can often be integrated into your mine plan, and that’s the best way you get your permit.”

At Gaspé, Noranda produced 150 million tonnes of copper concentrate from 1955 until the mine closed in 1999. The population of Murdochville fell to 600 from 3,000 but a new generation is now concerned their outdoor lifestyle could be threatened by a revived mine, Wares said. Osisko, wary of professional mining opponents flooding the community with misinformation, immediately said there would be five years of studies before any potential mining.

“Now they feel there’s time for discussion, planning, transparency and coming up with a plan that’s going to incorporate the community and everyone’s concerns,” he said. “The best way to fight NIMBYism is to be transparent and nip it in the bud before it becomes a problem.” TNM

How to invest in lithium explorers: pitfalls and pointers

BATTERY METALS | Understand geology, avoid ‘close-ology,’ check assays

BY COLIN MCCLELLAND

New York, NY — Exploring for lithium, a key component in electric vehicle batteries, is all the rage as companies seek to plug the gap between low supplies and surging demand to fuel the green energy transition.

The 700,000 tonnes of lithium mined globally last year will need to nearly quadruple to 2.7 million tonnes by 2030, requiring an investment of US$95 billion to meet supply needs, according to Hatch, a global engineering consultant based in Toronto.

But how to invest in lithium explorers, the small companies on the front edge in countries such as Chile, Argentina, Canada and the United States? Koby Kushner, CEO of Libra Lithium with 290 sq. km of claims near Thunder Bay in northwestern Ontario, says investors need a checklist on geology, company structure and assay results.

“There’s a lot of investment opportunities to pick from if you’re trying to play grassroots lithium

exploration,” Kushner said this month at the Society for Mining, Metallurgy & Exploration’s eighth annual Trends in Mining Finance Conference in New York. “Therefore, it’s very important to learn at least a little bit about the geology.”

Lithium is mined either from a brine pumped to the surface and left in settling ponds for months, or from hard rock sources such as spodumene. Brine-borne lithium

is predominant in Chile, Nevada and Alberta, while hard rock lithium is found in Australia, Quebec and Ontario. Spodumene is found in pegmatites produced under heat and pressure from granites, though not all pegmatites contain lithium.

In May, Kushner’s privately-held Libra began surveying 50 pegmatite targets on its Flanders North project. It’s one of eight projects held by the Toronto-based explorer.

“What’s key is that lithium mineralization is spatially related to this granite,” said Kushner, who worked as a mining engineer for Barrick Gold (TSX: ABX; NYSE: GOLD) and an equity analyst for Red Cloud Securities. “Generally, there’s a Goldilocks zone about 3 to 4 km away.”

Close-ology woes

The danger is relying on so-called close-ology, staking claims just because they’re near properties with demonstrated potential, like the swarm of activity around Patriot Battery Metals’ (TSXV: PMET; ASX: PMT; US-OTC: PMETF)

Corvette project in Quebec, Kushner said. All the land within a 20-km radius is staked, but many of the claim packages are full of granite which is less prospective ground, and the companies are still getting funded, he said.

Another factor to consider is how some companies hold huge blocks of land to prospect but may be under obligation to spend hefty amounts within a few years on exploration

or development that they may not be able to cover. Companies should generate projects in-house to avoid expensive option agreements while investors should beware of management teams that flock to whatever is optionable, he said.

“My simple filter is ‘OK, was the CEO — he or she — previously in cannabis or crypto?’ If so, I’m out.”

Investors should also be wary of reports of high lithium content in lake sediments, a commonly used indicator in Canada after the government conducted a survey, but unreliable because the lithium could have traveled, and its source is unclear.

Assays of pegmatites also have a limit to how much lithium oxide they can hold, which is about 8%. When a company reports 12%, red flags should wave, the analyst said.

“You get a lot of people that are chasing that pot of money and not everyone is in this to do genuine exploration,” Kushner said. “A lot of people are in it because they can raise money, you know, maybe buy a second vacation home.” TNM

Osisko Metals’ Gaspé Copper project, in the Gaspé peninsula of eastern Quebec. OSISKO METALS

A pegmatite sample containing beryl. LIBRA LITHIUM

Livent, Allkem create world’s No. 3 lithium miner in all-stock, US$10.6B merger

BATTERY METALS | Combined company would produce 248,000 tonnes of lithium a year

BY CECILIA JAMASMIE

Lithium firms Allkem (ASX: AKE) and Livent (NYSE: LTHM) are shaking up the sector by merging to form the world’s third-largest miner of the key metal used in batteries that power electric vehicles and hightech devices.

The all-share merger creates a company with a valuation of US$10.6 billion and a forecasted production capacity of 248,000 tonnes of lithium carbonate equivalent a year, representing about 7% of global mine production in 2023, said Fastmarkets NewGen battery raw materials analyst Jordan Roberts.

The deal places the new company among the top five lithium producers in terms of market capitalization, behind Albemarle (NYSE: ALB), Chile’s SQM (NYSE: SQM), Ganfeng Lithium and Tianqi Lithium.

“Allkem and Livent will combine their highly complementary range of assets, growth projects, and operating skills across extraction and processing under a vertically integrated business model,” the companies said on May 10.

Australia’s Allkem produces lithium carbonate from its Sal de Vida mine in Argentina. The operation is near Livent’s Hombre Muerto brines project and the Olaroz lithium facility, which is a joint venture project with Japanese trading giant Toyota Tsusho Corporation.

Allkem, formed through a scrip merger between Galaxy Resources and Orocobre in 2021, also produces hard rock lithium in Australia and has a chemical conversion facility in Japan.

US-based Livent has brine production in Argentina, a hard-rock based lithium project in Canada, and lithium refineries in the US

and China. The company also has supply agreements with various US-based automakers, including General Motors, Tesla, and BMW.

Livent CEO Paul Graves will take the top job at the new entity while Allkem’s director Peter Coleman will become the chairman. No role was announced for Allkem’s CEO Martín Pérez de Solay.

The company, to be based in North America, will primarily be listed on the New York Stock Exchange and seek inclusion on Australia’s benchmark S&P/ASX 200 index.

Canada and Argentina to benefit

As part of the “merger of equals”, set to close by the end of 2023, Allkem shareholders will take 56% of the company and Livent shareholders will own 44%.

“As a combined company, we will have the enhanced scale, product range, geographic coverage, and execution capabilities to meet our customers’ rapidly growing demand for lithium chemicals,” Graves said in the statement.

Livent has previously talked about plans to expand offshore to

Vale to decide on base metals sale: Brazilian paper

M&A

| Nickel producer may sell 10% stake to funds, automakers

BY COLIN MCCLELLAND

At press time on May 23, Vale (NYSE: VALE) was said to be on the cusp of deciding on the sale of a minority stake of its base metals business to automakers, pension funds and sovereign wealth funds, according to Brazilian news outlet Valor

The board of the world’s largest nickel producer, was reported to be analyzing binding offers for a 10% stake that could be valued at US$2.5 billion, Valor said on May 18, with a decision to come on May 25. The outlet cited unnamed people familiar with the matter who aren’t allowed to speak publicly about it.

The base metals sale could be to a single investor or a consortium, one of the people told Valor. Candidates could be GM, the Canada Pension Plan, Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority, and trading company Mitsui & Co. of Japan, Valor said it was told.

The Valor report updates news of the base metals sale first reported by The Financial Times in January.

Vale and GM didn’t reply to emails seeking comment, while a spokesman for Canada Pension Plan told The Northern Miner by email on May 19 that it doesn’t comment on speculation in the media.

Vale, which bought Sudbury, Ont.-focused nickel producer Inco in 2006 and operates the Voisey’s Bay mine in Labrador among its global assets, said last year it might seek a strategic partner for the copper and nickel unit. It wants to unlock value from the surging electric vehicle market where Tesla is already a major client. The unit could be spun off in a stock listing next year, sources told Valor

The global transition to clean energy is increasing demand for battery metals such as lithium, copper, nickel and cobalt. This year, GM already promised a US$650-million investment in Lithium Americas’ (TSX: LAC; NYSE: LAC) Thacker Pass project in Nevada. Tesla has been one of the leading investors in the battery metals space over the past decade, according to data collected by Bloomberg. Automaker Stellantis, formerly Fiat-Chrysler, promised a $5-billion battery plant

in Windsor, Ont., though it’s now in a dispute with the federal government over funding.

“If I move the green metals, copper, nickel, cobalt, to a separate entity, that makes it easier for people to understand the criticality and the growth that’s coming,” Vale CEO Eduardo Bartolomeo said on a February conference call about earnings. “That’s the next reason why we’re doing that. Because if you understand the needs of cash for this business, we’re talking a huge amount of money. We’re talking US$20 billion.”

The company is aiming to nearly triple copper output to 900,000 tonnes a year in 2030 from a range of 335,000 to 370,000 tonnes this year. The goal is to almost double nickel production at the same time to 300,000 tonnes per year from 160,000 to 175,000 tonnes in 2023.

Shares in Vale fell more than 5% in May to US$13.35 each, following the wider market lower on concerns over stalled negotiations about U.S. government debt. The stock, valuing the company at US$60.8 billion, has traded in a 52-week range of US$11.72 and US$19.31. TNM

“With a combined portfolio spanning from extraction to chemicals over multiple jurisdictions and resource types, and a healthy pipeline of expansions and greenfield projects, it will be one of the largest and most resilient lithium producers globally by the end of the decade,” Fastmarkets NewGen’s Roberts said.

The consolidation also enables the sharing of know-how, the analyst noted. Livent has been a leader in direct lithium extraction production, which it has used for 15 to 20 years.

“Allkem’s brine operations will now be able to benefit from this and Livent’s interest in Nemaska Lithium will be able to benefit from Allkem’s hard rock expertise,” Roberts said.

Lithium M&A surges Australian lithium miners have been fending off takeover approaches this year. In March, Liontown Resources (ASX: LTR) rebuffed a US$3.7 billion (A$5.5 billion) buyout bid from Albemarle, and has since turned down two previous offers by the U.S. producer.

meet surging demand from electric vehicle makers, saying that it was assessing lithium assets in Canada and other countries to boost its capacity.

“We see Canada as a core part of our expansion capacity. We have to get bigger. We can’t just sit still,” Graves said in a November interview.

Allkem gets the lion’s share of its profit from its Mt Cattlin mine in Western Australia, but it has flagged growth plans in Argentina and at the James Bay spodumene project in Canada.

The wave of deals in the lithium sector come as prices of the battery metal fell by more than 50% from almost US$90,000 per tonne at the end of 2022 to about US$24,000 per tonne in April, on weak demand from the Chinese EV sector, according to Benchmark Mineral Intelligence. Prices have recovered over the past few weeks and are now above US$33,000 a tonne. While the drop has been dramatic, Benchmark analysts note lithium prices were only about US$10,000 a tonne before the Covid-19 pandemic hit worldwide markets. TNM

NOTICE TO CLAIMANTS WITH POST FILING CLAIMS AGAINST THE DIRECTORS AND OFFICERS OF PURE GOLD MINING INC.

RE: NOTICE OF CLAIMS PROCESS FOR POST-FILING CLAIMS AGAINST THE DIRECTORS AND OFFICERS OF PURE GOLD MINING INC. (“PGM”) PLEASE TAKE NOTICE that on May 10, 2023, the Supreme Court of British Columbia issued an order (the “Post-Filing D&O Claims Process Order”) in PGM’s proceedings under the Companies’ Creditors Arrangement Act (“CCAA”).  A copy of the Post-Filing D&O Claims Process Order can be found on the website of KSV Restructuring Inc. (the “Monitor”) at: https:// www.ksvadvisory.com/experience/case/pure-gold-.

The Post-Filing D&O Claims Process Order requires that all claimants who wish to assert a post-filing claim against PGM’s Directors and Officers must file a Proof of Claim with the Monitor on or before 4:00 p.m. (Pacific time) on June 12, 2023 (the “Claims Bar Date”), by sending the Proof of Claim to the Monitor by prepaid ordinary mail, registered mail, courier, personal delivery or electronic transmission at the following address:

KSV Restructuring Inc.  220 Bay Street  Suite 1300 Toronto, ON M5J 2W4

Attention: Christian Vit

Email:       cvit@ksvadvisory.com  Fax:          647.848.1350

Claimants may obtain the Post-Filing D&O Claims Process Order and a Proof of Claim form from the Monitor’s website at https://www.ksvadvisory. com/experience/case/pure-gold- or by contacting the Monitor by telephone (647.848.1350).

Only Proofs of Claim received by the Monitor on or before 4:00 p.m. (Pacific time) on June 12, 2023 will be considered filed by the Claims Bar Date.

PURSUANT TO THE D&O CLAIMS PROCESS ORDER, FAILURE TO SUBMIT A PROOF OF CLAIM FORM TO THE MONITOR BY THE CLAIMS BAR DATE WILL RESULT IN ANY POST-FILING D&O CLAIM

YOU MAY HAVE BEING FOREVER BARRED AND EXTINGUISHED.

DATED this 29th day of May, 2023

KSV RESTRUCTURING INC.

MONITOR 220 Bay Street, Suite 1300 Toronto, ON M5J 2W4

Allkem’s flagship Olaroz lithium facility in northern Argentina. ALLKEM

Investors flock to safety on rising risk around the globe

Prospective geology, reasonable costs, workable permitting and regulation regimes, and political stability rarely go together in a mining jurisdiction.

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BY ALISHA HIYATE

That’s what makes mining such a high-risk, highstakes business. Early entry into risky, but geologically rich jurisdictions can only in retrospect be assessed as a brilliant move or an expensive disaster.

Miners have invested hundreds of millions into finding, delineating, developing and operating assets only to see them expropriated by governments. Centerra Gold’s Kumtor mine in Kyrgyzstan in 2021; TriMetals Mining’s Malku Khota silver-indium project in Bolivia in 2012; and several gold projects in Venezuela in 2008, including Gold Reserves’ Las Brisas project, and Crystallex International’s Las Cristinas among them.

In some instances, a country can become off-limits overnight for reasons that have nothing to do with mining policy. International sanctions against Russia, for example, forced Kinross Gold to sell its profitable Kupol mine in the Chukotka region last year — and to accept US$340 million for its asset, half the negotiated price instead of US$680 million — after a government review of the transaction.

And in other cases, political risk can shift quickly.

Take Ecuador’s infamous “windfall profits tax” that prompted Kinross to sell the rich, high-grade Fruta del Norte project, which it acquired for US$1.2 billion in 2008, six years later for US$240 million. After only six months of negotiations with the government — still led by the same president, Rafael Correa — new owner Lundin Gold was able to come up with a workable agreement to develop FDN. The mine produced first gold in 2019 and churned out more than 475,000 oz. gold last year.

While expropriations and geopolitical considerations such as a state of war are on the extreme side, current geopolitical trends are nudging up risks for miners in many regions. Resource nationalism is on the rise, as countries with previously mining-friendly jurisdictions including Chile and Mexico institute new taxes and restrictions on mining, while political stability remains elusive in many parts of the world.

One has only to look at the trio of Peru, Ecuador and Colombia — the focus of our current issue.

• In Peru, a political crisis began with the removal and arrest of leftist president Pedro Castillo in December, after he attempted to dissolve congress ahead of a vote to impeach him. Widespread protests against his removal turned violent, with scores of people killed. While the situation has calmed considerably (see Hudbay story on page 13), it was only five months ago that road blockades choked off mine supply routes and forced closures, with Glencore’s Antapaccay copper mine in Espinar province facing direct attacks.

• In Ecuador, President Guillermo Lasso successfully dissolved congress on May 17 ahead of an expected impeachment vote. Although it has never been used before, the move is allowed under the country’s 2008 redrawn constitution. However, widespread protests against the right-wing leader, mirroring country-wide demonstrations against Lasso last year led by Indigenous groups, are expected. Elections will take place within six months, but until then, Lasso, who won election in 2021, can govern by decree. In addition to the rising cost of living, Lasso’s failure to address escalating gang violence in Ecuador is a major reason for his dismal approval rating, which at the end of last year dipped under 20%.

• And in Colombia, there is uncertainty about new regulations that the leftist government of Gustavo Petro could put in place. Elected last year, Petro is eyeing higher taxes on mining and oil companies, mandating environmental licences for exploration, and updating the country’s mining code to prioritize small-scale mining over “big multinational companies” and increase environmental protections. In addition, a May 17 bombing attack by illegal miners that killed two people and injured 14 at Zijin Mining’s Buritica gold mine in Antioquia province demonstrates that concerns about security and criminal activity in Colombia aren’t all in the past.

Fraser Institute survey

Political instability isn’t new for any of the three countries in the northwestern corner of South America, which have bounced around on the Fraser Institute’s annual ranking of mining jurisdictions over the years. The think tank’s series of reports, which are based on surveys of mining executives, take both policy and mineral potential into account at a ratio of 40% policy and 60% geology in its Investment Attractiveness Index.

Peru, which has the longest history of large-scale mining development, rose as high as the No. 4 spot in the 1999-2000 survey, before falling to 14 in 2018. In this year’s survey, which was released in early May, Peru ranked 34th of 62 jurisdictions considered.

Ecuador, which has seen an influx of mining investment over the past decade, ranks 27th this year, up from 56 in 2018, but down from last year’s ranking of 24.

And Colombia, perceived as too unstable and dangerous, didn’t make the list for the first time until 2006-7, when miners began to see it make “large strides in improving security and battling criminal gangs and guerillas.” This year, it ranks 36th of 62, down from 29th spot last year. However, the Fraser Institute report noted that from a policy standpoint, it is the least attractive jurisdiction in Latin America and the Caribbean Basin for mining investment.

Given that this year’s survey was conducted between August and December 2022, some of the latest concerning developments in the region have yet to show up in the rankings.

The latest report reveals a preference for more stable jurisdictions, with the top 10 concentrated in Australia, Canada and the United States.

But a look back through previous years’ results suggests that trend started nearly 20 years ago, with tolerance for risk peaking in 2003 and 2004. During those years, five of the top 10 jurisdictions were located in developing nations. Since the financial crisis, there hasn’t been more than one country from developing regions in the top 10 in any year.

With skittish markets continuing to brace for a recession and investors opting for safety, expect to see more investment in jurisdictions like this year’s top 10: Nevada, Western Australia, Saskatchewan, Newfoundland & Labrador, Colorado, Northern Territory, Arizona, Quebec, South Australia, and Botswana. TNM

THE VIEW FROM ENGLAND: COLUMN | Win their hearts, and minds will follow

BY DR CHRIS HINDE Special to The Northern Miner

Ished tears within 30 pages. I expect you would too and, if you’re a miner, so you should. In a recently published novel, we are taken back to a small mining town in October 1966 when our industry killed children, young children, half a school of them.

Published by Faber & Faber, ‘A Terrible Kindness’ reminds us (as Jo Browning Wroe writes in her opening sentence) of when “something dreadful happened in Wales.” In Aberfan on that dark morning, 116 children (mostly between the ages of seven and 10) went to school and didn’t come back.

Their school roof poking above a sea of coal slurry is an image that will never fade, but many have been able to rationalize what happened. The spoil heap above Pantglas Junior School had an unusual composition and safe slope angles were compromised, the rain was heavy and the spring beneath the dump forgotten. (Legislation followed against this happening again, and the engineering geology of waste dumps was advanced and adopted world-wide.)

Hearts are not so easily repaired. A nation that had long embraced mining was betrayed, and the mining industry (everywhere) needs hearts as well as minds on its side. Cold calculation and rational reasoning are not enough. For that reason we are mistaken in our knee jerk, critical outpouring against the end-April tightening of Mexico’s mining legislation.

It is not often that I disagree with Ross Beaty but, in a recent interview with The Northern Miner published in the May 15-28 issue, the mining entrepreneur described the government’s move as “aggressive” and “extremely damaging” to Mexico’s mining industry. Perhaps it is, but he is fighting the wrong battle.

Beaty is correct, of course, to argue that the Mexican government’s new requirements will damage inward mining investment. He is focused, however, on influencing minds, and it is the hearts of a nation that need convincing.

The new Mexican law shortens mining concessions from 50 to 30 years, tightens water-extraction permits and raises environmental bonds. It also changes the firstcome-first-served grant system to a bidding process, increases remuneration to local communities and punishes speculation (by allowing concessions to be cancelled if no work is done within

two years). Exclusive exploration rights are now granted to a public entity, Servicio Geológico Mexicano (which may enter into agreements with private parties).

Taken at face value, these measures will seem reasonable to a majority of the public in most mining jurisdictions as we have failed to secure the necessary trust in existing mining practices. Staggeringly, this trust has been breached again in Wales, and barely 10 km north of Aberfan.

After 16 years, during which some 11 million tonnes of coal has been extracted, the Ffos-y-Fran opencast mine near Merthyr Tydfil has closed after an 18-month extension was rejected. Merthyr South Wales Ltd (MSWL) had asked to continue working until March 2024 (its original planning approval ended in September 2022), arguing that the additional revenue was required to fund a two-year reclamation scheme that had been arranged when it won planning permission in 2005.

Local residents say their lives have been blighted by coal dust and noise, and are furious that the local authority has not enforced remedial action to mitigate what they describe as a “scar on the mountain side.”

MSWL admitted that “insufficient funds” had been set aside to complete the restoration of the land (as agreed 18 years previously), and that time was needed to put forward and consult on a revised plan. The planning-extension meeting was told, however, that there was “a very real risk that one of the substantial benefits of the scheme will not be delivered.”

South Wales suffered a similar betrayal in 2010 when Celtic Energy Ltd. switched ownership of four open-cast coal mines to avoid restoration liabilities. In a subsequent fraud case, the judge ruled that the six defendants “had not acted unlawfully, regardless of whether or not they had acted dishonestly,” and said he could not judge “commercial morality.” Companies such as these two in South Wales do huge damage to our whole industry; damn them!

We all know that mining can be justified to rational minds. What remains to be done is demonstrate that our hearts are in the right place. Reasoning with the public is one thing, laying claim to their emotions is something else entirely. TNM Dr. Chris Hinde is a mining engineer and the director of Pick and Pen Ltd., a U.K.-based consulting firm. He previously worked for S&P Global Market Intelligence’s Metals and Mining division.

COMPANY INDEX

Newcrest Mining agrees to reunite with gold giant Newmont

M&A | Deal valued at US$19.3B will enhance Newmont’s copper exposure

BY ALISHA HIYATE

Newmont (NYSE: NGT; TSX: NEM) and Newcrest Mining (TSX: NCM; ASX:

NCM) are getting back together after being separated for more than 30 years.

Newcrest, which started out as an Australian subsidiary of gold giant Newmont in the 1960s before being spun out as a separate company in 1990, accepted a takeover offer valued at A$28.8 billion (US$19.3 billion), on May 14. It had previously rejected two bids.

The merger will create a megaminer with the industry’s largest reserve and resource base. It also adds more of the in-demand critical metal copper to Newmont’s portfolio.

The agreement will see Newcrest shareholders receive 0.4 of a Newmont share for each share held, plus a special dividend of up to $1.10 per share. If shareholders and regulators approve the deal, Newmont shareholders will end up with 69% of the merged company and Newcrest shareholders 31%. The companies expect the merger to close in the year’s final quarter.

The new deal offers Newcrest a 30.4% premium over its $22.45 per share closing price on Feb. 3. Newmont first offered 0.363 shares for each Newcrest share, before raising the share-exchange ratio to 0.38 shares in February.

On a conference call discussing the deal, Newmont president and CEO Tom Palmer said the merger would help the miner succeed in a “dynamic, complex and unpredictable environment” generated by societal, technological and geopolitical “megatrends,” and consolidates a portfolio of Tier 1 gold and copper assets in lower-risk jurisdictions.

“The addition of the Newcrest assets to the Newmont portfolio allows us to consolidate two world-class gold and copper mining districts in Australia and in Canada… unlocking compelling strategic, operational and sustainability driven synergies, unique to this transaction,” he said.

In a release, Palmer noted that, leveraging the company’s learnings from its acquisition of Goldcorp four years ago, Newmont believes it can deliver an estimated $500 million in annual synergies and $2 billion in incremental cash flow from optimizing its bulked up portfolio.

Newcrest chairman Peter Tomsett said that the transaction will provide significant value to Newcrest shareholders “through the recognition of our outstanding growth pipeline.” He added: “In addition to the ongoing benefits of merging these premier portfolios, the combined group will set a new benchmark in gold production while benefitting from a material and growing exposure to copper and a market leading position in safety and sustainability.”

Newcrest’s board has unanimously backed the proposal. More than 50% of Newcrest

shareholders will need to vote in favour of the merger, with at least 75% of votes cast in order for the merger to proceed. A simple majority of votes cast in favour by Newmont shareholders will also be required.

Brian MacArthur, a mining analyst with Raymond James says the deal gives Newmont the chance to acquire long-life assets and reserves and resources in lower-risk jurisdictions while increasing its copper exposure.

“The combined company would produce about 8 million oz. of annual gold production with

more than 5 million gold oz. from 10 large, long-life, low cost, Tier 1 assets,” he wrote. “Combined annual copper production would be about 350 million lb. from Australia and Canada.”

Newcrest’s operations include the Brucejack gold mine and 70% of the Red Chris copper-gold mine in British Columbia, Telfer gold-copper mine in Western Australia and Lihir gold mine in Papua New Guinea. It also holds a stake in the advanced Havieron gold-copper project in Western Australia and 50% of the advanced WafiGolpu gold-copper project in PNG in a 50-50 joint venture with Newmont.

Newmont has mines in Australia, Africa and across the Americas with about 96 million oz. of gold reserves. Newcrest counts gold reserves of about 52 million ounces.

After the merger, Newmont could sell some of its non-Tier 1 assets, with analysts at CIBC flagging several in Australia, the U.S., Canada and Suriname that the combined company could part with.

“In our view, we see Telfer (pending an update at Havieron), Cripple Creek & Victor, Éléonore and Coffee as the prime candidates for disposition. Porcupine, Musselwhite, and Merian could also be candidates for dispositions, though we see those as secondary in likelihood,” CIBC mining analyst Anita Soni wrote in a May 17 note.

Newmont will retain its TSX listing after the deal closes. Its shares traded at $58.96 at press time, down from $62.29 before the friendly deal was announced, and within a 52-week range of $51.44 and $89.79. Newcrest shares traded at $24.37 in Toronto, down $1.16. Its stock has traded between $13.81 and $27.44 over the last year. TNM

Marimaca Copper’s resource revamp lobs it into the ‘globally significant’ arena, says CEO

BY HENRY LAZENBY

Marimaca Copper (TSX: MARI) has reported a 44% lift in measured and indicated resources at its Marimaca Oxide Deposit (MOD) in Chile that will underpin an expanded operation in an upcoming feasibility study.

Part of Marimaca’s namesake project in the Antofagasta region, MOD now has measured and indicated oxide resources totalling 200 million tonnes grading 0.45% copper for 900,000 tonnes of metal. The update also outlined an inferred resource of 37 million tonnes grading 0.38% copper for 141,000 tonnes of metal.

The new estimate draws on 28,374 metres of new drilling completed since the previous estimate released in October 2022.

President and CEO Hayden Locke says that although the resource is still at the smaller end by global resource standards, the company has achieved the “magical but arbitrary” level of 1 million tonnes of contained copper across resource categories, “which means we’re now very much globally significant in terms of scale.”

The resource update represents

the conclusion of a successful twoyear infill drilling campaign at the MOD led by chief geologist Sergio Rivera and his team.

The oxide resource is at the heart of Marimaca’s strategy to become the next Chilean copper producer, but it can already see the future potential for the underlying sulphide mineralization.

Locke says the orebody’s shallow higher-grade core is expected to be

accessible in the first six years of the mine life. Its low strip ratio and limited pre-stripping or significant cutbacks expected during operation have also been preserved as the deposit has grown.

The new resource will inform a feasibility study slated to start later this year.

“What has been surprising for us is that the global resource, in terms of contained copper, increased

once again in this infill campaign,” Locke says. “This is quite unusual and represents a meaningful upside against our previous technical and economic studies.”

BMO Capital Markets mining analyst Rene Cartier is optimistic about the resource growth. “Overall, the updated resource is seen as another de-risking event building increased confidence at Marimaca ahead of a (feasibility study),” he said in a note to clients.

With more than 900,000 tonnes of contained metal in the measured and indicated categories, he expects the feasibility to outline a significant reserve.

The company has completed 139,164 metres of drilling since the deposit’s discovery in 2016. A sixth phase of metallurgical testing is underway which is expected to define the optimized process design flowsheet.

A 2020 preliminary economic assessment (PEA) confirmed Marimaca’s potential to be a low-capital-cost, high-margin copper mine. The project benefits from easy access to infrastructure, including power, transport and water, a skilled local workforce and simple logistics.

Importantly, Locke says the PEA also includes about 50 million

tonnes grading 0.7% total copper starting from the surface for about 350,000 tonnes of contained metal.

The mine plan calls for a low strip ratio of 1:1 maintained in constraining the pit shell, with all resources captured in a single pit. “Low pre-strip and LOM strip ratio drive significant cost advantages,” Locke said.

The latest exploration results represent the final phase of definition drilling at the MOD ahead of the feasibility. Meanwhile, the Marimaca team focuses on the sulphide target and delineating near-mine satellite oxide targets, including Mercedes, Cindy and Mititus.

“We have just finished our first sulphide drilling campaign, and samples are in the laboratory pending assay results. We continue to be very excited by the potential at depth at Marimaca. We’re getting no credit for it now, but we expect that to change if we have exploration success,” Locke notes on the sulphide drilling progress.

Marimaca shares traded at $4.00 apiece in Toronto at press time, while they’ve been up about 8% over the 12 months. It touched a high of $4.50 and a low of $2.45 over the period and has a market capitalization of $352.9 million. TNM

Newcrest Mining’s Red Chris copper mine in northwestern British Columbia. NEWCREST MINING

Core samples on display at the Marimaca copper project. TOM AZZOPARDI

TNM DRILL DOWN:

Ramelius at Mt. Magnet posts week’s best gold assay

BY COLIN MCCLELLAND

Our TNM Drill Down features highlights of the top gold assays of the previous week. Drill holes are ranked by gold grade x width, as identified by TNM Group data provider (www.miningintelligence.com).

Assays from Down Under led two from the Americas for the best gold drill results of the week May 12-19. Australia’s Ramelius Resources (ASX: RMS) is drilling to expand Mount Magnet, which it acquired from Harmony Gold in 2010 and restarted the next year. Osisko Development (TSXV: ODV) is drilling at the Trixie test mine at the Tintic project in central Utah. And Challenger Exploration (ASX: CEL) is using its assays to prepare a resource estimate at El Guayabo in Ecuador.

Ramelius cut 60 metres grading 7.8 grams gold per tonne from 448 metres downhole at Mt. Magnet for a grade x width value of 468. Mt. Magnet, 500 km northeast of Perth, has produced more than 6 million oz. gold since its discovery in 1891. The 225-sq.-km site includes the Eridanus pit, the Hill 60 underground deposit and the Shannon underground lode.

Eridanus, a new discovery in 2017, shows gold mineralization associated with an east-west trending granodiorite bound to the north and south by feldspar-phyric porphyry units. According to a September 2022 report, across all resource categories Eridanus holds 19 million tonnes at 1.2 grams gold per tonne

for 760,000 oz. gold, including probable reserves of 2.7 million tonnes at 1.3 grams gold.

The Hill 60 underground deposit was mined through a shaft access until the 1940’s and an open pit mining remnant lode in the 2000s before being restarted in 2019. It holds probable reserves of 400,000 tonnes grading 3.2 grams gold per tonne for 41,000 ounces.

Shannon’s lode is centred on a quartz vein within a granodiorite unit. Drilling since 2016 has defined the lode continuing below the pit for about 300 metres. It has 324,000 probable tonnes grading 5.2 grams gold per tonne for 54,000 oz. contained metal. Mining began in 2019.

Osisko Development’s hole

TRXU-DD-23-003 at Trixie in Utah cut 686 metres grading 62.8 grams gold per tonne from 38.3 metres for a grade x width of 431.

The company has completed 35 drill holes for 3,226 metres in its 5,000-metre drilling program this year, it said in a May 17 news release. The drilling is targeting mineralized domains and extending into the footwall to the west to test for parallel zones.

Two underground diamond drill rigs are operating and 1,390 metres of the Trixie portal and underground decline ramp have been completed. Osisko expects the ramp to reach the 625-metre level by the third quarter, when the company also plans to start

targeting copper mineralization

“High-grade gold and silver is observed in the footwall of the T2 and T1 zones, as both disseminated and vein mineralization,” Osisko Development president Chris Lodder said in the news release. “The drillholes are intersecting all zones within the deposit area and continue to build upon the exploration successes achieved in 2022. We are also excited to launch our initial drill campaign to target copper porphyry potential at Tintic.”

In hole GYDD-23-039 at the El Guayabo gold and copper project in Ecuador, Challenger Exploration cut 805.3 metres grading 0.5 gram gold per tonne from 4.6 metres for a grade x width of 403.

The assay is part of results from Australia-based Challenger’s phase two drilling program to generate an initial mineral resource estimate this month for the GY-A and GY-B anomalies at the site about 550 km south of Quito, the capital.

“This is another solid set of results which pave the way for our first resource in Ecuador,” Challenger managing director Kris Knauer said in a May 18 news release. “Adding to the potential it appears that GY-B and GY-C join forming one continuous zone at least 700 metres wide, open at depth and in both directions along strike. The main discovery zone, or GY-A, also remains open at depth and along strike.”

Canagold adds to gold resource at New Polaris project in BC

PRECIOUS METALS | Indicated ounces rise by 89%, overall tonnage by 23%

BY MOOSA IMRAN

An updated resource from Canagold Resources’ (TSX: CCM, US-OTC: CRCUF) raises the indicated ounces at its flagship New Polaris gold project in British Columbia by 89%, the company said on May 16.

The update, based on infill drilling from 2021-2022 saw the resource increase to 1.1 million contained oz. of gold in 2.9 million indicated tonnes grading 11.61 grams gold per tonne. That’s up from 586,000 contained oz. in 1.6 million tonnes grading 10.8 grams gold in a 2019 preliminary economic assessment (PEA).

The updated underground resource also includes 930,000 inferred tonnes grading 8.93 grams gold for 270,000 ounces.

The 23% increase in the overall resource tonnage comes from additional veins defined by the 2021-22 program that were integrated into the new geological model, the company said.

The gold grade was also improved by 8% in the indicated category, rising to 11.61 grams gold from 10.8 grams, due to refined modelling.

In a release, Canagold CEO Catalin Kilofliski said the company’s recent drill program was successful in hitting its resource target of over 1 million oz. to be incorporated in a feasibility study that’s now under way.

“Right now, we’re working with a potential mine plan that targets 100,000 ounces per year based on

an approximately 10-year mine life and assuming the current drilling depth we’ve achieved to date,” Kilofliski said.

New Polaris is about 100 km south of Atlin, B.C. and 60 km northeast of Juneau, Alaska, and is located within the traditional territory of the Taku River Tlingit First Nation.

The updated 2023 resource comes after Canagold completed an additional 40,000 metres of infill drilling.

The company updated the economics of the 2019 PEA in 2020 using a gold price of US$1,500 per oz., projecting cash costs of US$400 per oz., an after-tax net present value (at a 5% discount

rate) of $469 million and an internal rate of return of 56%. The payback period was pegged at 1.9 years and the mine life at 8.7 years for an 80,000 oz. gold per year operation.

In a research note on May 17, Red Cloud Securities analyst Taylor Combaluzier said the increase in the project’s resource and grade profile bodes well for its economics and brings it one step closer to its feasibility study.

“Canagold is already one of the highest-grade primary gold developers in Canada and the increase in tonnage, contained gold and indicated resource grade helps bolster the company’s resource profile,” he said.

Red Cloud also updated its modelled mine life for New Polaris and extended it by three years to 13 years (to 2039) and its net asset value to $473.3 million from about $363 million.

Red Cloud maintains its buy rating for Canagold and increased its target price to $1.40 from $1.10. Canagold shares traded at 25¢ in Toronto at press time, for a market cap of $34.2 million. Its shares traded in a 52-week window of 17¢ and 32¢. TNM

Canagold Resources’ New Polaris gold project in northwestern British Columbia. CANAGOLD RESOURCES

Neo Performance Materials preps to drill at Greenland rare earths project as CEO steps down

CRITICAL

MINERALS

| Company eyes PEA in 2024 for Sarfartoq project

BY BLAIR MCBRIDE

Canadian-based industrial materials manufacturer Neo Performance Materials (TSX: NEO) is preparing for its first exploration program at its Sarfartoq rare earths project in Greenland, just as its CEO and founder Constantine Karayannopoulous announced his retirement.

The $368-million market cap company uses rare earths to make magnetic powders, magnets, specialty chemicals and metals for industrial customers at production facilities in several countries including Canada, Germany, China and Thailand. It also recently became a permanent magnet manufacturer, after acquiring a 90% stake in U.K.-based ST Technologies Group in April.

CEO Constantine Karayannopoulos told The Northern Miner on May 11 about his plans to retire, saying that he had tried to retire three years ago but he negotiated a final tenure of three more years.

“Life is more than just work and I’ve been really working my ass off for the last 30 years in this job, starting this company and changing hands,” he said.

Neo president and chief financial officer Rahim Suleman will take over as CEO after Jul. 7.

The company acquired Sarfartoq last year as a longer-term way to minimize the price volatility of permanent magnets for its customers in the automotive industry.

It is now preparing for a summer drilling program at the rare earths project in Greenland, as it targets a preliminary economic assessment (PEA) for 2024.

On May 3, Neo transferred an exploration licence that was greenlit by the Greenlandic government to its special purpose subsidiary Neo North Star Resources (NNSR), which will do the drilling at Sarfartoq, located near the town of Kangerlussuaq in the southwest.

“We have had a number of discussions with the Greenland government [and] they’ve been very supportive of the project,” Karayannopoulos said. “This was the last remaining box that had to be ticked before the deal closed. We can start working on the site and take it to the next level.”

Neo purchased the licence from Hudson Resources (TSXV: HUD) for US$3.5 million, in a binding agreement announced last August.

“The folks like us that are the value-added producers… have to become miners ourselves. That’s why we set up NNSR,” Karayannopoulos said.

Capping off its latest news, Neo shareholders will in June vote on a rights plan that was floated last September, after

Australian rare earths developer Hastings Technology Metals (ASX: HAS) said in August it would acquire a 22.1% stake in Neo from an affiliate of Oaktree Capital Management, L.P. Hastings financed its stake with A$150 million ($135 million) that privately-held Wyloo Metals invested in Hastings especially for that purpose. Hastings aims to start production at its flagship Yangibana rare earths project in Western Australia in 2025.

Karayannopoulos said he was surprised at the time to hear from Oaktree that it had sold its majority stake to Hastings.

“(Hastings) have an interesting project in Australia, which, if they can bring it to market, it would be

very useful for them to be a raw material supplier to our Estonian facility,” he said. “We told them, if you build it, we will buy from you, as long as your product meets some specifications. However, we also made it very clear to them that we cannot take the technical risk of delivering that project and we cannot possibly take the financial risk.”

Hasting’s acquisition of a big chunk of Neo prompted the board of directors to approve a shareholder rights plan about a month later to protect shareholders’ interest amid any “unsolicited take-over bids” or acquisitions of large stakes in the company. While the plan was subject to acceptance by the Toronto Stock Exchange and ratification by shareholders within six months of its adoption, in February this year Neo said it was postponing ratification in a combined annual and special meeting of shareholders until June.

The CEO said that since “no troubles had surfaced by March” the postponement came down to logistics and costs.

“Instead of spending $150,000 on mailing costs, and a ton of work between lawyers, management, and consultants to write that circular for the shareholders, might as well

do this once because if we had that meeting in March, we would have to incur the expenses, write a circular and then update that circular two months later, before we mailed for June,” he said. “We felt that since there wasn’t an obvious, imminent threat... we decided to take the risk for a couple of months and wait for the annual general meeting. [There was] nothing else that was in play there.”

Summer exploration

Neo’s exploration licence covers part of the larger Sarfartoq carbonatite complex that also hosts Hudson’s ST1 rare earth elements project and the Nukittooq niobium-tantalum project.

Both projects contain neodymium and praseodymium in an indicated resource of 5.9 million tonnes averaging 1.8% total rare earth oxides (TREO) based on an underground mining scenario, according to a 2012 update to Hudson’s PEA published in 2011. Inferred resources accounted for 2.5 million tonnes averaging 1.6% TREO for the ST1 zone, based on a 1% cut-off grade.

About 3 km east of ST1 is the ST40 high grade zone that hosts a 45% ratio of neodymium oxide

to TREO, which Neo calls “one of the rare earth industry’s highest-known ratios.”

Neo’s 2023 drill program will run from June until October, with drill contractors and workers currently heading to a camp at the site, located at the end of a fjord and about 320 km north of the capital of Nuuk.

Up to 7,500 metres of mostly infill drilling is planned and Neo has enough cash to complete it and the PEA, though Karayannopoulos said the budget is confidential. The company hopes to complete the PEA by the first quarter of 2024.

While the 2011 PEA focused on one of 40 prospective sites at Sarfartoq, the new assessment will look to confirm the previous findings and then explore one or two more sites.

“Then next year and the year after we keep drilling and identifying not only the size, perhaps more importantly, we need to identify the quality of the resource,” Karayannopoulos said. “We need to look for more accurate descriptions of mineralogy… because that dictates what your flow sheet looks like, and how expensive it’s going to be to build.”

The Toronto-based company felt the need to do its own PEA so it could utilize better technology and so that its technical staff could “bless the work” already done, the CEO explained.

“We think that the combination of the characteristics of the deposit — tonnage, grade, mineralogy — combined with a flow sheet that we have seen rough estimates of. If we can confirm it, I think it could mean that this is a resource that can reasonably easily and at a very competitive cost be brought to market.”

Greening its supply chain

The project in Greenland fits into Neo’s “magnets-to-mine” sustainable supply chain strategy.

The rare earths at Sarfartoq have a low uranium content, which allows Neo to explore for them after the government banned uranium mining in 2021. In addition, the project sits beside a deep water fjord, from where ships can transport rare earth concentrate across the North Atlantic and to Sillamae, Estonia. Neo’s affiliate, NPM Silmet OÜ is building a rare earth separation facility there.

The feedstock will then be transported to a rare earth permanent magnet manufacturing plant that Neo plans to build in Narva, just east of Sillamae.

NNSR has entered into an offtake agreement with NPM Silmet OÜ that gives Silmet rights to buy up to 60% of the ore or mineral concentrate produced from Sarfartoq once it’s operational.

Last November, Neo was awarded a grant of up to €18.7 million ($28.1 million) from the Estonian government under Europe’s Just Transition Fund towards the Narva plant’s construction. It was reportedly the first ever grant given out to a critical minerals company in the European Union.

That facility is to eventually provide European manufacturers with magnets for electric and hybrid vehicles, wind turbines and energy-saving electric motors and pumps.

Neo also has a supply agreement with Energy Fuels (TSX: EFR; NYSE: UUUU), under which the Colorado-based producer of uranium, vanadium and rare earths provides Neo with mixed rare earth carbonate produced at its White Mesa Mill in Utah, which was initially mined as monazite sand ore in Georgia by Chemours (NYSE: CC).

Neo shares traded at $8.84 at press time in Toronto, valuing the company at $399.5 million. The shares have traded in a 52-week window of $7.17 and $17.20. TNM

Neo Performance Materials bought Hudson Resources’ exploration licence for the Sarfartoq rare earths project, in Greenland. HUDSON RESOURCES

Constantine Karayannopoulous, CEO of Neo Performance Materials. BLAIR MCBRIDE

“THE FOLKS LIKE US THAT ARE THE VALUE-ADDED PRODUCERS… HAVE TO BECOME MINERS OURSELVES.”

Canada must invest more in mining to regain top production spot: MAC

POLICY | Mineral production has dropped over last decade

Lucara loses lustre as diamond production, sales disappoint

DIAMONDS | De Beers forced to merge sales auctions

BY BLAIR MCBRIDE

Canada’s mining sector has recovered from the challenges of the pandemic, but more investment is urgently needed for Canada to fulfill its promise as a key player in the global green economy, says a new report from the Mining Association of Canada (MAC).

“The Canadian Mining Story: Economic Impacts and Drivers for the Global Energy Transition,” released on May 10, details how the sector contributed $125 billion (or 5%) to the GDP in 2021.

But while the report notes encouraging actions from the federal government to help build an efficient investment and regulatory environment, such as its unveiling of the nearly $3.8-billion Critical Minerals Strategy last December, the 2022 Fall Economic Statement and the 2022 and 2023 budgets, it says more needs to be done.

Canada is no longer the top producer of minerals needed for a low-carbon economy, like zinc and nickel, MAC says, and many other minerals aren’t being produced at the level they were a decade ago. The report points to a decrease in mineral investment as the cause of the production decline.

“The stakes have never been higher and this year’s report demonstrates that, with the right supports, our industry will be better able to provide the sustainably produced products essential to businesses and the public, both domestically and for our allies across the globe,” said MAC President and CEO Pierre Gratton.

To keep the sector competitive, MAC recommends further investments in domestic mineral processing; expanding government exploration programs like the Mineral Exploration Tax Credit (METC) and undertaking wider

mineral resource assessments to include their mineral potential in land management decisions; more investment in infrastructure, particularly in the Far North; and further investment in developing a skilled workforce, especially among Indigenous people.

Despite the sector’s unfulfilled potential, MAC lauds government support for mining over the past 12 months.

In last year’s budget, the government doubled the METC for specific critical minerals; while this year’s budget pledges to improve the efficiency of timelines and permitting processes for new projects by the end of the year.

“[Those measures] will improve our industry’s ability to provide the minerals and metals integral to low-carbon technologies and the energy transition — this is good news as time is of the essence if we are to establish Canada as the global mining supplier of choice,” Gratton said.

Compared with other mining jurisdictions, Canada also better fills the need for minerals and metals and with higher social and environmental standards, the report says.

“Building green economy value chains provides a once-in-a-generation chance for Canada. We can be a key player in the economy of the future if we seize the opportunity before us,” he said.

Mining was a significant part of the economy in 2021, and formed a larger portion of its $7-trillion GDP value than finance, construction, transportation or retail trade. It also employed 665,000 people in 2021, with 403,000 people directly employed in mining and 263,000 indirectly employed. Mineral exports reached record levels that year, forming 22% of Canada’s total merchandise exports. TNM

BY HENRY LAZENBY AND CECILIA JAMASMIE

Diamond producers Lucara Diamond (TSX: LUC; BSE: LUC) and De Beers noted lower production and sales in their May reporting amid weak market conditions and geopolitical headwinds.

Vancouver-based Lucara said in a May 11 release that the difficulties at its Karowe mine in Botswana in the March quarter weighed on its bottom line.

For the three months ended March, the company’s revenue fell 37% year on year to US$42.8 million, which president and CEO Eira Thomas ascribed to a planned change in product mix starting early this year, compounded by weaker diamond prices compared with a year ago.

Headline profit, which is adjusted to remove non-recurring items, fell 57.5% to US$15.3 million due to lower sales.

Since beginning commercial operations in 2012, Karowe has become the only mine ever to yield two 1,000+ carat diamonds — the 1,758-carat Sewelô in 2019 and the 1,109-carat Lesedi La Rona in 2015.

However, Thomas noted that global economic concerns and geopolitical uncertainty, including Russia’s ongoing aggression in Ukraine, continue to play out in a persistently weak market, particularly in North America.

However, the executive says prices are beginning to show signs of steadying as China continues to open post-Covid. She expects the trend to continue through year-end and contribute to strong long-term market fundamentals as demand is expected to outstrip future supply.

Interestingly, Thomas notes that sales of laboratory-grown diamonds increased during the three months. Intense competition and technological improvements continue to drive prices of lab-grown stones down.

“This further differentiates this market segment from the natural diamond market and highlights the unique nature and inherent rarity of natural diamonds,” Thomas says.

Karowe diamonds are sold through three separate and distinct sales channels, including the HB Trading sales agreement which caters to large +10.8 carat stones; the Clara digital sales platform which uses computing algorithms to match rough diamond production to specific polished manufacturing demand on a per-stone basis; and through quarterly tenders. All three platforms generated fewer sales during the quarter.

Lucara shares, last trading in Toronto at 50¢, are flirting with the 12-month low and are framed against a 75% loss over the past five years. The company has a market capitalization of $231.7 million.

Thomas says the company is updating its schedule and budget for the Karowe underground expansion project, the cost of which was most recently pegged at US$547 million, up from US$514 million as of last August.

In a note to clients, BMO Capital Markets mining analyst Raj Ray said he expects the update by June, which should provide visibility on any potential funding gap.

For now, although production and earnings came in below estimates, Lucara’s balance sheet looks stable. Ray noted that Lucara has cash on hand of US$31.2 million

compared with US$26.4 million at 2022 year-end. The company also has US$60 million available to it under its US$170-million underground project finance facility and a further US$27 million available liquidity on the US$50 million working capital facility.

Lucara says its key focus this past quarter was on the central ventilation and production shaft sinking at the expansion project, as well as ongoing grouting work. The expansion is now fully powered, following the installation of 11kV transmission and 132kV power lines.

Total expansion costs this year will amount to US$105 million. Hard times for hard stones

De Beers, the largest diamond producer by value, has also reported lower rough diamond sales due to ongoing economic uncertainty and a slower pace of recovery in post-lockdown China.

In its fourth sales cycle of 2023, the Anglo American unit sold US$480 million worth of rough diamonds in the period between May 1-16, down 11% from US$542 million in the previous cycle and down 21% from the US$604 million it fetched in the same cycle last year.

The company sells its gems through 10 sales each year in Botswana’s capital, Gaborone.

De Beers chief executive Al Cook said in mid-May the consumer slowdown in the U.S. and China has prompted the company to combine both cycle 5 and 6 interim and main auctions.

“Whilst this was a difficult decision to make, we believe that it is one that reflects our sustainable and responsible approach to rough diamond supply,” Cook said. TNM

Pembridge Resources in trading halt as it seeks liquidation

YUKON | Halted Minto copper mine made up 90% of London-based firm’s assets

BY CECILIA JAMASMIE

Shares in Pembridge Resources

(LSE: PERE) were suspended from trading on May 18 after the embattled miner said the board had decided to place the firm into creditors’ voluntary liquidation. The company, whose shares free fell in mid-May after operations at Minto Metals’ (TSXV: MNTO)

namesake copper-gold mine in the

Yukon stopped. Pembridge owns an 11.2% stake in Minto Metals, and previously loaned the company about $2 million to double water treatment capacity at the operations’ two plants.

Pembridge noted the receivable from Minto was critical to its cash flow over the next 12 months as it represents over 90% of the company’s assets. Close to $250,000 were payable in instalments over the rest

of 2023, it added.

Pembridge said it had engaged insolvency advisers and will call a meeting as soon as possible to formally resolve the firm’s voluntary wind up.

The company has approximately $350,000 of short-term liabilities and $126,000 in cash as of May 15.

The Yukon government has assumed care and control of the mine site, located within the Selkirk

First Nation’s territory.

Yukon Energy, Mines and Resources Minister John Streicker said in a statement the government had hired JDS Mining to ensure environmental protection was maintained at the site.

Minto Metals also requested that trading of its shares in Canada be suspended on May 15. The board’s six members along with two vice-presidents resigned the

next day.

The Minto mine, located about 250 km north of Whitehorse, had produced around 500 million lb. of copper since operations began in 2007. It employed about 180 people. Pembridge shares closed at 23¢ each on May 17, prior to their suspension the following day and had lost almost 89% of their value year to date. TNM

Lucara Diamond’s flagship Karowe mine in east-central Botswana. LUCARA DIAMOND

Critical Elements Lithium’s Rose project in Quebec. CRITICAL ELEMENTS LITHIUM

What Canada’s new Modern Slavery Act means for miners

LEGISLATION | Companies to face stricter reporting rules in 2024

BY ELIZABETH FREELE AND RACHEL DEKKER

On May 3, Canada’s Parliament passed Bill S-211, the Modern Slavery Act, aimed at combating forced labour and child labour in supply chains. This new legislation has far-reaching implications for all Canadian-headquartered companies that meet the Act’s thresholds, especially those that are part of complex supply chains prone to human rights challenges, like mining.

The Act is expected to receive royal assent soon, which means its substantial reporting requirements will come into effect on Jan. 1, 2024. The deadline for the first report submission is on or before May 31, 2024. If your company is not already producing annual Modern Slavery Statements (under similar laws such as in Australia and the U.K.), now is the time to prepare for the requirements of the Modern Slavery Act.

In an industry that continues to struggle with social acceptance, the expectations of the new act can help mining companies to demonstrate and improve their efforts. Here is what your company can expect and how it can best prepare.

Context and applicability of the Modern Slavery Act

Modern slavery occurs in almost every country in the world and is part of many supply chains, cutting across ethnic, cultural, socio-economic, and religious lines. Recent estimates from the International Labour Organization put the number of people living in forced labour conditions, specifically, at 27.8 million globally, on any given day. In its efforts to curb this, Canada’s new Modern Slavery Act expands what is considered forced and child labour, and introduces mandatory reporting requirements that will apply to many Canadian headquartered and listed mining companies. This includes disclosing your company’s actions to manage forced and child labour risks — and their effectiveness.

Your company will be required to report if it is listed on a stock exchange, has a place of business, conducts business, or has assets in Canada, and if it meets at least two of the following conditions in at least one of the last two financial years: 1) has at least $20 million in assets; 2) generates at least $40-million in revenue, or; 3) employs about 250 employees or more. For comparison, the act has similar thresholds to those already used for disclosure requirements under the Extractive Sector Transparency Measures Act.

Implications for operators

On a global scale, companies generally demonstrate significant performance gaps with the requirements of modern slavery legislation.

In 2022, only 33% of companies assessed by the Corporate Human Rights Benchmark put expectations on their suppliers, 11% worked with them on human rights, and 2% assessed issues and disclosed progress. In mining, the Responsible Mining Foundation (RMF) and World Resources Forum found in 2021 and 2023 that due diligence systems typically succeed at risk identification, but “fall far short of robust risk management.” As a whole, the mining sector has to make a significant effort to start to meet the requirements of Canada’s Modern Slavery Act. Implications for Canadian-operated and owned miners include:

Human rights due diligence: Canadian-owned, operating, or listed mining companies will need to implement comprehensive human rights due diligence (HRDD) processes to identify and mitigate the risk of forced labour and child labour (under-eighteens) in supply chains. This involves mapping supply chains, conducting ongoing risk assessments, developing policies and processes, and establishing supplier contracts and codes of conduct.

Improved reporting and monitoring: Under the act, companies are expected to document efforts to prevent and address forced labour and child labour and to make the information available to the public in a transparent and accessible manner, including displaying it prominently on the company website.

Penalties and fines: Companies failing to comply with reporting requirements or ministerial recommendations, or omitting or providing misleading information may be fined up to $250,000 per instance. Companies that fail to comply with import restrictions may face penalties and restrictions on their ability to import goods into Canada in the future.

Personal liability: Directors, officers, and other individuals who knowingly participate in, authorize, or assent to non-compliant activities can be held personally liable, in addition to the company’s offense.

Liable persons would be subject to fines of up to $250,000 per offence regardless of prosecution or conviction of the company itself.

Increased reputational risks: The act recognizes that failure to combat the human tragedy of forced labour is simply unethical. Non-compliance could result in significant reputational damage for Canadian companies. Stakeholders might interpret that non-compliance as concealing unethical business practices or supporting forced or child labour.

Preparing your company

There are steps that your mining company can take, in order to be ready to meet Canada’s process, performance, and disclosure expectations related to forced and child labour.

Review existing policies, procedures, and systems: In preparing for compliance, review your current management tools to ensure they align with the act’s requirements. Many will likely find gaps in policy, assessment, management integration, as well as monitoring and reporting.

Develop a comprehensive compliance plan: Once gaps are identified, develop a comprehensive compliance roadmap that includes mapping your supply chain, conducting risk assessments and human rights impact assessments, developing corporate human rights policies, and implementing supplier contracts and codes of conduct that reflect the new legislation’s requirements. The Model Contract Clauses for Human Rights Project provides useful contract clauses to help companies integrate human rights due diligence principles into contracting.

Engage with suppliers and partners: Collaboration with suppliers and partners is crucial for identifying and addressing potential human rights issues in the supply chain. The act requires companies to ensure that suppliers are aligned within the updated definitions of forced labour and child labour. Engage to establish clear expectations, open communication chan-

nels, and effective collaboration to implement good practices and ensure compliance.

Upgrade grievance mechanisms: Implementing effective feedback or grievance mechanisms is crucial for affected individuals to raise concerns and seek redress. This supports risk mitigation by supporting prompt, fair, and transparent handling of grievances, including providing appropriate remediation when necessary. Companies should ensure these mechanisms are aligned with the United Nations Guiding Principles effectiveness criteria, which is commonly lacking in industry currently.

Expand monitoring and reporting systems: Companies should integrate human rights performance into robust monitoring mechanisms, and submit it to internal and third-party audits. Monitoring should cover ongoing implementation and management, but also the effectiveness. Companies must report on compliance with their commitments and obligations, as part of continuous improvement and accountability in addressing operational and supply chain human rights concerns.

Train employees and management: Building a culture of awareness and commitment to ethical supply chain practices through training will help facilitate compliance. Provide internal training on human rights, modern slavery, and the new legislation, its requirements, and the importance of ethical supply chain man-

agement. This will help to ensure that workers and leaders know their responsibilities and can effectively implement management tools to ensure compliance.

What to expect in future

The prevalence of modern slavery globally has increased dramatically in recent years, growing from 40 million individuals living in conditions of modern slavery in 2016 to nearly 50 million in 2021. While Canada’s Modern Slavery Act represents a significant step forward in curbing forced and child labour, critics argue that the legislation may not go far enough. Concerns remain about the lack of enforcement mechanisms and the need for stronger collaboration between government, businesses, and civil society to achieve meaningful change. While it may see refinements over time, the act nonetheless helps move Canada forward on a journey to improve human rights risk management in global supply chains connected to Canada.

As global awareness of forced labour and child labour issues grows, companies can expect increased scrutiny of their supply chain practices across jurisdictions. Where similar legislation does not yet exist, governments worldwide are likely to introduce legislation like Bill S-211, leading to a more stringent regulatory environment. Proactive steps will leave your company better prepared to address modern slavery compliance and, more importantly, help reduce or even eradicate forced labour in your value chains. TNM

AS GLOBAL AWARENESS OF FORCED LABOUR AND CHILD LABOUR ISSUES GROWS, COMPANIES CAN EXPECT INCREASED SCRUTINY OF THEIR SUPPLY CHAIN PRACTICES.

Rachel Dekker and Elizabeth Freele are the co-founders and managing partners of mining sustainability think tank and ESG consultancy Sympact. Sympact supports companies in ensuring their social performance and disclosures meet growing expectations through advisory services, training, and thought leadership products.

Indonesia emerges as a cobalt powerhouse amid surge in demand

CRITICAL MINERALS | Nation now world’s second-largest cobalt supplier

BY HENRY LAZENBY

Demand for cobalt is set to more than double by 2030 to 388,000 tonnes as the electric vehicle (EV) sector shifts into overdrive, says a new Benchmark Mineral Intelligence report.

The consultancy forecasts compound yearly cobalt demand growth of 10% over the weak figures in 2022, according to a May 10 report that was commissioned by the Istanbul-based Cobalt Institute.

“The industry is optimistic the cobalt market will continue to grow in the coming years, driven by the success of cobalt’s use in superalloys and hard metals, and particularly in EVs,” the institute’s interim director general, Caroline Braibant, said in an email to The Northern Miner Cobalt-containing batteries are essential for EV batteries’ safety, performance and stability — a factor that will continue to define consumer preferences in Europe and North America, she added.

According to the report, the EV sector will account for 89% of demand growth for cobalt by the end of the decade, followed by energy storage at 3% and super alloys at 2%. The EV sector accounted for 40% of total metal demand in 2022, and is forecast to swell to 66% by 2030.

Despite the rising share of lithium-iron-phosphate (LFP) battery chemistries, cobalt-containing cathode chemistries such as nickel-cobalt-manganese (NCM), nickel-cobalt-aluminum oxide (NCA) and lithium-cobalt oxide (LCO) will be the preferred technology for battery applications — accounting for 59% of total cathode demand in 2030, Benchmark suggests.

“NCM chemistries for EV applications will remain the major driver, shifting to higher nickel and lower cobalt intensities over time. LFP’s share will rise further rela-

tive to 2022, reaching a 39% share in 2030. However, we do not anticipate a widespread switch away from cobalt-containing chemistries,” reads the report.

All this demand will require more supply. According to Benchmark, global cobalt supply, both primary and secondary, will exceed 200,000 tonnes this year, and only amount to 318,000 tonnes by 2030, meaning the market will be in deficit by then.

The Democratic Republic of Congo (DRC) continues to dominate as the world’s primary cobalt source, accounting for 73% of the mined cobalt supply in 2022. It is expected to remain the dominant producer, although this share will fall to 57% by 2030.

Braibant says the August 2022 U.S. Inflation Reduction Act (IRA) is likely to reshape the global cobalt supply chain. Neither of the major suppliers — the DRC or Indonesia — are IRA-compliant. Compliant jurisdictions are expected to benefit from the IRA’s proposed financial and tax incentives.

Indonesia rising Notably, Benchmark flags Indonesia as stepping up to the supply challenge. Indonesia is the second-largest supplier by some margin and growing quickly.

From 2022 to 2030, Indonesia has the potential to increase cobalt supply by 10 times, compared to the DRC’s output rising by two-thirds, and could account for 37% of the potential mined supply growth from 2022-30, according to Benchmark.

Indonesia became the second largest cobalt producer last year, capturing 5% of the global market share and bypassing Australia. It produced 9,500 tonnes in 2022.

Despite not producing any mixed hydroxide precipitate (MHP) before 2021, the quick rollout of new

high-pressure acid leach (HPAL) nickel production capacity in Indonesia has meant that cobalt in MHP is quickly becoming a crucial part of the global market. Benchmark forecasts 93% of Indonesia’s potential cobalt growth to 2030 will come from MHP, with the remainder from matte — an artificial nickel-iron sulphide containing 25%-45% nickel that has turned the traditional nickel market on its head.

Investment in Indonesian HPAL capacity is mostly Chinese, although more Western companies are getting involved.

For now, Benchmark expects cobalt supplies will continue to outpace demand, at least until the mid2020s. The average 2022 price for cobalt in Europe was US$31 per lb., peaking at US$40 per lb. As of late March, cobalt was trading at about US$18 per lb., with forecasts suggesting that price level should persist through the rest of the year.

The price outlook changes to a more optimistic tone from the mid to late 2020s, Benchmark forecasts, underpinned by an emerging structural deficit as supply growth slows and demand grows quicker.

“With additional supply required to fill the widening forecast deficit, cobalt prices will increase to incentivize investment,” Benchmark says.

The agency also flags a divergent pricing mechanism for intermediate battery chemicals and the actual metals market. The latter was traditionally used for trading in all stages of the cobalt value chain.

“With chemical and metal market fundamentals diverging over the last year, given the relatively tight metal market and the intermediate oversupply, the metal price has often failed to represent the overall market balance. As such, alternative pricing methods are emerging in the hydroxide market, which avoid referencing the metal price,” the report says. TNM

land before Teck was able to separate its metallurgical coal and metals businesses so it could try to buy the whole company for less than the sum of its parts. Teck needs to soundly execute its plan to simplify the division of its assets, Karafotias said.

“If all we see is a revised separation post, it’s going to be difficult to convince shareholders there is additional value,” he said. “They need to put more on the table.”

A confidential bid this month for Teck’s metallurgical coal assets by a Canadian group led by Pierre Lassonde, a founder of Franco-Nevada (TSX: FNV; NYSE: FNV) and a former president of Newmont, has added a new dimension to

Glencore’s pursuit, Karafotias said. But the panel agreed a main player will be regulators after Canada boosted its critical minerals policy and stiffened its foreign investment regulations last year.

“The thing that you have to recognize with respect to the Canadian critical minerals policy, it is a substantial expansion of the review authority of the Industry Ministry to look at mining transactions,” McKoen said. “When you start flipping through all the minerals that are on there, it starts to become a question of what’s not on there.”

Previously, federal review only kicked in for deals greater than $1.9 billion or down to $512 million depending on the foreign entity’s World Trade Organization status and treaty relationship with Can-

ada, he said.

“For a lot of acquisitions in the exploration mining space, they would fall below those thresholds,” he said. “Now with the critical minerals list, we have an issue, and that is they’ve said everything on that list, if it has a foreign acquisition component, then it’s subject to a nebulous review of some sort.”

Divestments

In November, Canada ordered three Chinese companies to divest holdings from Canadian companies even though one’s main project is in Chile and others concerned non-controlling stakes. However, before the new strategy was adopted in October, China’s Zijin Mining was allowed to buy Canada’s Neo Lithium, which has a proj-

Silver

price surge set to continue on lower mine supplies, growing green demand

PRECIOUS METALS | Tight physical market strains primary supplies

BY HENRY LAZENBY

Global mined silver production has fallen 10% below the record highs of the past decade and underpins the recent price rally and potential gains, a new Bank of America analysis suggests.

Silver miners cut production after a drawn-out bear market in the last decade, and guidance from the largest silver producers suggests that silver output will not return to previous highs soon, the bank says in its May 11 Global Metals Weekly report.

“Factoring in guidance from the largest silver miners covered by the bank’s equities research team, we believe supply will remain capped going forward,” Global Commodity Research team lead and report co-author Michael Widmer said.

Silver prices have leapt 21% yearly, reaching US$25.7 per oz. In early April and US$26.05 per oz. on May 4.

The bank flags tightness on the physical market as compounding the already constrained primary supply. The bank’s data demonstrates that the volume of metal stored at the Chicago Mercantile Exchange warehouses and the London Bullion Market Association vaults has fallen steadily.

This has helped to offset weakness in traditional industrial demand, with metal imports from Japan and the U.S. weakening. China remains a net exporter of refined silver, while India, which imported record volumes last

ect in Argentina. Now, a subsidiary of China’s Sinomine, which owns the Tanco lithium and tantalum mine in Manitoba, wants to build a $170-million concentrator.

“Is that going to be allowed? I don’t know. I have no idea which way they’re going to jump,” McKoen said. “Having state-owned enterprises in your capital pool for your company has just generated in Canada a significant price that did not exist prior.

“The phone calls with these national security bodies are bizarre,” he said. “They don’t do Zoom calls because they don’t want you to know anybody on there. You hear all these numbers dial in but they don’t say who they are. They sit there silently and then someone from Industry Canada asks you questions.”

summer, has now seen demand return to more normal levels.

The bank is bullish on rising offtake from green sectors but notes investors have thus far mainly taken a wait-and-see approach. It expects demand from green technologies, including solar and electric vehicles, to increase steadily.

“This should help keep the market undersupplied,” Widmer notes.

Widmer says investors are often the marginal price drivers. Still, confidence in the white metal had taken a hit in recent years when bullish pitches around ”promising” applications, like silver usage in bandages, didn’t deliver.

While U.S. coin sales are not very high, coin premia are trading at about US$1 per oz. above the levels seen in the past decade, the bank notes.

Miners’ production cuts and increased demand from EVs and solar panels have rebalanced the silver market and prices are now finding support, even without much non-commercial demand, Widmer argues.

To that point, investment assets under management at physically backed exchange-traded funds have fallen since last year’s third quarter, even as silver prices have rallied. “Yet, with fundamentals strengthening, there is scope for increased investor buying, which may provide additional momentum to silver prices,” Widmer said.

The bank forecasts silver to average US$24.55 this year and US$25.75 per oz. in 2024. TNM

Industry majors increased their participation in equity offerings by 50% and takeovers of juniors by 180% in 2021 compared to the previous year’s M&A activity, said John Wilkin, a partner with law firm Blake, Cassels & Graydon. GM’s investment in Lithium Americas brings a new dynamic because it’s focused on securing supply, diffeing from other investors seeking a future sale of the firm, he said.

“In the last couple of years, we’ve seen a lot of activity by the majors investing in junior stories, so earnins, joint ventures and small acquisitions and strategic investments are back,” Wilkin said. “We’re seeing Tesla and many others moving to a different point in the risk profile of a project and looking at doing streaming transactions as well.”

High-grade cobalt-copper ore from an artisanal mine site in the Democratic Republic of Congo. COBALT BLOCKCHAIN

MERGER from 1

Indonesia became the second largest cobalt producer in 2022, says the Cobalt Institute. COBALT INSTITUTE

The first silver bar poured at SilverCrest Metals’ Las Chispas mine in Mexico. SILVERCREST METALS

Miners in Chile to pay more taxes as long-awaited reform approved

LEGISLATION | Tax rate as high as 47% for top copper producers

BY CECILIA JAMASMIE

Chilean lawmakers have approved an amended mining royalty bill, in the works for almost two years, which will require companies operating in the country to pay more taxes and royalties to the government.

The bill, endorsed by the Senate on May 11, was approved by a vote of 101 in favour to 24 against on May 17. It now requires only the signature of President Gabriel Boric, who has publicly backed it, to become law.

The bill sets up a maximum tax rate of around 47% for companies that produce over 80,000 tonnes of fine copper a year, considered high by the industry.

It also imposes a flat-rate ad valorem tax of 1% on miners that produce more than 50,000 tonnes per year, as well as an additional 8% to 26% tax depending on the miner’s operating margin.

Depreciation, as well as supply and work costs, would be taken into consideration in calculating a company’s returns.

Mining companies in Chile, the world’s top producer of copper and the no.2 producer of lithium, currently have a tax burden of 41% to 44% which is what main competitors, such as Peru, impose on large producers.

The tax ceiling for units of giant mining companies, including BHP (NYSE: BHP; LSE: BHP; ASX: BHP), Anglo American (LSE: AAL) and Teck Resources (TSX: TECK.A/TECK.B; NYSE: TECK), was the focus of debate for months as the Boric administration attempted to increase its take of earnings, without undermining Chile’s competitiveness.

End to uncertainty

Mining association Sonami expressed relief that the measure ended uncertainty over the type of reform lawmakers would ultimately adopt.

“It puts an end to a period of almost five years of uncertainty for the sector, which hurt the country’s main productive activity,” Sonami president Jorge Riesco said in a statement.

The association described the final legislative language as “bet-

ter” than what was initially proposed by the government, giving credit to Finance Minister Mario Marcel for introducing industry-friendly revisions.

The divisive bill has not satisfied everyone, with some criticizing the “ad valorem” clause. “It creates the obligation to pay the tax even when there are no profits,” explained mining law advisor and academic Maria Paz Pulga.

“If you sell in periods of low prices, you make a loss not only

in terms of profit, but also because you have to pay the tax,” Puga noted.

The approved bill indicates that companies with negative operating profits will not be required to pay the ad valorem component of the tax.

Marcel applauded the vote result, highlighting that the higher level of government take required of miners would address various past abuses.

“With this legislation, we seek to

avoid what happened many times with our country’s natural riches: they were exploited, they disappeared, which left very little for the country and its future development,” he said in a statement.

The new tax scheme, effective on Jan. 1, 2024, would inject about US$1.5 billion a year into the state’s coffers, according to official figures. From that figure, nearly US$450 million will be distributed to regional governments for social spending. TNM

Selective” participation

The minister explained that the government will only seek control of the operation — via different mechanisms, not just majority participation — in projects that are considered strategic.

Currently, the only strategic lithium area is the Atacama salt flat, Hernando said. In the others, each company will negotiate with representatives of either Enami or Codelco. The result of such negotiations will be presented to a committee integrated by the ministers of mining, finance, economy and environment, the vice president of Corfo and the country’s president.

Hernando said the new lithium strategy contemplates three options of public-private partnership.

In the first one, Codelco or Enami would conduct prospecting and then negotiate the terms of development with interested parties.

The second modality will see the state partnering with a private company for the exploration stage and will negotiate the next phase with that particular company.

The last option is for the government to grant exploration licences directly to private companies and evaluate results they present.

“Our strategy seeks to help the country create an ecosystem in which more value is added to its lithium industry, especially around issues [such] as technology transfer and worker training,” Hernando said.

China, Canada interested

According to official figures, around 50 interested parties, including companies and countries, have already approached Chilean authorities to express their interest in participating in the lithium business — including China and Canada.

The country’s Minister of Economy, Nicolás Grau, said that Chile’s lithium policy does not give preference to any country. Rather, it opens the possibility of exploring new salt flats to any interested company.

“The conversations we have had in recent weeks make us think that when the exploration permits begin to be tendered, offers will come from companies from a variety of countries. We want to promote that diversity,” Grau said.

The minister noted that potential partners have applauded the government’s initiative as it sets up a mechanism for their entry into the Chilean lithium market, which did not exist until the policy announcement in late April.

“Something that has been highlighted is that the environmental requirements the government is putting in place are in line with the growing demands of buyers and society in general,” Grau said.

“This will give projects developed in Chile better prospects in terms of social licence and acceptance of their production in international markets,” he noted.

The government will create a public research institute to develop new refining technologies, and insti-

tute lithium waste and battery recycling.

While Boric’s plan relies on the wide scale deployment of direct lithium extraction technologies, both ministers said the state will not impose technological choices on private companies.

“Rather, we will regulate to achieve desired outcomes taking into account the surrounding biodiversity,” Hernando said.

The long-term plan is to consolidate areas of oversight currently held by different public institutions, with some authorizing sales quotas and water use, under the mandates of a state-run lithium company.

Not missing the boat While some experts reacted neg-

atively to Chile’s new strategy, the majority of those interviewed said the announcement brings an end to a long period of uncertainty for the sector.

Shawn Doyle, a strategic lawyer and business advisor at Canada’s McCarthy Tétrault, considers the policy a positive turn of events for private capital keen to invest in the battery metal.

“It must be remembered that, as a result of policy paralysis, Chile has been effectively closed to new private investment in lithium for decades,” Doyle said.

Analysts from Fastmarkets believe that, if Chile fails to capitalize on the lithium boom, it would fall from the world’s second-largest lithium producer as of last year to fourth in 2030 after China, Australia and Argentina. They forecast the country’s share of production would shrink from almost a third to 12%.

Global demand for lithium, according to the government’s projections, will quadruple by 2030, reaching 1.8 million tonnes. Available supply by then is expected to sit at 1.5 million tonnes.

The country’s strategic Atacama region, which is also home to vast copper mines, supplies nearly one-quarter of the globe’s lithium.

World output of lithium carbonate equivalent was 737,000 tonnes in 2022. It is estimated to reach 964,000 tonnes this year and 1,167,000 tonnes in 2024, according to the Resources and Energy Quarterly Report by the Australian Department of Industry, Science and Resources in March. TNM

Teck Resources’ Quebrada Blanca Phase 2 project in northern Chile. TECK RESOURCES

Chile’s Mines Minister Marcela Hernando. TWITTER/CHILE’S MINISTRY OF MINES

MINING IN PERU, ECUADOR & COLOMBIA

Discovery-geared Collective pries more porphyry secrets from Guayabales project in Colombia

BY HENRY LAZENBY

Since going public in May 2021, Colombia-focused Collective Mining (TSXV: CNL) has made four notable discoveries, including the Apollo high-grade porphyry system last June.

Its share price has reflected its exploration success — despite investor concerns about political risk in Colombia and recent election of leftist President Gustavo Petro — with the stock trading up 73% over the past year.

The junior is steered by the same team that was behind Continental Gold, which was bought for $1.4 billion in cash by China’s Zijin Mining in 2020 for its Buritica project in Colombia.

Its current flagship endeavour, the Guayabales high-grade coppergold-silver porphyry project, in Caldas department, started out as a grassroots surface prospect.

The company intends to continue to grow the deposit’s footprint this year with an aggressive exploration plan, executive president Ari Sussman told The Northern Miner in May.

“The challenge at Guayabales is that everything is under cover,” Sussman explains. “We drilled Apollo based on analysis of only a 10-metre surface outcrop, and to date, our deep drilling is describing three mineralizing events, charging up a system that appears to widen towards almost a kilometre depth.”

Sussman says Collective is shifting to the next phase of strategic exploration, seeking to grow the size of mineralization after successfully meeting the first objective of proving the depth continuity of Apollo mineralization from surface.

Globally, porphyries tend to distribute geologically in clusters.

Drilling is ongoing at the site, with three active rigs to be joined by a fourth in June and a fifth in the fall — the latter two expected to work on the third prong of the stra-

tegic exploration strategy, which entails making another regional discovery. Sussman says there are six priority step-out targets ready for systematic drill testing.

Apollo is a high-grade, bulk tonnage copper-silver-gold system. It measures 395 by 385 by 915 metres and is open for expansion. Sussman explains it owes its metal endowment to an older copper-silver and gold porphyry system being overprinted by a younger preciousmetal-rich carbonate base metal vein system (intermediate sulphidation porphyry veins) within a magmatic, hydrothermal inter-mineral breccia body.

Collective released on May 16 the assay results from two further deep

NATURAL RESOURCES

Trusted. Independent. Committed.

drill holes into the Apollo target and described visuals from a new investigative drill hole at the project.

According to Collective, hole APC-46 was drilled westward from drill pad six and returned 358 metres grading 1.5 grams gold-equivalent per tonne from 5.7 metres downhole (comprising 0.55 grams gold per tonne, 31 grams silver and 0.32% copper). The hole also returned 19.2 metres at 3 grams gold-equivalent in oxides, and 60.6 metres at 2.7 grams gold-equivalent (1.13 grams gold, 48 grams silver, 0.5% copper) from 153 metres downhole.

Sussman explains this hole extended the strike length of the shallow mineralization to the west, with the dimensions now measuring 160 by 130 metres (previously 150 by 130 metres) and bottomed in mineralization in quartz diorite porphyry with the final 7.1 metres averaging 0.9 grams gold-equivalent per tonne in the porphyry.

Hole APC-44 was drilled to the northwest and cut 428.2 metres grading 1.4 grams gold-equivalent per tonne from 2 metres downhole (consisting of 0.6 gram gold, 29 grams silver and 0.24% copper), including 20 metres at 3.1 grams gold-equivalent in oxides, and 18.3 metres at 5.21 grams gold-equivalent from 144.25 metres downhole.

Sussman says visual observations of the core from hole APC53 provided a pleasant surprise.

Delivering fit-for-purpose solutions across the entire mining life cycle

Our fit-for-purpose solutions encompass the skills of qualified geologists, geostaticians, analytical chemists, mineralogists, metallurgists, process engineers and mining engineers brought together to provide accurate and timely mineral and process evaluation services across the entire mining life cycle.

“Detailed visual logging of drill hole APC-53, which was drilled to the northeast from pad 10, indicates that two potentially significant zones of mineralization were encountered along the hole in what is thought to be a contact zone between the three styles of mineralizing events, including the original porphyry and two distinct brecciation events,” Sussman explains.

In this hole, the company intersected the first zone about 150

metres from the surface. The core comprised intense sheeted carbonate and base metal veins hosted within mineralized quartz diorite porphyry. This is the first time the company has observed such “an intense set” of sheeted carbonate and base metal veins outside the breccia and represents a potentially high-grade target for follow-up drilling.

Since announcing the Apollo discovery hole, the company has drilled 46 holes for about 20,700 metres, which have been assayed. The phase two drilling program started on schedule, with 15 holes completed and results announced.

Eight further holes have been completed at the Apollo system, with assay results for APC-45, APC47 and APC-48 expected in the near term.

Guayabales is located in an area with adequate transport and hydropower, where 10 other mines, including Aris Resources’ (TSX: ARIS; US-OTC: TPRFF) Marmato project, have completed the permitting process successfully (an application for an expanded operation is pending).

Marmato is the analogue for Guayabales, according to Sussman, and hosts a June 2022 resource just shy of 9 million oz. gold across all categories.

Sussman says the jurisdiction is mining-friendly and points to Montreal-based Auxico Resources (CSE: AUAG; US-OTC: AUXIF) receiving an environmental impact assessment approval for its Minastyc rare earths project in Vichada as recently as Apr. 12.

At $5.95 per share at press time, Collective’s Toronto-listed shares have come off their recent 12-month high at $7.05, with a current market capitalization of $358.3 million. TNM

The outcrop at surface of the main breccia discovery at Apollo. Collective Mining

Hudbay holds firm on Peru, even as focus turns to North America

SOUTH AMERICA | CEO says country is stabilizing after violent protests earlier this year

BY HENRY LAZENBY

Hudbay Minerals (TSX: HBM; NYSE: HBM) says it wants to maintain its longterm exposure to politically volatile Peru as its short-term focus turns to completing an acquisition in Canada.

On Apr. 3, the Toronto-based company announced a friendly, US$439-million offer for Copper Mountain Mining (TSX: CMMC; ASX: C6C). The merger would reduce its exposure (based on net asset value) to Peru to about 45%, with 55% attributable to North America. In Canada it has the Lalor gold, silver, copper, zinc mine in Manitoba, and the new Copper Mountain asset in British Columbia following the deal’s expected June closure. The company is also buzzing as it prepares to develop its 86,000-tonne-per-year Copper World project in Arizona.

“The quick answer is yes; we are readjusting our distribution geographically in the short term. But over the long-term, together with (Peru exploration projects) Maria Reyna, Caballito, and then Copper World, we maintain roughly the same distribution,” Hudbay president and CEO Peter Kukielski said in response to an analyst question during a May 9 first-quarter results call.

It could appear as if the company is moving to reduce its strategic

exposure to Peru, especially after January, when protesters entered mines in the southern region of Cusco, where Hudbay has its cornerstone Constancia mine. They also damaged and burned machinery and vehicles at Glencore’s (LSE: GLEN) Antapaccay operations, according to local media.

At least 66 have died in violent protests in the country, posing risks for other large mines such as MMG’s Las Bambas and Freeport-McMoRan’s (NYSE: FCX) Cerro Verde.

Kukielski says the Constancia mine had to resort to emergency measures during the first quarter to keep production going from lowgrade stockpiles.

Since December 2022, supporters of ousted president Pedro Castillo have engaged in a series of political protests against President Dina Boluarte’s government and Congress. Castillo had attempted to dissolve Congress citing its efforts to block his attempted policies, resulting in the legislative body impeaching and removing him from office the same day.

For the most part, Kukielski said the situation has stabilized, although the company’s March-quarter production figures were down. During the first quarter, Constancia produced 20,500 tonnes of copper against the prior quarter’s 27,000 tonnes, but gold output folded in half at 11,000 oz.,

while silver managed to hold up relatively well at 552,000 ounces.

“We’ve been really happy with the turn of events in Peru. It looks like President Boluarte is doing a really good job of stabilizing the environment,” Kukielski said.

So far, Kukielski said the company is not experiencing any problems dealing with the new bureaucracy in obtaining exploration permits.

“I believed in Peru over the last two and a half decades. Peru tends to go through these ups and downs and cycles in social unrest, but I am convinced that Peru is a good place to be,” Kukielski said.

In a May 9 note to clients, BMO Capital Markets analyst Jackie Przybylowski said the Copper Mountain acquisition made sense for Hudbay to diversify its production sources.

The analyst, who maintains an ‘outperform’ rating on Hudbay shares, says the production and shipping disruptions, including a challenged operating quarter at the Lalor mine, served to confirm the company’s rationale for acquiring Copper Mountain.

“It rebalances geographic exposure, somewhat diluting the Peru risk that has depressed Hudbay‘s valuation,” the analyst said in April.

At the time, Przybylowski said that adding Copper Mountain’s cash flows to its balance sheet would help Hudbay fund and build

its Copper World project.

A prefeasibility study for Copper World is expected by mid-year. Clearing and grading work to prepare for the future development continues at site, including building roads and other facilities.

At Constancia, transportation logistics have returned to normal since mid-February, and the company has significantly reduced concentrate inventory buildup at the mine.

Mining activities resumed in the nearby Pampacancha satellite pit in the same month.

“The teams continue to operate safely and with support from local communities,” he said.

The company says it’s on track to achieve full-year Peru production guidance of 91,000 to 116,000 tonnes copper and 83,000 to 108,000 oz. gold, weighted towards the second half of the year.

Peru exploration upside

Hudbay has also restarted exploration activities focusing on drill permitting the prospective satellite assets, and evaluating reserve expansions at Constancia and Pampacancha.

During the conference call, Kukielski noted that Hudbay was particularly excited about Peru’s brownfield expansion opportunities close to the Constancia processing facility.

The first, Maria Reyna, sits on

the line that joins the Las Bambas and Tintaya mines. It has a similar radiometric footprint to these mines in scale. Vale (NYSE: VALE) drilled 11 holes in the property over a decade ago, all intersecting copper at surface, including 160 metres of over 1% copper equivalent.

The second, the Caballito mine, previously operated by Mitsui until the early 1990s, produced high-grade copper. The company believes a waste rock pile has economic mineralization, given that the historical mine’s cut-off grade was more than 1.5% copper.

There’s more resource upside at its two producing mines, too. Hudbay is finalizing a limited drill program and technical evaluations at the Constancia deposit to confirm the economics of adding another phase to the current mine plan, converting a portion of the existing resource base to reserves.

“Enhancing our brownfield expansions will position the core business for future transformational initiatives such as our Copper World project and better positions us for the next wave of value-creating consolidation in the copper space,” Kukielski said.

At press time in Toronto, Hudbay shares traded at $6.36, down more than 12% over the past 12 months, having tested $4.07 on the low end and $8.47 over the period. It has a market capitalization of $1.6 billion. TNM

PERU, ECUADOR AND COLOMBIA SNAPSHOT: EIGHT COMPANIES PURSUING COPPER, GOLD AND MORE

BY NORM TOLLINSKY

While geopolitical risk in South America is growing, Ecuador, Colombia and Peru remain mineralrich hot spots with excellent potential for new discoveries. Here are eight junior companies searching for tomorrow’s precious and base metals mines in the Andean nations.

n ADVENTUS MINING

Toronto-based Adventus Mining (TSXV: ADZN, US-OTC: ADVZF) and its partner, Salazar Resources (TSXV: SRL, US-OTC: SRLZF) are in the midst of an infill drill program aimed at updating the underground portion of the resource estimate for their El Domo copper-gold deposit, part of the 215-sq.-km Curipamba project in central Ecuador. The updated resource will inform a future feasibility study scheduled for completion this year that will include a potential underground operation in addition to the open pit for which a feasibility study was completed in October 2021.

Results from six drill holes released on Mar. 20 included a 14metre interval of massive sulphide grading 3.13% copper, 0.79 gram gold per tonne, 4.02% zinc and 27.9 grams silver per tonne (4.4% copper equivalent) beginning at a depth of 200.3 metres. Results from another five holes reported on Feb. 27 included 21 metres grading 4.43% copper, 3.4 grams gold per tonne, 2.28% zinc, 40.5 grams silver

and 0.1% lead (7.54% copper equivalent) beginning at 190.7 metres.

El Domo has proven and probable open pit reserves of 6.5 million tonnes at 1.93% copper, 2.52 grams gold per tonne, 46 grams silver per tonne, 2.49% zinc and 0.2% lead. Indicated and inferred underground resources account for another 2.7 million tonnes, including 1.9 million indicated tonnes grading 2.72% copper, 1.37 grams gold, 31 grams silver, 2.38% zinc and 0.14% lead.

Salazar discovered El Domo in 2017 and signed an earn-in agreement with Adventus the same year entitling the latter to a 75% stake in the Curipamba project. The conditions of the earn-in option, including $25 million in exploration and development spending and the completion of a feasibility study, were satisfied in 2021.

Adventus is also conducting regional exploration across the entire Curipamba project, claiming the discovery of 15 “compelling, high-priority targets” based on results from a 2019 airborne MobileMT geophysical survey totalling 2,142 line-km. Among them was the August 2021 discovery of the Agua Santa target, a new VMS system 4.5 km southwest of El Domo, where one drill hole intersected 6.3 metres of 1.77% copper, 1.46 grams gold per tonne, 7.45% zinc, 23.2 grams silver and 0.24% lead.

Adventus Mining has a market capitalization of $66.5 million.

n ANACORTES MINING

Anacortes Mining (TSXV: XYZ, US-OTC: XYZFF), owner of the Tres Cruces high-grade gold oxide deposit in Peru’s Quiruvilca mining district has entered into a binding letter of intent to be acquired by Steppe Gold (TSXV: STGO, US-OTC: STPGF) of Ulaanbaatar, Mongolia. On closing, sharehold-

ers of Vancouver-based Anacortes will own 21% of the combined company. Under the terms of the agreement, Anacortes shareholders will receive 0.4532 of a Steppe Gold common share, representing consideration of approximately 48¢ per Anacortes common share, a premium of 32% based on the closing prices of both companies at the close of trading on Mar. 3. A non-solicitation covenant in favour of Steppe Gold was extended from Apr. 17 to May 5 “or such earlier or later time” as the two companies agree.

The acquisition would transform Steppe Gold, operator of the ATO gold mine in Mongolia, into a multi-jurisdiction gold miner with a potential development profile of more than 200,000 oz. and a resource base of over 4.5 million gold equivalent ounces.

The 30-sq.-km Tres Cruces property, located 100 km east of the city of Trujillo, has a pit-constrained resource estimate of 2.5 million oz. of gold in 46.5 million tonnes grading 1.65 grams gold per tonne in the indicated category, including 630,000 leachable oz. at an average grade of 1.28 grams gold contained in both

oxide and sulphide material.

The Tres Cruces project shares a border with Barrick Gold’s (TSX: ABX, NYSE: GOLD) Lagunas Norte mine, an epithermal gold deposit which has produced over 10 million oz. of gold.

New Oroperu Resources discovered Tres Cruces in 1995 and, together with subsequent joint venture partners Battle Mountain Gold and Barrick’s Peruvian subsidiary, completed more than 72,000 metres of drilling.

In May 2022, Anacortes received authorization from Peru’s Ministry of Energy and Mines for a 22-hole core drilling program to include infill drilling of the known oxide resource, and in an Aug. 4 press release reported an intersection of 142.9 metres of 1.43 grams gold per tonne from 40.5 metres downhole. Anacortes Mining has a market capitalization of $17.9 million.

n ARIS MINING

Vancouver-based Aris Mining (TSX: ARIS, US-OTC: TPRFF) was established in September 2022 as a result of the merger of Aris Gold and GCM Mining. The company’s Segovia operations, 180 km northeast of Medellin, Colombia, and its Marmato mine 80 km south of Medellin produced 215,373 oz. of gold last year.

Aris is also the operator and 20% owner of the Soto Norte gold project 350 km north of Bogota. It acquired the interest in March 2022 from a subsidiary of the Mubadala Investment Co. in Abu Dhabi. Aris also has the option to earn an additional 30% interest in the project.

A feasibility study for Soto Norte with an effective date of January 2021 pegs initial capital costs at US$1.2 billion and a mine life of 14 years.

The study estimates annual production at 450,000 oz. of gold, with life-of-mine all-in sustaining costs of US$471 per ounce. It estimated an after-tax net present value (NPV) of $1.5 billion and an internal rate of return (IRR) of 20.8% at a base case gold price of $1,675 per oz. At a gold price of $1,925 per oz.,

Adventus Mining and Salazar Resources’ Curipamba copper-gold project in central Ecuador. ADVENTUS MINING

Anacortes Mining’s Tres Cruces gold project in northern Peru. ANACORTES MINING

the NPV rises to US$2 billion and the IRR to 24.4%.

The project has an indicated resource of 48.1 million tonnes grading 5.47 grams gold per tonne, 36 grams silver and 0.18% copper containing 8.5 million oz. of gold, 55.3 million oz. of silver and 193 million lb. of copper.

Aris also announced an updated resource for its gold-copper Toroparu project in Guyana on Mar. 14, reporting 115 million measured and indicated tonnes grading 1.45 grams gold per tonne for 5.4 million oz. of gold and 118,000 tonnes of copper. Inferred resources are 21.2 million tonnes grading 1.71 grams gold per tonne for 1.2 million oz. of gold. The Toroparu project covers an area of 428 sq. km in the Cuyuni-Mazaruni region, about 215 km southwest of the capital city of Georgetown.

Aris Mining has a market capitalization of $468.6.7 million.

n AUXICO RESOURCES

Montreal-based Auxico Resources

(CSE: AUAG, US-OTC: AUXIF) announced the approval of an environmental impact study for its Minastyc rare earth property in Colombia on Apr. 12, allowing it to move heavy equipment to the site for bulk sampling and a processing facility. A previously announced authorization of a work plan by Colombia’s Agencia Nacional de Minera gives Auxico permission for a small-scale mining operation of up to 300 tonnes per month.

A March 2022, a technical report for Minastyc, located in the municipality of Puerto Carreno, indicates the presence of tin, tantalum, niobium and titanium. The report also identifies “fine concentrates from bulk sampling with results of up to 68.3% total rare earth oxide content,” including cerium, dysprosium, erbium, gadolinium, hafnium and lanthanum. The report is due to be updated to include a resource estimate pending results for 72 kg of samples from the property.

The critical minerals and rare earth elements are hosted in monazite sands at surface requiring limited infrastructure, which Auxico says will allow it to begin sales and exporting in the near term.

An Apr. 20 press release also announced the results of metallurgical testing of rare earth concentrates

from Minastyc, demonstrating the ability to produce commercial concentrates of light and heavy rare earths. Of the light rare earths, testing reported 46.9% concentration of neodymium). Of the heavy rare earths, dysprosium revealed a 16.1% concentration — 20 times compared to the initial feed.

Auxico has a joint venture agreement with a Brazilian mining cooperative for the exploitation and commercialization of rare earths from tin tailings located over an area of 180 sq. km in the state of Rondonia. It also has an agreement with Central America Nickel to act as a trade agent for rare earth concentrates from the Democratic Republic of Congo.

Auxico has a market capitalization of $24.8 million.

n LIBERO COPPER

In May, Libero Copper (TSXV: LBC, US-OTC: LBCMF) announced a partnership with Anglo Asian Mining (AIM: AAZ) for the initial design, engineering and financial modelling of Libero’s Mocoa porphyry copper-molybdenum deposit located in Putumayo, Colombia. A strategic partner and Libero’s largest shareholder, London-based Anglo Asian is an experienced project developer, mine builder and operator of several gold, copper and silver projects in Azerbaijan. Anglo Asian acquired a 19.8% stake in Libero in January 2022.

The Mocoa deposit has a pitconstrained inferred resource of 636 million tonnes of 0.45% copper equivalent containing 4.6 billion lb. of copper and 511 million lb. of molybdenum based on a 2021 technical report.

The deposit was discovered in 1973 as a result of a regional stream-sediment geochemical survey conducted by the United Nations and the Colombian government. Exploration programs consisting of geological mapping, surface sampling, ground geophysics, diamond drilling and metallurgical test work were carried out between 1978 and 1983, and again in 2008 and 2012. More recently, Libero began a five-hole, 5,000metre drill program in February 2022, and announced an intersection of 557 metres of 0.89% copper equivalent beginning at 108 metres depth.

Last May, the Vancouver-based company said it had identified nine

Above: Signing of an impact and benefit agreement (IBA) with the Shuar Indigenous nations of Warints and Yawi for the Warintza Project, providing certainty of community support for the responsible advancement of Warintza. SOLARIS RESOURCES

Below: Solaris Resources’ Warintza project in southeastern Ecuador. SOLARIS RESOURCES

new high-priority porphyry targets as a result of magnetic, radiometric and LiDAR surveys carried out in late 2021 over the Mocoa project area covering 87 sq. km.

Libero also holds the Esperanza porphyry copper-gold and epithermal gold project in Argentina’s Huachi mining district. Drilling by Latin Minerals in 2018 at Esperanza returned assays of 0.57% copper and 0.27 gram gold per tonne over 387 metres from surface, in-

cluding 0.74% copper and 0.33 gram gold per tonne from surface to a depth of 232 metres.

Other porphyry copper-gold properties in Libero’s portfolio include Big Red and Big Bulk in British Columbia.

Libero Copper has a market capitalization of $11.9 million.

n OUTCROP SILVER & GOLD

In April, Outcrop Silver & Gold (TSXV: OCG, US-OTC: OCGSF)

reported an initial indicated resource of 1.2 million tonnes grading 614 grams silver equivalent per tonne containing 24.1 million oz. of silver equivalent at its 100%-owned Santa Ana project in Colombia. Inferred resources add 966,000 tonnes grading 435 grams silver equivalent per tonne for 13.5 million oz. of silver equivalent. The resource estimate was based

SNAPSHOT from / 14

SolGold’s Cascabel project in Northern Ecuador. SOLGOLD

on seven veins, each of which was reported to be open at depth and along strike. Dozens of other veins with high-grade samples from outcrops and historical workings have also been identified and will be drilled this year.

Located 15 km southeast of the town of Mariquita and 190 km northwest of Bogota, the Santa Ana project consists of six or more mapped or projected vein zones across a trend 12 km wide by 30 km long. The area is considered to be the highest-grade primary silver district in Colombia with historic grades among the highest in Latin America.

Vancouver-based Outcrop has conducted exploration drilling on approximately 10% of its titled surface, completing more than 300 diamond drill holes. Drill results reported Mar. 14 from four holes testing its Megapozo shoot included an intersection of 5.9 metres grading 426 grams silver equivalent per tonne and 2.7 metres grading 445 grams silver equivalent.

Outcrop also owns the Mallama and Argelia gold-silver projects, the Antares gold project and the Oribella gold-copper project in Colombia.

A public offering that closed on May 10 gave Outcrop aggregate gross proceeds of about $4.5 million. Participation in the public offering by Eric Sprott in the amount of $1 million raised his stake in Outcrop to 14.2% on a non-diluted basis and 21.2% on a partially diluted basis assuming the exercise of his 19,400,000 warrants.

Outcrop Silver and Gold has a market capitalization of $45 million.

n

SOLARIS RESOURCES

Recent drilling by Vancouver-based Solaris Resources (TSX: SLS, USOTC: SLSSF) at its 268-sq.-km, 100%-owned Warintza project in southeastern Ecuador has confirmed the discovery of a second more intensely mineralized porphyry centre 350 metres south of the original mid-2021 discovery at its Warintza East target. Warintza East is part of a cluster of outcropping porphyrys anchored by a largescale, high-grade open pit resource at its Warintza Central target.

The discovery, announced on May 2, was based on drill hole SLSE-28 which showed “strong mineralization from 19 metres to the end of the hole (at 309 metres) characterized by chalcopyrite-pyritemolybdenite in stockwork veins and disseminations similar to the highgrade portions of the Warintza Central deposit.” Assay results were still pending at press time.

An April 2022 in-pit indicated resource estimate for Warintza Central reported 579 million tonnes grading 0.59% copper equivalent for 2.7 million tonnes of copper, 150,000 tonnes of molybdenum and 930,000 oz. of gold at a 0.3% copper equivalent cut-off. Inferred resources totalled 887 million tonnes at 0.47% copper equivalent for 3.5 million tonnes of copper, 130,000 tonnes of molybdenum and 1.1 million oz. of gold. The resource also includes 180 million tonnes at 0.82% copper equivalent in the indicated category and 107 million tonnes at 0.73% copper equivalent for an “indicative starter pit.”

Solaris also has options to earn up to a 75% stake in two projects in Peru: Caprichio, a 460-sq.-km property with outcrop samples grading up to 3% copper, and Paco Orco, a 440-sq.-km polymetallic property located in the northern extension of the Southern Peru Copper Belt for which it reports surface samples grading up to 0.5% lead, 0.26% zinc and 58 grams gold per tonne.

Projects in Chile include the 160-sq.-km Ricardo property where drilling encountered rock

types and alteration similar to those at Chuquicamata, and Tamarugo, a 51-sq.-km property 65 km southwest of Codelco’s El Salvador copper mine for which Solaris has an option agreement with Freeport-McMoRan (NYSE: FCX) to earn up to a 75% interest for US$5.5 million in spending and the delivery of a prefeasibility study.

Solaris also has a 60% stake in the La Verde copper-silver-gold project in Mexico’s Michoacan state.

Teck Resources (TSX: TECK.A/ TECK.B; NYSE: TECK) holds the remaining 40% interest.

Solaris Resources has a market capitalization of $956.1 million.

n SOLGOLD

Brisbane-based SolGold (TSX: SOLG, LSE: SOLG) completed its acquisition of Cornerstone Capital Resources in February, consolidating the ownership of its flagship copper-gold Cascabel project in Ecuador. Prior to the merger, SolGold held an 85% stake in Cascabel with the remaining 15% held by Cornerstone. The friendly, all-stock deal, originally announced in October 2022, valued Ottawa-based Cor-

nerstone at $107.9 million.

The results of a preliminary feasibility study announced in April 2022 confirmed Cascabel as a large, long-life mining operation. With an initial capital investment of US$2.7 billion, the study forecast the project’s after tax NPV of US$2.9 billion, its IRR of 19.3%, and put its mine life at 26 years.

Located in Ecuador’s Imbabura province, a three-hour drive north of Quito, the Alpala deposit at Cascabel has measured and indicated resources of 2.7 billion tonnes grading 0.37% copper, 0.25 grams gold

per tonne and 1.08 parts per million silver for 9.9 million tonnes of contained copper, 21.7 million oz. of gold, and 92.2 million oz. of silver.

During the first 25 years of mining, Cascabel is expected to produce 207,000 tonnes of copper, 438,000 oz. of gold and 1.4 million oz. of silver per year.

In February, SolGold also reported on a strategic review and organizational optimization of the company that will include a workforce reduction, “the direct or indirect sale of an interest in Cascabel” and the spin-out of assets other than Cascabel. However, SolGold is well funded, having raised US$86 million in gross proceeds as a result of a US$50-million royalty investment by Osisko Gold Royalties in November and a US$36 million-capital raise with the participation of China’s Jiangxi Copper.

SolGold has several other projects in Ecuador, including Porvenir, where it has discovered significant copper-gold mineralization, and Helipuerto, Rio Amarillo and Cisne Loja, which contain geochemical and geophysical indications of large porphyry deposits. It also holds six properties in Australia and the Kuma concession in the Solomon Islands.

SolGold has a market capitalization of $940.8 million. TNM

Aris Mining’s Marmato project in western Colombia. ARIS MINING

Above: Workers prepare the site at Outcrop Silver and Gold’s Santa Ana project in west-central Colombia. OUTCROP SILVER & GOLD

Examining a rock sample at Libero Copper’s Mocoa project in southwestern Colombia. LIBERO COPPER

Auxico Resources’ Minastyc rare earths property in Colombia. AUXICO RESOURCES

TORONTO STOCK EXCHANGE / MAY 15-19, 2023

Stocks ended the May 15-19 trading period with a modest drop as investors considered drawn-out negotiations about the U.S. government’s debt ceiling and Canadian and U.S. April retail sales were on the weak side.

The S&P/TSX Composite Index fell 188.91 points or 0.9% to 20,351.06. The S&P/TSX Global Mining Index decreased 3.57 points or 3.2% to 108.91, and the S&P/TSX Global Base Metals Index declined 3.41 points or 1.8% to 186.35. The S&P/TSX Global Gold Index lost 17.64 points or 5.5% to 305.77, and spot gold ended the week at US$58.30 per oz. lower, or 2.9%, at US$1,961.60 per ounce.

Centerra Gold fell 21% to close at $7.08 after performing poorer than expected in the first quarter. Canaccord Genuity mining analyst Dalton Baretto wrote in a note that Centerra’s Mt. Milligan operation in central B.C. produced 28% less gold and 13% less copper than he’d forecast, while costs increased at the Langeloth metallurgical facility in Pennsylvania.

The company’s cash on its balance sheet dropped by 56% from the end of 2021 “with very little to show for the decline,” Baretto said. However, management expects the cash consumption trend to reverse this year. Grades are improving at Mt. Milligan, rising costs may slow in the molybdenum unit’s mines in Utah and B.C, while the Öksüt mine

in south-central Turkey may restart.

Still, Centerra is supporting four assets on care and maintenance (Öksüt, Kemess, Thompson Creek and Endako) with only Mt. Milligan producing, and it diverts part of that production to a stream arrangement.

Wheaton Precious Metals, which lost $3.31 to close at $64.94, even though it landed a new stream in Ecuador. Wheaton paid US$300 million for as much as 6.6% of gold produced at Lumina Gold’s Cangrejos project.

“In addition to (an estimated 6%) return, Cangrejos continues to add long-life precious metals exposure to Wheaton’s portfolio,” BMO mining analyst Jackie Przybylowski wrote in a May 17 note. “This is consistent with the type of growth preferred by investors.”

TSX VENTURE EXCHANGE / MAY 15-19, 2023

The S&P/TSX Venture Composite Index fell 5.05 points or 0.8% over the May 15-19 trading session to close at 612.79.

Surge Battery Metals gained 12¢ to end the week at 43¢ per share on news from its Nevada North lithium project in the United States.

The Vancouver-based company completed an initial drill program at the clayhosted lithium project, 73 km northeast of Wells, Nev., in October, and is planning a second phase. On May 16, it said it has hired McGinley & Associates to conduct hydrologic work at Nevada North to support groundwater data collection and sampling and identify water sources within 5 km.

Drilling has identified a strongly mineralized zone at Nevada North with a strike length of around 1.6 km. The highlight of the campaign was hole NN2207, which cut a total of 120.4 metres averaging 3,943 parts per million lithium in four zones.

Baru Gold recorded the week’s greatest percentage change. The stock closed 100% higher at 5¢ on news that it dropped a lawsuit it filed last summer against the government of Indonesia. The Vancouver-based junior also said its 70%-owned Sangihe Island gold project had received “National Vital Object” designation, which means it will enjoy “special protections and priority treatment,” includ-

ing an assigned government liaison that will help it resolve any disputes.

The lawsuit alleged local police and government officials supported illegal miners for “personal enrichment” and failed to uphold Baru Gold’s contract of work for the project. The company said it now believes the issues raised in its lawsuit “are no longer present,” with new leadership in local and regional police forces committed to enforcing the law.

Baru Gold says it will now advance Sangihe to production without a feasibility study. The project has a 2017 resource outlining 3.2 million indicated tonnes at 1.13 grams gold per tonne and 19.43 grams silver, plus inferred resources.

Bravo Mining added 38¢ per share to end

U.S. MARKETS / MAY 15-19, 2023

The Dow Jones Industrial Average gained 126.01 points or 0.4% to 33,426.63 and the S&P 500 added 67.9 points or 1.6 % over the week to 4,191.98.

Among the week’s top value gainers was Nutrien, which added US$2.06 per share to close at US$61.95. Earlier this month, the company reported disappointing first-quarter earnings and dialled down its guidance for the rest of the year on falling prices and lower sales volumes. The company’s net earnings for the third quarter were US$576 million, down 58% from US$1.4 billion a year earlier, and its sales for the quarter ended March were US$6.1 billion, down 20% from US$7.7 billion a year earlier. To meet increased global demand, Nutrien announced last June a plan to ramp up potash production by 40% compared with 2020 production levels to 18 million tonnes by 2025. However, it will likely slow the ramp-up should softer market conditions prevail.

Lithium Americas closed 4% higher Friday at US$22.27 per share. The U.S. Interior Department has removed one of the last remaining obstacles to its Thacker Pass mine in Nevada by finding that nearly all of the site contains metal needed to make electric vehicle batteries. The opinion from the depart-

ment’s solicitor comes amid a debate about whether more U.S. mines should be built to produce lithium and other green energy transition metals. The U.S. federal judge rejected activist groups’ claims that the Thacker Pass project would cause unnecessary harm to the environment. Lithium Americas recently started construction at Thacker Pass after receiving a notice to proceed from the Bureau of Land Management.

Barrick Gold was the week’s most active gold stock, with 84 million shares changing hands. The stock closed the session US$1.32 higher at US$17.86. The company said on May 3 that improvements at its Nevada and Dominican Republic operations in the second half of the year will keep it on track to

Ero Copper gained $1.31 or 5.5% to close at $25.06 after reporting first-quarter results in line with expectations while the Brazil-focused producer remains on track to double copper output over the next few years.

“We maintain our outperform rating,” Przybylowski said in a note. “Ero Copper continues to be our top pick North American senior base metals stock.”

She said the second half of this year will

improve results as Ero starts commissioning the Caraíba mill expansion and increasing grades while gold production at Xavantina rises after tapping the Matinha vein.

Ero is also searching for nickel on its Curaçá Valley property, and developing the Tucumã mine where pre-stripping is ahead of schedule and engineering and electrical work are on schedule to finish by the third quarter. TNM

the week at $3.58. On May 8, the company reported trenching results from its Luanga PGM-gold-nickel project in Brazil’s Para state.

Highlights included 146.8 metres of 1.36 grams palladium per tonne, 0.59 gram platinum, 0.07 gram rhodium, including a 50-metre section grading 2.9 grams palladium, 1.06 grams platinum, 0.15 gram rhodium and 0.06 gram gold.

The company also released assays from historical metallurgical drill core that had never been sampled. Hole FM-0004 returned 110 metres of 1.39 grams palladium, 0.64 gram platinum, 0.08 gram rhodium and 0.12 gram gold per tonne from surface.

Bravo expects to release a first NI 43-1010 compliant resource for Luanga, which was discovered in 2003, this year. TNM

achieve its 2023 guidance. Those improvements include the completion of major processing plant maintenance at its 61.5%owned Nevada Gold Mines operations, the conversion of the Goldstrike autoclave to a carbon-in-leach process, better- performance at Turquoise Ridge following commissioning of the third shaft late last year, and the steady ramp-up of throughput at

Pueblo Viejo’s expanded plant. While lower than the prior period, March-quarter production was on plan, and free cash flow increased. BMO mining analyst Jackie Przybylowski wrote in a May 17 note Barrick is currently unique in offering long-term investors modest dividends and meaningful reinvestment in growth projects as it pursues the construction of tier-one operations. TNM

METALS, MINING AND MONEY MARKETS

TSX WARRANTS

PRODUCER AND DEALER PRICES

LME WAREHOUSE LEVELS

Metal stocks (in tonnes) held in London Metal Exchange warehouses at opening on April 27, 2023 (change from April 20, 2023 in brackets): Aluminum Alloy 1920 (0)

Alio Gold Inc. (ALO.WT) - 10 Warrants to purchase one common share of the Issuer at $7.00 until expiry

Alio Gold Inc. J (ALO.WT.A) - One Warrant to purchase one common share of the Issuer at $8.00 until expiry

Aris Gold Corporation (ARIS.WT) - One

Warrant to purchase one Common Share of the Issuer at $2.75 until expiry.

Aris Gold Corporation (ARIS.WT.A) - One

Warrant to purchase 0.5 of one Common

Share of the Issuer at $2.75 until expiry

Aris Gold Corporation (ARIS.WT.B) - One

Warrant to purchase of one Common Share of the Issuer at $2.21 until expiry

eCobalt Solutions Inc. J (ECS.WT) - One

Warrant to purchase one common share of the Issuer at US$1.95 per share until expiry

Excellon Resources Inc (EXN.WT.A) - One warrant to purchase one common share of the Issuer at $2.80 until expiry

Excellon Resources Inc. (EXN.WT) - One

Warrant to purchase one common share of the issuer at $1.40 per share until expiry

Excelsior Mining Corp. (MIN.WT) - One

Warrant to purchase one Common Share of the Issuer at $1.25 until expiry.

Gran Colombia Gold (GCM.WT.B) - One

ABE Resources Inc. (ABE.WT) - One warrant to purchase one common share at $0.15 per share. Alpha Lithium Corporation (ALLI.WT) - One warrant to purchase one common share at $1.10 per share.

Alpha Lithium Corporation (ALLI.WT) - One warrant to purchase one common share at $1.10 per share.

American Cumo Mining Corp. (MLY.RT)2 rights and $0.07 are required to purchase one share

American Lithium Corp. (LI.WT) - One warrant to purchase one common share at $0.30 per share.

Antioquia Gold Inc. (AGD.RT) - One (1) Right and $0.042 are required to purchase one share.

Aurania Resources Ltd. (ARU.RT) -

Fourteen (14) Rights exercisable for one common share at $2.70 per common share.

Aurania Resources Ltd. (ARU.WT) - One warrant to purchase one common share at $5.50 per share.

Aurania Resources Ltd. (ARU.WT.A) - One warrant to purchase one common share at $4.25 per share.

Aurania Resources Ltd. (ARU.WT.B) - One warrant to purchase one common share at $2.20 per share.

Avidian Gold Corp. (AVG.RT) - Three rights and $0.11 are required to purchase one Share.

Boreal Metals Corp. (BMX.WT) - One warrant to purchase one common share at $0.50 per share.

Boreal Metals Corp. (BMX.WT) - One warrant to purchase one common share at $0.30 per share.

Cabral Gold Inc. (CBR.WT) - One warrant to purchase one common share at $0.80 per share.

Caldas Gold Corp. (CGC.WT) - One warrant to purchase one common share at $2.75 per share.

Cascadero Copper Corporation (CCD.

RT) - One right and $0.015 are required to purchase one Share.

Cordoba Minerals Corp (CDB.WT) - One warrant to purchase one common share at $1.08 per share.

Cordoba Minerals Corp (CDB.WT) - One warrant to purchase one common share at $1.08 per share.

Cordoba Minerals Corp. (CDB.RT) - One (1)

Right exercisable for One (1) Rights Share at $0.05 per Share.

Cordoba Minerals Corp. (CDB.RT) - One right to purchase one common share at $0.54 per share.

Denarius Silver Corp. (DSLV.WT) - One warrant to purchase one common share at $0.80 per share.

Elevation Gold Mining Corporation (ELVT.

WT) - One warrant to purchase one common share at $4.80 per share.

Elevation Gold Mining Corporation (ELVT.

WT.A) - One warrant to purchase one common share at $0.70 per share.

Empress Royalty Corp. (EMPR.WT) - One warrant to purchase one common share at

warrant to purchase one common share of the Issuer at $2.21 until expiry.

Karora Resources Inc. (KRR.WT) - One

Warrant to purchase one common share of the Issuer at $0.50 until expiry.

Liberty Gold Corp. Wt (LGD.WT) - One

Warrant to purchase one common share of the Issuer at $0.90 until expiry may 16,

2019

Lithium Americas Corp (LAC.WT) - One

Warrant to purchase one common share of the Issuer at $0.90 until expiry

Lydian International Limited (LYD.WT)One Warrant to purchase one additional ordinary share of the Issuer at $0.36 per share until expiry

Nevada Copper Corp. (NCU.WT) - One

Warrant to purchase one common share of the Issuer at $0.20 until expiry

Nevada Copper Corp. (NCU.WT.A) - One

Warrant to purchase one common share of the Issuer at $0.22 until expiry

Nomad Royalty Company Ltd. (NSR.WT) -

One Warrant to purchase one common share of the Issuer at $1.71 until expiry.

Novo Resources Corp. (NOVO.WT.A) - One Warrant to purchase one common share of the Issuer at $3.00 until expiry.

TSX VENTURE WARRANTS

$0.75 per share.

Equinox Gold Corp (EQX.WT) - One warrant to purchase one common share at $3.00 per share.

Eros Resources Corp. (ERC.WT) - One (1) Right exercisable for (1) Unit at $0.05 per Unit.

Falco Resources Ltd. (FPC.WT) - One warrant to purchase one common share at $1.70 per share.

Firefox Gold Corp. (FFOX.WT) - One warrant to purchase one common share at $0.60 per share.

Firefox Gold Corp. (FFOX.WT) - One warrant to purchase one common share at $3.00 per share.

Freeman Gold Corp (FMAN.WT.U) - One warrant to purchase one common share at US$0.65 per share.

Giga Metals Corporation (GIGA.WT) - One warrant to purchase one common share at $0.60 per share.

Giga Metals Corporation (GIGA.WT.A)One warrant to purchase one common share at $0.45 per share.

Giyani Metals Corp. (EMM.WT) - One warrant to purchase one common share at $0.60 per share.

Goldstar Minerals (GDM.RT) - One Right to purchase one common share at $0.03 per share. Goldstar Minerals Inc. (GDM.RT) - One (1)

Right and $0.05 are required to purchase one common share. Hot Chili Limited (HCH.WT) - One warrant to purchase one common share at $2.50 per share.

Kaizen Discovery Inc. (KZD.RT) - One warrant to purchase one common share at $0.51 per share.

LaSalle Exploration Corp. (LSX.WT) - One warrant to purchase one common share at $0.15 per share.

Lion One Metals Limited (LIO.WT) - One warrant to purchase one common share at $2.75 per share.

LithiumBank Resources Corp. (LBNK.WT)One warrant to purchase one common share at $2.00 per share.

LSC Lithium Corporation (LSC.RT) - One (1) right exercisable for One (1) Unit at $0.40 per Unit.

Mako Mining Corp. (MKO.RT) - Rights exercisable for One (1) share at $0.10 per share.

Mako Mining Corp. (MKO.WT.A) - One warrant to purchase one common share at $0.60 per share.

Manganese X Energy Corp. (MN.WT) - One warrant to purchase one common share at $0.15 per share.

Maple Gold Mines Ltd. (MGM.WT) - One warrant to purchase one common share at $0.40 per share

Maple Gold Mines Ltd. (MGM.WT) - One warrant to purchase one common share at $0.40 per share

Mexican Gold Corp. (MEX.WT) - One warrant to purchase one common share at $0.12 per share.

Millennial Lithium Corp. (ML.WT) - One

Novo Resources Corp. (NVO.WT.A) - One

Warrant to purchase one common share of the Issuer at $3.00 until expiry.

Platinum Group Metals Ltd. (PTM.WT.U)One Warrant to purchase one common share of the Issuer at US$0.17 until expiry

Royal Nickel Corporation (RNX.WT) - One Warrant to purchase one common share of the Issuer at $0.50 until expiry.

Sandstorm Gold (SSL.WT.B) - One Warrant to purchase one common share of the Issuer at US $14.00 until expiry.

Sherritt International Corporation (S.WT)Each whole Warrant entitles the holder to acquire between 1.00 and 1.25 additional common shares (as bulletin 2018-0062 table ) determined based on the Applicable Reference Cobalt Price at an exercise price of $1.95 per Warrant at any time prior to the Expiry Date

Treasury Metals Inc. Wt (TML.WT) - One Warrant to purchase one common share of the Issuer at $1.50 until expiry.

Trevali Mining Corporation (TV.WT) - One Warrant to purchase one common share of the Issuer at $0.23 until expiry.

warrant to purchase one common share at $4.25 per share.

Millennial Lithium Corp. (ML.WT) - One right to purchase one common share at $4.80 per share.

Millennial Precious Metals Corp. (MPM. WT) - One warrant to purchase one common share at $0.50 per share.

Mineworx Technologies Ltd. (MWX.RT)For every one (1) Share held, Shareholders will receive one (1) Right exercisable for One (1) Share at $0.015 per Share.

Mineworx Technologies Ltd. (MWX.RT)One right to purchase one common share at $0.015 per share.

Northern Vertex Mining Corp. (NEE.WT)One warrant to purchase one common share at $0.80 per share.

Novo Resources Corp. (NVO.WT) - One warrant to purchase one common share at $4.40 per share.

Orezone Gold Corporation (ORE.WT) - One warrant to purchase one common share at $0.80 per share.

Orezone Gold Corporation (ORE.WT) - One warrant to purchase one common share at $0.80 per share.

Osisko Development Corp. (ODV.WT) - One warrant to purchase one common share at $10.00 per share. Rock Tech Lithium Inc. (RCK.WT) - One warrant to purchase one common share at $4.50 per share.

Sandfire Resources America Inc. (SFR.RT)

- Forty one (41) Rights exercisable for One (1) Share at $0.15 per Share.

Sandfire Resources America Inc. (SFR. RT) - Eight (8) Rights exercisable for One (1) share at $0.06 per unit.

Silver Mountain Resources Inc. (AGMR. WT) - One warrant to purchase one common share at $0.70 per share.

Silver Mountain Resources Inc. (AGMR. WT.A) - One warrant to purchase one common share at $0.45 per share.

Star Royalties Ltd. (STRR.WT) - One warrant to purchase one common share at $1.00 per share.

Three Valley Copper Corp. (TVC.WT) - 20 warrants to purchase one Class A common share at $6.66 per share.

Tintina Resources Inc. (TAU.RT) - Nine(9) Rights exercisable for one share at $0.06 per share.

Ucore Rare Metals Inc. (UCU.RT) - One (1) right exercisable for one share at $4.00 per share.

Vision Lithium Inc. (VLI.WT) - One warrant to purchase one common share at $0.15 per share.

Vizsla Silver Corp. (VZLA.WT) - One warrant to purchase one common share at $3.25 per share.

Westhaven Gold Corp. (WHN.WT) - One warrant to purchase one common share at $1.00 per share.

Yellowhead Mining Inc. (YMI.RT) - One (1) Right and $0.12 are required to prchase one Share

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