Stillwater Critical Minerals – Glencore Takes A 9.99 Percent Stake Funding The 2023 Exploration Program
Michael Rowley, President and CEO of Stillwater Critical Minerals (TSX.V: PGE – OTCQB: PGEZF), joins us to outline the key news that it has executed a definitive agreement for a strategic equity investment by Glencore Canada Corporation, a wholly-owned subsidiary of Glencore plc (GLEN.L) (GLCNF), for exposure to their flagship Stillwater West Project in Montana. Pursuant to the Placement, Glencore has agreed to purchase 19,758,861 units of Stillwater at a price of $0.25 per unit for gross proceeds of $4.94 million, with each unit comprising one common share and 0.70 of a common share purchase warrant. Each full warrant shall entitle Glencore to purchase one common share at an exercise price of $0.375, providing up to approximately $5.2 million additional funding, if exercised in full.
As announced on January 25, 2023, the updated Resource Estimate includes 1.6 Billion lbs Battery Metals and 3.8 Million ounces PGE+Gold. Base Case Inferred mineral resources of 1.6 billion pounds of nickel, copper and cobalt and 3.8 million ounces palladium, platinum, rhodium, and gold, in a constrained model totaling 255 million tonnes at an average grade of 0.39% total estimated recovered NiEq (or 1.19 g/t Palladium Equivalent). Mike makes the point that the mining approach for Stillwater Critical Minerals that is being proposed is more of a bulk mining deposit more akin to the South African Platreef battery metals and platinum group elements mines and development projects found on the northern limb of the Bushveld Igneous Complex, and why they have recruited 2 key ex-Ivanhoe team members to lead the next phase of exploration and de-risking of the deposit for the company.
We discuss how the influx of capital from Glencore’s strategic positions sets up the exploration team for another meaningful 5,000 – 6,000 meter drill program for this year, to follow up on the nickel sulfide mineralization targets hit last year, and further growth and expand the resources at Stillwater West.
If you have any questions for Mike regarding Stillwater Critical Minerals, then please email me at Shad@kereport.com.
- In full disclosure, Shad is a shareholder of Stillwater Critical Minerals.
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Sure thing DT. It was key news today, and so I started reaching out bright and early, and Mike said the KE Report was his first interview of many planned for today and next week, so that worked out nicely.
Stillwater Critical Minerals has had a nice move up over 35% today on this news and the market starting to wake up to the mineral endowment already proved up here, and that they are funded for the drill program this year to keep expanding the deposit. In a market where raising the capital has been very difficult, bringing in Glencore (of the biggest of the big boy miners and compentent smelters) as a new strategic shareholder is a nice vote of confidence in this project.
(PGE) (PGEZF) Stillwater Critical Minerals Welcomes Glencore As Major Investor, Stock Jumps
Mining.com – June 23, 2023
“Upon completion, Glencore would hold a 9.99% equity interest in Stillwater (on a non-diluted basis). Should all warrants contained in the units be exercised, Glencore’s stake would then rise to 15.87%, giving Stillwater approximately C$5.2 million in additional funding. In addition, the global miner has the right to participate in future financings to pro-rata position in Stillwater.”
“This represents a major step forward for Stillwater as we advance our flagship Stillwater West project with the vision of becoming a large-scale source of battery and precious minerals that are now listed as critical in the US, and elsewhere,” Stillwater CEO Michael Rowley said in a statement.
https://www.mining.com/stillwater-critical-minerals-welcomes-glencore-as-major-investor-stock-jumps/
Hi again Ex, I knew we were onto something when this stock was halted, I’m so glad Glencore got there first. Glencore looks ripe to start acquiring and I can’t think of a better venue than Stillwater. They have divested themselves of a number of mines in Bolivia to Santacruz, it looks like they are changing their business model. Glencore is an aggressive company if I was Sibanye I would be looking over my shoulder, but I don’t think Sibanye has figured that out yet. Oh, Oh! I have talked about Sibanye being taken out a number of times in the past, they have a lot of mines and minerals that are well suited to the new economy. Glencore could fit that bill. I think Sibanye believed that PGE would sit there until they were ready to make a move. Companies that aren’t sharks are food for the predators. DT
Good thoughts and comments there DT. Yes, I also think it wasn’t just Sibanye that had gotten complacent, but the retail markets and institutions as well. The stock closed up over 33% higher today and the project didn’t suddenly get 1/3 more valuable in one day, and in reality they just gave away 10% of, so it should have been more valuable yesterday before the big increase today, which just shows how inefficient these junior markets are, and that Mr. Market isn’t always right. PGE had been drifting down for months though, and likewise the project wasn’t getting any less valuable all that time. Those are the kinds of goofy disconnects there can be in junior resource stocks.
There has been (and still is) such a huge gulf between the insitu value of their metals in the ground and whatever shred of credit they were getting for it in market cap valuation, that it has been flat out laughable. At least today was a step in the right direction in the long road to this company starting to get re-rated higher, but there is a long way to go before most market participants balance out where this stock is trading and the resource value they’ve already proved up.
However, as you pointed out, getting the stamp of Glencore now shows Sibanye that there are other potential suitors for Stillwater West, (and yeah, I guess it’s possible suitors even for Sibanye themselves). Sibanye is a very well run company too though, and they’ve been busy making their own acquisitions of Nickel and Lithium projects over the last 2 years. However, maybe today’s news will be a wakeup call for them not to sleep too long on their direct neighbors with a district scale project that would be a huge compliment to their existing operations. I could eventually see both Glencore and Sibanye partnering together on this to bring this project into construction and development, but that is likely 2-3 years away still.
Mike mentioned that there were other major metals producers in NDAs with them that were also in the mix, but that some of them couldn’t get over the hump of paying a premium to the market price, whereas that was chump change to Glencore. More importantly Glencore understood the vision of PGE needing the extra capital [through acquiring their stake at a premium to market], so they’d be able to conduct a really meaningful drill program (which is what one wants to see in a stakeholder partner). At least Glencore gets it!
Sibanye is going to get nervous now with Glencore making a move on PGE, I love it. They need Sibanye’s mines next door and Sibanye is sitting on a lot of wealth, but I don’t think the market has properly priced them in accordingly but I’m sure Glencore is watching. WHOOP! It could go that quickly! Why build when you can buy at a fraction and trouble of the price. DT
Great interview Ex. Something had to be holding this stock back other than the general malaise. I agree with you that the Glencore investment is very significant to moving this company forward.
Thanks Lakedweller2. Yeah, I’m not sure where the disconnect is coming from in the resource estimates they put out and where the market is valuing the company. Maybe investors thought there was going to be a financing and that’s what was holding them back??
Even with that near-term concern some investors may have had, it doesn’t begin to explain the huge disconnect they’ve had between their market cap and the overall value of the insitu metal they have in the ground, (which I think Mike mentioned in a previous interview that he ballparked at worth $20 Biillion based on current metale prices).
Somehow the market has just been asleep on this one for some time now. Maybe today was a good wakeup call for many to get out their calculators and take a good hard look at that latest resource estimate.
There are drill plays out there that don’t even have a resource estimate out with $500 million to $1 billion+ market caps, that don’t deserve those valuations yet based on what they’ve proved up. But people get amped up and push certain equities to silly levels. We saw it with cannabis stocks, we saw it with cryptos several times now, we saw it with stay-at-home stocks in 2021, we saw it with meme stocks, and more recently in many Lithium stocks and AI stocks.
Meanwhile this company has put out 2 resource estimates (maiden, then the updated on) and shown $20 billion dollars worth of metal value in the ground already (before anymore drilling) and they’ve been trading at a fraction of the pre-resource cult drill-plays.
So are these logical and efficient markets that are always pricing companies correctly? Clearly not…
Lets hope they do better than when Glencore took 9.9% of PDM
Yes indeed. Different mgmt teams, different jurisdictions, different deposits, different setup…
Hey Ex, Thanks for bringing Michael Rowley (CEO of Stillwater Critical Minerals) on the show so quickly for an update, my family should be happy as well. Well Done, Amigo!!!!! DT