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Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered as Bottom-Fish and Spec Value Hunter picks and will include projects that may be of interest only because they are in the limelight. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. KRO will keep track of projects mentioned through Discovery Watch with HoweStreet.com. Discovery Watch is available via YouTube or Podcast.
NioBay Metals Inc was introduced to DW in February 2019 after the junior was granted a drill permit for the James Bay niobium deposit in northern Ontario near the First Nations town of Moosonee. This didn't solve the problem that the tribal council chief was opposed to mining in principle and refused to consult with NioBay as required, and, when the Ontario ministry granted the permit anyway, filed for a judicial review of the decision claiming that NioBay never consulted with the Moose Cree FN. That pissed off the other MCFN tribal council members who resigned and forced an election in July 2019 rather than as scheduled in 2020. The anti-mining chief was not re-elected and most of her anti-mining allies on the council were replaced by members prepared to listen NioBay. That process finally led to a "protection agreement" which plugged the MCFN into NioBay's exploration plans and gave them comfort that this was not going to wreck their backyard. It allowed NioBay to conduct a drill program in Q1 of 2020 which it got done before Covid-19 shut down everything. The drilling deepened and extended the footprint of the carbonatite which led to an updated resource estimate in early July 2020 that boosted the indicated+inferred resource 19% to 63.5 million tonnes at a grade of 0.52-0.53% N2O5. That, however, is not so important because the critical milestone is a PEA which describes a plausible mining scenario and what its economic value might be. The niobium market is dominated by supply from Araxa in Brazil which is five times richer and five times bigger than James Bay. Niobium is a $3 billion market controlled 85% by the CBMM family which has set the niobium price at a level which allows 2 other mines to be viable, one in Brazil owned by ChinaMoly and Niobec in Quebec owned by Magris. Niobium demand has being growing at a CAGR of 6.5%, though this will be lower during the pandemic. But James Bay wouldn't be in production until 2025 or beyond. The deposit was discovered during the 1960's and taken to feasibility by Bechtel, but never developed because of its remote location. NioBay's goal is to make it the world's fourth major primary source of niobium and to do that James Bay needs to be viable at the price set by CBMM. NioBay is working on a PEA it hopes to have out before October 2020. It will present an underground only as well as open-pit/underground hybrid scenarios with a 6,000 tpd processing facility. The market has a hard time quantifying the size of a niobium prize, so I have created a SC 6,000 tpd UG scenario OV within the ShareCollective using a resource of 40 million tonnes at 0.53% N2O5 and the spot ferroniobium price. Its after tax NPV outcome is USD $576 million which translates into a potential future stock price of $13.19 if there is no further dilution. That is quite an impressive target even when you assume 100% dilution to drive James Bay through feasibility. The 43-101 PEA will thus be a critical milestone for the market's perception of the upside for NioBay, and it will also become the basis on which the MCFN will have to decide on what terms, if any, they support a major niobium mine in their backyard. (Jul 15, 2020)
Opus One Resources Inc was introduced to DW in March 2017 as a proxy for a potential area play surrounding Osisko Mining's rethink of the Windfall gold project in the Urban-Barry area of Quebec. Although a greenstone belt this area unlike the Abitibi was not know for robust orogenic gold systems. Windfall was as an erratic gold system which yielded high grades but the zones did not hang together well. The Osisko team felt that Windfall was in fact a mis-understood Timmins style system, and undertook a massive drilling campaign which figured out the plunge of the vein systems, chased them deep, and eventually delivered a 6 million oz plus resource. Osisko started this during a bear market and there was a flurry of activity in adjoining juniors, but that didn't answer the question of whether Osisko had turned Windfall into something new and important on a regional scale rather than a local scale. Osisko had staked land to the east, surrounding the Fecteau project which Opus had optioned because of its apparent VMS potential. Opus itself was created to host a group of properties optioned from Adventure Gold before Probe Metals absorbed Adventure to get at the Val D'Or East project. The lack of visible skin in the game by the board of Opus was because they were custodians for hidden Quebec players. I turned Opus into a canary that served as a local proxy for the Windfall area play and a broader proxy for the Quebec resoruce sector. Opus One went from a tweety bird to near dead canary when Windfall failed to excite beyond Osisko and results of work done at Fecteau failed to excite the hidden shareholders. In early 2019 Opus optioned the Noyell project on the Casa Berardi Break east of the old Vezza Mine where Opus owned the Vezza North and Extension properties. Opus One's geologist Pierre O'Dowd was behind this project; a decade ago he had worked on it for a junior that used it as stepping stone for something "better" in Africa, and pulled the plug on the exploration strategy. Opus resumed that strategy in March 2020 with a 10 hole drill program but only got 2 holes done before Quebec pulled the plug on exploration due to Covid-19. This was a big disappointment because the Noyell target can only be drilled in winter when the swamp is frozen. When the holes were reported in early July and showed that the iron formation system was robust at depth and continued to the east if the IP survey is to be trusted, this near dead canary dragged itself off the cage bottom. Fecteau will only get some till sampling this summer, and even if it gets a couple holes to spend the flow-thru money, it would be very lucky to tag into a VMS zone right away. So this stock's market action will be about the resumption of drilling in January 2021 at Noyell, and thus it is now serving as a proxy for the awakening of a resource junior bull market. (Jul 15, 2020)
Wolfden Resources Corp was introduced to DW in August 2018 based on the intriguing story of Maine reforming its mining code and re-opening itsef to exploration after more than a decade of no trespassing signs. Wolfden was a first mover to do a deal on the Pickett Mtn VMS system which Getty found and explored during the 1980's. Since then we have been watching to see if Wolfden can expand the existing resource. This was accomplished with the January 2019 resource estimate for the West-East lenses after drilling pushed the West Lens deeper. 2019 was supposed to be the year Wolfden discovered new lenses in the Footwall Zone and in fold limbs parallel to the West-East lens limb. But technical drilling problems turned the campaign into a bust except for a teaser stringer zone in which the last hole was lost. But during 2019 Wolfden flew geophysical surveys, not just on the property, but also on a 30 km by 10 km grid covering geology similar to that which hosts the Bathurst Camp in New Brunswick and Buchans in Newfoundland. To avoid equity dilution Wolfden raised USD $3.5 million January 2020 by selling timber rights. It also filed for land use rezoning from logging to industrial for a 500 acre parcel that would be the site for mining infrastructure. This rezoning is necesaary for a mining permit application and they hope to get it by Q1 of 2021. In early Q3 2020 Wolfden will publish a PEA for a 1,000 tpd UG mine which was the basis for the rezoning application. I created a SC 1,000 tpd scenario OV in the ShareCollective which yields a USD $135 million after-tax NPV that implies a future CAD $1.24 stock price, but that is a worst case scenario. Much more interesting is the exploration potential to boost the existing resource to 10 million tonnes at the same grade so as to support a 2,000 tpd scenario with a 10 year mine life. The SC 2,000 tpd scenario is much more interesting at USD $464 million NPV with a corresponding CAD $4.26 stock price. Wolfden began a 5,000 m drill program in July 2020 designed to test multiple new targets at Pickett Mtn whose EM conductors represent potential tonnage footprints of 15-20 million tonnes. The DW hope is that Wolfen turns one or more of these targets into satellite massive sulphide zones that boost the resource towards 10 million tonnes. Failing that, Wolfden is negotiating with landowners for deals on some of the sourrounding area it flew in 2019. If successful, the play turns into a regional quest for Buchans scale VMS clusters. On July 13, 2020 John Kaiser conducted a Zoom Interview with CEO Ron Little and Expl VP Don Dudeck.(Jul 15, 2020)
Disclosure: JK owns NioBay, Opus One, Wolfden; NioBay and Wolfden are Good Spec Value rated Favorites; Opus is Bottom-Fish Spec Value rated
