Power Metallic CEO sees ‘monster-size’ deposit at Nisk

Power Metallic Mines’ (TSXV: PNPN; US-OTC: PNPNF) Nisk polymetallic property is probably at least as large as Anglo American’s (LSE: AAL; US-OTC: AAUK) 44-million-tonne Sakatti copper-nickel-platinum project in Finland, CEO Terry Lynch said.

Nisk – which is located in Quebec’s James Bay region and includes deposits of copper, nickel, platinum-group metals, silver and gold – could even one day rival Vale’s (NYSE: VALE) Voisey’s Bay mine for size, Lynch said Wednesday. Voisey’s Bay, which has been estimated to contain about 140 million tonnes, is Canada’s biggest nickel mine and one of the world’s largest.

Power Metallic is conducting drill programs to expand the mineralization in Nisk’s Lion discovery zone and other areas as the junior miner works to identify adjacent polymetallic deposits. Multiple assays are pending, with new results due to be released as soon as next week, the CEO said.

“In my mind I see us being a minimum of Sakatti, and I could see us easily getting to Voisey’s Bay size. That’s obviously monster-size. That’s how big this could be,” Lynch said during an online presentation.

“We got amazingly lucky,” he added. “We found nickel, we found a motherlode of copper. This type of discovery hasn’t been made in the last 18 years.”

‘World-class’

Nisk’s Lion zone has the potential to become a high-grade, midsized deposit, with copper, gold, silver, and platinum-group metals grades similar to Russia’s “world-class” Norilsk deposits, said Sid Rajeev, head of research at Fundamental Research in Vancouver.

Based on the most recent drilling results, the Lion zone alone could host up to 1 billion high-grade copper-equivalent lb., Rajeev wrote in a note published in September.

“You’re looking at over 3% pure copper and over 6%-7% copper-equivalent. That is very rare, given that the global average for copper deposits is probably 0.5%-0.6%,” Rajeev told The Northern Miner in an interview Wednesday. “The drilling results that have been coming out have not only confirmed the high-grade mineralization, but they keep expanding. The intercepts are consistently long. With every press release we see, we get more and more confident.”

Doubling capacity

Power Metallic is working on doubling drilling capacity at Nisk to six rigs by June. Having entered the project in 2021, the Toronto-based company now holds 80% of Nisk.

“We expect to drill over 100,000 metres between now and the end of 2026,” Lynch said. “Expect news from us starting next week every three or four weeks.”

Power Metallic plans to deliver a metallurgical study in this year’s second half, probably in the fourth quarter, Lynch said. The company is running at an 80% recovery rate and expects to do “much better than that,” he said.

“At this stage, we’re trying to get a grip on how big this thing is,” he said. “We haven’t found the edges of the system yet.”

If all goes well, commercial production at Nisk would probably start around 2030, the CEO said.

“We might be able to do it in four years, but certainly five is very doable,” he said.

Faster permits

Canada’s April 28 federal election is likely to result in speedier project approvals since both the Liberal Party and the Conservative Party are advocating for shorter permitting timelines, Lynch said.

“Permitting is likely to be enhanced because of the economic cycle we’re in, and the political winds are behind that,” he said. “That will be a very big plus for us.”

Nickel refiner CVMR has approached Power Metallic about buying Nisk’s output for a future plant, Lynch also said. CVMR makes nickel powders, which are used in electric vehicle batteries, three-dimensional printing and aerospace.

“We’re doing a feasibility study on building a nickel powder plant with them,” Lynch said. “The powder plant would be built in the U.S. We’ll probably have an update on that realistically about six months from now.”

Private placement

Power Metallic – which counts Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF) founder Robert Friedland and former Goldcorp CEO Rob McEwen as shareholders – raised $50 million in a private placement in February to support exploration at Nisk. Investors who took part in the financing are betting that the company will eventually be acquired, Lynch said.

“Within two years, most likely, there’s going to be some mammoth takeout here, or this becomes so good and we end up doing a joint venture,” he said regarding Nisk. “We’ll never build it because we don’t have the talent, but we might stay in as a half-owner. Or somebody else builds it and gives us cash, that’s another possibility. That’s really what [investors] are betting on.”

Power Metallic shares fell 2.4% to $1.23 in morning trading Thursday in Toronto, giving the company a market capitalization of about $289 million. The stock has more than quadrupled in the past year.