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NorthIsle Copper and Gold

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September 17, 2024 at 3:50 PM (MDT)|Broadmoor Hotel & Resort

Sam Lee

President & CEO, Director

Mr. Lee was appointed to the role of President & CEO of Northisle in October 2020. Over the past 20 years Mr. Lee has advised on some of the most prominent M&A, equity, and debt transactions in the international and Canadian global mining industry totalling over $100 billion in value. During this period, he has worked in major resource markets including Toronto, Sydney, and Vancouver where he led various strategic initiatives for CIBC World Markets. Most recently he was Managing Director and head of CIBC’s Vancouver Mining Group. Mr. Lee holds a Bachelor of Applied Science, Faculty of Engineering, from the University of Toronto, was a graduate of the Lassonde Mineral Engineering program, and is a CFA charter holder.

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CEO Sam Lee is here to discuss North Isle and I'll pass it off to Sam. Thanks very much. Thanks very much. It's been really active over the last year since we last presented at the Denver Gold Show. We've now I think developed a project that is best in class in British Columbia, one of the largest and the most attractive copper gold porphyry, which makes it then the best in class copper gold porphyry in all of Canada that is currently not owned by a major company. I will be making forward looking statements, please read the disclosure at your leisure. What we have today is about a 2.5 billion pound copper resource and indicated about approximately 5 million ounces of gold, about $1.1 billion N PV after tax and an IRR after tax of approximately 19% for a 22 year project. So this in all respects, is a moderate sized capital intensive copper project with an enormous gold credit. So capital intensity. That's something that I think has been really the theme over the last couple of years when you're in this environment where you do have a risk tolerance that is relatively low. We are looking for lower capital intensive projects. And so two years ago, we embarked on a strategy that was set out to look for higher NSR value per ton rock. So higher value rock in order to get to a point where we could advance a project that has lower capital intensity, lower throughput that could bridge to a much, much larger project. And I think we've done that in the last two years, we've made two new discoveries, one of which we've defined a resource base with metallurgical recoveries that has allowed us to identify an area that is over 2 to 3 times higher NSR value per ton rock than what we currently have. In addition, we've made another discovery that has set out to show that we can we have approximately 800 million strike along a trend right next to the project. that has boasted over 0.5% copper equivalent over intercepts of over 200 m. And then finally, I think if you're looking for the long term proposition within our 35 kilometer porphyry district, we have a very, very large predis discovery porphyry that's defined by 6.5 kilometer lithic cap and a 1.5 kilometers wide sort of other likes of a Los Palumbo or about Tahi you. And so this is something that we are advancing potentially with a partner over the course of the next little while. So if you're looking for value proposition, if you're looking for the growth proposition around exploration and of course, the long term optionality around Big Perry, buried porphyry like flo this is the opportunity to look at. We have a management team that has over 200 years of exploration, discovery developments, permitting operational finding financing, mergers and acquisitions with a team that's second to none to develop this opportunity. We have outperformed every single one of our copper peers over the last 12 months since last being here. Predominantly because of the fact that we do have an extraordinary amount of gold in our resource profile in our production profile that does set us apart. As we know, gold is the critical currency that can fund projects like large copper gold porphyry like ours with a much, much lower cost of capital. So we have an abundance of that. Our shareholders have been steadfast. We have been continually adding institutional names like Franklin Templeton in our deal. in December, our insiders own approximately 18% of the company. large institutions own approximately 15% of the company and we continue to have that level of support throughout. So this is where we live. We are in British Columbia, British Columbia used to be the largest, one of the largest copper producing nations in the world. And certainly the largest in Canada. This is a map that has been plucked from the provincial government's critical metal strategy that was just announced a few months ago. As you can see, there are not that many copper and gold poor free projects that are currently not owned by majors and therefore we are the largest and the best in province in all of Canada. Given that there are no other regions within Canada that host these types of copper and gold, poor free systems. We're on the north end of Vancouver Island, approximately 500 kilometers. Oops part 500 kilometers away from Victoria as you go north from the island, as you move north of Victoria and past highway four that leads through to Tofino. You can see the nature of industry of natural resource, extractive industry within the region, mining, forestry and fishing. As you go north of Campbell River, the entire area was built for the BHP Island copper mine that was in production from the 19 seventies to the 1995. So hundreds of millions of dollars has already been spent on roads, power ports and the town of Port Hardy itself. And that is where we live currently. We are on the northern part of the starting from the northern part of the island copper pits which again was mined for 24 years by BHB. That's the picture of the mine today. There's a port that still exists on the southern quadrant right there. And the first nations community for which we have consent agreements with have purchased the land that borders that port. So this is a very big economic opportunity for not only our stakeholders and shareholders, but for the government of these first nation groups that preside and for whom we advance our work. Port Hardy was built for the Island copper mine. It now houses about 303,000 people before the mine. It was about a 300 person town and really was built for the satisfaction of this mine housing the 2000 direct and over 3000 indirect workers. So as we look at hu this area was next Utah project which lots of drilling was done in the sixties. This was the results of very good exploration throughout the last 30 years. As you could see, the drilling signifies a high grade zone, open pits area that's exists in and around the valley of this defined pit area. Approximately 0.4% copper and 0.5 g per ton gold within this valley. This is an area that BHP at the time considered mining out and effectively trucking 20 kilometers to their existing mill in coal harbor. So this is what we believe is a very important cornerstone assets for long dated over 30 year production. Profile cash flowing. The question is how do we how do we affect this project and bring it into production with a reasonably sizable capital expenditure? So, what we have done over the last two years is we focused on an area just to the northwest, where we knew there was indication of higher value per ton or, and that was through the discovery of Red Dog a few decades ago. And therefore, that was the focus of our exploration. How do we get higher value per ton or to actually affect a staged phased production to fund the much larger HSU project? And as I said, over the last two years, we have been able to discover two new zones. One is at West Goodspeed where we've released 14 of 17 holes that we drilled over the past few months. What we're finding here is approximately 0.5% over a thickness of approximately 200 m. It's swelling towards the Northwest, swelling towards the other deposits that exist. This is right now already grades that are above average mining grades globally for gold copper peripheries. We're finding that the grades are increasing towards the Northwest, decreasing at depth. And so the next five holes that we're going to release over the next 4 to 6 weeks are testing the boundaries to the northwest, the higher grade zone where it's swelling and to depth to, to understand the overall envelope. Currently, we have approximately 800 m of strike in this zone. This zone hasn't been defined as a resource and therefore, isn't going to be included in our updated pe A that's going to phase the approaches from 20 to 40,000 tons per day to 80,000 tons per day. As we move towards the northwest, we're seeing that this is a very distinctive porphyry trend Along this Corridor, Red Dog was a resource that was actually incorporated into our 2021 pe a. What we see here is about 35 $40 per ton rock, which is more than the $22 per ton rock at hers Shamu. there's zero strip ratio or 0.1 strip ratio. So effectively, this exists on the top of the hill that just gets mined out with very little if any waste that is going to be used to again de define the phase one of our lower capital intensity higher margin project, but really was the kicker over the last year and it has caused a tremendous amount of support for us and our stock is Northwest Expo. This is a new discovery that we made about two years ago. We then set out to define a resource because what we saw was 2 to 3 times higher NSR value per ton of rock. There that would enable us to again reduce the capital intensity phase. This very, very large system in attractive high margin mining. And so in March, we announced of maiden resource at Northwest Expo that defined approximately 70 million tons. That is again 2 to 3 times a higher NSR value per ton rock post recoveries, which again, we released in March as well. So we're talking about $60 per ton rock versus the $22 per ton rock we have at Hoshi again, is the driver. This is enabling us to then. Now contemplate what Artem is contemplated with their Blackwater project, which is a staging effect of 20,000 tons per day, moving up to 50 75,000 tons per day. So that pe A will come up over the course of the next quarter will be completed by Q four released in and around the beginning of Q one. the other exploration drilling, excuse me, that we've progressed was within this high grade zone. I think one of the things that really caught the imagination of our geologist and the market at the time was the fact that we hit 100 and 35 m of over 2.1 g of a ton. So this now has been defined as a high grade portion of the open pits. This is obviously very attractive economically because you get the high grade ounces of high margin stuff out first, which obviously has a higher impact, a positive impact on N PV. So right now, we're currently drilling through to obviously upgrade the inferred to indicate it resources within that high grade zone. But we're actually going past the pit shell to try to find that causative intrusion of that high grade area. So that's a 270 g times meter area that we want that is exists within the porphyry that have the hydro thermal breccia signatures of, of, of, of calks site of Breite. within these intercepts, we were looking for the causative intrusion of that. So not only are we going past the pit shell, we're also drilling from the southwest into find the lateral intrusion. And that results, those results will be announced over the course of the next couple of months as we get them into the labs. One thing that I really want to emphasize as well from an infrastructure perspective. Second, and we've talked about the roads, we've talked about the port, we've talked about the town, but currently, there is one of the largest wind farms in British Columbia producing a capacity of 100 megawatts of power that at this point gets wheeled into California to satisfy their power demand. So there's an excess capacity of power of clean renewable power that exists in the region which is absolutely critical. And essential for projects such as ours as well. As you go to this blue sky, this really sort of feel low perspective, be very deep free system. Well, we have that opportunity as well. And throughout the years, we've spent lots of time and effort around triangulating and vectoring into a drill area that effectively identifies where that potassium right now shows the 6.5 kilometer lithic cap, 1.5 kilometer wide. We've mapped out the alteration zone that's peripheral to the. So this thing is tilting on its side plunging towards the southwest. We've done a number of drilling holes that's confirmed the tilting. We released this year two holes that provided proof of concept that we're getting closer and closer to the potassiums baah heu type system. This again is predis discovery. but this is a system that will require a lot more capital and a lot more attention. So we are currently going through a process to identify the right partner to advance this very deep porphyry. It's going to have a meaningful impact if we have a discovery clearly a game changer for the company, especially as it relates to the near surface open pits, assets that we will retain 100% interest in. This is just the Geo coincident Geophysics C IP and mag anomalies that have targeted our drill program that looks to be about 20 to $30 million in the future. Again, something that will be advanced through partnerships. And then finally, I think it's very important to note that we have been proving and providing evidence around our consent based decisions with our First Nations group. Making sure that we have consents prior to go through, going through the permitting process. And that has expedited our permits to record levels. Quite frankly. In British Columbia, it does take 12 months to 18 to 24 months to receive multiyear asset based permits. It took us 14 weeks to get ours because of our leading consent based approach that the province has identified explicitly as the gold standard to get projects expedited through the permanent project process in province. And so we are very proud that we have been thought leaders in this, we've been ahead of the curve and we have been effectively blessed with great partners with our first nation governments to support our project moving ahead. So in summary, lots of catalysts over the next 6 to 12 months, we're going to be releasing our good speed. That's the new discovery results currently defined at 800 m strike. Looking to extend that strike towards the north us towards the higher grade zones in the expanse of, of the excuse me, the swelling areas of that those intercepts. We're then going to be releasing our drilling Northwest Expo again. This is where the causative intrusion, the high grade zone within the higher margin or exploration and infill drilling. Then we're going to announce our new updated resource globally, which is then going to inform our new preliminary economic assessment that is set out to be released Q four Q one of next year. So with that, maybe I'll leave the rest of the time for questions. Yes, Sam, I just wanted to ask about the composition or the proposed composition of the copper concentrate based off the network you've done. Are there any deleterious elements? What does that look like? Yeah, I know. So this is super clean. So this is a BHP style island copper style system. So sep silica clay pyre chlorate magnetite, they produced a very clean copper and Molly concentrate, which is going to be the concentrate that we are going to be shipping obviously and, and processing the deleterious elements lower than 30 BP and arsenic. This is high premium concentrate that was sold to the Japanese smelters between 1970 1995. It's a very similar composition that we have. The difference is that we have this higher grade gold zone, again, this gold zone that's in and around 0.9 g per time gold equivalent. And so we are for the first phase for that 20 to 4, 30,000 ton per day phase, we're attacking that gold and we are going to add a cil circuit to the rougher and cleaner tails to achieve 90% recoveries on on that leach. Meanwhile, we still will produce a copper concentrate from the first phase. We are not going to produce a co A mo con because the Molly in the first phase effectively has been supplemented by this high grade gold zone. So all the in summary, it's a copper concentrate and a gold door for the first phase and then a copper and Molly concentrate for the second phase of the larger 80,000 timber phase. Very little deter elements. Gold reports into the copper and rhenium which is a critical metal in the US reports into the Molly concentrate. Understood. And then I just wanted to touch on potential for or who who is kind of interested in potentially being a minority partner. You talked about how you have this concentrate goes to Japanese smelters or previously had. So are those type of conversations going on? Yeah, so that that's a really good question. I'm really glad you asked it with only two minutes left for me to answer. But the beautiful thing about this proposition is it is 35 kilometer porphyry district with deposits that have been identified, explorations that have been identified. And of course, these massive lithic caps these, you know, signature porphyry structures that exist on our property. And so what we view this as a menu of options for partnership. What we absolutely have defined and determined is that we are in a market right now. That is absolutely requires strong partnerships. Right. We don't want to go down the path of developing a big copper gold porphyry system or even a small gold system without good partners. And so what we've identified are these deep buried porphyry systems. Again, PLO type systems that require the likes of a BHP to fund hundreds of millions of dollars to go after the deeper porphyry systems. We have these smaller gold systems in West Northwest Expo, which is in the lithic cap, something that is achievable, manageable in the eyes of the market for a company of our size, right, with a higher grade, higher margin rock. We've got Hushi which is effectively a mount million style deposit, low grade high tonnage. but when it is in production, it is Sana's number one asset and is absolutely minting cash right now. And then there's of course, the exploration profile across the 35 kilometer district. So when we look at partnerships, we look at all these opportunities and then we effectively assess what are the opportunities that resonate the best for our company. And we have obviously biases towards that. And with that decision, we will make our selection as to who the right partners or partner or partners will be. And I think this conference is an essential conference for that because this is a large cap conference. It is a conference that attracts the biggest and the best miners in the world. And I would say that our discussions to date have been extremely productive and robust. Excellent. Thank you Sam.


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