What is attracting Rio Tinto to James Bay to commit to investing $65 million in a handful of mining properties there over the next few years? Corvette and Adina are the keys to understanding the craze for the Far North.
Due to its remoteness and hostile climate, Nord-du-Québec is a region whose subsoil remains largely underexplored. What we do know, however, is promising.
Diamonds (Renard mine) and gold (Éléonore mine) have already been discovered there. Uranium was also found there (Matoush).
Lately what makes geologists run north of the 50th parallel is lithium, ore used in the manufacture of cathodes, the positive pole of lithium-ion batteries of an electric car. And for good reason, the region was the scene of two major discoveries.
First name to remember is Corvette. It is a property, located 40 kilometers from the LG4 plant, owned by Patriot Battery Metals (PMET, in Vancouver, $17.53).
“Patriot found a series of pegmatites [magmatic rocks] that seem very large that they are drilling. There seem to be some pretty interesting contents. It seems like something major. Time will tell,” says Éric Lemieux, an independent mining analyst, who specializes in exploration companies.
Over a distance of 2.2 kilometers, Patriot obtained samples with an average grade of 1% and more lithium on twenty occasions during the 2021-2022 drilling campaign. Some samples have a 5% lithium content over a distance of 15 and 20 meters.
“An average lithium content of 1% attracts attention”, explains, for his part, Gino Roger, president and CEO of Midland Exploration which has just concluded a 65 million agreement with Rio Tinto to explore properties. of lithium. Then, the extent must be significant, over tens of meters or, even better, over hundreds of meters.
“When the wave of lithium started to grow, Patriot came up with an exploration project with potential,” says Éric Lemieux. The timing was just perfect. The stock went up from $0.30 on Nov 25, 2021 to above $10 on Jan 20, 2023. That’s a nasty range,” he said.
In 2021 and 2022, Quebec had two very good years in exploration, with expenditures hovering around $1 billion, reports the Association de l’Exploration Minière du Québec (AEMQ).
According to analyst Éric Lemieux, about thirty exploration companies are actively looking for lithium in Nord-du-Québec.
We may not have seen anything yet. The initial mineral resource estimate for the CV5 area at Corvette, which will incorporate results from winter 2023 drilling, is scheduled for next July.
“We can’t wait to see the results. If these turn out to be positive, it will be good for us and it will add to the interest in the region,” says Gino Roger. In mining, when you discover a deposit on a property, the neighbors start digging.
The second name to remember is Adina, owned by Australian Winsome Resources. In May, it intercepted a sample grading 2.25% lithium over 18.7 meters at 43.3 m depth and another averaging 2.09% lithium over 10 meters at 35 meters deep. An initial resource estimate is expected in 2023.
“The discovery of a new zone of mineralization at Adina reinforces our belief that this is a globally significant lithium project,” said CEO Chris Evans when the drill results were released.
Since last October, Winsome’s stock, listed on the Sydney Stock Exchange, has risen from $0.38 to $1.70 in Australian dollars.
“We are in an emerging phase of discoveries across the James Bay region for lithium,” says Jean-Marc Lulin, president and CEO of Exploration Azimut (AZM, in Vancouver, $1.18), which owns 50% of the Galinée property which adjoins Adina. The potential, not just with us, but with others, is very encouraging. »
The race for lithium currently taking place in Nord-du-Québec is creating jealousy between the protagonists. A local mining exploration company is the subject of a smear campaign by a British Columbia shareholder who scouts its claims located near a property that has been subject to discovery of a world-class deposit. Report.
Last March, the CEO of the company Colored Ties, Kal Malhi, publicly called for changes in the conduct of the business of Exploration Azimut (AZM, in Vancouver, $1.18), a Quebec junior active for 20 years in the James Bay.
Mr. Malhi, Colored Ties and Bullrun Capital, Mr. Malhi’s private company, are minority shareholders of Azimut as well as a slew of exploration companies active in the Nord-du-Québec territory, including Patriot Metals, which discovered a lithium deposit at the Corvette property.
In a statement, Colored Ties and Mr. Malhi criticize Azimut, its management and its board of directors for sitting on its mining claims covering a large territory and letting its neighbors do the expensive exploration work. This wait-and-see strategy is reflected in Azimut’s depressed share price, they say.
While denouncing the lack of dialogue on the part of Azimut and its CEO Jean-Marc Lulin, the protesters demanded a change in the business model and demanded two seats on the board of the Quebec company, without success. .
Publicly traded Colored Ties (TIE, in Vancouver, $0.94) invests in early-stage exploration companies, offering, it argues, the opportunity for traders to invest in upstream projects generally offered only to high net worth or institutional investors.
On the side of Azimut, it is considered that the suitor is disappointed not to have been able to acquire the properties it coveted.
“The nature of what they allege has no basis. They say that we refused to dialogue and they consider that they are not sufficiently informed about what we are going to do. For these two elements, it is factually inaccurate ”, maintains in an interview Jean-Marc Lulin, president and chief executive officer of Azimut.
According to him, the disgruntled shareholders have begun discussions with a view to acquiring two lithium properties (Pikwa and Galinée) that Azimut owns together with SOQUEM (Quebec Mining Exploration Company, subsidiary of Investissement Québec, investor arm of the provincial government).
Pikwa is an immediate continuation of a major lithium discovery on the Corvette property, by Patriot Battery Metals, while Galinée is a neighbor of Adina, owned by Winsome Resources.
“Mr. Malhi has the right to approach us to acquire projects. We are in discussions with a number of companies and potential partners, including him.
“Mr. Malhi had a very insistent approach, the word is weak, to force a deal with Azimut. This is not an approach in itself that is considered interesting. You can’t be forced to sign with someone if you think there are other opportunities that are better. »
Azimut prides itself on having the main mining exploration portfolio in Quebec with 28 main projects totaling nearly 18,000 claims, mainly in the Eeyou Istchee Baie-James region. It spends on exploration over 10 million annually. Over the years, Azimut has entered into 33 partnerships with 19 distinct companies, including 3 strategic alliances with Rio Tinto and 6 projects with SOQUEM.