Categories: Energy
Topics: Lithium Stocks

Patriot Battery Metals (TSX: PMET)(OTCQX: PMETF) CEO Ken Brinsden on Advancing the World-Class Shaakichiuwaanaan Project & Unlocking Lithium, Cesium, and Tantalum as a North American Supply Chain Cornerstone

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today for a long-overdue catch-up is the quarterback and CEO of Patriot Battery Metals (TSX: PMET)(OTCQX: PMETF) — Mr. Ken Brinsden. Ken, it is so good to have you on, sir. How are you today?

Ken Brinsden: Fantastic to be with you, Gerardo. I really appreciate the opportunity.

Gerardo Del Real: Listen, as a long-term supportive shareholder, it puts a smile on my face that despite your incredible past success — and the incredible success you’re having now with Patriot — you’re still botched up in the back, sticking and moving, jet-lagged from the many, many trips. A CEO working hard, hard, hard. We appreciate that.

Let’s get right into it. We have a situation in the lithium space that’s changing in terms of the overall landscape. It’s been a frustrating year and a half — maybe two — for anyone who’s been in this space for more than four years. We had a phenomenal couple of years where it felt like investing in lithium stocks and miners was easy. You just put your money in, wait, and one day you wake up with more money.

What we’ve seen in the last 18 to 24 months is a pretty expected but more severe consolidation than many anticipated. Expected in the sense that we all knew it had to pull back. It wasn’t sustainable at that pace. I didn’t think, personally — let me speak for myself — I didn’t think China could do what it did for as long as it has.

So now I look at the landscape, I look at your background, and I think: okay, deep, severe consolidation — and in the meantime, Ken and the team have added phenomenal value. 

You now have not just one world-class discovery but potentially several world-class discoveries on a single project. And oh, by the way, you’ve brought in people who, to me as a shareholder, signal: ‘We’ll take this to production if we absolutely have to — no problem. We’ve done it before.’ You’ve obviously done it before.

I want to get your take on all of that. Let’s start with how you view the changing landscape because I’m starting to see a lot of green shoots in the lithium space, and the demand side of the picture is doing exactly what I thought it would.

Ken Brinsden: Gerardo, you’re spot on. You’re right that it has shifted from being a supply-side debate over the past couple of years where China had a big influence on the market. And I honestly believe we’re now through the trough and coming out the other side. I think demand is going to outstrip expectations.

But it’s the same old story, Gerardo. It’s still very much about what China’s up to — and they really are changing the game. Lower-cost cells are translating into a heap more EVs, globally now, because China is a major player in a lot of export markets. And it’s those low-cost cells that are making their way into new applications where the tech can be deployed economically.

One standout is the stationary energy storage sector, which is really a phenomenon, Gerardo. That one’s probably being grossly underestimated in terms of how fast it’s growing.

Just to give you some perspective: this year, growth in stationary energy storage is up over 50% — almost double the rate of EVs, which are in the 27-28% range. And that sector is going to be a big one in the coming years. It’s a really important driver of demand growth that, as I said, is probably being largely underestimated.

So yes, there’s plenty of reason to be optimistic about lithium raw material demand.

Gerardo Del Real: Let’s get specific with Patriot Battery Metals. You’ve got an emerging — and for you, a bit of déjà vu — world-class discovery. And I think this one is going to be significant not just for Canada, not just for Patriot, but for all of North America.

I believe deposits of global significance, especially in North America, are going to command a substantial premium in the coming years. And you don’t just have lithium; you potentially have three or even four different metals in high demand.

I want to start with the flagship, the lithium, because I know the cesium has recently and rightfully attracted a lot of attention. And we’ll definitely get to that.

But let’s begin with the lithium. That’s what initially attracted Volkswagen to partner with you. It’s why Albemarle came in at a significant premium and wrote a check. And oh, by the way, having C$100 million in the treasury and continuing to add this kind of value during a broader consolidation has been brilliant execution despite what the share price may suggest.

Let’s talk lithium. Where are you now? And what’s next, especially with the Feasibility Study, which I think will highlight a lot of key factors and give us a clearer window into the potential economics moving forward.

Ken Brinsden: Yes, it’s a phenomenal piece of geology, Gerardo. When you’re in the hard rock world, you’re looking for these classic kinds of LCT resources: lithium, cesium, tantalum. That’s what the geos will refer to. But it’s very rare that you get the confluence of all three — and some additive minerals — in one piece of geology.

But that’s exactly what we have at Shaakichiuwaanaan.

World-class lithium in terms of both scale and grade... cesium now proven with scale and grade in the maiden resource... and a tantalite resource that many would be jealous of if tantalum was your only focus. So yes, it’s really an incredible piece of geology — and it’s for all of those reasons that we’re excited about the project’s potential.

Onto the Feasibility Study — spot on, mate. That’s close. We’re only a month or two away from presenting the updated economics around a lithium-only CV5 development.

If I take you back to ground zero: we’ve got the CV5 resource — lots of lithium there — and more lithium, cesium, and tantalum at CV13. But just to be clear, the Feasibility Study is focused on lithium only at CV5. That’s what we’re delivering, and that’s what ultimately gets us through the next phase of mine authorization — the presentation of the Feasibility Study and the environmental approvals documentation.

The value-add we expect from the other co-products — particularly cesium and tantalum — will be captured in the detailed engineering phase, which will happen as we go through that first round of mine authorization.

So just to be clear again: lithium only at CV5 for the Feasibility Study. Still a fantastic project. But the economic upside from the cesium and the tantalum — that comes in the next step beyond the feasibility. And we’re looking forward to demonstrating what’s possible there because those co-products are also really material to the overall project.

Gerardo Del Real: For the generalist out there… and let me be clear, I consider myself a generalist, I’m not a geologist… when we look at the cesium, the tantalum, and the lithium, I have to imagine you’re having conversations with chemical companies, auto companies, etc.

Are you having separate discussions about each one? Or are there conversations happening that try to figure something out with all three? Because there are applications for all three metals where, hypothetically, you could send 25%, 50% of each to a single client in exchange for an offtake, right?

Or are those completely separate discussions at this point? I see the smile. I don’t know if you’re going to answer it.

Ken Brinsden: [laughs] No, no… I reckon you’ve raised a really interesting point there.

Actually, what it highlights is the issue of concentration. The way industry thinks about this stuff — they worry about the concentration risk going downstream through China. And if you were to say, ‘Could you send all of them in one direction?’ — it would probably be toward China.

But of course, most people in industry — especially those focused on North America and Europe — are thinking about diversifying their supply chains and moving away from that concentration risk in China.

What that has flushed out — and I’m really pleased to report this — is that as we’ve made these discoveries, we’ve been getting genuine inbound interest from counterparties who are motivated to talk about the potential in the resource.

Cesium is the most recent example. We made the discovery announcement even before the resource was out, and we were already getting inquiries about what could be done with that product, especially from groups looking to diversify supply chains beyond just China.

Cesium is interesting because, like a lot of critical minerals, it’s almost entirely controlled by China. So people are very interested in what the alternatives might be. And for those reasons, we’re happy to engage with them.

That doesn’t mean you don’t ultimately have the opportunity to sell to China. It just means there are parties actively looking for alternatives. And again, we’re happy to have those conversations.

Gerardo Del Real: Excellent. On the cesium front, I understand the maiden resource was estimated for Q3 of this year. Is that accurate?

Ken Brinsden: It’s already happened.

Gerardo Del Real: You got that one out, right?

Ken Brinsden: Right. And it’s really exciting because it’s pretty much unprecedented in its scale. The grade, in certain subsets of the resource, is kind of off the charts. So yes, we’re really happy with the outcome there, Gerardo.

It’s a fantastic resource — in total, about 2.3 million tonnes. I know that sounds incredible in the cesium world because the next biggest resource, we believe, is the Tanco mine, and that’s around 150,000 tonnes. So this has incredible scale, amazing grade, and we’re really keen to demonstrate what’s possible with that resource over the coming months and years.

Gerardo Del Real: I had the pleasure of speaking with Mr. Jody Dahrouge — who I know you’re familiar with — a few weeks back. He and I were just kind of shooting back-of-the-napkin notes, and we were speculating that there could be a couple billion dollars just in cesium here. And the resource estimate didn’t do anything to disappoint that hypothesis, right?

Thoughts on the potential value there? Do you want to get into that at all?

Ken Brinsden: Yes, the products that come out of the pollucite concentrates… so pollucite — the mineral — is kind of like what spodumene is to lithium. In the case of cesium, it’s the pollucite concentrate that delivers it.

And you’re basically following a similar path to lithium. It’s just typically done on a smaller scale. But the core idea is that the pollucite concentrate gets chemically treated and produces really high-value mineral species used in very specific and, in some cases, incredibly high-value applications.

Things like medical imaging, deep oil and gas drilling, optoelectrical uses is where cesium comes in. And now, with newer technologies, we’re seeing developments that improve the efficiency of solar panels. That’s where we see the next wave of tech — improvements in solar efficiency — and they’re probably going to rely on inputs of cesium.

Gerardo Del Real: Right.

Ken Brinsden: The industry’s been — I guess the right word is — ‘fearful’ about whether cesium could become a real growth opportunity. They’ve worried about where the supply would come from.

So a discovery like ours at significant scale creates more abundance of cesium, and that starts to open doors. The market begins to grow. That’s really what we’re focused on, Gerardo: the idea that new technology pathways are going to grow the market for cesium.

And if you’ve clearly got the world’s biggest cesium resource… well, you’re going to be a target for more and more discussions on how to make that real.

Gerardo Del Real: Yes. North America, again, the world’s largest resource. Champagne problems on that front, right?

Ken Brinsden: Yes, Gerardo, you don’t need to go to Greenland or Ukraine for your critical minerals. You’re right across the border in Canada right there in Quebec. It’s fantastic!

Gerardo Del Real: I spoke earlier about the share price performance… and sure, we’re up some 120% over the last month or so. But for those of us who started way back at 16 cents Canadian, rode it to C$17, and are now back around C$4.20 — it’s definitely been a roller coaster.

The end game, in my opinion, has never really been in doubt. It’s just all the in-between noise. And I get the frustration from some shareholders.

But one thing I’ve always preached — to subscribers, shareholders, friends, and family (and our group still owns a substantial amount of shares) — is the value that’s been added during the consolidation.

What I try to explain is that you have to look at the forest, not just the trees. If the endgame was always to let Ken and the team take this to production — or sell it at a significant premium well above today’s prices — then all the in-between stuff? Sure, I’d rather see the price higher than lower… but it’s just noise.

The emphasis I’ve really tried to drive home is the amount of value added over the last couple of years.

And it’s not just value in the ground. With new metals discoveries and the expansion of these zones, which are still wide open… I think that part is underappreciated. But also the team — the human value. The expertise you’ve added. People who’ve been through this rodeo before. People who’ve taken it all the way with you in the past and actually put projects into production.

Can you speak to some of those additions to the board and to the team because I think that also doesn’t get enough attention when we talk about the next stage here of potentially involving several world-class metals discoveries of global significance.

Ken Brinsden: Yes, I’m really pleased and proud to be working with what I consider to be a fantastic team. When I think back to the development of Pilbara Minerals — fighting your way through those tougher periods — it really takes a great team to remain focused to realize the potential in what you know is an amazing project.

And I’m certain we’ve got those characteristics at Shaakichiuwaanaan and within Patriot: a combination of unbelievable geology and a really strong project you can wrap around that with the right expertise to continue delivering the main game. That means de-risking the project so you ultimately reach production and create excellent outcomes with great customers and key partners involved.

We’ve made some really strong additions to the team in Montreal, and I’m so pleased to be working with them. Each one is capable in their own right. It’s a great outcome to be part of.

And I’d almost go as far as saying, Gerardo… you don’t attract the likes of Volkswagen making what is really their first-ever mining investment without having those key characteristics in place: a great project and great people who are ultimately going to contribute to its success.

I’m really pleased with the progress there too, Gerardo, and we’re looking forward to continuing to demonstrate what’s possible with the project.

Gerardo Del Real: You touched on Volkswagen, and we touched on the North American premium that I think should accompany every metals project — whether it’s lithium, uranium, or copper — that has significant scale.

We’ve seen it in the uranium space: AI and tech companies coming in looking for energy to power their ambitions for the next several decades; even the Department of Defense here in the US taking direct stakes in companies.

Do you see the potential or have you heard of any potential discussions where that kind of activity could spill over into the lithium space as well, especially as we head further into this situation with China? It used to be what I called a quiet Cold War but it’s not so quiet anymore, particularly when it comes to resource independence.

Do you think that dynamic could spill into the lithium space?

Ken Brinsden: Yes, I’m certain, actually, that process is already underway, Gerardo.

We now think about Shaakichiuwaanaan as a critical minerals story. It’s not just a lithium story anymore. The combination of cesium and tantalum, and potentially other key elements down the track — like gallium and rubidium, which we’re also focused on — means people are paying attention to projects that can genuinely add value to the North American critical minerals narrative.

Why are they so focused on it? Well, it all comes down to the concentration risk that now exists through China.

China got well ahead of the game in the critical minerals space over the past 15 years, and now it’s the West’s time to play catch-up. And part of that means getting invested and underwriting project development so that these alternative supply chains can actually make it to market.

The danger is that if the West doesn’t start responding now — and I think the US is especially sensitive to this — then there’s a real risk that we fall further and further behind to the point where you simply can’t catch up.

Gerardo Del Real: Sure.

Ken Brinsden: A little kind of microcosm of what I’m trying to describe is actually what’s happening in the car industry.

The Western car industry is under real threat right now because of the rise of Chinese national brands. And it’s not some overnight success story — it’s the result of about 15 years of building capability, quality, and lower costs.

A lot of that centers around batteries. And honestly, it’s getting to the point where the West’s car industry is in serious trouble. One of the reasons we chose to work with VW was because of their intense focus on solving these challenges for Western automakers, particularly within the brands under the VW Group.

And their response is real. They’re making mining investments, they’re investing in cathodes, batteries, and new car plants. They’re embracing hybridization to help address US range anxiety. All of these things are core to their strategy, and they’re investing like there’s no tomorrow.

Billions of dollars are going into the North American market to establish a real and growing presence at the same time that their business is getting hammered in China.

I focus on VW because they’re a relatively rare breed now, Gerardo. A lot of car companies are asleep at the wheel and not seeing what’s happening with the rise of Chinese national brands.

In the US, maybe you don’t see it quite as much yet. But in Australia, I can tell you, BYDs are everywhere. They’re on the streets, dominating. There’s a particular truck — the BYD Shark — and it just blew me away, coming back on this trip to Australia, how many of them I saw driving around Perth.

It’s really taking off. And it’s a sign, mate, that we probably need to be doing better in the West. And that’s why investment — like what you described — I think is a natural and necessary step to ensure the survival of key industries.

Gerardo Del Real: Well listen, no doubt Patriot is going to play an important part there. You have, give or take, about C$100 million in the treasury. How does that get allocated over the next six to twelve months, and what can we as shareholders expect to see from Patriot Battery Metals?

Ken Brinsden: Yes, spot on, Gerardo. We are doing a little bit more drilling. It’s more targeted now and not quite the same scale of programs we ran over the past couple of years because we’ve already broken the back of the resource base to support the Feasibility Study. But there’s still exploration intent, and we want to make sure we’re continuing to uncover new opportunities.

I mean, look at what’s arisen with cesium — and there’s still plenty of lithium exploration potential as well. So that’s part of it.

We’re also completing the Feasibility Study and the environmental approvals documentation, which gets us through the last hurdle for mine authorization. Once we submit the feasibility and environmental documents later this year, you’re looking at about 12 to 24 months for that authorization process.

So yes, those are our key focuses.

We’re also going to progress the economic opportunity in cesium and tantalum. As I mentioned earlier, those really start to come into play once we’re through the feasibility phase and into detailed engineering. I’m excited about that as they represent real value-add beyond the lithium.

It’s a fantastic credit to the project that you genuinely have all three… the L, the C, and the T: lithium, cesium, and tantalum.

Gerardo Del Real: I think a lot of people are underestimating the next six to twelve months. I don’t want to say material catalyst because you have several of those but you know how the general investor and speculator is. They want to see drilling, they want to see blockbuster results.

But once you get into feasibility studies and the real work that allows you to go from developer to producer — that’s the stuff that has to happen, and it’s starting now.

I think people are underestimating the potential for Volkswagen — or maybe another group, a chemicals company or vehicle company — to come in and say, ‘This is really unique. We want more of it, and we’re willing to work together in a number of ways.’

I think it’s going to be a fun six to twelve months watching you continue to deliver, and I’m really looking forward to the upside surprises on that front. I know you’re coy… I know you like to play close to the vest… but I think it’s going to be a great, great run.

Before I let you go, Ken, any thoughts on the lithium spot price?

I know the futures had a bit of a pullback. That’s going to happen. But we’ve had a relatively robust last three weeks or so, and it seems like we’re starting to see some cracks in China’s ability to keep flooding the market with cheap material.

Where do you think we go over the next few quarters or the next twelve months?

Ken Brinsden: Yes, the sector is due for some upgrades, actually, mate, because the brokers and analysts are a bit behind when it comes to the demand equation.

That’s the key now: demand has been outperforming expectations year-to-date. Lithium raw material demand is up around 30-35% so far this year, whereas most analysts and brokers are still sitting at around 20%. So there’s a gap emerging — and it’s real. That’s one of the reasons you’re starting to see prices respond.

The bigger picture is that China is moving the market faster than most in the West have given them credit for. They’ve overbuilt cell-making capacity, and now they can switch that on with lower-cost cells being contracted globally.

One area that really stands out — and I’ve said it before — is stationary energy storage. That’s a key phenomenon. Another is trucks and buses within China itself. There’s a lot happening, and it’s all moving faster than most would’ve assumed.

So, with all of that, I think the sector as a whole is due for upgrades. And I think we can safely say we’ve now seen the bottom. As uncomfortable as it’s been, we’re probably through it. Now, it’s all about engagement with industry.

You mentioned, Gerardo, that our project is good enough that we can continue building the consortium that’s going to take it through to production. There are more deals to be done, and they’re going to be important for the progress of our project. We’re really looking forward to showing what that looks like.

Gerardo Del Real: Excited to have you on. Excited for what comes next, Ken. Absolute pleasure. Thank you so much for your time.

Ken Brinsden: My pleasure, Gerardo. Great to be with you. Thank you.

Click here to see more from PMET Resources