Quebec Precious Metals (QPM) - 'A Resource isn't Essential for a Sale'

Quebec Precious Metals Corp. (QPM) is a Canadian gold explorer with a district-scale land package and is currently advancing its Sakami project in the Eeyou Istchee James Bay territory, Quebec, near Newmont Corp Eleonore gold mine. The company's flagship asset is the Sakami project with significant grades and well-defined drill-ready targets. 

Matt Gordon caught up with Normand Champigny, CEO, Quebec Precious Metals. Normand is a geological engineer with extensive experience in both public and private companies. He currently serves as a Director at Bonterra Resources. He has been involved with various aspects of the mining industry, including engineering, project evaluation, and project management for both domestic and international markets.

He previously served as an Executive Committee Member of the Prospectors and Developers Association of Canada. Normand also served as the Chair of the Board of Directors of Minalliance. He has also served as an Executive Committee Member for the Prospectors and Developers Association of Canada for several years. His educational credentials include a B.A.Sc degree from Ècole Polytechnique in Montreal, an M.A.Sc degree from the University of British Columbia, and a Specialized Diploma in Geostatistics from Paris School of Mines. 

Company Overview

Quebec Precious Metals is a new gold explorer with a significant land package in Quebec. The company was founded in 2018 and is headquartered in Canada. Matamec Explorations Inc. is the company's subsidiary. The company is listed on the Toronto Stock Exchange (TSX-V: QPM), the OTC Markets (OTCQB: CJCFF), and the Frankfurt Stock Exchange (FSE: YXEP). The company has a current market cap of $20M. 

Quebec Precious Metals is focused on finding the next gold mine in the James Bay region of Quebec. The company is focused to maintain its image as an entity that conforms to environmental and social norms. The company's CEO also helped create a Communication Fund in Quebec to improve the overall image of the mining industry in Quebec.

The company was created through a merger of 2 existing publicly traded companies along with the assets of a third company that was being run by Mr. Normand Champigny in 2017. This led to the formation of Quebec Precious Metals Corporation over a course of 10 months. The company obtained funding through Newmont (formerly Gold Corp). Newmont is the largest shareholder at QPM with a 13% stake. 

The company was successful in locating a mine which would later be called the Sakami project, located within the James Bay Gold Mining Camp. Since then, the company has been aggressively drilling the asset. As a result of the merger, there were a lot of non-core assets apart from gold which are present outside James Bay. The company has been offloading these assets for the past 3 years as it continues to focus on its flagship project. 

Quebec Precious Metals plans to use the funds from offloading non-core assets to advance its Sakami project, carrying out drill operations, identifying a significant resource, and eventually selling it to a developer or a producer. 

The Agreement with Vital

In August 2021, Quebec Precious Metals signed an agreement with Vital Metals to offload its 2 heavy rare earth projects based out of Quebec, Canada. As part of this agreement, Vital Metals will buy QPM's 68% stake in Kipawa and 100% stake in the Zeus exploration projects. 

This ongoing transaction is expected to close by 2021-end. Vital Metals is expected to pay QPM $8M over a 5-year period. This capital will be broken down into $2.5M payments for years 1 and 2, followed by $1M payments annually for the next 3 years. This agreement is in-line with Vital Metals' strategy to become a major Rare Earths producer in North America. 

The Tansim Lithium Project Transaction

In October 2021, QPM sold a 2% NSR (Net Smelter Return) royalty for the Tansim lithium project to Lithium Royalty Corporation. QPM has already received $2M for this transaction by invoking the buyback provision within the agreement. 

In January 2021, QPM had received a payment of $250,000 through Sayona Mining Limited and Sayona Quebec Inc. (collectively known as Sayonda Qc) by exercising the second option to acquire an additional 50% interest in the Tansim lithium project's mining rights. Currently, Sayona Qc owns 100% interest in the project. 

Drill Operations

Quebec Precious Metals is looking to invest the capital raised from offloading its assets towards drilling the Sakami project. A 10,000m drill operation is planned to commence by late fall or winter as it's easier to drill on frozen ground. Following this, the company plans to start another drilling campaign in 2022 winter as it continues to advance the project.

During the summer of 2021, the company carried out surface work to identify and expand drill targets. The company has an internal model in place that is aimed at a 2Moz resource for a standalone gold operation. 

Quebec Precious Metals is closely working with consultants to assess the drill results and plans to disclose the numbers by 2021 end. The company is looking for an open-pit operation with targeted grades averaging between 1g/t-1.5g/t. Based on the grade contours of the thickness of the deposit, the company anticipates that this resource has the potential for a 2Moz resource. 

The La Pointe Deposit

In 2020, the company drilled a recent discovery called the La Pointe Extension. This extension offers promising results with the current drill operations. The company has found potential for an extension at depth and along strike length. 

The company is focused on the La Pointe Extension and plans to carry out surface work in the summer to show the extension of the zone towards the southwest. This site will play a major role for the company to add higher-grade material to the developing resource. Quebec Precious Metals is prioritizing the development of the best possible resource before disclosing it to the market. 

The La Pointe deposit has been drilled up to a depth of 600m. The company discovered mineralization at a depth of 300m-400m from the surface, making it ideal for an initial pit. This will eventually develop into an open-pit operation.

Published Data

The company plans to publish additional drill results in the coming months. It is carrying out metallurgical work on its assets. The results received so far have been positive with up to 90% recoveries. The modeling for the asset is being carried out by 2 consulting firms along with the company's in-house consultant. 

The company has made all drill information available on its website including the raw data on assays and sample position. It also features a 43-101 report for the assets. 

Cash Position

Earlier in 2021, the company had a successful financing round raising $3M and has the ability to raise additional capital if need be. Quebec Precious Metals currently has $4M in cash flow, with an additional $2.5M expected from the Vital Metals transaction. This brings its overall equity to $6.5M with additional payments due over time. The company has the financial capability to carry out drilling operations for the next 2 years and is not looking to raise more capital in the near future. 

A large part of this financial sufficiency is due to the offloading of the company's non-core assets. The company is looking to offload its Matheson project in Ontario. QPM has a 50% interest in the project along with a private company. It is looking to offload this asset in the coming months for an approximate price of $0.5M. 

ESG Component

Quebec Precious Metals is dedicated to an operation that is ESG (Environmental, Social, and Governance) compliant. Its operations are based within the Cree Nation Territory. The Cree Nation has signed 3 agreements with the Province of Quebec over the years to foster economic development. These agreements made the First Nations community the largest beneficiaries of mining activity carried out in the region.

QPM is looking to develop strong partnerships with the Wemindji community. The company has assisted the community through construction and snow removal. QPM is looking to involve the community personnel in the conceptual engineering for its planned open-pit, which requires a cofferdam. This will be achieved through a reservoir that is controlled by Hydro Quebec. Eventually, the company plans to grant the local community ownership of the project and eventually assign them shareholder positions.

Quebec Precious Metals has also made a submission to ECOLOGO, a certification process that demonstrates that a company is carrying out exploration while conforming to the safety, and environmental norms along with protecting the local communities through good governance. Currently, this submission is in the auditing phase and approval is expected within the coming weeks.

The Elmer East Project

The Elmer East Project was discovered by Patwon in 2020 through an airborne survey, compilation work, and a targeting study in collaboration with GoldSpot Discoveries, QPM's shareholder and partner. This area was named Lloyd in honor of the trapline owner Lloyd Mapo. 

Quebec Precious Metals has carried out surface sampling, 2 rounds of channel sampling along with detail mapping at this site. The results for these surveys are expected in the fall. Based on these results, the company will allocate drilling resources to the site. The company also made a small discovery north of the deposit. 

Targets 2021 and Beyond

Quebec Precious Metals is looking to balance its resources between the La Pointe Extension with an 80% focus on the extension and 20% focus on the 23km trend. This 23km area is equivalent to a mining camp where the company is seeking to identify additional drill targets. A limited number of targets have been tested in this area so far. 

In the northeast area of James Bay, the company has the Blanche and Charles projects. These projects are high-prospect sites that are under planned exploration in the future. The company is looking to strike a balance between advancing the Sakami and La Pointe projects while also taking other areas into consideration.

To find out more, go to the Quebec Precious Metals Website