When PTX Metals (CSE:PTX) (FRA:9PX) set out to raise C$750k for exploration at their flagship W2 Cu-Ni-PGE project in Ontario, it was good to see the flow-through financing closed oversubscribed, to the amount of C$860k, with some last minute entrants coming in. After closing the important transaction regarding the central claim blocks within the W2 land package, PTX Metals didn’t sit on their hands and commenced drilling a few weeks ago. As the mineralized potential is really significant according to the historic drill results and the recent 3D modelling, I’m definitely looking forward to results from their first drill program, their resource model and other exploration efforts from W2.

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Please note: the views, opinions, estimates, forecasts or predictions regarding PTX Metal’s resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts or predictions of PTX Metals or PTX Metal’s management. PTX Metals has not in any way endorsed the views, opinions, estimates, forecasts or predictions provided by the author.

More cash in the treasury is always a good thing of course, as the proverb in junior mining goes when you are offered money just take it. As the latest flow-through financing was done at 4c with half a warrant (2 year @ 5c), which means 21.5M shares being issued right now, with another 10.75M shares potentially being issued after warrant conversion in the future, quite a bit of (potential) dilution was added again. However, exploration has started to deliver good results in the gold assets (Shining Tree & Heenan Mallard), and copper nickel assays are pending at W2 along with a new resource model estimate for this (exploration target model), so several catalysts could be able to move the stock this summer. Also, trading volume in May was 13.1M shares which was the strongest volume month in years, so quite a bit of rotation seems to be going on, with new investors coming on board who are looking to profit from an eventual bull market in the making.

Share price PTX Metals 3 year timeframe (source: CEO.CA)

Although the case for PTX Metals has improved quite a bit since CEO Ferron took over (acquired W2 project, further consolidation of Shining Tree and JV on Heenan Mallard, setup of Green Canada with various uranium assets, lots of money raised (C$6M in the last 14 months) and put to work in predominantly recon exploration and some drilling), relevant metal prices are rising to all-time highs, and despite the low amount of retail shareholders according to the presentation, PTX Metals didn’t manage to come out of the side ranging pattern.

Me and many other shareholders see the added value over time and are patient as the drill bit in the end is responsible for real value creation, but are also wondering where the continuous selling comes from, as for example the amount and quality of PP participants over the years comes to mind. The value add and high metal prices combined with ongoing dilution of raises simply don’t explain the ongoing bottoming process.

CEO Ferron had the following explanations, and he strongly believes the following catalysts will take us out of this pattern: “The W2 assays and resource estimate model will help attract better valuation and a broader shareholder base. The spinout of the uranium company and continued drilling success with the JV funded gold projects should also assist. We are listing on TSXV which will also help us attract a broader shareholder base. We trade on average 90M shares per year in Canada, so there is decent liquidity. Juniors just need a bull market or a significant discovery, of course we hope for both.”

The ongoing drilling of W2 is certainly the main driver in my view, considering the historic drill results achieved here in the past, all results being near surface as most historic holes didn’t go deeper than -150m.

• Hole 54002 intersected 0.92% Cu, 0.73% Ni over 18.2 m
• Hole 54004 intersected 0.48% Cu, 0.15% Ni over 32.0 m

• 6 m of 0.62% CuEq or 0.956 g/t PdEq (LH-01-06)
• 6 m of 0.64% CuEq or 0.971 g/t PdEq including 17 m of 1.08% CuEq or 1.86 g/t PdEq (LH-01-05)
• 42 m of 1.02% CuEq or 1.8 g/t PdEq including a high grade 4.5 m section of 4.52 g/t PdEq (LH-01-02)

Keep in mind that regarding geophysics, the most interesting claims are located in the east, as can be seen on this map:

However, these claims haven’t seen any drilling so far, so I’m definitely looking forward to this. The 3D modelling of the Central Area already revealed significant potential. The technical community that follows the project also sees the Eastern Area likely with the best strike length and the potential to host multiple higher grade deposits. The area has not been drilled and it’s the first time the entire W2 (formerly Lansdowne) project is under one roof including the central resource area, the northwest (vanadium area) and the east targets.

When doing a back of the envelope estimate, one could easily arrive at a 70-100Mt target for the orange-red shapes (indicating > 0.8% CuEq), and keep in mind these shapes are all positioned near surface, this kind of grade would be pretty economic. The ongoing drill program consists of 2,500m of diamond drilling, spread out over 2 phases. Phase 1 is expansion drilling (outside the resource) and is primarily focused towards the northeast of the compiled 7.5 km long trend of Cu-Ni-PGE mineralization. The first results are expected to be announced next week and the balance of the holes in a few weeks.

In addition to drilling, the modelling of the recently acquired historical resource area is underway with a goal to produce a resource model (exploration target) estimate under Section 14 of NI 43-101 following the completion of the ongoing drill program. The exploration target resource model allows PTX to use the historical Inco drilled holes which predate NI 43-01. The Phase 2 drill program will confirm some of the historical resource and drill at depth in the Inco zone which was drilled shallow compared with the NE zone. CEO Ferron expects the timeline for the resource estimate to indicate around July or August.

Shining Tree-Heenan Mallard

Since PTX Metals is also working at the Shining Tree – Heenan Mallard project, a quick update on this is always a nice to have. The JV with Fancamp Exploration completed a small drill program of 4 holes for 611.50m, and three holes hit gold mineralization. The results were encouraging, as hole1 returned 5m @ 0.64g/t Au from 16m, hole 2 returned 77.4m @ 0.4g/t Au from 27m, hole 3 returned 27.2m @ 0.55g/t Au from 61m, with a deeper vein of 1m @ 5.5g/t Au from 177m, and hole 4 returned 3m @ 1g/t Au. PTX Metals and Fancamp Exploration decided to drill here after trenching returned 2m @ 4.05g/t Au and 8m @ 2.39g/t Au.

The plan going forward for Shining Tree-Heenan Mallard is this according to CEO Ferron: “We are busy in Timmins now completing additional trenching at Shining Tree-Ronda and then trenching at Mallard to prepare for drilling at Mallard. We are also doing sampling at Heenan to better understand the geometry of the early stage discovery before additional drilling commences.”

Green Canada

PTX Metals is planning to spin-out Green Canada, a fully owned subsidiary owning 4 uranium projects (with more coming) in Q2, 2024. The company aims to hold about 60% of Green Canada leading up to the IPO, the idea is to dividend a significant part of this out to existing PTX Metals shareholders on a pro rata basis. Green Canada did acquire a significant land position in Thelon Basin last quarter, details will be provided soon. At the moment, PTX Metals is very busy closing one final uranium asset acquisition, involving a project which according to CEO Ferron will be by far the new flagship asset for Green Canada. Currently, they are also doing due diligence on several uranium projects, and starting to work out the listing strategy, timing and structure, aiming for a listing in Q3, 2024.

As the acquisition of this company making uranium asset has been ongoing for quite a while now (since November 2023), I wondered if Green Canada will be able to close this acquisition soon, in order to list next quarter, potentially just in time for the next leg up in the uranium spot price. CEO Ferron had this to share with the audience, as impending acquisitions obviously are of very covert nature: “We are focused on due diligence at the moment with an interesting number of assets in the Americas, but also internationally.”

Conclusion

Although the company is in good shape, some critical nuts had to be cracked regarding the share price performance. CEO Ferron is lining up his marketing strategy at the moment and is looking forward to good W2 drill results, which combined with a potential upcoming bull market could leave current share price levels behind us.

Since W2 easily has 70-100Mt potential, predominantly copper mineralized, with copper trading near all-time highs, in my view solid near surface drill results and an upcoming NI43-101 after a phase 2 drill program later this year could very well be the premier catalyst PTX Metals needs. The spinout of Green Canada could be very interesting as well depending on the incoming flagship asset and the development of the uranium spot price, and it is never a bad thing to have exposure to gold as well these days with the district scale Shining Tree-Heenan Mallard project, on trend with several meaningful deposits (Coté, Juby). Stay tuned!

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Disclaimer:

The author is not a registered investment advisor, and currently has a long position in this stock. PTX Metals is a sponsoring company. All facts are to be checked by the reader. For more information go to www.ptxmetals.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.