You might recall how, in the mid-80s, a band called Timbuk 3 declared that "the future's so bright, I gotta wear shades." That pretty much sums up Harry Barr's outlook for Pacific North West Capital Corporation (PFN) and its platinum group metals (PGM) project in the Sudbury region.
Barr, a silver-haired veteran of mining and exploration who has a straight-shooting conversational style, is Chairman and CEO of the Vancouver-headquartered company soon to be operating as New Age Metals Inc. (As of December, an official name change was scheduled for January.) PFN's corporate core is the River Valley (RV) project, approximately 16,000 acres believed to hold more than 2.5 million ounces of measured resources below ground.
Barr expresses confidence that, after more than 15 years of exploration activity that included drilling hundreds of holes and spending tens of millions of dollars, RV is not far from landing a strategic partner and becoming a producing open-pit mine. "We're hoping that mining could happen in the next three to five years," he says from PFN's 'Ontario field office' near Kingston.
There are six metals in the platinum group, but the focus in the mining world is on platinum and palladium, which along with rhodium are in the palladium subgroup of PGM. These precious metals tend to be found together in nickel-copper deposits.
Platinum is valued for its silver-grey lustre, considerable strength, malleability and resistance to corrosion. Though a rare metal, it's commonly used in the making of everyday items including jewelry and cellphones. Also, that automobile you drove to work this morning probably contains platinum in its catalytic converter and/or spark plugs.
Like platinum, palladium is malleable, ductile and rare. In fact, it's one of the 10 rarest elements in the earth's crust. Removed from ores after the platinum and gold have been removed, palladium is (again, like platinum) used as a catalyst and jewellery component. Car and truck catalytic converters commonly contain palladium, and the element is used in production of sulfuric acid.
Presently more than half of all PGM production is out of mines in South Africa, and most of the rest is from Russia. The two countries combined account for over 80% of global PGM production. Two companies, Anglo American PLC and Impala Platinum, produce most of the world's new platinum and palladium every year. North American Palladium's Lac des Iles mine northwest of Thunder Bay is one of only two primary PGM producers on this continent, along with Stillwater Mining Company's PGM operation in Montana.
River Valley could potentially be home to North America's third primary PGM mine – a development that would no doubt be welcomed by North American manufacturers who are dependent on African and Russian sources.
NEAR-SURFACE RESOURCESBilled by its owners as "the largest undeveloped primary PGM resource in Canada," the River Valley project is located in the Dana and Pardo townships east of Sudbury in a region historically famous for rich nickel and coppr deposits. The project's resources are 'near-surface' and less than 100 km in road distance from the city, with rail infrastructure also nearby.
After discovering the RV deposit in 1999-2000, PFN partnered with Anglo American to build a case for mining. Barr explains that Anglo American spent about $30 million on RV, but "by 2008 or 2009, we found ourselves underfunded" as the multinational miner turned its attention away from the project. The partnership dissolved and PFN became 100% owner.
Some 600 holes have been drilled at RV, with promising results. The deposit has 2.46 million ounces of platinum group metals and gold in measured and indicated resources, according to a 2016 PFN investor presentation. (The presentation duly notes, "Mineral resources are not mineral reserves … there is no certainty that all or any part of the mineral resource will be converted into mineral reserves.")
More recent chapters in the River Valley story involve an exciting discovery and an acquisition.
First, the discovery: "We drilled in 2015 and made a significant discovery we call the T2," Barr explains, adding that the discovery "could significantly impact the development potential of our River Valley project."
As for the acquisition, it's dubbed "the River Valley Extension" and was made in an August 2016 transaction with Mustang Minerals. The extension increases Pacific's strategic land position at River Valley to roughly 64 sq. km. or 16,000 acres.
The company also has an interest in potential lithium mining in southeastern Manitoba (where it has five wholly owned lithium projects) and Nevada (one project). The Manitoba projects are all located near Cabot Corporation's Tanco mine (tantalum, cesium) in the Cat Lake area.
"We hope to get to the drilling stage in 2017," Barr says of the Manitoba projects. "That includes a complete geological report of the properties with recommendations to go forward. Our objective is to get at least two or three of them into the drill stage by the end of Q1 of 2017."
Barr, who has been in mining and exploration for almost 40 years, has quite an experienced and well-credentialed team working with him. President and COO Colin Bird is a mining engineer with decades of international mining experience that includes being former chairman of Jubilee Platinum. Vice-President (Business Development) Trevor Richardson is a Laurentian University alumnus with extensive exploration experience in Canada and Africa. (Richardson was also appointed President of Pacific's sister company, El Nino Ventures Inc., in September 2016.) Bill Stone, formerly with Magma Metals and North American Palladium, is Principal Consulting Geologist.
PGM supply and demand seem to be working in Pacific North West's favour. As Barr notes, the demand side of the PGM market is likely to grow in the next few years due to global growth in automobile sales. And the supply side will have trouble keeping up with demand since, in Barr's words, "PGM mines are getting very depleted in other parts of the world." In fact, worldwide demand exceeded supply for both palladium and platinum in 2015.
Another factor in RV's favour is that Ontario is such a stable, mining-friendly jurisdiction. South Africa's platinum mines, including Anglo American and Impala Platinum's biggest operations, endured a months-long labour strike in 2014; Ontario seems safe from major disruptions.
Barr sounds optimistic when speaking of the search for a new partner. "We're talking to groups every day," he says. "We think a strategic partnership could easily happen in the next six months to a year. We're about to go to a big convention in South Africa, and hopefully we'll have good luck over there. We think in the next six months to a year we should be able to find a partner."
Developing a property into a producing mine is no easy task, but Barr tackles it with admirable aplomb. As he said to the Sudbury Star in September: "You've got to have faith, you've got to believe." He has that faith, and he sees a bright future in River Valley.