Categories: Precious Metals / Mining Stocks
Topics: Gold Stocks / Copper Stocks

Power Metallic Mines (TSX-V: PNPN)(OTC: PNPNF) CEO Terry Lynch on Hitting 27.10 Meters of 2.17% CuEqRec¹, including 4.76 Meters of 10.43% CuEqRec¹ at Lion

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Power Metallic Mines (TSX-V: PNPN)(OTC: PNPNF), Mr. Terry Lynch. Terry, always great to have you back on. How are you today?

Terry Lynch: Good, Gerardo. It's always good to be on the show and it's an amazing time of the world right now, isn't it? Holy cow. Every day, it's the revelation.

Gerardo Del Real: Listen, there's that old saying, "May you live in interesting times." I'll take less interesting times right now. I could settle for some stable and boring times for a bit. But look, with that being said, the macro backdrop, I know that when everything kicked off with the Middle East, there was a panic in the overall indices, a panic in the resource space.

Anything that was liquid or in the green was sold off. And I think we're starting to see a stabilization of that despite the fact that we don't have a more stable world, but we're definitely seeing a stabilization in the metals prices. Gold's back up to the $4,800 level. Silver's flirting with $80. Copper’s ran from $5.20 spot quickly back up to close to $6.

So I think on that front, slowly but surely, we're starting to see that capital is acknowledging the structural deficits and the structural demand for the metals. Right? And I think your news release today speaks to why Power Metallic can contribute in a significant way moving forward. So I'd love to start with the news that you had today. You hit some pretty darn good intercepts out there of copper.

Terry Lynch: Yeah. No, it's been great. I mean, if you look over our last few releases, the Lion zone continued to deliver the goods, right? I mean, it's a very strong discovery and we've had pretty amazing breadth of success. Something like, I think there's over 90 intercepts of more than 11 meters of more than 4.25% copper equivalent. And so it's when you think of the average copper mine today, I think the output is 0.4%. So when you get an order of magnitude above that, it's significant. So I think that part's been really good.

So we've been strong getting that out there. I think we recognized maybe in January when we put out the metallurgical study that was so outstanding where we had 95% plus recoveries, which was a lot more than we had expected in terms of we had been running 80. And when that happened and the market didn't really react, we sort of thought to ourself. And then it actually drifted down, as all the stocks did. And you talked about obviously the Iranian situation and its impact on the market, I think that most of the copper stocks came off 40%, ours did.

And yet we sort of felt there was something maybe we weren't doing right. Because we felt that we had moved the dial enough operation that we should have been going up and not going down, despite market conditions and understanding that that was still an impact out there. And so one of the things we did was went back to the drawing board and we said, is there some unanswered questions that were not being dealt with in the way that the market was understanding?

What we came back with was maybe there was three areas where we could have clarified better, maybe communicate better. And those three were really on the metallurgy, on whether or not there was enough metal in there to be a mine and just what the CapEx would be. Those were the three that we sort of distilled as sort of like, maybe if they weren't saying it to you directly, they were still thinking about it and maybe that's why they weren't investing.

So about a month ago at a ROTH Conference in San Diego, we presented our new deck, which is actually on our site now, Gerardo, and I would encourage anyone listening to you if they're interested in Power Metallic, go check that deck out because we used three highlights of stock charts in there. I call it the good, the bad, and the ugly. The good is 2024 when we were a top performing mining stock in Canada and on the TSXV and had a tremendous run. And of course, that brought in all the great investors like Robert Friedland and Rob McEwen and Gina Rinehart and so forth and so on because great rocks will bring great people, as you know.

So that was '24. And then the last year, for the most part, until January was pretty much a sideways move, despite a lot of progress on the project, amazing growth in the commodities. Since we did our financing in February ’25, the underlying commodities that we have, copper, platinum, palladium, gold, silver, were up over 70%, yet stock was flat. And then in addition to that, we added six times more land and not just moose pasture like land immediately adjacent to discovery, like great land. But still sideways.

And so we thought okay, we'll get this metallurgical study out. That'll turn it. And no, instead the Iranian thing happened and the stock fell back. But I think we felt that we needed to change our tactics, address these problems more head on. So we got the metallurgical study out. So that clearly solved that first problem on the metallurgy that people were concerned that polymetallics are complicated and maybe that people are thinking that this is going to be difficult to get recoveries properly. So when you get 95% of recoveries, you get no recovery issue. So that part was good.

The second part was, are you big enough to be a mine? And I think because it's a high grade discovery, the tonnages are less and it's not like huge 300 meter intersections and stuff like that. But when you get 32 meters of 7%, that's a lot of metal in the ground.

Gerardo Del Real: Yeah. That adds up.

Terry Lynch: So I mean, you get 90 intercepts of more than 11 meters of 4.25% copper equivalent. That's a lot of metal on the ground. So in fact, we have a nice chart in the deck now, which shows that the grade really drives your capital intensity, right?

Because the more rock you have to crush, the more material you have to move, the more labor, more diesel, the more everything, the more cost. That means you need a lot more capital. It means you're going to get a lot less return on your capital. And so by us having such high grade, it means we're going to have a lot less capital that is needed to put it in production and we're going to have much higher returns. Now, this is so unusual, Gerardo, I think people just don't understand it because it's not every day you get one of these discoveries. It's like every 20 years.

So I think one of the reasons we changed our strategy and we moved up our PEA and our MRE, we were going to do it like get the drilling all done all this year and get that out for next year. We've moved that up. Now we changed that because the discrepancy between what we found already and what the value is, is so high, we feel like, hey, we got to push the chips in the middle here. So we're going to get the MRE out this summer. It'll be out in July, I would think. And then we'll get the PEA in Q4.

And that would be much harder for people to casually dismiss it and say, "Oh, this can't be a mine." No, this is going to be a mine. There's no doubt in my mind, and it's going to be a very profitable one. So I think those are the messages we're now getting out. And we were having a great response to that message really since the ROTH Conference. Today we put out what we thought, what you thought, what is in fact great drill intercepts but the market took it as a liquidity option and sold a pile of stock today, but we'll get back at it tomorrow and people bought stock today. So obviously whoever sold this is out and longer hands, firmer hands are in and we'll just eat through it and go out the other side. It's one of those things that these things happen and it's unfortunate, but we think the messaging is now more on point. And we think that the buyers that are buying the stock today and every other day are understanding that this is a really dynamic opportunity to get into.

Gerardo Del Real: Well, listen, I need to point out that your copper equivalent calculation is based on $2,360 gold, $2,798 silver. I mean, $4 a pound copper, I could go on, right?

Terry Lynch: Yeah.

Gerardo Del Real: And so I think that's worth noting because I mean, there's being conservative, Terry, and then there's being hyper, hyper-conservative. So I'm really curious on the resource estimate and the PEA, what that looks like and the inputs that you're using for that.

Terry Lynch: Yeah. It would be interesting to see. We've been trying to ... We got our knuckles rapped early on about how to do the copper equivalent thing. And so we've been super conservative since then, and probably maybe overly so at this stage, but it's on the PEA, again, our QP will choose what they believe is a valid way to go. I would think it would be a lot higher than that. I certainly have looked at some PEAs recently and they're using much bigger numbers. So it'll all come out in the wash. And I think for sure, we put a slide in our deck where we put out the analyst estimates, put out our recoveries, the grades, the payables, the taxes. You can put all that stuff in AI now that can go into Grok or Claude or whoever you're using for your AI and you're going to get a pretty good feel for what the PEA is going to show.

You plug those numbers in and it's going to give you a 10 figure number most likely. That’s what my AI does, but it's pretty crazy. So there's just a giant disconnect. But the good news is that I was actually doing some calls today in Washington DC with some people and there's more and more interest, I can tell you, in the resource space from generalist funds. And despite the risk off in the overall market because of the conflict, there's still investing happening in the resource space. So that's encouraging. Whereas before, we've gone through long periods of no sunshine in this mining world, as you know, but I don't sense that that's there, even though obviously the prices have been knocked down.

Gerardo Del Real: Yeah. No, look, I think the prices are still robust. I mean, yeah, they're down from all time highs, but they're definitely ... If we take a look at the forest and not just a tree, you scan back two years or you zoom out one or two years ago. And I think all of us would be delighted with where the prices are now. I suspect prices continue to tick higher. Great news today. Appreciate the update. Looking forward to having you back and really looking forward to the resource estimate and the PEA. That should make for some pretty good conversation.

Terry Lynch: Absolutely, Gerardo. You take care. Great chatting with you today.

Gerardo Del Real: Appreciate your time as always. Thank you.

 

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