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Wednesday, July 6, 2022

Group Ten Metals

Overview

The push for a greener economy has led the American and Canadian governments to identify more than 30 minerals as critical commodities. The US government has called for the development of a local supply chain of certain critical minerals –– including battery and platinum-group metals –– that are needed to meet the surging demand from green energy needs.

When it comes to sourcing battery and platinum group metals, one type of deposit stands out as a key target. Platreef-style deposits are massive in scale and feature disseminated nickel and copper sulfide mineralization that is enriched with platinum-group elements (“PGE”), gold, chrome, and more. These occur stratigraphically below the high-grade reef-style deposits typically associated with South African PGE mines which are the dominant global source of platinum group metals. Whereas these reef deposits are narrow and require high-cost selective mining methods, the wide widths of Platreef-style deposits are amenable to low-cost bulk tonnage mining methods, resulting in much lower operating costs. For example, Ivanhoe Mines’ (TSE:IVN) Platreef mine in South Africa is anticipated to be one of the largest and lowest cost platinum-group metals mines in the world at more than 1.1 million ounces of palladium, platinum, rhodium and gold production per year. Anglo American’s giant Mogalakwena mine and Platinum Group Metals’ Waterberg project bring the total endowment of the Platreef to over 400Moz PGEs, and tens of billions of pounds of nickel and copper, plus other minerals.

Today, Ivanhoe Mines’ Platreef mine has an indicated mineral resource estimate of 42 million ounces of platinum, palladium, rhodium, and gold, plus 3.66 billion pounds of nickel and copper, in a compelling and attractive mix of battery and platinum group metals that is comparatively rare. A growth-stage exploration company that shares this Platreef deposit style in a politically stable jurisdiction like the US would present an exciting opportunity for investors, particularly in light of the federal government’s quest to secure domestic supply of these critical elements.

Group Ten Metals (TSXV:PGE, OTCQB:PGEZF, FWB:5D32) is a Canadian mineral exploration company focused on advancing its large-scale flagship Stillwater West platinum, palladium, nickel, copper, cobalt and gold project in Montana, USA. The project is located in the iconic Stillwater Complex of Montana, USA, a rare world-class magmatic system that is geologically similar to the Bushveld Complex in South Africa which hosts the Flatreef, Mogalakwena and Waterberg deposits as well as numerous high-grade platinum deposits within the Merensky and UG2 reefs. Similarly, the Stillwater district hosts Sibanye-Stillwater, currently operating the world’s highest grade PGE mines along the analogous J-M reef, as well as Group Ten’s Stillwater West project.

Group Ten Metals Stillwater West

Dr. David Broughton, former Chief Geologist for Ivanhoe Mines and co-recipient of AME BC’s 2016 Colin Spence Award for Excellence in Global Mineral Exploration for Ivanhoes’ Flatreef discovery stated in 2018 that “the recognition of a Platreef setting in the Stillwater district is an exciting development.”

In October 2021, Group Ten announced an inaugural NI 43-101 mineral resource estimate for the Stillwater West project which delineated a total of 1.1 billion pounds of nickel, copper and cobalt with 2.4 million ounces of palladium, platinum, rhodium and gold. The resource estimate was conducted in a constrained model totaling 157 million tonnes at an average grade of 0.45 percent total nickel equivalent (equal to 1.20 g/t palladium equivalent) using a 0.20 percent nickel equivalent cut-off grade.

The initial resource estimate is based on five deposits within the most advanced 9-kilometer core project area, less than one-third of the project’s overall strike length. The company sees excellent continuity and expansion potential and is focusing its efforts on expanding the inaugural resources within the core area while also advancing earlier stage targets across the 32-kilometer span of the project, which covers the same highly prospective magmatic stratigraphy as the core area.

Group Ten completed its largest exploration program to date in 2021, with drill results expected to form the basis of an updated 43-101 resource estimate in the first half of 2022. Assays from the first two holes of the 14-hole campaign were announced in December and included the widest high-grade mineralized intercepts ever seen at Stillwater West. These first results were highlighted by 63.7 meters of 0.92 percent nickel equivalent (2.46 g/t palladium equivalent) at the CZ deposit and 728 meters of continuous sulphide mineralization at 0.27 percent NiEq, or 0.73 g/t PdEq at the Chrome Mountain target, which included contained intervals of successively higher grades.

Assays from the remaining 12 holes are expected to be announced over Q1 2022, followed by publication of an updated 43-101 resource estimate.

Group Ten Metals 2021 Mineral Resource Areas

The company is led by a capable management team with more than 100 years of corporate and exploration experience with junior and major companies. Group Ten Metals’ exploration and development team has extensive experience in top-tier districts such as the Stillwater and Bushveld districts.

Group Ten Metals Black Lake-Drayton project

Group Ten Metals holds additional district-scale secondary assets which it is seeking to monetize. The company recently announced an earn-in deal on its Black Lake-Drayton project, a high-grade gold project located in Ontario, Canada. Black Lake-Drayton is situated in the Rainy River gold district which hosts major mines and projects in an area that has expanded rapidly since the 1990s including several recent discoveries. The Black Lake-Drayton project adjoins Treasury Metals’ (TSX:TML) recently consolidated Goliath Gold complex with more than 3 million ounces of gold. The project is located in the same greenstone belt as New Gold’s (TSX:NGD) Rainy River project which has more than six million ounces of gold, and is roughly 100km south of Great Bear’s Dixie gold project.

The company’s Kluane Ni-Cu-PGE project in Canada’s Yukon Territory positions Group Ten with the largest land position in the Kluane Mafic-Ultramafic Belt, a large magmatic system that extends through the Yukon from northern British Columbia to central Alaska that hosts a number of PGE-Ni-Cu deposits. The Kluane project properties are each within 15km of the Alaska Highway and situated on trend with, and south of, the Nickel Shaw (formerly Wellgreen) deposit, one of the largest undeveloped PGE-Ni-Cu projects in North America at 6 Moz of Pt+Pd+Au and 3 Blbs of Ni+Cu in M&I resources and an additional 2 Moz of Pt+Pd+Au and 1 Blbs of Ni+Cu in Inferred resources. Although earlier stage than the company’s flagship Stillwater West project, the Kluane project shows excellent potential with massive sulfide mineralization returning up to 3.1 g/t of platinum, 1.4 g/t of palladium, 1.0 g/t of gold, 3.1 percent of nickel, 2.8 percent of copper and 0.2 percent of cobalt on the Spy claim block. Farther south, the Ultra claim block has trenching results of up to 5.5 g/t of platinum, 13.5 g/t of palladium, 0.5 g/t of gold, 4.1 percent of copper and 1.7 percent of nickel from an ultramafic sill.

The company is currently assessing and evaluating monetization strategies for the Kluane project.

Company Highlights

  • Group Ten Metals has the second-largest landholding in the Stillwater Complex in Montana, USA, adjacent to Sibanye-Stillwater’s mine complex.
  • The company’s 100 percent-owned flagship Stillwater West project is district-scale in size, covering a rare and world-class magmatic system that hosts five minerals that are listed as critical by the US government.
  • The Stillwater West project features Platreef-style deposits of battery and precious metals with exceptional expansion potential, and also high-grade gold.
  • Stillwater West has a significant inferred NI 43-101 mineral resource estimate of 2.4 million ounces of palladium, platinum, rhodium and gold as well as 1.1 billion pounds of nickel, copper and cobalt.
  • Group Ten Metals recently announced a deal whereby Heritage Mining may earn a 90% interest in the company’s Black Lake-Drayton gold project in the prolific Rainy River gold district in Ontario, Canada, by meeting specific exploration, development, and payment requirements.
  • The company’s wholly-owned Kluane project is a district-scale, highly prospective platinum-group element, nickel and copper project located beside one of the largest undeveloped PGE-Ni-Cu deposits in the world in the Kluane mafic-ultramafic belt in Yukon, Canada.
  • Group Ten Metals’ exploration and development team has extensive experience in top-tier districts such as the Stillwater and Bushveld districts.
  • The company is well capitalized and fully permitted, with no debt.

Key Projects

Stillwater West

The flagship Stillwater West project has demonstrated resources of nickel, copper, palladium, platinum, gold, chromium, cobalt, gold, and rhodium, and is located in the state of Montana in the United States of America. At 61 square kilometers, the property is a district-scale asset that covers the lower Stillwater Igneous Complex adjacent to Sibanye-Stillwater Ltd.’s mine complex that includes three mines plus also concentrator, smelter, and refinery operations. The Stillwater Igneous Complex is a large layered magmatic system that is geologically similar to the Bushveld Igneous Complex in South Africa. For example, Sibanye-Stillwater’s J-M Reef deposit – the highest-grade major PGE deposit in the world, and the largest outside of South Africa and Russia – is located in the same stratigraphic location as the great reef-type mines in the Bushveld Igneous Complex. The giant mines of the Platreef are located stratigraphically below these reef-type deposits, hence Group Ten’s focus on the lower portion of similar layered magmatic geology in Montana.

Group Ten’s dedication paid off when it debuted an inaugural NI43-101-compliant mineral resource estimate of Platreef-style mineralization in October 2021 at the wholly owned project, proving its “Platreef-in-Montana” model. The base case mineral resource estimate includes 157 million at 0.45 percent nickel equivalent, or 1.20 palladium equivalent, for contained metal of 694 million pounds of nickel, 347 million pounds of copper, 69 million pounds of cobalt, 758,000 ounces of platinum, 1,314,000 ounces of palladium, 61,000 ounces of rhodium and 303,000 ounces of gold. The project also features multiple kilometer-scale targets with excellent potential to expand the project’s existing resources into untested adjacent areas as guided by multiple coincident anomalies shown in geophysical and geochemical surveys, and a database of more than 100 drill holes that lie outside of the resource areas.

Despite its location in a historically productive and famously metal-rich US district, the project is considered underexplored. Group Ten’s systematic approach has now demonstrated the potential of the project to host both scale and grade, and the company believes that the current resources have exceptional expansion potential. Group Ten Metals expects to have full results from the remaining 12 holes drilled as part of its 2021 resource expansion drill campaign by February 2022 and plans to update its inaugural resource estimates as soon as possible after that. Additional catalysts include potential agreements on secondary assets, and updates on ESG and metallurgy work, including the potential to incorporate carbon sequestration at Stillwater West. Group Ten Metals will continue to leverage its substantial database and predictive geological model at Stillwater West to maintain its low cost of discovery and advance the asset in a timely manner.

Kluane

The fully-owned Kluane project has demonstrated platinum-group elements, nickel and copper mineralization and is located in Yukon in Canada. The project is accessible by highway. The property is located in the Kluane mafic-ultramafic belt that hosts known platinum-group elements, nickel and copper deposits. The belt is home to the multi-million-ounce Wellgreen deposit which is one of the largest platinum-group elements, nickel and copper projects in North America. The Kluane project features similar geology to the largest known platinum-group, nickel and copper deposits, including the Bushveld and Stillwater complexes.

Group Ten Metals Kluane

The Kluane project consists of the Spy, Ultra and Catalyst properties. The Spy property adjoins to and is on trend with Nickel Creek Platinum’s advanced Nickel Shaw platinum-group element and nickel project. The Spy property has massive sulfide mineralization with assays up to 3.1 g/t of platinum, 1.4 g/t of palladium, 1.0 g/t of gold, 3.1 percent of nickel, 2.8 percent of copper and 0.2 percent of cobalt. The Ultra property has trenching results of up to 5.5 g/t of platinum, 13.5 g/t of palladium, 0.5 g/t of gold, 4.1 percent of copper and 1.7 percent of nickel from an ultramafic sill.

The company is currently in the process of assessing and evaluating monetization strategies for the Kluane project. Group Ten Metals also plans to conduct surface exploration to expand the known mineralization and refine the targets on the property.

Black Lake-Drayton

Group Ten Metals Black Lake-Drayton

The Black Lake-Drayton project is a high-grade gold project located in Northwestern Ontario in Canada. The 137-square-kilometer property is situated in the Rainy River gold district which hosts greenstone belts, major mines and projects. The project is accessible by road and is near rail and power. The Black Lake-Drayton project adjoins Treasury Metals Inc.’s recently consolidated Goliath Gold complex which hosts more than three million ounces of gold. The project is also located near New Gold Inc.’s Rainy River project which has more than six million ounces of gold.

The Black Lake-Drayton project has high-grade gold demonstrated in a 127-hole database and historic bulk samples. However, the project is considered relatively underexplored and has seen little systematic exploration across its 30-kilometer length. Of particular note, it has not seen the application of geologic models developed more recently elsewhere in the same Archean greenstone belt, which is now hosts over 14 million ounces of high-grade gold and is home to several recent discoveries. Archean greenstone belts host some of the world’s largest and highest-grade gold mines, including the world-class Red Lake mines.

In November 2021, Group Ten Metals signed a definitive agreement that granted Heritage Mining the right to earn up to a 90 percent interest in the project. To complete the earn-in, Heritage Mining must complete payments of 7.2 million shares and $320,000 in cash, exploration work of $5 million, and grant Group Ten Metals a 10 percent carried interest through to a feasibility study. Group Ten also gains up to $10 million in discovery bonuses at $1 per ounce of gold or gold equivalent.

Heritage Mining has advanced four priority target areas at Black Lake-Drayton that show potential for multi-million-ounce high-grade gold deposits, in addition to other compelling earlier-stage targets.

Leadership Team

Michael Rowley – President, CEO and Director

Michael Rowley has over 25 years of executive experience in the exploration, mineral processing and mine environmental industries. Rowley’s experience includes capital markets, acquisitions, project development, management and exploration operations. Rowley is a co-founder of Group Ten Metals as well as a director. Rowley is currently active in other publicly-traded companies, including Granite Creek Copper and Bravada Gold, and is also an officer of Sierra Mountain Minerals Inc.

Gregory Johnson – Executive Chairman

Gregory Johnson has 30 years of experience in the mining industry with a record of success in exploration, development and financing of large-scale base and precious metals projects. Johnson has seen these projects from the discovery stage through advanced economic assessment. Johnson has expertise in the exploration of platinum group elements, gold, silver, nickel and copper. Johnson has developed broad experience in the capital markets. He has been involved in raising over $650 million in project financing for his companies. He has also built shareholder bases and secured the participation of major institutional investors for these companies.

He began his career with Placer Dome Inc. (now Barrick Gold Corp.) where he held various senior roles in domestic and international exploration. Johnson is one of the founders of NovaGold Resources. Johnson was also a co-recipient of the PDAC’s Thayer Lindsay International Discovery Award for his role in the discovery and advancement of the 40-million-ounce Donlin Creek gold deposit in Alaska. As President and CEO of South American Silver and Wellgreen Platinum, Johnson led the significant expansion and advancement of several major precious and base metal deposits. He currently serves as chairman and CEO of Metallic Minerals Corp. which is a leading silver explorer in the Yukon Territory.

Johnson has also been recognized for his work in sustainable development and community engagement. Johnson was awarded the Robert E. Leckie Award by the Yukon government for excellence in environmental stewardship. Johnson holds an Honors Bachelor of Science in Geology from Western Washington University.

Gregor Hamilton – Director

Gregor Hamilton has 25 years of experience in the mining sector as a geologist, investment banker and entrepreneur. Hamilton began his career in mineral exploration in South America. Hamilton later worked for 11 years in investment banking in London and Sydney where he specialized in structured finance and M&A. Since 2010, Hamilton has been involved in the acquisition and development of mineral properties within both public and private resource companies.

Hamilton has a Bachelor of Science in Geology from the University of Edinburgh and a Master of Science in Mineral Project Appraisal from the Royal School of Mines at Imperial College in London, UK. He also serves on the board of Metallic Minerals Corp.

Gordon Toll – Independent Director

Gordon Toll is a mining engineer with over 50 years of global mining industry experience as an entrepreneur and developer of large mining operations. His distinguished career in the mining industry has also involved acquisitions and new business development, startups and public company leadership. Toll’s senior leadership positions with major companies include commercial and technical executive positions with BHP Billiton, Rio Tinto, Atlantic Richfield and Texasgulf. He was also a founder of Ferrous Resources in Brazil which is now a subsidiary of Vale. Toll was also the deputy chairman of Ivanhoe Mines and the chairman of Fortescue Metals Group.

Toll is recognized for his fund-raising and mine-building abilities for large-scale resource industry projects around the world. He has been directly involved with raising over US$5 billion during his career. Currently, he manages private investment companies such as Braemar Infrastructure Pty Ltd. Braemar Infrastructure Pty Ltd. has received major development status from the South Australian Government and is proposing a multi‐purpose infrastructure corridor for the Braemar Region.

Toll is a mining engineering graduate from the University of Queensland. Toll also holds a Master’s degree in Business Science from Columbia University.

Dr. Craig Bow – Senior Geological Advisor

Dr. Craig Bow has over 40 years of international mining experience across all stages. Dr. Bow’s experience includes key contributions to the advancement of Sibanye-Stillwater’s PGE mines from initial exploration through to a positive production decision. He is a recognized expert on global PGE-Ni systems. Dr. Bow was also part of the team responsible for the multi-million-ounce Arctic Platinum partnership between Gold Fields Ltd. and Outokumpu in Finland. He was formerly the exploration manager of North America for Gold Fields. He has also led numerous technical programs for Cyprus Amax, Newcrest and AngloGold Ashanti. Dr. Bow holds a Ph.D. in Geology from the University of Oregon. He is a Qualified Person with the American Institute of Professional Geologists and a member of the Society of Economic Geologists.

Mike Ostenson – Project Manager, Geologist and QP

Mike Ostenson has extensive experience in exploration, mine development and mining in the Stillwater Complex. This experience includes the roles of vice president of exploration and Qualified Person at Premium Exploration. Ostenson’s former roles also include exploration geologist at Beartooth Platinum, gold mine geologist at AngloGold and ore grade control geologist at Stillwater Mining Company. Ostenson has a Bachelor of Science in Earth Sciences from Montana State University.

Justin Modroo – Project Geophysicist

Justin Modroo has 20 years of mineral exploration experience. Modroo’s was a geophysical consultant with Premium Exploration and Beartooth Platinum in the Stillwater Complex. Modroo also has experience with other North American exploration projects. Modroo has extensive first-hand knowledge of the geology and geophysical characteristics found at the Stillwater Complex as well as the historic project data. Modroo has a Bachelor of Science degree in Geophysical Engineering and a Masters of Science in Geophysics from the Colorado School of Mines.

Harry Burgess – Mining and Mine Engineering Advisor

Harry Burgess has more than 40 years of experience in management and mine engineering. Burgess held senior positions with Anglo-American and other companies in Zambia and South Africa. Burgess is also the co-founder of Micon International Limited.

Brian Cloney – Finance Advisor

Brian Cloney has over 35 years of experience in public accounting and financial consulting with a particular focus on the mining sector. Cloney has held the role of chief financial officer with several publicly-traded resource companies. Cloney was a director of Group Ten Metals from March 2014 to June 2016.

Garth Kirkham – Geology and Mining Advisor

Garth Kirkham has over 34 years of experience in the mineral exploration industry as a board member, leader and geoscientist. He has numerous professional designations and awards for his work. Kirkham heads Kirkham Geosystems Ltd. and was a founding director of Group Ten Metals.

Douglas Warkentin – Processing and Metallurgy Advisor

Douglas Warkentin is a metallurgical and process development consultant with over 30 years of experience in the mining and mineral processing industries. Warkentin is currently the senior metallurgist at Kemetco Research Inc. in Richmond, British Columbia. He has conducted mineral processing, hydrometallurgy, mine water treatment and resource recovery on a broad array of base, precious and high-tech metals projects for international clients. He was a co-founder of Group Ten Metals and served on the company’s board until July 2014.

Rebecca Moriarty – Chief Financial Officer

Rebecca Moriarty is a Chartered Professional Accountant with over 20 years of experience in the mining industry. Her background includes a unique combination of technical and business accounting expertise. She received a degree in Geology from Queens University and a CPA designation. Moriarty is supported by the Malaspina Consultants team which is a Vancouver-based financial consulting and advisory firm staffed with highly experienced accounting personnel. Before joining Malaspina, Moriarty worked with PricewaterhouseCoopers LLP where she was a manager working exclusively with resource companies.

Chris Ackerman – VP Corporate Development

Chris Ackerman is a graduate of the UBC Faculty of Law. Ackerman has extensive experience in both government and private industry, including five years as senior manager of corporate communications with Wellgreen Platinum and senior business development advisor with the Yukon Ministry of Economic Development. He is presently also senior management at Group Ten’s peer companies in the Metallic Group, being Metallic Minerals Corp. and Granite Creek Copper.

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