Categories: Energy
Topics: Lithium Stocks

Q2 Metals (TSX-V: QTWO)(OTC: QUEXF) VPE Neil McCallum on Final Assays, Exploration Target & Summer Drill Program

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the VP of Exploration for one of my single largest lithium holdings. I'm talking with Mr. Neil McCallum from Q2 Metals (TSX-V: QTWO)(OTC: QUEXF). Neil, happy shareholder here. You announced the final assays from the Winter Drill Program and you're initiating an exploration target at the 100% Cisco Lithium Project. I want to start by talking about the results, which once again, great widths, great grade, long runs of mineralization, right? Can we talk about the release?

Neil McCallum: Yeah, definitely. So I guess it's not one of our top releases out there, so it's steady forward. These are some holes that were drilled toward the east to understand the extension of that direction as well as towards the north and then the three holes as well that we're testing the southernmost extension of the zone that we've defined so far. So these are good. They're not blockbusters, they're not 200 plus meter intervals. But when you're talking several hits of above 20, 30, even 50 meters, that's more than good enough to start building resources. So that leads into the other conversation of the exploration target that we're starting.

Gerardo Del Real: Let's talk about that exploration target. It's a practice that's really common in Australia. It's a practice that other companies in James Bay, including Patriot Battery Metals, have exercised and have done so very successfully in terms of providing an initial snapshot of what could potentially be there and then being able to update that as you refine the geological model. Can you speak to that and how you all approach it?

Neil McCallum: Right. So I guess one thing to keep in mind is that this exploration target is not a mineral resource and we can't apply any economics to it. So it's that leading edge toward defining a resource, and it's going to take a bit more work for us to get to that resource stage where we can confidently say we have this amount. But that exploration target is a way to quantify what we have right now when our drill spacing is so wide because our target's so large, we've been doing large step outs that are quite large, 200 to 400 meter step outs, which is not enough to build an inferred or greater resource, obviously.

But it will get us in that level of understanding to put out numbers of a range of tonnages and a range of grades, which is like that in-between stage of drilling and then defining a resource. So it times out really well for us, and it's going to help us tell the story a little bit more because we've got other people, analysts and whatnot that are putting out numbers, but we can't really speak to those because we didn't put them together. And it's not something that a professional geologist registered... has done. So we can't speak to that, but people can look at it online themselves. But this is something that we can put in our presentation we can speak to, and it's a good start.

Gerardo Del Real: No, look, there's a part in the release that I think is under-appreciated. You talked about how busy the summer is going to be, crews currently being in the field of mapping and sampling and the first drill collar expected next week. Can you speak to that?

Neil McCallum: Yeah, so we're excited to get back because that hole 36 that was drilled in the opposite direction of all the drilling so far ended at the start of the traditional goose harvesting season in the James Bay Eeyou Istchee area. So we had to stop and that's fine. We left the drill on site and we can go back right away and keep going on that drill hole. And that sets the stage of what we're going to be doing next, which is getting that closely-spaced drilling started in the main zone because we obviously need to get that next milestone, which will be beyond the exploration target level, which will be the inferred level. So that will take work, but we've got to start doing that. And as well, there's still loads of potential for targeting along strike in all directions, understanding what's happening at that CO2 outcrop towards the east. And as well, there's a bunch of outcrops right in the immediate area that just haven't been drill tested. So there's a lot to do.

Gerardo Del Real: No, listen, I want to go back to the exploration target. And look, I know that you can't say it, but I'm not a professional qualified geologist that writes 43-101 reports. I compare it what, one of the analysts recently put out, and what they put out is anywhere between 150 to 200 million tonnes of the grade that we've known to understand 1.3 to 1.4%. I know you can't touch that. I know you can't speak to it. I am not a geologist. I'm not a professional when it comes to these estimates, but the person that put that estimate out is, and so if it's anywhere near that, I'm going to continue to be a very, very, very happy shareholder. Back to the exploration target, how soon do you think you all could turn that around just to provide, again, zero economics to it and doesn't have the rigor of a 43-101 compliant resource, but it does give us a peak, right?

Neil McCallum: Yeah, it gives us a peak. And the way that it goes is that because we've done a good amount of drilling, that exploration target is going to focus in the area of the drilling. Some exploration targets when it's a more early stage will wave arms a lot more and say, well, given a few outcrops this is what it could look like. So it's going to get us an indication of what we have so far, but not even really touch the untested potential. So that's an exciting part of it too, is that it's going to be more or less in the area that we have. So we're looking to get that done. We've obviously now finished our results for the winter program, and it's going to be likely that early July timeline for getting that statement out for the exploration target.

Gerardo Del Real: No, look, exciting times. I think slowly but surely, the sentiment in the lithium space is starting to turn. When I listen to the likes of the Joe Lowrys and the Howard Kleins and some of the people that are having discussions with major, major, not just lithium producers, but chemical companies, and they talk about a timeline towards a deficit, this is probably the first quarter where people are starting to ballpark when that deficit will happen in a way that it's relatively near term and the market's always forward-looking. So I've been wrong on how long China could glut the market with the low-price, low-quality stuff. So I won't bring out my crystal ball, but I love buying when stuff's cheap and on sale, especially when I know it's world-class stuff. That's done very, very well for me in my 15, 16 years in this space. So I will continue to look to do that in this space because I think in a year or two, we're going to be looking back at these prices and just laughing our behinds off that we could have bought so much more, and it was so obvious, right?

Neil McCallum: Yeah, it's hard to see the share price where we are now and our peers. Compare that to two years ago, it's a wild ride in lithium. But I think what we can say, and it's a good opportunity for people that want to get into the space, is that we're in that low depression, and it's only going to turn around from here. It's certainly lots of good metrics for things to improve, so we're looking forward to that as a company as well.

Gerardo Del Real: No, good stuff. The robots are coming, everybody. Neil, always a pleasure to have you on, man. Thank you so much.

Neil McCallum: Likewise. Take care.

Gerardo Del Real: All right, chat soon. Cheers.