When Jason Bahnsen took on the role of chief executive officer at Happy Creek Minerals Ltd. (TSX-V:HPY, OTC:HPYCF), he faced a welcome predicament: leading a company with a portfolio of promising, fully permitted and drill-ready, district-scale assets.
“What struck me is that the company had too many assets on its plate. You’re not getting the full value,” Bahnsen told Proactive.
A mining engineer by background, Bahnsen has focused on cleaning up the company’s balance sheet and repositioning it as a tungsten play.
His strategy centers around Happy Creek’s high-grade Fox tungsten project, located 70 kilometers northeast of 100 Mile House in British Columbia, Canada.
Bahnsen saw a significant opportunity for Happy Creek with tungsten, what he described as a “niche commodity”.
Tungsten is a critical mineral valued for its high melting point, density, and applications in military, clean energy, and advanced manufacturing. Its strategic importance and limited supply make high-grade deposits like Happy Creek’s Fox project highly significant, particularly in stable jurisdictions like Canada.
A 2018 National Instrument 43-101 resource estimate for the Fox project outlined 582,400 tons at 0.83% WO3 (tungsten trioxide) of indicated resources and 565,400 tons grading 1.23% WO3 in the inferred category.
“Grade is king. If you’ve got the highest grade in the world, you’re going to be on the right side of the cost curve,” Bahnsen said.
He highlighted the significance of this maiden resource being half indicated and half inferred.
“That is a very good outcome for an initial resource which is typically more leveraged to the inferred side because there’s just not enough drilling,” he explained. “That’s a very high level of confidence.”
The CEO also noted that the resource estimate was based on only “a very small part” of the project, based on a calcium silicate seam spanning two kilometers. The company has identified an overall mineralized trend of 10 kilometers by 5 kilometers through geological mapping, prospecting and previous drilling.
Expanding the Fox resource
Happy Creek Minerals has announced a 100-hole, 10,000-meter drill program at the Fox project, which is set to kick off in mid-2025 and aims to expand a 2018 maiden resource.
“It’s low-hanging fruit to increase the size of the resource quite readily,” Bahnsen said. “We know where it is. It’s just got to be drilled.”
Happy Creek aims to expand the current resource estimate from about 1 million tons to 3 million to 5 million tons at 1% WO3.
“If we can take that up to 3 to 5 million tons, we have a viable deposit,” Bahnsen said.
Concurrently, Happy Creek has started working on securing funding earmarked for the development of critical minerals projects from the US Department of Defense.
Bahnsen pointed to Fireweed Metals, which has secured millions of dollars from North American governments to support the development of its critical minerals projects, including US$18.5 million from the US Department of Defense to advance its Mactung tungsten project towards an investment decision.
Fireweed has also secured up to C$12.9 million from the Government of Canada for infrastructure supporting its critical mineral assets at Macmillan Pass, Yukon Territory.
“It’s a fair bit of bureaucracy to get in the door there. Typically it’s about a two-year progress so we thought, let’s get that underway,” Bahnsen said.
Highland Valley deal unlocks value
As Happy Creek zeroes in on the Fox project, Bahnsen has been seeking strategic alternatives for Happy Creek’s other assets that will allow the company to retain exposure to their upside.
“We like all these projects. We don’t want to just sell them as is, we want to have exposure to the upside there,” Bahnsen said.
“I could easily spend $40 million on drilling but that’s pretty tough to raise in the market here, so I’d much rather try to realize value through these assets, especially if we can get a small cash component to any of these transactions.”
Happy Creek recently closed the sale of its Highland Valley copper project, located adjacent to Teck’s Highland Valley Copper Mine in British Columbia, Canada’s largest copper mine.
The project was sold to Metal Energy (MERG) for $300,000 in cash and initial equity equal to 9.9%. Over four years, Happy Creek will receive an additional $6 million in equity bringing its stake in Metal Energy up to approximately 20%. Happy Creek also retains a 2.5% net smelter return royalty on the project.
“From a Happy Creek shareholders point of view, it’s effectively a spin out of that asset because MERG had nothing else in it,” Bahnsen said.
He is looking for partners for Happy Creek’s other projects, such as the company’s Silverboss molybdenum-copper-gold-silver project in British Columbia.
“I want to find a home for some of these other assets where we can have direct exposure through an option agreement, a joint venture, or a sale like Highland Valley,” Bahnsen said.
The CEO is also taking other steps to secure cash in a non-dilutive way. Happy Creek has raised about $500,000 in cash, which Bahnsen believes puts the company in a good position “to get things going”.
“This year could be a very transformative year for Happy Creek as we focus our strategy,” he concluded.