Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
A little over a month after Triple Flag Precious Metals (TSX: TFPM; NYSE: TFPM) announced it was buying Maverix Metals (TSX: MMX) in a deal valued at C$606 million, the Canadian streaming and royalty company said this week that it’s adding to its portfolio with a new royalty on Clean Air Metals’ (TSXV: AIR) Thunder Bay North project in northern Ontario.
Triple Flag is acquiring up to a 2.5% net smelter return (NSR) royalty for C$15 million on the platinum, palladium, copper, and nickel project about 50 km northeast of the city of Thunder Bay and 60 km southeast of Impala Platinum’s Lac del Iles mine.
Clean Air Metals received the first C$10 million tranche on Dec. 19 and has the right to buy down up to 40% of the NSR royalty and reduce the NSR percentage to 1.5% within a three-year period. The company has granted Triple Flag a right of first refusal to match any other offers for stream, royalty or similar financing agreements.
The junior exploration company is planning a preliminary feasibility study on the project next year.
A preliminary economic assessment completed in Dec. 2021 outlined a 10-year ramp-access underground mine plan on the project’s two deposits—Current and Escape—and a 3,600 tonne per day milling complex. Initial project capital costs were estimated at C$367.2 million with total capital costs of C$536 million.
The project’s two deposits contain total indicated resources of 14.6 million tonnes grading 1.54 grams palladium per tonne, 1.58 grams platinum per tonne, 0.10 gram gold per tonne, 2.30 grams silver per tonne, 0.42% copper, 0.23% nickel, 167.33 grams cobalt per tonne and 0.05 gram rhodium per tonne.
Total inferred resources stand at 8.08 million tonnes averaging 0.69 gram palladium, 0.67 gram platinum, 0.07 gram gold, 1.07 grams silver, 0.33% copper, 0.15% nickel, 138.50 grams cobalt and 0.01 gram rhodium. The resource estimate’s effective date is Nov. 2021.
Clean Air Metals believes the project has potential to grow.
“The exploration upside at this Mid-Continent Rift related mineral system being developed at Thunder Bay North is considerable,” Abraham Drost, Clean Air Metals’ CEO stated in a news release. “We look forward to continuing the search for the source of high value massive sulphide deposits in feeder zone structures, for the benefit of our Indigenous partners and other stakeholders.”
Triple Flag, which is expected to become the world’s fourth-largest senior streaming company when its transaction with Maverix Metals closes in January 2023, has a market cap of about C$3 billion ($2.2bn).
