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Pivotal Metals (ASX:PVT) interview with CEO Ivan Fairhall

October 12, 2023

Pivotal Metals, PVT

Pivotal Metals (ASX:PVT)

We spoke to Ivan Fairhall, CEO of Pivotal Metals (ASX: PVT) about the company’s prospects so with its polymetallic Horden Lake project in northern Quebec. Full transcription below.


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Stuart: Hello and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m one of the co-founders of our service. And joining me from Brisbane on the morning of Friday, the 22nd of September, 2023, is Mr. Ivan Fairhall, who’s the CEO of Pivotal Metals, ASX: PVT. Ivan, good morning.

Ivan: Good morning, Stuart. Great to be speaking again.

Stuart: Yes, Ivan. I’m looking at your market cap, or at least I’m trying to, but I forgot to bring my magnifying glass to work. If I wanna buy Pivotal Metals right now, I can have the whole thing for a little over $9 million, of which $5 million is cash at the moment. That’s pretty miserably low for a company sitting on the Horton Lake copper gold project in southern part of James Bay.

Ivan: Yeah, it’s certainly completely disconnected to the value of the company, the quality of the assets that we have. So, frustrating, I suppose, for us and existing shareholders, but certainly an opportunity for people to be looking for, you know, rewrite-type stories. Yeah, as we progress projects.

Stuart: Right. Absolutely. Let’s go back in time. Horton Lake came into the Pivotal portfolio but it had been known about since the 1960s. The vendor who vendored it to Pivotal eventually gave you the project, and by that stage we had, I’m looking at the numbers here, 27.8 million tons at 1.49% copper equivalent. That’s a great resource for well, anywhere in the world, but particularly for a tier one province like Quebec.

Ivan: Yeah, certainly the project was very much under the radar held in a private group. The resource when the project was acquired when the deal was announced was smaller, but there was a bunch of existing data that the company went through and realized the scale of the opportunity. And so even before we closed the deal, we announced the updated resources. And that’s that 27 million tons at what, 28 million tons at 1.5% roughly copper equivalent. So yeah, a fantastic deposit, huge asset. And we’ve bought it at pennies because it was, you know, tied up in a private group and we got the deal done.

Stuart: Right. This being Quebec, there’s plenty of infrastructure around. Val-d’Or is only a few hours’ drive south. You’ve got that beautifully inexpensive hydropower that Quebec is famous for. When we were talking about this yesterday you were concerned the only potentially serious capital expenditure measure, you’re gonna have to make is to build a camp there, because the nearest township is a long way away.

Ivan: Yeah. Look, that’s one of the key attractions of the project. I’ve been to site and Quebec as a jurisdiction is fantastic. It’s eight wonder in the world and the Fraser Institute of Investment attractiveness. And, the reason there is, you know, of course in addition to the, you know, stable and transparent investing laws, it’s a mining jurisdiction. The Val-d’Or region is a huge mining region. It’s a little bit like Pilbara or the gold fields, I suppose. And they have all of, you know, major mines, major infrastructure, all the contractors are there. It’s a fantastic place to be doing business. You mentioned the cheap hydro power. They run north, south down you know, past the project effectively, you’ve got two lane, you’ve got a national highway fully sealed to within 10 kilometers of the project. So all the infrastructures there. Quebec also has this amazing flow through share scheme that can be accessed by our ASX investors. And we did a financing earlier in the year at an 85% premium because it’s a tax credit harvesting that you can…

Stuart: Not well known, is it? You don’t actually have to be a trader, on a Canadian exchange or even a Canadian company to access it for generous system.

Ivan: No, exactly. We did one of the first deals in Australia, and it’s a huge benefit and much less diluted to shareholders dollar-for-dollar to get money into the ground, being able to raise it at a premium for work that’s getting done in country.

Stuart: Right. As you’ve turned over the data that came to you from the private group, that vendored Horton Lake, you are still seeing targets that have been inadequately explored, given their potential. Seems to me like the upside of this project is huge, just in terms of building out the resource from here.

Ivan: Oh, absolutely. Like the project’s open, adept, open a long strike, and has had quite a lot of drilling’s, had 50,000 meters of drilling, and that’s how you get such a big resource of, you know, 28 million tons. But there’s more to find. It’s, as I said, it’s opened, and one of the first things we’re looking to do is geophysics, downhill geophysics, and look at what’s deeper, and hopefully generate some targets, and show that this has the potential to grow in scale. And, the other thing, which we’ve been talking about for a while is the ability for the project to grow in grade. Because not all of the precious… The things like cobalt don’t appear in the resource, but is known to be in the minerals was an assay. Assays were not consistent across the project for gold and silver. And so we are looking to infill some of that information and lift the grade of the project as well as also grow the size of it. So you get that sort of double bump in…

Stuart: All right. Talk to us for a moment, what’s the geological setting that’s yielded the largest that is your flagship project?

Ivan: Yeah, so it’s basically the mineralization exists on a contact between the sediments, and the gabbros. And so that’s where the mineralization’s formed. So, it’s fairly consistent plain, our body dipped to about 55 degrees and the engineer in me is telling me that’s a really great sort of geometry to be mining. It’s quite thick mineralization up to sort of 40 meters. So really, long-hole open stoping, which is pretty productive and relatively low-cost mining method. And so we’ve defined that over one and a half, two kilometers strike. But, looking at the regional geology, I really think that there’s opportunity to grow the project along strike the trends about 15 kilometers. There’s been some exploration and hits but not followed up intensively. And so we’re looking to continue to show that this project can get significantly bigger, along with doing the de-risking on the asset that we’ve really defined, which is the job compliant resource.

Stuart: And you’ve got the claims to stretch along part of that strike.

Ivan: We have some claims and we’re looking to consolidate more, so we’ll have to just keep an eye on that.

Stuart: All right, Ivan, let’s talk about your background. You’ve just arrived at Pivotal. Prior to that, you spent a long time with a TSX-listed company called Mawson Gold. The Mawson thing is the giveaway that originated in Australia, but ended up traded in in Canada. And you had a pretty interesting cobalt project in Finland called Rajapalot that you were working on, got that all the way to a PEA, where the numbers were not bad even at a relatively weak cobalt price.

Ivan: That’s right. And so, yeah, that was a similar story. You’ve got an asset that people didn’t understand. It was an exploration story that had been around for a while, and I think it had lost a little bit of momentum in that case. Was, I think one of the major challenges. And, my job was easy to go out there and do the work to show what we have here is a bona fide development opportunity. Do the de-risking work, run some economics in the scope PEA in that scenario. And so you are able to say, “look, we’ve got tremendous exploration upside, here’s all the opportunities to grow the resource.” But the difference is that we are not looking to find a project. I think what we are gonna say now, and I think what is true here is we’ve found the project and yeah, the upside’s all gonna be incremental, but what you’ve got is already an attractive project. And that’s the kind of message we wanna send here with Pivotal. That we’ve got a significant asset that is really credible and, as we deliver upside into it, that value will grow.

Stuart: Right. And not the only project you’ve got in Quebec, there’s another one a little bit further south called Belleterre… I’ve really gotta pronounce my French pronunciations, Belleterre Angliers. Tell me about what’s going on there.

Ivan: Yeah, well, us Australians are not known for our foreign language pronunciation, so I try to stick to the acronym. BAGB is how we refer to them. And yeah, so that’s a huge claimed area to the west of Val- d’Or. You know, people that aren’t familiar with the area, Val-d’Or is the activity and Cadillac Break, which is just one of the world’s most prolific mineralized settings. So this is to the west of that, just off Trent, in a parallel zone. And significant mineralization has been being defined. We’ve got drill hits into a number of relatively small, but super high grade gabbro intrusions effectively. And you’ve got intersections like, you know, 9, 10 meters at one here, 9, 10 meters, 9.4 meters at 3.5% nickel, 4.5% copper, and 4.5 grams a ton.

Stuart: Yeah, I’ll take that any day of the week.

Ivan: I mean, those are splashy, splashy grains, and what it shows is intense, intense mineralization. A lot of metals have flowed through the rocks down there, and to date, they’ve been identified, in relatively small accumulates. And these gabbroic intrusions, and they’re known, and there’s a number of them. To date, no one’s been able to hang them together. And I think the problem is, they’ve been looking for what they’ve already found and looking relatively shallow, taking the sugar hit, putting holes into really amazing mineralized bodies, but not economic minds. We’re in the business of finding economic minds, that’s how you create real value. And so what we are going to do is look at what unifies these metals, where did the metals come from? Where is the feeder zone? And so we’ve got a plan to do some deep geophysics to identify… They look deep up to 2 kilometers. We’ve got a number of VTEM targets, but they’re all relatively shallow by the nature of the work that was done but, used to follow up on those targets and look below them, and try and find the real opportunity, as you know, where’s the body that fed these individuals.

Stuart: All right, so it’s September at the moment. That means you’ve got probably four months of a window to drill before things start to get a bit hairy, as the ice thaws in that James Bay part where Horton Lake is located. What’s your plans for the next few months?

Ivan: Yeah, so the drilling actually starts in January. That was when will really start proper when the winter is in its full winterness. Cold and the access is the best. That’s the cheapest time to drill in that part of the world. So that’s why we’re targeting our program at that point. And in the meantime, we’re full steam ahead, getting prepared. We’re gonna try and downhill geophysics. We’ve checked that the holes are open. We’re looking to investigate these…look below where the mineralization had showed that it extends, and we can feed that in, depending on what that says we have the opportunity to feed that information into our drill program, gonna get started on the network, hopefully. We’re gonna do the geophysics survey that I mentioned at BAGB. So we’ve got news flow coming before the big news, which is gonna be the drilling and the assays that coming out next year.

Stuart: Right. And it’s fair to say that just about none of this is in the price, because people aren’t appreciating the quality of Horton Lake, let alone the upside that you can get from BAGB.

Ivan: Oh, we’re trading at a cent a pound, just on the project. The Horton Lake project. BAGB, in a standalone company would’ve a market cap like ours, since, in some ways, you’re getting a free hit on 28 million tons at 1.5%. So 400,000 tons of copper is, yeah, I mean, trading at an EV of $5 million, come on.

Stuart: Right. Let’s talk about an issue that people possibly have had with Pivotal in the past. A couple of years ago, the company maker was a tin tungsten project in Northwestern Spain. Now that hasn’t worked out so well and probably left a few shareholders disappointed. Talk to us about the tail end of that situation.

Ivan: Yeah, sure. We’re putting that project behind us effectively. There was two projects there, the San Finx Mine and the Santa Comba mine. San Finx has been sold, Santa Comba, we’re looking to work out of, in the quickest, lowest cost possibility. We weren’t happy with the way that things were being managed in Spain, or not managed, but the regulatory environments. And just…

Stuart: Look, Spain took a turn to the left in recent days. That hindered a traditional mining country. Possibly to come back with a new government that’s coming in. But, you know, you’ve got bigger fish to fry now.

Ivan: That’s right. We’ve moved on from Spain. That’s clearly reflected in the share price. We’ve taken our medicine. And, yeah, shareholders have suffered some pain, but that’s created the opportunity with Horton Lake, and we’re gonna look to rebuild, and we’ve got fantastic assets. It’s really just about getting attentive on them, doing the work, and demonstrating the real value there.

Stuart: Right. Well, Ivan Fairhall, bon voyage in terms of the big upside that’s coming in the Canadian province of Quebec. Good luck on this appointment and keep us informed about where things go.

Ivan: Thanks a lot, Stuart. Great to chat.

Stuart: See you soon.