Interview with Mark Selby, CEO of Canada Nickel

Our previous interview: https://www.cruxinvestor.com/posts/canada-nickel-tsxvcnc-pioneering-nas-nickel-future-with-innovative-financing-and-esg-focus-5926

Recording date: 21st September 2024

Canada Nickel Company is making significant strides in advancing its Crawford nickel sulfide project, positioning itself as a potential key player in the North American nickel market. The company has recently secured substantial funding commitments and strategic partnerships, marking a crucial step towards realizing its ambitions in the Timmins nickel district of Ontario, Canada.

CEO Mark Selby recently outlined the company's progress in securing a comprehensive financing package for the Crawford project. Canada Nickel has obtained commitments for nearly US$900 million in debt financing, including a US$500 million letter of intent from Export Development Canada (EDC) and a CAD$500 million commitment from another financial institution. EDC's involvement as the mandated lead arranger for a larger debt facility is particularly significant, potentially unlocking access to a total debt package of US$1.5 billion.

On the equity side, Canada Nickel is targeting approximately US$1 billion in financing. A substantial portion of this is expected to come from Canadian government support in the form of refundable tax credits, amounting to over US$600 million. These credits are tied to critical minerals development and carbon capture and storage initiatives, aligning with Canada's strategic priorities in these sectors.

The company has also secured a strategic partnership with Samsung, involving a US$100 million option agreement. This deal would grant Samsung 10% of the project in exchange for 30% of the offtake, demonstrating industry confidence in Crawford's potential.

With these commitments in place, Canada Nickel is now focused on securing the remaining US$300-400 million in equity financing. The company is working with Scotiabank and Deutsche Bank to identify potential strategic partners or offtake agreements that could provide upfront funding.

The significant government support for the Crawford project underscores the strategic importance of domestic nickel production in North America. As Selby noted, "This is a once-in-a-generation opportunity to take advantage of the large flows of government money that are coming into the space that allow you as a retail investor to get a bunch of free leverage from the government to be able to build a project that's going to last, in the case of Crawford, at least 40 years."

The demand outlook for nickel remains strong, particularly from the electric vehicle and energy storage sectors. Selby emphasized that "the market needs 10 Crawfords to be able to satisfy that demand," highlighting the scale of the opportunity.

For investors, Canada Nickel offers exposure to a strategic asset in a stable jurisdiction, backed by substantial government support and aligned with long-term market trends. The company's innovative financing approach, combining government incentives, debt facilities, and strategic investments, could serve as a model for future critical mineral projects. However, investors should be aware of potential risks, including execution challenges inherent in large-scale mining projects, short-term nickel price volatility, and the need to secure remaining equity financing.

Canada Nickel is working towards a construction decision for the Crawford project by mid-2025, aiming to have the majority of its financing package in place by the end of the current year. As the global push for electrification and energy transition continues, projects like Crawford are likely to play an increasingly important role in securing supply chains for critical minerals, potentially offering significant long-term value for investors.

View Canada Nickel's company profile: https://www.cruxinvestor.com/companies/canada-nickel

Sign up for Crux Investor: https://cruxinvestor.com

Interview with Louis-Pierre Gignac, President & CEO of G Mining Ventures Corp.

Our previous interview: https://www.cruxinvestor.com/posts/g-mining-ventures-tsxgmin-new-500000-oz-gold-producer-5263

Recording date: 19th September 2024

G Mining Ventures (GMIN) is rapidly establishing itself as a rising star in the gold mining sector, offering investors exposure to a company with a clear growth trajectory and a track record of efficient project execution. Led by President and CEO Louis-Pierre Gignac, the company is strategically positioned to capitalize on the current favorable gold price environment while building a substantial production base.

The cornerstone of GMIN's operations is the Tocantinzinho (TZ) gold project in Brazil, which recently achieved commercial production on time and within budget. This accomplishment demonstrates the company's operational capabilities and sets the stage for positive cash flow generation. TZ is designed to produce approximately 175,000 ounces of gold annually, with potential to reach close to 200,000 ounces, providing a solid foundation for the company's growth ambitions.

GMIN's next major growth driver is the Oko West project in Guyana, which represents a significant step-up in scale. Oko West is projected to produce 353,000 ounces of gold annually for 13 years, potentially more than doubling the company's output. With an estimated NPV5 of $1.4 billion at a gold price of $1,950 per ounce, this project offers substantial value creation potential for shareholders.

Further expanding its project pipeline, GMIN recently acquired the Gurupi CentroGold project in Brazil from BHP. This strategic acquisition provides the company with a high-quality resource base of 1.7 million ounces of indicated resources and 0.6 million ounces of inferred resources, along with significant exploration upside across a 1,900 square kilometer land package.

A key differentiator for GMIN is its team's expertise in project development and execution. The company emphasizes thorough planning, risk management, and community engagement in its approach to project development. This focus on responsible development not only aligns with increasing ESG considerations in the mining sector but also helps mitigate operational risks.

GMIN has outlined a clear growth strategy aimed at becoming a million-ounce annual gold producer. The company plans to achieve this through a combination of optimizing production at TZ, developing Oko West, advancing studies and exploration at Gurupi, and potentially pursuing strategic acquisitions.

The current macroeconomic environment provides a supportive backdrop for GMIN's growth plans. High gold prices, driven by inflationary pressures, geopolitical uncertainties, and economic concerns, are enhancing the economics of the company's projects. As CEO Gignac notes, "We never expected to be producing gold at these prices when we did our planning. So that's a sweet spot and ideal timing for us to be completing a project."

For investors, GMIN offers exposure to a growth-oriented gold mining company with a diversified project portfolio at various stages of development. The company's successful execution at Tocantinzinho, the significant potential of Oko West, and the long-term opportunities presented by the CentroGold project create a compelling investment case.

However, potential investors should also consider the risks inherent in mining development, including possible cost overruns, permitting challenges, and gold price volatility. Despite these considerations, GMIN's experienced management team, focus on efficient execution, and clear growth strategy position the company as an attractive option for those seeking exposure to the gold mining sector with substantial upside potential.

View G Mining Venture's company profile: https://www.cruxinvestor.com/companies/g-mining-ventures

Sign up for Crux Investor: https://cruxinvestor.com

Interview with Doug Ramshaw, President & Director of Minera Alamos Inc.

Our previous interview: https://www.cruxinvestor.com/posts/minera-alamos-mai-focus-is-on-growing-low-cost-gold-production-2758

Recording date: 18th September 2024

Minera Alamos, a gold producer and developer operating in northern Mexico, presents an intriguing opportunity for investors seeking exposure to the gold mining sector. The company's strategy, centered on disciplined growth and a strong focus on free cash flow generation, sets it apart in an industry often characterized by aggressive expansion and capital-intensive projects.

Led by President Doug Ramshaw, Minera Alamos is navigating the complex landscape of Mexican mining with a portfolio of projects at various stages of development. The company's flagship operation, the Santana mine in Sonora State, demonstrates management's operational flexibility. In response to challenging market conditions, the team made the strategic decision to scale back production at Santana, prioritizing balance sheet protection over short-term output. This move positions the company for potential production increases as market conditions improve.

The company's most promising asset, the Cerro de Oro project in Zacatecas State, could be a game-changer for Minera Alamos. With a base case scenario of 60,000 ounces of gold production annually for over 8 years and an attractive all-in sustaining cost (AISC) profile, Cerro de Oro has the potential to generate significant free cash flow. At a gold price of $2,000 per ounce, the project is estimated to produce $58 million in annual free cash flow, a substantial figure for a company of Minera Alamos' size.

Investors should note the company's approach to capital allocation and financing. Over the past four years, Minera Alamos has raised $26 million, with $8.6 million still on hand as of June 30, 2024. This conservative approach to capital deployment could be particularly advantageous in the cyclical mining industry, where many companies struggle with dilutive financings and poor returns on invested capital.

The political and regulatory environment in Mexico remains a key consideration for investors. However, with the upcoming transition of power from President Andrés Manuel López Obrador to president-elect Claudia Sheinbaum, there are indications that the permitting process for mining projects may improve. Minera Alamos appears well-positioned to benefit from any positive shifts in the regulatory landscape, particularly with its Cerro de Oro project.

Potential catalysts for the company include progress on permitting for Cerro de Oro, production ramp-up at Santana, and positive developments in the project timeline for Cerro de Oro. However, investors should also be mindful of risks, including ongoing political uncertainty in Mexico, gold price volatility, and the inherent operational risks in mining.

Minera Alamos' emphasis on free cash flow generation and disciplined growth could appeal to investors seeking gold exposure with a focus on shareholder returns. The company's projected free cash flow yield, particularly from the Cerro de Oro project, may compare favorably to larger gold miners, potentially offering an attractive value proposition.

In conclusion, Minera Alamos represents a focused play on gold mining in Mexico, with a management team committed to capital efficiency and value creation. While the risks inherent in junior gold mining should not be overlooked, the company's strategic approach to navigating challenges and its portfolio of promising assets position it as an interesting option for investors looking to diversify their exposure to the gold sector.

View Minera Alamos' company profile: https://www.cruxinvestor.com/companies/minera-alamos

Sign up for Crux Investor: https://cruxinvestor.com