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Kaiser Watch March 24, 2023: Will Tower graduate to 2023 Favorites Collection?


Posted: Mar 24, 2023JK: Kaiser Watch March 24, 2023 with Jim Goddard and John Kaiser
Published: Mar 24, 2023KRO: Kaiser Watch March 24, 2023: Will Tower graduate to the 2023 Favorites Collection?
Kaiser Watch is a weekly 15-30 minute audio show produced by KaiserResearch.com with Jim Goddard and John Kaiser discussing the junior resource sector. The show has three parts: the first is a general topic, the second discusses developments involving the KRO Favorites which as of January 1, 2022 are no longer exclusive to KRO members, and the third is a peek inside the members only KRO Bottom-Fish Workshop. KRO is transitioning into a Do-It-Yourself research platform that covers all Canadian and Australian resource listings and which also features a Bottom-Fish Workshop where John Kaiser highlights juniors with solvable "missing pieces". Companies that graduate from the Workshop may become part of the Annual Favorites collection whose profiles and related commentary are unrestricted for non-members. Visit the KRO Favorites Dashboard for quick access to all the unrestricted Favorites related content. KRO is not sponsored or compensated directly or indirectly by public companies. The business model is based solely on membership fees in the form of a USD $450 Annual Individual Membership that at some point will increase substantially to reflect KRO's shift to a research platform. However, when the change happens active members will be grandfathered to renew indefinitely at the current rate provided they maintain a continuous paid membership. Kaiser Watch is available at Kaiser Research YouTube and as a Podcast downloadable from KaiserResearch.com. Each episode will be made available through the publication of a Kaiser Media Watch blog report which will provide links to specific questions and include supplementary graphics. All episodes will be archived at Kaiser Watch.

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Kaiser Watch March 24, 2023: Will Tower graduate to the 2023 Favorites Collection?
Jim (0:00:00): Has Brunswick Exploration started drilling yet on any of its lithium projects?

Brunswick Exploration is finally drilling after spending nearly a year assembling a portfolio of Canadian lithium prospects based largely on archival research followed by boots on the ground field inspections that have identified 650 pegmatite bodies the junior plans to test with make or break drilling programs. Drilling is underway on Anatacau West adjoining to the east of the Galaxy/Cyr lithium deposit Allkem is putting into production. In fact, Monday's news release benefits from drilling having started during the past week. An expanded drill program with substantial eastward stepout fences suggests to us that the initial fence of holes 50 m of the border has confirmed the Allkem pegmatites extend onto Brunswick's ground.

The sexy part of Monday's update is about the Plex project, which Virginia Gold called the "Poste Le Moyne Extension". A chopper visited Plex just ahead of PDAC and not only confirmed the location of the core shack, but also that the core boxes are intact and have not been vandalized (ie not dumped and kicked around so that samples cannot be linked to drill hole locations and position within the core). In testing the Orfee gold zone Virginia drilled through pegmatite that was only vaguely logged and not split for assaying. Brunswick does not yet know if these pegmatite intervals, 96 greater than 8 m occurring over a 1,300 m strike encountered while testing the Orfee gold zone, are LCT type, but within two weeks it will have a crew on site to test pegmatite intervals with an XRF gun, and designate those intervals whose pathfinders indicate LCT for sample preparation and assaying. These pegmatites adjoining the gold zones in a coincidental rather than genetic manner may prove to be barren, but, if instead they prove similar to those of another former Virginia claim block called Corvette which currently supports a $2 billion implied project value for Patriot Battery Metals, will launch Brunswick into S-curve territory. If Brunswick announces that it has shipped Plex core samples for assaying, it will then allow drill permitting to begin ahead of July. The realistic plan was to spend the summer putting boots on the ground and perhaps drilling in the fall. Although Hearst drilling in Ontario is expected to begin in April, the market will be focused on Plex if core gets shipped for lithium assays.

Brunswick Exploration Inc (BRW-V)





Favorite
Fair Spec Value
Anatacau Canada - Quebec 2-Target Drilling Li

Regional Map of Anatacau West

Drill Plan for Allkem's Galaxy/Cyr project west of Brunswick claim

Regional Map of Brunswick's Plex Project

Orfee Zone Drill Plan and proximity to pegmatites
Jim (0:09:08): It has been a month since NioBay rejected assay results for the Crevier project and asked the lab to redo them. Should NioBay shareholders be worried?

NioBay was a risky bottom-fish graduation to the 2023 Favorites Collection because the flagship James Bay niobium story has been neutered by the Moose Cree First Nation which is caught in a community conflict between an anti-mining faction and a pragmatic faction which believes that the best path to preserve ethnic identity is to become locally engaged in commercial enterprise which stops the exodus of the brightest into the melting pot of Canada while ensuring that resources are responsibly exploited.

For those who are not indigenous this topic is a third rail, which I am herewith touching at cancellation risk, which doesn't trouble me because as a cosmopolitan stateless being I am already a zero. The anti-mining lobby has authentic roots in its opposition to practices that dump emissions onto powerless downstream victims while harvesting a one sided profit. But after accomplishing major reforms in places like Canada that resulted in strict standards for mines in jurisdictions that have accountability grounded in democracy, these forces have mutated into a cynical process no longer grounded in pragmatic goals.

Typically classified as "left-wing", the anti mining lobby has in fact become synonymous with a right wing End Timer mentality where the future is subordinated to absolute ideals without any regard to pragmatic goals like generation after generation building on the prior and still flourishing rather than spiraling down a slope of diminishing returns. The pursuit of purity is the ultimate dirtiness, and it really is time for pragmatists to stand up and cry bullshit on both ends of the political spectrum which itself is a fraud because left and right wing are synonymous with autocracy.

However, since this debate at the local level can only be decided by the Moose Cree First Nation, outsiders, and that includes the market, have defaulted to an outcome that can best be described as accepting the Moose Cree as the Left Behind Nation which in its "cling on" form would be obliterated with nobody caring when Tucker Carlson's vision of America annexing Canada becomes reality, which benefits neither MCFN nor NioBay stakeholders. There is substantial upside in the NioBay stock price should the MCFN pragmatists prevail, but the reigning view is that End Timers are in charge of the jurisdiction claimed by the Moose Cree First Nation. NioBay was graduated from the Bottom-Fish Collection to the 2023 Favorite Collection because of a project called Crevier in an entirely different First Nations jurisdiction, one that has embraced pragmatism as the key to its survival.

NioBay's stock price at the moment is entirely dictated by expectations about the future of the Crevier niobium project in southern Quebec. A drill program was done last fall which partly tested to see if there was more to the Main Zone than established by several decades of exploration since 1975 (apparently not). But it also included 4 holes drilled westwards from the shore of Lac Touladi which intersected a pyrochlore mineralized host rock very different from the late stage nepheline syenite dyke that defines the Main Zone whose niobium and tantalum grade just aren't high enough to be commercial, especially given the metallurgical characteristics of the Main Zone's mineralogy. These Lac Touladi holes, first described in mid December, alerted me that there was something new and different about Crevier, perhaps something much bigger than the James Bay deposit trapped in First Nations existential politics. But lately my enthusiasm has started to look foolish, leading some of my subscribers to speculate I have been played by the CEO.

Jean-Sebastian David (JS to reduce 5 syllables to 2), who became CEO in late 2021 when Claude Dufresne resigned to focus on a niobium story more related to technology than geology, started off with about 900,000 shares and during 2022 has bought 532,700 shares in the open market to bring his position to 1,432,152 shares. He stopped buying in late October 2022 when the stock was $0.11. On February 13 NioBay reported that the Crevier assays had been received but were unreliable because the sample assays did not match the interval logs and expectations. Some niobium values were very high where none were expected and very low when pyrochlore was visible in the interval. The lab was instructed to conduct another set of assays and a segment of the preserved half core was sent to another lab as a quality control test.

Since then JS David has bought 151,000 shares in the open market between $0.17-$0.22 with the last reported purchase on Thursday. Now cynics may point out that this is only $30,000-$40,000 worth of stock, and could be just a strategy to paint the tape. But that is to ignore the context of the buyer who is a salaried CEO with no train of successful stock plays in his resume. He is in fact a loner. Only one other insider bought stock in 2022 and that director stopped in late October. When I asked him this week if updated assays had been received he said no and indicated he would keep buying until he receives them at which point he will be blacked out. When was the last time the market saw insider buying and interpreted it as a "stay away" signal?

When I asked other insiders or people close to the company what they thought about the Lac Touladi intersections the best I got was that they were intrigued; none seemed to think that Crevier was turning into bigger and higher grade niobium discovery than the existing nepheline syenite hosted Main Zone which has about 41 million tonnes of 1900 ppm Nb and 241 ppm Ta. One party who should have known better thought the pending assays were about the mineralization related to the Main Zone! So what is going on here? It is making me start to think I am a fool!

NioBay's JSD got back to me this week with the message that he does not yet have assays and will continue to buy until he is in poesseion of material information, so anxiety that NioBay is staring at reliable but crappy assays is misplaced. He says regardless what the holes average, the system they intersected under Lac Touladi is very large and different from the nepheline syenite hosted Main Zone. He has negotiated an arrangement with the Pekuakamiulnuatsh Nation and is taking steps for a serious summer drill program because this new aspect of the Crevier alkaline complex needs to be explored in greater detail.

Based on the spacing of holes 6, 8, 9 and 10 and their depth NBY is looking at a footprint of 2,000 m by 300 m wide by 350 m deep which at 2.6 SG implies a tonnage of 546 million. There is room for a dozen or so 50 million tonne zones in this blob. NBY has posted a bunch of core photos on its Facebook page and I've assembled some in a graphic below. Some of the core photos have crayon grade markings which are probably based on an XRF gun so the readings will be very localized. The point is that decent clusters of pyrochlore are present in the core, and we should not read too much into the thin section analysis about what grade will be (see Crevier Thin Section Report). Note that the core photo with a 1.64% Nb grade has a 0.24% Ta grade marked; the thin section study found no evidence of tantalum bearing minerals, though of course those samples are just tiny slices of a half billion tonne blob.

I don't own enough stock to be over the moon crazy about the potential, but NioBay matters to me because my job as a bottom-fisher and story hunter is to find plays the market and even some insiders hate. NioBay is such a junior which is why I have dug deeper to understand the story. I've obtained a government mag map which clearly reveals the outline of the alkaline complex. In addition I have created a combo graphic which shows the drill plan side by side with an image which allows us to see how the magnetic low (the blue from the government mag image) around the southern end relates to Lac Touladi. The whole thing reminds me of a lobster arm with the claw at the northern end. The dark NW linear in the middle is the nepheline syenite Main Zone where all the historical drilling took place.

The Lac Touladi zone sits where the alkaline intrusive complex transitions into a magnetic low. At this stage the Crevier story should be viewed as an entirely new dimension of the Crevier intrusive complex with a wider range of mineralogy than what characterizes the late stage Main zone dyke. It is prudent to dial back expectations that the assays will include long intersections with blockbuster grades above 0.5% Nb2O5 that sends the stock soaring as the market wonders if another Niobec scale deposit is emerging. More likely detailed drilling to define the zonation within this Lac Touladi zone is needed to properly understand the economic implications.

I suspect the market weakness is coming from shareholders who interpret the assay delay as bad news and who are perhaps realizing that this is not going to be an overnight hole 109 sensation (ie Eskay Creek BZone discovery hole). But I think the assays will have enough juice in them to propel the observers on the sidelines beyond being intrigued. Depending how you look at it, the market is either 100% discounting a social license breakthrough at James Bay or discounting the notion that Crevier is becoming something new, different and better than the Main Zone, perhaps even better than the James Bay project caught up in MCFN politics. My inclination is to continue to accumulate the stock, though, because the results are unlikely to be blockbuster, there may be a better opportunity to buy, albeit at a somewhat higher price, after the assays are out and the uncertainty about a total bust is gone. It's not like JS David has a history of crying false wolf. This is the first time he is crying wolf and just about everybody with clout is ignoring him.

NioBay Metals Inc (NBY-V)





Favorite
Fair Spec Value
Crevier Canada - Quebec 7-Permitting & Feasibility Ta Nb

CEO JS David's lone wolf insider insider trading activity

Regional Magnetic Survey showing Crevier alkaline intrusive complex

Crevier drill plan contrasted with map showing magnetic low of intrusive complex

Core photo shots of Lac Touladi Holes at Crevier

Main Zone outrcrop and core photos
Jim (0:15:45): Last year you talked often on Kaiser Watch about Bottom-Fish rated Tower Resources but it never made your 2023 Favorites Collection. The stock has nearly tripled during the past month. What is going on?

Tower Resources Ltd is currently Bottom-Fish Spec Value rated and is a candidate for graduation to the KRO 2023 Favorites Collection. I published Tracker March 22, 2023 as an update on what Tower was all about in 2022 and what has happened in early 2023 to triple the stock price from its year end bottom-fish level and explain why the stock could head a lot higher. Tower expects assays for the new Thunder Zone on the Rabbit North project by early April, and if these are good, Tower will be graduated to the 2023 KRO Favorites. Most of the Tracker is covered by the 8 minute segment of this Kaiser Watch episode, but I am not providing the details here in written form because discussion of the Bottom-Fish Collection is supposed to be restricted to KRO members paying USD $450 annually for access to the research platform and the Bottom-Fish Workshop.

Time is money, and personally I prefer to read rather than listen or watch because when I read my mind dictates how much time is consumed, whereas audio and video dictate how much time I must donate to consume the content. The trend these days is toward mediating content via video or audio rather than the written word. KRO members post links to such content in the KRO Slack Forum which is especially appreciated when the member includes a synopsis of the topic and an explanation why it is worthwhile. The written word, however, is superior because the time needed to digest its wisdom is unrelated to the time taken to craft it. I took a lot more time to craft the Tracker than to blurt out from memory without the visual cues of a powerpoint presentation the 8 minute KW segment about Tower. Yes the audio is free, but the written version is better and costs less time. This week's NioBay segment is an anomaly, but not really, for NioBay is already a Favorite and thus not subject to the KRO paywall. However, the gist of the KW segment on NioBay was presented earlier this week within the KRO Slack Forum which is an interactive privilege extended to paying KRO members provided they stick to basic decorum rules.

Tower Resources Ltd (TWR-V)






Bottom-Fish Spec Value
Rabbit North Canada - British Columbia 3-Discovery Delineation Au Cu

Regional Map of Tower's Rabbit North Project

2021 regional till sample map contasted with Central-Dominc Train maps

Cloesup of Lightning Zone and its Dominic Lake Train

How the Thunder Zone relates to the Lightning Zone

Closeup of how Thunder Drill Plan relates to Thunder's Central Train

Contrast between Thunder and Lightning Core
Disclosure: JK ows shares of Brunswick and NioBay; Brunswick and NioBay are Fair Spec Value rated Favorites, Tower is bottom-fish spec value rated.
 
 

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