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Tough financing climate puts exploration of Thunder Bay PGM deposit on hold

Clean Air Metals on the lookout for financing partner to bring Thunder Bay North project to life
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(l-r) Clean Air Metals COO Mike Garbutt and CEO Jim Gallagher entertain Mines Minister George Pirie in October (Company photo)

Thunder Bay mine developer Clean Air Metals said it’s waiting out a challenging financing environment while searching for a deep-pocketed strategic partner to advance its platinum group metals (PGM) project.

In a news release this week, CEO Jim Gallagher spoke about a “difficult situation” with investor interest in Canadian junior mining “at an all-time low despite the global concern for supply of critical metals to supply the green energy revolution.”

That should raise concern, Gallagher stated, because “if investors don’t return to mining, the green energy transition cannot happen.”

The company has placed exploration drilling on hold at its Thunder Bay North PGM project, 50 kilometres north of the city. It features two parallel deposits, called Current and Escape, which contain platinum, palladium, copper and nickel with some gold and silver in the mix.

With these critical metals at “multi-year lows,” it forced the company had to make some hard decisions last summer.   

The company has been in cash conservation mode since June. Staff were reduced along with trips to investor shows. Exploration drilling has been deferred to 2024.

“These activities do not yield the intended benefits in the current environment,” said Gallagher.

“We remain reluctant to raise funds at these poor valuations and are positioning ourselves to wait out these markets until investor interest returns to the market."

Clean Air had $7 million cash in the bank at the end of October, but will need more to resume exploration. 

Rather than go to the equity markets, to get over the hump, Clean Air is searching for a financing partner.  

In October, the company embarked on a “strategic alternatives process,” led by the board of directors, to either find a funding partner, strike up a joint venture, or entertain other transactional opportunities. 

That process still continues, the company said this week. There’s no timetable to finish the search. Clean Air said there likely won’t be anything to report until early in the new year in the form of a signed agreement or some kind of transaction.

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The lack of “news flow” and activity in the field has been alarming for shareholders. Gallagher said he’s fielded “direct calls from many investors.” 

He’s assuring them that this is one of the better quality platinum and palladium projects outside of South Africa and Russia. Prices for critical metals are bound to rebound, “perhaps dramatically,” given the market imbalance between the demand for green tech metals and current investments in mining.

This hasn’t been a good year for Clean Air. In February, the company admitted a mistake in its resource calculation and was forced to do recount. There was also a front office change with CEO Abraham Drost departing in June and Gallagher, the executive chair, taking over.

Thunder Bay North contains an indicated mineral resource of 1.2 million ounces of platinum and palladium, 56,800 tonnes of copper and 33,800 tonnes of nickel.



Ian Ross

About the Author: Ian Ross

Ian Ross is editor and reporter at Northern Ontario Business. He can be reached by email at ianross@nob.on.ca.
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