Group Ten Metals (PGE) - PGEs, Nickel and Copper: What is the Upside?

Group Ten Metals (TSX.V: PGE / OTCQB: PGEZF) is a Canadian mineral resource exploration company focused on the advancement of the flagship, 100%-owned, district-scale Stillwater West PGE-nickel-copper project on the doorstep of the high-grade Stillwater mines in Montana, USA. Group Ten also has 100% ownership of two district-scale polymetallic assets in Canada that it has been unable to monetise.

Rowley co-founded Group Ten Metals in 2007. In 2012, the company consolidated a district in Ontario, and in 2015, it turned its attention to the nickel-copper-PGE space in Yukon. In 2017, the company obtained Stillwater. The business plan is a simple 'bank land, de-risk, add value' strategy.

Matthew Gordon interviews Michael Rowley, 10th June 2020

With C$3M in the bank, Group Ten could have some difficulties choosing exactly to focus on. Rowley stated that the real focus is on Stillwater, debuting the resources and presenting the potential to the market. While Rowley does attribute value to Group Ten's non-core assets, he states there has been little investment appetite for the properties until the last two years came around. If anything, in a bear market cycle, these minerals have been viewed as liabilities by majors. With the market starting to turn, Rowley claims that majors are circling around the non-core assets like hungry sharks. We certainly hear this a lot, but he is adamant that the market is now back on Group Ten's side.

Group Ten intends to conduct drilling on the "5 most advanced areas of Stillwater." If these targets reveal significant potential, Rowley can revalue the company around those resources. This means Group Ten can raise money at higher prices and carry out larger, more advanced drill programmes. The market might be forgiven for feeling a little nervous about Group Ten's ability to deliver, given that the company has had no discernable success since 2007 and failed to monetise its Canadian assets.

With the C$3M, and potential additional investment coming in, Rowley feels the company can make a deal with a strategic partner at any time; his focus is on making the right one. However, he wants to add plenty more value to Stillwater before any of these discussions progress further. The key objective is to deliver the resources, revalue the company around the maiden resources, and determine the amount of field exploration to be conducted. Given it's such a large land package, I'd have liked to have heard a more specific plan.

Pushing the project forward is, at its core, an experienced, successful team. Chairman, Greg Johnson, took NovaGold from C$0.10 per share all the way up to a C$2B market cap. There are several other notable presences, but some of the team are juniors. Rowley labels it a "truly world-class team."

This "world-class" management team owns a meaningful 29% of Group Ten Metals, and they paid for all of them. The institutional component of the share registry is also solid, at 20%. Group Ten's neighbour might have been purchased for US$2B, but I will be holding fire until Rowley can show me something more concrete that generic marketing talk; I want to see hard numbers. Existing shareholders have been long-suffering, and this huge, highly-prospective land package isn't doing anything for them while it has a sub-par valuation attached to it.

The management team is remunerated via a contracted salary, but Rowley claims to take steps to cut costs where he can. The message to the marked it that he understand Group Ten owes the market better, more detailed information, and it owes shareholders some concrete growth. Let's see what the rest of 2020 has to offer for Group Ten Metals.

What did you make of Michael Rowley and Group Ten Metals?

Company Website: https://grouptenmetals.com/