"When you and I first got together three and a half years ago, Peter, that option was not available to us. We are focused primarily on trying to accelerate the startup of the mill. When the opportunity came up to work with a New Afton, we thought that was great. Rather than having to go to the market for the small equity raises, where shareholders are diluted we thought that we should monetize a portion of the surface stock pile. When we last talked, I think we were estimating that pilot plant of about $23 million Canadian. Today with better copper, gold, and silver price is it's worth well over thirty." Ian Berzins, July 12, 2024
https://cdn-ceo-ca.s3.amazonaws.com/1j92v6j-2024-07-12-CCMI-Ian+Berzins+CEO+interview+MP3.mp3
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@Newton: Hello, this is Peter and I'm here with Mr. Ian Berzins, president and CEO of Canadian critical minerals incorporated. Hello Ian.
$CCMI CEO Ian Berzins: Hi, Peter. Good to catch up.
@Newton: Four years flies by doesn't it?
$CCMI CEO Ian Berzins: Well, it's only three and a half but, but you're right.
@Newton: $CCMI on the TSXV. Congratulations on your news there yesterday. July 10, 2024, we are starting to see a bit of a hockey stick in your revenue from the small scale mining thing that you have going on.
$CCMI CEO Ian Berzins: Yes.
$CCMI CEO Ian Berzins: Yes, you're correct. We began a process almost eighteen months ago with NewGold where we learned that they had capacity in their mill. They took samples of our material and they liked it. It's compatible and so we began a process where they approach the government and amended their operating permit in order to accept our material. What we're sending over to them is stock pile material that came out of out of mining operations here at Bull River between about 1996 and 2010.
@Newton: Beautiful.
$CCMI CEO Ian Berzins: We're learning everyday. We are using what's called an ore sorter. We're learning how to optimize that machine because we're about 650 kilometers away from mine to mine. There's a long haul distance for us to be sending material over. We're trying to work the economics so that both New Gold and ourselves also find it profitable.
@Newton: Wow.
@Newton: Great work! Really impressive to see you going through the checklist of things there, executing on a strategy that I've heard a lot of people talk about for a few years now. The ideas are easy, execution is hard. I'm really impressed to see you guys actually moving this forward that way. Thank you. I think we need more of this in the BC junior mining business.
$CCMI CEO Ian Berzins: It's still early days but what is interesting is a lot of people in Canada talk about this hub spoke type situation where you're sending material to a central mill.
$CCMI CEO Ian Berzins: When you and I first got together three and a half years ago, Peter, that option was not available to us. We are focused primarily on trying to accelerate the startup of the mill. When the opportunity came up to work with a New Afton, we thought that was great. Rather than having to go to the market for the small equity raises, where shareholders are diluted we thought that we should monetize a portion of the surface stock pile. When we last talked, I think we were estimating that pilot plant of about $23 million Canadian. Today with better copper, gold, and silver price is it's worth well over thirty.
$CCMI CEO Ian Berzins: But the interesting thing for us is to the best of my knowledge, we are the only mining company North America that's using an ore sorter on a copper sulphide ore. There are a number of projects in Canada that I think will be interested to see how we progress. The real big change for us is when we did our test work with TOMRA in Germany back eighteen months or so ago. We felt that we'd be probably capturing about sixty percent 60% of the metal would go into about ninety-five percent 95% of the metal. Then the waste would have a little bit of metal in it. What we found is that we're able to actually create what I would call the "super con".
$CCMI CEO Ian Berzins: The rejects from the ore sorter actually have sufficiently high-grade between point four 0.4% Cu and one percent copper 1% Cu that they will be economic to put through our own mill once we get up and going. We like the sweet spot that we're working with now, producing above 4.75% Cu copper and the copper equivalent is almost five and a half or higher 5.5% Cu Eq. At this point, we're gonna stick with that for another month and see where we go. Peter, you mentioned the hockey stick. I think we should be able to plateau at this level of USD $250,000 per month and maybe a little bit better now that we're running seven days a week.
@Newton: So many important details in this mining engineering skill set for speculators here. A lot of people may think they're familiar with mining exploration concept, but when you start talking about metallurgy, recovery rates, mass pull -- oh boy, it gets even more interesting really quickly. This is where the rubber meets the road for mining. In my mind, this is a pretty important definitive test. And all the underground mine workings -- there are so many different aspects of this story that are important to understand. I think it's good for investors to get more exposure to this story because it kind of demands a particular skill set and knowledge set that may not be widely distributed in the Canadian investor base. That's why I wanted to reach out and make a recording to put this out for public consideration.
@Newton: There are a bunch of details that I'd love to get into with you, but I don't wanna bog the conversation down too much. There's one quote from the news release I think is related to what you're referring to you there before about the fines stock pile. Apparently 25% percent of material on surface was created during the original crushing and screening process, but it's too small for the X-R-T process to effectively separate. You've got grades for the fines from zero point four to one percent 0.4-1% Cu. And the cut off grade is point four with this quote that virtually all the fines and reject material can be economically processed at the Bull River Mine once the company has received permission to restart the mill. That's a quote from the news release tied into what you were just referring to, if I understand correctly. Good work, thank you.
@Newton: There are little details in these news releases that have a whole bunch of context behind them. I think it's a good challenge for investors to wrap their heads around stories like this, figure out what's really going on and what it means.
$CCMI CEO Ian Berzins: Thanks, Peter. One thing to clarify is that the fines representing 25 percent of the stock pile are run-of-mine. The fines are gonna grade notionally about 1.4% copper but they're too fine to be picked up through the ore sorter -- what we would be doing is taking the fines at 1.4% copper with the rejects at 0.4% to 1%. We'll end up having a nice grade of material to go through our own mill.
@Newton: Perfect, thank you. The broader question I have is if we take a step back and look at the historical facts. The stockpile at surface is not your material, right? You said 1994 to 2010, I believe. And the question about permits when touching old surface material is important to me. If we're going to put the conversation into the weeds, then that would be the set of weeds that I would pick. I am most curious about industry perspective on permitting because it seems like a moving target because the change is happening so fast around the world and happening in BC right now. If I could ask what kind of clean-up opportunities are there on a for-profit basis? You're not talking about tailings remediation. You're talking about run of mine waste. That whole conversation is important to me.
$CCMI CEO Ian Berzins: If I circle back to when we began our application to restart the Bull River Mine, we were looking to do a phased approach. We would initially mill the surface stock pile and then we would go underground. We thought that would make it easy for government to understand what we're trying to do. Some aspects of the restart involved additional studies and the process is taking a couple of years. We are through what's called the pre-application phase and the government is really waiting on us for our final application. We have a couple of engineering studies like hydrology and hydro-geology that need to be completed before we do our final submission. The permit process is smooth and we're not waiting on government right now. Government is waiting on us. The real game changer for us is that by being able to produce this much higher concentrate grade potentially changes our strategy where we may actually want to get permission to go back mining underground, which we had before.
$CCMI CEO Ian Berzins: If we continue to produce a high-grade product then it may allow us to pay as we go for the upgrades that need to be done. Right now, we have a fully developed underground mine. We have to basically rebolt and rescreen the main decline to access the immediate workings. We've got a couple of balls in the air in terms of making sure that the permits that we asked for end up covering what we really what we want to do. When a permitting process takes multiple years, the operating conditions and priorities for the company change from when it starts to when it ends. At this point in time, we're very comfortable. We're working with the Ktunaxa First Nations. They've been involved with the project. We have capacity funding agreements with Ktunaxa First Nations and we're collectively trying to move to the next phase, which would be to restart the underground mine.
@Newton: Good for you. And what does that capacity funding agreement look like?
$CCMI CEO Ian Berzins: I can't get into some of the details, but we compensate or refund some engineering studies costs to the Ktunaxa First Nations for work they would like to do with their own consultants. Basically, it helps them to better understand the project. At this point in time, one of the main issues we encountered was the perception of selenium, which is a big issue in the Elk Valley because of the Teck coal mines. Maybe I should say the Glencore coal mines now. The coal mines have been liberating selenium for years. Selenium is really in the background water at the Bull River Mine. We do not have an issue with selenium and we've been able to demonstrate that with our consultants. It was a bit of a speed bump a couple of years back. After we talked to Ktunaxa First Nations and the BC government, we have not yet been through the environmental assessment department as a reviewable transaction and we were able to get that seven months later.
$CCMI CEO Ian Berzins: We recieved a positive determination. The project is advanced -- it's got roads, it's got grid power, there are no material impact to the footprint, and no hazard to the public. The environmental assessment department determined that our project should not have to be reviewable. That was one of the milestones for us, but it did delay putting in some of the portions of the application.
@Newton: No shortage of delays and challenges with project development at this phase. This is really high stakes stuff, as it should be. If bad decisions are made in the early planning stages, then it can cause disasters to play out years later, decades later, and even beyond. The environmental legacy impacts of some of these projects is incomprehensible.
$CCMI CEO Ian Berzins: Our project is a little bit different. We have an old tailings pond that's over fifty years old with no effluent in it. It's really just a pile of dirt on the side of the hill. It's not going anywhere. What we're planning to do is introduce dry stack or filtered tailings storage standards initially. Down the road, we would plan to return the majority of the tailing back underground in to a paste backfill, so the footprint will be modest all things being considered.
@Newton: In the future, the mining world seems to be more and more underground. Looking at some of these broad conversations happening around the world about open pit mining and it seems like there's a lot more things that can be controlled underground.
$CCMI CEO Ian Berzins: For us, the beauty of our deposit is that we've got a good sized 35 million pounds of copper underground to a depth of about 350 meter. We can access three quarters of the current resource from the current tunnels. We had very successful drilling in the last two years that identified better grades about 150 meters below our lowest working, which is the nine level. We're of the view that at some point we would like to go again and do some deeper holes. We need to get a better drill angle to do it, but with the cash flow from the current sale of the stock pile material we will be able to finish off our permit requirements. Arguably at some point here, we are trying to do a few more drill holes to better understand the potential down-dip extension of the current body.
@Newton: Great work. Congratulations.
@Newton: There's nothing like underground drilling, too. The different pierce points and the geometry you can test with exploration drilling underground is a whole other thing beyond what you can do from surface. There's a lot more degrees of freedom, so to say. I'm sure the exploration geologist and people who want to get excited about upside potential for deposit size can see meat on the bone with these old mines. When you're working in these things, it's great.
$CCMI CEO Ian Berzins: An important difference for us is that we are de-watered. There are other operations that are flooded. Ours has been de-water and maintained in a de-watered condition since 2010. We've got 22 kilometers of tunnels. It's a unique situation where we can actually mine from the bottom-up if we want to. Or we could go to higher grade in immediate levels. It's been developed on forty metre vertical sub-levels, so it's a very unique situation. We don't have a high cost of primary development to access the first years of operating.
@Newton: Oh, beat.
@Newton: Absolutely. We joke sometimes about credit card money -- if you stress test a mine plan at a twenty percent discount rate, then how does it look? Scenarios like you are describing here may have a chance relative to some of these massive underground development spending programs. Everything else that goes into these modern mega projects is a mind boggling to me.Good for you to sniff that out. Maybe one other question about global strategic macro considerations. It seems like there is a consolidation happening or changes in ownership for some of these legacy assets. The Elk Valley coal company is such an important chapter of Canadian history. The was completed yesterday and we are in an important moment.
@Newton: I'm thinking about the shareholder registry of $CCMI and whether you think about trying to bring on strategic partners in terms of company equity or project interests? Do you have any thoughts on your shareholder registry and companies you might like to see on it? Or people you might like to see on the CCMI shareholder registry in the future?
$CCMI CEO Ian Berzins: We've actually had some interesting conversation with other CEOs in our space. In general, there's been virtually no consolidation in the junior space. The intermediates and the seniors seem to have no difficulty. The juniors seem to be protective and stuck believing that their asset is better than the guy next door. Or that somebody has to wait on drill results. I think that the junior mining space is overdue for consolidation. When you look at the cost to have listings in Canada and United States and to be publicly listed as an expense, I think that we are certainly looking for synergies. Again, they've got to be a creative. If you want to do a one plus one and can honestly get three, then that's great. But if you do one plus one and the it's one and a half, then you haven't really done a good job. We're keeping our eyes open. The fact that we will have continued revenues now coming for the next year and a half to two years. I think a few people may look in our direction to see whether or not there are is compatibility.
@Newton: There is a whole, big world of investors out there. This small little back water of the Canadian markets is so small in comparison to these global pools of capital. Our valuations are so small in many ways compared to some of these other companies that are out there in the world. It's about performance, it's about results, and it's about execution. I see that with you in that news yesterday that starts to show a level-up of cash flows. Great. Again, I'll say it again: we need to see more of this in the Canadian eco system. Thank you for your leadership.
$CCMI CEO Ian Berzins: As a last point, consider that we have another project. I've talked mainly about Bull River but we still have a significant position in a private company that has a hundred percent of our Thierry project in Ontario. We are the second largest shareholder in that project company. We don't have to spend any more money there and recently Orecap Invest released the final five holes of the drill program that we did last year. We spent about $600,000 last year and drilled five holes. In my mind, those holes were as good or better than what we expected and they've expanded the deposit. The deposit at Thierry is very encouraging. It requires more drilling and we encourage Ore Cap, who are the current operator, to continue advancing the Thierry project. Currently, it has 1.3 billion pounds of copper and more. That project continues to ge t very little value for it in the market, but we think this will be a mine somebody down the road again.
@Newton: I think this piece about adult supervision on the corporate side is important. There's something about the history of that project -- where it is now versus where it's been in the past. These assets go through these boom cycles. The assets go through boom and bust cycles, so do the stocks and the markets. All these different things that are happening now are very important to understand. You don't drill off one a billion plus pounds of copper without significant investment by prior participants. Whoever becomes the stewards of those projects through the next cycle is to be determined. Where does the Canadian junior mining business fit in a global context? Are we investable?
@Newton: To the speculators out there, I think that it helps to think about adult supervision. If we can see better behaviour in the company board rooms, better government standards, and better execution in the field, then that's a recipe for success. That's something that I respect. Ontario and BC, let's go! The 2020s in Canada have bullish potential. This could be meaningful for the rest of the country. There's so much opportunity in Canada.
$CCMI CEO Ian Berzins: To me, the Thierry project is beautiful. When we were Braveheart before Canadian Critical, we always looked for projects that were relatively near or at advanced infrastructure. That's always been important to me. When you're next to established towns with grid power, rail lines, and all weather road access -- that makes a huge difference. We don't have to go into the Ring Of Fire to build a mine. The mine was there before and it has year-round access. That's a project I like, where you don't have to lean on government to pay for infrastructure to get access. It's already there. From my perspective, it'll be a relatively straightforward process to expand the current near surface resource at Thierry. There's already a large underground resource that can be either done in concert, or one would advance the surface material first. We plan to stay involved with Thierry and we encourage our partners there to continue to advance that project.
@Newton: Good for you. Thanks for the update. We're at the 24 minute mark, so I will wrap it up. Is there anything anything else to say.
$CCMI CEO Ian Berzins: No thanks, Peter. It was really good to connect this morning and I look forward to chatting in the near future.
@Newton: I'll be watching. Nice to connect again a few years later. Great to see you marching down that path. Mr. Ian Berzin, President and CEO of Canadian Critical Minerals Incorporated. TSXV CCMI. Thanks very much.
$CCMI CEO Ian Berzins: Thanks Peter.
