Electric vehicles have for years now been extremely popular with consumers who want to do their part to reduce CO2 emissions. Every major vehicle manufacturer is in the game to some extent, and companies such as Tesla and Rivian make nothing but vehicles that run on electricity.
But there is also a completely different energy source that can power vehicles in equally clean fashion. Automotive heavyweights such as Toyota and Honda are pouring money into related research.
Establishing these new drivetrains as mainstream would represent somewhat of a holy grail on the clean technology front, in part because one of the ways to obtain this fuel is to let it flow out of the ground from a renewable source.
That fuel is hydrogen and it has caught the imagination of engineers across the world because it burns without emitting CO2. This early in the game it is more costly on a per-kilometre basis than gasoline or electricity, but technologies tend to start that way, with costs coming down in line with technological progress and economies of scale.
One might wonder why we do not see a plethora of natural hydrogen exploration companies or producers listed on stock exchanges around the world. One reason might be that the science behind discovering natural hydrogen is still developing, and without an edge in that department, it’s difficult to get far.
Quebec Innovative Materials (CSE:QIMC) ticks the technology box plus others that observers may deem important when assessing a company in the sector.
The company’s share price is up 380% year to date at the time of writing and had been up by over 1,500% at its high, before profit-taking arrived to begin turning over some of the shareholder base.
Quebec Innovative Materials’ flagship property is Ville Marie, located 15 kilometres north of the Québec town bearing the same name and only hours by car from major northeast metropolitan areas.
In a little over five months since exploration began, the company has reported soil showings of hydrogen that indicate a source lies deep beneath the surface. The questions now are how much is there, how pure is it and can it be extracted in economically feasible volumes?
“We started Quebec Innovative Materials six years ago with a vision of clean, natural hydrogen, and that vision was from Professor LaFlèche and the team at INRS,” says Quebec Innovative Materials Chief Executive Officer John Karagiannidis, referring to the Québec government’s Institut national de la recherche scientifique (INRS), and Professor Marc Richer-LaFlèche, Scientific Head of the institution’s Applied Geoscience Laboratory.
“Some years ago, a number of papers came out of Australia regarding natural hydrogen and related exploration techniques. Professor LaFlèche used the models and applied them in Canada, which led us to stake in the Ville Marie and Lac Saint-Jean areas.”
Hydrogen can be obtained both from natural sources and through industrial processes. In industry terminology, “white” or “natural” hydrogen refers to naturally occurring hydrogen, while “grey” and “green” hydrogen denote hydrogen produced through industrial methods.
The potential for a regenerative dynamic to come into play makes the discussion of defining the economics of a natural hydrogen project particularly interesting. Whereas oil and gas deposits take millions of years to form and then ultimately deplete as humans tap them, natural hydrogen is generated continuously when water reacts with iron minerals deep underground.
“We don’t look at it as a resource,” says Karagiannidis. “We look at it in terms of flow. What is the renewal rate and what is the commercial flow out of the main conduits. You can’t look at it as a static system where you have a resource. You are not looking for a reservoir but rather for a renewal rate and what is the commercial flow.”
Given this explanation, resource investors would be right to think that Ville Marie resembles an oil and gas project as well as a mining project. And this is what led to the involvement of one of Canada’s most successful entrepreneurs in both the oil and gas and mining sectors: Sheldon Inwentash.
Currently Chairman and Chief Executive Officer of Toronto-based ThreeD Capital, Inwentash is not only adept at putting companies together but a famed portfolio manager, perhaps best known for his 22-plus years leading Pinetree Capital, which made investments in hundreds of junior mining companies.
In the early years of his career, Inwentash did a lot of work with oil and gas. “I have a background in the oil and gas industry and especially building companies in the 1980s,” Inwentash explains. “And I was involved in the gas tight shale projects being explored in Québec about 15 years ago and realized how gas-rich the province is.”
It was the work by INRS that piqued Inwentash’s interest as well. “In reading the technical reports INRS had done, it occurred to me that geological hydrogen, which is a new phenomenon, is sort of at the intersection of how oil and gas is discovered, and how mining is affected in that same ecosystem. Because ostensibly the rocks create gases – it’s sort of like a live system. You almost have to have some knowledge of both of those disciplines.”
And as Karagiannidis explains, the capital market capabilities that ThreeD brought to the table were just as valuable. “On the capital markets side, we have Sheldon and Jakson Inwentash and the whole team at ThreeD, our largest shareholders and our initial funders when we launched our hydrogen projects.”
In its formative years, Quebec Innovative Materials worked on a different set of projects containing silica, and these are still part of the portfolio. “We have press released that we are looking to proceed with bulk samples and we have buyers, so we are at the bulk sampling stage with the silica,” says Karagiannidis.
But hydrogen is the company’s main focus, with preparatory work at Ville Marie leading toward the commencement of hydrogen exploration this past summer, starting with a hydrogen soil-gas sampling program carried out by INRS.
The first two hydrogen anomalies announced were each observed over a length of 500 metres, with concentrations in the first zone ranging from 311 ppm to 388 ppm (parts per million), and 157 ppm to 346 ppm in the second.
Soon after, the company said it had extended a line of significant anomalous natural hydrogen soil gas findings to 9 kilometres. A subsequent announcement revealed that hydrogen soil samples with concentrations exceeding 1,000 ppm had been collected. “We are thrilled to announce this transformative discovery outlining a highly charged 70 square kilometre hydrogen area within our 250 square kilometre Ville Marie property,” Karagiannidis stated at the time.
Most recently, Quebec Innovative Materials announced the launch of winter monitoring to measure natural hydrogen gas flow rates in identified hot zones in the project’s St-Bruno-de-Guigues region.
“It is a two-stage approach,” says Karagiannidis. “We are focusing on geophysics from a terrestrial perspective, going from east to west to specifically identify the primary conduits underground. We are also starting our specific hydrogen sampling but this time on the lake itself, so we are going to drill through the ice and put in a proprietary gas-measuring probe to measure at different levels.”
It is painstaking work but moving along smoothly, and all designed to set the team up for a significant drill program come summer. It is also aimed at further establishing Quebec Innovative Materials as a leader in hydrogen exploration.
“We are the most advanced natural hydrogen pure play in Canada, and I would say top two in North America,” Karagiannidis concludes. “We are really at the forefront of a nascent natural hydrogen industry.”
This story was featured in Canadian Securities Exchange Magazine.
Learn more about Quebec Innovative Materials at https://www.qimaterials.com/.