GT Resources Inc

GT Resources Inc (TSX.V:GT) is focused on discovering environmentally and socially conscious Green Transportation and Energy Transition metals. Its strategy is to advance First World projects with district scale potential, primarily nickel-copper and platinum-group-elements (PGE). In Canada, three recent discoveries have outlined a new extremely high tenor nickel - copper district at the Tyko Project in Ontario, while in the Yukon the Company holds the Canalask nickel - copper project. In Finland, the Läntinen Koillismaa (LK) platinum-group-element (PGE), copper-nickel Project hosts a significant NI 43-101 Resource.

Mineralization at the Tyko Project is dominated by nickel sulphides thereby providing significant exposure to Battery Metals. Three extremely high-grade discoveries at zones spanning over 20 kilometres in strike length have defined Tyko as a new nickel district. The 2021 discovery of the Smoke Lake Zone has been shown to contain massive sulphides over a 300 meter strike length with a further 450 meters of disseminated to blebby mineralization. The West Pickle Zone (discovered in early 2022) has a defined 600 meter strike length so far. The Ember Zone was discovered in late 2022 and has returned semi-massive sulphides up to 2% nickel over 1.9m.

At its LK Project in Finland, the Company has existing NI 43-101 resources of 4.1 million palladium equivalent ounces. Metals comprising the resource equivalency, in order of economic importance are palladium (44%), copper (29%), nickel (12%), platinum (7%), gold (8%) and cobalt.

In June 2022, the Company acquired the Canalask copper-nickel project from Victoria Gold Corporation, located in the Yukon. Immediately before its sale to Xstrata, Falconbridge Nickel had acquired the Canalask project but it has been dormant since then (2008). The Canalask property came with drill-ready targets and an unexplained historic “footwall” resource of 400,000 tonnes grading 1.3% nickel. While copper mineralization is evident, the historic resource did not include copper.

GT’s strategy of targeting battery metal projects in top-tier jurisdictions led Glencore Plc to conduct a strategic equity investment in April 2023 and two follow-on investments. Glencore now owns over 16% of GT. The investment validates the quality of GTs strategy, assets and its team. Having a 10% stake in the Company, Eric Sprott is the second largest shareholder having validated the team and assets with his initial investment in 2019.

The Company is well capitalised with approximately 50% of its share price held in cash. On a proforma basis as at March 31, 2024, it had $12.4 million of cash on hand. ($10.6M cash at Mar 31, 2024 plus $1.8M from a top up strategic equity investments by Glencore via a structured financing at approximately 200% of the price in Q2-2024).

The 2024 exploration program is well underway with a drilling campaign at its Canalask copper-nickel project having begun in June 2024.

For investors seeking the Energy Transition metals exposure, GT Resources is relevant and provides a compelling valuation. The LK PGE-Cu-Ni project is a highly strategic asset, given the European Union’s push to secure domestic critical minerals to support reduced greenhouse gas emissions.

The key catalysts in the coming months will be the results of the current drill program at Canalask.

Funding

GT Resources has C$12.4 million of cash as of March 31, 2024 (proforma), of which C$1.8 million is dedicated to Canalask’s drill program (July – Sept 2024).

The remaining C$10.6 million (proforma) of cash reserve provides the company with ample financial flexibility to weather the current downturn in its share price and the resource sector generally, thus mitigating the risk of further dilution. Investors can simply enjoy the drill results ride.

GT Resources’ desire is to accretively establish a C$100 million valuation to further drive institutional investor interest and share price.

Metallurgy

For any polymetallic sulphide mining project, ultimate success comes down to metallurgy and the ability to profitably maximize metal extraction from the host rocks.

Recognising this reality and understanding that its LK project in Finland represents a very large mineralised system that can continue to grow resources, GT Resources conducted an extensive metallurgical assessment program that supports its NI 43-101 resource estimate. Seeing management take an aggressive approach to de-risking a project for a discerning audience at an early stage is testament to their technical prowess. 

The results were published along with its 4.1 million ounce palladium equivalent resource estimate in April 2022.

The Phase II program demonstrated the highly repeatable and consistent ability to produce both a copper and separately a nickel concentrate irrespective of rock type and grade variability, using conventional flotation processing. Importantly, both concentrates are of very high value with no deleterious elements, in fact, both have high sulphur and iron thus making them even more attractive to smelters. 

The copper concentrate has a grade of 30% copper plus over 50 g/t PGEs.

While the nickel concentrate incorrectly appears to be low grade having 5% nickel, it also contains over 50 g/t PGEs, making the contained metal more valuable than nickel concentrates being produced in the Sudbury basin and Scandinavia. Thus, both products are expected to be easily sold to either local or foreign base metal smelters and no reliance would need to be placed on PGE smelters.

Given their earlier stage, metallurgical process testing has yet to be conducted on the Tyko and CanAlask copper-nickel projects, whilst we expect a consistent robust technical assessments to be undertaken.

Exploration Potential

At LK, GT Resources has tested a total of ~6 km of strike length, from a total of 38 kms, where sufficient drilling density exists to calculate the current resource, while shallow reconnaissance drilling has indicated that the remaining 32 km of strike length is mineralised primarily with nickel and copper. 

Rather than aggressively continuing to expand the current resource whose economics are not 100% Battery Metal related, while equity markets are depressed, GT believes it is more prudent to focus its attention on its North American pure-play Energy Transition “Battery Metal” projects.

The Tyko Project represents a part of Ontario that the Ontario Geological Survey has not even mapped, accordingly, virtually all property information is being developed by GT. This takes time and therefore investors should not expect overnight success. What we know is that the results to date have been spectacular with three very high-grade discoveries spread along a 20-kilometre strike length. Management believes that once outstanding exploration permits are granted, the strike length will expand to 30 kilometers. They are optimistic of gaining yet another discovery of high-grade nickel–copper on the east side of the property. The key part of the exploration strategy is to find the source of the extremely high-tenor mineralization that has been discovered to date.