The last six months have been the most volatile period for North American investors in decades. Given mass global unemployment due to COVID-19, unparalleled intervention by central banks in the markets, and increasing American political chaos, it has become nearly impossible to invest without wondering if there is any sensible way to mitigate this seemingly endless risk.
That is why I’m looking for investments that can potentially move the needle no matter what’s happening on CNN.
It’s a quest that has taken me around the world, and back in time. From observing a team in northern Canada working to unearth one of the world’s rarest and highly sought after precious metals, to witnessing the aftermath of a massacre of miners in Africa nearly a decade ago, my cameras caught, exclusively for this film, the inner workings of a global economy few ever see.
Palladium is more valuable than gold and 30 times rarer. Mainly used in catalytic converters, the device used in vehicles to reduce vehicle emissions, palladium has seen a 25% price jump this year – despite the pandemic-induced economic mayhem.
Palladium’s rising price is the result of two interconnected drivers: 1) a massive shortage of global supply, and 2) the fact that two of the earth’s three largest palladium resources are located in jurisdictions fraught with risk, South Africa and Russia.
Bank of America Merrill Lynch says carmakers – the largest customers of palladium – will struggle to find enough of the precious metal as “global supply is set to remain flat.”
It is this opportunity that has attracted mining CEO Wayne Tisdale. He has built his career finding underdeveloped mining assets, strategically allocating money, geology and time to their enhancement, and then selling them on for multiples of what he paid for them. Tisdale has done this several times over his career, selling five companies with an aggregate enterprise value north of $1 billion. Tisdale’s most recent success was selling U.S. Cobalt for $149 million in 2018, after spending less than 3 years and $20 million on the project.
Acting on a hunch that the shortage of palladium would only become more acute, a year ago Tisdale connected with prospector Richard Sutcliffe. Sutcliffe helped find one of only two operating palladium mines in the Americas, the Lac Des Iles mine near Thunder Bay, Ontario. It was sold last year to Implats for $1 billion.
Using his knowledge of palladium, Sutcliffe reasoned there could be another deposit near Massey, Ontario – a small town an hour’s drive from Sudbury, the mining capital of Canada.
Sutcliffe had previously worked on what is now referred to as the East Bull Project, proving up a 523,000 ounce palladium resource. He then teamed up with Tisdale to form Canadian Palladium (CSE: BULL) (OTCQB:DCNNF) (FRANKFURT:DCR1). All summer the company has been drilling, with a view to tripling the current resource. The hope is to ultimately sell.
“My goal is to do what we did with U.S. Cobalt,” Tisdale told me, “to sell it insitu to a company that can take it to the next level.”
As Michelle Gahagan, one of Canadian Palladium's directors, put it to me, “The point is to get it to the point where there’s an attractive resource and somebody will come along and take it to the next stage.”
The company just closed a $3.4 million financing that will go towards moving East Bull closer to the finish line.
Tisdale believes that could be sooner than later.
“I would think we should be sold by a year from today.”
Watch my film and decide for yourself if you think Tisdale’s assessment hits the mark. One thing is for certain: the outlook for palladium remains bullish.
Cautionary note regarding forward-looking statements
Certain statements made, and information contained herein may constitute “forward looking information” and “forward looking statements” within the meaning of applicable Canadian and United States securities legislation. These statements and information are based on facts currently available to the Company and there is no assurance that actual results will meet management’s expectations. Forward-looking statements and information may be identified by such terms as “anticipates”, “believes”, “targets”, “estimates”, “plans”, “expects”, “may”, “will”, “could” or “would”. Forward-looking statements and information contained herein are based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and reserves, the realization of resource and reserve estimates, metal prices, taxation, the estimation, timing and amount of future exploration and development, capital and operating costs, the availability of financing, the receipt of regulatory approvals, environmental risks, title disputes and other matters. While the Company considers its assumptions to be reasonable as of the date hereof, forward-looking statements and information are not guarantees of future performance and readers should not place undue importance on such statements as actual events and results may differ materially from those described herein. The Company does not undertake to update any forward-looking statements or information except as may be required by applicable securities laws.
In accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects, Gary Clark, P.Geo. Director, is the Qualified Person for the Company and has validated and approved the technical and scientific content of this video. The Company strictly adheres to CIM Best Practices Guidelines in conducting, documenting, and reporting its activities on its various exploration projects.
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