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Slowdown in financing affords opportunity for Thunder Bay mining company to gain ground

Clean Air Metals on the hunt for 'distressed' mineral projects in northwestern Ontario
Clean Air Metals drilling
(Clean Air Metals photo)

It’s a lousy financing environment in junior mining, but Thunder Bay’s Clean Air Metals sees a strategic opportunity to go big.

The owners and mine developers of the Thunder Bay North palladium-platinum project are out to enlarge its mineral holdings and are scanning the North for acquisition targets and partnership deals.

Northwestern Ontario is the place to be, the company said in a recent news release. Given the significant nickel, copper and palladium group metals showings, it “remains one of the best places in the world to explore for this suite of metals."

Prices for critical minerals remain depressed despite the anticipated global need for these minerals for the green energy transition.

These tough markets to fund critical minerals projects prompted the company to put the brakes on exploration at Thunder Bay North last fall, Clean Air’s one and only project, north of the city. 

The project is comprised of two parallel deposits of 14 million tonnes containing 1.2 million ounces of platinum group metals, 57.500 tonnes of copper and 34,300 tonnes of nickel. There’s also some gold and silver in the mix.

The company reported having $7 million in the bank last fall, but that’s not enough to advance it toward production.

Rather than sit on a stand-alone property, the Clean Air team feels they have the expertise in house and there’s enough promise on the landscape to acquire, explore and develop a pipeline of projects to be ready for when the commodities market suddenly turns.

In doing some online mining investor media interviews last week, CEO Jim Gallagher said the company is on the hunt for “distressed” platinum, palladium, copper and nickel properties, of which they have listed more than a hundred to investigate.

Heading into 2024, Clean Air said they are looking at “mergers, earn-ins, acquisitions and business relationships with other assets.”

"The current environment of low investor interest and declining and stagnant metal prices is a negative for the mining industry,” said Gallagher in a statement. “The strategy of assembling a small, manageable portfolio of assets, many of which are dormant due to financial constraints, turns this negative into an opportunity."

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Last fall, the company embarked on a “strategic review” to find a funding partner for Thunder Bay North, to strike up a joint venture deal, or entertain other transactional opportunities. 

In this latest update, the company said despite discussions with several parties in the last few months, nothing has proved fruitful. 

Clean Air’s board and management didn’t feel that any of the interest expressed represented fair value for the company.

“Much of the interest could be described as opportunistic,” the company said in the release.

A number of their peers are in the same boat as they are.

“Many of these assets are dormant due to a lack of cash within their holding companies and in some cases a lack of the expertise to further explore the deposits,” the company said.

And they have historical mineral resource estimates that are worth a second look.

“Additionally, we strongly believe that with the diverse geological setting present in this province, there exists the potential for numerous new discoveries to be made," the company said.