Critical Minerals Co. Upsizes Private Placement Featuring Glencore

Stillwater Critical Minerals Corp. (PGE:TSX.V; PGEZF:OTCQB; 5D32:FSE) announced it is upsizing by more than half a private placement that also features a lead order from major Glencore Canada Corp. due to strong investor demand.

The non-brokered private placement has been increased to 27.5 million units for gross proceeds of CA$3.85 million from the previously announced 17,857,143 units for gross proceeds of CA$2.5 million, a rise of 54%.

Glencore Canada, a wholly owned subsidiary of Glencore International Plc (GLNCY:OTCMKTS), has agreed to increase their current position by buying a further 15 million units of Stillwater stock for proceeds of CA$2.1 million. Glencore announced a 9.99% strategic equity investment in Stillwater in 2023.

According to the company, its 100%-owned flagship project, Stillwater West in Montana, is in "one of the world's largest and highest-grade PGE-Ni-Cu regions adjacent to high-grade Sibanye-Stillwater's PGE Mines with over 14 Moz (million ounces) past Pd+Pt (palladium and platinum) production."

The latest private offering is expected to close on or about April 26 and is subject to customary conditions, such as acceptance by the TSX Venture Exchange.

Stillwater is a mineral exploration company focused on the Stillwater West critical minerals project.

A 2023 mineral resource estimate expanded the project's inaugural resource by 62%, the company said, and defined 1.6 billion pounds of nickel, copper and cobalt and 3.8 Moz (million ounces) palladium, platinum, rhodium, and gold in a constrained model totaling 255 million tonnes (Mt) at an average grade of 0.39% total estimated recovered nickel equivalent (or 1.19 grams per tonne palladium equivalent or Pd Eq).

The selective mining high-grade component yielded 11.6 Mt at 1.05% total nickel equivalent (or 3.24 grams per tonne total Pd Eq) as 0.56% nickel (Ni), 0.33% copper (Cu), 0.03% cobalt (Co) with 0.54 grams per tonne (g/t) Pd, 0.27 g/t Pt, 0.15 g/t gold (Au) and 0.019 g/t rhodium (Rh).

The Catalyst: New Copper Cycle on the Way?

So far this year, copper, a metal very important to the energy transition, has jumped more than 12%. It was US$4.53 on Monday afternoon.

"Copper has traded in the (US)$3.13-3.90 range for most of the past two years, with the lows occurring in 2022, shortly after the Fed embarked upon monetary tightening in July of that year," wrote expert Michael Ballanger of GGM Advisory Inc. "Recently, however, the compelling fundamentals brought about by the looming structural supply deficit propelled copper to new recovery highs above (US)$4.00."

Despite some cooling due to slower-than-expected electric vehicle (EV) sales, the global copper market was worth US$304.1 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5.1% from 2023 to 2032 to US$496.8 billion, Acumen Research and Consulting reported.

Technical Analyst Clive Maund noted the metals markets "at large are entering a major bull market, with strong gains already being seen in copper, gold, and silver over the past month or two."

EVs use as much as four times the amount of copper internal-combustion engine cars do.

"The increasing demand for copper could be met through developments in mining technology, well-organized designs for ore processing, and the discovery of new copper reserves," Acumen's report noted. "According to the United States Geological Survey (USGS), international copper reserves rose by approximately 720 million tons in 2017, and undiscovered copper reserves are estimated to be approximately 3,500 million tons."

Haywood Securities noted in a January 2024 report that based on the time it takes for new copper supply to come online, the market for the metal "will be tightening for the foreseeable future [and] that could eventually lead to a new copper cycle." Haywood noted predictions are for a copper deficit this year, marked by supply shortfall of about 500,000 tons.

Company Rated a 'Buy' for Potential Investors

Technical Analyst Clive Maund noted the metals markets "at large are entering a major bull market, with strong gains already being seen in copper, gold, and silver over the past month or two."

But "copper is a special case with a huge supply shortfall incoming due to the combination of an explosion in demand due to the expanding use of copper in batteries for EVs and power storage, etc., coupled with a supply shortfall due to the dearth of major new copper discoveries in recent years," Maund wrote. "It just so happens that Vortex is exploring for copper (and) gold in highly prospective areas."

A report from Couloir Capital last October rated the company as a "Buy" for potential investors and named a target price of CA$0.35 per share, pointing to Stillwater's plans to advance its Montana properties with an expanded resource and drill targets on Chrome Mountain and Iron Mountain.

Stillwater has several catalysts to report, according to its investor presentation, including pending drill results from Stillwater West and upcoming 2024 exploration plans.

Ownership and Share Structure

Management and insiders own approximately 20% of Stillwater, according to the company. Executive Chairman and Director Gregory Shawn Johnson owns 2.95%, President and CEO Micheal Victor Rowley owns 2.58%, Independent Director Gregor John Hamilton owns 1.64%, Independent Director Gordon L. Toll owns 0.51%, and Vice President of Exploration Daniel F. Grobler owns 0.21%, according to Reuters.

Institutions own approximately 25% of the company, high net-worth investors own about 27%, and Glencore Canada Corp. owns 9.99%. About 18% of the company's shares are in retail, Stillwater said.

There are 197.79 million shares outstanding with 162.25 million free float traded shares, while the company has a market cap of CA$30.66 million and trades in a 52-week range of CA$0.13 and CA$0.23.

Important Disclosures:

1. Stillwater Critical Minerals Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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