New Alliance Focuses on Alaska's Copper-Nickel-Platinum Potential Amid U.S. Mineral Demand

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Stillwater Critical Minerals Corp. (PGE:TSX.V; PGEZF:OTCQB; J0G:FSE) recently announced that it has entered into a letter of intent (LOI) with Granite Creek Copper Ltd. (GCX:TSX.V; GCXXF:OTCQB). This agreement sets the framework for Granite Creek to acquire a 90% interest in Stillwater's Duke Island copper-nickel-platinum group element (Cu-Ni-PGE) project in Alaska. The proposed transaction will occur through an all-share, non-arm's-length acquisition. It grants Stillwater a 1% net smelter royalty (NSR) on Duke Island, with a possible reduction to 0.5% upon payment of US$1 million by Granite Creek. This acquisition aligns with Stillwater's strategy of focusing on its flagship Stillwater West project in Montana. Additionally, the deal includes a minimum work commitment of CA$500,000 over the next three years to explore and develop Duke Island further.

Stillwater's CEO, Michael Rowley, noted in the news release that this partnership will provide both companies the opportunity to advance Duke Island's unique resources.

As Rowley explained, "We are very pleased to enter this agreement with Granite Creek and look forward to both supporting, and benefiting from, its progress in advancing Duke Island's demonstrated nickel, copper, and platinum group element mineralization in addition to its carbon sequestration and geologic hydrogen generation potential. Our strong relationship with Dr. Greeshma Gadikota and the Cornell University team has expanded to now include Granite Creek, and together, they are well-positioned to advance the project in the nascent field of geologic hydrogen while giving Stillwater additional exposure to North American critical minerals. The Company remains focused on its flagship Stillwater West project in Montana's iconic Stillwater mining district, including the previously announced carbon sequestration and geologic hydrogen studies, with the vision of becoming a cornerstone of the U.S.' critical mineral supply chain."  

Why Nickel, Platinum, and Copper

On September 30, BHP underscored copper's essential role in advancing both global electrification and digitalization. The article predicted copper demand would increase by approximately 70% by 2050, reaching over 50 million tonnes per year. BHP attributed this demand to three key drivers: "Traditional" economic growth, the energy transition, and digitalization. They highlighted copper's importance in the electric vehicle sector, stating that EVs require three times more copper than conventional vehicles, while copper's role in digital infrastructure, like data centers, is expected to increase significantly, driven by artificial intelligence and data processing needs. BHP emphasized the long-term need for increased production investment to meet demand, noting that scrap copper could only supply a fraction of the anticipated needs.

In an October 11 report, Fastmarkets noted a promising outlook for copper prices in Q4 2024. The report expected an average of US$10,265 per tonne based on the positive impact of macroeconomic developments. This fiscal support was anticipated to stimulate liquidity and bolster speculative positioning in the copper market, particularly as demand from China's renewable energy and electric vehicle sectors gains momentum. Fastmarkets projected that the global copper market would likely see a continued upward trend through 2025 due to steady demand for green energy and electrification projects.

The platinum sector continues to show promising potential, driven by industrial applications and supply dynamics that may support price stability and growth. On October 22, The Jerusalem Post emphasized platinum's unique role in various sectors, including automotive and healthcare, due to its catalytic properties and durability. Platinum's ability to reduce emissions in catalytic converters and its increasing use in fuel cells are expected to support demand. The report highlighted that platinum's position in the precious metals market could bolster its value, especially as a complement to gold in diversified investment portfolios. According to the publication, "as long as US$800 is respected, platinum is supposed to be working on a bullish resolution," with price forecasts reaching as high as US$1,440 by 2025 in an optimistic scenario, supported by constrained supply and solid industrial demand.

Granite Creek Catalysts

According to their investor presentation, Granite Creek's involvement in the Duke Island project enhances its exploration portfolio and complements its recent acquisitions in Alaska.

The company's partnership with Cornell University and other stakeholders on geologic hydrogen and carbon sequestration research expands its strategic focus beyond traditional mineral extraction, positioning it as an early mover in emerging energy technologies. Granite Creek is also focusing on maximizing its shareholder value by leveraging its mineral-rich assets and strategic collaborations, potentially leading to accelerated exploration timelines and revenue generation.

Stillwater Catalysts

Stillwater's decision to divest 90% of Duke Island to Granite Creek aligns with its primary objective of concentrating on the Stillwater West project in Montana, known for its world-class nickel-copper-cobalt-platinum deposits.

With financial backing from strategic partner Glencore and involvement in U.S. government initiatives, Stillwater is capitalizing on increasing demand for critical minerals and is well-positioned to support the nation's electrification goals. This transaction with Granite Creek further allows Stillwater to streamline its resources and focus on its core assets while benefiting from Granite Creek's expertise in developing Duke Island, as outlined in its corporate presentation.

Analysts on Stillwater 

In an October 17 research report, Couloir Capital analysts highlighted that Stillwater Critical Minerals Corp. had achieved a significant exploration milestone by completing the first-ever 3D geological model of its flagship Stillwater West project.

According to Couloir, this development "showed clear expansion potential" as the model connected the eastern and western portions of the area. This was seen as creating a comprehensive foundation for further resource growth. Couloir Capital assigned Stillwater a Buy rating, noting a target price of CA$0.23, representing a 97% potential upside from the report's observed price of CA$0.12.

Couloir analysts also underscored the strategic importance of Stillwater's recent partnerships. They reported that Stillwater signed an agreement with U.S. Strategic Metals to explore an offtake arrangement for battery-grade metals, intending to support U.S. critical mineral supply chains. Additionally, a partnership with the Lawrence Berkeley National Laboratory, backed by a US$2 million grant from the Department of Energy, aims to investigate geologic hydrogen production at Stillwater West. Couloir analysts remarked that these initiatives positioned Stillwater as a key contributor to the domestic critical minerals sector, supporting the shift toward green energy.

Couloir went on to emphasize the positive advancements in Stillwater's earn-in deal with Heritage Mining on the Drayton-Black Lake project. They noted that Heritage met several commitments, such as exploration spending and share issuance, which could potentially enhance Stillwater's valuation if the project advances toward a mineral resource estimate. 

Ownership and Share Structure

According to Refinitiv, insiders own 6.29% of Granite Creek Copper, including the CEO Johnson with 2.56%. The next top two, both directors, are Robert Sennott with 2.01% and Michael Rowley with 1.37%.

The company does not have any institutional investors. Retail investors own the remaining 93.71%.

Granite Creek has 198.27 million shares outstanding and 185.79 million free-float traded shares. The company's market cap is CA$3.97 million, and it trades in a 52-week range of CA$0.02 to CA$0.06 per share.

Management and insiders own approximately 20% of Stillwater, according to the company.

Executive Chairman and Director Gregory Shawn Johnson owns 2.86%, President and CEO Michael Victor Rowley owns 2.56%, Independent Director Gregor John Hamilton owns 1.65%, Independent Director Gordon L. Toll owns 0.44%, and Vice President of Exploration Daniel F. Grobler owns 0.23%, according to Reuters.

Institutions own approximately 25% of the company, high net-worth investors own about 37%, and Glencore Canada Corp. owns 15.4%. About 18% of the company's shares are in retail, Stillwater said.

There are about 227 million shares outstanding with 174.5 million free float traded shares, while the company has a market cap of CA$36.33 million and trades in a 52-week range of CA0.1000 - CA0.2200.