Categories: Base Metals
Topics: General Base Metals

Power Nickel (TSX-V: PNPN)(OTC: PNPNF) CEO Terry Lynch on New High Grade Discovery 5km Northeast of its Main Nisk Deposit

 

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, the last time that you and I spoke publicly, you mentioned to me that you were really excited about the results that you were seeing and you just had an announcement here this week that really validates and speaks to the potential here. You just made a discovery, you ended up drilling, it's like almost an ounce or just an ounce per tonne combined platinum and palladium over 7.75 meters. Congratulations. This is five kilometers northeast of the main deposit. Provide the context for me.

Terry Lynch: Yeah, it was an amazing hole drill. I mean, you wait all your life for a hole like that. I remember when I got the assays in, I thought it must be an error, and I sent it back to the guys and I said, "Well, we got to reassay this because this looks crazy." And they said, "Well, we already did." So it was like, boy, was ever I happy to receive that text. So it was obviously just a tremendous hole. And the context is twofold really. Obviously that's a $1,600 rock or whatever, platinum and palladium are trading for now, which is enormous kicker for any sort of economics on a project. But one of the things you'll find in the really big nickel plays like the Voisey's Bay and the Norilsk and stuff like that is they had the massive kickers and that's what made those projects so big and so pervasive.

And when you start to see systems kick out stuff like this, especially five kilometers away, it gives you some, wow, this could be really big. And so there's two things to take away as an investor. One is, wow, that's really profitable rock. And I may announce as a PGMs as well, it could be super exciting just as a PGM play, but it's part of the nickel. So maybe there's a bigger, much bigger complex there. The fact that you're five kilometers away from our current sort of core Nisk Main is super inspiring to say, "Hey, what's in between there?" And we know, because we got the preliminary stuff back from our airborne EM, we'll be releasing the full airborne EM in a couple weeks I think. And that stuff lit up. So it's exciting to think of what can be. So obviously what is obviously a hot hole, tremendous, but one hole doesn't make a mine as you know, but it's obviously a great indication of what's there and shows that the system is charged even five kilometers out.

And the fact that it's on the cusp of other great holes that we've had on the nickel side suggests the system's really comprehensive and quite robust, which is what we've been saying from the outset. This is what we noticed and what we believe in. So the company couldn't be happier with results. I mean, in ordinary days, back in the day you put a result like that and the stock would've gone up five times, but we barely moved 10%. But that's the other challenge in life these days.

Gerardo Del Real: You mentioned that one hole does not make a mine, and obviously we're talking about the discovery hole here five kilometers away, but you're pretty darn confident. I know privately that you do have a mine on your hands as it relates to the main deposit. Tell me about that.

Terry Lynch: Yeah. Obviously we've been releasing assays since we've been drilling in September and they've been pretty robust. I mean 40 meters of 1.6%, 10 meters of almost 3%, 16 meters of one and a half. So the hits keep on coming. So we've got more of those coming. We know that from our main body. And so we've been given guidance to say that we think that we're basically going to go up to eight to 10 million tonnes of about one and a half percent nickel. Anything over 50,000 tonnes that contain nickel today would become a mine. This will be over a hundred. And that's just the start in our view. So we have no doubt this will be a mine in our mind. And we're starting to see industries coming to the table and like I say, we're dealing with several NDAs now with majors and they're excited about this.

And because we post all of our drill collars so people can model us themselves, we even put our own leapfrog up there so people can get comfortable with that "Hey, we're not joking about this. This is going to be real." And the big thing when a mine goes from exploration to commercial as you know, because you're an expert in this space, the valuation has changed. You go from being a zero to being a one. So the group that we look at as our peers, and they're all down by about half because the nickel hasn't really caught a rocket yet, or being 140 to 480 million US. We've financed just recently at 25 million US. Today we're maybe worth 30. So it's still a tremendous bargain and it's a great time for people to be looking, I think.

Gerardo Del Real: No, look, I think you're onto something pretty significant here. I know majors like to go shopping, I won't say at a bottom because they typically are slow to the table, but the fact that they're at the table right now with several NDAs, I think speaks to the quality of the deposit you have. And look, this news discovery could be the cherry on top and a real kicker. Anything to add to that, Terry?

Terry Lynch: Yeah, I mean, the big thing is that the news flow is going to be heavy here for the next two months. We've got a couple more assays to come, so they're in the pipe and we sort of know when they're going to be coming out and we expect all to be more continuation of the story, more proof that we're moving towards that eight to 10 million tonnes. And then we've got the airborne EM, which is exciting because basically our nickel's carried in a massive sulfide, so it's highly magnetic. So airborne EM is a great technique to pick it up. That only works to sort of 150 meters. That's where it works best. Beneath that, it's not as effective, but we've already seen the preliminary stuff. We see the Christmas tree starting to light up, and so there's a lot of potentially interesting pods.

The other thing we're doing is we talked the last time about the ambient noise tomography, the sound mapping that we'll be doing to identify these pods and which is basically, we'll obviously put them over our core deposit, get the signature from that in terms of what sound map correlates to the, let's say that 40 meter hole, with 1.6% nickel. So we're looking for signatures like that through the ultra mapping sequence, which is now about five, six kilometers long. And then we'll sort of see where that is, especially with the airborne, you start to get concentric circles of, hey, there's a hit here on the airborne and there's a hit here on the sound map. Maybe be a hell of a good place to drill. So that's what technology can do for you, allow you to drill more cost effectively smarter and find your resource quicker. So that's where we're going, we're funded now to get drilling probably again in mid-July. So the next two months is really to design the program, make sure we've identified the highest and most prospective spots, and then get to it. And then obviously, hopefully at some point get this 43-101 out in early July. And sometime between now and then the market's going to wake up and say, "Hey, these guys are going to be a nickel mine and maybe we better explore this Power Nickel investment."

Gerardo Del Real: Should be a fun rest of the year. Great work, Terry. Congrats on the new discovery. Looking forward to the many, many catalysts for Power Nickel.

Terry Lynch: Thanks, Gerardo. Thanks for having us on. We really appreciate it.

Gerardo Del Real: All right. Chat soon.

Terry Lynch: You bet.

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