Major Precious Metals Sees Skaergaard Project As Key To Palladium Sector Growth
Major Precious Metals Inc. sees increasing global demand as a significant growth catalyst for its Skaergaard Platinum (AIM:ZERO) group metals (PGM) project in Greenland.
In 2020, Greenland ranked second in Europe for “investment attractiveness” on the Fraser Institute’s annual survey of international mining companies.
Currently described as one of the largest PGM deposits in the world, the size of Skaergaard is likely to eventually rival the largest PGM deposits in South Africa and Russia.
In April 2021, a new NI 43-101 Mineral Resource Estimate (MRE) showed Indicated Resources of 81.6 million tons (Mt) at 2.1 grams per ton (g/t) for 5.51 million ounces (Moz) of palladium equivalent (PdEq) and an Indicated Resource of 217.3 Mt at 2.05 g/t for 14.4 Moz PdEq.
As its sole focus, Major Precious Metals is committed to quickly moving Skaergaard through the development process and into production.
Comprised of three mineral exploration licenses, MEL 2007-01 is a 107 square kilometre (km2) area which hosts the Skaergaard Intrusion and is the focus of the company’s 2021 summer drilling campaign.
Additionally, there is also MEL 2012-25, a 16 km2 zone that houses the Sødalen camp with airstrip access via helicopter; there are also two fjords; Miki and Watkins. While a new area dubbed MEL 2021-10 is 754 km2 lies north and west of Skaergaard deposit.
Located 450 km west of Iceland and covering 87,700 hectares, one area of particular interest at the flagship asset is the Skaergaard Intrusion, an area first identified in 1930.
The zone has been the subject of several drilling campaigns and extensive scientific research over several decades, which resulted in the identification of a Reef Structure, described as a unique layered mafic igneous complex with stratiform PGMs – palladium, Platinum (AIM:ZERO), gold and iron, titanium and vanadium oxides.
Within the Reef Structure there are three separate precious metals horizons with additional zones of iron, titanium and vanadium mineralization.
Previous explorers invested C$16 million in drilling 68 holes and conducting metallurgy testing and studies, and further testing is now underway.
How is it doing:
On August 26, 2021, Major Precious Metals released an update on its Phase I diamond drilling program at Skaergaard.
The ongoing drill campaign began in July and prioritized the northern part of the Skaergaard deposit, including several areas being drilled to determine the open-cut potential at the site.
Historically, these priority areas were never drilled due to the focus on defining a resource in the southern part of the deposit.
The company noted that the successful completion of the drill holes within key priority areas by September has the potential to both upgrade and significantly expand the existing MRE for Skaergaard, targeted for Q4 2021 and provide the basis for a preliminary economic assessment (PEA) during Q1 2022.
The drilling is also anticipated to convert additional inferred resources to the indicated mineral resources category. There are also plans to investigate the northern part of the resource for continuity as well as explore the possibility of open-pit mining.
On the corporate level, a private placement closed in mid-July raising aggregate gross proceeds of $10 million. The company has earmarked the net proceeds from the private placement to further support the exploration and drill efforts underway at Skaergaard.
In early May, Major Precious Metals appointed Anthony J Williams as chairman of the company’s board of directors and CEO. Williams previously founded and served as chairman of the Dragon Group, a privately owned group of companies with a variety of interests in international mining finance and project management.
The company also welcomed Dr Gustavo Delendatti to the role of vice president of exploration. Delendatti is a senior geologist with almost three decades of experience in the evaluation, exploration and development of a variety of mineral deposit types in South America, North America and Australia.
Shortly after the arrival of the two executives, the exploration firm filed its NI 43-101 technical report supporting the Mineral Resource Estimate for the Skaergaard project.
Inflection points:
Ongoing global shortage of palladium for automotive uses
Rising palladium and gold prices
Diamond drilling program to be completed 3Q 2021
PEA scheduled for completion in 1Q 2022
What the broker says:
In an August 18, 2021, report, Laurentian Bank Securities Equity Research released an initiation of coverage report on Major Precious Metals which gave the Greenland focused company a ‘SPECULATIVE BUY’ rating.
The bank’s analysts cited the company’s favorable jurisdiction, the size of the deposit and its attractive valuation as contributing factors for the positive rating. The report also noted that the company was undervalued given the resource estimate.
“We are initiating coverage of Major Precious Metals Corporation (SIZE-CN) with a Speculative Buy rating and $0.80 target price. It is our belief that the Skaergaard project has been historically overlooked due to a depressed gold price and unattractive Platinum Group Elements (PGE) market,” the analysts said.
The analysts continued: “However, given the recent appreciation in palladium price driven by increased global demand as a result of the growing green economy (palladium’s largest application is in catalytic converters), this has led to a ~78% price increase over the last two years.
“As a result, we believe that Skaergaard offers substantial scale and potential value to those seeking palladium exposure and who are comfortable with the inherent risks of an exploration stage company with a project in a remote region.”
What the boss says:
In the company’s August 26 statement announcing the Phase I diamond drilling program update, Tony Williams, chairman and CEO of Major Precious Metals said: “The report confirms that Skaergaard already contains a very large Palladium and Gold Resource with known mineralization open in all directions and we are excited to highlight some of the key target areas and priorities for our current drilling program.”
“We will report again as the detailed results from these key target areas outlined above begin to emerge in the coming weeks’. We also plan to report these results and engage with shareholders and other potential investors via a number of upcoming webinars and international precious metal conferences. Full details of these will be provided in due course,” he added.
“As more results are reported we believe we will be able to clearly show that we are adding significant value for all stakeholders as we move forward along the Mine Development Cycle. This includes the planned PEA, which will outline the next steps needed for potential extraction of the substantial precious metals mineralization at Skaergaard,” Williams concluded.
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