The inaugural Canada Investment Summit is generating some buzz around at least two mining projects in the Northwest Territories, but the real measure of the summit’s success will emerge in the coming months, not days, mining executives say.
“I do feel that the attention is percolating towards us, we’re getting inbound calls from investors,” said Chad Williams, interim CEO of Honey Badger, the company advancing the Dehcho-region mine now known as PC Silver.
Not all the calls are from investors at the summit, he said, adding that Honey Badger is about to release an independent economic study that will illustrate the merits of the mine.
This week, Prime Minister Mark Carney has convened many of the world’s largest investors in Toronto to pitch them on 160-plus Canadian projects.
Five NWT projects are in the summit’s prospectus, including the PC Silver mine and proposed Nechalacho rare earths mine east of Yellowknife.
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“The tacit endorsement of being in that prospectus allowed us … to have some very good discussions,” Avalon Advanced Materials chief financial officer Lorin Crenshaw said.
While only government officials and big private institutions were at the summit itself, Avalon – which is advancing a mine at Nechalacho – held its own investors’ day and round table discussion.
“I won’t name names of investors, but to have some very good discussions with investors that manage billions of dollars … that’s very important,” Crenshaw said, praising the federal government for its efforts to bring so much private capital into the same room.
“We’re going to measure returns on this over the next year, not the next 24 hours,” said Crenshaw. “And we’re already seeing good inbound interest.”
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“This kickstart event is really helpful,” said Tatiana Torres, a communications manager at Avalon. “Being able to at least connect with folks in private meetings and investors kickstarts a lot for us.”
Measuring the summit’s success over a longer time period makes sense because it takes time for large institutions to do their due diligence, Williams said.
“It will take months for this to come to a boil. Governments generally move relatively slowly. Large institutions are also relatively slow, and so these things do take time. But it’s a great start.”
Canada makes tax change
On Tuesday, Carney also announced a new investment incentive called the “Productivity Mega Deduction” that would allow companies to fully write off the cost of most new capital assets.
The Mining Association of Canada applauded the Productivity Mega Deduction and called it “transformational” in a press release.
For mining companies, the association explained, the deduction could include a range of machinery, equipment and infrastructure used to build, operate, modernize or expand mines, as well as equipment used in mineral processing, smelting and refining.
“With these announced new measures, Canada will become one of, if not the most, competitive mining tax jurisdiction in the world,” Pierre Gratton, the association’s president and CEO, was quoted as saying.
Avalon’s team didn’t offer an immediate endorsement of the mega deduction because they hadn’t had a chance to review the details. At a high level it sounds helpful, Crenshaw said.
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“This is positive, but the magnitude of the positivity is uncertain,” Williams said, adding that Honey Badger’s accountants are looking at it.
Scott Monteith, CEO of Avalon, wants to see more federal support for the Nechalacho mine to help stabilize the risk profile and attract private investors.
Ideally, he said, this would look like Ottawa providing financing in the form of debt, equity and perhaps an offtake agreement for the rare earth metals to provide a guardrail against China’s grip on these metals. (A separate company, Vital Metals, has mining rights in the same spot as Avalon. Only Avalon is listed in this week’s summit prospectus.)
Cabin Radio contacted the other three companies with NWT mining proposals in the prospectus but did not hear back ahead of publication.
The other projects are Li-FT’s Yellowknife Lithium Project and carbonate conversion facility, the Pine Point mine in the South Slave region, and Fortune Minerals’ Nico mine outside Whatì.
