Atco Mining (CSE: ATCM)(OTC: ATMGF) CEO Etienne Moshevich on Confirmation of Potential Hydrogen Storage Capacity at Flat Bay Salt Project, Newfoundland, Canada
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO and largest shareholder of Atco Mining — Mr. Etienne Moshevich. Etienne, it's great to have you back. Market cap aside… and there's the opportunity, and I keep highlighting it every time we speak… but market cap aside, how are you doing today, sir?
Etienne Moshevich: Market cap aside, I'm doing very well. Thanks for taking the time today, Gerardo. Thank you. Appreciate it.
Gerardo Del Real: Well, listen, let's get right into it. I have a substantial position in Atco that is a long-term position for me. And so while a lot of people, including myself, would love to see the share price higher, the market is going to recognize the value in due time; I'm confident of that. What I want to see as a shareholder is I want to see the company executing and adding the value that's going to lead to that re-rate.
And you just had some news that was as significant for the company as any news release that I've seen from you. And I'll just read the headline and let you fill in the blanks. But the news is, you announced a large-scale hydrogen storage estimate at the Flat Bay Salt Project that outlines the potential for, on a conservative basis, 7 caverns; on an optimistic basis, 14 caverns.
And again, I'll let you fill in the details because it's exciting stuff given what's going on in the region.
Etienne Moshevich: One hundred percent. And again, thank you for doing this, Gerardo, and thank you for being a loyal and supportive shareholder.
This is exactly what we've been waiting on and working with RESPEC for. And RESPEC — I'm sure all of your audience knows because I've been speaking about them for a long time (they're working with the likes of Vortex Energy as well) — they're kind of the premier hydrogen storage salt cavern experts in the world. They're out of South Dakota.
And we have two projects that we've shown them: the Flat Bay and Eagle salt projects. The first one we were kind of working towards was Flat Bay, as everybody knows. And so the first thing they came out with, with us, was saying, yes, according to them, there is salt on our project. And then, the next thing was the potential size of the salt cavern. And then, the third news release, which is what we just announced last week, was how much hydrogen can you potentially store in your cavern, according to them.
And why is that significant?
Because, as I said, and I can't highlight this enough, is that the Newfoundland government gave bids to four companies, and one of them is WorldEnergyGH2. And it has already been announced and already put into the market that they're going to be spending $66 billion in the area building clean energy infrastructure projects. $66 billion. And this is not just me saying it; this is in the news. And this is a massive, massive figure, and they're all going to have to store their hydrogen somewhere.
And as of right now, there are only three players in the area. Us, Vortex, and Triple Point — that's it. And we are by far the smallest market cap. We're a sub-C$4 million market cap today. Less than a C$4 million market cap today. It's absolutely mind-boggling.
And the biggest thing is that what we wanted to do with this news release is showing, yes, we have, on the conservative side, 7 caverns that could potentially store around 130K tonnes [of hydrogen]. And then, on the optimistic side, 14 caverns that could potentially store up to a quarter-million tonnes. And what does that mean?
The problem is it's not like gold where you can say, ‘This is how many tonnes you have in the ground and here's how much it's worth,’ and you can just do a quick calculation on how much your market cap is. It's a little ambiguous right now as to what that hydrogen storage is worth. And the reason for that is because there isn't one number out there that this is how much hydrogen is worth.
These companies that are investing so much money in the area, and they're building these infrastructure projects, and we don't know the exact number of how much it's going to be worth… but we can tell you they're going to have to store their hydrogen somewhere.
And if we can show them that we can store hydrogen in our salt caverns, then we can go to them and say, ‘Hey, look, here's the detailed info on our salt caverns. Here's how much hydrogen you could potentially store in our caverns,’ and then cut a deal with them. There's a guarantee that it's going to be worth more than a C$4 million market cap, which is where we're trading today.
And the numbers, I can't quote you the numbers, which is a problem, which is why I think we're not trading at a much higher market cap right now is only because I feel like the audience doesn't really quite understand.
But if you look at a company like Vortex Energy, when they announced the exact same news release, they were trading at C$1.50 a share, and they went to C$2.40 a share; at that time, up to around a C$175 million market cap.
And if you look at their news release on one of the structures, they could store about a half a million to 900,000 tonnes of hydrogen. So three to four times more than ours. But on their other structure, it was a quarter-million tonnes of hydrogen, which is the same as ours on our optimistic side. And we're trading at a C$4 million market cap, and they're trading, right now, at a C$50 million market cap, which was as high as C$175 million.
So this is the biggest next step for us, is gathering as much information as we can through working with RESPEC so we can go and approach these four companies that are building these wind infrastructure projects in the area and say, ‘Hey, look, here is the info on our salt caverns. Let's either do a deal or what can we do together?’
But the interesting part is, it's not just them. You're going to be seeing massive energy companies, aside from these four, because, remember, there were over 19 companies that submitted bids, which means that only four got the bids. But there are many more than just four that are interested in building these projects and investing in clean energy off the coast of Newfoundland.
So we can go to not just these four but approach many other companies, including much larger ones that didn't even submit bids but are household names in the energy industry, because they're all moving into the space.
I can't tell you how much that's going to be worth. I can't tell you when. All I can tell you is, if you read the news, read the headlines, the industry is only going to continue to grow, and it's just getting started. We are at the beginning. We're at the first inning of this, which is why I can't tell you exactly how much each tonne of hydrogen is worth.
But I can tell you it's worth way more than our market cap… and the industry is only going to continue to build. And we're trying to position Atco at the forefront of this. Is that a good summary for you, Gerardo?
Gerardo Del Real: That's a phenomenal overview. I think that really crystallizes the opportunity.
Let me ask you another question because I think this part is important. You mentioned a few of your peers. You mentioned getting 19 different companies that wanted a piece of the pie; four were awarded the initial opportunity. Clearly, the other 15 are going to want to make inroads in the region.
So my question to you is, on the hydrogen storage side, how many companies have the kind of land package — and it's not moose pasture; this is quality land — how many other companies have as significant a holding as you do in the region?
Etienne Moshevich: There are only three companies in the region that have any sort of land position like us. That's Triple Point, which is Atlas Salt’s subsidiary, Vortex Energy, and us. There's nobody else. And we have over 21,000 hectares. We're one of the largest landholders in the area. There are only three of them — that's it.
I was speaking with a very large company that's looking at potentially getting into the space, and they confirmed there are only three of us in the area because having a strategic land position by the coast is the most important land position you can get.
There's a lot of available land, kind of, inner inside the province and stuff. That may bode well for salt mining but it doesn't necessarily mean you can store hydrogen there, and economically, and make it make sense because they're building the wind turbine projects off the coast so you have to be by the water.
It's like building a house and you want to be waterfront. There's a lot of land that's available inland but you want to be right on the water. And we have prime waterfront real estate. That's what we have.
Gerardo Del Real: Well, it's as simple and straightforward a risk-reward proposition as I've seen in quite some time. And to be frank, there are a lot of bargains out there right now. We know it's people front-running tax loss selling season right now. We know that the junior space is seeing record low volume and 52-week lows across many sectors.
Again, my contrarian heart smiles at that because I'm going to be able to add to several of my core positions that I paid higher prices for at lower prices. And when I look around and think about the way that I allocate capital, it's not for today or tomorrow, or for 2 cents or 3 cents. It definitely takes a mid- to long-term view on the cycle.
And I love being ahead of cycles. It's been really, really good to me. I think we're ahead of another one now. It may take a bit for people to get the opportunity but, boy, when it happens, is it going to be fun!
Etienne, anything else to add to that?
Etienne Moshevich: Yeah, I just wanted to quickly add… I forgot the exact year but it was when the entire lithium space was early and nobody really understood that lithium was kind of a new commodity that people were going after. Everybody was always going after the regular kind of gold, copper, etc.. Lithium wasn't that hot.
And there were several companies that kind of hitched their wagon to lithium — developed and amassed incredible land positions, great projects. And they were able to get those great projects because nobody else was going after them because nobody cared. And then, all of a sudden, when the entire market realized how valuable lithium was with the entire electrical car industry and everything, these companies got bought out and soared and went to multi-dollars.
And is that going to happen with Atco? Obviously, I hope so. I don't know. That's the goal; that's the plan.
But I really feel that the entire clean energy and hydrogen storage industry is where lithium was eight years ago. Because, in fact, you’re starting to see much larger companies getting into the space. Chevron acquired a cavern in Utah. And people can take a look on Atco's website in the Industry News tab, and you can take a look at that news.
You're starting to see much larger companies quietly go after it. And it's not in the mainstream media yet but, in my mind, it will. And when it does, and when everybody understands what this really means — what does each tonne of hydrogen really mean economically and how do you take advantage of that $66 billion that's being invested in the area at a C$4 million market cap — they're going to see the value that I see as the single largest shareholder and as the CEO of the company. And that's the goal.
Gerardo Del Real: Again, I couldn't agree with you more. I'll be adding to my position here if it stays at these levels over the next several months. And again, that's speaking to someone that already has a pretty decent holding and a pretty substantial amount of warrants to go along with that.
Etienne, always a pleasure. I'm looking forward to looking back at these interviews and these conversations and laughing at the C$4 million market cap because I'm pretty confident it'll happen… I just can't tell you when.
Etienne Moshevich: I really appreciate it, Gerardo. I mean, I take a look at some of your past interviews, and when you first featured PMET, Patriot Battery Metals, and I remember it was... don't quote me on it, but I think it was like 17 cents, 20 cents, 25 cents at around that time… and it hit a high of C$17.
And I hope that we'll be able to turn Atco into the next PMET. That's the goal. That's what we hope… we’ll look back and laugh at when I was saying it's at a C$4 million market cap.
Gerardo Del Real: Yeah, I've told you the story before, right? I think Patriot's market cap was right around there. It was C$6 million, C$7 million post-rollback. And they got ahead of what ended up being a land package with massive scale that had some good historic numbers that hadn't been explored in a substantial way.
And a gentleman by the name of Neil McCallum and Dahrouge Capital worked with Patriot to give them the initial land package there and vend that in and do some work on it. And no coincidence, I think that Neil McCallum also worked with Atco and is working with Atco to help identify a lot of what is now, again, a large-scale land package that I think is ahead of its time.
So yeah, looking forward to future conversations. Etienne, thank you so much.
Etienne Moshevich: One hundred percent. And I wanted to just quickly add and confirm that Neil, yes, he's a director of ours. He's a director of Atco.
Gerardo Del Real: Well, he's got a hot hand. The last several projects that he's worked on have either turned into really special plays or on the way, I believe, with Q2 Metals and what they're doing there and with what Atco is doing.
So I think it's going to be a fun next 12 months. A bit of market volatility right now… par for the course… seen it a hundred times. Won't be the first time and won't be the last. Thank you again, Etienne.
Etienne Moshevich: Really appreciate the time, Gerardo. Thank you.
Gerardo Del Real: Cheers.Click here to see more from Atco Mining