Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Wellgreen Platinum’s CEO, Greg Johnson, met with MINING.com last month to update us on the company’s Yukon project, a platinum group metal nickel deposit in southwestern Yukon.
MINING.com: What is Wellgreen Platinum (CVE:WG)?
Greg Johnson: We are an exploration and development stage company with our core project located in the Yukon. It’s becoming one of the largest, undeveloped open pit, platinum group metal deposits globally.
MINING.com: Can you bring me up-to-date with the project?
Johnson: We had a new team come into Wellgreen about 2 1/2 years ago. So we have been undertaking intensive drilling, engineering and metallurgical testing, which has culminated in a updated preliminary economic assessment that we published earlier this year. With that project update, we have delivered a new view on the project that shows that this is a large open pit and it has the potential to become the lowest cost producers of PGMs and nickel. And it is located next to a highway and has existing ports that make it overall low capital in terms of a project.
MINING.com: What are the factors that make it a low capital project?
Johnson: Open pit mining is a key factor. It’s more similar to an open pit copper-gold pit operation, as compared with most of the world’s nickel or platinum group projects, which tend to be deep underground. So it means that our unit costs, because of the economy of scale using the big equipment in an open pit, means our cost structure is still quite low, less than $500 per oz.
Wellgreen is located in Canada, 317km NW of Whitehorse. Image from InfoMine.
MINING.com: What about the First Nations in the area?
Johnson: We are working with the Kluane First Nation, which is an excellent First Nation partner. We have an exploration cooperation agreement in place with them. We cooperate with them for business opportunities on the project.
MINING.com: Everybody hears about Russia and South Africa regarding platinum. What’s it like having a platinum project in North America?
Johnson: Well, you are right. Platinum production is either concentrate at either southern Africa or Russia. There are very few projects that are outside of those areas. So Wellgreen is fairly unique. In Canada we have the Sudbury district and northern Quebec, but Wellgreen is pretty unusual in terms of being in Canada as a first world jurisdiction. So I think it is a number of key advantages. We don’t have the political risk on our project that other projects would have and there are very few open pit projects as well.
MINING.com: Are there differences being someone with a platinum project as opposed to other precious metals? Are the investors different? Is the story different?
Johnson: Since our project is a balance between base metals, nickel, and precious metals, platinum group metals and gold. So we kind of get a mix of investors focused on those areas. I think in general the investors who are interested in a development stage company tend to be the same group of investors. But if they are looking for that allocation in PGMs, they don’t have many options to look at outside of South Africa or Russia. It means there are small group of companies who are our peers.
MINING.com: What’s next?
Johnson: So as we have completed this PEA update, which was a second PEA earlier this year, we are moving into prefeasibility level studies on the project. Those have already been kicked off. They will continue into next year. We are targeting to start feasibility studies later next year or the year after.
