Sudbury-based Wallbridge Mining has focused its gaze toward platinum group elements (PGEs) in the Sudbury basin.
“We're almost entirely focused on the projects that have significant potential for PGEs,” Joshua Bailey, the company's vicepresident of exploration, told Northern Ontario Business at the 2013 Ontario Exploration and Geoscience Symposium in Sudbury.
Bailey estimates approximately 20 million ounces of platinum group elements have been discovered in the Sudbury basin over the last 20 years.
PGEs, which primarily include platinum and palladium, are important components for catalytic converters in vehicles and fuel cells.
“These are elements that are basically key for keeping emissions low and keeping smog down in big cities,” Bailey said. “I think demand is pretty strong right now.”
South Africa and Russia are the world's top PGE producers, but Sudbury has turned out to be a North American leader for the metals. Bailey said Sudbury has the advantage of labour and political stability over those two jurisdictions.
“Most of these metals come from jurisdictions where there are a lot of infrastructure problems and labour issues,” he said.
As a junior miner, Wallbridge has entered in a number of joint ventures to explore and mine PGE deposits in the Sudbury basin.
The company has collaborated with Lonmin PLC, the world's third largest platinum producer, since 2002.
The North Range joint venture with Lonmin was finalized in 2012. The project includes 15 properties in a 15-square-kilometre area. The 2013 North Range joint venture program concluded in September, and had an approved budget of $1.1 million to explore the properties for PGEs.
According to the terms of Wallbridge's agreement with Lonmin, the latter company can earn up to a 50 per cent interest in the project if it spends twice Wallbridge's expenditures on the properties.
By making additional expenditures Lonmin can earn up to a 65 per cent interest in the properties.
“The biggest issue (for junior miners) is to find those deep-pocketed partners,” said Garry Clark, executive director of the Ontario Prospectors Association. “Wallbridge has done very well with that.” Clark said 2013 has been a difficult year for junior mining companies.
“This is probably the hardest year I've ever seen. I've been in the business since 1983,” he said. “This year the amount of exploration dollars being spent worldwide, let alone in the province, is way down.”
Clark said juniors have had difficulty securing funding due to declining investor confidence tied to mining exploration.
That slump, Clark said, has been due primarily to shrinking demand for raw materials from China. Despite a poor year for mining exploration, Clark said there are glimmers of hope things will improve. In addition to its joint ventures with Lonmin, Wallbridge has also found a deeppocketed partner in Impala Platinum Holdings Ltd., the world's second largest PGE producer.
Wallbridge has collaborated with Impala on the Parkin Offset joint venture. The project includes exploration along the northeastern rim of the Sudbury basin, where there are deposits of PGEs, nickel and copper.
The region includes the former Milnet Mine. In 2012, Wallbridge and Impala drilled two holes in the Milnet 1500 zone to analyze the deposits and determine the scope of work for 2013.
Impala spent $6.2 million to earn a 50 per cent interest in the property in 2011. The company can earn an additional 15 per cent interest by funding a feasibility study and securing Wallbridge's portion of development funding to commercial production through loans.
Wallbridge has also developed one of its projects on its own – the Broken Hammer mining property – which could generate estimated earnings before interest, taxes, depreciation, and amortization of $8.4 million.
The net present value of the project, which would have a mine life of around 12 months, is around $6 million, Bailey said. The Broken Hammer Project is at the feasibility stage.
Once it is developed, the revenues will allow Wallbridge to fund more exploration projects without having to turn to the timid markets.
“There's a huge amount of discovery potential in Sudbury,” Bailey said. “It's incredible that some huge deposits are still being found here. The geology here is just incredibly rich.”
