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TANTALEX LITHIUM RESOURCES: ENJOYING “BEST OF ALL WORLDS” AS TWO PROJECTS MOVE TOWARD PRODUCTION AND INITIAL DRILLING BEGINS IN LARGE LITHIUM CORRIDOR

Lithium is all the rage these days and for good reason, with the world going increasingly electric and viable sources of near-term lithium supply insufficient to meet projected demand. There are plenty of lithium exploration projects on the go, yet grade, location and other factors suggest few will go into production anytime soon.

Tantalex Lithium Resources (CSE:TTX) is in the enviable position of having a tin and tantalum project readying for production in Q1 2023, a lithium project heading for production by 2025 and a huge lithium pegmatite exploration project soon to see its first drilling ever. And expectations for the pegmatite project are high, sitting, as it does, near one of the world’s largest undeveloped hard rock lithium resources.

Tantalex President and Chief Executive Officer Eric Allard is a veteran of mining in Africa and knows well the country in which his team operates, the Democratic Republic of the Congo, or DRC. In a recent interview with Canadian Securities Exchange Magazine, Allard discussed working in the DRC and outlined timelines to production and exploration for the company’s projects.

Tantalex has three projects that collectively involve lithium, tantalum and tin. All are in the DRC and two are progressing toward production. Tell us about your experience in the DRC and the various aspects of working there.

The DRC is a very mining-focused country, so the procedures, regulations and administration for mining companies are clear. There is a mining code, a mining law and many mining companies operate there: Barrick is one, Glencore, Trafigura, ERG.  They focus mainly on copper and cobalt.

The DRC is a very favourable jurisdiction in that regard. The challenge is administration. Because mines in the DRC are so rich, and mining represents such a large portion of the government’s annual revenue, they don’t so much see the difference between junior exploration companies and producing companies. Moving forward as a publicly listed junior mining company can be challenging in the DRC because they are used to overseeing producing companies, and it is a different mindset.

Looked at another way, the DRC resources are so rich that they do not really look for investors either. Investors come to them.

We are fortunate because the DRC has stated that it is very interested in developing the electric vehicle battery metals space, lithium being one of the big elements. The biggest hard rock undeveloped resource was discovered a few years ago in the Manono area: 400 million tonnes at 1.65% Li2O, which is one of the most incredible LCT (lithium-cesium-tantalum) pegmatites ever. And that’s in the region where we are.

Because we are operating tailings reclamation projects, our speed to market and ability to bring our projects to production is a big advantage. Seeing as we will likely be the first lithium producer in the DRC, we are getting a lot of support from the government.

What about obtaining permits and finding skilled workers?

There are no surprises as you go along. As long as you follow the procedures, the government will act upon them. As an example, we recently obtained a mining permit for our TiTan tin and tantalum project.

As far as human resources, Manono is a fairly remote area, but because the DRC is a mining country, there are a lot of very qualified technicians, engineers and tradespeople available. That’s a big advantage compared to many other mining jurisdictions around the world that are suffering from serious labour shortages.

You just mentioned receiving permits for TiTan.  What comes next?

We had to work with the government on getting a better road to reach the project, and that is almost complete. We will be pouring the concrete foundations in December. It is a $10 million investment, and we anticipate two to three months for construction. Commissioning is scheduled for March, and the start of production shortly thereafter.

Can you walk us through TiTan’s economics and what this does for the company’s financials?

Production is planned to be 120 tonnes of tin concentrate per month and 20 tonnes of tantalum concentrate per month with a plant capacity throughput of 130 tonnes per hour.

On average, we are looking at about US$2.5 million to $3 million of revenue per month at today’s commodity prices, which would generate around $1 million to $1.5 million per month in net cash flow. The objective is to use it for the development of our other projects and also phase two and three of TiTan.

Talk to us now about the Manono Tailings project and the pegmatite corridor. Looking at maps of the projects, they seem to sit in a line.

They do, and that is a big advantage because our team can be working simultaneously on all three projects. The TiTan project is 40 kilometres southwest of the Manono Tailings project, so it’s all in close proximity.

Our flagship is really the Manono Tailings project. It comes from an old tin mine that operated from 1913 to the 1980s. The mine focused on tin and tantalum and never exploited the lithium. We bought into the tailings licence in 2018, and there are 11 dumps and processed tailings terraces. We conducted a drone topographic survey of the entire concession area and confirmed 105 million tonnes of material on surface.

A year and a half ago we identified where we would start drilling, targeting dumps with a higher presence of pegmatite, and we drilled on about half of the total dumps. We identified from our 13,000 metres of drilling a very interesting resource in the southwest portion.

We released the maiden resource for the Manono Tailings project on December 15 of this year, with 12.09 million tonnes at an average grade of 0.64% Li2O and a little under half already in the Measured and Indicated category. This allows us to proceed immediately with our phase one project to produce about 100,000 tonnes of spodumene concentrate per year at 6% Li2O (SC6) for an initial mine life of six to eight years. 

With SC6 lithium concentrate foreseeably selling above US$4,000 per tonne for the next six to eight years and extremely low mining costs, you can see why we are so excited.

We are aiming to be in production by 2025.

And the pegmatite corridor is pure exploration at this point, is that correct?

Yes, our focus is to get the Manono Tailings project into production as soon as possible and take advantage of the supply shortage in the lithium space to generate substantial revenue for the company. We have already initiated a feasibility study and environmental and social impact studies, and we are targeting the completion of the feasibility study by June 2023. A PEA (Preliminary Economic Assessment) will likely be issued in March.

The pegmatite corridor is the blue sky potential. It is a 25 kilometre corridor immediately adjacent and down strike to the 400 million tonne 1.65% Li2O hard rock resource I mentioned earlier. All geology indicates the pegmatites that formed the historical mine extend to the southwest onto our properties. There are showings on surface of the pegmatites, but the corridor on our properties has never been drilled. We actually just started drilling there. 

Let’s look beyond just mining for a moment. Tantalex supports community efforts in the DRC. What can you tell us about these and your motivation for being involved?

It’s a win-win. We are in partnership with the government with these efforts. The government relies on us to help NGOs and local populations, and by us doing so, it brings everyone closer.

It’s a case of becoming a citizen of the country. We are not there just to prove up a resource. The ultimate goal is sustainability.  And to have a sustainable operation when we plan to be in the DRC for the long term, we have to work with the community and help people as much as we can, and they will help us in return. That’s what we are doing right now, and it is wonderful to see.

This latest medical campaign that we’ve supported, involving an NGO called Upright Africa, is just fantastic. It involved medical teams coming in and providing health care. Founder John Woods is a retired US doctor and has been in and out of Africa for the past 10 years, in war zones and lots of situations.

The Manono area was a thriving mining community for 80 years, and when the mine stopped so did everything else. Manono was forgotten by the rest of the world, but because there is more mining now, there is more hope. Doctors came in, and they were able to inaugurate a new hospital and get operations going.

To see this happening not only helps people who are ill but gives hope to others. That’s what they need – they need to feel that somebody is there to help them out. The mortality rate for children under 12 is close to 40%. And they are dying from things that don’t make sense in 2022.

You are based in Canada, but the projects require a lot of expertise on the ground, and I see you had metallurgical work done in South Africa. Talk to us about operating advanced projects overseas.

I’ve spent most of my career on the ground, and our team is also very experienced in Africa. Most of the members of our board have worked or are still working in Africa. We have a team of about 100 in the DRC, so we have surrounded ourselves with experienced managers, operators and workers. For us, it is nothing new. It is just our normal area of work. It is very remote, and there are always the challenges of Africa, but it is our experience that enables us to operate there effectively.

Is there anything we have missed?

To summarize, we are a company which is a near-term cash flow producer for three extremely strategic commodities: lithium, tin and tantalum, and also one with blue sky potential for much more discovery on our additional 1,200 square kilometres of exploration concessions around Manono. I think we have great assets and great people, and the timing could not be better for us. It is the best of all worlds.

This story was featured in Canadian Securities Exchange Magazine.

Learn more about Tantalex Lithium Resources at tantalexlithium.com

InnoCan Pharma: Combining Cannabinoids and Cutting-Edge Science to Deliver Drugs on Target

Smart drug delivery systems that deliver medications to specific sites in the human body are on the leading edge of science.

This type of biomedical engineering focuses on maximizing drug efficiency and minimizing possible side effects, while reducing the overall amount of medication used and frequency of treatment.

Cannabinoids play a crucial role in regulating the immune system and have been shown to suppress inflammation through multiple anti-inflammatory pathways. Their high safety profile makes them an appealing alternative to many traditional drugs, according to Iris Bincovich, Chief Executive Officer of InnoCan Pharma (CSE:INNO). 

InnoCan is working to harness the unique qualities of cannabinoids and combine them with the latest in drug delivery systems. The goal is to deliver cannabinoids such as CBD so that more of it becomes available for the body to benefit from than with current platforms.

Bincovich recently spoke with Canadian Securities Exchange Magazine about working with university researchers on the combination of cannabinoids and innovative delivery systems, as well as the direction in which the company’s technologies are heading.

InnoCan recently reported the results of preclinical trials on dogs, using injections for both pain relief from osteoarthritis and for the treatment of epilepsy. What did you learn from these trials?

We learned that we can bring a substantially better bioavailability of CBD to the bloodstream.

The low oral bioavailability of CBD in people, at 6.5% to 20% of administered dosage, is a result of first pass metabolism in the liver and considered to be variable and dependent on fasting and fed conditions.

Together with The Hebrew University of Jerusalem, we’re developing injectable liposomal CBD formulations (LPT) that have already shown higher bioavailability of CBD and prolonged release to the bloodstream.

In a recent study, we’ve learned that the LPT showed close to 100% bioavailability of CBD and prolonged release for at least four weeks after one LPT subcutaneous injection.

In this preclinical trial, a dog with drug-resistant epilepsy was treated with InnoCan Pharma’s LPT injections. The results demonstrated that the frequency and intensity of the dog’s epileptic seizures decreased significantly. Since the last LPT injection, the dog has not had a seizure for over 10 weeks.

In another preclinical trial, six dogs suffering from osteoarthritis and treated with oral analgesics, but still experiencing pain, were administered a single LPT subcutaneous injection in addition to their routine analgesics. CBD concentrations were observed for six weeks following the liposomal CBD injection in the dogs’ plasma. Owners reported that the dogs’ pain and wellbeing scores improved for several weeks after the injection. The results show that the LPT technology has the potential to provide additional analgesia in dogs suffering from pain.

You’re starting by treating dogs for these conditions, and eventually moving on to the human side?

We’re gathering data for this purpose. We chose a big animal model for developing a drug and a treatment model. And yes, the veterinary industry is a potential market whereas the regulatory barriers are marked for the human pharma side.

In both pathways, veterinary and human, we see a lot of potential for the LPT technology to improve patients’ quality of life.

CBD-loaded exosomes (CLX) may hold the potential to regenerate cells. Could this work for conditions associated with the central nervous system?

Exosomes are small particles created when stem cells are multiplied. Lately, they are considered a very promising delivery platform for different molecules. The exosomes can be used as a delivery vehicle that can deliver cannabinoids to diverse target sites in the body.

Various cannabinoids were shown to protect neuronal cell death following their exposure to various oxidative stress damages.

We’re collaborating with Ramot at Tel Aviv University to develop a revolutionary cannabinoid-loaded exosome technology that may hold the potential to provide a highly synergistic therapeutic effect. This effect utilizes the regenerative and anti-inflammatory properties of exosomes and cannabinoids to target various conditions associated with the central nervous system.

What’s next for InnoCan?

The LPT platform development is now in the stage of collecting more safety and efficacy information, with a view toward human clinical trials.

From Q4 2022 going into 2023, we will commence targeting pharma veterinary companies, especially in the companion animal arena for pain management and epilepsy drugs, to initiate negotiation of licensing agreements.

In the three years since we went public, we’ve done an early exercise of warrants. Nearly 90% of our investors chose to exercise the warrants for total proceeds of C$9.2 million. We’re collaborating with leading scientific institutes, focusing on the development of the LPT and CLX drug delivery systems, to achieve our goals of presenting the market with more efficient and accurate delivery systems of cannabinoids to the body.

This story was featured in Canadian Securities Exchange Magazine.

Learn more about InnoCan Pharma at innocanpharma.com.

Marimed: More US Growth in the Works for This Consistently Profitable Cannabis Company

Consumer demand for legal cannabis continues to grow in the US despite stalled legalization efforts at the federal level. Analytics company New Frontier Data, for example, projects US cannabis sales will hit US$57 billion annually by 2030, with that number possibly reaching $72 billion if 18 additional states permit adult recreational use.

MariMed (CSE:MRMD) has developed into a premier seed-to-consumer multi-state operator with expertise in cultivation, production and dispensary operations. The company has a track record of sustainable revenue growth along with one of the strongest EBITDA margins in the industry, projecting $135 million to $140 million in revenue for 2022, as well as $35 million to $40 million in adjusted EBITDA.

The Canadian Securities Exchange Magazine recently spoke with MariMed President Jon Levine, who discussed the company’s growth prospects, how it plans to increase shareholder value and the ways in which US federal legalization efforts influence MariMed’s business.

What distinguishes MariMed from other US multi-state operators?

MariMed is a company that prides itself on its history and a leadership team with a strong track record of winning licences. We built this company over several years – first as advisors helping businesses win their applications and building out their facilities, and now as acquirers working to consolidate those businesses under the MariMed footprint.

Today, we have a lot of team members and facilities with deep industry knowledge, including several members of our executive leadership team. Our CEO Bob Fireman, COO Tim Shaw and I have been working together in this industry for more than a decade.

Why did you choose the states in which you operate, and do you have plans to expand to other states?

In the beginning, MariMed submitted applications in multiple states that were available for licensing and focused on getting those states up and running. Now that MariMed has consolidated the businesses in Illinois, Massachusetts and Maryland, we are focused on expanding to the maximum allowable by law in each of those states.

In Massachusetts, for example, we plan to add two more adult-use dispensaries to our fully vertical, seed-to-sale operation there. In Illinois, we recently added a cultivation-and-processing licence that, once operational, will make us fully vertical in that high-growth state, and we also acquired a licence to build a fifth adult-use dispensary. Illinois allows operators to own and operate a maximum of 10 dispensaries, so we are also focused on adding an additional five to maximize our retail operations in that state.

Additionally, we’re looking for other markets we can expand into that have limited licences and are within the larger regions we presently operate in. We can go in and do the same build out where we go fully vertical as quickly as possible.

What are MariMed’s plans to enhance shareholder value?  

We have an exciting future ahead of us. As I mentioned, we’re building out Illinois, Massachusetts and Maryland with additional locations. We’ve also recently won licences in Ohio and Connecticut. 

We’re also going to continue to expand into additional states through either acquisitions or through the licensing process. Then we’ll build them to be as fully vertical as quickly as possible.

We’re also going to expand our branded products, including Betty’s Eddies, Kalm Fusion, Bubby’s Baked and Vibations: High + Energy, which have all been very successful in each of the states in which they are presently distributed. We’re going to make them bigger and stronger, as well as expand them into additional states over the next several years.

How do you intend to finance your growth plans?

We’re presently cash-flow positive and generating additional cash every month. So, we’ve been using cash flow from operations to expand at a slower rate. But with the current down market making equity issuance not the best option for shareholders, there are opportunities to borrow non-dilutive money at attractive rates given our financial strength and clean balance sheet.

What impact, if any, has the government’s inability to introduce federal cannabis legalization had on your business?

It’s a disappointment for MariMed because we would like to see some form of the SAFE Banking Act passed. That’s less important for our company, as our strong management team has learned how to operate within these tough confines of borrowing and banking abilities for over a decade. The SAFE Banking Act is really about helping smaller cannabis entrepreneurs that are more challenged in gaining fair and equitable access to capital.

We would love to see the SAFE Banking Act passed, and with the right amount of social equity reform included in it. But even with the continued delays at the federal level, MariMed can still operate efficiently and successfully. We’re going full steam ahead in building additional opportunities for our investors.

Finally, what do your shareholders have to look forward to in the next 12 months? 

Our investors should expect continued success and growth. Over the next 12 months, we will open additional retail and cultivation facilities, generating more revenue, and increasing the number of consumers that can access our great brands. We’ve been very successful over the last few years, and we’re going to continue that trend.

Our shareholders should expect MariMed to have a strong balance sheet with the ability to expand our cash flow and to borrow money at reasonable rates to accelerate the expansion of our business to get to the next level. We may be considered a small MSO, but we are going to become much bigger. 

In this market, we have a wonderful opportunity to continue to grow. I think our shareholders will benefit from patience and expect that we will continue to grow over the next several years.

This story was featured in Canadian Securities Exchange Magazine.

Learn more about MariMed at marimedinc.com

Cresco Labs: Top-Tier House of Brands Acquires a Major Retail Network and Sets its Sights on Becoming Number One

Cresco Labs (CSE:CL) Chief Executive Officer Charlie Bachtell believes that when it comes to cannabis, brands matter just as much as in any other industry. Branding Cresco’s retail stores Sunnyside, rather than simply using the parent company name, is but one example of this concept at work.

There are 51 Sunnyside stores across seven states, all brightly coloured and selling products in packaging that would be right at home on the shelves of Whole Foods or CVS.

Different Cresco Labs products have their own unique branding too, depending on their target audience. There’s the namesake Cresco, the flagship “excellent everyday cannabis,” packaged in sleek, matte-coloured containers.

Then there’s Mindy’s, a line of restaurant quality edibles made in collaboration with a James Beard award-winning chef. The packaging has a deep red colour and black cursive font – it looks indulgent. It’s a Cresco Labs product just the same, but it has a totally different identity.

Bachtell emphasizes the importance of a house of brands strategy rather than what he calls a “branded house” where everything is named for the company itself. Consumers are loyal to brands they trust, and you cultivate that trust by speaking to your target audience.

“One thing we realized very early is that the cannabis consumer is very wide and varied,” Bachtell says. “You’ve got your 21-year-old male college student, but you’ve also got your 63-year-old grandmother. They’re effectively walking to the same store to buy the same product, but they want it to look and feel very differently from each other.”

The dedication to brand differentiation is paying off. Cresco Labs had the top branded product portfolio in the second quarter, according to cannabis sector analytics firm BDSA, including the top portfolio of branded flower, the top portfolio of branded concentrates, the second-highest portfolio of branded vapes and a top five portfolio of branded edibles.

The company grew even stronger in March when it announced a definitive agreement to acquire what Bachtell refers to as “the largest engine of value creation in the industry,” New York-based Columbia Care. Once complete, the acquisition will bring 131 facilities (99 dispensaries and 32 cultivation and manufacturing locations) into the Cresco Labs family in one fell swoop. The transaction is expected to close around year-end.

Creating scale in the US cannabis industry is a challenge, in no small part because regulations vary from state to state. Most cannabis companies, Cresco Labs included, generate 75% of their revenue from their three biggest states, according to Bachtell.

But with Columbia Care under the umbrella, Bachtell expects to have eight states contributing at least US$100 million to the top line in 2023. That’s significant diversification.

“We are matching the most productive per-store retail operating model with one of the largest combined retail store platforms in the industry,” Bachtell explained on the company’s earnings call to review the second quarter. “We are creating an unmatched diversification and balance of revenue by geography and by channel.”

Speaking of geography, Cresco Labs is number one in market share in Illinois, Pennsylvania and Massachusetts. The goal is to be in the top three in every state where the company operates.

Bachtell is based in Illinois, where before he co-founded Cresco, he was general counsel for a mortgage company. He started that job in 2007, just in time for the housing market to be engulfed by the Great Recession.

The mortgage industry went from relatively unregulated to highly regulated overnight, Bachtell says, and those in the business had to figure out how to navigate rapidly shifting sands.

When a colleague suggested they get into the cannabis business in 2013, Illinois was just about to pass a law legalizing medical cannabis. Bachtell was skeptical it would be a good fit for him, but then he saw the legislation.

As it turned out, mortgage banking and cannabis sales have something in common.

“I read the bill, and it was as well-drafted and thorough as legislation that was geared toward that banking industry through the last five years of crazy regulatory and legislative initiatives,” he says. “I felt like I had read this book before.”

What Bachtell realized then is that cannabis would never be less regulated than it was at the time. Especially if federal legalization eventually became law, cannabis would develop into a consumer product whether the industry knew it then or not.

The cannabis industry, according to Cresco, can be broken down into four verticals: cultivation and manufacturing, building consumer brands, distributing those brands onto as many shelves as possible, and retail locations. The goal is to excel at all four, but Cresco is prioritizing the middle two. That’s the way the wind is blowing, according to Bachtell.

For example, if cannabis products do end up on the shelves of your local pharmacy, that makes brands more important than brick and mortar retail stores.

Illinois also became the first state to require that products be packaged in childproof containers. That cemented the importance of packaging in what Cresco Labs considers its mission to this day: normalizing, professionalizing and revolutionizing cannabis.

“If Illinois was going to require you to put it in a container, then that becomes your Coca-Cola can, your Budweiser bottle, your Marlboro cigarette pack, your Tylenol box,” Bachtell explains. “However you want to think about cannabis, it just became a consumer product good.”

Bachtell is the first to admit that the cannabis business is complicated. With all manner of different state regulations and federal legalization not yet realized, it’s not an easy industry to navigate. But it’s where Bachtell feels he belongs.

“I knew what the industry needed at that time, which was somebody to come in that had been through this kind of chaos before and knew how to normalize and professionalize an industry that people were concerned about.”

Investors are concerned too, he says, and fatigued by the lack of federal progress. Cannabis companies can’t trade on the New York Stock Exchange or Nasdaq while cannabis is federally illegal, and there is no shortage of OTC-traded companies jockeying for position.

But Bachtell believes Cresco Labs can become the most important company in cannabis. With a vibrant house of brands and an acquisition that more than doubles the company’s retail footprint, the mortgage lawyer turned cannabis CEO looks to have collected all the pieces to the puzzle.


This story was featured in Canadian Securities Exchange Magazine.

Learn more about Cresco Labs at www.crescolabs.com.

IM Cannabis: Early Mover Status Drives Growth in Multiple Legal Cannabis Markets

IM Cannabis (CSE:IMCC) Co-Founder and Chief Executive Officer Oren Shuster believes that entrepreneurs have to trust their “gut instincts” and follow the data to make good business decisions.

Earlier in his career, Shuster had co-founded with Rafael Gabay the Ewave software group, which was thriving with over 1,000 employees. Nevertheless, when the subject of medical cannabis came up during a meeting, Shuster’s instincts nudged him toward exploring its potential. 

“We started the Ewave technology group, and I quickly focused on healthcare technology. I’ve been one of the pioneers in developing web-based electronic medical records, radiology management and telemedicine solutions. But one day, a man talked to me about medical cannabis,” says Shuster. 

“As an entrepreneur, it got my attention, so I spoke with patients and doctors and collected data and feedback on medical cannabis. A light bulb went off in my head; I knew I had to do it – there’s something significant here for patients.”

With decades of experience in technology and medical ventures, Shuster then pivoted to co-found IM Cannabis, or IMC, in Israel.

In 2010, IMC sold its first batch of premium flower. The company is an outlier, and in a very good way, with operations in Israel, Canada and Germany, the world’s three largest federally legal markets.

Where most people see problems, entrepreneurs such as Shuster tend to see opportunity.

“A lot of cannabis companies went to Malta, as it was easy, but we went to Germany. A tough or challenging environment didn’t matter, as we have a strategic approach to Europe – not opportunistic,” says Shuster.

Germany legalized the medical use of cannabis in 2017. Shuster’s early push into the regulated German medical cannabis market has positioned IMC for high-octane growth as Europe’s largest economy presses ahead with plans to legalize cannabis for recreational use. German lawmakers are expected to introduce a draft bill on recreational cannabis legalization by the end of this year, according to media reports. 

“We’ve laid our foundation in Germany, currently one of the largest medical cannabis markets in the world, which is expected to rapidly expand as the German government enacts broad regulatory reform of cannabis use,” says Shuster. 

Undoubtedly, Germany legalizing cannabis for recreational use will be a seismic move for Europe. Tiny Luxembourg and Malta have given the go-ahead for people to grow and consume cannabis, but Germany is the continent’s biggest market.

Currently, IMC operates in Germany through its fully licensed EU-GMP subsidiary Adjupharm GmbH, which has built a logistics centre that allows it to repackage products. With the completion of the logistics centre, IMC has doubled its footprint in Germany to 8,000 square feet, upgraded its production facilities and increased its storage capacity to seven tons of cannabis. 

“IMC has a very clear strategy. What we’ve done is built the supply chain which starts with premium products in Canada going to our state-of-the-art EU-GMP facility in Germany. We are building it as the hub for the EU market,” explains Shuster. 

“We are in the best position to take a leadership position in the massive European market of 750 million people.”

In Germany, the IMC Hindu Kush strain has been a strong seller, helping make Adjupharm GmbH a top 10 cannabis company in the country. Adjupharm has initiated product licence applications to prepare for the launch of new high-quality THC products in the fourth quarter of this year and first quarter of 2023.

“We entered the Canadian market because we needed premium products for Germany and Israel. Our cannabis capacity in Canada is about 15,000 pounds (6,804 kilograms) annually, and we are not yet at full capacity. It’s all premium, indoor-grown Canadian cannabis,” notes Shuster.

“We are growing locally and selling in the Canadian market while supplying our other global markets. We’re also buying premium products from Canadian growers.”

IM Cannabis offers cannabis flower and strain-specific cannabis extracts under the IMC brand, plus dried flower, pre-rolls and pressed hash offerings under the WAGNERS and Highland Grow brands. IMC serves both medical and recreational consumers in Canada. 

IMC has launched a slew of new products in Canada in response to high demand for its WAGNERS and Highland Grow brands, which hold top-three spots in the premium and ultra-premium segments in Ontario, according to sales data from the Ontario Cannabis Store (OCS). 

The WAGNERS pre-roll catalog at the OCS has expanded with the launch of Tiki Rain, Blue Lime Pie and  TRPY ZLRP pre-rolls. Two new 3.5g dried flower stock keeping units (SKUs) – Tiki Rain and Purple Clementine – were launched in addition to an expansion of the concentrate portfolio, with the introduction of soft black hash and 3.5g soap bar hash. New product rollouts include Frost Bite, Leviathan and Space Jagger, according to the company.

“There are distinct advantages to being in different markets in diverse phases of maturity. The Canadian market is the most mature, fully legalized market with a variety of products. We’ve gained insights from being in an ultra-competitive market and can carry those insights to less mature markets,” says Shuster. 

IMC produces a full suite of distinct strains – Roma, Tel Aviv, London, Dairy Queen, Mango Mint, Lemongrass, Pecan Pie, Mimosa – and at least three different oils. The premium brands are aimed at high-end consumers and benefit IMC with premium pricing and higher margins.

“Most of our products are premium and occupy the highest category, as consumers are willing to pay more for quality and artisanal brands,” says Shuster.

While focusing on revenue growth, Shuster has also rigorously pursued cost and margin efficiencies at IMC. For its second quarter ended June 30, 2022, IMC reported C$23.8 million in revenue, a 114% increase from the same period in 2021.

IMC sold 3,210kg of dried flower during the quarter, at an average selling price of $5.72 per gram, compared to 1,842kg for the comparable quarter in 2021, at an average selling price of $3.92 per gram. 

IMC chalked up the jump in revenue to more medical and recreational cannabis sold at higher average selling prices per gram in Israel and Canada. The company’s gross profit, before fair value adjustments, was $5.6 million during the quarter, compared to $0.6 million in the second quarter of 2021.

“At the end of Q2, we had $5.8 million in the bank. We’ve accelerated along the path to profitability with increased revenue, operational streamlining and a focus on cost reduction,” says Shuster. 

“We are seeing growth and a revenue run rate of almost $100 million annually.

IMC has launched its Canadian WAGNERS brand in Israel and plans to bring new medical cannabis products to the country later this year. 

IMC’s de facto company, Focus Medical Herbs, closed its Sde Avraham cultivation farm in Israel, resulting in cash cost savings of $2.5 million per year. It has also finalized the sale of SublimeCulture and restructured its operations in Canada, yielding $4 million in annual cash savings.

A cautious risk-taker, Shuster has connected the dots of opportunity by building a diversified company with a global cannabis supply chain.

“I take calculated risks. I never put all my eggs in one basket, which is why IMC is geographically diversified with operations in Israel, Canada and Germany,” says Shuster.

“On legalization, we are primed to target new adult-use recreational cannabis markets in Germany and capture substantial market share across Europe.”

This story was featured in Canadian Securities Exchange Magazine.

Learn more about IM Cannabis at https://imcannabis.com.

Trulieve Cannabis: Staying True to Proven Growth Plans and Core Values Turns Trulieve Into a Cannabis Powerhouse

Trulieve Cannabis (CSE:TRUL) is one of the cannabis industry’s major success stories, with many of its biggest achievements occurring in the four years since it became a publicly traded company. The Trulieve team focused on innovating and leading Florida’s medical cannabis market at first and then expanded into new jurisdictions, the prudence of its strategy confirmed by strong profitability.

Importantly, this seed-to-sale, fully integrated multi-state operator is also making a mark by supporting the communities it calls home and championing cannabis policy reform.

As Trulieve Chief Executive Officer Kim Rivers explains, community and advocacy have been at the heart of the brand since the beginning.

In one example, Gadsden County, a majority-minority community in northern Florida where Trulieve built its first cultivation facility, has seen the company grow to become its leading employer, according to Rivers.

“We’ve had a material impact on the jobless rate there and pride ourselves on the difference we’ve made in that community,” Rivers says. “That story has been repeated in other communities that we’ve gone into, particularly on the cultivation and manufacturing side of the business.”

Since its launch in 2015, Trulieve has expanded quickly, now operating more than 4 million square feet of cultivation and processing capacity, more than 175 dispensaries and with operations in 11 states. The company is the largest medical cannabis operator in Florida, having recently celebrated the sixth anniversary of its first retail sale in the state, and is a top player in its other core markets of Pennsylvania and Arizona.

As it grows, the company has been able to keep its values of community and advocacy at the forefront by entering into new markets with specific characteristics. “Where we chose to make investments and how we chose to go into a community is thoughtful and purposeful,” Rivers explains. “It allows us opportunities to have a deeper connection with the communities, customers and patients that we serve.”

In addition to Trulieve’s internal community-focused initiatives, such as its supplier diversity program, the company works with a range of organizations, including the Epilepsy Foundation and veteran’s and children’s initiatives. Rivers also highlights the support of individuals qualifying for expungement of low-level cannabis offenses.  Among other benefits, expungement provides these individuals the opportunity to remove the conviction from their record, to participate in the industry and to vote to influence future cannabis policy.

A combination of customer focus and financial discipline has allowed Trulieve to thrive where other cannabis companies have not, Rivers notes.

“We made the decision early on to focus on branded products through branded retail, and we’re not shy or hesitant about growing our scale in both supply chain as well as our retail network,” she says. “That gives us the ability to build more durable relationships with the customer and have more control over the customer journey.”

This approach is clearly working, with the company reporting strong Q2 2022 results despite a challenging macroeconomic backdrop, including pressure on the company’s wholesale segment.

Trulieve reported a 49% year-over-year revenue increase in the quarter to US$320.3 million, including a 3% rise in retail revenue to $298.6 million. “We’re proud to see strong customer loyalty continue in the first half of the year,” says Rivers.

The company also posted a 17% EBITDA increase to $110 million and finished the quarter with $181.4 million in cash. 

The success of Trulieve’s approach is also evidenced by its expansion of operations into other markets, including Arizona, California, Massachusetts and Pennsylvania. Almost one-third of the company’s retail operations were located outside of Florida as of the end of the second quarter.

While Rivers notes that each new market has unique challenges due to differing regulations, Trulieve has found many aspects of its Florida business model to be transferrable, including operating and manufacturing procedures and market analysis.

According to Rivers, the company has been thoughtful in terms of how it can share resources across its broader platform and gain efficiencies where possible, citing the company’s nutrient program as an example.

Currently, the company is unable to transport cannabis products across state lines, but it can transport nutrients, and its nutrient blends are used across all of its sites in the US. “We also do a good bit of our research, development and innovation work in Florida because we have the ability to do that at scale,” she says.

Rivers also points to the company’s team as a key strategic advantage. “We have individuals who have operated within our Florida market and been a meaningful part of our scaling of operations from when we were initially three stores to now more than 100 stores in the state,” says Rivers. “Being able to take these lessons and apply learnings across different markets has been invaluable.”

For Trulieve, the year 2022 is about organic growth, as more states enhance their medical cannabis programs and pivot toward recreational use. Rivers says the company has focused on its branded products and branded retail while optimizing the portfolio of Arizona-based Harvest Health & Recreation, which the company acquired in a $2.1 billion all-stock deal in October 2021. 

As part of that effort, Trulieve divested non-core assets and operations, one recent example being the decision to discontinue wholesale operations in Nevada. 

“Sometimes it’s just as important what you don’t do as what you do,” Rivers says. “The goal is to enter 2023 as a stronger company positioned for the opportunities we see ahead of us.”

Despite recent remarks by political leaders in support of cannabis policy to cover state banking or criminal justice, Rivers notes that progress around cannabis reform on a federal level has been slow.

However, she remains hopeful that the encouraging discussions will morph into actual policy. “It’s very apparent that this is a popular issue due to the amount of conversation that it is getting before the midterm elections,” says Rivers.

One particularly important jurisdiction for Trulieve going forward is the southeast US. Rivers says the company has been “very bullish” on this region, citing recreational cannabis initiatives in Maryland as just one reason.

Another key area for growth is recreational cannabis opportunities in the company’s home state of Florida, which already has an 800,000-patient-strong medical cannabis market.

Trulieve backs the Smart and Safe Florida Act, a proposed constitutional amendment that would allow the recreational use of cannabis by people aged 21 or older in Florida. The company is hoping it will appear on Florida’s November 2024 ballot. Trulieve has contributed $5 million to help get the proposed amendment on the ballot.

“That will be a massive catalyst for our industry and certainly for our business, with 21 million residents in Florida and up to 130 million tourists visiting the state a year,” Rivers concludes. “We think our strategy will continue to serve us well in emerging markets as they develop but certainly also as the landscape on the federal side transforms.”

This story was featured in Canadian Securities Exchange Magazine.

Learn more about Trulieve Cannabis at www.trulieve.com

Spotlight on Darcy Krohman

Your education and experience are at a unique intersection of finance and mining. What made you decide to pursue this career trajectory?

During my undergrad, I completed several business courses which set me on a path to pursue the Chartered Accountant program, articling with KPMG. My intent was always to integrate finance and mining, as, from my perspective, the subject matter and information derived from these two disciplines provide the “nuts and bolts” of the operations of any mining or mineral exploration company.

Where did your career in mining start?

My first jobs in the mining space were with the UBC working for a PhD student and mapping a large region near the Mascot Gold Mine in the Similkameen Valley of southern BC, followed by summers working for BHP-Utah Mines in the Coastal Mountains of BC and on Vancouver Island at their Island Copper Mine.

What’s the most important thing you’ve learned during your time at the CSE?

The importance of patience and flexibility while working with issuers to achieve their objectives. Many junior companies do not have the in-house expertise or resources to address many of the complex issues to get their companies and mineral projects past the exchange listing “finish line.” EThe services the CSE provides for listing and ongoing continuous disclosure processes are integral to obtaining a positive outcome for the company, investors and the CSE.

What is the most important thing mining companies need to consider when going public?

The single most important aspect of any company, public or private, is having the right people doing the right functions. The mining industry is littered with examples of good projects significantly impaired by management with the wrong skill sets. Mining companies, like all companies who decide to go public, must also realize that the rules of the game change once you decide to go public. The assets of the company are no longer solely for the benefit of the directors, officers, management and insiders, and there is an ongoing obligation to account for those assets.

From your perspective, what are some challenges that public mining companies are currently facing?

In a complex industry like mining, there are numerous challenges faced by public companies. Some of these include identifying resources, dealing with longer lead times, developing new technology, finding qualified labour, working in remote and complicated jurisdictions, and complying with corporate social responsibility to stakeholders, Indigenous peoples, and the environment.

What are some misconceptions about mining you think people should know?

Probably the amount of environmental damage a mine will have if developed responsibly. To maintain our current standard of living, metals have to be produced, and environmental impact and surface disturbance will, unfortunately, occur. However, that impact can be mitigated by using evolving technologies, completing a cost-benefit analysis at each stage, and complying with professional and industry standards. Canada has high environmental standards, and I believe the export of these standards will help improve the acceptance of mining as a sustainable industry worldwide.

This story was featured in the Canadian Securities Exchange magazine.

Québec Nickel: High grade at the core of a business plan to supply vital metals to the clean energy sector

Experienced executive David Patterson wanted to be ahead of the nickel curve when he formed a new Québec-focused company in September 2020, foreseeing growing demand for metal in the clean energy sector.

Patterson moved quickly, approaching Glenn Mullan, Chief Executive Officer of Val-d’Or Mining, ultimately leading to then-private Québec Nickel buying what is now the company’s 15,000-plus hectare Ducros nickel, copper and PGE project from Val-d’Or Mining for 3,589,341 special warrants.

In July 2021, Québec Nickel (CSE:QNI) listed its shares on the Canadian Securities Exchange, and in November of the same year raised approximately $7.5 million. 

At Ducros, the company is embarking on an extensive exploration program pursuing high-grade mineralization. Currently underway are airborne and ground surveys as well as an aggressive 20,000 metre, multi-phase drill program encompassing the 2022 exploration season. 

Canadian Securities Exchange Magazine caught up with Patterson, Québec Nickel’s Chief Executive Officer, recently to learn more about the company’s plans.

Québec Nickel is exploring for high-grade nickel in the Abitibi, yet the area is better known for its many gold and VMS deposits, with only low-grade nickel occurrences. Talk to us more about your vision.

We believe that our Ducros property has all the necessary features to produce a high-grade nickel deposit. On our property we see geologic structures in an area with high volumes of mafic and ultramafic rocks. This unique combination of geological setting and geology give the Ducros the potential to host an economic nickel ore body. 

In a broader sense, what’s the difference between higher and lower grades in nickel?

All things being equal, a high-grade deposit will have a smaller ecological footprint and can better withstand volatile metal prices. A low-grade deposit may be economic at the current metal price, but could not sustain an operation if prices drop significantly.

How is your current drilling and exploration program going? What have you discovered so far, and what do you hope to achieve?

The COVID variant Omicron slowed our exploration activity at the start of 2022. However, in early February we were able to begin both our airborne VTEM survey as well as Phase I drilling on the Ducros. Our most recent press release has a detailed description of the rock types we have encountered. We will need to wait for assays for the current holes, and we anticipate having them in the next month or so.

Can you tell me more about the Ducros project and why you are excited by it?

We believe we have a large project area that has seen very limited exploration activity. Previous work by other independent operators on small portions of the property has provided our technical team with evidence that the area has a significant volume of mafic and ultramafic rocks. This is a similar geological setting for most of the magmatic sulphide nickel discoveries in the last 100 years.  

In addition, limited drill programs conducted in 1987 and 2008 show that there are nickel occurrences in these rock types. Our 2020-2021 exploration program of geological mapping, geochemical sampling and geophysical surveys has given us confidence that we are in the right geological setting. Our 43-101 Technical Report from 2021 discloses channel and grab samples from the Fortin showing outcrops that contain over 2% copper and 0.5% nickel with elevated platinum and palladium values.

Can you say more about your executive team, their background, and what you bring to the company as CEO? 

On our board of directors, we have people with tremendous nickel exploration experience as well as expertise in finance and accounting.

Our technical team has considerable experience in nickel exploration, with both brownfield and greenfield discoveries that have gone into production.  

As for me, I have helped finance large nickel exploration projects in Canada over the last 25 years. I believe the team that we have brought to Québec Nickel can find an economic ore body and has the experience to be able to develop the project through to production. 

How would you sum up the company’s opportunity to a potential investor?

I believe that we are in the early stages of a metal super cycle, that we have chosen the right metal given this super cycle and we have the right people to guide the successful development of the company.

This story was featured in the Canadian Securities Exchange magazine.

Learn more about Québec Nickel at https://quebecnickel.com/.

International Battery Metals: Technology to support clean, consistent lithium supply takes a big leap forward

Technological breakthroughs are where the big money is often made in the stock market, and International Battery Metals (CSE:IBAT) is a perfect example. As it entered the fourth quarter of 2020, the company’s shares could be picked up for around $0.10. More recently, those same shares have changed hands as high as $7.40.

It is a success story based on solutions in an industry crying out for them, one where inefficiency is clashing with a generational shift in consumption to create high prices and serious concerns about future supply shortages. Given the move toward greener economies, not to mention regional resource security, it might not come as a surprise that lithium is the prized product we are talking about.

International Battery Metals Chief Executive Officer Dr. John Burba can truly be described as a technology pioneer in the lithium extraction industry. Now at the helm of his own company, the pace of his achievements is only picking up momentum.

Dr. Burba spoke with Canadian Securities Exchange Magazine in late March about the company’s technology and how he sees it contributing to a better macro climate for the lithium industry, and the global environment, in the years ahead.

We will explore your technology and the company’s success in a moment, but can you begin with your view on the state of lithium supply and demand and how it shapes your strategy?

I’ll start off by saying that I think the lithium industry today is where the oil and gas industry was in about 1910. There are strong analogies.

If you go back to what was happening in the early 20th century, people did not really know much about how to get oil and gas out of the ground successfully. The process was very dirty. Pollution was ignored. It was just a nasty process. Of course, that has improved in the decades since.

The lithium industry is not that different. There are two major supplies of lithium today. There is hard rock mining, which is spodumene. Basically, companies are mining this in a variety of places and sending it to China for processing.

Then there is lithium extraction from brines, and you either have solar evaporation, which is very damaging, or you have FMC’s process, which I invented when I worked for FMC. That approach is better but still has drawbacks.

The industry has old processes that are not as efficient as they need to be, and significant issues on top of that with environmental damage. That is the backdrop to where we are. We have a tremendous shortage looming over us, and that is why prices are so high for lithium right now.

If the world continues producing lithium the way it does, the shortages are going to get worse. It will negatively impact the number of vehicles that can be produced and the number of batteries that can be produced. People will start using less efficient batteries and that is not going to be good for the transition we hope to see.

Can you quantify industry efficiency for us?

To give you a few examples, recovery rates for these processes are not very high. If you look at solar evaporation in Chile, they only recover about 20% to 30% of the lithium and the rest is wasted on the desert floor. FMC’s process recovers around 40% to 45% of the lithium.

Lithium is the only industry I’m aware of that tolerates such abysmal recovery rates. Most industries would be going crazy if they were wasting over 50% of their desired product.

So, these are the burdens that this industry is bearing right now. And the answer is not going to come from big established companies. They are simply not capable of, or not interested in, radically changing the industry so that it becomes efficient and responsive to the needs of the world.

In a recent press release, Universidad de Santiago de Chile stated that your technology is the “only one capable of separating lithium without leaving a significant impact on the environment.” Walk us through what differentiates your approach.

When you look at lithium extraction, one hears a lot about direct lithium extraction (DLE), and many start-up companies preach that as if it’s some new thing. The DLE concept actually began at Dow Chemical in the late 1970s and the 1980s, so that idea has been around for a long time.

Basically, it is about having a technology that can selectively pull lithium from the brine and let everything else go by. We are using a proven form of direct lithium extraction that is based on an absorbent that a friend of mine and I invented back in the 1990s. We have improved it since then, but it was groundbreaking at the time.

This material will selectively recover lithium from a saturated brine. And the selectivity is astronomically high.

The reason that matters is because there is not that much lithium in even the best resources. In that Atacama brine that everybody loves, you have about 2,000 parts per million lithium. If you look at Alberta, you are talking about 50 to 80 parts per million.

The lithium concentrations are low and you have to have something that will pick up the lithium and leave behind everything else.

We have improved our process so that – and we still have to prove this – but we are expecting to see recovery rates substantially higher than 60%. And we are hoping for recovery rates in the range of 90% to 95%.

The second thing is we intend to inject the brine back into the formation rather than putting it onto the ground and letting it evaporate. The problem with letting it evaporate is that you create salt flats all over the place, and salt is very detrimental to ecology.

The third thing, and perhaps the most important for jurisdictions such as Chile, is that our technology enables us to recover vast amounts of water. We will be recycling about 98% of our process water. In the Atacama, for example, they don’t recycle any water with solar evaporation.

What about the equipment itself? Are there positive environmental aspects to your physical footprint at a project?

We have been able to shrink the size of the processing equipment and that has allowed us to modularize and develop a mobile plant concept. We can put modular equipment in place, assemble it, turn it on and begin processing lithium in a short period of time.

When we are done, we pick up the equipment and eventually you won’t be able to tell that we were ever there. We can build one of these plants in months, rather than years.  

I will add that our omnibus patent for this mobile and modular process has been issued.

What is the status in terms of commercialization? And what is the commercialization plan?

I’m glad you brought that up, because if we can’t make money, we can’t do a good job on the environment. We have two contracts with a company called Scorcia Minerals. They have substantial resources and we have a contract with them in Chile and Argentina providing exclusive rights to use our equipment there.

Our arrangement sees us receive a royalty on final sale of the product. They buy the equipment from us on a cost-plus basis, we operate on a cost-plus basis, and we own 10% of each project.

We are focused on North America right now and I would say that in the next two years we intend to have one of our units extracting lithium in the United States. We also intend to build a lithium carbonate hydroxide facility in the United States so that we have a North American base for significant lithium production.

Once we are established in North America, we are also open to Africa, Europe and other places where they have good resources.

Give us a look at your future and where the industry is going. How big do you think you can get and how does your company maintain a leadership position?

We have passed a tipping point from the standpoint of transportation and electrification. In the first question, I made the analogy to the oil industry a hundred years ago. I think lithium is going to see a lot of the same drive that oil did.

Some people will ask why not sodium, or why not potassium? It comes down to basic chemistry. Lithium is the best. Its transport numbers are the fastest, which means it will zip across a cell very rapidly, and go into crystals very rapidly, and it has a very high half-cell potential. So, when you look at this, all of it bodes well for powerful, high-capacity batteries. It is not likely we are going to find a battery chemistry that works better than lithium.

And then how do we remain relevant? We have to do every one of our projects in a credible and honest way and we have to be successful in everything that we say. We are not into predicting. We want to do it and then explain what we’ve done. Our accomplishments need to be real and measurable. That is the kind of thing that serious investors like.

Anything we have missed?

Right now, the biggest driver of success in the industry is time to market. We have exceedingly high prices. If I can start today and have a plant operating in 18 months, as opposed to six years, I have already won the game. That is where the mobile and modular extraction comes into play. We can get in rapidly, and we can expand a facility rapidly. It is like LEGO – you just plug it in.

I’d also point out that high recovery rates and things of that nature flow through to low operating costs. And something we have not talked about is that capital costs for our modular system are substantially lower than for traditional plants. We don’t have to put in foundations or construct big buildings. We don’t have a cast of thousands to support 24 hours a day. This makes it much easier to finance a plant and that makes it easier for us to expand. These are the reasons I am very optimistic about our future.

This story was featured in the Canadian Securities Exchange magazine.

Learn more about International Battery Metals at https://www.ibatterymetals.com/.

Element79 Gold

Mineral exploration companies rarely talk about the potential for generating cash flow because it simply is not part of the vision. For Element79 Gold (CSE:ELEM), however, it is a key aspect of the path to success, and the company is currently putting the finishing touches on a portfolio designed to achieve it in the near term.

Element79’s flagship is the Maverick Springs Project in Nevada and it has a number of other properties along the state’s Battle Mountain trend as well. It also has projects in British Columbia and Ontario, and recently moved to acquire two high-grade Peruvian gold projects. 

Upon completing the Peruvian acquisitions, Element79 Gold will have a diversified portfolio of assets including greenfield, advanced 43-101 inferred resource stage, and historic high-grade past-producing mines that have the potential to become producers again.

Canadian Securities Exchange Magazine sat down with Element79 Gold Chief Executive Officer James Tworek in late March to find out more.

Element79 recently completed a 43-101-compliant, pit-constrained mineral resource estimate for the Maverick Springs project in Nevada. What did it tell you?

It gave us an opportunity to gather all the data that had been amassed from previous owners of this property and to take the historical resource and bring it up to modern standards. In doing that, we were able to incorporate an additional 59 drill holes of data, which had been completed after the historical reports.

It also gave us the opportunity to refresh our perspective on the project. As it was previously conceived only as a prospective underground mine, arguably there was a lot that was being missed. By looking at it from the perspective of a pit-constrained model, we can now look at the strip ratio of all of the strata above the hard rock and begin to incorporate those economics.     

Right now, the strip ratio is about 5:1, and going forward our plans include doing some infill drilling to prove up value and to enhance our understanding of the project’s metallurgy, with the intent of getting better yields from higher strata and enhancing overall project economics.

Aside from Maverick Springs, Element79 has a portfolio of 15 properties in Nevada which you are assessing for further exploration, potential sale or spin-out. Which is most likely? 

Because it is such a diverse portfolio, we have stratified them into what we’ll call the “best hits” in terms of what we will likely keep ourselves and focus on to unlock value. I would argue that Element79’s market capitalization is very much weighted on the value provided by our 3.71 million ounces of gold equivalent and the potential of developing Maverick Springs. Little of the rest of the portfolio is being accounted for today.

Some of these are well-explored properties, with 160-plus drill holes on them, but they don’t have any form of modern report. So, this is a great opportunity for us to revisit data, put in some work on the properties and generate modern reports on them with the intent of unlocking the value of the resources onto our balance sheet.

In addition to raising capital for the projects, we have been speaking with potential partners that might want minority joint ventures on specific properties. We are looking at all these aspects, and now that we’ve reached our current strategic M&A plateau we’re confident in where we’re going with developing our portfolio.

Beyond Nevada, you are in the process of acquiring the Snowbird project in British Columbia and have an option on another project in the famous Timmins mining camp in Ontario. What can you tell us about these? 

The Timmins project, called the Dale Property, has proximity to IAMGold’s Cote gold mine, where production is expected by mid-2023. Being on the same greenstone belt, about 60 kilometres away, there is a great opportunity to show there’s something worth pursuing.

That said, Dale is at a very early stage, so we have to balance that exploration requirement with developing our other more advanced projects at the same time.  

With the Snowbird project, where we have already funded about 3,000 metres of drilling, we intend to close the purchase shortly. The catch to the transaction was that the exploration permit ended on December 31, 2021, and the vendors, Plutus Gold, had a contractual commitment to invest $1 million in exploration by June 30, 2022.

Exploration permits are currently taking six months or more to obtain, so having to wait for it could have jeopardized the acquisition in the immediate term. We’ve been told that Plutus is just getting assays trickling in, and a 43-101 report on the project is underway. We should have that information in the first part of the second quarter.

Element79 recently signed a Letter of Intent to acquire some past-producing gold mines in Peru. What do these offer? 

We have an LOI signed and we’re going through a 90-day due diligence process prior to closing. These assets were previously producing but were shuttered due to low prices in the early 2000s. But there was prolific production out of them. The Lucero asset was producing in the range of 19 grams per ton gold equivalent.

The beauty of working in Peru is that mining is deeply rooted in the culture and it’s a cornerstone of the economy. Also, the permitting process is streamlined compared to many jurisdictions.

There are existing permits in place to extract 350 tons per day of ore. And with the Lucero asset, where the two permits are in place, there is regional infrastructure. The closest mill is only running at about 60% capacity and around 20 days a month, so there’s potential for us to start generating cash flow in the near term.

The company has said its portfolio offers a pathway to revenue. What do you think is the timeline?

Post-acquisition of the Peruvian portfolio, which should be closing at the latest by mid-June of this year, we plan to take the time to make sure that we have adequate basic exploration, including an initial 43-101 resource for both former mines to get them operating again. We feel quite confident that within 18 months we should be in production at Lucero.

That can help offset our day-to-day operating costs, and even fund some exploratory work. If we want to move by leaps and bounds, we are speaking to different financing parties, with debt financing a topic. With cash flow, we can justify borrowing to develop both the Peruvian assets as well as our flagship and Nevada portfolio that much faster.  

What should investors in Element79 expect in the medium term? 

We’re ratcheting up very quickly from a lean start-up to a fully functioning operational mining company on a global basis. We’ve just brought on another world-class teammate, Mr. Kim Kirkland as our VP of Global Exploration and are engaging further consultancies and country managers for specific assets.

The pending newsreel includes updates as we close on Snowbird and eventually on the Peruvian assets. We’re also actively raising capital, as well as progressing long-term sustainability initiatives while developing our portfolio. 

Bringing on cash flow is a key driver of our corporate strategy. There are a lot of junior miners that aren’t able to achieve this goal based on their assets or strategy. We intend to be doing that within 18 months of acquiring the Peruvian portfolio.  

My personal goal was to ensure that this company would have access to cash flow within 24 months of our IPO. We seem to be on that trajectory right now, with an amazing team of people and key assets to get us there.

This story was featured in the Canadian Securities Exchange magazine.

Learn more about Element79 Gold at https://www.element79.gold/.