Platinum Market Tightness Meets Execution Optionality at Clean Air Metals

• Clean Air Metals operates the Thunder Bay North project, a rare primary platinum asset in North America with 14.9 million tons of indicated resource and an 11-year mine life at 2,500 tons per day
• The company's PEA shows strong economics with a post-tax NPV of CAD $219 million at a 39% IRR, which increases to CAD $700 million NPV at current spot prices with a 100% IRR
• Management is pursuing a dual-track strategy for 2026: advancing toll milling studies while evaluating a standalone mill option that could position the site as a regional processing center
• The platinum market shows compelling fundamentals with a growing deficit approaching one million ounces annually, driven by declining South African supply and increasing demand from hybrids, industrial uses, and investment demand
• The company recently intersected significant mineralisation 400 meters down plunge on the Escape deposit, demonstrating substantial exploration upside across 2.5 kilometers of largely untested strike length

Clean Air Metals (TSXV:AIR) represents an increasingly rare investment opportunity in the North American platinum sector. With the Thunder Bay North project in Ontario, the company controls one of the few primary platinum assets on the continent at a time when supply-demand fundamentals are turning decisively favourable for the metal.

CEO Mike Garbutt brings substantial operational experience to the role, having spent 14 years with Falconbridge (Glencore's predecessor) and time with KGHM International before joining Clean Air Metals in mid-2022. His background in mining engineering and project development positions him to execute on the company's near-term production goals.

The Platinum Market Opportunity

The platinum market presents compelling fundamentals that underpin Clean Air Metals' investment thesis. 

"Platinum is an interesting case. It is a precious metal, but it has some great industrial use. The bottom line is it's a pretty small market, 6 to 7 million ounces, and there's a growing deficit, nearing a million ounces a year."

The supply side faces multiple headwinds. Primary mine supply from South Africa, which dominates global production, continues to decline. Additionally, recycling from catalytic converters has fallen to a 15-year low, removing a key secondary source from the market. These supply constraints are occurring just as demand accelerates across multiple sectors. On the demand side, the narrative around platinum has evolved significantly. 

"People would talk about the demise of platinum and palladium because of battery electric vehicles, and that's not entirely the case. The platinum loadings in hybrids and plug-in hybrids is actually quite higher than what you get in the combustion engine."

Beyond automotive applications, platinum demand is expanding in industrial uses, particularly chemical production in China, jewellery, and the emerging hydrogen economy. Perhaps most significantly, investment demand has surged. 

"With global instability and ongoing concerns about inflation, people have ran to platinum as a ...low-cost store of value as opposed to gold, and it's getting taken up in large quantities in Asia at the moment."

Project Economics and Development Strategy

Clean Air Metals' Thunder Bay North project contains 14.9 million tons of indicated resource with a polymetallic composition that provides revenue diversification. The resource breakdown shows 25-30% copper, 35% platinum, 25-30% palladium, with additional nickel, gold, and silver credits.

The recently completed Preliminary Economic Assessment outlines an 11-year mine life processing 2,500 tons per day. At metal prices current during the study, the project showed a post-tax NPV of CAD $219 million at a 39% IRR. However, with spot prices having approximately doubled since the study, 

"we're looking at $700 million NPV at 8% discount rate and 100% IRR, just astronomical numbers."

The PEA evaluated a toll milling scenario that keeps onsite infrastructure minimal by shipping run-of-mine material to an existing processing facility. This approach significantly reduces upfront capital requirements to under CAD $100 million. "The capital costs are really quite manageable, under $100 million certainly," Garbutt confirmed.

Dual-Track 2026 Strategy

Management is pursuing parallel paths in 2026 to maximise optionality. The first track involves advancing toll milling metallurgical studies to optimise recoveries under that processing scenario. 

"What we want to do is do some testing specifically on toll milling to better understand the potential or what needs to be done to improve recoveries on a toll milling basis." 

Simultaneously, the company will conduct advanced technical studies on a standalone mill option. This could position Thunder Bay North as a regional processing center for northwestern Ontario's nickel, copper, and PGE assets. "Being a regional toll milling center is kind of needed in the region," Garbutt noted, highlighting the strategic value beyond the company's own production.

The company is also advancing exploration permitting that would allow ramp development and bulk sampling while full operational permitting proceeds. This approach compresses the timeline to production by allowing underground access and validation work to occur in parallel with regulatory processes.

Interview with Mike Garbutt, President & CEO of Clean Air Metals

Exploration Upside

While the buildable asset provides the foundation, significant exploration potential remains. Late in 2025, the company achieved a major success on the Escape deposit. 

"One of the most exciting things last year was intersecting the Escape down plunge. Stepped out 400 meters and on our first hole we hit 50 meters of mineralisation."

This intersection validates the company's targeting methodology across 2.5 kilometers of largely untested strike length. 

"We have 2.5 kilometers of strike that's generally untested and we've proven the methodology of targeting, so I think we maybe need to do a bit more work and really demonstrate that. But I think that has the greatest potential for scale for us." 

Strategic Partnerships and Financing

With approximately CAD $1 million in treasury, Clean Air Metals will need to raise capital to execute its 2026 plans. However, management is actively pursuing strategic partnerships that could provide non-dilutive financing. 

"If scale could get us some non-dilutive financing, someone would come in as a JV partner, that would be ideal."

The company is engaging with mid-tier producers who share the long-term view on PGE fundamentals and could benefit from regional consolidation opportunities in northwestern Ontario. While willing to pursue traditional equity financing if needed, management views a joint venture arrangement as the optimal outcome for shareholders.

Jurisdictional Advantages

Ontario provides significant advantages for project development compared to other platinum-producing jurisdictions. Government support at both federal and provincial levels includes improved regulatory frameworks and various funding mechanisms. Critical minerals designation for platinum, palladium, and copper further enhances access to government programs. Equally important are relationships with First Nations communities. 

"Companies that have good relationships and actually are looking to have First Nation communities actively involved in the development as opposed to just looking to inform communities but actually having them involved, that is actually the difference maker in Canada and Ontario."

VP of Sustainability and Community Kris Tuuttila leads these efforts, bringing deep knowledge of regional permitting and community engagement. Combined with government support, these relationships provide a pathway to accelerated development timelines compared to other jurisdictions.

Market Positioning and Outlook

Clean Air Metals occupies a unique position in the North American PGE space. 

"As people start paying attention to PGEs and particularly platinum, they're going to take a look around and not see a whole bunch of assets of our quality and at what stage we're at."

The company differentiates from other PGE projects that require CAD $1.5-2 billion in capital. 

"We're low risk, low capital, good grade, and reasonable size. There's got to be a space for assets like us to be built in North America.”

With platinum prices remaining elevated, supply constraints persisting, and demand growing across multiple sectors, Clean Air Metals is positioning to capitalise on what management views as a sustained favourable market environment for the metal.

The Investment Thesis for Clean Air Metals

• Rare North American primary platinum asset in a market dominated by aging South African mines facing declining production and increasing technical challenges
• Compelling project economics with post-tax NPV of CAD $700 million and 100% IRR at current metal prices, representing substantial leverage to sustained elevated platinum pricing
• Low capital intensity toll milling option under CAD $100 million enables near-term production pathway with manageable financing requirements and reduced development risk
• Significant exploration upside demonstrated by recent 50-meter mineralised intersection 400 meters down plunge on Escape deposit, with 2.5 kilometers of strike length largely untested
• Polymetallic revenue diversification with 30% copper contribution provides natural hedge and additional leverage to copper's strong fundamentals
• Strong jurisdictional advantages in Ontario including government support for critical minerals, streamlined permitting frameworks, and productive First Nations partnerships
• Potential for non-dilutive financing through strategic partnerships with mid-tier producers seeking regional consolidation opportunities and PGE exposure
• Standalone mill optionality positions asset as potential regional processing hub, creating additional revenue streams and strategic value
• Market timing advantage as institutional investors increasingly recognise platinum's role in decarbonisation, hydrogen economy, and as inflation hedge/store of value

Macro Thematic Analysis

The global platinum market is experiencing a structural transformation that creates compelling investment opportunities for primary producers in stable jurisdictions. The market's relatively small size of 6-7 million ounces annually makes it particularly sensitive to supply disruptions and demand shifts. South African production, which dominates global supply, faces multiple headwinds including aging infrastructure, declining ore grades, increasing depth, and operational challenges that have led to sustained production declines.

Simultaneously, recycling from catalytic converters has fallen to 15-year lows, removing a critical secondary supply source just as primary production struggles. This supply squeeze coincides with expanding demand across multiple sectors. The automotive transition, rather than eliminating platinum demand, is actually increasing it through higher loadings in hybrid and plug-in hybrid vehicles, which are growing at 10-15% annually and outpacing battery electric vehicle adoption.

Industrial applications, particularly in Chinese chemical production, continue expanding while the hydrogen economy represents substantial future demand potential. Most significantly, investment demand has surged as investors seek lower-cost precious metal exposure amid geopolitical instability and inflation concerns. Asian buyers in particular are accumulating platinum as a store of value alternative to gold. This combination of constrained supply and diversified, growing demand supports a sustained higher price environment.

Clean Air Metals CEO Mike Garbutt captured the opportunity succinctly: "We've been talking about the fundamentals being good for a while now and now it's coming home to roost." With metal prices approximately double those used in the company's economic studies, the margin expansion and project economics improvement demonstrate the substantial leverage platinum producers have to these favorable market conditions.

TL;DR: Executive Summary

Clean Air Metals controls one of North America's rare primary platinum assets with robust economics showing CAD $700 million NPV and 100% IRR at current metal prices. The company is pursuing a capital-efficient toll milling pathway requiring under CAD $100 million while exploring standalone mill options and seeking strategic partnerships for non-dilutive financing. With platinum fundamentals strengthening due to South African supply declines and diversified demand growth from hybrids, industrial uses, and investment demand, the Thunder Bay North project offers substantial leverage to sustained elevated pricing. Recent exploration success intersecting 50 meters of mineralisation 400 meters down plunge demonstrates significant upside potential across 2.5 kilometers of largely untested strike length.

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