Grid Metals (GRDM) - Milling Agreement to Generate Early Revenue

Grid Metals Corp. is a Canadian exploration and development company focused on the exploration of its mineral resources at its properties in Manitoba and Ontario. The company’s asset portfolio holds nickel, copper, PGM, cobalt, palladium and lithium mineralisation.

The company at the end of 2022 attended the Mines and Money Conference in London, which occurred between 29 November and 1 December 2022, and used the conference as a forum to speak to investors, suppliers and peers.

Grid Metals Corp. announced at the end of September 2022 that it had concluded a private placement consisting of the issuing of 56 million common shares of the company at CAD$ 0.21 per share for the gross proceeds of CAD$ 8.52 million. The raised funds will be implemented by the company to advance its projects in Manitoba and Ontario, with the company aiming to develop a preliminary economic assessment (PEA) for its Makwa Mayville Ni-Cu-PGM-Co project in Manitoba and continue its exploration initiatives at its Donner Lake property.

The company announced in October 2022, that it had signed a memorandum of understanding with the Tantalum Mining Corporation of Canada Ltd. (TANCO) regarding the metallurgical testing of lithium spodumene ore from the Donner Lake Lithium property. The agreement will see Grid Metals Corp. supplying samples from the property to the Tantalum Mining Corporation of Canada Ltd. to test the sample’s amenability to produce a quality lithium spodumene product. The company will upon the successful completion of the initial test work and the obtaining of an advanced exploration permit supply a bulk sample from the property for metallurgical testing. Should the metallurgical testing of the bulk sample be successful, the company and the Tantalum Mining Corporation of Canada Ltd. will enter into a binding agreement to split the costs and profits of mining, processing and selling lithium spodumene concentrate to the global market.

Management

The company is led by Robin Dunbar, who serves as the President and CEO of Grid Metals Corp. Dunbar is also the President of Mustang Minerals Corp. and a Director of McEwen Mining Inc. He holds an MBA from Dalhousie University and is a former director of Australian nickel producer Western Areas Ltd.

Dave Peck is the Vice President (VP) of exploration and business development. Peck has extensive experience in the mineral exploration and mining industry and before joining Grid Metals Corp. served as the Vice President of Exploration for North American Palladium Ltd. before its acquisition by Impala Platinum.

David Black is head of Investor Relations for Grid Metals Corp. and has been involved in the Investment Industry and handling public affairs of companies for more than 35 years. Black has also in his career served as Investment Advisor, Sales Manager and Consultant.

Carey Galeschuk rounds out the company’s management team and is the qualified person for Grid Metals Corp. Galeschuk is a registered professional geoscientist in Manitoba and Ontario and is responsible for the exploration effort at amongst others, the Mayville and Makwa projects of the company.

Capital raise

Grid Metals Corp. announced at the end of September 2022 that it had concluded with a private placement offering which consisted of the issuing of 56 million common shares of the company at CAD$ 0.21 per share for the gross proceeds of CAD$ 8.52 million.

The private placement included additional investment from Lithium Royalty Corp. a pure-play battery metals royalty and streaming company and a new cornerstone investment by the AMCI group, which is a mining and investment group specializing in the natural resource industry.

The raised funds will be implemented by the company to advance its projects in Manitoba and Ontario. Dunbar explains that the company aims to develop a preliminary economic assessment (PEA) for its Makwa Mayville Ni-Cu-PGM-Co project in Manitoba and continue its exploration initiatives at its Donner Lake property.

“Primarily, drilling right now. We have two drills going into our lithium property, trying to delineate a resource and then, we'll do some exploration holes. We're also just bringing in our PEA, a new resource, on our base metal project and a PEA, so basically a scoping study.”

TANCO Toll-Mining

The company announced in October 2022, that it had signed a memorandum of understanding with the Tantalum Mining Corporation of Canada Ltd. (TANCO) regarding the metallurgical testing of lithium spodumene ore from the Donner Lake Lithium property. The agreement will see Grid Metals Corp. supplying samples from the property to the Tantalum Mining Corporation of Canada Ltd. to test the sample’s amenability to produce a quality lithium spodumene product. Dunbar explains that the company will upon the successful conclusion of the initial test work and the obtaining of an advanced exploration permit supply a bulk sample from the property for metallurgical testing.

“…number one, is an advanced exploration permit which we will submit in January. We were hoping we'll get that back in about six months. So, that will enable us to do a bulk sample, send that into the Tanco for processing, and see what the recoveries are. We know we're going to get good recoveries, just a question of quantifying that on a larger scale, bulk sample.”

Should the metallurgical testing of the bulk sample be successful, the company and the Tantalum Mining Corporation of Canada Ltd. will enter into a binding agreement to split the costs and profits of mining, processing and selling lithium spodumene concentrate to the global market. Dunbar explains that the long-term strategy of the company is to process its own mineralisation, but that the toll mining agreement will aid the company in reaching its long-term goal through the cash flow created by it.

“…the longer-term strategy is to have a big enough resource that you could put in your own concentrator. The shorter-term strategy is to talk to the Tanco Mine who's expanding their processing facility and doing some toll milling. We think that the toll milling option is going to be shorter. It requires a smaller resource and will be a faster term to production.”

The envisioned toll mining agreement may initiate in the next 18 months according to Dunbar, with the possibility existing for the company to expedite the process and reach production earlier.

“…from there, you apply for mining permits. So, the advanced exploration permit enables you to put in the infrastructure that you need to actually do the mining and toll milling, and, you know, so that timeline is from the middle of next year, it could be 18 months, it could be much shorter than that.”

Makwa Mayville Nickel-Copper Project

The Makwa Mayville project of the company is located in the Bird River Greenstone Belt approximately 145 km from the city of Winnipeg in Manitoba.  The project hosts two Ni 43-101 compliant resources which contain nickel copper platinum group metals and cobalt mineralisation. The indicated resources of the project amount to 33.8 million tons of mineralisation at a grade of 0.27% nickel, 0.37% copper, 0.06 g/t of platinum and 0.19 g/t of palladium. The indicated resources of the project total 5.8 million tons of mineralisation at a grade of 0.19% nickel, 0.43% copper, 0.06 g/t of platinum and 0.15 g/t of palladium. The project had a PEA conducted on it in 2014, with its envisioned operation being that of a blast-and-haul open pit operation with the ore transported to the Mayville site. Dunbar explains that Grid Metals Corp. plans to publish a preliminary economic assessment (PEA) on the project in early 2023.

“That'll put some new economics on the project. And then, that'll enable us to have a document to talk to the market about. The next step will be more drilling, trying to expand the resource but at the same time working on a pre-feasibility stage study.”

Dunbar explains that the company plans to include an industry partner at the project in the future to advance the Makwa Mayville project at an increased pace. The production of battery metals in North America is sought after by various EV manufacturers, not only due to security and proximity of supply but also the tax benefits the manufacturers can enjoy under the Inflation Reduction Act.

“The way we finance that is, you know, by bringing in an industry partner who is looking for metal that can go into the supply chain for the OEMs in North America and that's where we're seeing interest. They want a North American supply of metals, particularly nickel, that they'll get credits for under the Inflation Reduction Act. So, if they build a car in North America, batteries, whatever it is, they get the tax credit for the person ultimately buying the EV.”

2023 initiatives

Grid Metals Corp. will in 2023 continue to focus on advancing its Donner Lake project and Makwa Mayville project according to Dunbar. The aim of the company at its Donner Lake project is to further increase the mineral resources of the project which will add to the value of the planned toll mining agreement.

“We have been working in the area in Southeast Manitoba for a long time. It’s a big area but there are still things that we're working on that will sweeten the pot, so to speak. But, basically, on the lithium side, we want to grow the resource, high grade, make it a big, robust resource. That's key and we have two drills, as we speak, they're drilling away and, that takes time and money and that's what we're doing. So that is kind of moving ahead.”

The company has the goal of advancing its Makwa Mayville project to a size of between 10 and 20 million tons of mineralisation according to Dunbar. The mineralisation size coupled with the company’s lithium asset will then position the company to become a dominant junior mining company in the area in the future.  

“I would like to see 10, 15, 20 million tons in a resource in southeast Manitoba which is a fantastic location, which is going to become a hub in nickel. And we will be the dominant junior in lithium exploration and development in southeast Manitoba which will feed into the state.”

The simultaneous advancement of the company’s projects is aided by the close proximity of its projects. The proximity, according to Dunbar, enables the company to use the same service providers or vendors for both projects.

“The reason we're doing two things is they're right on top of each other. They’re literally right beside each other. And that's the way. So, those actually present some real opportunities in terms of, how we explore, permitting - all these things. We go talk to the same people, and use the same team so it creates some opportunities for us.”

Grid Metals Corp. aims to position itself as a valuable player in the growing battery metals market. Dunbar believes that the company will in the following years be able to capitalise on the growth of the market, as it is currently with its potential toll mining agreement, to further create value for its shareholders.

“So, we want people to see, “Okay, lithium. They're building the resource. They're looking at short-term production. They’re trying to get to scale. Base metals - they've got a good project. They're trying to move that along. You know, they're advancing that project.” So, over the next, one or two, three years, both these are going to be very valuable streams of potential metal revenue. That's really what we're trying to build.”

To find out more, go to the Grid Metals website