Q2 Metals (TSX-V: QTWO)(OTC: QUEXF) CEO Alicia Milne on Transformational Acquisition of Large Scale Cisco Project, James Bay, Quebec


Gerardo Del Real: This is Gerardo Del Real, with Resource Stock Digest. Joining me today is the CEO of Q2 Metals, Ms. Alicia Milne. Alicia, it's great to have you back on. How are you today?

Alicia Milne: I'm doing well. It's great to be back.

Gerardo Del Real: Well listen, let's get right into it. Congratulations are in order. You pulled off one of the more better structured deals I've seen in quite some time, and it's actually why I wanted to have you on because I know with some of your legal background that had to have been a pivotal part in being able to acquire 100% of the Cisco Lithium Property, which, look, already has historical assays including 115.4 meters at 1.21% lithium.

I know the team's excited to get out there in the summertime and start exploring. I know you're cashed up and have money for drills. But let's talk about the structure of the deal and what it took to get the vendors back at the table. I know it's a group you were familiar with and if my sources are correct, you all were the belle of the ball at a PDAC. A lot of conversations were had.

Alicia Milne: Yeah, I guess we were the belle of the ball. No, I mean the whole deal came through pretty organically. We had been looking at other projects in the James Bay Area and Neil just happened to reach out to Canadian Mining House and had some discussions with them and they pretty much said, "Hey, we have this project that you guys will definitely want to be interested in, but we can't show it to you until a certain date."

So Neil signed an NDA with them and on that date the information was available and Neil pretty much called right away and said, "We need this project. This is an amazing project." So we actually went up there, visited the vendors, and Neil drove up and Simon Cohen and I, flew over and spent a day with them. Went to their core shack and looked at the core and chatted with them about what their plans were and where they were at.

And they had a valuation in mind for the project. We had a valuation in mind for it and it just sort of came together over the span of, I think it was two weeks. And there's a bit of back and forth on how to structure it. And I am pretty sure the structure changed about three, four times in that two weeks. But it came down to the wire. We wanted to get it done before PDAC, so that way we could both talk about it.

And I want to say it was Thursday morning, about three o'clock in the morning, my time that chasing one final signature so that we could get the news release out and then update all of our materials and then pretty much hop on a plane and go to Toronto. So it was a bit of a whirlwind, but we got it over the line and we're super excited and looking forward to actually getting out there and doing some work on it.

Gerardo Del Real: Tell me a bit about the logic behind the structure. If there's one pushback that I'll provide and I'll play devil's advocate on a bit, is the eventual dilution. There's zero question about the quality of the project, the potential scale. You have 37 and a half kilometers of trend to go explore, and again, you don't hit those types of intercepts that you have historically without it being a pretty significantly mineralized system. But the dilution aspect of the deal, can you explain the motivation there and why that works both for shareholders and for the vendors?

Alicia Milne: Well, Neil, quickly plotted out the top drill intercepts in the James Bay Area in 2023 and I think up to 2024. And that hole number five that ended in mineralization is ranked like it's number 10 on the list of, I think there's 24 odd drill intercepts here on the list.

I get the whole dilution and I know some of our shareholders weren't too happy about it, but this is a game changer for the company. It is close to infrastructure. The town of Matagami is 150 kilometers south of it, which is the end of the rail line. So I get it, but on the flip side, I think this will put the company in a different category.

Gerardo Del Real: No, and listen, let me be absolutely clear. I'm a long-term committed shareholder. My shares are sitting there, they're not for sale. I'm definitely looking to add. I couldn't be more thrilled to get this done. And look, I frankly like the way the share and cash consideration is kind of staged out, it's not all upfront in year one or all upfront in the first two years. It's structured in a way where you're able to let the property prove itself up and that's the part of the deal that I really, really like. What comes next?

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Alicia Milne: What comes next? Well, we're finishing off the agreements here and getting all that sorted out, the legal part of it all. Neil and his team have been great and they're super excited to get out there. Obviously the project's under snow right now, so we will get out there as soon as we possibly can.

And I think his initial plans are to relog the core, reassay it, and then do property wide mapping and sampling. Actually get boots on the ground and get out there. The vending group, they only looked at that one small section and there's a huge trend there that is untested. So the eventual plan is to drill this year, like you mentioned, we do have cash. We have probably about 2 million leftover of the flow through funds that we raised last year.

So looking forward to getting going. And there's also Mia, we only scratch a small surface of Mia as well. We concentrated on the trend that was there that we could visibly see, and that's another big project that we virtually did not touch much of given the fact that we only started working there in September because of the forest fires. So we have a busy, busy year ahead of us and I know the team is anxious to get out there and get going.

Gerardo Del Real: Assays are still pending for Mia. I have to believe that given the scale of Cisco, that Cisco probably is at the front of the line as far as attention. And I also have to believe that you probably have a ton of phone calls in regards to potentially joint venturing Mia, so that you can advance both projects simultaneously. Would that be accurate, Alicia?

Alicia Milne: Yeah, absolutely. If you had asked us in January what our plans were for this year, it was solely focused on Mia and trying to prove up a resource there. But things have changed. We now have two children and we're going to be concentrating the majority of our funds on Cisco and looking to see what we can do with Mia.

Gerardo Del Real: Well, excited to see what the rest of 2024 brings. Lithium to me, clearly has bottomed the spot price has been flat to high over the past several weeks. I think that's a trend that continues. There's a lot of activity with majors behind the scenes that I think bodes well for the rest of the year. And we know that down cycles in the lithium space happen quickly and violently. But I just want to remind everybody that, so do the up cycles, right? I think we're at the cusp of another one of those vicious up cycles to the upside and can't wait to see what Q2, Cisco and Mia have in store for us this year.

Alicia Milne: Absolutely. Looking forward to it.

Gerardo Del Real: All right, thank you for your time. Looking forward to having you back on.

Alicia Milne: Thanks.

Gerardo Del Real: Cheers.

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