Thunder Bay-based Clean Air Metals (TSXV: AIR; US-OTC: CLRMF) released an updated resource estimate for the company’s flagship Thunder Bay North platinum and palladium project in northwestern Ontario in late January and says it’s on track to complete a preliminary economic assessment before the end of the second quarter of this year.
The company’s 100%-owned TBN project, about 50 km northeast of Thunder Bay, consists of two deposits, Escape Lake and Current Lake, which are situated 3 km apart. The project 60 km southeast of Impala Platinum Holdings’ Lac des Iles mine.
Current Lake’s indicated resources stand at 12 million tonnes grading 3.44 grams palladium-equivalent per tonne and 5.79 grams platinum-equivalent per tonne for 1.3 million oz. of palladium-equivalent and 2.2 million ounces of platinum-equivalent. Inferred resources add 6.4 million tonnes grading 2 grams palladium-equivalent per tonne and 3.4 grams platinum-equivalent per tonne 417,000 palladium-equivalent oz and 700,000 platinum-equivalent ounces.
The Escape Lake deposit contains 4.3 million tonnes grading 3.67 grams per tonne palladium-equivalent and 6.16 grams platinum-equivalent for 505,000 palladium-equivalent oz. and 849,000 platinum-equivalent ounces. Escape Lake’s inferred resources total 3.5 million tonnes grading 2.23 grams per tonne palladium-equivalent and 3.75 grams platinum-equivalent for 247,000 oz. of palladium-equivalent and 415,000 oz. platinum-equivalent. The resource estimates used a cut-off grade of 1.56 grams palladium-equivalent per tonne and 2.56 grams platinum-equivalent per tonne.
“There are extremely high-grade, massive sulphide intersections which we believe were transported from the source, and we’re looking for the source,” says Jim Gallagher, who joined the company as executive chairman in early February. “So, there is a common feeder system, and we have some really good geophysical targets that seems to fit with the theory of the origin, which is very similar to the Norilsk deposits in Russia. We’re targeting those feeder systems, those massive sulphide targets.”
Prior to joining the company, Gallagher had been contemplating retirement, after orchestrating the sale of North American Palladium to Impala Platinum for about $1 billion in late 2019.
“I was supposed to be semi-retired now, but Clean Air made a strong pitch to me and this has become a big part of my life now,” Gallagher said with a chuckle.
It has been a busy few years for the junior. After listing on the TSX Venture Exchange in May 2020, the company kicked off a 30,000-metre drill program, even as the pandemic forced them to take additional efforts to safeguard their exploration teams.
Earlier this year, Clean Air restarted drilling operations at Escape Lake in mid-January. Two rigs are turning now and Gallagher says he expects at least one more by the end of the first quarter or early in the second quarter.
“Our priorities in 2021 are to keep on drilling at Escape Lake and continue to upgrade overall [data],” Gallagher said. “The bulk of the resources on Current Lake are very well defined – the bulk is in the indicated category – which means we can move it forward into a pre-feasibility study or a feasibility study. But Escape Lake is slightly higher grade than the overall average at Current, so we want to continue that exploration [work].”
At the beginning of February, the company announced a $10 million bought deal private placement financing deal, consisting of 11.9 million flow-through shares at a price of 42¢ and a further 9.8 million flow-through units priced at 51¢. Each FT unit consisted of one common share of the company and one-half of one common share purchase warrant that will each qualify as a flow-through share. Each warrant entitles the holder to acquire one common share of Clean Air at a price of 55¢ for a period of two years after the offering closes. (Over the last year Clean Air Metal’s shares have traded in a range of 26-48¢ and at presstime were changing hands at 35¢. The company has just under 140 million shares outstanding for a market cap of $49.7 million.)
Gallagher notes that his past role as president and CEO of North American Palladium and his knowledge of the region will help him guide Clean Air Metals.
“Look, I know the Thunder Bay area,” said Gallagher, a mining engineer who once worked for Falconbridge. “I know the resource base. Done major capital projects at Lac des Iles. I’ve got good experience with the local supplier base, the First Nations, the permitting, the consultation, the Ministry.”
Gallagher also says his career has taught him to do a thorough risk assessment of every project he takes on. “As I often say to investors on calls, all mining projects carry risk,” Gallagher said. “But the on the whole risk-scale, this [TBN] is pretty low. It’s close, very close to the infrastructure, to the highway, close to powerlines, close to a good labour base. And the ore body is very close to the surface. It has platinum and palladium in a 1:1 ratio, on a volume basis. This was just too compelling for me to say no.”