Recently, Chen Lin of What is Chen Buying? What is Chen Selling? spoke at the Metals Investor Forum. He stated in an interview with First Tellurium Corp.'s (FTEL:CSE) CEO Tyrone Docherty that China has announced an embargo of solar assets against the United States, which currently leaves the company as the only producer of Te in North America.
First Tellurium Corp. is a North American mining exploration company holding land assets in both British Columbia, CA, and Colorado, U.S. Its Deer Horn property in British Columbia is known to have the only positive PEA (Preliminary Economic Assessment) for Tellurium (Te) in North America and is named by First Solar as one of only four world-class Tellurium projects in the world.
The Deer Horn property is also capable of producing high-grade gold and silver, which plays into First Tellurium’s proposed profit metrics.
Planned 10,000-Tonne Bulk Sample
On March 1, the company announced it had launched permitting for a 10,000-tonne bulk sampling at its Deer Horn Property. This sample may be what First Tellurium needs to move Deer Horn to production.
“We are looking two or three years ahead with Deer Horn,” said First Tellurium President and CEO Tyrone Docherty. “With the positive PEA, extension of the tellurium-silver-gold zone in 2022, and broad-based exploration planned for 2023, we believe the project will be ready for the sort of ‘ground-truthing’ a bulk sample can provide towards a production decision.”
Docherty noted that the bulk sample is targeted for 2025.
Why Tellurium? Growing Demand
Tellurium is a thin, fragile metal eight times rarer than gold that has become increasingly vital to advancing eco-technologies such as solar panels and long-lasting lithium batteries.
As the metal is only found in select locations and technologies are coming to rely on it more and more, First Tellurium believes First Solar’s Te demand could exceed global production by 70%, driving significant price increases for the product.
Analyst Clive Maund noted that "with growing inflation-driven demand for metals generally and increasing interest in . . . tellurium . . . the improving fundamentals for the company make a breakout into a robust bull market likely before much longer."
"North America is just too dependent on foreign sources for the critical metals required for clean energy, defense, and other essential needs," said Docherty in a December 2022 news release from First Tellurium. The percentage of Te that comes from mines is small — a mere 10% compared to the 90% that is extracted from copper.
First Tellurium is aiming to up that percentage with its two current properties as it continues to explore hundreds of other properties internationally.
According to a report by Investing Whisperer, other than sourcing through copper processing, Te is a rare and brittle metalloid element found in small quantities in the Earth’s crust — about eight times rarer than gold itself. As the demand from solar panel manufacturers grows, Te production is seen to shoot up in the near future.
"It’s possible that the market for Te could be much larger in the near-to-mid term — due to the increased use of solar panels. Right now, it’s a very small market with just under 600,000 kg produced in 2021," the report said.
Green Efforts Backed by Indigenous Support
First Tellurium claims to be dedicated to green mining efforts and land restoration. The company states that it works in partnership with the Indigenous peoples of Canada, in part by choosing to operate small mines rather than industrial mines, in order to restore swaths of neglected or previously misused land. This tactic offers the dual benefit of allowing First Tellurium to begin drilling sooner as the infrastructure build time is lower.
The company’s website states that "tellurium, silver, and copper are essential metals for the world’s emerging green economy. Tellurium is also recognized in both Canada and the United States as a critical metal."
The main market for this metal comes from the green technology sector, specifically for use in solar panels and the development of smaller, more efficient batteries.
Eco-Catalysts
Results released by First Tellurium in November 2022 showed that a recent exploration at Deer Horn in October identified an apparent 1.1-kilometer extension of the existing silver-gold-tellurium vein system, which would extend the overall system to approximately 3.5 kilometers (2.2 miles).
In addition, the company’s Klondike Tellurium Project in Colorado is considered one of America’s top Te exploration projects and was previously owned by First Solar as a potential source of raw tellurium for its solar panels.
The market has seen an increased push from both American and Canadian governments to apply more funding to Te mining in North America as demand for this rare, eco-technology essential metal rises. First Tellurium has announced plans to drill in summer 2023, an economics plan based on only 20% exploration of the known mineral zone.
The breakdown is as follows:
Key metrics, using US$1300/oz Au, US$17/oz Ag:
- 1.6 year payback
- 9-year open pit mine life.
- IRR of 42%
- Estimated US$28.3M
- After-tax NPV of US$36.5M
A graph from First Tellurium also shows increasing prices for Tellurium at a steady growth since September 2022.
Analyst Clive Maund noted that "with growing inflation-driven demand for metals generally and increasing interest in one of the company’s main products. tellurium, due to its being a cheap but effective substitute for silver in solar panels, the improving fundamentals for the company make a breakout into a robust bull market likely before much longer."
Maund is only one of several analysts pointing to First Tellurium’s potential, especially since the company has no true peers in the current market.
Streetwise Ownership Overview*On March 1st, 2023, Brien Lundin gave an analysis of the deposits First Tellurium’s PEA has projected:
"Deer Horn has a defined resource of tellurium that includes 66,000 kilograms of indicated material and 27,000 kilograms of inferred material. That resource also contains 68,000 ounces of gold and 2.1 million ounces of silver (indicated) and 32,000 ounces of gold and 930,000 ounces of silver (inferred)."
With increasing demand and the company’s lack of competition in North America, investors are keeping a close eye on First Tellurium and its future.
Ownership & Share Structure
According to the company, 11% of First Tellurium is owned by management and insiders. According to Reuters CEO, President, and Director Tyrone Docherty owns 10.50%m with 7.63 million shares. Director Josef Anthony Steve Fogarassy has 1.38%, with 1 million shares, and Director Lyle Allen Schwabe has 0.77%, with 0.56 million shares. There are no institutional investors and the rest is retail.
FTEL has CA$1.5 million in the bank with a CA$35,000 to CA$40,000 monthly burn rate.
The company has a market cap of CA$23.37 million and over 84 million outstanding shares.
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Disclosures:
1) Cori Rupe wrote this article for Streetwise Reports LLC as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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