Power Nickel (TSX-V: PNPN)(OTC: PNPNF) CEO Terry Lynch on Buying Low & Selling High


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Power Nickel, Mr. Terry Lynch. Terry, you've been on the road. It's great to have you back on. How are you today, sir?

Terry Lynch: Doing great, Gerardo. Great to be on. It's always a pleasure to talk to you.

Gerardo Del Real: Well, thank you. I appreciate the kind words. It's been a busy, busy 2024 for yourself, for the company. I want to get into the high-grade hits, the most recent ones specifically, but before that, I know you've been traveling as I mentioned, and I wanted to get your take because you've been to some pretty interesting places and I saw you online with some pretty insightful commentary on the travel. So can you share with us where you've been recently and then just your take.

Terry Lynch: Yeah, so basically the last month, been in Dubai for a week, Korea for a week, London for a week, and then PDAC for the week. So I'm pretty tired now got to say, but I mean generally it was great. I mean Dubai, I always thought it was a bit overblown, but then I went there and it was like, wow, this thing is just... The energy there is ridiculous. And so there's a lot of exciting things happening, I think, in the mining finance world there. It's not ready for prime time yet, but it's happening big time behind the scenes. So I think they're going to become a major force in mine finance. And we were there with the guys who were doing the feasibility study at Nisk, they're notionally Canadian company, but mostly, they're running in Dubai because they're doing so much in Africa and Asia. So that's where most of their team is and their CEO.

And so we've made a lot of progress on Nisk and other business development opportunities for us there. So that was sensational. And then we went from there to Korea and met for the second time with the Korean batteries metal complex, with the guys that have done like six deals. They did the Cannon Nickel deal, these guys. So the guys had brought us in and Cannon Nickel went over last year about the same time as I did, and a year later they got that amazing deal done. And so I think that's going to happen for us too, probably after the feasibility study comes out. So that was super positive. And then we went to London and we have Hannam and Partners, which is a very credible, I would say one of the best investment banks for nickel. They did Lifezone Nickel, which was the big IPO in New York last year.   

So they covered us with research and nice target, but a really thorough research report, great positioning for us as we want to try and break into the investment fund market and pension funds and whatever, because you're stuck down here at like 35 million market cap. We got to make the move to 200. So it's like we need some bigger guys to come in. So I think that's part of it is getting the right research and the right thoroughness that the bunch could get comfortable with.

And then we came back to PDAC and PDAC obviously challenging this year because you've got this dysfunction, which is that commodity market's pretty healthy overall. Maybe a top 20% commodity market and the TSX-V is on its ass. It's the lowest in history or close to it. So there is a problem with our capital markets as we've talked about in the past, but I had the sense of talking to the people at the show that there's a sense that the bottom is in and that you need to start to deploy your stack now. And I'm certainly of that view. So I think… what's Rick Rule’s saying that cure for low prices is low prices, I think it's now the time to buy.

Gerardo Del Real: I couldn't agree with you more. We chatted off-air about the checks we've been writing and how aggressive we've been in positioning for that rebound. And look, I want to be absolutely clear with everyone out there, when you get a rebound from these depressed levels, whether it's in nickel or palladium or we saw it in uranium a couple of years ago, we're going to see it in lithium again here soon, I believe, the first move higher for the equities, especially the juniors that have assets, that have actual value can be violent to the upside, can be 200-300% in a matter of weeks. And we talked a bit off-air about how hard it is sometimes to get behind the eight-ball as they say and miss that first 200-300% move. Because at that point you're chasing with everyone else, right?

Terry Lynch: Yeah, yeah. And you can't stomach getting back in. And then the thing might run to a ten-bagger and you liked it, you liked the management and everything, but you just got too greedy. You know what I mean? And like I say to people, I'm saying it's like Power Nickel our stock, I'm saying, hey, I don't know that say 23, 24 cents, something like that. Hey, will it go down to 21 or 19? I don't know. So you're going to miss getting in because it's going to go to 40 or 50 and then you won't get in. It may go to five bucks and you've missed it all for 2 cents. That's really bad thinking.

Like layer in, put 25% of your stack in and then whatever piece you're thinking about for Power Nickel or the other thing I'm saying to people, buy funds because at least you get placed. There's a lot of great funds out there, CI, McKinsey, Palos, BT Global. There's really good fund managers that will... You are not going to get the huge delta, but you're going to get significant delta and you won't feel like you've missed it because the fear I have for listeners is, they're going to be paralyzed and on the sidelines and that's what we got to educate and say, "Hey guys, write some checks. Get in the game."

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Gerardo Del Real: Couldn't agree more. Let's talk nickel. I'd love your take on nickel, the nickel market, the PGM market, pretty depressed right now, but there is an increased effort and focus and I think this is an important emerging trend for people to watch, whether it's in the lithium space, the nickel space, the metal space in general. But there's been a push to really set up a separate price mechanism for responsibly sourced commodities. And I think this is an emerging thing that people are not really paying much attention to. And I don't believe that assets that are in quality jurisdictions are being given the premium that those assets deserve.

Terry Lynch: 100%. The best example of that. As a math thing, you look at Cannon Nickel, they just had Samsung come in for around 20 million or so for like 9% of the company. But the significant part of that deal was that the next two parts where they basically committed, they have an option to invest 110 million for 10% of the JV and that basically they've said to Cannon Nickel, "Go out there and put the rest of your financing together and then we're there," because they definitely want to buy 40,000 tonnes a year nickel from these guys. I met with the very same guys. That's just 20% of their needs. So they need nickel from North America. They couldn’t have bought nickel from Indonesia. That's not a player for them. They can't be perceived as being a rape and pillager of rainforest when you're selling consumer products like that.

So there's an example and in that case you think 110 million, it's 10% and they bought right now 10% for 20 million. It's a big difference, Gerardo. There's the math, right? So that's an example. And it will be even more profound for Power Nickel because we've got a much higher grade project and it's actually much more possible or will be, we believe, when we get it out. And we're certain that feasibility to go this summer. So to me it's crazy, but this market, because of the shorts and stuff, it's been a problem. But I think at some point we just overwhelmed them and we've been hitting it with the drill bit again like we thought. The PGM hits that we've had in the Wildcat have been phenomenal. I mean, we started off with eight meters of one ounce PGM at 60 meters of depth, which is killer. Stepped out a hundred meters, hit the same thing.

Now, we don't have the assays yet back because it takes some time to get that, but visually we've got twice as much as copper pyrite as we have in the first one, which is what carries this stuff. And then we hit another two holes like that. So it's like we got a really nice high grade nickel in there too. So it's a really, really valuable kicker to these things. And this is when we had Rio Tinto's head of exploration was in. Remember, this particular strike that we're on right now, five and a half kilometers from our main zone.

So a couple things from that. One is, holy crap, maybe that whole area is materialized, it's charged. So we think it is. And then to get that high grade hit, that really happens when you have this something cooking at depth and that gets tossed up. That's what the head of exploration at Rio Tinto says. So that's a really amazing result for you guys. You're going to find more of that and that's what the really great nickel PGMs are all about. So we're pretty excited about what we're doing and at some point, we're hoping the market will get excited too, but you just got to just keep on persisting, right?

Gerardo Del Real: Agreed, agreed. You kind of outlined it, but just to bullet point it for everybody and wrap it up, tell us what comes next, Terry.

Terry Lynch: So more of the same, so more drilling both on the Wildcat and then we're drilling around the main zone where we use that ambient noise tomography to identify the new targets where we've got a signature on them. So we're drilling these and again, with these new technologies, that never guarantees you're going to have a hit, but it gets you to attack the areas where you're most likely to have hit and you get the target quicker, so fewer wasted holes, get to the promised land and then exploit from there. So we're drilling that. We've never had better prospects than what we're drilling hard. Then on the feasibility side, we'll expect to have some benchmark studies out from CVMR shortly that'll validate the much higher recovery rates that we're going to get from working with them. We're going to go from 70%, which was in our 43-101 to we think north of 90%. And the cool thing with the CVMR, here's a number for you, nickel today around $17,900, I think, for a tonne of nickel on London, tonne of nickel powder, $80,000.

Yeah. So that's the business you want to be in, Gerardo, you want to be getting into that refinery margins and that's what Power Nickel's going to do. So all that'll be coming over the next few months. And then we're also spinning out our copper-gold subsidiary and we use the same ambient noise tomography program in Chile on our copper projects down there. It looks fantastic. So that's going to be exciting. So yeah, I mean I'm just thrilled with what we're doing operationally and at some point we hoping this market's going to gap. I know it's going to gap. And then people say, "Well, I don't know. Why’d it do that?” But it's pretty obvious why it did it. But it's about whether you're there or not.

Gerardo Del Real: I've been in this game for a little over 15 years. You've been in it longer than I, Terry. And even with the little experience and the vast experience that you have, it fascinates me how market psychology always plays out in the exact same way. When we go from a bear to a bull market and from a bull to a bear market, I think we're going to have a heck of a rest of the year in 2024, and I think 2025 is going to be a banner year as well. But a lot left to do this year. Thank you so much for the update and I'm looking forward to having you back on here soon.

Terry Lynch: Okay, Gerardo, thanks so much. Have a great day.

Gerardo Del Real: All right. Cheers. Bye now.

Terry Lynch: Bye.

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