Scientific Metals Corp Presentation 2017
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Transcript of Scientific Metals Corp Presentation 2017
FOCUSED ON THE ACQUISTION AND DEVELOPMENTOF HIGH GRADE COBALT AND LITHIUM DEPOSITS
This presentation includes certain statements that may be deemed forward looking statements. All statements
in this discussion, other than statements of historical facts, which address future production, reserve potential,
exploration activities and events or developments that the Company expects, are forward looking statements.
Such forward-looking statements include, without limitation: (i) estimates of future prices, supply, demand
and/or production; (ii) estimates of future cash costs; (iii) estimates of future capital expenditures; (iv) estimates
regarding timing of future development, construction, production or closure activities; (v) statements regarding
future exploration results; (vi) statements regarding cost structure, project economics, or competitive position,
and; (vii) statements comparing the Company’s properties to other mines, projects or metals. Although the
Company believes the expectations expressed in such forward looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and actual results or developments
may differ materially from those in the forward looking statements. Factors that could cause actual results to
differ materially from those in forward looking statements include market prices, exploitation and exploration
successes, continued availability of capital and financing, and general economic, market or business conditions.
Investors are cautioned that any such statements are not guarantees of future performance, that the Company
expressly disclaims any responsibility for revising or expanding the forward looking statements to reflect actual
results or developments, and that actual results or developments may differ materially from those projected, in
the forward looking statements, except as required by law.
Disclaimer
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Overview
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Scientific Metals Corp. (TSX.V: STM) (Frankfurt: 26X) (USA: SCTFF) is a Canadian-based exploration company focused on the acquisition and development of production grade metal deposits that are critical components to modern day rechargeable batteries.
Scientific Metals Corp.’s key assets are located in Idaho, Utah and Alberta in regions known to host high grade cobalt deposits and lithium bearing brines.
What is Cobalt?
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• cobalt (Co): a brittle, hard, greyish – white magnetic metal that melts at 1495C. Its high melting point and ability to retain
strength at high temperatures makes it an irreplaceable metal for industrial application.• Cobalt’s uses vary from aircraft engines to its main use in rechargeable batteries• Battery usage accounts for 49% of cobalt demand*• A key component in Telsa’s Lithium Ion Batteries
Source: Panorama 2013 du marche du cobalt
*source: Darton Commodities
Cobalt Demand
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Demand for Cobalt is expected to soar with the growth of EV Lithium ion batteries
Source: Bloomberg New Energy Finance
Cobalt Supply
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Majority of current Cobalt source comes from Mining in the Democratic Republic of Congo (DRC) or as a byproduct in copper and nickel mines. • Lower copper prices have triggered a number of large mines to shut down - cutting off
cobalt sources. • over 10% of cobalt production is offline, resulting from closures due to weak Cu and Ni
prices.• properties with higher Co to Cu ratios will rise to the forefront of production, being less
by global changes in Cu and Ni prices
Cobalt Production
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The DRC, an area of high political and economic risk, holds close to half of the worlds cobalt reserves.• The DRC supplies >50% of the world's mined cobalt*.
• With ~20% of that attributed to artisanal mining • The result is Global scrutiny of supply chain.
Source:CCO public domainSource: Amnesty International,2016,*USGS 2016: Mineral Commodities Summary
Tesla Demand
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Issue?
Total US production • 2015 -> 700 tonnes mined. 2500 tonnes
produced from secondary sources*• Tesla’s first Gigafactory will require 5,000 –
10,000t Cobalt annually when operating at full capacity. Where will future supply for Tesla and other EV developers come from ?
In addition… Tesla recently announced that they will produce home energy storage batteries, if this is based on the same technology, where will the further supply come from?
Tesla and other EV companies are currently looking beyond the DRC to avoid supply disruptions.
*USGS 2016: Mineral Commodities Summary
Iron Creek Cobalt Project, Idaho
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• Located in Eastern Idaho, approximately 42 kilometers from the town of Salmon
• Property encompasses:• 7 patented claims totalling 137 acres• 58 unpatented claims totalling 1,160 acres
• 28 kilometers South East of Formation's PEA stage, Idaho Cobalt Project, within a well known mineral trend known as the "Idaho Cobalt Belt", a NW-SE trending, 40 km long belt of cobalt mineralized Proterozoic -age Yellowjacket Formation sedimentary rocks.
• discovered in the 1940’s as a possible iron deposit. Explored in the 1970’s by Hanna Mining and later in the 1980’s by Noranda, Inspiration Mines, and Cominco (mid-1990’s).
• Approximately 30,000 feet of diamond drilling and 1,500 feet of underground drifting has been completed exploring the property.
Iron Creek Cobalt Project, Idaho
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Resources (Historic) - Two zones of cobalt mineralization known. The first zone comprises a high grade underground cobalt deposit of around 1 million tons of possible reserves grading 0.61% Co and 0.3% Cu* . A second zone contains 229,000 tons averaging 0.48% and 0,24%Cu*.
The Iron Creek Historic Grades are comparable to other high grade Cobalt operations in North America.
Project Cobalt % Copper %
Werner lake,Ontario**
.31 .29
Idaho Cobalt Project***
.55 .75
Project Avg. Cobalt % Avg. Copper %
Iron Creek, Idaho .61 .3
*Source: Noranda Report **Global Cobalt, Technical Report ***eCobalt Technical Report
Lithium Demand
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Lithium Price
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Why Oilfield Brines?
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Benefits:
• Usage of existing high cost wells.
• Extensive historical database from previous work.
• Massive available infrastructure related to petroleum based operations.
• No pumping necessary. Generally highly pressurized mineralized brine will flow freely.
• High Grade underexplored brine deposits. Clayton valley has seen a draw down in brine grades over the 50+ years of operations.
• Initial discussions on water usage positive.
• At depth historical lithium brines sampling.
Oilfield Brines in Utah and Alberta are contained within, and surrounding, historical oil producing formations that contain significantly mineralized brines. Years later, these depleted formations run oversaturated mineral brines under significant pressure, decreasing the need for additional costly exploratory wells.
Issues in Clayton Valley?
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A decrease in lithium grades, resources and over allocation in Nevada’s Clayton Valley brines has prompted juniors to look elsewhere in North America for lithium brine reserves.
Additional issues have begun to arise in regards to water rights..
• As Nevada is the most highly regulated state for water use in the US, any consumption of water in the Clayton Valley area requires valid water rights to meet state regulations.
• Clayton Valley basin is currently “over-appropriated”, with Albemarle’s Silver Peak Mine being the largest consumer of water in the area*.
• Any new application for water use in an over-appropriated basin would be carefully reviewed by the Nevada Division of Water Resources, and it is uncertain if any new applications would be granted*.
• How many new lithium mines will the state of Nevada permit with water consumption a growing issue?
Source: *Nevada Sunrise Gold Corporation, Jan 28,2016
Paradox Basin, Utah - Location
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• The Paradox Basin Lithium Property, located in the Paradox Basin, lies:
• ~4 km northwest of Intrepid Potash’s Cane Creek Operation
• 11hrs drive from Tesla’s gigafactory in Nevada
• High semi – desert region with an average of 10 inches rainfall/ year and 300+ days of sunshine per year combined with excellent infrastructure and year – round access provides ideal conditions.
• Year - round access to road and rail.
• Nearby operation at Cane Creek produced 93,000 tonnes potash in 2015 through solution mining and large scale solar evaporation ponds*.
Source: * Intrepid Potash 2015 Annual Report
Figure – Cane Creek, Intrepid Mines Potash Operation. 3km South of Paradox Valley
Paradox Basin Lithium Property
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• The Property consists of 111 mineral claims covering approximately 2,200 acres
• Approximately 6 Historic Oil & Gas drill holes have been drilled on the property with 25 historic wells drilled in the area . These wells reported lithium grades from 81 –1700 ppm in saturated brines.
• Brine well that reported 1700 ppm lithium was estimated to produce 50,000 barrels of brine per/day under natural pressure*.
• Lithium 1,700 ppm equal to 0.17% or 3.4 lb/ton
• Potential to produce 8,786 tons Li2C03 per year*
• prices for lithium carbonate have rocketed from around $6,400 (U.S.) a tonne in 2015 to more than $20,000 (U.S.) a tonne today **
• The Property lies contiguous within 400m of this brine well and within a zone determined by the USGS to contain greater than 40% Total Dissolved Solids in oil field brines.
Source: *Mesa Uranium: Technical Reports Durgan 2011, ** Global and Mail, 5-30-2016 edition
Paradox Basin, Utah
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Source: *UoM Gruber/Medina 2010, ** Mesa Uranium: Technical Report Durgan 2011
Project Average Lithium ppm
Atacama, Chile 1400 ppm
Uyuni, Bolivia 532 ppm
Hombre Muerto, Argentina 520 ppm
Silver Peak, Nevada 200 ppm
Project Lithium brine ppm
Paradox Basin, Utah Up to 1700 ppm**
Paradox Basin Brine Sample Against Global Average Lithium Brine Concentrations*
Deep Valley, Alberta
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• Located in the Fox Creek - Sturgeon Lake area of west-central Alberta. The Property encompasses 6,648 ha (16,427 acres) and is located approximately 55 km due west of the community of Fox Creek.
• The Property is underlain by Leduc Formation aquifers that are known to be highly enriched in lithium, potassium, boron, bromine and other commodities. Within the central part of the Property, historic samples of formation waters (brines) have returned 140 mg/L (ppm), which are amongst the highest values recorded within the Province of Alberta as reported by the ERCB in its report of October 2011 entitled "Geological Introduction to Lithium-Rich Formation Water with Emphasis on the Fox Creek Area of West-Central Alberta (NTS 83F and 83K)".
Deep Valley, Alberta - Location
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Figure 1 (source): Shaded contour map of lithium-bearing formation waters in west-central Alberta. The map is generated from a dataset totaling 1511 analyses (Eccles and Jean, 2010)
Management
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Brian KirwinPresident and Director
Mr. Kirwin, BA, earth sciences, Dartmouth College, MSc, mineral exploration, Queen's University, is anaccomplished mining executive and geoscientist with over 33 years of experience with both senior andjunior mining companies. Mr. Kirwin began his career in mining working in exploration and corporatedevelopment on projects from grassroots to mines worldwide for companies such as Placer Dome,Freeport McMoRan and Cominco. He has served in leadership positions in various capacities from chiefexecutive officer and founder of American Bonanza Gold Corp. and Nevada Copper to vice-president,exploration, for Vengold Inc. With global experience evaluating and developing deposits, mines and riskworldwide, Mr. Kirwin has led teams to several discoveries.
Wayne TisdaleIndependent Director
Wayne Tisdale has 40 years of experience in investing, financing and consulting to private and publiccompanies in the areas of mining, oil and gas and agriculture. He runs his own merchant banking companyand sits on the board of directors of a number of private and public companies in the areas of mining, oiland gas and agriculture, including Declan Resources Inc., Opal Energy Corp. and Suparna Gold Corp. Overhis career, Mr Tisdale has raised over $2bn of both equity and debt financing and has been instrumental infounding a range of highly successful companies.
Management
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Garry Clark Independent Director
Mr Clark is the Executive Director of the Ontario Prospectors Association (OPA). He has been a Director, Vice President or President ofOPA since its formation in the early 1990s. Mr Clark currently serves on the Minister of Mines Mining Act Advisory Committee (Ontario)and the Ontario Geological Survey Advisory Board. He graduated with an HBSc (Geology) from Lakehead University, Thunder Bay. MrClark brings to the company extensive experience in managing large scale exploration and development programs internationallyincluding Asia and North America. In addition to over 30 years of consulting experience, he had held geological positions with a numberof mining companies and has served as a director of other TSX Venture Exchange listed companies including his current position withChallenger Deep Resources Corp and Elissa Resources Ltd.
Michelle GahaganChair & Director
Ms. Gahagan was the former president of Scientific Metals Corp. (formerly Suparna Gold) since January 2011. Ms. Gahagan is currentlydirector and president of CellStop Systems Inc., as well as a director of Declan Resources Inc. (TSXV: LAN) and eShippers ManagementLtd. (NEX: EPX.H). Prior to the commencement of her involvement in merchant banking, Ms. Gahagan graduated from QueensUniversity Law School and practiced corporate law for 20 years. Ms. Gahagan has extensive experience advising companies with respectto international tax-driven structures, mergers and acquisitions. Ms. Gahagan has successfully completed the Investment ManagementCertificate course and is a Qualified Person under the Financial Services Authority (UK) regime.
James WelykochyIndependent Director
Mr James Welykochy has over 30 years of experience in the oil and gas industry and energy related capital markets. He is a ProfessionalGeologist (a member of APEGA and CSPG) and also has considerable experience in the capital markets having held various roles as anequity analyst as well as being involved in institutional sales and corporate finance and investment banking. Mr. Welykochy also hasexperience as a member of the board of directors of other public companies including, LGX Oil & Gas Inc. and Ryland Oil Corporation
Capital Structure
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Trading Symbols:
TSX Venture STM
Frankfurt 26X
US SCTFF
Outstanding 30,404,062
Market Cap 6.3 Million
Year High 0.52
Year Low 0.16
Proposed Financing: $2 Million (10 Million Units) @ $0.20 with full warrant @ $0.40 for 18 Months
Contact
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Corporate Address:
302 – 1620 West 8th Ave.
Vancouver, BC V6J 1V4 Canada
www.scientificmetalscorp.com
For Further Information please contact:
Kelsey ChinCorporate Secretary
Phone: (604) 639 4457
Email: [email protected]