Recent International Energy Agency (IEA) forecasts show that solar photovoltaic (solar PV) technology will generate more power by 2027 than any other source, and First Tellurium Corp. (FTEL:CSE) hopes to help power that revolution.
Two important elements in the construction of solar PV panels are tellurium (Te) and silver (Ag), both abundant at First Tellurium's Deer Horn project in British Columbia.
"This growth scenario aligns perfectly with our strategy for developing First Tellurium's Deer Horn project," said First Tellurium President and Chief Executive Officer Tyrone Docherty. "While Deer Horn is known best for its high-grade tellurium resource, the property's current indicated silver grade, as per our latest preliminary economic assessment (PEA), is estimated at 157 grams per tonne (g/t). Factoring in the indicated gold grade of 5.12 g/t, we have a very attractive mix of precious and green metals."
Deer Horn is known to have the only positive PEA for a Te project in North America. It's named by First Solar Inc. as one of only four world-class Te projects.
"There's a very decent chance tellurium will breakout this year because First Solar is using 60 to 70% of worldwide production to make a solar panel," said asset manager Chen Lin.
"There's a very decent chance tellurium will breakout this year because First Solar is using 60 to 70% of worldwide production to make a solar panel," said asset manager Chen Lin, author of the What's Chen Buying? What's Chen Selling? newsletter. "Their production has grown rapidly."
First Solar plans to double its solar panel manufacturing capacity to lessen China's dominance of the market. It plans to spend US$1.36 billion increasing module capacity to 16 gigawatts (GW) by 2024, according to S&P Global.
"The hunt for tellurium is a microcosm of challenges the energy sector faces in powering the world economy with mineral-intensive green energy resources rather than fossil fuels," S&P wrote.
Te is one of the least common elements on the planet, according to the U.S. Geological Survey. Most rocks contain an average of about 3 parts per billion Te, making it eight times less abundant than gold. In addition to solar panels, it's also used in lithium batteries and is to vulcanize rubber, tint glass, and manufacture rewritable CDs and DVDs.
The Catalyst: 2023 Exploration on the Table
Deer Horn's PEA was calculated on 450 meters of a 2.4-kilometer gold-silver-tellurium vein system. Sampling in 2022 identified a possible 1.1-kilometer extension of the system, the company said.
"Drilling planned for 2023 will focus on confirming and enlarging the zone extension," said Docherty. "We also plan to conduct infill drilling to expand the current indicated and inferred resources."
First Tellurium will also focus this year on testing new targets identified in 2022, mapping, and aerial surveys of the 5,133-hectare property.
The company also just launched its bid for permitting a 10,000-tonne bulk sample at the project, targeted for 2025.
"We are looking two or three years ahead with Deer Horn," Docherty said. "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."
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.
Pressure to Bypass China
The market has seen an increased push from both American and Canadian governments to apply more funding to Te mining in North America. Docherty noted that U.S. President Joe Biden has banned solar panels coming from a Chinese company that uses forced labor.
The global market for Te is predicted to grow at a compound annual growth (CAGR) of 4.6% between 2022 and 2030.
"There's a lot of pressure now to source solar panel production from domestic suppliers," said Docherty. “Our goal is to help meet that demand, both from our Deer Horn project in BC and our Klondike project in Colorado."
The global market for Te is predicted to grow at a compound annual growth (CAGR) of 4.6% between 2022 and 2030.
Chen noted that the solar PV industry is also the largest industrial consumer of silver and that its use in the technology is also likely to increase dramatically in the coming years.
Streetwise Ownership Overview*"The gold-silver old price ratio is currently around 90-to-one, where historically it has been much, much lower; even 10- or 12-to-one," he said. "The market will realign itself. And when it does, I believe silver prices will increase dramatically, especially when driven by surging demand."
Ownership and Share Structure
According to the company, 11% of First Tellurium is owned by management and insiders. Docherty owns 10.50% or 7.63 million shares, Director Josef Anthony Steve Fogarassy has 1.38% or 1 million shares, and Director Lyle Allen Schwabe has 0.77% or 0.56 million shares. There are no institutional investors, and the rest is retail.
The company has a market cap of CA$16.63 million, with about 95 million shares outstanding, 63.46 million free-floating. It trades in a 52-week range of CA$0.255 and CA$0.085.
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