Hot Stocks: Pele Mountain Resources advancing development at Eco Ridge
With prices of rare-earth elements taking off and REE fundamentals looking robust, companies in the REE space could be in for more exciting times ahead. Among the companies with promising growth potential is Pele Mountain Resources, a Toronto-headquartered explorer and developer focused on developing its 100-percent-owned Eco Ridge Mine Rare Earths and Uranium Project. Eco Ridge is one of very few North American deposits with NI 43-101 compliant rare earth oxide (REO) resources. It is located in Elliot Lake, the only Canadian mining camp to have ever achieved commercial REO production.
Its latest 43-101 resource estimates put its indicated rare earth oxides at about 51.9-million pounds, and inferred resources of 96.4-million pounds, in addition to uranium oxide resources 15.2-million pounds indicated and 31-million poounds inferred. We plugged in these figures into our resource calculators to glimpse the project’s potential at today’s prices. What we arrived at was very encouraging: the gross metal value for the inferred resources of uranium and REOs combined was $1.76 billion, and for the indicated resources, $877.6 million. The gross project value we arrived at was $2.64 billion and a gross project value per share of $19.70, given the current shares outstanding of 133,918,746. It is currently trading at $0.26 a share under the symbol GEM in the TSX-Venture.
On May 3, the company announced that shares have commenced trading in the United States on the OTC market’s prestigious tier, OTCQX International, under the symbol GOLDF. ”With rapidly increasing interest in our Eco Ridge Mine Rare Earths and Uranium Project and our portfolio of Northern Ontario gold properties, we are pleased to begin trading on OTCQX International. The OTCQX will provide Pele with a cost-effective means of enhancing its visibility and liquidity, benefiting all of our investors, especially those residing in the United States,” said Pele Mountain president and CEO, Al Shefsky.
Pele Mountain Resources followed up this announcement with more good news on May 24, confirming that the Province of Ontario has granted two mining leases to their wholly owned subsidiary, First Canadian Uranium Inc., for its Eco Ridge Project. The leases give Pele the exclusive right to mine the deposit. The renewable mining leases are valid for a period of 21 years.
“The receipt of our Mining Leases marks another important milestone on the path to development at Eco Ridge,” said Shefsky. “We remain on schedule to deliver an updated NI 43-101 preliminary assessment next month that will incorporate design enhancements achieved since the initial positive scoping study in 2007 and, for the first time, providing an economic model.”
As the mineralized reefs of the Elliot Lake mining camp are well known for their consistency and size, the mineral resources at Eco Ridge have excellent potential for upgrade and expansion. The May 24 commencement of a 7,000-metre drill program will include in-fill drilling within the existing resource wireframe with an objective of upgrading up to 5-million tonnes of inferred resources into the indicated category. The program will also include step-out drilling to the north and east of the Resource Wireframe with an objective of bringing up to 10-million additional tonnes of the mineralized reef into the inferred resource category.
“We believe Eco Ridge contains an important future source of heavy REO and U3O8 and we are determined to rapidly advance its development,” Shefsky said.
Next month’s anticipated PA will include a schedule of activities necessary to advance the project through the feasibility and licensing stages.
This presentation may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The Issuer relies upon litigation protection for forward-looking statements. This piece is for information purposes only and is not a recommendation to buy or sell any securities.