Categories: Base Metals / Energy / Precious Metals
Topics: General Base Metals / General Energy / General Precious Metals

Dahrouge Geological Consulting President Jody Dahrouge on Everything from Patriot’s Earth-Shattering Lithium Discovery in James Bay, Quebec, to Rare Earths, Uranium, and Gold

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today from Dahrouge Geological Consulting, as someone on Twitter… and this made me laugh, Jody… said, ‘the legendary story of the man who inspired one million nearologists’ — Mr. Jody Dahrouge. Jody, how are you today?

Jody Dahrouge: I'm doing great. How are you, Gerardo?

Gerardo Del Real: I am well. Let's dive right into it. I had the pleasure of meeting you for the first time at PDAC. We were able to sit down and have a couple of brief conversations that were really insightful.

Obviously, the talk of the conference was Patriot Battery Metals. It's no secret, obviously, that yourself, Darren Smith, who's VP of exploration for Patriot, Neil McCallum, who, amongst others, helped stake that, and is now VP of exploration for Q2 Metals… it's no secret that Dahrouge Consulting has become the go-to firm for anything and everything James Bay because of that success. 

And so first off, for those not familiar with you, can you give us just a brief primer on your background, outside of being the man who inspired one million neurologists here recently?

Jody Dahrouge: Well, I became a geo. I went to the University of Alberta; graduated in 1998 or 1988… God, I'm getting old… 1988 from geology. And then, I worked a few years in the industry. And you know how it is… it's busy, it's not busy. Quite quickly, I learned that going from job to job may not be the ideal situation or project to project. 

And so I went back to university and worked full-time as a geologist for ATCO Power. And concurrent with that, I was studying computing science; graduated from computing science in 1993. I remember having numerous job offers. 

I think it was the start of the high-tech boom, really, and I said to my wife, well, I'm going to just go claims staking for this fellow, Laurie Harfedol, who had a consulting firm in Edmonton. And once the claims staking is over in September, I'll take one of these great computing science jobs. You know what; never did… never looked back. 

It's just pretty hard to take the field out of the geologist. Once you're a geologist, there's no job like it… there's no life like it.

Gerardo Del Real: Well, clearly the passion is there. I know that the recent success, and we'll talk Corvette in just a second, we'll talk a couple of other names in James Bay that I'm curious to get your take on. And then, obviously I want to talk about what plays you believe have the potential to turn out to be real plays because, as I mentioned in the intro, there's so many near-ology plays nowadays that it's overwhelming. 

It's funny, I put up an interview with Q2 Metals, which I'm biased, I'm a shareholder, I really like the team, I like the connections to the Patriot Group. And I phrased the question, is this the next Patriot Battery Metals? And I had some great back and forth banter that I really appreciated on Twitter about, ‘not you too Gerardo,’ right? And so let's talk James Bay, Jody. 

I want to talk about Corvette and what you believe that has the potential to be. Again, I am a biased shareholder. It's one of those positions that I will hold the bulk of until the eventual buyout and/or it getting put into production. But how special is that district?

Jody Dahrouge: It reminds me of the Pilbara district 10 years ago when Greenbushes was changing from a tantalum producer to a lithium producer. The Pilbara, there in western Australia, has just blossomed from 10 years ago. 

They've been through the ups and downs of high spodumene prices, low spodumene prices, and yet they always kept managing to make discoveries, advancing projects. This reminds me of that; a very early stage Pilbara discovery or Pilbara district discovery. Yeah, we're just at the very beginning. 

I see a multitude of discoveries happening. Pegmatites are not necessarily as rare as, say, kimberlites or diamond deposits or rare metal deposits. But they're rare enough. And they tend to occur in districts or environments which are repetitive, repeated around the world. You can go looking for peraluminous intrusions that give rise to these types of deposits. And again, they tend to occur in clusters or in districts.

Yeah, it's pretty special. We've been drilling for Patriot for going on, probably, two years now, and there seems to be no end of it. I mean, the activity just is picking up all around us. There are discoveries all around us. Certainly, you would point to Q2 Metals, which, funny enough, Neil and I tried to buy that project before Q2 bought it.

Gerardo Del Real: I heard!

Jody Dahrouge: Neil told you this story?

Gerardo Del Real: No, I heard from someone else.

Jody Dahrouge: Yeah, I mean, it was very frustrating. We couldn't buy it. I kept upping the offer. But, look, they sold it to someone else. Little did we know it went to Q2, or Queensland Gold at the time, but we had figured that out… and good for them. I mean, it was a great pickup. 

And now, luckily, we've got the opportunity to work on that project. It reminds me a lot of Patriot when we first staked Patriot in 2016 or so; outcrops on surface, spodumene on surface. I haven't actually been on the ground so I haven't seen it. We're relying on historic reports. But certainly, it has similarities. And the drill bit will tell us if we're the liar or not. If we drill it and it's got scale to it, then it's going to be pretty exciting for that group and that project.

But another one that I like is Ophir Gold. They have the continuation to the east in that same greenstone belt. As we look through the historic data on that project, we start seeing references from the 1950s, 1960s for spodumene-bearing outcrops that are described as pegmatitic, or they certainly look like they could be pegmatites. 

And then, we’re constantly looking at satellite images, trying to zero in… could that be a pegmatite or is it just basalt… or is it just, what is that? And obviously, you're fooling yourself until you actually get on the ground.

But I think there's a lot of companies out there that have tremendous potential in James Bay. Osisko has got an amazing land package that they're just starting to dig into. Winsome has a beautiful discovery at Adina. It's a project we actually worked on several years ago. Brunswick Gold has picked up an amazing land package countrywide. 

We're talking about James Bay but there are other parts of Canada that have potential as well. The Northwest Territories in and around the Yellowknife area; that district has been known for over 50 years. And a company called Li-FT Power has picked up a big land package in that area.

One of the very first projects we staked and transacted with Patriot's predecessor, 92 Resources, was the Hidden Lake project, which is just east of Yellowknife. And we had channel sampled it, drilled it, got some really nice intersections… certainly not the scale or magnitude of what we're seeing at Patriot. But back then, I would be happy finding a 20 million tonne deposit. Now, looking at the potential of Patriot, it's like, how am I ever going to top this?

Gerardo Del Real: And it's still early, right? 

Jody Dahrouge: Pardon me?

Gerardo Del Real: And it's still early with Corvette… that's the thing that's amazing to me. And I'm not a geo, but I think, easily, just with CV5, we're probably headed closer to 200 million tonnes right now than 100 million tonnes. 

We'll know soon as we get some more results from the Nova zone and we'll see how far that extends. But I've gone on record saying in my non-geo, very simple-minded way, and I said this to Blair the other day, it's starting to look to me like one big blob underneath. Is there anything in the drilling that disproves that up until now?

Jody Dahrouge: Well, I'm not actually the one doing the consulting on it. Darren, in my office, is sort of managing the exploration on that. Obviously, Patrick Schmidt and Brad Ulry are helping out with it. But just looking at what's been reported, it's got scale, I mean, over three kilometers long. I think the deepest drill hit is 400 or 500 meters. 

I liken it to an egg carton, how it's corrugated on one side and corrugated on the other side. That's really what these things look like in three dimensions or that's my best analogy. So they're going to pinch and swell on strike, and they're going to pinch and swell at depth. They're going to get cut off. They're going to be faulted.

But the thing that is amazing with Corvette is there are 50 kilometers worth of pegmatite outcrops on surface, and they come and go because this area is heavily glaciated. So a lot of it is covered. If this glacial cover, if all these lakes weren't present, I think it would've been discovered many years ago.

Gerardo Del Real: Sure.

Jody Dahrouge: But the fact there were these isolated outcrops along this greenstone belt, people never paid that close attention to it. But imagine something three kilometers long sticking out on surface like a sore thumb, it would've been drilled. It would've been tested, and someone would've owned it.

Gerardo Del Real: It sounds like, Jody, and correct me if I'm wrong, but it sounds like you actually do believe that some of these other plays are going to turn into real discoveries. We know the bulk won't, right? I know the bulk won't because you can't have 500 new entrants to James Bay… I'm just throwing a number out there… and have every one of them be successful. 

That's not the norm anywhere in the world, and James Bay isn't going to be an exception. But you absolutely believe, it sounds like, there are more discoveries to be made, not just at Corvette, obviously, but with the Q2s, with the Ophirs, with some of these other companies that you mentioned.

Jody Dahrouge: Absolutely. Yeah, some will turn out. There's only one Patriot. I'm skeptical that there will be another of that magnitude. And certainly, the beautiful thing about Patriot is the mineralogy. I mean, incredibly coarse grain spodumene that is easily, or at least in initial tests, where it appears to be easily recovered by dense medium separation. 

So the simplicity of it, the scale of it… and it's all spodumene. It's like 98% spodumene. At least that's what I've observed. There's not lepidolite… there's not all these other things that complicate recoveries. 

And the coarse grain nature of it is, I think, very unique because it simplifies the recovery. Yeah, there's only one Patriot. And on a worldwide basis, I truly believe, over time, this will end up being in the top few deposits in terms of scale and simplicity.

Gerardo Del Real: I absolutely agree.

Jody Dahrouge: But to be honest, if I went out and found a 40 million tonne deposit right now somewhere else, I'd be one of the happiest guys in the world. That's in North America, in Quebec, in the James Bay region; Quebec bends over backwards for the miners.

I'm an Albertan on the other side of the country, and I wish we had the geology that Quebec has in our portion of the Canadian Shield and the tried and true mining history that they have. But hey, that's why we're in Quebec because that's where the great geology is, and that's where you can develop projects in Canada these days. 

And it's also always ranked really high in the Fraser Institute of rankings on a worldwide basis for where mining companies like to go to do their exploration and development. We've actually been working in Quebec, I want to say, since the early 2000s. I'm a director of Commerce Resources. We have a rare earth project in northeastern Quebec, south of the community of Kuujjuaq called Eldor.

Gerardo Del Real: I was going to ask you about other commodities that you like. You beat me to it, Jody. Yeah, not to interrupt, but I was absolutely going to ask you next, what other commodities you like and I was going to ask you about Commerce. So please, please continue.

Jody Dahrouge: I love rare earths. There are a few projects I'm following around the world. I really like one called Meteoric Minerals. The symbol's MEI. Tolga runs that company out of Australia; trades on the ASX. 

They have a beautiful ionic plate project in Brazil. They're surrounded by a number of mines. I believe some of the aluminum companies are probably in there mining clays or bauxite in and around the project. But early days for it; very attractive.

I like Commerce; of course, been a director forever. And again, there's another project we discovered that's got scale. It's just a bit remote, though I believe in the project and that it can be developed over time.

And I think rare earths need to be paid attention to because Lynas is faced with this perpetual issue in Malaysia of not getting their permits extended for processing their ore that they're mining out of Australia and shipping there. And they're currently constructing a similar facility in Australia knowing that Malaysia is going to shut them down. 

And does that facility in Australia get up and running and running smoothly before Malaysia shuts down the facility that they currently have there? There could be a problem for the Western world if there's a gap in that timeframe.

Gerardo Del Real: That's an interesting conversation to have. And the reason I really think it's interesting on a percentage basis, the first time that I came into Patriot-like gains, and again, on a dollar basis, Patriot far exceeds that because I didn't have as robust positions back then as I do with Patriot. 

But the rare earth craze back in 2010, 2011 was the first time that I was able to buy a company at 16 cents, 20 cents and see that go to $18. There was Rare Element Resources. There were a couple of other ones. Tasman Metals was one. Flinders Resources had a graphite and rare earth asset at one time. I could go on. 

But you believe that we're going to have another rare earth type shortage. Do you believe it'll be more sustainable than that run? That run was, for me, a year and a half or two years, and then it was a round trip for most of those companies, right?

Jody Dahrouge: Yeah, absolutely. I think that's going to hit the market soon enough. And it might take something like Lynas having their processing facility in Malaysia shut down to get everybody's attention. 

But the demand for rare earths is increasing. I don't have the specific numbers. I just know that rare earths demand, especially the magnet feed, the praseodymium, neodymium, dysprosium, those rare earths, they're just in great shortage.

I mean, you saw Elon Musk talk about how Tesla is going to phase them out of the electric engine for one of their models. And I'm skeptical. I mean, an induction engine versus a permanent magnet engine… I believe the permanent magnet engine is far superior. And if you're going to increase the length of which an electric car can travel without re-energizing, using permanent magnets is probably the way to go.

And there's no shortage of rare earths. There's lots of rare earths around the world. I used to say, if you find a rare earth project, you find a metallurgical nightmare. They're not easy things to process. Oftentimes, they're associated with uranium and thorium, which you have to deal with. So that is a big issue. They're costly to sort out the metallurgy. They're costly to develop.

Good on Lynas on what they did because they achieved what no other company in a long time, since Mountain Pass, I suppose, in California, had achieved in developing their project. 

Rare earths are an interesting one, and hopefully your comment plays out again and makes a whole bunch of money for a lot of people. A lot of these inexpensive rare earths companies, once rare earths get in the limelight, they’ll all take off and have those, what did you say it was… 16 cents to $18. I'd love to see those returns for people.

Gerardo Del Real: Yeah, it was absolutely phenomenal. And unfortunately for me, for maybe a year, year and a half, I thought, man, this investing in juniors is easy. I mean, there was one point, Jody, where I was sitting there once Rare Element Resources got an NYSE symbol, they actually had options, right? 

And so I was buying calls, long-dated calls, on margin. And just, again, percentage gain wise. But man, I absolutely love this. I think I have a knack for it. And of course, a year later, when it all went the other way, it was a very humbling experience and one that I'm thankful for now as I get a little bit older. 

But I absolutely agree with you. I think rare earths will be back in focus soon. It's something that our group is positioning for quietly behind the scenes. I'm sure we will have more conversations in regards to that but I'm definitely of the same mind.

So you like lithium; you like rare earths. What other commodities here in the near to mid-term do you just see the world not being able to do without, Jody?

Jody Dahrouge: I've always been a uranium bug and had a passion for uranium exploration in the Athabasca Basin. I’ve been involved in a lot of discoveries and putting together a lot of projects. In around 2005 to 2006, I got involved with a company called Strathmore Minerals, which eventually spun out Fission Energy. 

David Miller was the first president of Fission Energy. I was the second president. But that company and its predecessors eventually made several discoveries on projects we put together… and I'm proud of that. And I think uranium is going to be in the spotlight again soon enough. And there's a host of recent discoveries in the basin and things that people should be paying attention to. 

Some other commodities… historically, we focus more on esoteric: uranium, rare earths, lithium, specialty metals like niobium. We've been involved in a company called NioCorp in Elk Creek, Nebraska. They have a beautiful niobium deposit at Elk Creek. I'm also a gold bug.

Gerardo Del Real: Of course.

Jody Dahrouge: We're always all waiting for gold to hit new highs.

Gerardo Del Real: I'm very thankful for lithium in the interim.

Jody Dahrouge: Gold, it seems, is the thing that empties my pocketbook; doesn't make me more money. I'm always investing in it, waiting for the big home run, and it just never seems to materialize.

Gerardo Del Real: I hear you, I hear you. Jody, this has been insightful. We should absolutely do it again. I'm looking forward to the reception. I appreciate your time. I know you're plenty busy. I know you're likely not needing any work but how can people get a hold of you if they want to be in touch?

Jody Dahrouge: Yeah, just get a hold of me through the office. We have an office in Edmonton, Alberta. Easy to find a phone number and just phone and leave a message. Most of the time I'm here in the office. If not, I'm out traveling somewhere. But the office will always know how to get a hold of me. Or just message me on Twitter where I like to hang out and talk way too much politics!

Gerardo Del Real: Love it! Jody, absolutely phenomenal insights. Appreciate the time. Thank you so much again.

Jody Dahrouge: Okay, thanks for chatting.

Gerardo Del Real: Alright, cheers.

Jody Dahrouge: Cheers.