Source: http://epsteinresearch.com/2017/05/08/director-interview-lico-energy-metals/
Dwayne Melrose
is a Director & Chair of the Technical Committee for LiCo Energy Metals [TSX-V: LIC / OTCQB: WCTXF / Frankfurt: 43W1]. I interviewed Dwayne by phone and email in the week ended May 5th. While
the interview focused a bit more on the Company’s Lithium project in
Chile, the Cobalt opportunity in Ontario, Canada is exciting as well,
and LiCo is funded to actively advance both projects. Here’s a great infographic on the Company.
Dwayne, thank you for your time. Let’s start with your background, can you summarize 30 years into 1 or 2 paragraphs.
Sure,
no problem. I have over 30 years’ experience in the mining industry,
where I’ve worked all over the world and in a wide range of capacities.
Boiling it down though, I’m a project developer. For example, as
President & CEO of True Gold Mining Inc., [2011-2015] my team advanced the company from exploration (pre-PEA) into a fully permitted and financed company (raising over $200 M in equity/debt) in just over 3 years. I spent 20 years with Cameco Corp/Centerra Gold working in Canada, the U.S., Kyrgyzstan & Kazakhstan (uranium capital of the world).
In
the Kyrgyz Republic I led the team at the Kumtor Gold Mine responsible
for the discovery of the SB Zone, which significantly increased the
mine’s reserves and resources.
I
know my way around all aspects of exploration and development. I
especially like projects with the potential to be developed in a matter
of a few years, not the 5-10 years it takes to develop a gold or uranium
mine these days. That’s why I was drawn to LiCo’s lithium brine project in Chile, there’s real potential to be able to dramatically de-risk
that project. The region has a skilled mining workforce, mining
services and equipment. Our camp is nearby two of the largest lithium
producers on the planet, so it has a lot going for it. NOTE: {read full bio here}.
Thanks, that was great. Can you give readers a brief overview of LiCo Energy Metals?
Yes,
as the name suggests, LiCo Energy Metals is focused on two energy
metals, Lithium (“Li”) and Cobalt (“Co”). We have control or ownership
interests in 4 primary assets; our flagship Purickuta Project, an option
on a Li brine exploitation concession in the famed Atacama salar in
Chile, 2 interesting Li prospects in Nevada and the Teledyne Co project
in Cobalt, Ontario. We have funds earmarked for all projects, but by
looking at our press releases, one can see our main interest at this
time is Chile and Canada.
How did you find LiCo, or did the Company find you?
Yes,
well I guess the Company found me. I had been speaking with key
shareholders at the end of last year, waiting to hear more about various
projects under consideration. As mentioned, the lithium play in Chile
won me over. Of course, the Company has promising cobalt properties in
one of the best jurisdictions (outside of the Democratic Republic of Congo) to
find cobalt. I’ve been impressed at how rapidly we have been able to
move the ball forward on our projects. That’s something that attracted
me as well, the corporate culture of getting things done and being
properly funded to work quickly and efficiently. My skill set allows me
to cover a lot of bases on the technical side, which is what I’m best
at.
In
Chile you have an option on an exploitation concession, surrounded on
all sides by Chile’s SQM and nearby the operations of another Li giant,
Albemarle. There are few publicly-listed Li juniors in Chile, but over
20 in Argentina. Why aren’t other juniors pursuing Chile as actively as
they are Argentina?
That’s
a great question, one on the top of my list when I signed on with LiCo.
There certainly is uncertainty with regard to a junior (ourselves included)
being able to advance a project in Chile. We understand that and
accept that risk because the potential reward is quite large. Doing
business in Chile is challenging, but no more challenging than in many
other countries I’ve worked in. There’s a perception that there’s no
room for juniors in Chile because SQM and ALB are such major players in
the space. But, we believe there’s always room for more than 2 players.
If we’re right, then we have a seat at the table in the single best
lithium producing jurisdictions in the world. And, we’re not just
sitting around waiting for the overall Chile/Li/junior story to pan out,
we’re actively involved with boots on the ground and planned
exploration activities that are pre-funded.
You
bring up a good point about Argentina. Of course Argentina will be a
major player in Li supply going forward. Chile is already a major force
and will remain so. Argentina is getting saturated with Li juniors (still plenty of Li to be found and harvested, still a great story, but crowded with juniors).
We feel strongly that there will be Li winners from among the ranks of
juniors in Argentina, winners in Chile, in Nevada and parts of Canada
and Australia…. But only the strong will survive in coming years.
Funding is key, and we are in good shape on that front.
Please tell us more about the Purickuta Project.
Yes,
this is currently our flagship project, and we’re looking to lock down
additional property in Chile, both Li and Co targets. I love this
project and I’m happy with how it’s progressing. I just returned from a
10-day trip, and I’m impressed with the mining / minerals culture in
the Atacama salar region. In the nearby community that we will be
working with, something like 75% of the jobs are at either SQM or
Albemarle, so again, skilled labor will not be a problem. Equipment
& Infrastructure? Not a problem.
We
have an exploitation concession, which is different then an exploration
concession. So, we believe that we will be able to advance the project
relatively quickly. With that in mind, we already contracted a firm to
do a detailed Transient Electromagnetic (TEM) geophysical survey that
should provide detailed information on the depth and possible thickness
of brine bearing aquifers to enable optimal drill target selection.
Subject to receipt of permits, drilling to depths of up to 350 m will
commence shortly thereafter, followed by an engineering &
hydrological study that will include flow testing, porosity measurements
and an assessment of aquifer potential.
We
believe, subject to permitting, this work could lead us to a maiden
resource in a year or less. Technically speaking, drilling a prospect
Li brine deposit is straightforward, a lot easier than chasing narrow
vein gold deposits! We will continue to deliver updates on our Phase 1
exploration program at Purickuta, so readers should stay tuned.
Can you update readers on the Teledyne Cobalt project?
Yes,
look– an estimated $25 million (inflation-adjusted) was invested onsite
prior to our arrival, there are underground workings, 600 hectares, the
project is in one of the best jurisdictions outside of Africa and
China. A detailed NI 43-101 Technical Report
was delivered in September 2016. The property is on-strike with a
prolific past producing mine. The property adjoins claims that hosted
the Agaunico Mine. From 1905 through to 1961, Agaunico
reportedly produced 4,350,000 pounds of cobalt and 980,000 oz. of silver
worth hundreds of millions in today’s dollars and spot prices.
LiCo
Energy Metals reported that it has commenced a Phase One exploration
program on the Teledyne Property. A geophysical survey has been
completed. It covered areas that have had little to no exploration work
to further identify prospective mineralized targets to depths of up to
about 300 m or greater. This work, along with the historical data that
is currently being compiled, will be evaluated in advance of a diamond
drill program planned to commence in late 2nd qtr/early 3rd qtr. We
have a lot of good information on our website about the Teledyne project.
Experts
like Simon Moores, Joe Lowry & Chris Berry do a great job informing
investors about green energy-tech metals. Do you have a view on the
market fundamentals for these metals?
When
it comes to the global paradigm shift towards green energy high tech
Li-ion batteries, I leave it to the experts you mentioned and others.
We follow their work, and they seem to agree that demand for both Li
and Co will be very strong. This chart tells me all I need to know
about the underlying strength in Cobalt, half of world-wide production
and reserves are from (in) the Democratic Republic of Congo. Even if
supply from the DRC can be sustained, global corporations like Tesla Inc. will presumably go to great lengths to source Co from any other place on earth!
Are there misconceptions about LiCo Energy Metals that you would like to address or final thoughts to leave us with?
I
really think that it might be a misconception that Chile is not open
for business to juniors. If Chile is a primary factor in keeping
readers away from a company like LiCo Energy Metals, that might be a
mistake. Every jurisdiction has its own set of opportunities and
challenges. If we successfully move forward, we will be doing so in the
single best salar on the planet. So, readers should certainly
diversify; own Li / Co juniors in other jurisdictions, but it probably
makes sense for risk tolerant investors to have exposure to Chile as
well. To add to that, getting exposure to both Li and Co, in a single
company, is rare and something to consider.
Thank you so much for your time and thoughtful answers to my questions.
Disclosures
:
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