Company Spotlights / Market Commentary

Alaska Energy Metals adds significant tonnage to the Eureka Deposit w/ Updated MRE

  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 4 years of experience investing in financial markets. As a fundamental investor, Declan embraces the investment principles of Warren Buffett and his disciples. This puts a focus on finding businesses with healthy financials, competent and accountable leader, enduring competitive advantages, and those that are selling at discount to what they are worth.

Edge is publishing this content on behalf of the Company and is compensated for investor relations services.

Last month, I introduced you to Alaska Energy Metals (CA: AEMC) (USA: AKEMF), an Alaska-based mineral exploration company with what appears to be a serious nickel deposit within its flagship Nikolai Project.

At the time of my first introduction, I mentioned that AEMC’s Nikolai project had an inferred mineral resource of 1.5 billion pounds of nickel, 373 million pounds of copper, 115 million pounds of cobalt, 419 thousand ounces of platinum, 802 thousand ounces of palladium, and 120 thousand ounces of gold, bringing the total nickel equivalent metal to more than 2 billion pounds.

This was already a formidable project composed of multiple key resources and well-positioned to benefit from the global energy storage boom; S&P Global expects demand for nickel and cobalt to jump 23x by 2035.

But the AEMC team, led by President and CEO Greg Beischer, knew that there was more to the Nikolai Project than meets the eye.

To demonstrate their conviction, the company tapped Stantec Consulting Services to perform an updated—and independent—mineral resource estimate (MRE) on a 4.5-kilometer, 100% owned, section of the Nikolai Project known as the Eureka Zone. The MRE consisted of 35 historical drill holes, previously purchased by AEMC, and eight new diamond drill holes (totaling 4,138 meters) carved by the company in 2023.

This updated MRE provided AEMC with critical insights into the project and helped it realize its potential In essence, it was a substantial value add for the company given the five-fold additions to the resource supply of its mineral deposit, cost reductions, and more.

With that said, let’s explore the results.

The Updated Mineral Resource Estimate

MRE Indicated and Inferred Resources | Alaska Energy Metals

With the unveiling of the 2024 NI 43-101 MRE for the project, it’s evident that Alaska Energy Metals (AEMC) is holding a remarkable deposit. The Eureka Zone stands out with an impressive 813 million tonnes of nickel equivalent (NiEq) in indicated resources at a grade of 0.29% NiEq, along with 896 million tonnes in Inferred resources at a grade of 0.27% NiEq. This marks a remarkable 180% surge in Nikolai’s Inferred resource and introduces the first Indicated resource to the project.

Keep in mind that the announcement of over 800 million tonnes of Indicated resources provides AEMC with a higher level of certainty in tonnage, grade, and mineral continuity, showcasing Nikolai’s abundant mineral resources and promising economic outlook. This means greater consistency and potentially more capital inflows as well.

But this alone does not do the project justice. To truly grasp the potential of this project, allow me to share a comprehensive list of both the Indicated and Inferred resources:

Indicated MRE:

  • 813 million tonnes grading 0.29% NiEq containing:
  • 3.877 billion pounds (1.758 million tonnes) of nickel
  • 1.276 billion pounds (578,783 tonnes) of copper
  • 303 million pounds (137,438 tonnes) of cobalt
  • 4.0 million ounces of platinum, plus palladium and gold

Inferred MRE:

  • 896 million tonnes grading 0.27% NiEq containing:
  • 4.225 billion pounds (1.916 million tonnes) of nickel
  • 1.040 billion pounds (471,736 tonnes) of copper
  • 327 million pounds (148,324 tonnes) of cobalt
  • 3.4 million ounces of platinum, plus palladium and gold

As you can see, this project hosts a very substantial resource supply, including nickel, copper, cobalt, platinum, palladium, and gold. There is chrome and iron in the deposit too. The Nikolai MRE has transformed from having no nickel in its Indicated resource to approximately 3.877 billion pounds, with the Inferred nickel resource leaping from 1.552 billion pounds (703,975 tonnes) to 4.225 billion pounds (1.916 million tonnes), a 172% increase. In total, the project now boasts over 8 billion pounds of nickel and 10 billion pounds of nickel equivalent metal, solidifying its status as one of the larger known nickel deposits in the United States.

Beyond the resource boost, AEMC’s updated MRE brings additional advantages. The identification of a new high-grade core zone within the EZ2 zone, with an indicated resource of 211 million tonnes at 0.34% NiEq and an inferred resource of 154 million tonnes at 0.33% NiEq, presents substantial economic potential. Mr. Beischer emphasizes that this discovery has the potential to significantly impact the project’s economics positively.

Furthermore, AEMC successfully reduced the strip ratio of the Eureka Zone from 3.7:1 to 1.5:1 by connecting the Eureka West and Eureka East deposits into a single 4.2-kilometer deposit. This strategic move not only improves the project’s economics but also reduces the geological footprint by minimizing waste rock removal during ore extraction. Additionally, three parallel zones of mineralization (EZ1, EZ2, and EZ3) were identified.

In conclusion, the combination of an enhanced mineral resource supply, reduced strip ratio, and the discovery of a high-grade core zone are pivotal catalysts for Alaska Energy Metals’ future endeavors. Mr. Beischer succinctly summarizes the project’s rapid progress, stating, “In less than a year, we have taken an exploration concept to a substantial deposit of nickel and other critical metals… With this updated mineral resource estimate, the Eureka deposit of the Nikolai Nickel project represents a globally significant accumulation of nickel and has now become one of the larger known nickel deposits in the United States.”

Final Thoughts

Alaska Energy Metals is one of a select few organizations set to benefit substantially from a surge in demand for nickel, and other supplementary metals. With over 8 billion pounds of nickel and more than 10 billion pounds of nickel equivalent (when including copper, cobalt, platinum, palladium, and gold), the company is set to become a key supplier of battery materials and more for North America. This is growing increasingly important as North America shifts towards investing in domestic supplies and production.

Despite this, AEMC appears relatively undervalued compared to industry peers and trades at a market cap of just USD 25 million.

But with the newly published MRE showcasing the economic potential of its flagship project and more drilling scheduled this year, there is no doubt that Alaska Energy Metals will be a key player in the American battery market and beyond for years to come.

Disclosure/Disclaimer:

We are not brokers, investment, or financial advisers; you should not rely on the information herein as investment advice. If you are seeking personalized investment advice, please contact a qualified and registered broker, investment adviser, or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Edge Investments and its owners are compensated by Alaska Energy Metals for Investor Relations Services. Edge Investments and its owners reserve the right to buy and sell shares in Alaska Energy Metals without further notice, which may impact the share price. Please do your research before investing, including reading the companies’ public filings, press releases, and risk disclosures. The company provided information in this profile, extracted from public filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it. The commentary and opinions in this article are our own, so please do your research.

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  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 4 years of experience investing in financial markets. As a fundamental investor, Declan embraces the investment principles of Warren Buffett and his disciples. This puts a focus on finding businesses with healthy financials, competent and accountable leader, enduring competitive advantages, and those that are selling at discount to what they are worth.

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