Palladium One Mining Inc. (TSXV:PDM) has a promising project in Finland and is expecting a C$1.2 million investment from Eric Sprott
SmallCapPower | November 14, 2019: Palladium One Mining Inc. (TSXV:PDM) shares have powered as much as 35% higher, hitting a price of $0.095, over the past two weeks following the announcement late on October 28, 2019, that Eric Sprott is expected to take an approximate 19.3% equity position in the Company via a non-brokered private placement at a price of C$0.06 per unit. While the billionaire resource-sector financier has been known to take stakes in many resource juniors, his anticipated investment of about C$1.2 million in Palladium One is notable.
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.
The real catalyst here, though, could be the palladium price itself. Palladium’s value recently surpassed US$1800 an ounce, up more than 250% during the past four years, making it the most valuable of the four major precious metals. More than half of the global supply of palladium is used in catalytic converters, which convert as much as 90% of the harmful gases in automobile exhaust (hydrocarbons, carbon monoxide, and nitrogen dioxide) into less noxious substances, such as nitrogen, carbon dioxide and water vapour (Source: Wikipedia).
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.
All of which bodes well for Palladium One Mining investors.
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