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4 | THE MINING ISSUE
LETTER FROM THE EDITOR · 06 By James Black
contents BLUE LAGOON RESOURCES · 08 President and CEO Rana Vig discusses his leap into mining and provides advice for finding success in a new industry.
CERRO DE PASCO RESOURCES · 14 More than just a mining company, Cerro de Pasco Resources plans to use its resource management to restore prosperity in the local Peruvian community.
ROCKCLIFF METALS · 18 CEO Alistair Ross explains the company’s focus on copper-rich deposits, detailing upcoming projects and plans that will take them straight into 2022.
TALISKER RESOURCES · 22 With the purchase of the Bralorne Gold Project in British Columbia, CEO Terry Harbort details the factors that can help shorten exploration timeframes.
NORTHSTAR GOLD · 25 CEO Brian Fowler looks forward to advancing the Miller Gold Project in the famous Kirkland Lake Gold District and discusses the potential for exciting discoveries this year.
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GENERATION MINING · 28
GROUP PUBLISHER Hamish Khamisa
In the race to create a greener world, Generation Mining is drilling for palladium, an increasingly soughtafter white metal whose demand is being driven higher by the desire for cleaner vehicles.
EDITOR-IN-CHIEF James Black
5 TIPS FOR NEW INVESTORS Guest contributor Kevan Matheson of Edge Investments provides tips for new investors looking to understand how to invest in mining stocks.
EDITOR Peter Murray ASSISTANT EDITORS Maira Brondizio Christine Nguyen DESIGNER Elisabeth Choi WRITERS Uttara Choudhury Patrick Graham Giles Gwinnett Angela Harmantas Andrew Kessel Peter Murray CONTRIBUTOR Kevan Matheson PHOTOGRAPHERS Mario Motti Deon Nel Matt Watson FREE DIGITAL SUBSCRIPTION Published by Sparx Publishing Group on behalf of the Canadian Securities Exchange. To receive your complimentary subscription, please visit blog.thecse.com/publicentrepreneur-magazine and complete the contact form. To read more about the companies mentioned in this issue, visit blog.thecse.com or proactiveinvestors.com
PUBLIC ENTREPRENEUR ISSUE 1•2020 | 5
Letter From the Editor Time flies when you are having fun. With another PDAC Convention upon us, it’s easy to be reminded why the mining industry is such a critical component of the Canadian economy and in turn, the Canadian capital markets. On the Canadian Securities Exchange, for example, mining issuers account for over 30 percent of the issuer base with encouraging signs of life in the funding and secondary trading markets. Of particular note is the $43 million raised in CSE-listed mining companies in January 2020 – a clear signal that the industry will play an even larger role in CSE’s growth narrative in 2020 (last year’s annual sector total was $203 million raised). There are, of course, many drivers to this industry’s growth. Most recently, the flight to gold is leading experts to predict continued strength this year, a significant development that will have major trickle-down effects on gold exploration companies. Also moving the needle in the industry is the undeniable growth and adoption of electric cars – look no further than the share price of Tesla to see what may spur the speculation into the battery metals space, which includes lithium, graphite, nickel, zinc, and cobalt. Additionally, consider copper, widely accepted as a key element needed to support the global ‘electrification’ thesis.
CSE REPORTS CONTINUED STRENGTH IN 2019 2019 marked the CSE’s second best year in trading and financing in its 15-year history. As of December 31st, 2019, the CSE had 569 listed securities with an increasingly international footprint. Read more about the exchange’s strong performance in 2019 and plans for 2020: thecse.com NEW VIDEO SERIES
INTRODUCING #BETWEENTWOROCKS ON CSE TV The CSE is excited to announce #BetweenTwoRocks, a brand-new video series featuring interviews with mining thought leaders. Watch interviews from this year’s Vancouver Resource Investment Conference (VRIC) on our YouTube channel: youtube.com/CSE_TV
From a macro perspective, both the fundamental needs of our species and the future pursuit of frontier economic opportunities rely on the mineral supply chain. Everything that keeps us alive (medical equipment), socially functioning (phones), and mobile (vehicles) inherently relies on the exploration business to make new discoveries to support innovation and ensure our future prosperity. For investors, picking who the players will be in ensuring our future survival and growth is no simple task! There are literally hundreds of investible mining exploration companies in Canada, and they vary wildly in their prospects to deliver value back to investors. In this issue of Public Entrepreneur, we provide a basic framework on how to choose good quality companies when it comes to making an investment decision – see what I am talking about on page 32. Another worthwhile endeavour is to analyze where the “smart” money is entering the fray. Several of the companies profiled in this issue have partnered with, or accepted investment from major players in the mining industry, including Kinross Gold, Newmont, Osisko Mining, Sibanye-Stillwater, and individuals such as Lukas Lundin and Eric Sprott. Rest assured, if your approach is to “follow the money,” then there are some notable role models participating in recent financings by CSE issuers. One final trend worth pointing out is the economic impact that these mining and exploration companies can make on local economies. Generation Mining and Cerro de Pasco Resources (both profiled in this issue) demonstrate the vital link between exploration and the local communities necessary to further a project to feasibility. In today’s day and age, it’s as important as ever to take into consideration how one’s investment dollar into an exploration story can contribute to someone’s livelihood, environment, and general quality of life – it’s a lot to consider. Until next issue, thank you for reading! Sincerely, LET’S GET SOCIAL
FOLLOW US ON James Black Editor-in-Chief email@example.com
6 | THE MINING ISSUE
WWW.CSELAW.CA 416.519.6886 100 Bass Pro Mills Drive, Vaughan, Ontario, L4K 1X5
C O M PA N Y I N T E R V I E W
BLUE LAGOON RESOURCES One of 2019’s hottest exploration stocks has quite the entrepreneur at its helm By Peter Murray
hat is the profile of a “typical CEO” in the mineral exploration industry? There isn’t one really, though you often find a mix of geology and public markets experience that covers most of the bases. Rana Vig, President and Chief Executive Officer of Blue Lagoon Resources (CSE:BLLG), is cut from a somewhat different cloth, though. He’s listed some of the biggest names in cannabis, run a highly successful magazine, and that’s just scratching the surface of a very impressive entrepreneurial resumé. Mining exploration is the outlier in Vig’s career. It’s the one and only sector where commitment and hard work has not resulted in major business success. He plans to do something about that with Blue Lagoon and is off to a good start, with shares in the company gaining 573 percent in 2019, following a July 4th trading debut. Public Entrepreneur shared lunch with Vig in Vancouver recently to learn about the company’s progress so far and what lies ahead. Let’s begin with a little bit about your background. What brought you into the mining business? And what are some of the career experiences that led to the creation of Blue Lagoon?
Basically, I am an entrepreneur. I have been in business for almost 35 years, and in those years I had five start-ups in different verticals – all private businesses and all family businesses. Around 2010, I connected with a very successful businessman who had made most of his money in mining. He recommended I try something different from the private business world and work with him in capital markets. I was looking for a change. That 2008/2009 period had just happened when everything was collapsing. It was a dismal time in the business world. So, I got involved with him, invested well over $1 million, and in about six months, it was worth around $10,000, because the mining industry imploded. Long story short, I don’t know all there is to know about mining, but my goal in every business I enter is to be the dumbest guy in the room, so to speak. I want to surround myself with very, very bright people. 8 | THE MINING ISSUE
The fundamentals are the same. It’s a matter of assembling very smart people who are good at what they do. – Vig
President & Chief Executive O�cer
Blue Lagoon Resources Inc.
CSE Symbol BLLG
Listing date July 4, 2019
PUBLIC ENTREPRENEUR ISSUE 1•2020 | 9
Gordon Lake Gold Property Two mining leases covering an area of 1,505 acres on Gordon Lake 110 kilometres northeast of Yellowknife in the Northwest Territories of Canada
Gordon Lake Core
I have a couple of strengths and one of them is executing plans. When everything was collapsing in the public companies I’d become involved with, I took over as CEO and spent several years rebuilding them. Business doesn’t change. Business is business, whether you’re running a restaurant or a magazine, or whatever you are running. The fundamentals are the same. It’s a matter of assembling very smart people who are good at what they do. I’ve been a CEO, a chairman; I’ve been on boards. To be honest, I’ve met some not so great people in the public company realm, which is something I wasn’t used to in my private business life, but I’ve also met some very good people and developed some meaningful relationships, and they are who I work with. We will get into your projects in a moment, but ﬁrst, take us through the concept behind Blue Lagoon. What is the strategy for building the company and creating value for shareholders? What makes Blue Lagoon different?
A couple of years ago, once I’d cleaned up the companies I was involved with, I decided to start fresh. I was very fortunate the last couple of years and brought two of the largest cannabis deals to market. I did a company called Curaleaf, taking them public, and it was the largest cannabis raise in history, at $520 million. I also did Harvest Health & Recreation, which at $300 million was the third largest. I then had to consider what to do next, and cannabis was retracting. I’ve had nothing but bad experiences in mining since I started in this business. But it has to come back at some point. I concluded that gold has to be the one, the safest place to start. And I launched an exploration company, and that’s Blue Lagoon. 10 | THE MINING ISSUE
I’m not a geologist or a mining engineer. But, again, first and foremost is always to bring together real experts in their fields. Then, go out and find undervalued assets, something where I have the opportunity to add value, because that’s how you build value for your shareholders. We listed Blue Lagoon on July 4th of 2019 at a little over $1 million in market cap, and here we are, seven months later, trading at over $50 million in market cap. You have a deal with Mag One Products, whereby Blue Lagoon can earn as much as 70 percent in a joint venture by investing $5.25 million in stages. It is an interesting business and an interesting deal structure. Tell us more about how it beneﬁts Blue Lagoon’s value creation effort.
Mag One has great technology that they can rapidly advance. All they need is the money. It is an attractive value proposition for me and my shareholders. Why magnesium? People have pointed out that we are a gold company, so what are we doing in magnesium? Well, that is the entrepreneur in me. I’m not necessarily trying to build a gold company. I am trying to build a mining exploration company and advance shareholder value. My first and foremost job as a CEO is to create value and make my shareholders happy, because they are coming along for the ride with me. Magnesium is a great metal. It’s 35 percent lighter than aluminum and over 70 percent lighter than steel. With Tesla and all these electric cars, they want to get lighter. Same thing with planes. The issue is that magnesium can’t compete with aluminum on price. Enter Mag One. Their technology will compete with
The reason we like the Gordon Lake property so much is that it is in an area known for gold production. – Vig
aluminum, and even more important is the environmental side. Right now, over 90 percent of the magnesium in the world is produced in China from something called the “Pidgeon process,” which is highly pollutive. But Mag One is zero-emission. All that’s missing is the capital, and $5 million is not a lot of money. If we can supply them with that, it will advance the project. I believe gold is going to do really well this year, but if it isn’t quite ready to break out yet, then I have this incredible technology that we can help advance. This company has access to 110 million tons of tailings with 23 percent magnesium, so there is no drilling involved. All we need to do is help them advance the science, and we could potentially change the world. Gordon Lake is a property you optioned in the Northwest Territories. High-grade gold was found over signiﬁcant widths by previous owners, and you recently announced steps toward conducting your own drilling. Tell us more about the plans and the timeline.
The reason we like the Gordon Lake property so much is that it is in an area known for gold production. The Discovery Mine did over 1 million ounces, the Con Mine did about 5 million ounces, and the Giant Mine did about 7 million ounces. Being an entrepreneur, the deal is great. It made sense to acquire that to balance our portfolio for summer as well as winter. As for when we are going to start, we have already engaged local experts in the area, Aurora Geosciences. When it freezes, it gives you access to ice roads, which makes it very economical, as you don’t need helicopters. We hope to get started there later in February or early March.
A 43-101 report was released on your Pellaire project in December. There is no resource yet, but there was historical production in the area. Why do you like this one so much and what is the game plan?
Pellaire is a beautiful property a couple of hours southwest of Williams Lake, also in an area known for gold. It has 10 highgrade veins identified. The owners have been at it for years and circumstances brought it available for sale. We took JDS Engineering, one of the best in what they do, and had them fly up with us and do some analysis. One of the things that really attracted me to Pellaire is that there is 25,000 tons of crushed rock sitting right by the Number 3 vein. I had JDS help me with a back-of-the-envelope estimation and we believe there is significant value to be had from that, just by trucking it out. That, along with drilling, presents a great upside opportunity. The precious metals sector has made a measured but undeniable comeback in the last few quarters. What is your outlook for the metals, and what are you hearing that those outside the business don’t know?
I don’t know if there is anything I hear other than what everyone is talking about. Many of these countries are in trouble and there are currency problems. We know that, at some stage, gold is always the safe haven that people turn to. If you look at the Indian community, it is a big consumer of gold. I am Indian, and I can tell you that in India, a village will pool its money to buy a gram of gold – not an ounce but a gram. My point is that even the poorest of the poor must somehow PUBLIC ENTREPRENEUR ISSUE 1•2020 | 11
Being an entrepreneur, one of my principles is that you must always pay your bills. My word is my bond. – Vig
On Top of Pellaire's Exposed Veins
acquire gold. That tells me something. It gives me insight about a very large country and its desire to own the metal. That has to come into play at some point, as these deposits are becoming harder and harder to find.
my bond. You can take it to the bank. If I don’t have the money in the bank, I am not going to contract you. I think that is one reason, actually, that I have a good following. Even if things are bad, it is not going to get better if I lie to you.
Blue Lagoon closed a ﬁnancing last year at $1.00, and you just completed another at $1.50 in January. A lot of CEOs would like to be in your shoes. What is the ﬁnancing environment like for exploration companies? And have you had any feedback from existing or new shareholders that stands out in your mind?
Let’s close with one of the indispensable lessons you’ve learned in your business career.
The financing environment is still very tough. I was fortunate to be coming off of two big deals with a solid following of people who believe in me. People believe I have the ability to find the right projects and the right professionals to advance those projects. We announced $1 million at $1.00 per share and closed $1.1 million – $300,000 of it from me, to show that I am right alongside everyone. The January financing was for $1 million as well, at $1.50. I never want to be in a position where I am waiting to look for money. I wanted to make sure we had the money secured to advance our projects. We are sitting around $1.5 million in cash. I also never want to be in a position where my geologist is looking at me and asking if I am going to advance the money to the drillers or not. Being an entrepreneur, one of my principles is that you must always pay your bills. My word is 12 | THE MINING ISSUE
It is extremely important to look at who you are investing with. You must believe that person has the ability to take your hard-earned money and grow it. I think you significantly reduce your risk if you sit with the person you are banking on. There are lots of people around the world with great ideas, but we never hear about them because they don’t have the ability to execute. I have the ability to listen, understand, and use my business skills to advance any project. If you are looking at a company to invest in, Blue Lagoon was one of the best performing companies in 2019 and we should at least be on your radar. I believe we have a lot of runway to execute what we are working on now, and what we may acquire in the future. MORE CONTENT ON THE #HASHTAGFINANCE PODCAST Rana Vig on How to Maintain Investor Interest 365 Days a Year in Mining – episode available on blog.thecse.com/pe-podcasts
CERRO DE PASCO RESOURCES
A new generation breathes life into an old mine with benefits that reach far and wide By Andrew Kessel
erro de Pasco is a centuries-old community nestled high in the Andes Mountains of Peru, but after nearly 400 years, a local mine that once brought prosperity must rethink a path forward in alliance with the nearly 50,000 people who now live there. What began as an underground operation became an open pit at the centre of a growing population of miners and their families. Outdated mining technology resulted in inefficient yields. Tailings and stockpiles grew, and contaminated dust and water crept into surrounding areas. There’s a huge economic opportunity in the tailings and stockpile at the site, though, not to mention known in-situ resources, 11,000 hectares of concessions, and unexplored areas. But Cerro de Pasco Resources (CSE:CDPR) wants to do more than make money. Chief Executive Officer Guy Goulet and Executive Chairman Steven Zadka have a vision that, if everything goes right, will see parts of the population relocate away from certain areas to new locations with clean drinking water, heat in their homes, and well-paying jobs – for the benefit of all stakeholders. The company bought the mineral rights to the tailings and stockpile in 2012 and in November, inked a deal to acquire the mine itself and all accompanying infrastructure. Public Entrepreneur caught up with Goulet and Zadka as they began transitioning the company into production, 14 | THE MINING ISSUE
initiating a multi-decade plan to revitalize a mine and restore a city. TELL ME ABOUT YOUR BACKGROUND IN THE MINING INDUSTRY AND HOW CERRO DE PASCO CAME TO BE.
Zadka: In 2011, through my capacity as an investment banker, I came across the opportunity to buy the mineral rights on the tailings and stockpile in Cerro de Pasco and decided to jump on it. Guy was running a company called Maya Gold & Silver in the early 2010s, and I was one of the bankers. He closed a very difficult client of mine and had incredible energy, so I said, “This guy knows how to do things.” He left that company in 2017 and I reached out. Goulet: I was working in Morocco, and Steven approached me while I was on my way out, following the restart of a silver mine there. We teamed up to accelerate the development of the project and list the company on the Canadian Securities Exchange. I’m also attracted to pro-environmental projects. In 2000, I co-founded H2O Innovation, which is the largest water treatment company in Canada as of today.
WHAT ARE WE LOOKING AT HERE IN TERMS OF METALS? WHAT’S THE GAME PLAN ON THE MINING SIDE?
Zadka: I knew that there was silver, lead, and zinc. And I discovered that there was also copper
CHIEF EXECUTIVE OFFICER
Steven Zadka EXECUTIVE CHAIRMAN
Company CERRO DE PASCO RESOURCES INC.
CSE Symbol CDPR OCTOBER 18, 2018
C O M PA N Y I N T E R V I E W
“ We call ourselves a resource management
company because we plan to do more than just mining. There are some aspects of mining at Cerro, but there's other aspects involved. – Zadka
PUBLIC ENTREPRENEUR ISSUE 1•2020 | 15
and gold in the tailings. The grades are pretty good, both because they’re old and they come from one of the richest mines in the world. You’ve got material, metals literally sitting on top of the ground, which is much less expensive than traditional exploration. We’re buying two subsidiaries that are producing and permitted. For 2019, we estimate their revenues were about $120 million combined. Permitted capacity is about 20,000 tonnes per day on sulfides and right now, it’s doing 7,000 tonnes a day, and once we bring these tailings into production, the annual revenue starts getting into the $250 million to $300 million range. With all the resources we have and what we’re acquiring, we have a 17 year mine life. But the reality is that the mine is going to go for much longer because there’s 11,000 hectares of concessions and areas that are largely unexplored. Goulet: Post-acquisition combined, Cerro de Pasco will be the largest holder of silver in one single site. There is a need to increase the current production capacity up to its permitted level of 20,000 tonnes per day. We estimate this will require about $35 million of capital. Once production levels are up, cash flow will start to generate rapidly.
16 | THE MINING ISSUE
We’re in the process of raising the capital required for the first phase, which is $65 million USD. YOU’VE CALLED CERRO DE PASCO A RESOURCE MANAGEMENT COMPANY. WHAT DOES THAT MEAN?
Zadka: A traditional mining company is only focused on extracting metals from the ground. That’s what mining is; it’s going into the ground, digging up dirt, and putting the waste somewhere. We call ourselves a resource management company because we plan to do more than just mining. There are some aspects of mining at Cerro, but there’s other aspects involved. For one, we’re reprocessing the materials that are sitting on top of the ground, which is not theoretically mining. There’s also storage of waste. If you can return clean water to the environment, you’re managing a resource. If you can turn your waste into building products, or turn pyrite into heat to generate hot water, you’re managing a resource. WITH THAT IN MIND, HOW IS RESOURCE MANAGEMENT GOING TO HELP THE PEOPLE OF CERRO DE PASCO?
Zadka: We’ve been completely open and transparent with the community and the local government. We’ve told them the truth, and the truth is that this is a mess that can be turned into an opportunity with some reorganization, planning, and support from the local authorities and community. The government acknowledges that Cerro de Pasco is laden with lead, and they have a plan to relocate sections of the city 30 kilometres away from the mine. What they need in order to do that, amongst other important factors, is support from the most important economic driver in town. That’s us. Peru has a program called “Obras por Impuestos,” or taxes for works, that enables a company to use taxes generated from operations to fund infrastructure projects for the benefit of society. You can fund roads, sewer lines, hospitals, and schools. One of our main objectives is to do just that. We also want to take it a step further. None of the cities in the Andes Mountains have heat, and it’s freezing every night. We have so much pyrite, which produces heat on its own, that we can harness to produce hot water and we could pump that hot water through the city. Goulet: We want to do more water treatment systems and educate the young people to wash their hands before they eat. We want them to play in parks where we’re going to renew the topsoil. I come from Thetford Mines in Quebec, which was the world capital of asbestos. You know what I was doing as a kid? I was going with my bike and playing in the dumps. In Cerro de Pasco, we want to avoid that. There is a problem of contamination in Cerro de Pasco, but just as important is the problem of poverty. That mine used to employ 7,000 people. Some 1,200 work there now in some capacity. In an area that is 4,400 metres high, what else is there to do for work besides mining? Let’s recall that the problem of contamination is not mainly due to mining activities. The old city is located on a geological natural accident: a massive intrusion of lead, zinc, copper, silver,
“ We want to help solve that problem of poverty and restore prosperity in the community. – Goulet
and gold. A “mine” is what it’s called today! And the population has been living from that operation over the past 400 years. We want to help solve that problem of poverty and restore prosperity in the community. THE COMPANY IS LISTED IN NORTH AMERICA, BUT WHAT DOES YOUR MANAGEMENT TEAM LOOK LIKE IN PERU?
Zadka: I’m based in New York, and Guy’s based in Canada, but the heart of the management team is in Lima and Cerro de Pasco. We employ several Spanish speaking expat VPs, who are specialists in different areas like mining, geology, metallurgy, environment, health, and safety. Everybody that works with us has a very special drive, and I don’t think you find that at other mining companies because this isn’t only about making money. Here, we’re trying to make a difference. Goulet: We’re going to spend $58 million over the next four years on HSEC (Health,
Environmental, Social and Communities). We have a social license, which is essentially a vote of confidence from a key component of the population that agrees with our business plan. That’s an important asset in Peru. We received positive signals from the Minister of Energy and Mines, the local government, and the President himself. CAN AN ENVIRONMENTAL RESTORATION PROJECT LIKE THIS ALSO BE PROFITABLE?
Zadka: There are multiple benefits to the local population and the environment, but at the end of the day we believe this is a very compelling investment. Not surprisingly, investors are cautious about tailings and stockpiles because they tend to be a finite resource. They would not normally offer the opportunity to find something above and beyond expectation that could make the stock go up by 10 times overnight. However, Cerro de Pasco not only has 170 million tonnes of reserves in the tailings and stockpiles, but also 140 million
tonnes of material in the ground and 11,000 hectares of concessions in one of the most prolific mining districts in the world, which has never been properly explored. We’re talking about almost 1.6 billion ounces of silver equivalent. That would be the biggest amount of silver in one location on the entire planet. Nobody else has that. WHAT DOES THE LONG-TERM PICTURE LOOK LIKE?
Seventeen years from now, a large portion of the population won’t be living in Cerro de Pasco anymore. They’ll no longer be affected by the hazards of the area. They’ll have access to clean water and live in proper homes. There are still two approaches to mining. There are companies that try to skirt ESG-related issues, and there are those that see the opportunity to deal with these issues head on. We aspire to be a leading example of why you shouldn’t run away from these problems. If you’re innovative and you’re willing to go the extra mile, you’re going to have a much better impact on the outcome. Cerro de Pasco needs that outcome. PUBLIC ENTREPRENEUR ISSUE 1•2020 | 17
C O M PA N Y I N T E R V I E W
ROCKCLIFF METALS CEO ALISTAIR ROSS IS BULLISH ON COPPER AS EVERYTHING GOES ELECTRIC By Uttara Choudhury
ockcliff Metals (CSE:RCLF) is a Canadian near-term copper producer and active explorer in the Snow Lake greenstone belt of Manitoba. The company has one of the largest land parcels in the Snow Lake mining belt, a region home to copper, zinc, gold, and silver deposits – the portfolio spans more than 4,500 square kilometres. Also key to the plan is the Bucko Mill, a facility that Rockliff will convert to process copper (it was originally built to handle nickel). Rockcliff ’s growth outlook is simple to grasp, with near-term annual copper production projected at 20,000 tonnes and rising gradually to over 50,000 tonnes. Chief Executive Officer Alistair Ross spoke with Public Entrepreneur about the realities of taking a mine into production in the current environment, and what shareholders can expect from his team in 2020. You are a seasoned mining veteran who has lived in many different parts of the world, including England and Africa. What drew you to Rockcliff’s project in Manitoba?
The opportunity to build a mining company from scratch was something I had been contemplating for a while. When the Rockcliff opportunity presented itself, I was asked to take the company from an explorer to a producer, from essentially a one-person company directing exploration activities to a company that would find its way into the mid-tier ranks of copper producers. I jumped out of my second retirement when I saw the resource base it already had. The fact that some of the heavy lifting had already been done with 18 | THE MINING ISSUE
High-grade copper core
RCLF Properties Map
| Snow Lake, Manitoba
The opportunity to build a mining company from scratch was something I had been contemplating for a while. – ROSS
Greenstone Resources providing the capital to get us through the study phase, and Norvista providing the cornerstone asset of the Bucko Mill lease as well as an important mineral resource in the Tower project, is really important. Rockcliff’s portfolio of properties is extensive. Walk us through the highlights.
The bulk of the properties are similar in a couple of ways. One, the deposits are at or near surface, and that would allow for rapid access via ramp and portal rather than shaft. Secondly, they are typically narrow veins and steeply dipping in nature. This has allowed us to focus on designing a mining method that could fit multiple ore bodies and allow the transfer of capital equipment from one mine to the next. Tell us how you transform a junior explorer into a high-grade copper-zinc producer.
Our strategy is to focus on our copper-rich deposits initially due to our belief that, of all metals needed for the next phase of greening our planet, copper is virtually a core part of almost all solutions currently being contemplated and pursued. Battery-powered electric vehicles, renewable power generation, storage of energy – all of these require copper in differing amounts. BHP put out a forecast in May 2019 suggesting that
at the mid-point of forecast EV penetration, approximately 1 million tonnes per annum of extra copper would be required. How we are aiming to position ourselves to deliver some of that extra production is by selecting three of our more promising projects (Rail, Tower, and Talbot) for drilling with an eye to preliminary economic analyses. We would then select the best looking project to advance to a bankable feasibility study (BFS) that would include defining the work required to recommission the Bucko Mill. We would concurrently permit the mining property and the mill to become a copper producer and have a financing plan in place so that – upon board approval of a construction decision at the end of 2020 – we could begin to mobilize in early 2021. That would all be with a view to producing our first concentrate for sale in early to mid 2022. Outline your work program for 2020 and tell us if you expect it to be a busy summer.
The whole year will be busy. We intend on having updated resource statements for Tower, Rail, and Talbot by the end of February, and our preliminary economic analyses of those three properties should be ready by early May. From there, we would go into a bankable feasibility study on the chosen property
Alistair Ross Chief Executive Officer
Company Rockcliff Metals Corporation
CSE Symbol RCLF
Listing date May 7, 2019
PUBLIC ENTREPRENEUR ISSUE 1•2020 | 19
for completion by year-end. In parallel, our permitting for the mine property and the mill will be proceeding, and our financing plan will be completed based on the preliminary economics. While we are waiting for the BFS project selection, we are drilling our secondary properties at Copperman, Free Beth and Tramping. As soon as we have made our decision for the BFS property, we will then launch an intensive drill program to further upgrade our knowledge and allow for BFS-level work on the resource, mining, and metallurgical factors. Can you shed some light on Rockcliff’s status regarding production permits, environmental permits, and road access to the Snow Lake properties?
We have taken all the samples and completed our studies on the Tower and Talbot properties. At Rail, we are just short of our spring study samples to be in a similar position. We have completed our studies on the implications of placing copper tailings in the tailing area at Bucko and found no impact. We are therefore ready to file for a Notice of Alteration for the mill once we have completed our mining studies to understand what throughput may be required to match the mine output. Roads are only contemplated for the Talbot and Rail properties, and studies are underway to assess both environmental permit applications and engineering design implications. How much cash do you have on hand and how far does it get you?
We currently have sufficient funding to complete our required exploration program with approximately $12 million in our flow-through account, and we are on track to complete our studies for a board construction decision in 20 | THE MINING ISSUE
“Our strategy is to focus on our copper-rich deposits initially due to our belief that, of all metals needed for the next phase of greening our planet, copper is virtually a core part of almost all solutions currently being contemplated and pursued. – ROSS December. We have about $5 million in our hard dollar account to support us until then. We would require a raise to begin construction in 2021. What are the prospects for subsidiary Goldpath Resources, which has ﬁve highly prospective lodegold properties within the Snow Lake area?
We are pleased that Kinross Gold has agreed to continue its earn-in option at Laguna and Lucky Jack, and we look forward to seeing their continued success. The rest of the properties are of secondary interest at the moment and we will be undertaking a strategic review of their role in our company during 2020. Given your advanced work, has the company signed any preliminary offtake agreements?
We have not signed any offtake agreements but we have been approached with expressions of interest to talk as our studies develop. Our very early review of the ores suggests that our concentrate will be clean and of reasonable to high grade. So with current knowledge, I do not anticipate any issues placing these concentrates on the market at competitive rates.
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C O M PA N Y P R O F I L E
SHORTER TIMELINES TO DISCOVERY ARE THE GOAL WITH PRIME BC PROJECTS By Patrick Graham
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erry Harbort, Chief Executive Officer of Talisker Resources Ltd. (CSE:TSK), is convinced that he and his team have found the perfect gold project to catapult their junior resource company into the big leagues. This past December, the Toronto-based explorer purchased 100 percent of the Bralorne Gold Project in south-central British Columbia from Avino Silver & Gold Mines in a multimillion-dollar cash and stock deal. Consisting of three main mines, Bralorne was one of the longest producing high-grade gold deposits in British Columbia, operating from 1929 to 1971. Though some 4.2 million ounces were pulled from the earth at a recovered grade of 17.7 grams per ton, the mining operation was eventually shut down due to depressed gold prices. When mining in the area came to a halt, gold was at $200 per ounce, adjusted for modern inflation. With gold now selling for nearly US$1,600 per ounce, Harbort says Talisker is eager to get at “that $200 rock still left in the ground” at Bralorne. “We looked all throughout that region of south-central BC and we came across the Bralorne project, which initially was something that was probably bigger than what we were searching for,” explains Harbort, a veteran geologist who’s worked for major miners such as AngloGold Ashanti. “But we were able to do what became a transformational transaction for the company.” For Talisker, which Harbort formed alongside some close industry colleagues, greenfield exploration was the plan when trading commenced on the Canadian Securities Exchange in spring of 2019. However, the acquisition of Bralorne advances the company into the next stage in one fell swoop.
Bolstered by $25 million in financing and royalty sales, the company kicked off 2020 by firing up the first drill rig at Bralorne in early February. Harbort says Talisker will drill 3,000 metres along strike extensions of existing veins with plans of further drilling 6,000 to 7,000 metres in April, with results expected around the middle of the year. The company has 45,000 samples from Bralorne and plenty of other data that, according to Harbort, is enough to give the company confidence that significant gold deposits remain in the ground. “We can actually see where the samples intersected veins, and we can wireframe these into vein models and calculate what an approximate potential grade would be,” he says. “We know, historically from the production, that the continuity was very high. So, it means as we go to depth and along strike we’ve got a pretty good chance of the veins continuing at a very high grade. We believe that’s what we’ll be targeting, as opposed to drilling and hoping we hit veins. We’re drilling the way we already know where the veins are. That really reduces our risk.” Looking ahead to the rest of 2020, Harbort says Talisker is “working toward defining what the footprint is and how many millions of ounces are poten-
TERRY HARBORT CHIEF EXECUTIVE OFFICER
COMPANY TALISKER RESOURCES LTD.
CSE SYMBOL TSK
LISTING DATE APRIL 26, 2019
We looked all throughout that region of south-central BC and we came across the Bralorne project, which initially was something that was probably bigger than what we were searching for. – HARBORT PUBLIC ENTREPRENEUR ISSUE 1•2020 | 23
tially there” as part of a crucial resource statement expected for release in early 2021. In addition to Bralorne, Talisker also holds 85 percent of the gold belt at Spences Bridge, another exciting gold project in British Columbia. The claim stands as one of the largest land stakes in the province’s history. At Spences Bridge, Talisker has formed a strategic alliance with Westhaven Ventures, which owns the Shovelnose highgrade epithermal discovery contiguous to Talisker’s claims. “Initially, the Spences Bridge gold belt was what was called a frontier gold belt where people see indications of a certain style of mineralization but deposits there have never been discovered,” he explains. But in September 2018, that all changed when Westhaven discovered a high-grade vein deposit, promoting the project from frontier status to emerging. Subsequently, “the whole belt could host a number of discoveries.” Harbort says Talisker “aggressively” explored Spences Bridge in the last field season, when it was just starting up as a new company. During that time, Talisker had 23 geologists at the site who collected more than 3,000 stream sediment samples and defined eight drill targets. For 2020, the company has budgeted $3.5 million for 20 geologists working on five projects. While Bralorne and Spences Bridge are Talisker’s most important projects in British Columbia, the company has several more in its portfolio, ranging from early stage projects to advanced ones. All told, Talisker’s properties comprise 270,605 hectares over 288 claims, three leases and 154 crown grant claims, making the company a dominant exploration player in south-central British Columbia. Harbort says Talisker was attracted to the region in the first place not only because of the geology and celebrated mining history, but also the abundance of scientific theory. “We believe that there are a number of belts in that part of British Columbia that haven’t been well explored simply because there’s not a large number of low sulphidation epithermal gold deposits or mines,” he explains. “What we noticed very quickly was that there was a knowledge gap in the exploration techniques for these types of deposits,
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and the textural and alteration interpretation, to tell where a deposit’s stratigraphy was.” However, gold mining isn’t only about geology, science, or the data. Logistics, Mother Nature, and minding the bottom line for investors also play a crucial role as well. That’s why Harbort loves “the latitude and the weather” in south-central BC, not to mention a developed infrastructure, unlike some colder, more inaccessible regions of the province. “The field stage is very short and access can be problematic in other parts of BC. You often have to fly in with helicopters and fly them to a base. You’ve got to build camps. It becomes very expensive,” he says. “The areas that we’re exploring are just a couple of hours drive from Vancouver. We don’t have to build camps; our geologists can stay in hotels in local towns. We don’t have cooks and kitchens. We don’t have any helicopter support.” As a result, Talisker is much freer to capitalize on positive outcomes and to channel the savings back into the project. This makes it possible for them to work longer during the year, and shorten exploration timeframes. “That means we can do a lot more with our investors’ money and hopefully give them a short discovery timeline so they can get a return a lot quicker than on projects in more northern areas,” Harbort explains. When it comes to investors, current or prospective, Harbort points out that most of the company’s financing comes from deep-pocketed institutional investors who embraced Talisker in its early period. So, retail investors might want to take notice. “They know they’re not backing us because of luck. They are backing us because of the management team, because of the assets that we have and our ability to get access to capital and then to successfully execute the plan.”
C O M PA N Y P R O F I L E
NORTHSTAR GOLD THE NEW FACE SHINING BRIGHTLY IN THE KIRKLAND LAKE GOLD CAMP By Angela Harmantas
hen you’re a new name in exploration on the market, it helps to have an established project with a proven team at the helm. This statement certainly holds true for recently listed Northstar Gold (CSE:NSG), a company that is working on advancing the Miller Gold Project in Ontario’s famous Kirkland Lake Gold District. This region has historically delivered more than 25 million ounces of gold from seven mines. Northstar is led by Chief Executive Officer Brian Fowler, a seasoned mining executive with over 38 years of experience in mineral exploration under his belt. Behind Fowler is a veteran team of mining and
capital markets experts with decades of insight and success advancing resource companies and projects. Miller is a 1,100 hectare property just south of the town of Kirkland Lake, central to a district that has been producing gold for more than a hundred years. In the early 1900s, the historic Miller Independence Mine saw a number of shallow shafts and three levels of development on the high-grade gold No. 1 vein, with limited success. Exploration by Northstar and others since then has defined additional shallow high-grade gold veins, with a historic estimate of 270,000 ounces of gold at 11.5 grams per ton, and a lower-grade bulk tonnage gold exploration target at Planet Syenite that
PUBLIC ENTREPRENEUR ISSUE 1•2020 | 25
may contain up to 500,000 ounces of near-surface gold ranging in grade from 1 to 3 grams per ton. None of these targets has been tested at depth. It’s the geology, however, that excites Northstar’s CEO the most. “The Miller Gold Property has very compelling geological similarities to the Macassa SMC (South Mine Complex) and other Kirkland Lake gold deposits,” explains Fowler. “Miller has the same style of vertical and flat, highgrade gold-telluride veins that are a unique feature of the Kirkland Lake District. Furthermore, gold mineralization on the Miller Property is controlled by a ‘first order’ fault structure (the Catharine Fault) that joins the regional Kirkland Larder Break and similar first order structures within the Kirkland Gold District. These fault structures acted as channels and traps for gold deposition.” Fowler goes on to explain that it has been determined that gold mineralization at Miller was emplaced at the same time as that at the Kirkland Camp gold deposits, some 2.6 billion years ago. These similarities and geological features suggest Miller could be tapping the same gold source as the Kirkland Gold District. The Macassa mine has been in production since the 1930s and owner Kirkland Gold continues to find and produce high-grade gold more than 2 kilometres below surface. The Miller Property, on the other hand, is essentially unexplored below 300 metres.
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“We're really excited [to have] both Kirkland-style high grade gold-telluride veins and broad low-grade intrusion-related gold mineralization in significant quantities on the Miller Property,” Fowler says, “Our main job now is to do some drilling on these targets and bring them to 43-101 status. If you stand back and look at it, we could be knocking on the door of around 700,000 to 800,000 ounces here.” Since Northstar picked up Miller in 2012, the company has spent around $2 million on exploration. Including the use of ground magnetics, 3D IP surveying, and nearly 6,000 metres of diamond drilling in 27 holes. Those holes returned multiple high-grade and broad low-grade intersections with abundant visible gold. In 2016, the company mined and processed a 932 ton bulk sample from the historic No. 1 vein that averaged 5.1 grams per ton gold. Most of the past drilling done at Miller has been vertical in nature. Subsequent surface stripping and sampling by Northstar has defined numerous vertical high-grade gold veins and structures, which cannot be assessed, let alone discovered, by vertical drilling. This year’s drill program will see Northstar utilize angled holes to properly test these new targets. “We're very confident that we're going to make new discoveries at Miller, possibly within the Catherine Fault zone itself, which amazingly has never been drilled,” Fowler says. “It's comparable to Kirkland Lake Gold’s Amalgamated Break where they’ve found an incredible amount of high-grade gold mineralization that remains open at depth. These structures can be incredibly rich and with kilometre-scale strike and depth continuity. We believe we have all the makings of a Macassa SMC-like gold mineralizing system at Miller and we're really anxious to get the drill spinning.” At 3,000 metres, the Phase 1 drill program is scheduled to commence in late February. This will have a preliminary focus on confirming and expanding portions of the near-surface Miller Independence historic estimate and the Planet Syenite bulk tonnage gold exploration target. Drilling will also follow up other known near-surface, high-grade and intrusion-hosted gold targets, including Allied Syenite. Having a few million dollars on hand to support exploration doesn’t hurt – Northstar closed its $3 million initial public offering in December of last year at $0.30. “Everyone thinks we either definitely have a gold market or we're heading into a solid gold market,” Fowler says of the company’s healthy IPO. “We believe our timing was perfect.” There’s even more to Northstar Gold than Miller, though. The explorer also has the Bryce Gold Property and the Milestone copper-nickel-cobalt claims. These could add value at the drill bit or through farm-out opportunities. The task ahead for Northstar is to prove up the claims at Miller. “We’re going to do it through a concerted and robust exploration effort, which we are now permitted and funded to complete,” Fowler concludes. “I really believe there is excellent potential to make some significant gold discoveries at the Miller Gold Property this year.”
thinks we either deﬁnitely have a gold “Everyone market or we’re heading into a solid gold market. We believe our timing was perfect. – FOWLER
BRIAN FOWLER Chief Executive Ofﬁcer COMPANY Northstar Gold Corp. CSE SYMBOL NSG LISTING DATE December 30, 2019 WEBSITE northstargoldmining.com
PUBLIC ENTREPRENEUR ISSUE 1•2020 | 27
C O M PA N Y P R O F I L E
INVESTORS RUSH TO RARE PALLADIUM PURE PLAY AS METAL PRICE SOARS
By Giles Gwinnett
alladium is not a metal that the average person on the street is likely to know much about, but with the race on to create a cleaner, greener world, that could soon change. Over 90 percent of this so-called ‘white metal’ is used to make catalytic converters for cars with internal combustion engines, and it’s also used plentifully in hybrid vehicles. As regulations tighten across the auto industry to reduce emissions, more palladium is needed than ever before. This dynamic is behind the meteoric price rise for the metal in the last couple of years, going from around US$800 per ounce to US$2,300. A potential supply deficit in the years ahead is adding fuel to the increase. Based on one study’s findings, the globe’s 10 million ounce-a-year palladium market is set to experience a deficit of 1.9 million ounces in 2020, as mining production has been steadily falling since 2004 and there is a dearth of new mines coming onstream. Generation Mining (CSE:GENM) is looking to take advantage of that backdrop with some big ambitions in the PGM (platinum group metals) space. With its shares having more than doubled in value since the beginning of 2020, recognition of the strengthening palladium price is broadening just at the right time. The company’s flagship asset is the Marathon Palladium Project, which is in 28 | THE MINING ISSUE
partnership with Sibanye-Stillwater, a major player located a few miles from the town of the same name in Ontario. Marathon is the largest undeveloped palladium project in North America. It has already had 1,000 holes drilled into it, and has been the subject of two feasibility studies at lower palladium prices. Generation Mining is the operator. “It’s had great work done on it,” explains Kerry Knoll, Generation Mining’s Executive Chairman. “It was not a mine when people tried to develop it before, when palladium was at $500 an ounce, and it wouldn’t be a mine today at $500 an ounce. But at $1,000 and higher, it is a mine,” he says. Several companies have been involved with the project since the mid-1980s, including Marathon PGM Corporation, Stillwater Mining, and Mitsubishi. The numbers for Marathon – 7.1 million palladium-equivalent ounces in the main deposit – are compelling. Generation Mining’s preliminary economic assessment, published in January of this year, was based on a palladium price of $1,275 an ounce, which gave the deposit a pre-tax net present value of C$1.19 billion at a 5 percent discount rate. One can only imagine the economics today, given the price of palladium is well above $2,000 per ounce.
GENERATION MINING LIMITED
MAY 9, 2018
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Going into production could make Generation Mining, as Knoll puts it, “lots of money,” but he points out that the mine would still be profitable even at $1,000 an ounce. Knoll also notes that Marathon, which has a mine life of 14 years, represents something of a rarity for investors, as it is a pure-play palladium project (even though it also contains metals such as platinum and copper). In addition, palladium projects tend to be held by private companies or are just one part of a huge mining company’s overall portfolio, so getting exposure is tricky for investors. When asked how the Marathon deposit compares to others around the world, Knoll says, “There’s a couple of very large ones in South Africa. Ivanhoe has one, a company called Platinum Group Metals has one. They’re much larger than ours, but they’re also slower to develop because they’re underground mining. Ours is an open pit, surface mine, and we can get into production a lot quicker because of that. And it’s also a lot cheaper.” Generation Mining aims to bring the project and its 194,000 palladium-equivalent-ounces per year to commercial production. According to the PEA, initial capital costs are pegged at $431 million, which Knoll reckons is eminently achievable, via a number of options. “Financing mines today has never been more flexible,” he explains. “There are streaming royalty companies to which we could sell, perhaps, the gold, or a part of the gold and a part of the platinum stream, upfront for cash. And it looks like we might be able to raise up to $100 million doing that on pretty reasonable terms.” Knoll also cites the equity and debt routes and points out that Generation Mining’s partner Sibanye must provide 20 percent of the money or get diluted down. The project, neatly situated in a region where mining is part of the tapestry of life, boasts
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excellent local infrastructure, including TransCanada Highway access, a main rail line, power, and an airport. “One of Canada’s largest gold mines, Hemlo, is located just down the road from us and it’s still in production, although it’s been winding down and the locals are looking forward to the jobs that we would bring to the area,” says Knoll. Generation Mining is just the latest company that mining industry veteran Knoll has been involved with. He and Chief Executive Officer Jamie Levy were behind the sale of Pine Point Mining and its zinc project in the Northwest Territories to Osisko Metals for $35 million in 2018. He explains how Osisko Metals didn’t want to buy all of the exploration assets, so Generation Mining was spun out into a separate company, which then struck an option deal the same year to buy a 51 percent stake in Sibanye-Stillwater’s Marathon deposit. Generation Mining can earn up to an 80 percent interest by spending $10 million over four years, at which point Sibanye can re-acquire 31 percent to bring its stake up to 51 percent, though Knoll reckons this is unlikely because Sibanye will need to spend over $100 million to do that. Sibanye is a pretty decent partner to have, of course, since it is the second-largest palladium company and largest platinum company in the world, so its knowledge of the commodity and the industry is extensive. Knoll says Sibanye can be particularly helpful once the project is in production. Sibanye would be able to assist Generation Mining with the marketing and sale of its concentrates to smelters (a co-marketing arrangement is in place with Sibanye), which can be an onerous process for smaller companies. In January, Generation Mining announced an $8 million financing to advance the Marathon project. Resource sector legend Eric Sprott invested $5 million of the total, joining other big names on the shareholder register, including Lukas Lundin and Osisko Mining. There should be plenty of news flow in coming months as the company hires its engineering team and selects the group to carry out a feasibility study. It also plans to restart the permitting process. With the green energy story getting louder by the day and lesser known metals increasing in global importance, Generation Mining’s Marathon project is taking a well-deserved place in the spotlight.
mines today has never been more flexible. – KNOLL
M ININ G S TO C KS
5 Tips for
New Investors in Mining By Kevan Matheson There’s a lot of excitement coming back into the resource sector, and investors are paying attention. Unfortunately, there are few sectors more complicated and unapproachable than mining. Many CEOs seem to speak their own language, without realizing that not everyone knows what a good drill result is, or why their giant map cross section is so exciting. It’s a shame, because a lot of capital has been redirected towards better marketed industries, to the detriment of the entire mining sector and investors. Edge Investments is all about educating the next wave of investors, so to do my part, here are 5 simple things to consider when buying a mining stock – for more information you can check us out @edge.investments!
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1 2 3
THE COMMODITY At the end of the day, you are buying into a company that pulls resources out of the ground. Whether it’s gold for jewelry, lithium for batteries, or copper for telephone wires, it’s important to understand what makes the price of that commodity move up and down. Following thought leaders, like fund managers, on social media is a great way to get a feel for what commodity they are excited about and why. Every mineral has its own story, and it’s important to get a feel for it so that you can feel comfortable with your investment.
STAGE OF PRODUCTION Say the price of gold is on fire, yet gold stocks aren’t going up – why? Because many “gold” stocks don’t actually have any gold. These companies are exploration companies, trying their hardest to prove that the expensive pile of dirt they own has something extremely valuable buried deep underneath. Exploration, development and production are the three stages of developing a mine. Risk goes down as companies progress through the stages, but so does the potential return for investors. If you can successfully identify what stage the company is at, then you’ll be able to understand how the price of the commodity will affect the underlying business.
MANAGEMENT When it comes to investing in any stock, management is key. This is a big topic, but let’s just focus on two components: past experience and insider ownership. If key management has guided a company through an acquisition, major discovery, or another significant event, then, generally speaking, they are better prepared to do so again. In conjunction with that, the importance of insider ownership cannot be overstated. If management personally owns a large piece of the company, then if the stock falls, they get hit even harder than you do. That means they will do everything possible to make sure that doesn’t happen. If the stock price is falling, check to see if executives are buying in the market – if they are, that can be a good sign that they feel the price is undervalued.
FINANCIERS All companies need cash, but where they get it can make a big difference. Take a look at the largest shareholders of a mining company, and see if there are any strategic financiers. This could be a patient, deep-pocketed institution that can support the company through tough markets, or a more senior mining company that could act as a helpful ally down the road. In the case of an exploration company, the most logical exit is to be acquired by a major company. If a large producer already has a significant investment in a junior company, it could be a good indication of their optimism around the smaller company's prospects.
MARKETING It’s important to read editorial about the company you are researching, but be careful to look into any conflicts of interest the author may have. Publicly traded companies pay media agencies, newsletter writers, and digital marketers to draw more awareness to their stock, and hopefully increase trading volume. A well-written piece of “analysis” isn’t a replacement for thorough research on your end. At the bottom of any kind of article about a company, look for a disclaimer that indicates if the author owns shares or was compensated in any way by the company, and make sure to verify any information you find across multiple sources. Resource extraction is at the heart of our economy, but it’s often taken for granted. Every piece of technology that you touch is made possible by the resources found and extracted from deep in the Earth. Mining is a part of everyday life – it allows us to enjoy artificial light, provides us with modes of transport, and makes us more connected than ever.
With this article, I hope to have given a basic framework with which to make approaching mining stocks a little bit more manageable. I invite you to check out what we’re doing at Edge for a deep dive on all things mining stocks. We do everything from running live courses, to creating video content about public companies, and hosting Deal Nights where you can watch pitches and drink cocktails. Check out our website at www.edge.investments, and come join our community!
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