Categories: Energy
Topics: General Energy

Patriot Battery Metals (TSX-V: PMET)(OTC: PMETF) CEO Blair Way Goes In-Depth on What Comes Next at Corvette Lithium Project, Quebec

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Patriot Battery Metals — Mr. Blair Way. Blair, how are you today?

Blair Way: I'm doing great, Gerardo. We've been spending a few days here in Europe and getting an awful lot of interest in our Patriot Battery Metals. So that's always a good experience to come meet new people and find such a heightened level of interest.

Gerardo Del Real: Well, let's start there. There's been some pushback from several, several major shareholders and smaller shareholders as well that are concerned about the lack of institutional interest. I think the sentiment is that retail did what it was going to do as far as the price. 

We know we're in a downturn in the lithium space overall. But there's a sentiment, and I share this sentiment, that the next run-up is going to come from institutional investors and bigger money. How is the roadshow and the marketing efforts and you being out there having conversations going for you?

Blair Way: Well, we built our investor relations team so we have a rep working all of the time in Australia and all of the time, full-time, in North America, which also overlaps into Europe. And really, I've spent a great deal of time on the road both in Australia, North America, and now Europe. 

And then, I'm back to Western Australia. And then, carry on and doing various discussions that we do to either attending different conferences or even ones that we can orchestrate ourselves now because we have these relationships in many jurisdictions. So really, we've been wearing our boots down on the pavement. 

But it's also a tough time. People are looking at the track and going, ‘Is it going to go down any further? Is it going to go up? Maybe it's the time to start now?’ And a lot of people are sitting on the fence. I think spodumene pricing gets people nervous. But the interest is there.

As I mentioned at the start here, the level of interest we're seeing here in Europe is great. I was actually surprised… I haven't been to the UK, I haven't been to London for a few years, pre-Covid, and just walking around the streets in London on Sunday afternoon after I arrived, I was surprised, really, at the percentage of electric vehicles. 

And not just people cruising around in Teslas trying to feel cool but it was actually a myriad of variants of EVs from the higher-end BMW fancy ones to your sort of less fancy sort of lower-cost entry as well as the little vans, the delivery vans, the taxis.

There are a lot of EVs and charging stations everywhere. I mean, obviously, this is in the city of London and there are lots of incentives, financial incentives, or, otherwise, penalties if you're driving an internal combustion engine. But there was a real different feel to it. You had to watch it walking across the street or you can get run over by a silent EV sort of thing. There were a lot of them around and I was surprised because that's a big change from when I was last in London.

Gerardo Del Real: So I take all of that to mean that you're meeting with institutions, and interest continues to be strong. We know the share price is stuck between C$9 and C$12, right? That seems to be the range right now. 

Let's get into some of the positives. And then, I'm going to play devil's advocate for a little bit because, look, frankly, again, I have some questions as a shareholder that I think merit some clarity. First and foremost, congratulations on the Discovery of the Year Award. I suspect that with CV9, you actually may be onto doing a round two of that. 

There was somebody on the internet, Pete — shout out to Pete from Twitter — that was modeling CV9 and the first results there, potential results. We don't know grade yet. And comparing that to the initial discovery at Corvette. And it looks like CV9 could rival or be better than the initial discovery at Corvette. What are your thoughts on CV9 thus far from what you've seen?

Blair Way: Well, obviously we're waiting on assays but anyone that wants to read back in the historic news releases of the samples that we've taken at CV9 give you an indication of what sort of material we've already identified at surface. And again, assays will confirm it but certainly it's a reasonable extrapolation to make because we're drilling underneath the outcrops. 

But we're very happy with what came out of CV9. We don't pick these clusters just on a whim. We had a reasonably high level of confidence based on the experience that we've grown over the last couple of years in the property. And CV9 was, until CV13, CV9 was our second pick after CV5. But CV13 came in, so we did CV13. 

The CV9 is now proving to be something definitely that requires more work. And we will do more work on that property. Of course, we hope to get to it this winter program. But we also are heading towards a pre-feasibility study, which means to upgrade our resource in a meaningful way from inferred to indicated needs quite a bit of infill drilling at CV5. 

So during the winter, we can tackle a lot of that infill drilling. So it's in place for our resource upgrade plan for July-August in the new year, which will add the extension work that we've done west of CV5 and also some of the work that we've done at CV13. We don't want to do the drilling at CV9 first because then those assays, they aren't going to feed necessarily into a resource, whereas the drilling at CV5 will. So we have to do that first. It's about sequencing your work so it feeds into the updating of the resource.

We are looking at scheduling in — not only at CV9 but also some of the other clusters — we still like but just have not had time due to priorities. And you do have to prioritize otherwise you end up just having a whole bunch of holes randomly drilled all over the property. So we are prioritizing. CV5 needs to be upgraded from inferred to indicated. 

We are working towards a PFS and that's essential for a PFS to be completed. And the PFS is a very relevant and important document in order to progress CV5 down the development pathway. And that to us is also very important. But we will have enough rigs that certainly, either late winter or into spring and summer drilling, then we'll start branching out into some of these other areas once we're confident of our update of CV5 with the infill drilling.

Gerardo Del Real: We've talked about potentially 10 rigs in January. And you just mentioned infill drilling, which, obviously, is important to upgrade the resource. But upgrading the confidence in the resource is one thing. Expanding the scale of what looks to be a generational discovery is a completely other thing. 

How much focus will there be on proving out the potential scale as much as you can with the C$150, C$160 million and the 10 rigs that you plan on deploying here in January?

Blair Way: We start drilling with the 10 rig drill program in January. We'll start with five and then ramp it up. Obviously, bunks, beds are the defining factor for how many drills we can ultimately have because it's not just the drill crew, it's the geology crew. We go from 5 rigs to 10 rigs and we have to double our capacity for throughput of core and core cutting, so we double our facility at site. 

All of these things you have to manage. Otherwise, you end up just bottlenecking and you create a bottleneck somewhere else. So we're comfortable with a 10 rig program. There may be an opportunity to add a couple more. We'll determine that once we get to 10 to just see how well things are working because, again, you don't want to have breaks sitting around there doing nothing. So it's about managing the implementation of growth in a meaningful and sensible way.

Now, as we get towards the end of winter, as I said earlier, we get towards the end of winter and summer, into spring and summer, we're going to have our full camp, our full-size camp in place. That allows us to have the bunks that we need in order to continue to drill with the 10 rigs and possibly more. But we will then look in the spring and summer drilling how we might continue to expand. 

Some of the drilling we'll do this winter will be continuing with exploring that connectivity between CV5 and CV13. That is the biggest bang for our dollar, shall we say, to demonstrate the continued growth and scale of this thing. CV9 will get drilled at some time but we do have to plan out when that is. There's also CV8 and CV12 and CV10. And we also have done some fieldwork, which we did this towards the latter part of the summer once we get back on the ground again and into the fall.

That fieldwork has to be interpreted. We’ll wait on assays and some of those outcrops that we've identified, and we will provide summaries of that. That sort of data is coming. Again, that information is used to make an informed decision of where to drill next from a perspective of, we'll say, the growth drilling rather than the sort of infill drilling, which the infill drilling is important in order to demonstrate our ability to get into production and what it takes to do that. 

So you have to balance the priorities. I mean, is the market going to respond to exploration wildcat holes or are they going to respond better to demonstrating the de-risking of getting Corvette into production? 

So it's a balance. And if you get, as you transition away from more traditional retail investors to institutional, the institutional definitely want to see a path to production. That's more important to them. So we have to manage those priorities.

Gerardo Del Real: Speaking of bigger investors, Albemarle obviously came in at significantly higher prices. There is an MOU in place that prevents the company from coming into the market and buying aggressively. Is there the potential to amend that at all and has there been any interest on that front?

Blair Way: Yeah, it's funny. I see this on chat rooms and stuff, and for some reason everybody thinks that these corporates sit around at their trading desk going bye, bye, bye or whatever. It's just not the style. Like, we've done a strategic investment. These standstills are in place only to prevent some sort of backdoor approach. 

If anybody with a standstill wishes to buy, they just can talk to us the same as if they wish to sell. It's just so that we know. Standstills don't stop anybody from doing anything. It just prevents it from being opaque. As I said, I find it frustrating reading people's interpretations of these things because that's the whole purpose of the standstill is to just keep everything out front and center so there's no secret agent stuff going on. It's nothing more than that. 

A standstill is something that is agreed upon by the two parties to put into place, and there are provisions within them to agree to modify or adjust as appropriate. And that's how they work. It's nothing that complicated. It doesn't stop anybody from doing anything. It just means, let's talk about it. 

If Albemarle came and said, ‘Hey, look, our trading desk is just really busy and they'd really like to buy more,’ I would never expect that but that would be a discussion we'd have. And we'd want to understand, are they going to go and try and go crazy or what are they going to do? And to be honest, most of these corporates, they're not buying on the market. I mean, people may think they are but they really aren't. That's not how they approach it.

Gerardo Del Real: How is that relationship with Albemarle progressing? Obviously, there was a time limit that was implemented within that MOU for potentially consummating a more formal relationship. How's that coming along?

Blair Way: It's great. We have a nine-month term on it with the ability to extend it three. So the nine months takes us to May. We're working through all of the more technical aspects, and we're really happy with the way it's going. Albemarle has been a great group of people to work with. 

We're working through the various aspects of technical stuff, which is right down to some of the nitty-gritty of we are continuing to undertake more metallurgical work, validating results that we have to date simply because that's the thoroughness of going through and doing proper representative testing across the whole area of drilling. Obviously, we have more and more core available so we have more and more material.

And that creates more of our spodumene samples that then can be applied to the processes in Albemarle's work stream. So we've been working through all of these, as I said, more technical aspects at this stage. But as we approach the new year, that's when we can start talking about maybe what some sort of commercial relationships might look like. 

But again, working together with a great group of people. And yeah, that's probably all we can really talk about at this stage but happy with the process for sure.

Gerardo Del Real: You had a press release at the end of October that, frankly, caught me a bit off guard and then, honestly, confused me a bit. You've expanded the land position at the Eastmain Project. And so I wanted to better understand the motivation behind that. 

And there was a comment in that press release that talked about unlocking the value of non-core assets. And so my confusion, Blair, came in where I see you expanding a position in a non-core asset while simultaneously not refusing to, but not moving forward with what I want as a substantial shareholder for myself anyhow and as it relates to me. 

A spinout, right? I would love a spinout. I think the non-core assets are being given zero value. I think Corvette is undervalued as a standalone. I think it's a generational discovery as I mentioned upfront. How is that coming along? What was the strategy first off with Eastmain? What's the thought there? And then, what's the strategy moving forward to unlock some of that value in those non-core assets?

Blair Way: Yeah, so the Eastmain property was an opportunity that was presented to us some time ago. And it wasn't probably the highest of priorities so it was operated or worked on for probably about eight months in the background. And during that eight months, of course, we saw the market go and do what it did. 

So had the market been high, and I announced that people had been all excited and bullish, but because the market was down, it was like what's going on and what's this all mean? Really, what it meant was an opportunity that we felt was too good to pass up. It was property that enhanced some of our existing properties. 

So in the event that we choose to do a spinout or we just choose to drill it internally and build value that way, again, that's still up for debate internally with respect to what's the right way to go.

And again, this follows back to, if your shareholders are all retail, they obviously want to spin out because they want to have exposure to that in some form of shares or something. Whereas if it becomes more institutional, they're more patient and more inclined to say, ‘You know what… just build the value and show that there's the value there.’ 

And a lot of the institutional-type shareholders are saying, ‘What are you thinking about consolidating? Are you thinking about other properties or other companies? You've got more share presence… or we're one of the larger players in the region so we could start consolidating while things are down a little bit. 

So which is the right strategy? That's still probably up for debate. Doing a spinout now, again, as I said, it's not decided. The acquisition of the property was something that had been working along in the background for probably a better part eight months prior to the announcement.

It wasn't done the week before the announcement. It was something where we were not in a hurry. And there were some things that had to be done in order to make it possible to consummate that transaction. And it literally took more than six months, and we were not in a rush. It was a value that we agreed upon, the six months prior, and it was still a reasonable price, we felt. 

And it's a good property; it has merit. It complements our existing portfolio of properties, and we'll either be drilling it ourselves or we will have some form of an entity that would spin out and take it.

But we've got other more pressing priorities, I guess, right now because doing a spinout is not something you do in an afternoon. You have quite a bit of work in order to do that. And if we do that work at the expense of other work, then I think people will be disappointed with that as well. 

So it's about prioritizing the activities that need to be done because if you try and do everything all the time, you're going to miss stuff. I mean, it just doesn't work that way… only so many hours in a day.

Gerardo Del Real: Yep, agree. So spinout not moving forward but not-not moving forward. Up for discussion.

Blair Way: Exactly. It's a 50/50 chance, I guess. Let's leave it at that.

Gerardo Del Real: Alright, fair enough. You touched on Albemarle, and you touched on development. If you and Ken and the team decide that, let's say we have a, and I don't believe this will be the case, but let's say that the lithium space remains in consolidation mode, trending downward, for longer than we all expect, and you decide, you can drill for the next year or two, prove up the value, and you really don't need to go to the market anytime soon. And if you did, you could do so at a substantial premium. And I'm sure you wouldn't be short on potential suitors on that front. 

What does the path to development look like as it relates to permitting and the ideal scenario for developing the CVs? And obviously, by the CVs, I mean, there are discussions about the lake, and I know you get tired of hearing it, as do I, but on the retail side, there definitely is a misunderstanding about permitting the lake and what that looks like in Quebec. Can you clarify just what the approach is company-wise there?

Blair Way: Well, we've talked about that process, and I think some things are heard and some things are not heard. Again, the kickoff of permitting is submission of a project description, and we'll be announcing that before the end of the year. Once that project description is in, then that's the kickoff of permitting. 

We'll then be able to share more about the process. But certainly, with respect to the way CV5 is evolving and what we've already identified, there's already the ability to start mining without impacting the lake. The lake will be noncritical path; it will be part of the permitting process but it will not be the driver to the start of mining. 

So that should make people chill out a little bit on the whole lake issue. CV5 connecting all the way to CV13 may mean, maybe it's pushed out to later, but in many ways it doesn't make sense because there is a nice bit of high-grade material there in the lake area. It's in the shallower part of the lake. So we are looking at various scenarios of mining and staging the pits, staging our little berms that will divert the upstream water away from the area that we want to mine. 

All of these things are part of what we are looking at and optionality through our pre-feasibility study work and, really, the permitting process, we're going to kick it off. It's going to start on… we're certainly looking at the timelines. I think I've mentioned it before, we expect to have, certainly, permits received in '27, construction in '28, and commissioning, ideally, by the end of '28, early '29. 

So '28 has always been the time we want to be flicking on the switch on the plant as we, later on, in '28, for commissioning or what have you. But again, the lake won't be the driver of when the plant is turned on or off.

It is actually the actual process: getting our ESIA submitted, all of the various processes that we go through, consultation and that… but it certainly looks like commissioning by the end of '28 is achievable, and we think that's a pretty reasonable timeline. Also, considering the fact that if we were to do it much sooner, then we’ve got to figure out where we're going to send our concentrate because there aren't going to be any processing, chemical processing, lithium hydroxide plants available in North America. So that creates some challenges as well.

So the goal is, obviously, and we want to see alignment where a chemical plant is built such that it's able to take a feed from the Corvette project, and that sort of timeline matches up with the timeline of when that chemical production facility will be available in North America. So it all dovetails together, and we're seeing battery plants being built and all that sort of stuff. 

I'm sure there's going to be, if even half of those plants that you see on the map of North America for battery plants, even half of them are being built, that means five Corvettes need to be in production by that time. And there aren't five Corvettes in North America, I can tell you that.

Gerardo Del Real: What's your take on just the future of exploration at Corvette with a 50 km trend, half of which is yet to be even properly mapped and sampled? What does that look like for you?

Blair Way: Well, I guess we're going to start looking more like what you see in WA. So I'm not sure, you've probably been following Pilbara Minerals. And just this July, they announced that they’ve added another hundred million tonnes to the 300 million tonnes. Not sure anyone, really, did anyone really care about it other than the fact they said, ‘Oh, that's good.’ That just means they've got lots of production.

And they also announced that they're planning on expanding their production through production capacity, as well, from 600-odd thousand to I think 1.2 million; that's a substantial increase. Really, we have to start looking at it that way. We're not there yet but I think once we get our updated resource, including our indicated and inferred, I'd like to think that the market is going to start going, ‘Alright, we get it, we see it.’ And of course, in parallel to that, we'll be starting to demonstrate the continued connectivity.

This has always been about connecting the dots… just the dots are further apart. Remember, when we connected CV5 and CV6, people thought we were crazy. Then, it was CV5 to CV1, which was 1.8 km away. We drilled all winter. Guess what… it connected. 

Now, we've been drilling the CV5 heading towards CV13. We've chewed up pretty much a kilometer of that. Guess what… maybe, it looks like now we've got, I think, we'll be less than 3 km away to CV13; CV13 is 2.3 km. We've pretty much connected that. So these are all about connecting the dots. 

CV9 is another area that, about 7 km away, is CV12 and, sorry, CV8 and CV12. We will just look at what makes the most sense to demonstrate connectivity. And it may well be CV13. Maybe we start drilling west of CV13 to see how it connects to CV8 and then CV8 to CV12.

We have to make that decision. And the connectivity is certainly something that the market seems to understand. Whereas from CV9, we could just start branching out east and west and see where it takes us along the trend as we extrapolate it. And that also is another option. Plus, we’ve still got fieldwork on a large part of the property to identify additional outcrops that may be even more drill-worthy. 

So we still have to head up the lake to the east from CV5. And to be honest, that's best done in the lake, sorry, when the lake is frozen for a lot of that drilling. And we will look at that again towards the wintertime. If the ice is looking good, we might send one of the rigs off on a little bit of a pathway. So we have to adjust and adapt to some degree about just the environment and what it lets us to do.

But we also need to continue to advance our CV5 resource onward and upwards. We can't just keep focusing on exploring bigger-is-better. But we have already demonstrated we're pretty damn big. And we now need to show that we can get permitted and that we can get into production because that seems to be the larger criticism that you hear through the various feedback or chat rooms or whatever. 

People don't understand the process in the absence of understanding or they're referencing some other projects that have had their own share of issues and problems that are unrelated to our permitting process but it's being applied onto us. So the best thing we can do is also continue to demonstrate that permitting process and the applicability of it to what we have at CV5.

Gerardo Del Real: Have you had discussions, and if so, how have they gone with the government there that is going to be, obviously, overseeing that permitting process? I mean, there's a lot of talk about the Inflation Reduction Act and the positive impact. And that's clear as day, right, the positive impact that it has had and how that may contribute to expedited, responsible, but expedited permitting. How is that process coming along?

Blair Way: I feel like I should have some sort of teacherly-like comment here that people aren't listening to what I say. We're putting a project description in. And the project description is a commencement of the permitting process in which we start to speak with the government authorities in respect to the project. 

With no project description, the conversations are relatively casual, shall we say, but once a project description is in, that's the kickoff of the process. So we have had interaction now with the government entities in respect to some of the possible incentives and the like but it's still very early days. 

If we're going to go talk to them, first they’re going to say, ‘Well, how big are you going to be? What's your production rate? What are the economics… show us your economic model.’ There's a bunch of stuff which is part of doing a pre-feasibility study. All of these things need to be done as well as drilling, and we have a team working on it. We have consultants working on it so that we can bring that information to light. 

And then, that information also feeds into the various entities, whether it's the Quebec government, the federal government, or even the US government. We did have a friendly chat with the DoD in the US at a conference we were at, and they were super interested in what they have. They like the scale. So there's been casual conversation… but really, until we have this project description in and also pre-feasibility or that sort of level of documentation so that people that we're speaking to understand the substance of what we're talking about.

If you sit there waving your hands, ‘Well, it's going to be about this big and it's going to do this.’ And they're like, ‘What are you saying? Show me the numbers.’ And so we are getting close to that sort of stage, and we will be providing updates on that. But I have to be a little bit coy on what I can share at this stage because we haven't finalized them. 

So as we finalize things, we'll announce the project description and assays and all of these things. Once they're available and we finalize them, we’ll put them out. And I guess people have to be a little bit patient on some of this stuff because there's quite a bit of work involved.

Gerardo Del Real: And so again, for those that haven't been listening, what does 2024 look like?

Blair Way: I think 2024 is going to be a pretty special year. Obviously, one thing people will be hanging their hat on is the update of the resource, which we're planning for July-August, similar sort of timing that we did last year, subject to how many meters we drill. 

If we end up drilling a lot of meters this winter, the assays may flow a little bit slower; they may flow a little bit faster. So subject to some timing with assays. But we expect to have that updated resource around the same sort of time we had this year for the first resource. 

We have our project description going in to talk about; we have continued assays flowing from the 40-odd thousand meters that we've drilled this summer and fall. So that's a pile of meterage that's going to be providing lots of things for people to sink their teeth in; lots of assays.

We have the ongoing discussion, the work that we're doing with Albemarle. That's going to be, as I mentioned, May is when that nine month ticker comes around. We'll either be providing an update or we'll be extending it. Either way, we'll provide some follow-up or details on that. 

We also have a PFS coming at the end of 2024 as well. So 2024 is really a big year. And, of course, during 2024, because we've submitted our project description, by the end of this year, we'll be getting feedback from the authorities. And then, that's where we can talk in a lot more detail about how that discussion is going and look. 

The early stage indications are, as you know, we've done quite a bit of baseline environmental work already on site. That really helps us be ensured that we can provide a robust ESIA. But there's still a ton of work. There's lots of work that we'll have to do on the property in order to get it to a permitted status. But we are up to the task, and we are pretty confident we know what needs to be done and can do it.

Gerardo Del Real: Blair, always a pleasure. I appreciate the time. I'm looking forward to assays. I won't ask you when because you're not going to tell me but I assume they'll start flowing in on a pretty consistent basis moving forward. Anything to add?

Blair Way: Well, just keeping in mind with assays, given the way the markets are in January, we're not going to be the same as we did last year. We're not going to be putting any out in the first couple of weeks. We'll talk about other things. 

The assays, it's better to collect them up and have a nice tidy story that the markets can absorb when everyone gets back to work after Christmas. I know, similar to what we did last year, we will provide some wrap up of how things went this summer and fall even though we did lose some time to the fires.

I believe we've done really well at recovering from that by being able to ramp up and, obviously, the Albemarle private placement, the strategic investment, really helped us consummate that to be able to really ramp it up, which meant getting our camp in place and getting all of these things so that we are really laying out the runway. 

But there's a ton of drilling; 10 rigs. Last year, we had five rigs in the winter program. This year, we're going to have ten. Five rigs, if you'll recall, we targeted 20,000 meters. We did 30. This year, let's just say, we're targeting 40 but who knows. We may have a big year; it's a really good opportunity. If it's a nice cold winter and the ground stays frozen for longer and the lake stays frozen for longer, we have lots of opportunities.

Gerardo Del Real: Well said. Blair, thanks again.

Blair Way: Alright, good to chat, Gerardo.

Gerardo Del Real: Chat soon, cheers!

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