92 Resources is a junior mineral exploration dedicated to opportunities in energy. Their current focus is the Hidden Lake Project, a prospective hard-rock lithium project with good access in the Northwest Territories. They also have a frac sands project near Golden, BC that is quite neat. They have worked uranium projects in the past and may prove to be in acquisition-mode going forward.
The company has 55 million shares outstanding, with 69 million fully diluted. The current market cap is approximately $6M with the shares trading up to $0.10 recently. The company has $760,000 cash as at June 30, 2017 and no debt. You can find more on the company web site here: http://www.92resources.com/
Read on for a quick, introductory conversation with Mr. Adrian Lamoureux, President & CEO of 92 Resources (TSXV:NTY | FSE:R9G2) recorded on September 6, 2017.
Peter: Hello Adrian. Great to be talking with you here for the first time about 92 Resources, NTY on the Venture.
Adrian: Hello, Peter. Thank you.
Peter: Quite the story. You've been at the helm for three years now.
Adrian: Yes, that is correct.
Peter: You've led it through some pretty challenging times and kept it together. I went way back to some of the news releases from 2014 when you joined as CEO and the company was renamed 92 Resources. At that time, the company was talking about energy. Is that still a key focus?
Adrian: Yes, it is. At that time, we were really thinking about energy in a big-picture sense and we are still there.
The one project that seem to be the most clearly related to the energy industry as it stands today is our frac sands project in BC. We have been calling it the Zim Frac Project since acquiring it in 2014, but now we are starting to refer to it as the Golden Frac Sands Project. We've had to put that one on the shelf a bit over the last few years because of weakness in the oil and gas marketplace overall, but it is still alive. It is an excellent project that we're very excited about, but it has been great to have time for our other projects as well. We have two lithium projects, Hidden Lake in the Northwest Territories and Pontax Lithium in Quebec. These lithium projects are part of our focus on energy-related exploration projects, but is moreso about looking to the future of energy.
Peter: OK. Thank you, Adrian. Good to hear about this broad focus on energy and how that is expressed on a project-level within the company.
I find myself getting a bit excited about the frac sands project because it's somewhat exotic. There are a few other frac sand projects in public companies, but not many. The few that I have encountered seem to have great economics behind them. All of that depends on the particulars of the project, but the idea of frac sands project seems to strike a balance between the mystery of niche industrial minerals with the realities of the oil and gas business.
Adrian: Sure, Peter. Frac sands has been one of those commodities that's quietly been on the rise, albeit it's taken a bit of a dip the last couple of months. If you look at the overall picture for the last 18 months, frac sands companies have outperformed most of the major companies focused around all sorts of different commodities. It's quietly been a darling, simply because they're using more of it. There is just more demand for the good stuff.
We like to think that we have one of the top tier frac sands in the world. This could prove to be one of the top tier products as it is developed further. It is a product that has very strong demand globally, particularly in the oil and gas markets in the neighboring province of Alberta. We're ideally situated and we think we have a fantastic project.
Peter: Great. The Golden Frac Sands Project nearby the town of Golden, BC. I gather that a lot of people from Calgary, in particular, like to visit the town as it is so different from the city. And you are right there. Amazing.
Adrian: That's right. The area has great infrastructure for all kinds of economic activity. There's not a lot of mining in the area, but there is another frac sand project adjacent to us and they are a producer. They have an ideal position next to the railway, which helps keep costs down when you're looking at deliverability.
Peter: Even looking at the area on google maps, I feel like there must so much potential for mining there but I've never encountered any projects focused there. Great to hear about this one from you.
And I'll just point it out again for anyone who's all excited about these frac sands projects -- don't forget to look at the oil price!
Adrian: I should point out, Peter, that our Golden Frac Sands Project has high-purity silica. We've had some people kicking the tires recently, but their interest has been primarily in our silica for other purposes. There are a range of uses for this high-purity silica, as in solar cells. There are other factors at play here, other than just the oil price.
The Golden Frac Sands Project is a unique one. You could attack it in a number of different ways, which is just great for the strategic planning of a development plan here.
Peter: You've acquired additional tenures in March of this year, now covering 18 km of length along the Mount Wilson formation. I can just imagine the potential size of what you've got here. They could be mining this for decades to come!
Adrian: We wanted to gobble up as much area surrounding us as possible. It was when our neighbor was bought-out for a little over AUD$40 million and the new owners put their project into full-scale production of frac sand that gave us the impetus to create a larger land package in the area. I think it will prove to be a great decision.
Peter: I was not aware that your neighbor had been bought out, when did that happen?
Adrian: That was probably about 18 months ago now. They were a company called Heemskirk and they were producing their sand for many different purposes. Over the past couple years, they went through a refit to reformat their mill solely towards frac sand production. They were an ASX-listed company, but have now been taken private after they were bought by a large fund out of Australia. Now, they are producing frac sands from this area adjacent to our Golden Frac Sands Project. We are right on trend with them and directly attached to their property.
Peter: Very interesting. It occurs to me that being private might have some advantages in niche markets like industrial minerals.
Adrian: We can infer that it made more sense for them to be private in this case. I can see advantages of going that route, but I am a public markets guy. I am primarily geared towards developing resource projects in the public markets. Since they have become a private company, we have been generally had less access to information about their activities so it's hard to say what has been going on there -- other than they are in production of frac sands.
Peter: Has there been evidence of increased activity at their site?
Adrian: Yes. They spent many million dollars going through the refit I mentioned. They now have a state-of-the-art facility that is gear towards frac sand production. Yes, there has clearly been increased activity there in recent years.
Peter: These waves or cycles in markets are so interesting, particularly in oil because it's so important. It seems to me like each next phase of bullish activity seems to drive improvements in the industry. All this discussion of restimulating horizontal wells and everything is very exciting.
Adrian: Yes, Peter. We certainly need more of that here in Canada, that growth led by innovation. Although I would suggest that the foundations for that growth are laid during the tough times when the survivors have to find better ways of doing things.
Peter: Well, that makes for a nice little wild card in your back pocket at the very least. It may not be your primary focus, but it's still a good thing to have in the company.
Adrian: To clarify, Peter, the Golden Frac Sands project is definitely not on the back burner. We have been on the ground over the last couple of months and are in the midst of creating a 43-101 compliant technical report on the project. It is really on a front burner and we are giving it a lot of care. However, it is taking second fiddle to our lithium project in the Northwest Territories.
Peter: Thanks for clarifying. Yes, I see it here in a news release from June 6th, where it says that you are working to collect sufficient information to support an NI 43-101 technical report on the property. Good to hear -- it can be a long and winding road to get those reports done. Hopefully you can end up in the right place at the right time.
Adrian: I think we will, Peter. We hope to have that report completed soon. As you pointed out, we have been communicating about it for quite some time now. It is well on the way. We are waiting for more results to come back from the lab, then to compile that data and implement it into the models within the report. I think we're quite close to having that complete.
Peter: Today is September 6th, 2017, and you have a news release out! It is concerning this Hidden Lake lithium deposit that you just mentioned, way up in the Northwest Territories. I believe you have a two-week window for your summer work program there, is that correct?
Adrian: Let me correct you on a couple things there, Peter. Yes, we are planning a two-week work program but it is not as if that is the only time we can do work at site. We can actually do things at that site year-round. Part of the reason for that is the project is located adjacent to a highway around 40 kilometres from Yellowknife. It may be in the Northwest Territorties, but don't let that scare you away.
Peter: (Laughs) OK! What a lightning program -- two weeks.
Adrian: We want to get in, get out, get the data, and get back on the ground here again this fall. This program is meant to be quick so that we can get ready for the next one.
There have been some challenges with the logistics of this program. There have been significant delays due to helicopter restrictions, as everything has been allocated towards fighting forest fires here in BC. It's been a bit of a nightmare to tie down access to these machines due to the overwhelming devastation that these fires are causing across the province. Also, our geological team has been having an extremely busy year. It's been challenging, but we are in line with our intended scheduling at this point.
Peter: And I will briefly mention the funding from the Northwest Territory Mining Incentive program. That must be very beneficial, particularly given the risk of disruption that you have for the program this year with the BC wildfires.
Adrian: Yes, it is a huge benefit. It was quite a surprise to be allocated such a large portion of that budget. We consider ourselves very fortunate to have the government as a partner on this. For them to be willing to come up with such a large amount of money is a little overwhelming as a vote of confidence in us and the project. I think it's absolutely fantastic.
Peter: From the little bit that I do know about the project, there is quite a history to lithium there. It may be new to me, but it's certainly not new to the area.
Adrian: Yes, there has been quite a large amount of work done within the area. A lot of it was done through a private company, as is typical with some early-stage geological exploration. The fact that so much of the work was done by a private company can make it more difficult to get the information on what was done, but we have found that the historical work was phenomenal. Very high-quality work that provides a great guide for us today. To be honest, we were excited when we finally got in there to start working on this project. I think the large proportion of funding allocated to us for the Hidden Lake Project under the Northwest Territory Mining Incentive Program reflects this same sense of excitement.
Peter: Interesting to hear mention of these private companies again, whether it's a small-time prospector or something else. The public companies get a lot of the attention, but they're the ones making noise. There's a lot happening in the background with the private companies and it's important to appreciate all that.
Adrian: Yes, that's fair Peter. They were able to lay a foundation at Hidden Lake that now gives us an idea of what to look for and what our potential results could be. It's great to have a serious geological group get out there before you, lay some groundwork, and then pass it along to you.
Peter: I see a recent appointment of David Ramsay to the Board of Advisors. I gather he was involved in politics in the Northwest Territories in the past and also has quite an extensive business career.
Adrian: Yes. In addition to being a fantastic guy, he's got a fantastic resume. We consider ourselves extremely lucky to have Dave part of our team. We think he's going to be instrumental for us moving forward.
Peter: Wonderful. Lots of other questions occur to me here, but I will keep it short. I will point out that you have been successful raising equity this year, with an oversubscribed financing recently.
Adrian: Yes, we have a strong shareholder base. Many people who have been with us for some time and others who are new to the story. I believe we offer a compelling investment at our current valuation and many of our shareholders agree.
Peter: Thank you, Adrian.
Adrian: You're welcome, Peter. Goodbye.
Please note I have been compensated to prepare and disseminate this material.
This document contains statements that are forward looking statements and are subject to various risks and uncertainties concerning the specific factors disclosed under the heading “Risk Factors” and elsewhere in the Company’s periodic filings with Canadian securities regulators. Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.