Categories: Precious Metals
Topics: General Precious Metals

Bravo Mining Corp. (TSX-V: BRVO) Lead Director Dr. Nicole Adshead-Bell on Developing a Potentially Game-Changing Pgm Deposit in Mining-Friendly Brazil by Way of the Drill

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the lead director for Bravo Mining — Dr. Nicole Adshead-Bell. Nicky, it is great to have you on. How are you today?

Dr. Nicole Adshead-Bell: I'm very well, and it's a pleasure to be on. Thank you very much for having me.

Gerardo Del Real: Well, I am glad to have you on. I am biased, as always. I always like to get that out of the way. I always joke that I wouldn't be speaking with anyone on or off the record if I didn't have a bias. And in this case, I'm biased because, one, I'm a shareholder of Bravo Mining. 

But two, frankly, when I look at opportunities in the resource space, I always look at mitigating the risk. Anytime I'm allocating capital, my very first question to myself is how can I mitigate the risk… what is the downside? 

So when I look at a project that's got a historical resource that's already robust, metallurgical work that's already proven that there isn't a fatal flaw… when I look at the kind of team that exists, and I see that the team that's been put together has been serially successful, not just individually, but as a collective group in the part of the world where this project is being developed… I'm looking around and it's honestly one of the better opportunities that I've come across in quite some time as a speculator.

And so I wanted to have you on to explain to the audience why I believe this Luanga project, one, is undervalued, and, two, will be recognized by the market soon. But before we get to all of that, you have an incredible track record of success, and I want to start there. 

You're the lead director, as I mentioned, and anybody that's been in this space for any amount of time, knows your background. But I suspect we're going to have quite a few eyeballs to this story, and I would love for you just to introduce yourself a bit and speak to your background a bit? And then, let's talk about the team in a second.

Dr. Nicole Adshead-Bell: Sure. Well, I'm biased as well. I'm also a sizable shareholder, so we'll caveat the conversation with that. So my background is a geologist, originally, before turning to the dark side as my geological peers describe me. I was born and educated in Australia; moved to Canada, West Virginia, and back to Canada. 

So I've got a very good understanding from an in-the-trenches perspective of how that side of the business works. And then, I went to work for a precious metals firm; then worked as an investment banker, and then back to a precious metals firm and left in 2015. Really focused on making investments under my own company but also joined a number of boards. 

So how I really got exposed to this and have had the absolute fortune is… so the founder and the largest shareholder, the guy behind this story, Luis Azevedo, how I got to know him was I was a non-executive director of a company with a large open pit gold mine in the northeast of the country. It was ASX-listed, and I ended up becoming CEO of that company. 

And it was a company that was under a lot of stress; had a very stressed balance sheet. There were operational issues. And what we managed to achieve — and it was really due to the leadership of our in-country team — and what I brought to the table was I recognized the talent on that team. And we turned and stabilized operations. 

We fixed up our distressed plant extension, and we ended up financing that company via M&A because we needed a hefty amount of money to fix the balance sheet. And we've seen in our sector the death by a thousand cuts financings of companies that are in operations but they don't fix the balance sheet… and all they do is kick the tire down the road. 

So I came away from that experience, and we sold the company for a 69% premium, which is pretty good given the shape of the company. And then I thought, well, I'd love to be involved in Brazil again but with something that didn't have the challenges that were a product of decisions that I didn't make… because I love Brazil… I fell in love with the country. 

The people are incredible; an incredibly skilled mining workforce: more engineers, met-guys, and geos than Australia, the US, and Canada combined. Incredible natural resources: in almost every commodity you can think of, there's a world-class deposit. Yet, I think, underappreciated by the market. 

And there's been a few failures or a few less-than-stellar performers. And when you dig into why those assets or companies have underperformed, it's not a country issue; it's always a ‘management of your business’ in that country issue. And I felt, having gone through a fairly tough set of circumstances with Beadell, that there was a real opportunity to do things right as long as you are backed by a very good Brazilian team and you recognize the power of local knowledge and local expertise.

So I spent two years trying to get a gold project out of a mid-tier gold company; failed. And in hindsight, it was fortunate that I failed on that because Luis Azevedo — who is the executive chairman, CEO, founder, and largest shareholder of this company — I knew him from my Beadell days because he was a founder of a very successful boutique law firm that specializes in mining. 

And he too was a geologist, originally, before turning to the dark side. And so Luis reached out to me in December of last year, and said, ‘Look, Nicky, I've come across this project. I've got no ownership of it. I'd love to list it in Canada. And I'd really like for you to be involved. Would you consider it?’ And so he sent me a CA; I signed the CA, read about the project, and then contacted Luis and said, ‘Not only do I want to be involved, you can't change your mind because I'll stalk you until you allow me to be involved!’

And so what happened — and this is a rare thing — it's the first time I've ever been involved in building something from the ground up. And so it's quite different when you are involved in helping shape the culture and the strategy and bringing a good group of people together to, as you said, this is a high-risk business, and we can all choose where to allocate our capital. But in my experience, if you don't have the right people, it's the most important ingredient. 

And so we then assembled a best-in-class board. Stephen Quin — who I'm sure you know — is an awesome mining entrepreneur. He's very well-known in the sector. His ethics and his culture and his strategy are aligned with Luis’s and mine. And then, two other directors joined the board… between this board, I mean, we cover basically every single aspect of the mining industry that you want to see.

It's a board that is very diverse in the mining sector experience. I think diversity is a word that's unhelpfully chucked around right now. But between this board and the senior management team, we've explored for, we've permitted, we've developed, we've financed, we’ve built, and we've operated mines not only elsewhere in the world but specifically in Brazil and specifically 50 kilometers away from the location of Luanga. So appropriate experience… we're very over-endowed with that… and that's a rare thing in our sector.

Gerardo Del Real: It's also a rare thing to have a board that has so many people involved that have monetized assets, right? I mean, it's a rare thing in this space to be able to take a project, develop it, build it, and/or sell it. 

And it stuck out to me very early on that the goal here — and correct me if I'm wrong — isn't just exploration to collect a check… it isn't just exploration to say you're busy… it's to develop, it's to build, and eventually monetize the Luanga asset. Am I wrong in that assumption?

Dr. Nicole Adshead-Bell: No, I think, ultimately, at the end of the day, you need to have a strategy that delivers for all of your stakeholders. And I think this is a very rational board and management team. And as you said, it's a board and management team that has been involved in nascent stages of an evolution of a business through to executing on the sell side. 

So Luis and Tony Polglase, one of our directors, co-founded a very successful Australian-listed company called Avanco. And they took — along with Simon Mottram  who's our president (he was a VP of Exploration of Avanco) — and they took the Antas copper asset in the Carajás, pretty close to Luanga, from discovery through to permitting, construction, and into production in five years. That's unheard of in our sector. And then, they were acquired for a 100% premium by Oz Minerals.

And I think the key to success in our sector is understanding where you are in the cycle but also making appropriate decisions based on where you are in the cycle. And you see too many management teams that, I think, become a little bit blinkered, and then they don't have a strategy that works successfully based on what they have. And also, as you know, you always need to have an exit… you always need to be planning.

And this asset will be built, and it will be built either with us or with someone else. I think everybody involved in this, despite being a geo, I am not attracted to very early-stage exploration stories. The risk is too great and it's binary. 

So to come across an asset, which Luis did — this is 100% due to Luis's in-country connections and the respect that he has in-country and his long-term relationships — and the fact that he delivered in the Carajás is the entirety of the reason as to why this asset is coming to market. 

But as you said, it's an asset that was owned by Vale SA. It hasn't been recycled through numerous junior hands. And they spent a lot of time and effort. They discovered it in late-1990. They drilled it out in the early-2000s in a very different commodity price environment. 

Then, essentially, it went into safekeeping, and they've been going, more recently, through a divestiture process. And we, and our current shareholders and future shareholders, and our stakeholders, get to benefit from that. And so this is an asset — how we describe it, and it's been a strategy, I think, that's been very well-received in this very high inflation environment that we're in — is this is an exploration asset without the exploration risk because there's a very large mineralized system — 7 km of strike — that was broadly defined by Vale SA.

And it's our job to go, ‘Well, how big does this get?’ And Vale — being in an iron-ore district of the Carajás — they looked at everything from an open pit situation. Their drilling average is only 200 meters, and they had three drill holes that went below 200 meters. And those three drill holes ended in mineralization. And so their drilling didn't stop because mineralization stopped; they were just looking at this as a shallow, open-pittable opportunity. 

And so with our recent IPO, we managed to raise a substantial amount of money — C$40 million — plus our existing balance sheet. We're in this very fortunate position of having a very strong balance sheet with which to focus on delivering on exploration over the next two years without having to tap the markets again. And a mistake too many juniors make is… I'll raise a bit now and then raise a bit in the future… and the share price never gets upward pressure.

So we have strategically tried to de-risk how Luanga advances over the next two years, and then, concurrently, because we think that this also is an asset that should ultimately be developed. And given Luis's skillset in the area… he's been involved in permitting 13 mines in Brazil… he really is the best in the business at this side of it. 

And as we know, you look around the world, permitting is one of the biggest challenges. And it's not only a challenge to get permitted, it's a challenge to keep that permit. So we are concurrently doing baseline studies. And we're doing all of the work that we need to do so that if/when we decide to pull that development trigger — it's at the right time in the market and we can do that as rapidly as possible.

Gerardo Del Real: The project has a market cap of roughly C$174 - C$175 million; C$45 million of that is backed by cash. But as interesting to me is where the cash came from. And I want to talk a bit about the shareholder base because there's some pretty impressive names on that shareholder roster. Can you just briefly touch on that, Nicky?

Dr. Nicole Adshead-Bell: Sure. So the big institutions came in during the IPO. But our strategy pre-IPO was to reach out to all of our connections in the business. And having come from the institutional side, we always found it pretty galling when companies would come to us at the IPO but hadn't had the courtesy to contact us pre-IPO. And it's all, really, about coming to them for the expensive round. 

So what we made — between this board and the management team — we have very good relationships and, I think, based on mutual trust with institutional investors. So for example, Blackrock, which is — and these investors have provided us permission to use their name — Blackrock was a very sizeable shareholder of Avanco. And it was a great story, and [inaudible] speaks very highly about Luis, and there's a lot of mutual respect between the two of them.

And so when we reached out to Blackrock — as we did with a lot of institutions for our private rounds — they said it was subject to their due diligence process, which was very extensive in nature. And frankly, we didn't think we'd get through it. They ended up owning 8% in our private round. And so what we wanted to do with the fifty-cent-round was to place that strategically. 

It's high-risk capital, obviously, and generally at a lower price as to when you go public. But we wanted to ensure that that went into hands that we thought would be able to benefit the company in the long-term going forward. And we also got the Stock Group of Companies in that fifty-cent-round; Matt Geiger from Geiger Capital, Paul Stevens, and a number of other well-known resource investors that really focus on this small end of the market.

And I think that they saw the opportunity… they saw the people and the team that we’ve put together and, of course, the quality of the asset. And then, we went public in very difficult times, as someone in the industry has said to me, ‘It's a miracle… I didn't think you guys could do it!’ And really, I don't think the average junior would've been able to raise the money at the valuation that we did.

And what that speaks to are three key things: Confidence in the team; at the end of the day, people are the most important ingredient. Confidence in the project; it is very rare to come across a project that has all of these qualities. It's a very large mineralized system. It is incredibly well-positioned in the Carajás in terms of its infrastructure, which just reduces your cost of doing business.

And not only if you've become a development project but even in this exploration phase, we’re an hour drive from Parauapebas, which is the mining center of the Carajás. It's got multiple big supermarkets; it's got two CAT distribution centers. It's the source of schooled labor. So we are very well situated in terms of access and in terms of labor. And in this part of the Carajás, and, really, due to Vale’s extensive investment in infrastructure in the last 40 years, we also benefit from a lot of power infrastructure. And so we are very well-positioned.

And in Brazil, there's some very challenging land status designations. And fortunately for us, we're not subject to this because the surface is privately held. It was deforested 40 years ago. So not only are we not cutting down trees in the Amazon, we have a program of replanting. And there's no community living on site.

It is one of the most simple situations that I've seen from a land perspective. There's no major rivers running through. The topography is very friendly. You are in a high rainfall environment, which means you don't have a negative water balance. And as we know, water is a key issue around the world. It is almost a perfect layout, as much as that you can have in our sector.

So having seen probably 300 projects around the world over the last 22 years across every continent except Antarctica, it's incredibly rare to see one with all of these qualities. And so I think all of those elements allowed us — when we were doing our pre-marketing and then our IPO marketing — to attract funds that are the best in the business that take a really long-term view. 

They're very well-known resource investors, including Steve Land at Franklin. He was a large investor in Chalice, which was this amazing Australian PGM success story that had a discovery a couple of years ago. It went from 20 cents to $10 last year and got a $3 billion valuation. And so I think he saw hallmarks just between the potential with our asset base.

And then, Tembo Capital; they are very long-term, very sophisticated resource investors. They do a lot of due diligence before they invest in anything. Blackrock, I think, needs no introduction; the largest fund manager in the world. And then, of course, RCS. And RCS, again, are very specific resource investors. 

So I think we're fortunate enough to have this base of institutional resource investors that take a very long-term view. And they understand the risk or proposition. And I think that they — I don't want to put words in their mouths — but I think that this is a pretty unique opportunity.

Gerardo Del Real: You mentioned Chalice having a multi-billion dollar valuation, right? And I mentioned that Luanga is currently being assigned a roughly C$175 million valuation. It's a very similar project. Is that the analog… or is that an analog?

Dr. Nicole Adshead-Bell: Well, of course, we always compare ourselves to Chalice; that's the valuation that we want. So there is a bit of a selective comparison there. Look, their deposit is a little bit different in the sense that they don't have rhodium. And so not all PGM deposits are created equal in terms of their commodity mix. 

And so their deposit is palladium-rich, as is ours. They have platinum and gold as we do. And they also have nickel, copper, and cobalt. Whereas we have palladium-rich, which is we have platinum, we have gold, we have nickel… but we also have rhodium. And interestingly enough, as we were doing our marketing, a lot of the institutional investor interest and focus was on rhodium. Most rhodium supply comes out of South Africa, and not all PGM deposits have rhodium.

So we have, as we like to say, this commodity mix for everybody. We have the PGMs, which some people look at as precious metals… some people look at them more as industrial metals given that they're used in internal combustion engines in terms of reducing emissions. And then, nickel; there's this whole green thing that's been playing out in nickel in terms of the build-out on the battery sector and the EV sector. And so, whatever you want, if you want to be exposed to green metals, or if you want to be exposed to precious metals — we feel like we have it all in this commodity mix.

And I think one of the reasons why rhodium has been such a focus, it's a very volatile priced commodity. So the current price is around US$15,000 an ounce. So you don't need that much rhodium to have a pretty big economic kick to your project. And it hit its high of US$30,000 an ounce last year. And that was really around these concerns about PGM supply coming out of Russia. 

Russia is a predominant supplier of palladium; about 40% of global supply is out of Russia… and also South Africa — with inherent political risk — given that most PGMs come out of South Africa and Russia.

Gerardo Del Real: There's an ongoing Phase-1, 25,500-meter drill program that’s happening as we speak. I think there are six rigs onsite. And you had some news this morning. And look, I'm not a geologist, and I don't have a PhD — we can't all be Nickys, right — but you had some news this morning that I think might be game-changing news if it actually is followed up with the drill rig. 

Do you want to touch on that a little bit? There was an intercept of massive sulphide mineralization that hadn't been seen despite the fact that this project has seen a lot of drilling, right, again, by Vale, not by a junior, not by some company that's looking to cash a check but by a major mining giant. And so can we talk about the news from this morning?

Dr. Nicole Adshead-Bell: Sure, it is very exciting. I was joking with someone this morning that Luanga appears to be the gift that keeps on giving. It is! Luanga is what you would call a low-sulphidation system; a low-sulphide system. It doesn't have a lot of visible sulphide; that spectacular, pretty shiny stuff that everybody reacts to. 

So as far as we're aware, nothing of this style of mineralization has been intercepted by Vale until what we intercepted today. So we did release last week — ahead of Rick Rule’s conference that we attended in Florida last week — just an example because we wanted to show the different styles of mineralization at the conference and had some core… and that was semi-massive sulphide mineralization. Again, very unusual; it's not something we see at Luanga. 

The hole that was intersected — which is quite a distance from any previous historical Vale hole — we hadn’t seen this before. And it's very exciting stuff. And someone said, ‘You can't find the Gangue mineralogy; i.e., the ways that you see that in the photograph of the core.’ So it is massive sulphide and semi-massive sulphide mineralization. 

We're seeing a lot of pentlandite, which is a nickel-sulphide mineral. We're seeing chalcopyrite. And this is a low-copper system. We haven't seen that much chalcopyrite before. So obviously, we need to wait for assays. 

But we felt — given the tenor of the intercept — obviously, it's pretty exciting during this time to start talking about things. Insiders want to be in a position to be able to go into the market, and by that, it behooved us to get that out because we felt it was material. And it's very exciting; it's a potential game-changer. 

So our job, over the coming months, is not only just to drill out Luanga, this massive mineralized system… so seven kilometers of strike. To put that into context, Chalice is 10 million ounces; that's only over two kilometers of strike. And they put approximately 250,000 meters over 500 holes into an ore body that has a strike length of two kilometers versus our seven kilometers. So basically, we have an awful lot of room to be able to infill and understand how big the system is.

And so to intercept massive sulphide means there are a lot of questions over that. So is this a potential sulphide plunging… is it a feeder zone? It's our job to understand what it actually is. So we're at the very early stages. It's a new style of mineralization; it’s massive sulphide. It's our job to ensure that we have at least one drill rig focused on seeing how big this is.

So when you have massive sulphides, you also want to start using geophysical techniques, such as EM. The team on the ground is, obviously, immediately ensuring that we can start doing that process. We've cased the hole to allow us to do this. And what EM does is it helps you focus in on what direction you should be drilling because of the type and style of mineralization. It's very exciting. We're very excited about it. This deposit is fantastic. I honestly haven't seen too many deposits like this in my experience… and I've seen quite a few!

Gerardo Del Real: I feel better informed. ‘Smarter’ is the word I was going to use! I also feel happier as a shareholder because, frankly, I was happy just to have the six rigs proving up that historical resource and adding to that. And so, obviously, that was in progress and going very well. 

But again, the news from this morning, I couldn't be happier as a shareholder. So congrats on that. I can't wait to see the follow-up work that goes into proving up what it means. 

This has been a phenomenal discussion, Nicky. I mean, you have the right team… you definitely have the right asset… you have a team that knows what it's doing and knows how to get things done in this part of the world. 

The share structure is excellent… the shareholder base is phenomenal. And the best part of it for me, as a shareholder is, again, I think the asset right now is significantly undervalued given the state of the markets. But I don't think that's going to last. Is there anything else you'd like to add to that?

Dr. Nicole Adshead-Bell: I think you said it better than I could possibly have. Absolutely, it's an asset of unusually high quality. And so… how big does it get? We don't know the answer to that yet… but it's going to be pretty exciting finding out!

Gerardo Del Real: I'm looking forward to visiting the project when there is an opportunity to do so and the schedules coincide. It's been an absolute pleasure. Thank you so much for your time.

Dr. Nicole Adshead-Bell: Thank you very much as well. And thank you to those of you who will, hopefully, be listening to this at some stage.

Gerardo Del Real: Alright, we’ll chat soon. Lots of news flow coming!

Dr Nicole Adshead-Bell: That's true! Chat soon. Appreciate it!