Pacific North West Capital Corp speaks to InfoMine
Monday, December 13, 1999
VANCOUVER (InfoMine)
Chris Thompson, Editor of InfoMine's News and Investment Sections recently spoke to company director Douglas Hickey concerning platinum, palladium and Pacific NorthWest Capital Corp.
Pacific NorthWest's mission is to acquire, explore and develop Platinum Group Metal (PGM) properties in order to discover Canada's next PGM mine. The company has a highly prospective land holding
consisting of 8 projects near the prolific mining center of Sudbury, Ontario. Their recently announced option/joint venture agreement with the Anglo American Platinum Corporation Ltd (Amplats), the world's
largest platinum producer, ensures that they will have the resources on tap to pursue their goal.
Chris:
I understand that your company's objective is to acquire, explore and develop platinum group metal properties? Would you like to expand on this?
Doug:
We started PFN as a brand new company in late 1997. It was a Junior Capital Pool company on the Alberta stock exchange, which we wanted to give a fresh focus. Mining was a tough industry at that time but we always felt the potential was there for some good stories and we looked at the prices of platinum and palladium and saw that there was a burgeoning market, a growing demand an uncertainty of supply in some areas. We began to focus on acquiring properties that we felt had
some good potential, which maybe had been looked at in the past. We looked at Canadian opportunities because we like working in Canada where there's political and economic stability and there's a lot of mining savvy people in addition to some pretty good mining infrastructure, in certain places.
Initially we picked up properties in the Nipissing diabase just outside of Sudbury, Ontario, that had recorded PGM values that were pretty intriguing, running sometimes up to 7-8 grams apiece. It
was an unusual target for PGM's. Most are ultramafic intrusions but in this case we felt that the potential and numbers intrigued us enough to realize there could be some good potential there.
In the early 98's we started trenching and drilling programs on some of our projects on the Nipissing diabase, particularly the Janes project and we delineated some very good PGM mineralization, running three grams a tonne over 16 metres, accompanied by good copper nickel
values running at about 1.3% combined copper/nickel. So we had success there, on the Nipissing targets. Within one year we had established the validity of those targets.
We have just completed a second drill program at the James project with the idea of putting together a small resource. It's only one target of many associated with the Nipissing database but we have about half a dozen that are running up to 5 or 6 grams in surface grab sample which will be investigated.
In the meantime, we picked up a property associated with the River Valley Intrusion that had been known for some time but had never been investigated for PGMs. An Ontario retired OGS scientist had staked the ground, which had grab samples running up to 12 grams. This is a more traditional PGM target and the values were strong enough to intrigue enough people including a company called Amplats - which we will talk about a little later.
Chris:
Your work programs intrigue me, more specifically in the Dana Lake area. You have your River Valley project for which you recently released results. The results seem to be below what you expected - based on average grab sample grades retrieved a while back. Would you like to comment?
Doug:
Well, the important thing about the River Valley results to date is their remarkable consistency. Grab samples of course are cherry picked. You grab them because you like the look of the rock.
We chose a very rigid grid 2.5 meter spacing and took samples, each one just as valid as the other work was on rock types just as much as on exposed areas of mineralization. We got back 400 ore grade samples over substantial areas, with great consistency. There were somem spikes, some higher grade spikes within that but remarkable grades of 2.5 grams very nice open pit potential in something like that and a large statistically valid number of samples so proving statistically that something very interesting is going on there.
Chris:
I did notice that your press release mentioned some anomalous values retrieved. It mentioned that there was a possibility of them being associated with the contact of the River Valley Intrusion with older rocks. Do you have anything to add there, I find that quite intriguing?
Doug:
Well, it's the focus of further work that we're doing right now. There is another group of samples a group of 800 of them - that we're waiting to get assays back over the next while. In the first
sampling we did a lot of the areas that had really good values. I mean in the 3-5 gram range were towards the edge of the areas that we've stripped. We started realizing that that consistency
was near the contact. We will be focussing on this, in the next little while, because the contact runs for almost 14 km and therefore if it's a valid target its a pretty big one.
Chris:
So then that would be a major focus of your exploration?
Doug:
Oh, no question. And also we have three areas in which PGMs were discovered as far as 5km to the south that are running up to 10 grams, which aren't necessarily contact associated. We may be looking at a reef type formation and if we've got multiple targets we may have something really intriguing going on there. Having one target is pretty good having multiple ones is quite remarkable.
Chris:
I believe you've had a look at an Ontario Geological Survey Open Report. It seems to haveintroduced you to some other locations, which might present opportunities for your company. Would you like to comment?
Doug:
Well, the OGS did a program over the summer - part of their broader mandate - simply to do geological mapping of Ontario in detail. As they were moving through the River Valley Property
they uncovered 2 of the 3 targets that we didn't have to work for, which is rather interesting and a great thing. One of the things about the Ontario government is that they are very mining friendly
and cooperative in working with us. That's open data but it certainly was nice to have them point the way for us.
Chris:
Well, you definitely seem to have your hands full. I guess one of my major questions concerns
your relationship with Amplats. The almost sudden interest of the South African platinum majors in the Canadian junior market, especially in the Sudbury area, came as a surprise, or maybe not for
some. How did that come about? How did you manage to negotiate what is seemingly a very sweet deal with the world's largest platinum producer?
Doug:
Well, once we optioned the River Valley property we put it in front of the Amplats executives in South Africa. Harry Barr, the president of the company, was down in South Africa and met with
them and showed them some of our initial results. In the course of their due diligence, before any deal had been concluded, they carried out their own sampling and initial mineralogical recovery tests and came up with the idea that they felt this was a very strong target. The River valley property, being a traditional PGM host made it easier for them to get behind it and to recognize it than perhaps the Nipissing Diabase targets, although they have an interest in some of those as well. Impala Platinum jumped in quickly as well with Mustang (Minerals) to the south of us. The character of our relationship with Amplats is a very good one. They saw the merits of the potential
of the property right away. We act as the operator on the project, which we regard as a great privilege because a lot of the majors like to take control of exploration programs. It says a lot about
the people that are working with us and we have no intention of disappointing them in that regard. The fact that Amplats and Impala have chosen to spend considerable sums exploring River Valley is a real vote of confidence for the potential of the property.
Chris:
Well, it definitely seems that they are by far the world leaders in that area of the market at the moment and it's encouraging to see them taking an interest in Canada.
Doug:
I am very happy to have their technological assistance particularly their metallurgical expertise working with us. It helps us and enhances the chances of our success.
Chris:
I would like to move on and discuss your opinion of the platinum and palladium markets. Just quickly moving to palladium, what do you view as opportunities for your mineral portfolio with regards to the metal?
Doug:
Well, the River Valley property and most of our Nipissing properties run in a ratio of a little better than 2/1 Palladium on River Valley and about 3.5 to 1 on the Nipissing targets, in favor of palladium. Palladium has never had a strong market until quite recently. It is now extensively used in catalytic converters. Prior to that it was a metal that you could pick up for $75.00 an ounce, it never really had a big run. But now that there is such a strong demand for it - a continued growing demand. Catalytic converters are being used in North America. Some third world countries are getting on board because their air pollution problems. The situation in North America is that the exception of diesel engines is changing now and that's going to mean a strong continued demand for the metal. In addition, future technologies will improve demand for platinum and palladium for
catalytic reasons. There will exist a strong and continued demand for the metals supported by high tech industries as well as in the case of platinum - a strong jewelry demand. So, we believe that platinum and palladium are not going to go away and will be the metals of the 21st century. In addition, we feel that their unique chemical properties will sustain and enhance demand in the
coming decade.
Chris:
I would agree with you there. I think that the fundamentals at the moment look good, especially considering the metal's short-term supply constraints.
Doug:
There's talk about the Russians having "manipulated" the palladium market for their own benefit -65% of the world's palladium does come from Russia. I think North American ounces. Stillwater
(Mining Co) proves that could be very well validated in the marketplace because there exists a strong demand that won't be easily disrupted by political and economic considerations outside ofthe North.
Chris:
Do you see Amplats' and Impala's recent interest in international opportunities as increasing and gaining steam?
Doug:
I think that's likely. I understand that Amplats may have picked up a property in one of the old Russian republics. I'm not sure which one. I saw it in the Mining journal a little while back. I think that they want to diversify from South Africa but I don't pretend to know enough about the political situation in South Africa to comment. I think that anyone who puts all of their eggs in one basket runs a bit of a risk. They seem to like to see a little diversity in their portfolio.
Chris:
Yes, talking of diversity, I think Southernera (Resources Ltd) is a good example of that. They seem to be progressing with their Messina development in South Africa.
Doug:
We have in the recent past looked at acquisitions in South Africa and we certainly haven't ruled out that possibility. Again all eggs in one basket, PFN will continue to seek out other opportunities
in other places that we think have good potential. We've looked at some American opportunities.
We've looked at some other ones in Canada and we've looked at a few down in South Africa too.
We will never say that if River Valley becomes a mine we won't need anything else. We will continue to build our portfolio in the best way for us.
Chris:
So you look at yourself as definitely a PGM?
Doug:
Definitely a PGM focus. In our stable we have a company called International Freegold (Mineral Development Inc) that has gold focus - pretty much out of favor right now. But, it wouldn't make any
sense to put an asset into that company other than gold assets. And for the same reason when we first formulated PFN it was with the idea of building a company with a good strong focus and I think
we've succeeded at doing that to date.
Chris:
Most definitely. You are attracting a lot of market attention at the moment. Your company was featured recently in Jay Taylor's Gold, Resource and Environ Stocks newsletter and was even
mentioned in Mr. James Dine's Dines Letter newsletter. He is definitely bullish on platinum/ palladium's prospects for the future.
Chris:
Well, I would just like to thank you on behalf of our subscribers and InfoMine for your time. We wish you all the best.
Doug:
Thanks Chris.
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