Interview with Derrick Weyrauch, President and CEO of Palladium One Mining (TSX.V: PDM).
Palladium One Mining Inc. is a TSX-listed PGE and Nickel-Copper exploration and development company. It possesses several assets: the flagship Läntinen Koillismaa PGE-Nickel-Copper Project in north-central Finland and the Tyko Nickel-Copper, PGE Property near Marathon, Ontario, Canada.
The key theme at play is strong fundamentals. Palladium One published their first Resource for the company in September: 1.2Moz of palladium equivalent (split 50/50 between indicated and inferred). Palladium has a strong foundation of demand and limited supply says Weyrauch.
Palladium is an industrial metal: 86% of it is consumed in auto-catalysts, and it is predominantly used in gas engines. Using Palladium allows for cleaner air, making palladium a modern, green solution to transportation headaches is the marketing spin. The slow decline of the diesel engine is resulting in greater future demand. There has been a structural deficit of Palladium in the market in recent years, and Palladium One is hoping to fill that gap. The market is small at around 10Moz. There are additional applications of Palladium in dentistry and jewelry, but are much smaller markets.
Palladium One is in the process of closing a non-brokered private placement for $3.8m dollars. Renowned Canadian mining investor Eric Sprott is investing $1.2m, giving him a 19.9% ownership of Palladium One. This is only option money for Sprott as Palladium is not large market, nor a key focus for him, but it is interesting to us that he has selected this Palladium asset.
Weyrauch explains another ace up Palladium One's sleeve: Finland is an excellent jurisdiction with "first-world geological data sets." This area has been heavily researched and the information is publically available.
Palladium One has a brand new management team and board as of 2019. Dr. Peter C. Lightfoot, a 20-year nickel exploration veteran at Inco and Vale, clambered aboard in September. A real plus, not sure if this is his only focus though. Neil Pettigrew, a geologist with 20-years of mineral exploration experience, serves as Palladium One's Vice President - Exploration. Weyrauch's primary experience comes in the world of finance where his experience has been restructuring mining companies and experiencing success.
Weyrauch claims the main obstacle for Palladium One is the same as for every other junior: raising capital. Weyrauch has used the accurate historical data, obtained in Finland, to successfully push the Palladium One story. He claims the reason behind the lack of exploration under previous stewardship at the property comes from economic downturns of Palladium rather than a lack of promise. We shall see.
Palladium One's strength comes from the fundamental promise of their flagship asset, and the fundamentally robust level of palladium demand.
Palladium One has a market cap of CA$2.94M. It started the year with a share price of just $0.04CAD, rising to a peak of $0.14CAD in April, before falling back to its current value of $0.075CAD. A concern is the available capital to do what they need to do and getting to a point where the company understand the economics for this project.
There will be questions marks around the management team's experience in this particular field, and the commodity itself. The palladium market is small, and with the impending EV revolution, battery metals would demonstrate enormously greater growth potential in the automotive sector. By the time Palladium One would be ready to mine, would EV be taking hold? It is a question of whether investors buy into the macro story of palladium, and can trust the team at Palladium One to deliver on an asset that has failed to be mined under several previous companies.
- Company Overview
- Palladium: What is it, What's it Used For and What's the Size of the Market?
- Company Financials and Cash Position: How Will They Finance Their Projects?
- Finland: Is it a Mining-Friendly Jurisdiction?
- Team Experience
- Business Plan and Focus: What is the Plan and When Do People See Things Move?
- Current Constraints: What is Preventing Them from Moving Forward and How are They Dealing With it?
- What Did Eric Sprott Buy Into and Why Should You Invest?
Watch the interview here.
Company page: https://www.palladiumoneinc.com/
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