Resource-sector financier Eric Sprott has taken a nearly 20% equity position in Palladium One Mining Inc. (TSXV:PDM)
SmallCapPower | January 21, 2020: Palladium One Mining Inc. (TSXV:PDM) shares have surged about 144%, to its current price of $0.195, since we first wrote about the Company on November 14, 2019. At the time, we noted that billionaire resource-sector financier Eric Sprott had invested about C$1.2 million into PDM via a non-brokered private placement at a price of C$0.06 per unit, giving him an approximate 19.3% equity stake in the Company.
Palladium One has a 100% interest in the palladium-dominant Läntinen Koillismaa PGE-Copper-Nickel project located in Finland. A resource estimate for the Kaukua Deposit within Läntinen Koillismaa, released in early September, showed 635,600 palladium equivalent ounces at a grade of 1.80 grams per tonne (g/t) in the Indicated category, along with 525,800 Inferred palladium equivalent ounces grading 1.50 g/t. The model also presumes a conservative palladium price of US$1,100 per ounce.
Palladium One describes the Läntinen Koillismaa project as having excellent infrastructure with low-cost, open-pit mining potential. Finland is considered a politically-safe jurisdiction with a strong mining history and has low operating costs compared to North America. Palladium One believes there could be much more exploration upside to this Project, as three major zones were not included in resource estimate, such as Kaukua South with drill results that included 32.95 metres of 1.05 g/t PGE (platinum-group elements). As well the Fennoscandia shield, in which Läntinen Koillismaa lies, hosts world-class deposits such as Pechenga nickel and Portimo (Suhanko) palladium deposits.
Since our article was first published, the spot price of palladium has jumped from US$1800 an ounce to more than US$2500. Stricter environmental laws in Europe and China is increasing palladium consumption, according to Australia & New Zealand Banking Group Ltd., as reported by Bloomberg, which also argues that production is likely to continue to fall short of the increasing demand for the ninth straight year through 2020.
As well, according to a Bloomberg report, production of platinum-group metals in South Africa fell the most in 18 months in August, with power outages further clouding the supply outlook, while growth in Russia stalled in September. Palladium is mined primarily as a by-product of platinum and nickel production, adding further uncertainty to the supply picture.
Palladium One Mining, meanwhile, announced that its Läntinen Koillismaa project has had seven of eight exploration permit renewal applications approved by the Finnish Mining Authority. The Company also said it has begun an induced polarization (IP) survey on the Project and is planning up to 5,000 meters of diamond drilling.
Palladium One Mining has about 111 million shares outstanding.
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