EDM Resources Inc (TSX-V:EDM, OTC:SWNLF) is a company focused on developing a zinc project located near Halifax, Nova Scotia. This project is strategically positioned, offering proximity to key markets in the United States and Canada. The company has been diligently working on obtaining the necessary permits for the project with an eye to commercial production by 2026.
Economically, the project has shown great promise, as evidenced by a recent report released in 2021 highlighting its strong economics. The rising zinc prices have further improved the project's financial outlook, adding to its appeal.
With zinc being a critical metal, especially in industries like manufacturing and infrastructure, the project's location offers strategic advantages for accessing markets with high demand.
In this interview with Proactive, CEO Mark Haywood talks through the final steps to get into production.
Proactive: We're eager to delve into your project and learn more about your company. Could you provide us with an overview of EDM Resources?
Mark Haywood: EDM Resources is based in Halifax. We have a mine just near the airport in Nova Scotia. It's a zinc, lead and gypsum mine. Right now we're going through the last part of permitting to put it into production either next year or early in 2026. We have the last part to go this year, which is the Department of Fisheries and Oceans permit. We expect to have that application in towards the end of this year.
Let's delve into the mine itself. The latest technical report from 2021 demonstrated robust economics for the project. Could you elaborate on the project, particularly regarding zinc extraction, and the compelling economic factors surrounding it?
Absolutely. The mine was based on zinc initially, but it's now got zinc, lead and gypsum. When you put all those commodities in place, we have a very strong, positive cash flow over the 14-year mine life. The net present value of the project alone is over C$174 million, and the internal rate of return on an after-tax basis is 65%. That's kind of unheard of! The project’s key metrics are so strong that we in the business call this a very robust project, with a long mine life and very robust economics. Over the 14-year mine life, the project will generate significant cash for the province in terms of royalties and taxes for the Canadian government. Also, we employ over 150 people on the mine site when we're in full production.
When the report was conducted, the zinc price was much lower. However, it's noteworthy that the current zinc price has contributed positively to enhancing the project's economics. Would you agree that the current zinc price has had a beneficial impact on the project's financial outlook?
Yes. The report was done in December 2021, which is not that old. Zinc prices have gotten better and better, and so have the project’s economics. The technical report is the gold standard of where the project is, but things have gotten better in the zinc market. Zinc is now a critical mineral as well, which is gaining more traction in the marketplace. The price of zinc is destined to go up.
Being situated in Nova Scotia, do you see it as a significant advantage, especially given your proximity to the United States?
The logistics of this project is phenomenal. We're close to an all seasons deepwater port. Once you’re in that position the zinc, lead and gypsum can really go anywhere, on the Atlantic and cross down to China or over to Europe. Logistics are so key. We're close to a major capital city and we have access to the market, being very close to the sea water.
Let's look at what's happening in 2024. While permitting progresses, are there other activities underway behind the scenes, all gearing up for the eventual commencement of the mine?
As we wrap up our permit process, we're also focused on optimizing the project's economics. This involves securing permits for additional necessary work. Additionally, we're bolstering our team both at the board level and within the project itself. I'm confident that the project's success will not only benefit investors but also contribute significantly to the province of Nova Scotia as we progress toward production.
As a brownfields operation, it's not as if we have to recreate a thing. All we are doing is putting new equipment in that's been proven. My job as CEO is to de-risk the project, and that’s what we’re doing.
Having a brownfields operation is one of the greatest de-risking opportunities you can have, because all you're doing is putting new equipment in, and then going into production. We’re going to be in great shape going into production.
Quotes have been lightly edited for style and clarity