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

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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

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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

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Interview with Nic Earner, Managing Director of Alkane Resources Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/alkane-resources-asxalk-balancing-gold-production-growth-with-copper-gold-development-potential-5689

Recording date: 18th September 2024

Alkane Resources (ASX:ALK) is an emerging Australian gold producer that presents an intriguing investment opportunity for those seeking exposure to the precious metals sector. With a clear growth strategy and potential for significant cash flow generation, Alkane is positioning itself as a noteworthy player in the mid-tier gold mining space.

The company's primary asset, the Tomingley Gold Operations in New South Wales, is currently undergoing expansion. Alkane is in the final stages of developing a new mining area, which includes underground mining at the Roswell deposit and the commissioning of new processing facilities. This development is set to drive production growth from the current 75,000-85,000 ounces per annum to a targeted 100,000-110,000 ounces by 2027.

Nic Earner, Managing Director of Alkane Resources, highlighted the company's progress: "We're in the really late stages of developing the new mining area. We are mining underground at Roswell, and we're about to enter commissioning the paste plant and the flotation circuit. The most important thing about that is we're 85% of the way through our capital spend."

This expansion is expected to significantly boost Alkane's cash flow generation. Management estimates project-level free cash flow of A$60-65 million for 2024, increasing to A$110 million or more in 2025. Importantly, the company anticipates funding its growth plans through operating cash flow, without the need for additional capital raises in the near term.

Beyond its producing assets, Alkane holds the Boda Kaiser exploration project, a large copper-gold prospect that could provide substantial upside. The company is considering bringing in a partner to advance this project, which could unlock additional value for shareholders without diverting resources from the core gold business.

Alkane's long-term strategy involves becoming part of a larger gold producer, potentially through mergers or acquisitions. This vision aims to create a multi-asset company producing around 250,000 ounces of gold annually, which could attract increased investor interest and potentially lead to a re-rating of the company's shares.

However, investors should be aware of the risks associated with mining operations and the execution of growth plans. These include potential delays or cost overruns in development projects, gold price volatility, and operational challenges inherent to the mining industry. From a macro perspective, Alkane is well-positioned to benefit from ongoing economic uncertainties and inflation concerns, which historically have supported gold prices. The company's potential copper exposure through the Boda Kaiser project also aligns with the global electrification trend.

For investors, Alkane Resources offers exposure to a growing gold producer with clear expansion plans, strong cash flow potential, and exploration upside. The company's focus on organic growth, combined with strategic ambitions for M&A, presents a compelling investment case in the Australian gold mining sector.

As with any mining investment, thorough due diligence is essential. Investors should closely monitor Alkane's progress in achieving its production targets, cash flow generation, and advancement of exploration projects. The company's ability to execute its growth strategy effectively will be crucial in realizing its potential and delivering value to shareholders.

View Alkane Resources' company profile: https://www.cruxinvestor.com/companies/alkane-resources

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Interview with Jeff Quartermaine, Chairman & CEO of Perseus Mining Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/perseus-mining-asxpru-597-million-cash-ending-fy2024-with-strong-operational-performance-5750

Recording date: 17th September 2024

Perseus Mining Limited, an Australian gold mining company, has established itself as a significant player in the African gold mining sector. With an annual production of approximately 500,000 ounces of gold at an all-in sustaining cost (AISC) of around $1,000 per ounce, Perseus has positioned itself competitively within the global gold mining industry. The company's focus on African operations, recent acquisitions, and strong financial performance make it an interesting prospect for investors seeking exposure to the gold market through a growing mid-tier producer.

CEO Jeff Quartermaine highlighted the company's recent success: "Clearly the last couple of years have been very good for us with the high gold prices and we've been generating an awful lot of cash and profit which we've been able to deploy into growing our business and establishing ourselves very firmly in the upper ranks of the mid-tier gold companies on a global basis." This statement underscores Perseus's ability to capitalize on favorable market conditions and reinvest in its growth strategy.

A key recent development for Perseus is the acquisition of the Nyanzaga project in Tanzania from OreCorp. The company aims to make a final investment decision on this project by December 2024. Notably, Perseus has established a positive relationship with the Tanzanian government, which Quartermaine describes as a rare alignment of interests: "This is one of those very rare occasions I think where the agenda of the government is totally aligned with ours both of us want this project developed and want to have it into production as quickly as we can."

Perseus's strategy involves geographical diversification across multiple African countries to mitigate country-specific risks. This approach, coupled with the company's focus on high-quality assets, positions it well in an industry facing challenges in finding new, economical deposits. As Quartermaine noted, "On the African continent, there is a lot more opportunity now and outstandingly good opportunities both at a Grassroots level and further up the food chain."

The company has also made recent changes to its leadership structure, appointing Rick Mennel as the new non-executive independent chair and Amanda Weir as the new Chief Operating Officer. These changes demonstrate Perseus's commitment to strong governance and operational excellence.

For investors, Perseus offers several attractive features:
Strong production profile and competitive costs
Significant growth potential through new acquisitions and projects
Geographical diversification across multiple African countries
Experienced management team with a focus on sustainable growth
Strong cash flow generation supporting growth initiatives and potential shareholder returns

However, potential investors should still consider the risks associated with Perseus's operations, including political and regulatory risks in African countries, gold price volatility, operational risks inherent in mining and currency fluctuations. In the context of the broader gold mining industry, Perseus appears well-positioned to capitalize on the scarcity of high-quality assets, particularly in Africa. The company's strategy aligns with industry trends towards consolidation and expansion into emerging regions.

For investors comfortable with the risks associated with African mining operations and gold price volatility, Perseus Mining offers an opportunity to invest in a growing mid-tier gold producer with significant potential for future expansion. As always, potential investors should conduct thorough due diligence and consider their risk tolerance before making investment decisions.

View Perseus Mining's company profile: https://www.cruxinvestor.com/companies/perseus-mining

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Interview with Dan Wilton, CEO of First Mining Gold Corp.

Our previous interview: https://www.cruxinvestor.com/posts/first-mining-gold-tsxvff-gold-developer-eyes-200oz-in-the-ground-upside-5825

Recording date: 17th September 2024

First Mining Gold (TSX:FF) is positioning itself as a key player in the gold mining sector, with a focus on developing two of Canada's largest undeveloped gold projects. The company's strategy centers on advancing these assets through critical stages of development, potentially creating significant value for investors in a market facing a scarcity of large-scale gold projects.

First Mining Gold boasts two key assets that form the cornerstone of its portfolio. The Springpole Gold Project in Ontario stands out as one of Canada's largest undeveloped gold projects. The company is on the verge of submitting its final environmental assessment for Spring Pole, with the goal of securing environmental approval by the end of 2025. This project offers significant leverage to gold prices, with every $100 increase in the gold price potentially adding $250 million US to its after-tax Net Present Value.

The company's second major asset is the Duparquet Gold Project in Quebec, situated in the renowned Abitibi gold belt. Duparquet hosts substantial resources, with 3.5 million ounces in the Indicated category and an additional 2.5 million ounces Inferred. Ongoing exploration aims to test the high-grade potential at depth, and the company is targeting an updated Preliminary Economic Assessment (PEA) for Duparquet after the ongoing 2024 drilling program.

First Mining Gold's strategic position aligns well with current industry trends. The scarcity of large, permitted gold projects in tier-one jurisdictions, coupled with major producers' growing need to replenish their project pipelines, puts the company in a favorable position. Additionally, stabilizing input costs and resilient gold prices could potentially improve project economics. As CEO Dan Wilton notes, "We've done the hard yards... we've done the work and so now I think it does put the projects in a pretty interesting light."

The company has demonstrated financial prudence in its approach to project advancement. Over the past four years, First Mining Gold has generated over $60 million in cash from its asset portfolio without resorting to shareholder dilution. This strategy has enabled the company to progress its key projects through challenging market conditions. However, it's important to note that additional financing will likely be required as the projects move into future development stages.

For investors considering First Mining Gold, there are several potential upsides to consider. These include significant leverage to gold prices, strategic optionality in terms of project development paths, the scarcity value of large-scale projects in stable jurisdictions, and exploration upside, particularly at Duparquet. As always, investors should still be aware of the risks inherent in mining development. These include permitting uncertainties, substantial capital requirements for development, potential gold price volatility, and the execution risks associated with mine development.

In the near term, investors should watch for several key catalysts that could impact the company's value. These include the imminent submission of the final environmental assessment for Spring Pole, the upcoming updated PEA for Duparquet expected in Q1 2025, and ongoing exploration results, particularly from the deeper drilling program at Duparquet. These events could provide valuable insights into the projects' potential and the company's progress in advancing its assets.

View First Mining Gold's company profile: https://www.cruxinvestor.com/companies/first-mining-gold

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Interview with Nolan Watson, President & CEO of Sandstorm Gold Royalties

Our previous interview: https://www.cruxinvestor.com/posts/sandstorm-gold-royalties-tsxssl-positioned-for-30-production-growth-debt-reduction-3933

Recording date: 17th September 2024

Sandstorm Gold Royalties, the sixth-largest gold streaming and royalty company globally, is positioning itself for significant growth in the coming years. Led by President and CEO Nolan Watson, the company has embarked on a strategic path that could potentially double its production and substantially increase its cash flow over the next five years.

Two years ago, Sandstorm made a bold move by acquiring over $1 billion worth of assets, financed through debt. While this initially raised concerns among investors, especially in a rising interest rate environment, the strategy appears to be paying off. Watson explains, "I'm a big believer that you need to buy things when nobody cares about growth and then when all of your shareholders are banging on the door for growth, that's when you should not be buying things because that's when they're very expensive."

The company's growth projection is anchored by five (among over 230 other) projects:
Greenstone (Equinox Gold)
Platreef (Ivanhoe Mines)
Robertson (Barrick Gold)
Hod Maden (SSR Mining)
MARA (Glencore)
These projects alone are expected to drive Sandstorm's production from approximately 75,000 royalty ounces today to potentially over 150,000 royalty ounces within five years. Importantly, this growth projection does not include numerous other development projects in Sandstorm's portfolio, providing potential upside beyond the company's current guidance.

Financially, Sandstorm is focused on improving its balance sheet. The company expects to reduce its debt from $640 million to $350 million by the end of this year, with plans to eliminate it entirely within three years. Once the five key projects are operational, Watson projects that Sandstorm could generate nearly $300 million in annual free cash flow at current gold prices.

Management's confidence in the company's prospects is evidenced by significant insider investment. Watson himself has borrowed $3 million to purchase additional Sandstorm shares, stating, "I'm convinced Sandstorm shares can double or triple."

While the company currently offers a modest 1% dividend yield, the focus is on debt reduction and potential share buybacks once the balance sheet is strengthened. Watson emphasizes the company's commitment to maintaining or increasing the dividend.

For investors, Sandstorm offers exposure to gold price upside without the operational risks typically associated with mining companies. The company's streaming and royalty model provides a diversified portfolio of assets operated by major mining companies, potentially reducing single-asset risk.

The investment thesis for Sandstorm is supported by broader macroeconomic factors that could benefit gold, including economic uncertainty, monetary policy decisions, currency devaluation concerns, and gold's role in portfolio diversification. However, investors should still be aware of potential risks, including gold price sensitivity, project execution risks at partner operations, geopolitical risks in some jurisdictions, and the impact of interest rates on the sector.

In conclusion, Sandstorm Gold Royalties presents an intriguing opportunity for investors seeking exposure to the gold sector. With a clear path to production growth, improving financial position, and strong management alignment, the company appears well-positioned to capitalize on its recent strategic moves. As always, investors should conduct their own due diligence and consider their risk tolerance when evaluating this investment opportunity.

View Sandstorm Gold Royalties' company profile: https://www.cruxinvestor.com/companies/sandstorm-gold-royalties

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Interview with Sean Roosen, Founder & CEO of Osisko Development Corp.

Our previous interview: https://www.cruxinvestor.com/posts/osisko-development-building-tier-one-gold-and-copper-mines-5487

Recording date: 17th September 2024

Osisko Development Corporation (TSXV:ODV) is advancing its flagship Cariboo Gold Project in British Columbia, positioning itself as a compelling investment opportunity in the gold mining sector. The project, nearing final permitting stages, represents a significant near-term gold production prospect in a tier-one jurisdiction.

The Cariboo Gold Project boasts impressive fundamentals:
2 million ounces of gold in reserves
Over 3 million additional ounces of gold in measured, indicated, and inferred resources
High-grade deposit averaging 3.78 g/t gold
Initial production target of 4,950 tons per day, yielding approximately 220,000 ounces annually

Sean Roosen, founder of the Osisko group, emphasizes the project's exploration potential: "We're averaging 14,000 ounces per vertical meter that we've gone down. For every 100 meters that we've gone down, we've averaged 1.4 million ounces." This metric suggests substantial room for resource expansion, with the deposit tested to depths beyond 1,000 meters.

Osisko Development is implementing innovative technologies to enhance operational efficiency. The company pioneers the use of an all-electric roadheader, potentially reducing development costs by around $1,000 per meter. Access to low-cost hydroelectric power (approximately $0.05/kWh) further positions Cariboo as a potential low-cost producer.

The project's scalability is a key attraction. Management envisions expanding production to 10,000 or even 15,000 tons per day in the future, potentially doubling or tripling annual gold output. Roosen outlines the company's ambitious goals: "Corporately, the big target for me is to set the stage to be a $1 billion company. We have the asset base to do that."

From a financial perspective, the project's economics appear robust. The initial feasibility study, using a conservative $1,700 per ounce gold price, yielded an internal rate of return around 20%. With current gold prices much higher, the project's potential returns could be significantly enhanced. An updated feasibility study using a $2,000 gold price is expected by year-end.

Investors in Osisko Development gain exposure to a management team with a proven track record. Roosen previously led the development of Canadian Malartic, now one of the world's largest gold mines, and founded Osisko Gold Royalties, a $4.3 billion royalty company.

Near-term catalysts that could drive share price appreciation include:
Final permitting approvals (expected in late 2024 or early 2025)
Results from the planned bulk sample (scheduled for October)
Updated feasibility study incorporating higher gold prices
Ongoing exploration results potentially expanding the resource base

While the investment case is compelling, investors should consider risks such as execution challenges in mine development, potential capital cost inflation, gold price volatility, and regulatory hurdles.

In the current macroeconomic environment, with strong gold prices and increasing M&A activity in the sector, Osisko Development represents an attractive opportunity for investors seeking exposure to a large-scale, high-grade gold project on the verge of production in a top-tier jurisdiction. The company's significant insider ownership provides some insulation against hostile takeover attempts while potentially positioning it as an attractive M&A target for larger producers seeking to replenish reserves.

View Osisko Development's company profile: https://www.cruxinvestor.com/companies/osisko-development

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