Shoutout SASKATCHEWANOV for this article. When I saw it posted as a Word file, I figured I'd volunteer to post it as an article on the site. Please let me know if you'd like me to take it down, thanks. From Peter @Newton Bell
Phenom Resources: The Most Important Mineral You’ve Never Heard Of
How many $30 million market cap pre-discovery gold explorers can you name? Too many to count, right? Now - how many of those companies that you named also come with $3.9 billion worth of economic metal in the ground? I bet that list gets a lot shorter in a hurry. If this scenario catches your interest, allow me to introduce you to Phenom Resources. Phenom Resources is an expert-led Nevada explorer whose flagship property actually holds two, separate, potential metal deposits – a large, historical vanadium resource, and a series of never-been-drilled Carlin-Style gold prospects. This unique and powerful combination makes Phenom an exploration company worthy of your hard-earned money.
Phenom – The Team
Phenom’s team is a strength of the organization, which, given the deposit, is saying something. Long-running CEO Paul Cowley is a very capable former geo who has a wealth of experience. He’s worked for majors, and worked on several successful copper, gold, and diamond deposits. But the wild card of the teamis Nevada mining legend Dave Mathewson. Dave is perhaps the world-leading expert on Carlin-Style gold formations. He has discovered numerous gold deposits all around Nevada and intimately understands the land there. There is no one else you would rather have working previously unexplored Nevada gold prospects than Dave. And he’s at Phenom.
To say it all in a single go, vanadium (V) is a niche base metal whose main market is being used in the production of steel. Importantly, though, a small-but-rapidly-growing use for it is in the burgeoning green energy sector. Meanwhile, an extremely narrow group of producers are presently slated to not come near to keeping up with demand over the coming decade. Each of these facts have tailwinds associated with them.
Vanadium is actually mainly mined as a byproduct to iron (but also oil, shale, coal and other minerals), where it is removed and purified during the smelting/refining process. In fact, 82% of all vanadium is produced as a byproduct of another resource. Put another way, less than 1/5th of vanadium is presently mined as the primary resource. Where it is mined as the primary resource, vanadium grades can range widely but are roughly analogous to copper porphyry grades in terms of economic viability (V can be profitable down as low as 0.2% grade). Metallurgy is general predictable and recovery rates are about 80+, as is the case with Phenom. Open pit and block cave mining are the standard extraction methods (Phenom is an open-pit scenario being all within 80 meters of the surface.). Understand the ramifications of so little vanadium being the primary resource. Vanadium production is tied to steel demand, not vanadium demand. If vanadium demand began to consistently outstrip steel, which already has and is projected to continue, there just simply isn’t enough supply that can be tapped into to meet increased demand. This is obviously a potent scenario for the price of any resource.
Steel manufacturing is the current primary use of vanadium. Just two pounds of vanadium can double the strength of one ton of steel. About 90% of all vanadium currently is used with steel. Only about 2% of vanadium mined presently is used for energy storage. However, this 2% is the key to understanding vanadium’s bull thesis. The “vanadium redox battery” is essential to our green energy future. This is because vanadium redox batteries are perfectly-suited to large, stationary storage systems, like the aforementioned building or solar farm. Vanadium batteries are non-flammable, do not produce heat, and operate at room temperature. No dangerous fires like with Lithium Ion batteries. Another critical advantage is that the lifespan of vanadium – 25 years – far outstrips Lithium Ion batteries (5 years), and vanadium batteries are not damaged from full drawdowns to zero power. All this combined together has industry experts in consensus that vanadium is going to play a critical role in the coming green energy transition.
The macro tailwinds for Phenom and vanadium truly are impressive. Vanadium’s CAGR is expected to grow at a rate of 10.2% to the year 2025 and even 2030 . Simply put, there aren’t nearly enough few vanadium deposits capable of being turned into a mine in that time frame. So there simply isn’t anywhere near enough supply coming down the pipe to meet the large and growing demand. Phenom Resource’s project is one of those few. And you know what else? Phenom’s deposit is the largest, high grade vanadium resource in North America, and is located in Nevada, maybe the friendliest mining jurisdiction in the world. But that’s not the end of it. Vanadium has also been declared a critical resource and targeted for government funding in Canada, the USA, and other leading nations. So you have $3.9 billion worth of vanadium in the largest, highest-grade deposit in North America. Put another way, Phenom has $3.9 billion worth of a niche, green energy, critical mineral that is rapidly growing in demand, all within 80 meters of surface. Oh, and the government is looking to invest *a lot* of money in that exact sector.
And there’s potential for gold too? Are you kidding me?
Dave Mathewson is on record that he believes there is gold down there (there being 200-300 meters below the surface). And the timing couldn’t be more perfect for new investors, as the inaugural drill campaign on this gold system began just days ago. Phenom is positioned to have a dramatic rerating if drill results come back positive, as the optionality of having a dual deposit system is singularly powerful. This is a powerful unknown. If Mathewson manages to make yet another Nevada discovery – one he is one the record as excited for the potential of – what happens to Phenom? How powerfully, how rapidly is it rerated? Phenom’s land would be the target of majors all over the world, as governments have finally started to come around to the potentially-disastrous mineral deficit they are facing.
So, to wrap it up. Vanadium is a niche, relatively unknown metal, and a large part of proving the bull case for Phenom Resources is proving the bull case for Vanadium itself. Put simply, Vanadium will play an increasingly critical role in the green revolution over the coming years, and Phenom is in a uniquely well-suited position to take full advantage of multiple related macro tailwinds. Thus, Phenom in a sense gives you the best of both worlds – the steady, growing strength of a PEA-stage deposit getting its economics ever more sorted out and improved alongside the excitement of a highly-prospective land package just about to see its first drilling campaign. And all this is why Phenom is one of the most intriguing, explosive junior explorers you are liable to come across – and why they are worthy of your time, due diligence, and investment.
Thanks for the contest, CEOca!