by Will Purcell
The diamond and specialty minerals stocks box score on Wednesday was a so-so 75-76-149 as the TSX Venture Exchange fell fractionally to 575. Polished diamond prices edged 0.1 per cent higher, but specialty -- battery, in other words -- metals prices continue to struggle. Vanadium oxide, well above $30 (U.S.) per pound last year, is now under $7 (U.S.) per pound. Cobalt, $43 (U.S.) per pound in early 2018, now sells for about $13 (U.S.) per pound.
Dr. Leon Daniels and Graham Warren's Pangolin Diamonds Corp. (PAN), down one cent to 3.5 cents on 480,000 shares, has new drill targets on the MSC portion of its Malatswae property in Botswana. The area spans about 1,000 hectares from which the company has now recovered 16 diamonds during soil sampling. The gems, which range from 0.425 millimetre to two millimetres in size, were recovered from four different sites within the MSC area, suggesting that they came from multiple diamondiferous kimberlite sources.
Further, Dr. Daniels, president and chief executive officer, and Mr. Warren, chief financial officer, say that Pangolin has recovered plenty of indicator minerals including garnet, ilmenite, olivine, and a mantle xenolith fragment from the soil samples across MSC. They add that in some cases the indicators have attached kimberlite that can be easily crumbled away, suggesting their bedrock source is nearby. Of course, that is standard fare on Howe Street; veteran diamond investors know all too well the difficulty in finding supposedly nearby sources.
Pangolin frequently points out that Malatswae and MSC are about 100 kilometres southeast of the Orapa mine and its associated kimberlite field, which also hosts the Damtshaa, Letlhakane and Karowe mines. Karowe has been a cash cow for Lucara Diamond Corp. (LUC: $1.10) since 2013 and Orapa has been a cash cow for De Beers for generations, but Dr. Daniels and his crew acknowledge that any kimberlite find at Malatswae will represent a new kimberlite field. (Still, it is always nice to point down the street to affluent neighbours, even when those neighbours live in their own gated community.)
Dr. Daniels, who has worked in South Africa, Botswana and environs for most of his career, yet lives in Uruguay, says that at current field work rates -- which have been glacial with occasional bursts of tortoise-like speed -- Pangolin expects that drilling of the newly identified targets at MSC will occur late this year. Perhaps, but a few of Pangolin's previously promised drill programs were seemingly swallowed by the shifting Kalahari sands over the past five years.
Jeremy Poirier and Gil Playford's Bearing Lithium Corp. (BRZ), up three cents to 28 cents on 25,000 shares, has appointed Mr. Playford to be its chairman. The Vero Beach-based Mr. Playford had bought 4.8 million Bearing shares last August at 25 cents and he added 1.55 million more through several market transactions this spring. He now holds 6.35 million shares, about 10 per cent of the company's stock.
Mr. Playford spent much of his career with Union Carbide Corp, but according to Bearing Lithium's pitch, he is best recalled as "having spearheaded the sale" of LionOre Mining to Norilsk Nickel in 2007 for $6.8-billion in cash. Of course, "spearheading" is usually promoter-speak for "was around at the time." Indeed, Mr. Playford was president and CEO of LionOre, but that was for just two years in the mid-1990s. By the time of the takeover, he was deputy chairman of the company.
Mr. Poirier, Bearing's president and CEO, says that he is excited to have Mr. Playford as a director and chairman, adding that he will also be representing Bearing's interest on the board of the joint venture operating company, Minera Salar Blanco (MSB), which is advancing the Maricunga lithium brine project in Chile toward production. Mr. Poirier is apparently banking -- literally -- on Mr. Playford's financing experience paying off as Bearing seeks financing for the project.
A feasibility study early this year was based on a plan to produce 20,000 tonnes of lithium carbonate per year at Maricunga over a 20-year period, enough to support a discounted net present value of $908-million (U.S.) after taxes. The $563-million (U.S.) mine plan is based on a 125-million-cubic-metre reserve averaging 1,117 milligrams of lithium brine, a sliver of the resource available. Bearing Lithium owns an 18-per-cent interest in MSB and will be responsible for its share of the development costs.
Mark Smith's Largo Resources Ltd. (LGO), up two cents to $1.43 on 7.48 million shares, has served notice on Glencore International AG that it will not be renewing their off-take agreement, arranged in 2008, which is set to expire at the end of April, 2020. (Essentially, Glencore gets to buy all the vanadium pentoxide produced at Largo's Maracas Menchen for the first six years of its life.)
Mr. Smith, Largo's president and CEO, says that the offtake deal was instrumental in his company securing the required financing to build the $300-million mine, but he says that the coming split with Glencore will be a "transformative moment in the company's history." To aid the transformation, the company has appointed Paul Vollant as its director of sales and trading. He will presumably be using the moments between now and next spring to transform Largo's internal sales and trading business into an independent operation.
In law, even a win often turns into a loss. Rodney Irwin's Stans Energy Corp. (HRE) crashed to a 2.5-cent low, ending the day down 5.5 cents to 3.5 cents on 15.26 million shares on word that the Permanent Court of Arbitration has ruled that Stans Energy prevailed on both jurisdiction and on the merits of its claim against the Kyrgyz Republic. Accordingly, the court awarded the company $24-million (U.S.), including damages, interest and costs.
The company, which launched the battle six years ago, after the Kyrgyzstanis revoked the company's licence for the Kutessay II rare earth project, had been seeking over $200-million (U.S.) as compensation. The high point of the battle came in 2014, when a Moscow-based arbitration court awarded Stans $118-million (U.S.), but that award was subsequently overturned by a higher court.
In the spring of 2018, Mr. Irwin, Stans Energy's president and CEO, agreed to a "privileged litigation finance agreement," through which the financer would get a portion of any financial settlement. The undoubtedly thick agreement and its terms remain hidden, but presumably the financer is in line to get a big portion of the settlement, assuming the Kyrgyz Republic can be coerced or cajoled into coughing up the cash. (Indeed, investors suspect that Stans is unlikely to see much, if anything, from the award.