Power Metallic making power plays – Special Feature
This article is a sponsored feature from Mining.com.au partner Power Metallic. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Power Metallic (TSX-V:PNPN) is a Canadian exploration company making power plays.
The company remains focused on advancing its Nisk project area – including the ‘high-grade’ Lion copper-PGE discovery and Nisk copper-nickel-PGE-cobalt deposit – towards Canada’s next polymetallic mine.
In mid-July, it closed on a definitive agreement to acquire 313 mineral claims from Li-FT Power (TSX-V:LIFT). These claims adjoin the 45.86km² Nisk property.
Power Metallic now holds almost 213km² of land in the Nisk camp, securing 20km of strike on the northern basin margin and 30km on the southern margin that envelop the Nisk, Lion, and Tiger discoveries.
Prior to closing the Li-FT deal, Power Metallic also obtained an exploration licence for the Jabal Baudan project in Saudi Arabia’s Jabal Sayid Mineralised Belt – underscoring its strategy of advancing minerals exploration globally. It also highlights an ability to secure high-value assets in competitive jurisdictions, as reported.
As CEO Terry Lynch tells Mining.com.au, Power Metallic is now actively seeking to move to a more senior exchange, and as part of these power moves. Part of this strategy includes looking to beef up the board.
In mid-August, Lynch was in New York for a non-deal roadshow as the Canadian mineral explorer seeks a potential listing in the US. Meeting with interested prospective investors, many of which have no mining exposure, Lynch says it’s time for Power Metallic to be engaging with the ‘big boys’ – and Wall Street is where power moves are made.
Listing in New York is seen as an ideal avenue to access capital although the CEO notes that floating on the Australian Securities Exchange (ASX) remains on the cards.
One thing Lynch is discovering by engaging with generalist funds in particular is while they have little or no mining stocks currently they are very interested in the junior mining space and want to invest. Power Metallic seems to be firmly on their radars.
“And it’s like, wow, we haven’t seen those generalist guys in years. So I still think it’s still early days,” the CEO says.
Muscling in with a power LiFT
“There’s always, there’s a bit of a zone in capital markets where retail can take you to a hundred million and then institutions take from $500 million and beyond. But that area in between. It’s sort of a struggle zone, and we’re in there now, breaking through it,” Lynch tells this news service.
“But it’s also a great zone for retail to be looking at because, and that’s why we’ve had a lot of success with ultra high-net-worth people because they know the math and they know these zones and they know that, this is where we get our bargains and we’ll ride it out.
“So as a company, all you can do is just keep pounding away and hopefully it works out.”
The ultra high-net-worths the CEO speaks of include industry legends and fellow billionaire mining magnates Robert Friedland and Rob McEwen.
One thing these ultra high-net-worth investors have in common – other than extreme wealth – is they tend to have longer term outlooks on exploration plays. They recognise the potential of a junior’s assets now but understand that it takes time, a measured approach, and the right people to have that potential realised.
For Power Metallic this question now is: How quickly are you going to build a mine?
“I believe we’ve already got a financially justified mine right now, but I think it’s going to be much bigger. And I think this time next year, the whole world will have realised not only do they have a mine, they have a district,” Lynch says.
As mentioned, Power Metallic acquired 313 mineral claims from Li-FT Power that adjoin the Nisk property, meaning it now holds 212.86km² of land in the Nisk camp.
The company expanded its land package by 360%, which enables Power Metallic to potentially develop multiple mines in the region, something Lynch says will be “transformative”.
“So we’re going to be a major player up there. We’ve basically assimilated most of the district. And I think that’s what the market will be hearing more about as we go.”
Power Metallic is embarking on a metallurgical process. A met study could be published either by the end of the year, or in early 2026.
The metallurgical study is literally putting Nisk under the microscope through chemical analysis to better understand exactly where the minerals sit and where they would report to.
Building blocks
The reason the company is so active is Lynch has a bullish outlook for the future, echoing sentiments of legendary natural resource investor Rick Rule who believes bull markets follow predictable patterns and this means the rest of the mining sector will soon follow.
“I definitely think that’s the case. We’re just at the start line, in my view. And I think it’s going to be a ripper, you know, probably one for the ages, especially because we’ve been so capital constrained, more capital constrained this cycle than almost any other cycle,” Power Metallic’s CEO adds.
“So that means the stocks that survived should really prosper. And I think the rips will be higher, they’ll get more attention. That’s what drives retail investors is when they see a 10 cent stock go to 10 bucks, they wake up. thinking, I could have bought that 10 cent stock. That could be me.
“That’s the truth in mining, you really have as good a chance as the Wall Street guys. Probably better because I’m in New York right now and I’ve been talking to the street and they are just getting reacquainted with mining. I think now that the President is talking about mining, America will take notice and to be ready I think we’re ultimately going to be hopefully listing here (in the US) shortly.”
“That’s the truth in mining, you really have as good a chance as the Wall Street guys. Probably better because I’m in New York right now and I’ve been talking to the street and they are just getting reacquainted with mining”
Power Metallic is also transforming from a “let’s find it and sell it” outlook to a “let’s build something that keeps on growing”. It is not interested in selling unless the price really is too good to say no to.
While Lynch concedes a public company technically are always in the business of selling if a suitor presents a premium offer in the best interests of shareholders. However, the CEO believes Power Metallic has the right team in the right jurisdictions, working on the right project to build multiple mines.
“We don’t waste money, we are pretty efficient with our capital. So we’re very bullish on the mining space overall. We think it’s underinvested and it’s ultimately going to have a great mining cycle. It’’s a great time to be bullish on mining. We have what we think are asymmetric opportunities,” he continues.
Powering up Saudi Arabia
While the Nisk property is 95% of the company’s current focus, the push into other geographical regions is part of its strategy of growing its potential production profile, extending beyond having district-scale exposure in Canada.
Obtaining an exploration licence for the Jabal Baudan project in Saudi Arabia’s Jabal Sayid Mineralised Belt is a milestone. It positions Power Metallic as one of the few foreign companies with mining concessions in the Kingdom.
Work at the project will eventually include a comprehensive compilation and reconnaissance stage, followed by advanced exploration targeting high-priority zones.
The Jabal Baudan property, encompassing over 200km2, is the largest of the seven exploration packages offered in the Jabal Sayid Belt. Situated 150km south of Jeddah along the western Red Sea coastal plain, Jabal Baudan is recognised for its prospectivity for copper, gold, and zinc.
The region is known for its massive volcanogenic massive sulphide (VMS) deposits, including the world-class Jabal Sayid Mine and the promising Umm ad Damar deposit.
As Lynch explains, the opportunity to enter the Kingdom a few years ago while at Beaver Creek. There, a “pretty compelling case” was made about the geology in the region.
“We checked it out with, you know, obviously world-class guys like Steve Beresford and others. And everyone said, ‘Yeah, it’s the real deal’. It’s like the Abitibi in the 1940s. It’s super prospective. So that was enticing,” Lynch says.
A year later the Lion zone at Nisk was ramping up and the opportunity to enter Saudi Arabia popped up once again.
Lynch reiterates while Nisk is 95% of the current strategic focus, it’s prudent that mining companies continue ‘planting the next seedling’, as it takes years for the fruits of labour to sprout.
Drilling is not poised to start in Saudi Arabia for another year but expectations are it’ll be a “very exciting place to be” and – for the longer term.
Nisk and reward
In North America, as mentioned Power Metallic continues advancing the Nisk Project Area (Nisk-Lion-Tiger) – a ‘high-grade’ copper–PGE, nickel, gold, and silver system – towards Canada’s next polymetallic mine.
Mineralisation at the Nisk and Lion discovery zones is expanding, it is evaluating the Tiger target, and exploring the enlarged land package through successive drill programs.
Lion contains about 45% copper and 55% precious metals – of which roughly 40% of the latter is PGMs – or PGEs as they are known in North America.
This bodes well for the company as it’s more advanced in terms of its PGMs than most other juniors.
“Right now, at current PGM prices, if you’re just a PGM discovery it’s tough, still tough, even though it’s gone up about 25%. If you look at the charts, boy, the charts in the PGMs look fantastic to me,” Lynch says.
“I mean, if you’re a chartist, you gotta like that chart. I think it looks like it’s obviously retesting a bit right now, but it definitely looks like it could rip.”
At the time of writing, platinum was trading at US$1,349 a troy ounce, palladium US$1,136, while rhodium was US$7,425, iridium US$4,675, and ruthenium US$925 per troy ounce, according to UK-based speciality chemicals company Johnson Matthey.
Since May 2024, the PGMs market has seen a recovery, with platinum prices surging some 33% and palladium rising about 12.5%.
This recent price movement follows years of deficits that had not yet translated into higher prices — a disconnect that appears to be on the cusp of resolving itself.
Write to Adam Orlando at Mining.com.au
Images: Power Metallic & Mining.com.au
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