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Q2 Metals is exploring for lithium in Quebec’s James Bay region, with its flagship asset being the Cisco Project. This conversation with CEO Alicia Milne covered the company’s technical capabilities, insider incentives, project history, drilling strategy, capital structure, and market-facing decisions. I got to ask Alicia about the team’s qualifications, shareholder alignment, permitting and community relations, and the broader challenge of advancing a potentially large lithium system in a less-than-perfect commodity market.
TL;DR
- 1. Q2 Metals is advancing the early-stage Cisco lithium project in Quebec, having drilled 14,000 meters across 37 holes, with plans to continue step-out and infill drilling through 2025.
- 2. The company does not yet have a mineral resource estimate and estimates that 40,000 to 60,000 additional meters of drilling, requiring $20–30 million in capital, would be needed to reach that milestone.
- 3. Q2 currently has approximately $7.5–8 million in cash, with summer exploration plans scaled to match available funds while avoiding dilution in a difficult lithium market.
- 4. The company is not pursuing joint ventures or asset-level deals at this stage, preferring to retain full control of Cisco while remaining open to future strategic equity investment.
- 5. Non-core assets such as the Mia, Stellar, and Big Hill projects are being held with minimal spend or actively marketed for divestment, allowing Q2 to focus resources on Cisco.
Is Alicia Milne the Right Person for the CEO Job?
Alicia Milne is a corporate lawyer by training.
She has worked in Vancouver’s mining sector since 2003, predominantly on legal and governance matters. Her résumé spans private companies to NYSE-listed firms, with experience that includes legal work, directorships, and corporate management. “Anything and everything to do with essentially mining on the corporate side,” she said.
Whether that qualifies her to lead a lithium-focused exploration company through a downturn is a fair question. She acknowledged her non-technical background but leaned on decades of administrative experience and board involvement, including a role with Women in Mining BC.
Is Q2 Metals Her Main Focus?
Milne is a director on three other boards but said Q2 is her full-time commitment.
“I live and breathe Q2 all day every day,” she said.
Does the Geological Team Have the Right Experience?
According to Milne, VP Exploration Neil McCallum has roughly a decade of lithium experience, mainly through his association with Dahrouge Geological Consulting. He was involved in early staking of what is now Patriot Battery Metals’ Corvette project and has stayed close to the James Bay lithium scene.
How Much Skin Does Management Have in the Game?
Insiders collectively own just over 6% of the company, according to Milne. Her own stake is approximately 900,000 shares, or around 1%. She stated that all shares were purchased in financings or the open market and that her average cost base is around $0.50 per share.
Much of the insider ownership stems from a 2020–2021 recapitalization, during which a gold project was vended into the shell. Director Simon Cohn and his business partner reportedly own over 5 million shares.
Will Management Buy More Shares in 2025?
Milne stated that she and McCallum are interested in buying more stock, provided they exit blackout periods. However, given constant drilling activity and real-time visibility of lithium-bearing pegmatite in core, they may remain blacked out indefinitely.
Does Management Hold Any Royalties?
No management or board members hold royalties on the Cisco project.
The 4% gross metal royalty (or NSR equivalent) is held by the project’s original vendors. Each claim block has a path to reduce the royalty to 1%, though the costs and terms of that reduction were not disclosed.
How is Executive Compensation Structured?
Milne, McCallum, and director Simon Cohn were granted PSUs in December 2023. Milne’s are tied to share price and market cap. McCallum’s are tied to geological milestones including a defined resource, along with market performance.
Stock options have also been granted but without performance conditions.
Additionally, the company has employment agreements that include change-of-control clauses worth two years of salary.
What’s the History of the Cisco Project?
Q2’s initial lithium exposure came via the Mia project in early 2023. After forest fires delayed work, they began exploration late that year. Cisco came into focus in December 2023 when its vendors (also the Mia vendors) offered the asset once it exited a confidentiality agreement.
According to Milne, McCallum and Cohn viewed core from Cisco in January 2024 and immediately pushed to acquire it. Q2 secured the deal based on pre-existing relationships. The company now considers Cisco its flagship.
The asset was acquired during a market collapse, not in a bidding war. Milne acknowledged the lithium sector’s volatility and said that some questioned their decision to proceed.
What is the Business Strategy for Q2 Metals?
Milne was direct: “We’re not mine builders.”
The goal is to de-risk Cisco and either attract a buyer or bring in a stronger development partner. She admitted the lithium market “absolutely doesn’t care” about new discoveries right now and raising capital is difficult.
How Big Does Cisco Need to Be to Attract a Major?
Milne declined to provide specific size targets. She cited early third-party research from Canaccord suggesting a large mineralized system. To date, Q2 has drilled 37 holes totaling 14,000 meters, including six historical holes, but there is no NI 43-101-compliant resource.
When Is the Right Time for a Mineral Resource Estimate (MRE)?
An MRE is not imminent. According to McCallum’s internal estimates, a resource would require 40,000 to 60,000 meters of additional drilling and a $20 to $30 million budget.
Q2 does not have this capital now, so it will have to raise it in the future.
How Long Would That Drilling Take?
With four to six rigs, a resource program could take 6 to 9 months. The company can scale crews through contractor networks but is currently constrained by funding.
When Will They Raise Capital?
Milne said they would raise capital if a suitable window opened but described market conditions as poor. A financing was considered in October 2023 but not executed. She acknowledged hindsight criticism, but is committed to looking forward.
Will They Accelerate or Reprice Warrants?
The company has nearly $5 million in 50-cent warrants expiring in 2026. They cannot be repriced. Acceleration would require holder approval, which is unlikely. Milne regrets not including an acceleration clause.
Will They Use Flow-Through Again?
Flow-through financings, particularly charity structures, are under consideration. In 2023, Q2 secured a 2x premium using this structure. Milne said it provided efficient capital with lower dilution.
What Is the Strategy for Building the Share Registry?
Currently dominated by retail investors, Q2 is seeing some institutional buying. Milne indicated openness to strategic equity investment but is cautious about ceding a large stake too early. JV offers on Cisco have been declined as premature.
How Are Drilling Costs?
Winter drilling cost $560 to $570 per meter. Helicopter support was the major expense. A planned access trail could reduce future costs, but no timeline was provided. Summer drilling costs are not significantly lower.
What Happened in the Last News Release?
Q2 drilled 14 holes this winter, totaling roughly 6,900 meters.
One highlight was 179 meters of continuous spodumene-bearing pegmatite. Other holes were less conclusive. CO2 zone holes were shallow and non-mineralized.
Why Did the Stock Drop on the News?
Milne speculated the selloff was due to a shareholder needing to exit. No specific reasons or institutional selling were confirmed. The market may have expected a repeat of 2023’s 347-meter intercept.
When Are the Assays Coming?
Initial assays from four holes are expected in early May. Additional batches will follow on a six-week turnaround. Hole 36, which ended in pegmatite, is likely to be re-entered this summer.
Where Are They Stepping Out Next?
The plan is to step further south and east. Some mapped outcrops remain untested. Only a small fraction of the 41,000-hectare land package has been explored.
Are They Dead Set on an MRE?
Milne said the company is still debating timing. While a resource would support future permitting, she acknowledged the risk of capping market upside by quantifying the system too early.
Is Accessibility an Issue?
Yes, particularly in forested areas to the south. Tree cutting is required for pad building. Lidar data is used to navigate forest cover. The terrain is workable but not without cost.
When Is Metallurgical Work Coming?
Preliminary mineralogy confirms spodumene as the primary lithium mineral. Metallurgical testing for DMS potential is underway, with results expected by late June. Tantalum potential is also being assessed.
How Much Money Will Be Left After Assays?
Milne estimated $7.5 to $8 million in cash after covering winter drilling costs. A summer program of 6,000 to 8,000 meters is planned, starting with mapping and sampling.
How Much Are They Spending on G&A?
G&A spend is projected at $175,000 to $200,000 per month. Q2 recently hired community, permitting, and corporate development staff. Marketing campaigns have targeted Asia and now Europe.
How Are Community Relations Going?
Q2 operates in Namaska Cree territory. Milne described the relationship as positive. Local tallymen have provided input on access routes. A local liaison has been hired.
Are Permits in Place for Full Development?
No. Environmental baseline work is underway but permitting for advanced exploration or mine development has not begun. Milne cited Patriot Battery Metals as a permitting benchmark.
What’s Going on With the Other Projects?
Mia has enough work completed to maintain tenure.
Stellar may lapse this year; Q2 has not visited it.
Big Hill, the Australian gold project, is for sale. Holding costs are $50,000 CAD per year. Q2 is open to selling the asset for cash or shares. No active effort is underway for Mia or Stellar.
What Are Alicia Milne’s Main Concerns?
“Things that are beyond my control,” she said, citing lithium market dynamics. Internally, she feels confident in the team and funding position. Travel logistics were her only operational concern.
Q2 Metals Interview with CEO, Alicia Milne
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