VRIC JV Video: Clean Air Metals eyes toll milling for Ontario platinum project

Clean Air Metals: Thunder Bay North Critical Minerals Project – Detailed Summary

Key Concepts:

• Thunder Bay North Project: A platinum-group metals (PGM) project located near Thunder Bay, Ontario, Canada.
• PEA (Preliminary Economic Assessment): A study outlining the economic viability of a mining project.
• Toll Milling: Processing ore at an existing mill owned by another company, reducing capital expenditure.
• PGM (Platinum Group Metals): Platinum, palladium, rhodium, ruthenium, iridium, and osmium – valuable metals used in various industrial applications.
• Indicated Resource: A mineral resource with sufficient geological confidence to allow for an economic assessment.
• Advanced Exploration Permitting: Permits allowing for ramp construction and bulk sampling while full operational permits are sought.
• Down Plunge Exploration: Exploring the continuation of a mineral deposit at depth.
• NPV (Net Present Value): A metric used to evaluate the profitability of an investment.
• IRR (Internal Rate of Return): A metric used to evaluate the profitability of an investment.

1. Project Overview & Resource Details

Clean Air Metals is developing the Thunder Bay North Critical Minerals project, situated 40 kilometers northeast of Thunder Bay, Ontario. The project boasts a 14.9 million ton indicated resource, primarily focused on platinum, with significant quantities of palladium, copper, and payable amounts of nickel, silver, and gold. The deposit is located approximately 65 kilometers south of Impala Canada’s Lac des Iles mine, which operates a 12,000 ton per day concentrator, presenting a potential toll milling opportunity.

2. Preliminary Economic Assessment (PEA) Results & Metal Price Sensitivity

The recently completed PEA initially indicated a post-tax NPV of $150 million at an 8% discount rate, based on previous metal prices. However, with the recent surge in platinum and palladium prices, the post-tax NPV has increased substantially to approximately $500 million, with an Internal Rate of Return (IRR) around 80%. The PEA focused on a low-capital cost toll milling operation, estimating under $100 million in capital expenditure for ramp development and minor infrastructure. The project’s multi-metal composition provides a degree of resilience against fluctuations in individual metal prices.

3. Permitting Strategy & Community Engagement

The company is actively pursuing advanced exploration permitting, which will allow for the construction of a ramp and the extraction of a bulk sample. This ramp construction can proceed concurrently with the permitting process for full-scale operations, significantly derisking the project. A key component of their permitting strategy is proactive engagement with First Nations communities, prioritizing early consultation and incorporating their input. The company highlights a strong and collaborative relationship with local communities.

4. Unique Position as a Primary Platinum Asset

Clean Air Metals characterizes the Thunder Bay North project as a “rare primary platinum asset” in North America. Unlike many PGM deposits which are palladium-dominant or low-grade open-pit operations, this project features relatively high platinum grades as the primary commodity. This positioning is advantageous given the declining primary platinum mine supply globally, particularly from South Africa, where mines are transitioning from platinum to palladium production due to geological changes and infrastructure challenges.

5. Platinum Market Dynamics & Industrial Applications

The increasing demand for platinum is driven by its diverse industrial applications. While traditionally used in auto catalysts (particularly in hybrid and plug-in hybrid vehicles which require more platinum than combustion engines), platinum is also crucial in hydrogen production, jewelry, and glassmaking. Recently, investment demand has surged, with platinum behaving more like a precious metal akin to gold, offering investors a less expensive store of value. As stated by Mike Garvet, “people are investing it in its… as a store of value that’s less expensive than gold.”

6. Management Team & Share Structure

The company is led by a team with significant experience in PGM development. Chairman Jim Gallagher previously served as CEO of North American Palladium (owner of Lac des Iles). VP of Exploration Lionel Jean has 20 years of experience with magmatic PGM deposits, also from Lac des Iles. VP of Community and Environment Chris Tutela brings 20 years of permitting experience in the region and strong community relationships.

Currently, Clean Air Metals has approximately 250 million shares outstanding, resulting in a market capitalization of around $27 million. Benton Resources is the largest shareholder with approximately 10%, followed by several European groups holding around 5% each. The company is actively seeking to broaden its institutional shareholder base.

7. Exploration Upside & Down Plunge Potential

The company recognizes significant exploration potential, particularly in the “escape down plunge” – a continuation of the deposit at depth. Initial drilling on one target within this area yielded 50 meters of mineralization at a depth of 350 meters, described as “literally unheard of.” While the current focus is on the existing deposits, the land package contains five intrusions that represent long-term exploration targets.

8. Development Path & Future Studies

The company is pursuing parallel development paths: refining the toll milling option through metallurgical testing and conducting a feasibility study (or potentially a pre-feasibility study) for a standalone mill. This dual approach will allow for an informed decision on the optimal development strategy by 2027. Concurrent with these studies, the company will continue to advance the advanced exploration permitting process and conduct further exploration drilling in the down plunge area.

9. Key Investor Takeaways

Mike Garvet highlighted three key points for investors:

• Primary Platinum Grade: The project is a rare, high-grade primary platinum asset.
• Strong Platinum Fundamentals: The platinum market is experiencing positive dynamics with declining supply and increasing demand.
• Low-Risk, Development-Ready Project: 90% of the resource is already in the indicated category, minimizing exploration risk and positioning the project for near-term development. The company emphasizes it is not solely an exploration play.

Conclusion:

Clean Air Metals’ Thunder Bay North project presents a compelling opportunity in the critical minerals space, particularly within the platinum group metals sector. The project’s favorable economics, low capital expenditure potential through toll milling, strong management team, and proactive community engagement position it for successful development. The significant exploration upside and the company’s strategic approach to permitting and development further enhance its attractiveness to investors. The project’s focus on platinum, a metal with increasing industrial and investment demand, provides a strong foundation for future growth.