Power Nickel (TSX-V: PNPN)(OTC: PNPNF) CEO Terry Lynch on Expanding the Central High-Grade Zone at Nisk


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 are on a mission to build a billion-dollar-plus company. How are you today?

Terry Lynch: I'm doing great, my friend. It's really great to chat with you, and it's an outstanding day here, so all is good.

Gerardo Del Real: Wonderful. Listen, let's get right into unlocking that value. Where's your current market cap right now?

Terry Lynch: Generally, about $25 million U.S. or so. That would be a good number, I think, today.

Gerardo Del Real: So if you're able to pull this off, there's a lot of runway between a $25-million market cap, and an asset that's worth a billion dollars, right?

And so I would expect a pretty dramatic re-rating, if you're even halfway successful with that mission statement. And then look, when I look at the latest drill results, expanding the central high-grade zone, it's starting to look like you have some real scale here, and potentially, something that could turn into something pretty special.

Terry Lynch: Yeah, that's our feeling. Generally speaking, the main ore body has been super cooperative. We've had now almost I guess, 15,000 meters of our own drilling on it, and probably 60% of our drill holes have intersected ore bodies all with 1% nickel or better, so that's fantastic. And we've also learned a lot about adjacent interest that other pods that look like that now might be possible. And so our core, we think we're going to get to maybe when we update the 43-101 in September, probably at least 8 million tonnes, maybe as much as 10, and that will contain more than 100,000 tonnes of nickel, which is double what you need to be commercial. So, this is going to be a commercial mine. Now it's a question of, how big will it be? So, what do you look like? You look at, what are the analogies in Canada for ultra massive, high-grade nickel sulfide mines and the two that pop out are Lynn Lake at 22 million tonnes and Voisey Bay, which is north of 50.

So we certainly think that's where we're heading and what really encourages us, we stepped out maybe a couple weeks back, we announced that five kilometers away along sequence, along our ultramafic strike that we intersected at 60 meters from surface, eight meters of almost one ounce PGM. So that type of stuff happens generally speaking on these Norilsk and Voisey Bay type deposits, like massively charged areas, and they have these high grade kickers. So do we have one? Well, it certainly looks like we very potentially could. So we're doing all the right things, I think, to explore it. And we think we've got a tiger by the tail.

Gerardo Del Real: You are expected to publish a 43-101 in Q3, which obviously, is rapid approaching. What are you hoping and targeting for that 43-101?

Terry Lynch: Yeah. We basically said we think it'll be somewhere eight million tonnes or thereabout north and whatever we report, we think that'll be enough to show that it's commercial off of this one pod. And our point would be that every nickel sulfide mine in the history of time in the world has always been multiple pods. So unless this is a first and it doesn't look like it, given some of the results we've already had, it looks like there will be multiple pods here. And so are we going to have three or four pods? Who knows? And generally thinking, these are quite shallow deposits right now, it's also likely that there's a lot of stuff deeper. So to that point, we're using some interesting new technology to identify and advance the exploration of the nickel sulfide, and it's called ambient noise tomography. We touched on it on one of our last conversations and we're actually deploying it.

The gear is arriving from Australia today. And these little geodes, they look almost like look like landmines, but they're not. We put them out there and you put them in like a hundred meter grids over your core deposit, and then you send these electronic pulses down in the ground and sound waves and it goes down 2,000 meters. It comes back and is captured as a sound wave. And then what they do is they then, through algorithms and whatnot, they compare those sound maps that they've captured and they compare that to, for example, one of our holes, we had 40 meters of 1.6% nickel, so that's at a specific point in the earth, the coordinates. So we know exactly where that is and we'll have the exact sound map that correlates to that sequence. So then all of a sudden we're going to know, "Hey, the sound map that looks like that, that signature means its a massive sulfide, where are they? Let’s find more of them."

So that's what this technology helps us do, not just vertically, so we'll see if there's something deeper in this main area, but we'll also be able to take it across obviously, first a six kilometer ultramafic sequence and then through the rest of our 45 square kilometer package. So it's pretty exciting to be able to be on the cutting edge of that. And we think that can be used in conjunction with the Airborne EM and the down hole EM and the gravity and the IP. So all these geophysical tools, all are basically designed to reduce risks to enhance better drilling prospectivity.

Gerardo Del Real: You have one more set of assays to go, is that correct?

Terry Lynch: Yes, we got another really... We think it will be another really good to great set of assays coming out in about two or three weeks, and that'll be the final one of the winter program.

Gerardo Del Real: A lot to like. I know that in general, the junior resource space tends to get quiet right around the summertime as people are out of the office and on vacation and kids come home from school. But I got to say, this Power Nickel story keeps getting more and more interesting and intriguing to me. So I'm looking forward to the next set of assays. Really looking forward to that 43-101 and getting a snapshot of what potentially, could be a pretty, pretty large scale resource here eventually.

Terry Lynch: Yeah, no. I mean, I was talking to somebody and they were saying, "How are things going?" I said, "Well, mining wise, it couldn't be going better." In my dreams, I have a deposit like this that's reacting like this and it's giving us cooperation. As you know, Mother Earth, she doesn't part with her treasures very easily. Gerardo, you've been around a long time. You know this.

Gerardo Del Real: Yes, sir.

Terry Lynch: So this one, is it's been really great to have that cooperation. I haven't been getting a lot of love in the market relative to our peers. And our peers are already, everyone, of course, have been crushed somewhat by the market, but we're trading at, I don't know, a fifth to a 20th of what our peers are trading at. And arguably, I think we've got as good or better prospects. So at some point in time the market will rationalize that and there'll be a major rerating of us, and in the interim, we'll just continue to knock out the great results and at some point the market will catch up.

Gerardo Del Real: Looking forward to the catch-up. Always appreciate catching up. Looking forward to having you back on when we get those last set of assays there, Terry.

Terry Lynch: Sounds great, Gerardo. Have a great day, my friend.

Gerardo Del Real: All right, you as well. Take care.


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