Disclosure: Canadian Critical Minerals Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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Price Performance (1-year)
Bull River Mine (100% interest)
The property, covering 10,374 hectares, is located 50 km east of Cranbook, B.C.
10-12 hours from Vancouver. A past producer currently in care and maintenance
Connected to the BC Hydro electrical power grid. Year-round access to the site via paved, all-weather roads
Mineralization, History, and Infrastructure
The project hosts a high-grade vein type copper-gold-silver deposit. Mineralization has been identified over 1,200 m strike, at a relatively shallow depth of 350 m, suitable for underground mining. Vein widths range between 2.5 m and 30 m.
Since 1976, $250M+ has been invested in the property, including 170,000 m of drilling, revealing veins across seven levels. Mineralization remains open at depth
Gold was first discovered on the property in the early 1860s. The property was mined between 1971 and 1974, until the depletion of open-pit resources. During this period, production totaled 16 Mlbs of copper, 204 Koz silver, and 4 Koz gold, with a high CuEq grade of 1.8%, and a recovery rate of 93%.
A key advantage of this project is its potential for rapid advancement to production, thanks to the existing infrastructure, which includes 22 km of underground workings, a 700 tpd mill, and a substantial surface stockpile
The mine features underground infrastructure down to 350 m
Resources and Stockpile
High-grade/low-tonnage underground resources totaling 164 Mlbs CuEq at 2.1%. Indicated resources alone support a 12-year mine life
In addition to the underground resources, the project has 6.1 Mlbs in CuEq (1.7%) surface stockpiles.
Unusually high grades (1.7% CuEq) for stockpiles
Development Strategy
In early 2024, the company received a permit authorizing screening, crushing, and sorting activities, enabling the extraction of stockpiles to generate near-term cash flows. The company secured an agreement with New Gold Inc.’s (TSX: NGD) New Afton mill, located 650 km from the Bull River mine, to supply pre-concentrated copper ore from its surface stockpile over two years.
Started extracting materials from stockpiles in early 2024. As of December 2024, CCMI had shipped 5,825 tonnes of mineralized material to New Afton, generating US$1.5M in revenue
Stockpile extraction will likely continue for another 12 to 15 months, potentially yielding another 10,000 tonnes, generating US$3M in revenue
The project hosts 180 Kt of mineralized stockpile, with approximately 15 Kt expected to be sold under the two-year agreement with NGD. While generating near-term cash flows from stockpile extraction, the company is advancing plans to process the remaining stockpile (165 Kt), and resume underground mining. This requires obtaining permits for tailings disposal, and underground mining. The following steps summarize management’s strategy:
As the project’s CAPEX is low (<US$15M), we believe the company will not have any difficulties in raising capital and advancing the project to production, once the permit is approved.
Our discussions with management indicated that key aspects of the permitting process include a detailed design for dry stack tailings, and an updated effluent discharge plan. As there are First Nations communities near the project, the company will have to gain support from them, if and when the project is advanced to production. Management has indicated that they are in discussions with First Nations communities in the region.
Advancing plans to process the remaining stockpile, and resume underground mining
Management and Directors
Management and board own 9% of the outstanding shares. Six out of seven directors are independent
Financials
Subsequent to Q1-FY2025, CCMI raised $1.35M through equity financings
FRC Valuation and Rating
Our DCF model returned a fair value estimate of $0.22/share. Our valuation is highly sensitive to copper prices
We are resuming coverage with a BUY rating, and a fair value estimate of $0.22/share. 2025 could be a pivotal year for CCMI, as permitting stands as the company’s primary hurdle. The company has delineated a resource capable of supporting 10+ years of operations, with a low CAPEX requirement, thanks to pre-existing infrastructure. We believe that any positive progress in the permitting process will lead to a significant boost in the share price. Our valuation is conservative, as it does not account for any upside from the company’s exposure to XXIX Metal.
Risks
We are assigning a risk rating of 5 (Highly Speculative)
We believe the company is exposed to the following key risks:
