Volta Metals’ flagship is the Springer rare earth and gallium project near Sturgeon Falls, Ontario, about 70 km east of Sudbury. The company also holds the Aki lithium, cesium and tantalum package (the former Falcon West ground) near Armstrong in northwestern Ontario, which is not the focus.In this interview, I asked the CEO about the current resource, the just-completed drill program, metallurgy, gallium, ownership and royalties, treasury, and the path to a PEA.
TL;DR
The current resource is 56.6 million tonnes indicated at 7% TREO and 120 million tonnes inferred at 6% TREO, pit constrained at a US$43 per tonne net metal revenue cutoff, with a near-surface higher grade core around 1.1%. Roughly two thirds of that TREO is cerium and lanthanum, which the resource does not treat as payable, with NdPr, terbium and dysprosium making up about 22% of the basket and NdPr alone over 80% of the projected income. Gallium showed up in historic core at 50 to 60 g/t and was never reported by the previous operator because nobody cared at the time, according to the CEO. He also said metallurgy is the single biggest unknown and that gallium is not real until it is proven recoverable. Roughly half the gallium sits in synchysite alongside the rare earths and half sits in feldspar, which currently reports to tailings. They have just over $2 million in the bank, and he estimated about $5 million more to get to a production decision, excluding a bulk sample and pilot plant, which he said would cost roughly twice that again.
What have they done for shareholders lately?
They finished a 13 hole, roughly 5,500 metre winter program in April, and assays plus gallium numbers are still coming out through the summer. He told me one hole was drilled next to a historic hole at a slightly different angle, stayed in mineralization, and they kept going until the drillers ran out of rods, ending up more than twice as deep as the historic drilling. First pass SGS flotation and early leach work is underway at Laurentian, and the initial results showed 13 times enrichment where he said five to ten is normal, plus very low radioactivity at around 0.2 ppm uranium and thorium below the North American crustal average. On the corporate side, they recently cut a deal moving from 80% to a path to 100% of Springer, with the final payment due by mid June next year or sooner if financing allows. They signed an MOU with Nipissing First Nation, held town halls in Sturgeon Falls, and have been running environmental baseline work since last year.
How much money do they have and what are they spending it on?
He said they have over $2 million in the bank, which he expects covers the current work program. The last raise was in April, $2.5 million at 17 cents with half a warrant at 25 cents for two years. Total money raised since inception is under $10 million over about three and a half years, covering the lithium assets, the Springer acquisition, drilling, baseline studies, metallurgy and marketing. He said G&A is under 10% of total spend and 63 to 65% has gone into the ground. Money is now going to assays, metallurgy at multiple labs, the resource update and the PEA. On future dilution, he put another $1 million to $2 million on drilling to firm up the high grade core and about $2 million on studies, so roughly $5 million beyond current cash to a production decision, and he agreed a bulk sample and pilot plant would sit outside that number. He would not commit to how they raise it, and he said the Aki lithium ground is a possible option or sale if the value is there. He turned down the hypothetical of giving up 51% for a carry to a production decision.
Upcoming catalysts
Technical: remaining drill results heavy through September; updated resource end of September to early October, which he expects will include a gallium resource for the first time; more definitive metallurgical and gallium recovery results in late October to November; PEA in Q1, ideally before the end of February, though he flagged it could slip a month or two if they choose to drill more first; possible bulk sampling in the new year.
Operational: continued environmental baseline work, which he said makes them eligible to apply for an advanced exploration permit if it runs through the first half of next year.
Corporate: the final payment to move from 80% to 100% of Springer, due by mid June next year or accelerated depending on financing; a raise he described as possible later this year or early next; marketing deliberately kept slow and targeted until the metallurgy numbers are in.
Risks
Metallurgy is the risk the CEO named without hesitation. The initial results were encouraging but not definitive. Kerem does not yet know what his concentrate looks like or who would buy it, since each of the US processing facilities being built uses a different technique. Gallium is unproven on recovery, and if the feldspar hosted half cannot be attacked economically they only get at roughly half of it. Lab turnaround is already the bottleneck and has pushed the PEA out of this year. There is no separation capacity in North America today, so material would have to go to China if it were produced now. He also flagged policy risk directly, saying the US floor price that moved rare earth pricing from around $55 to $60 up to $110 is a government policy that could be reversed, which would hand pricing power back to China. Beyond that, dilution is coming at some point, and the payable basket is narrower than the headline 7% TREO suggests.
VERY IMPORTANT WARNING
Please note that this company has not paid Resource Talks for the creation of this content. This website is a business that charges for the creation and publication of content. This means there will always be a potential conflict of interest which means you can never rely on anything said herein.
By consuming this content, you acknowledge that Resource Talks and/or its affiliates and/or their personnel may own, have owned, or will own interests in and/or may have a business relationship with some or all companies/entities mentioned/featured in this publication. You further acknowledge that entities which may be referenced or featured in this publication or their related parties may hold an interest in Resource Talks or its affiliates, which may create further conflict of interest.
The information provided herein is general & impersonal in nature and meant for entertainment purposes only. The reader acknowledges and agrees that the information does not constitute a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. The author is not a licensed investment advisor. He is just another talking head on the internet. He might own shares of companies mentioned in this publication. Always assume he doesn’t know much more than a potato does. The mining & exploration space is among the riskiest sectors to invest in. The risk of anything mentioned in this publication is 100% loss of capital. If you don’t read the official documents provided by the company on http://www.SedarPlus.ca, you will lose all of your money.
