Categories: Base Metals
Topics: General Base Metals

Atco Mining (CSE: ATCM) Director Neil McCallum on Establishing an Early-Mover Advantage on Large-Scale Canadian Salt Dome Structures in the Emerging Clean-Energy Hydrogen Storage Space

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the director of Atco Mining — Mr. Neil McCallum. Neil, it is great to have you on. How are you today?

Neil McCallum: I'm well, thanks. Thank you for having me on.

Gerardo Del Real: Well, listen, I want to talk salt. I want to talk Atco. I want to talk about the 100% ownership of the seven salt projects in the portfolio. But before I get into all of that, I joked off air with you that I felt like I had to thank you for some of the most recent successes that you've had in identifying properties, in the case of the Corvette District, that you and your group have turned into what's looking like a generational lithium discovery. 

I know that you just took on another position so when I saw your name and I saw Atco and I looked at the tiny market cap, I said, let me reach out… let's see if we can have a conversation on the record with Neil. But first things first, congrats on all of the successes here recently. Well deserved!

Neil McCallum: Oh, thanks…that's great! I think it just goes to show that you need to be early on some of these new ideas. We were looking at lithium as far back as 2015 and 2016 when we first made some of the acquisitions around Corvette. So not a lot of people believed in lithium at that time, and it kind of got forgot about for a little bit. And then, it came back. And obviously, it's the talk of the town, lithium, right now. 

And that's kind of my reasoning for joining the Atco team, as well, is we're thinking not just next year… we're thinking 5 to 10 years from now for these salt projects with the idea of getting in early, getting a good land position, getting a good following, and trying to tell the story. So that's the thought there.

Gerardo Del Real: Well, let me provide a bit of context. I believe you have roughly, I want to say, just shy of 30 million shares outstanding. You trade roughly for, I think, C$0.20 or so the last time I checked. So the market cap here is absolutely tiny. It is maybe just a tad bit above C$6 million. 

Let's talk about salt. Why salt? This is, again, a commodity that I don't think gets looked at in our space as a commodity that can provide opportunity. Clearly, you believe in it. Clearly, you've been right more often than not in being early and putting together large scalable projects. And clearly, you've done that here with Atco. Can you tell me about the salt space?

Neil McCallum: Absolutely. There's sort of two parts to the salt space. One of them is providing salt as an industrial commodity for roads and for other industrial purposes. And of course, road salt is another one. 

The other part to it is a little bit of a new story… it was new to me when I joined the board. But one part of the green energy and clean energy story that we're trying to reform the world on is hydrogen. And you wouldn't think that the two go along… but hear me out. 

When we talk about hydrogen, a big part of that is storage. And one of the best ways to store hydrogen — there are many ways you can do it — but one of the simplest and cheapest ways to store hydrogen, after you produce it, is to send it into an underground salt cavern.

And what we've got on our project in Newfoundland is targets that look like they could be large salt structures based on some of the old work that we've compiled. And there are some other salt structures that have been defined by drilling around us. And we're looking to provide that kind of a solution to what could be one of the largest hydrogen producing areas that could be coming within the next two to three years in Newfoundland.

Gerardo Del Real: Walk me through — and I'm fascinated by this, obviously, because of your past successes — but walk me through the vetting process for these projects. And then, walk me through what you consider the highest priority projects in the portfolio in the near term. 

Obviously, every project has merit or it wouldn't be there. But in the near term, where do you tend to want to focus the bulk of your attention here?

Neil McCallum: Yeah, for Atco salts, they're called different projects but essentially they're all within the same geologic domain… and what we've done to prove up the idea here is we flew an airborne gravity survey, which will give us a pretty good indication of where these salt domes are. 

When you look for a gravity low, that typically indicates a salt dome because those salt structures are quite a bit less dense than the rocks that are surrounding them. So what we're trying to do is repeat the success of a company called Atlas Salt who is spinning out some of their salt dome projects into a company called Triple Point Resources. 

And they're slated to go public very soon, and they have a salt dome that has been drilled in the past. And there's a good chance that they are going to be on some of our projects — namely the Eagle Salt Project, which is about 10 kilometers south of them.

Gerardo Del Real: That is fascinating to me. When we talk peers — and you just mentioned them going public — when we talk about peer valuations, can you provide a bit of context on what Atco is aiming to do? Again, I know from some of your history that you don't tend to get involved with projects if you don't believe there is pretty substantial scale. 

I’ve got to believe, by the over 20,000 hectare package that you've managed to put together, that that's absolutely the playbook this go-around. But can you give me some peer comps on what new shareholders — I'm fascinated by the story by the way, especially with the C$6 million market cap — some peer comps as to what Atco is aiming to do here within the next couple of years?

Neil McCallum: Yeah, sure. I think the best comparison would be the Triple Point project. And I'm not sure the fundamentals on what their share structure and valuation is going to be when they come public. But I think that we, at a C$6 million market cap, can do quite well by just continuing to explore and find these salt structures.

Gerardo Del Real: Well, that's fascinating to me. What comes next, Neil?

Neil McCallum: Yeah, next will be getting the results from our airborne survey, which should be any day now. And then, the next step is going to be drill testing these.

Gerardo Del Real: Fantastic! I love those! I tend to tell people… I'm a simple guy with simple premises… and some of my biggest winners have always had pretty simple stories around them. So I am looking forward to following this. Thanks again for your time.

Neil McCallum: Okay, absolutely.

Gerardo Del Real: Cheers.

Neil McCallum: Take care.