Baselode gets judges’ nod in London Pitch Battle
- 9 December 2024
Three slick presentations, three experienced leaders and three business cases with, evidently, plenty of upside. But there could only be one winner of the final Mines & Money Pitch Battle of Resourcing Tomorrow 2024.
And that was Baselode Energy’s uranium play on the edge of Canada’s Athabasca Basin, “the most asymmetric uranium opportunity in the world right now”, according to CEO James Sykes.
Baselode and its ACKIO project came out ahead of a high-purity alumina (HPA) venture in Western Australia and silver and zinc in northern Mexico, in the eyes of five respected investors: Baker Steel’s Mark Burridge, Discovery Group’s Jim Paterson, Greg Harris from Jacri Capital, Global Mining Capital’s Keith Spence and Patrick Chidley of 3ppb.
They probed the three-minute pitches of the finalists before delivering their votes.
Baselode beat Impact Minerals and Impact Silver in a tight result.
Impact Silver’s Steven Gold was able to point to silver and zinc cash flows from Zacualpan and Plomosas, respectively, in Mexico, and a team with nearly two decades of operating and exploration experience in a part of Mexico with a rich production archive.
Impact Minerals boss Mike Jones gave probably the smoothest pitch, acknowledged by several of the judges, pointing to the potential for a US$20 million junior to rocket on the back of a $15 billion HPA resource in Western Australia. That’s going to take technical de-risking and partnering with an offtaker or two.
Impact’s template, though, is ASX-listed Alpha HPA, already worth about A$1.1 billion, which has a modest existing HPA operation but has picked up about $400 million of low-interest government loans to help it build a $550 million, 10,000 tonnes-per-annum operation it says can generate maybe $330 million a year of EBITDA.
“If you were to ask me about the same three stories before COVID I would have definitely gone to the classics – silver or uranium,” said GMC’s Spence.
“But in this environment … I'll put all my marbles on Impact Minerals.
“You're more likely to get grants from the government; you're more likely to get support. It’s a niche market but there are not many players there. It has the potential for cash flow, notwithstanding the technical risk.”
Otherwise, the marbles mostly fell on Baselode.
“Our share price has been absolutely crushed but … we think we've got great assets and great people,” said Sykes, who has been involved in circa-550 million pounds of U3O8 resource discovery in the Athabasca Basin.
“We've got $11 million cash and [a] … $13 million market cap for an enterprise value of about $2 million. We used to be a $100 million market cap company.
“But we also have our ACKIO discovery, which is a near-surface uranium deposit.
“In the Athabasca Basin area there are a lot of high-grade deposits. There are a lot of large tonnage deposits, but most of those don’t get mined because of the water issues.
“Anything with over 100m sandstone cover does not [typically] get mined because the water infiltration rate is just too much.”
Only two such mines, Cigar Lake and McArthur River, got going.
“Both of them were over 300 million pounds when they started mining [and] they’re over 20% average grade,” Sykes said.
“So these are the unicorns of the industry.
“Ninety-five per cent of the mines in the Athabasca were all mined as openpits or added a decline access. So that’s the type of deposit that we want to find.
“We don't want to find a deposit. We want to find a mine.”
Baselode is aiming to post a maiden ACKIO mineral resource estimate of up to 15Mlb by the middle of next year. It is also expecting to advance other targets and has $5 million earmarked for 2025 exploration.
“Most of the grades that have been mined [in the basin] are between 0.3-0.6%. We think that our grades are right in that range,” Sykes said.
3ppb’s Chidley split his vote but said he liked the uranium story, “not because I necessarily thought it was the best deposit in the world, but I thought that the valuation was very attractive due to the cash in the company”.
“It has obviously got some pedigree in terms of exploration success in uranium,” he said.
Harris from Jacri Capital said he didn’t know enough about HPA to properly weigh Impact Minerals’ prospects and while he liked the other Impact’s existing cash flow and exploration upside, he also wanted “a risk adjusted return”.
“Baselode [provides] an opportunity for us to come in at a reasonable valuation.
“I think there’s enough going on in that commodity market that [Baselode] does have wind in the sails,” Harris said.
Burridge added: “It's a good discovery in a good district. Perhaps it is helped by the share price. [$13 million market cap] makes it worthwhile.
“That’s not to say the others aren’t investable.
“I certainly think that the [Impact Silver] story is great. Mixing some production success with exploration growth is a brilliant story.
“And I think that if that story on Impact Minerals had been translated into a commodity I understood that probably would have won it.”
