Categories: Energy
Topics: Lithium Stocks

Q2 Metals (TSX-V: QTWO)(OTC: QUEXF) VP Exploration Neil McCallum on Hitting 179.6 Meters of Continuous Spodumene Pegmatite as Drills Continue to Spin at Flagship Cisco Lithium Project, James Bay, Quebec

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the VP of Exploration for one of my favorite lithium plays. I'm talking, of course, of Mr. Neil McCallum from Q2 Metals Corp. (TSX-V: QTWO)(OTC: QUEXF).  

Neil, every time we chat, I say congratulations. So, let's get the formalities out of the way. Congratulations, once again, on some excellent results and a phenomenal start to drilling at the 100%-owned Cisco Lithium Project in Quebec. Great work. How are you?

Neil McCallum: I'm doing well, thanks. Great to chat today. I'm really excited about the news we have out. It's all good.

Gerardo Del Real: Let's get to the news. The highlight number was 179.6 meters of continuous spodumene pegmatite.

Hole 27, if you add up the numbers — and I know for technical reasons, you can't do it, but I can — it's over 300 meters of spodumene pegmatite. I'll caution that it is not all continuous but 179.6 meters of it absolutely is continuous. 

The other holes also had significant hits. I'll let you provide the context and the summary of the release. And then, I have some questions from myself and from some of our friends on X. 

Neil McCallum: Sure. Hole 27 ranks as one of our best holes on the project so I couldn't be more happy with that. It wasn't one continuous 347 meters or anything like that but it still adds up (all of those three that are fairly close together) to a pretty significant zone. 

It adds another 200 meters of strike length to the south as we continue to test, in that direction, the full extent of the ~1.9-km-long trend. We've got that over 1 km now. So it's all looking good from that perspective.

The other holes, if you were any other player in Canada, you'd be happy with a 40-meter interval… but it just isn't stacking up to the other zone that we've defined. And I think there's a little bit more work we need to do to the east to find any sort of parallel trend. 

We're drilling towards the deposit, and I expect that if we keep going, we'll find some more interesting stuff. We've got that C-02 outcrop in the northeast. It's not insignificant as well so that's going to be adding to the picture at some point.

Gerardo Del Real: I'm glad you brought up the east. Obviously, that hole from the release is a significant step-out from one of the other best holes in the program. We're going to say that often, I think, over the next several months.

You brought up following that up to the east. And then, one of the comments I saw somewhere was, ‘It’s too bad it's closed off to the east.’ I don't assume that to be accurate. You're the geo; you're the VP of Exploration. Give me your color on that.

Neil McCallum: It is definitely not closed off at all. I wouldn't even consider those close enough to the main zone to really be attached. They're 400-meter step-outs so that's a completely different zone. 

It's going to be interesting to see how this deposit shapes out because it's not as consistent in terms of a clear strike length, like watching the CV-5 deposit for Patriot evolve; that was almost a straight-line thing. And it has some little pinches and swells to make it interesting.

This is a bit more complex in terms of defining its shape. It's not quite as linear as some of the other deposits out there so it's really going to be crystallizing as time goes on. We've really only scratched the surface. 

To put it into context, we now have 27 holes released. We're going to reach several hundred holes before we figure this thing out. We're early days but we're really looking good. We’re making sure the perspective is there in terms of this being a brand new discovery; every single hole will add to the picture and certainly nothing is closed off.

Gerardo Del Real: I love the perspective. I think anyone that's paying attention and is doing even some pretty basic math and estimates — that includes myself — can say with confidence that this is absolutely shaping up to be a world-class deposit. 

I don't think it's a mistake that when I went to the breakfast back at VRIC that you and Alicia and the team put on for everyone, that the likes of Agnico were there at 7:30 in the morning. I don't presume Agnico gets up at 7:30 in the morning just for kicks and giggles. 

So I'm going to ask you, and you probably won't be able to answer, but can you at least answer whether or not you've gotten more phone calls from potential strategics that are paying attention and want access to a seat at the table potentially in the future?

Neil McCallum: Sure. As you said, I can't say anything. But a lot of people are paying attention to us, I’ve got to say. That's all I can really put words to. It's nice to be in this position where we've got a really good story and we've got a lot of options for how to proceed. It's all looking very positive at this stage. 

The lithium market is what it is… and we're still doing well despite that. We've got lots of cash in the bank and, still, as you mentioned, lots of interest. We are looking forward to seeing what the spring and summer unfold for us.

Gerardo Del Real: I suspect, and, again, this is just speculation and me watching the market, but looking at the price action, it looks to me like the lithium space has bottomed and the crème de la crème is starting to catch a bid. 

And so, one of the things that Patriot has done so well during this consolidation over the last year and a half or so is really its focus on adding value. They've strengthened their team, amd they've done a lot of really important met-work. They're obviously taking care of all of the baseline data collection that you need to do to advance eventual permits. 

And so, where is Q2 Metals, being at an earlier stage but, obviously, also in that world-class status? Where are you as far as the met-work goes and moving along some of that baseline data collection that’s going to be critical for future permitting and future estimates?

Neil McCallum: That's a good question. And, look, we're doing what we can that’s reasonable to start at this early stage. There’s a lot of desktop work that can be done for that baseline study. 

The physical in-the-field data needs to be collected over a two-year timespan for any of the advanced permitting for mine operations. But because we don't know the true size of this yet, we're not going to know how large our stockpiles are or where they're going to go. 

We're somewhat limited by the early stage. But we're collecting whatever information we can just to make sure that, once this does eventually get to that advanced permitting stage, we're ready to go and that there are as few delays as possible. 

On the met-work, we've already completed preliminary work to understand that the mineralogy is dominantly or exclusively spodumene. There are virtually none of those other minerals that might take some of that lithium away and knock down its concentration down the line. So that's a positive.

We're collecting data for the next stage of met-work, which will be to determine the potential for DMS (Dense Media Separation) processing. Again, we don't know exactly where we are yet so we’ve got to be diligent and do the work that's necessary at this stage without getting ahead of ourselves.  

You can go really down the rabbit hole on met-work only to find out that the samples you collected aren’t even representative. As we work to perhaps double the known strike length, we need to be cognizant of not getting too far ahead of ourselves in the met-work. In other words, we're doing what’s necessary and reasonable at this point.

Gerardo Del Real: If you continue to hit with these kinds of results and have the success you're having, are there thoughts of an expanded program? And the follow-up question to that would be, if it's data dependent, but the data is good, as I suspect it's going to continue to be, are there any thoughts on bringing in additional people power, human IQ, IP, to come in and help with the project and advance it in an accelerated way?

Neil McCallum: For sure. That's a continuing conversation for us. And the progress at which we can advance logistically and get as many drills as possible is all money dependent. 

We've got cash in the bank to complete this program, and more, continuing into the summer. We're going to need to do a large program. I mean, if money wasn’t an issue, I'd want four drills today. 

Yet, we have to be cognizant of where the market is and not dilute our current shareholders at these price levels. We believe we're going to have good results with the cash we have in hand. The plan is to do something later where it's not quite as dilutive. It’s a constant and evolving conversation, and we're trying to time things right.

Gerardo Del Real: Last question, and this is a gift and a curse, and it has been that for Patriot and others: any thoughts on an ASX listing?

Neil McCallum: That's a constant conversation as well. There's still a lot of interest coming out of Australia for people looking at us and following us. They get it. They understand lithium. 

There are more producers Down Under than there are up here in Canada so they understand the amount of success stories and what the potential can be. I don't think it makes sense for us having watched Patriot go through their listing on the ASX, which was a bit of a rough point for them in terms of delaying the work and progress. 

We don't want to delay anything at this point… so the timing just isn't right for us at the moment. We'll see what happens in the future. And if it makes sense to list, then great. But we're going to make sure we do it without creating any sort of delays or hiccups for us.

Gerardo Del Real: Excellent. And look, the first four holes were pretty aggressive step-outs. What does the rest of the drilling look like in terms of how spaced out the step-outs are? And are there any constraints as to where you can drill those next holes?

Neil McCallum: No, I think that some of the winter constraints were a distance away from water sources. That's one benefit this project doesn't have. There are no lakes nearby, which creates a bit of a challenge in terms of obtaining the water needed to operate the exploration drills. 

That's a bit of a constraint we had early in the winter. But now, we can expand our footprint and make sure we're testing this thing with those 200 to 400 meter step-outs in all directions. 

I'm really happy with the way things are going to the south with Hole 27; that's nothing to be shy about, the success we're seeing there. We’re very excited about heading further to the south. And then, as well, heading to the east. We've got a lot more work to do to keep going; around ~600 meters to the east of where we were to test it with Hole 24A and Hole 26. 

We've got a lot of work ahead and I'm excited about it!

Gerardo Del Real: Excellent. How are things with the lab? The labs seem to be responding a whole heck of a lot better now that there are less people exploring. How are things coming along on that front?

Neil McCallum: Yes, all systems are a go. We're not seeing any sort of significant delays from the labs, and we'll be getting results out as soon as possible. 

This most recent release kicked off when we shipped the samples off to the lab so we've yet to see exactly how that looks. But the estimates are reasonable; four to six weeks is sort of the standard timeframe they give us. But you never know in terms of QA/QC and other things that may pop up. 

We want to make sure we're putting out the best quality results as possible. Like you said, there are not as many people out there right now doing work so I don't expect there to be any sort of volume related delays on assays. Things are looking good there.

Gerardo Del Real: Exciting times! It's great to be trading in dollars, not cents. I suspect that in the next several months, we're going to trade significantly higher. I’m a happy shareholder. Congrats on some great work, Neil. I’m looking forward to chatting, it sounds like, maybe in a couple of weeks with some more assays.

Neil McCallum: Yes, sounds good.

Gerardo Del Real: Excellent. Neil, thank you for your time. I appreciate it.

Neil McCallum: Any time, Gerardo.

Click here to see more from Q2 Metals