The global automotive industry for decades has used platinum and palladium in emission-controlling catalytic converters given the precious metal’s ability to withstand higher temperatures and promote chemical reactions without themselves being used up.
As the industry evolves beyond petrol-engined vehicles, platinum is now crucial to the development of the hydrogen economy of the clean energy future, as it is a vital component in the anodes and cathodes of the hydrogen fuel cell, combining hydrogen and atmospheric oxygen to pass water out the tailpipe, while releasing electrons into a battery.
Clean Air Metals Inc is doing its part to contribute to the hydrogen economy as it explores its 100%-owned Thunder Bay North platinum and palladium project in northwestern Ontario.
The project, which also contains significant quantities of copper, nickel, and precious metals as well as quantities of cobalt and rhodium, is located 60 kilometres southeast of Impala Platinum Holdings’ Lac des Iles mine.
The Thunder Bay North property contains both the Current deposit and the Escape deposits, twin magma conduits that contain tantalizing high-grade, massive sulphide intersections the company hopes will lead it to the source of the rich mineralization.
World-class system
“It's a world-class system,” said Clean Air Metals CEO Abraham Drost. “There is material in the Escape conduit, for example, which runs the average mine grade 2.5% nickel, 5% copper, and 14 grams platinum/palladium.”
The junior resource company clearly has high confidence in the project. The sulphide feeder zones have magma conduits and fault structures similar to the Norilsk site in Russia, an area rich in nickel as well as platinum group elements that it has been producing for close to a century.
As a result, Clean Air Metals, which intends eventually to have an underground mine that targets the deposits’ high-grade zones, is deploying the same exploration methods to zero in on potential massive sulphide units.
The project is on the traditional territories of the Fort William First Nation, Red Rock First Nation, and Biinjitiwabik Zaaging Anishinabek and the company has been collaborating with them to minimize the project’s environmental impact. The company also recently issued a report reviewing its environmental, social, and governance (ESG) factors for the project’s development.
According to the latest resource update, the Current deposit contains 10.4 million tons of ore at 8.32 grams per ton (g/t) in the indicated category with a further 5.3 million tons at 3.83 g/t of inferred resources. The Escape Deposit contains a further indicated resource of 4.1 million tons of platinum ore and 2.8 million tons inferred.
Upbeat Preliminary Economic Assessment
Recently, Clean Air Metals strengthened its expectations for the project after receiving an upbeat Preliminary Economic Assessment (PEA) and highly positive assay results for the Escape deposit in January 2022.
In December 2021, Clean Air Metals reported a robust mine plan and cashflow model as part of the independent PEA for the Current and Escape deposits.
The PEA showed an after-tax net present value (NPV) of C$378.4 million, using a 5% discount rate, as well as an after-tax internal rate of return (IRR) of 29.8%. The PEA also estimates the project will generate average annual revenue of C$239.8 million per year from the sale of the project and copper mineral concentrates over a 10-year mine life.
“We see tremendous development potential that we've just outlined in the PEA, effectively a 10-year mine plan with a high economic net asset valuation which handily exceeds capital,” the Clean Air Metals CEO said.
Furthermore, the first four years of the mine life will see platinum mined at 9.4 grams per ton with a processing rate of 3,600 tons per day. The initial capital expenditure costs of $367.2 million can be paid back in 2.4 years after the start of production.
The company noted that total mined metal production over the life of the mine, based on the present resource base, is expected to be 629,000 ounces of platinum, 618,000 ounces of palladium, 111 million pounds of copper, 57 million pounds of nickel, 38,000 ounces of gold, and 850,000 ounces of silver.
In January 2022, the company shared new assays from the Escape deposit, which underwent 37,000 meters (m) of expansion drilling in 2021.
For example, a hole at the Escape South high-grade zone intersected 46 meters (m) grading at 19.6 g/t palladium equivalency, composed of 3.03 g/t platinum, 3.94 g/t palladium, 1.33% copper, and 0.51% nickel from 399m downhole.
Going forward in 2022 and beyond
Looking ahead for the rest of 2022 and flush with $12.5 million from a recent financing, the company is planning a minimum of 30,000m of drilling at the Thunder Bay North project as it plans for an eventual pre-feasibility study for 2023.
“We drilled 47,000 meters in 2021. We could do as much as that again,” said Drost, noting the drilling will focus on the “exploration potential of within the minerals deposit system, which is the pursuit and the search for massive sulphides - high-grade platinum and palladium, rich nickel, copper-rich massive sulphide mineralization, which is endemic to these types of rift-related systems.”
The company will also undertake metallurgical work, looking to bring the rhodium and cobalt up to a smeltable level while seeking streaming opportunities for a broad range of metals as well as strategic partners.
Clean Air Metals expects to complete a mineral resource update in 2022 on the greater than 35,000m of step-out and delineation drilling that has been completed on the Escape deposit since the January 20, 2021 resource statement on which the PEA mine plan is based.
“If we hit the massive sulphides in quantity the way we think we may, we will confidently be able to state that we have the potential at Thunder Bay North for the next Norilsk in North America, which of course is huge,” Drost said.
“That is our goal. That is our objective because we think we've got it," he concluded.
Contact the author: patrick@proactiveinvestors.com
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