Grid Metals: Nickel and Lithium in Manitoba

GRDM.V, Grid Metals, Lithium, nickel, Manitoba

There is a lot of market excitement about “battery metals”, lithium, nickel, copper, cobalt and graphite. The future is all about electric vehicles and battery electrical storage to fortify the “grid”. This is where Grid Metals (GRDM.V) begins to shine. The company is developing two projects in southern Manitoba – one a lithium project, the other a nickel/copper project – both located in close proximity to each other.

I spoke with Robin Dunbar, Grid’s President to check on the company’s progress with its properties.

“At the Makwa Nickel Deposit we are looking at a former producing nickel mine,” said Dunbar. “We’ve done geophysics on the property which has identified four areas where we think we can add more resource.”

The company reported the results of the first hole of fourteen at Makwa. This hole “intersected two separate intervals of <1 metre of massive sulfide mineralization with nickel grades greater than 1.5% within a broader mineralized package including 15 metres of 0.64% and 3.5 metres of 1.14% nickel equivalent grade”.

“This first hole is underneath the old underground mine,” said Dunbar. “This is reconnaissance exploration drilling looking to identify areas for follow up.  The whole area is “brownfield” exploration.”

“We’re looking at both open pit and underground mining,” said Dunbar. “You follow the open pit mineralization deeper by going underground.”

Ultimately, it is a pure economics question. Is there enough material at a high enough grade to justify the capital expenditure needed for a mine?

“As well as exploration we are rejigging the NI 43-101 scoping study (PEA) we completed in 2014,” said Dunbar. “Since 2014 we have completed additional metallurgy and identified other inputs to improve the overall project economics.”

“We think this is one of the best, undeveloped, nickel-copper base metals deposits in Canada,” said Dunbar.  “We’re looking at a 250-300 million CAPEX. Compare that to other junior nickel developers and it is at the low end.  The grade of the open pit deposits is very attractive as well.”

The outlook for the nickel market to grow based on use in electric vehicle batteries is very good. ,” said Dunbar. “There are not too many projects around that have the combination of open pit grades and tonnes that we have.  At current metal prices there is well over 4 billion dollars worth of rock in the two pits that comprise our PEA resource.”

Exploration is continuing at Makwa with the hope of finding more and higher-grade mineralization. At the same time, Dunbar estimates that they are looking at a three year time frame to get the required government permits.

As work progresses on Makwa, Grid is also working on 75% owned Donner Lake lithium project. The Company reported on initial results from its 2022 lithium exploration program in a news release dated April 5, 2022.

The Company is looking for spodumene-bearing pegmatites – spodumene is the mineral which hosts the lithium – in what are known as dykes. The dykes are located along a ~9 km long prospective geological contact between the Bird River greenstone belt and the Makwa Lake batholith and occupy obvious structural trends. This area is largely unexplored and undrilled.

“The dykes can be like coal seams,” Dunbar said. “We find the dykes and then drill them. We have drilled 16  holes in the Northwest Dyke which is showing great continuity. . We haven’t missed yet.

From the April 5 release, “the first hole of the program (GDL22-01) intersected 13.75 metres averaging 1.53% Li2O including a maximum grade of 2.06% Li2O starting at a downhole depth of 86 metres.

GLD22-02 was drilled on the same setup at a shallower dip and intersected a 9.4 metre pegmatite with 1.47% Li2O over 8.0 metres and a maximum grade of 2.28% Li2O starting at a downhole depth of 57.0 metres.”

“At the moment, spodumene concentrate is selling for well over US  $1,000 per ton,” said Dunbar. “We have a historical resource of 3.5 million tons.  Over the course of 2022 we hope that our drill program will confirm and the expand the historical resource.

There are still 9 holes from the current program to be reported. The company is looking to complete a maiden 43-101 resource estimate for the property sometime later 2022.

From an investor’s perspective, a company offering exposure to nickel, copper and lithium, trading at $0.18 for a market cap of $19,161,000 is awfully tempting. Especially as there will be a steady stream of drill results from both Makwa and Donner Lake over the next few months.


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