Power Nickel (TSX-V: PNPN)(OTC: PNPNF) CEO Terry Lynch on Setting Up For a Perfect Storm in the Commodity Supercycle


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, how are you today?

Terry Lynch: Gerardo, it's great to talk to you again. Happy new year, my friend. We haven't chatted since the holidays, I don't think. So, I just want to wish you guys the best this year. I think it's going to be an important year for junior mining.

Gerardo Del Real: Thank you so much for the kind words. I completely agree. We chatted a bit off-air. We were both in Vancouver here recently, and it was interesting because, despite the kind of tempered sentiment, it was busy. And I know you were busy, and I most definitely was busy. And it seems like there's two types of speculator out there right now. Contrarians like you and I that are excited about the opportunity to initiate positions or double down on positions at what I think are just bargain basement prices. And then those that aren't able to take advantage of that market and maybe just don't have the capital to deploy and are looking for capital. And it's definitely a tale of two worlds right now. So we talked a bit off-air, we talked about some of the spectacular opportunities that are out there and how this commodity supercycle is setting up for an interesting couple of years in multiple commodities. So I wanted to get your thoughts on the sector, and then let's talk Power Nickel and how you're positioning for that.

Terry Lynch: Yeah, yeah, no, I agree 100%. I was on an interview with the Northern Miner when I was in Vancouver, and they asked me the same question. I said, "Look, I think the audience is sitting on their wallet and they need to get off half of their wallet." Whatever your position is, if you're going to put X in junior mining, take half of X now and make your bets because what's going to happen, and you and I talked about this, nobody can predict exactly when this thing's going to turn, and when it turns, it's going to turn hard, and you're going to get 50 and 100% jump-ups in a couple of weeks. And I know what happens when that happens in stocks. I've been there myself. I can't get myself to buy into that. And then I leave these great stories, and many of these stories will go 10-baggers.

There's going to be a lot of 10-baggers. And like I say to people, so if you have to wait through three or four or five, or six months and it goes down 20%, but ultimately you're getting a 10-bagger the next two years. Who cares, man? Get in half your position on these firms you're convicted in. Don't buy shit. Like, there's such great stuff out there that's already evidenced at the drill-bit in whatever sector you like. It's there. And good learner folks, like yourself, have identified a number of these opportunities, and wow, I mean, people, you will be so happy to do that. And I'm telling you, not investing is not the strategy because you will regret the day and you will not buy it when this thing takes off. You'll be thinking it's coming back, and it's not coming back. So listen, get off half your position now.

Gerardo Del Real: I couldn't agree with you more. Look, I've been fortunate to have several triple-digit gains and some quadruple-digit gains, and frankly, some 10,000% plus gains, and every single one of those positions at one point was down 50%. And it's just the game, folks. It's what these types of markets bring. They're going to bring volatility to the downside. You have to know what you own and why you own it. You have to own quality. And then you have to know that your timeline is likely either your best friend or your enemy in this game. Because if you can weather the months where everything's pulling back and sentiment is dire and everybody's looking for capital, if you can weather those months, and sometimes it's more than months, sometimes it's a year or two, and come out on the other side of it, that's where the real money is made. And I can't emphasize that enough to people that are listening, that maybe are newer to the space or haven't experienced a pullback within a bull market, because I absolutely think that's what's happening across many sectors in the commodity space.

Now, specific to Power Nickel, you're positioning for what I think is going to be a pretty pivotal 2024, which is why I wanted to have you back on. Can you speak to that pivotal 2024 that you're planning for?

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Terry Lynch: Yeah, I mean, basically, you and I both know, at the end, the drill bit decides who wins and loses in this sector, right? If you have a really great ore body, it's proven up by the drill bit, and eventually you can't stop that stock from succeeding because the majors come in and want to make it a mine. And then valuations follow and stuff like that. So for 2024, for Power Nickel, we're at that precipice. We basically had our first 43-101, or 7.2 million tonnes, 1.13%. Pretty good start, probably have to be over 10 to be a mine. We're going to be well over 10, in my mind. I think this thing, we've got this one, I guess deposit right now. It's called NSC Main. And then we've identified four other pods that we think will be similar and used some very unique technology to do that. We can talk about that later, but we're drilling on the first set of those drill prospects this week, in fact.

And we've really got the best drilling prospects we've ever had at Power Nickel. And obviously, we've done pretty good to get to 7.2, but I would expect to double or maybe triple that this year with the drill bit. And so, that will make us unstoppable. And that's why we sort of say we're the best deal in this nickel space at the high end, and the 1% nickel sulfides because it's a different game in nickel. Grade is so important in terms of internal rates of return, which is what justifies mine decisions. So grade's your friend, and we've got a good grade, so now we're about to add a bunch of tonnage. And who knows how big this thing can be? Gerardo, it's pretty enticing.

Gerardo Del Real: No, listen, clearly you’re cashed up, you just raised, I believe, just shy of $2.2 million. You have an aggressive plan for 2024. I think you're going to end up positioning yourself right in the sweet spot of when things turn. And again, look, no crystal ball, we've been in this long enough to know that it can go down a little bit more. It could go down for longer than you think. The key is to stay solvent, stay patient, know what you own, buy quality stuff, and be selective with capital. But also, if you have high conviction on a position, get in there and just sit on it and let it play out the way it's supposed to.

Terry Lynch: Yeah, 100%. I mean, you look at our stock, I think last year, 18 to 36, it's trading around 23, 24 right now. We just invested at 25, just in January. So you're buying in cheaper than that. Me and Rob each bought there. So it's like you're getting there cheaper than our last round. It's a hell of a time to enter. And honestly, I think that we've got such a string of news coming. We've got a bunch of assays coming from our fall position, and then we're obviously drilling. We just finished hole one in the winter session. We're happy with that result. We're on to hole two. Hole two is the first of a... We've identified, as I said, four different ambient noise tomographic targets. Now this ambient noise is going to become a thing. I'm telling listeners watch for companies that are using ambient noise tomography from Fleet Space Technologies because, having used it ourselves, I'm a big believer in this technology. It's really mind-blowing what it's able to do.

So for us, it was able to identify a signature where they were able to measure the velocity of the rock. So in our case, we have ultra-mapping deposit, 4,300 meters per second. And when that dropped off from 3,600 to 3,750, that's where the massive sulfides, I mean, massive sulfides were concentrated with the nickel. So we were able to find that almost on a one for one basis. So obviously, we did this extensive, we did a survey over the core body so we could correlate things. And then we did, like, four square kilometers around it using this correlation. And we identified four similar targets that have the exact same signatures. Now listen, Mother Earth, as you know, she's a crafty devil, so she may have more tricks for us, but all you can do with the science is deploy it as best you can with the best scientists, and then ultimately you have to drill it to see.

So we're drilling, we're pretty convicted that this stuff is going to convert in a high percentage, and that will really sort of ramp up the tonnage very quickly. And then, if it goes on the one, and again, historically every nickel sulfide mine that's ever been produced in the history of the world – always multiple pods. So this would be very unusual if this was just a single pod deposit. So quite likely, there's going to be three or four of these things or more. And the other thing is, this is all between the surface and 500 meters. What's deeper? Quite likely, a lot more nickel. Generally, nickel's a deeper play. Most of the big ones, like Raglan and Voisey's Bay, and Norilsk, are all half a kilometer to two kilometers deep. And so we're quite lucky to have the surface deposits to help drive the initial economics. But who knows how big this thing could be? And the great thing, I know you're a big asymmetric investor, I'm the same way. I don't like to risk a lot. I like to have a lot of upside.

And the cool thing is you're buying this thing for like 10 cents on the dollar right now, and you've got this exponential upside. That's the positions you want to be looking to take a position in my view.

Gerardo Del Real: I couldn't agree more. I think it's going to be a really fun 2024. I think the first half is likely the last half that a lot of speculators are going to be able to initiate positions or double down on positions at these prices. I think the second half is going to be an absolute blast. Thank you so much, Terry. Appreciate the time and looking forward to seeing what Mother Earth left behind for y'all.

Terry Lynch: All right, Gerardo, I'm looking forward to coming on and telling you about some really hot holes, and we'll talk to you sometime post PDAC.

Gerardo Del Real: Awesome, take care. Appreciate it.

Terry Lynch: Cheers.

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