Quebec Precious Metals (TSXV: QPM) is a Canadian mining exploration company advancing its 100%-owned Sakami flagship project located in the James Bay area near Newmont Corporation's Eleonore gold mine. According to the company, more work on the property could show that Sakami might deliver a series of significant deposits along a 23-kilometer trend. Producing gold there would significantly buoy the mining development in this territory. The company also owns non-core assets, which can provide the leverage to add more cash.

Quebec Precious Metals

Quebec Precious Metals runs its operations in the James Bay territory. The company owns an extensive 885 Km2 land package in which its flagship project, Sakami, is located. Explorations first began in the late 1950s to issue a geological map, which was finally released in 1957 by the Geological Survey of Canada. After numerous companies explored the area, this was eventually in 2013 that the region witnessed a drilling program. Canada Strategic Metals (now Quebec Precious Metals started to drill in the La Pointe area and obtained significant gold intersections. Previous work done by the company enabled to:

-Identify the 23 km-long gold-bearing trend thanks to airborne magnetic survey data interpretation;

-Discover through prospecting significant showings at La Pointe and La Pointe Extension deposits and Île, JR, Péninsule, and Simon areas;

-Encounter a huge prospective trend with multiple soil gold-arsenic anomalies at La Pointe and La Pointe Extension, leading to diamond drilling, and the company has put a more significant focus on these locations since 2018)

The La Pointe deposit has a strike length of 950m, a 450m-depth, and a 600m down-plunge. 134 diamond drill holes where completed totalling 36,747m of drilling, with an average thickness of mineralization between 30 to 50m and up to 100m thick. About the La Pointe Extension, the 2020 winter drilling campaign returned positive results, with the discovery of high-grade mineralized samples taken from outcrops while investigating strong gold and arsenic soil geochemical anomalies. Recent drilling programs confirmed the high-grade gold mineralization, and Quebec Precious Metals identified undrilled targets over a strike length of 2.5 Km to the South of the deposit. Doing operations on these targets could significantly expand the deposit's size.

About new projects, Quebec Precious Metals announced on November 11 it closed the acquisition of prospective lithium projects with Idaho Champion in the Pegmatite-Rich James Bay region, Quebec. The project covers approximately 162 Km2 and is just located north of the Patriot Battery Metals' Corvette project that intersected intervals including 1.23% Li2O and 118 ppm Ta2O5 over 96m (news release from July 28, 2022).

"The Projects are clearly underexplored for lithium. In light of the recent discoveries in the area, we welcome the opportunity to become a significant shareholder of Idaho Champion while working with them to become successful explorers in the James Bay region. This transaction is consistent with our strategy to monetize non-core assets."

Normand Champigny, CEO

Share Structure/ Financials

Quebec Precious Metals shared its financial statements for the period ending October 31. The company had $481k in cash, $2.6M in total assets, and $1.4M in total liabilities. The company has low operating expenses, representing only $335k for the trimester. This data significantly decreased YoY, and expenditures were worth $1.0M for the three months ending October 31, 2022. The most considerable expenses are current salaries and employee benefit expenses ($106k) and professional & consulting fees ($108k). Added to the cash position, QPM received $1.0M from Vital Metals Limited.

This transaction happened because Vital didn't purchase QPM's 68% interest in the Kipawa and 100% interest in the Zeus heavy rare earth projects. Quebec Precious Metals holds other non-core assets it can monetize. Its biggest asset is the Tansim Royalty project (lithium), worth $2M. In total, the company could convert $3.5M in cash. About the recent partnership with Idaho Champion, Idaho Champion will acquire 100% of the Blanche and Charles Lithium projects from QPM in return for $100,000 in cash and 12,000,000 common shares of the company, of which 50% will be subject to escrow for 18 months. QPM will retain a 2% net smelter return royalty on the claims constituting the Projects. The company will have the option to repurchase 1% of the NSR from QPM for $1 million.

Regarding the share structure, the company has 82M shares outstanding, 4M options (avg. price: $0.37), and only 655k warrants at $0.30 that have four months left before expiring. The management & insiders, including Newmont Corporation, own 13.6% of the share structure, and Québec institutions (Caisse de dépôt et placement du Québec Investissement Québec, SIDEX, CRDC, SBDJ) own 12.1%. The company's stock price is traded below $0.10, and it witnessed 52-week fluctuations between $0.06 to $0.24.

Bottom Line

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Quebec Precious Metals (TSXV: QPM) is currently advancing its Sakami project to the mineral resource estimate stage located in the James Bay area, Quebec, where Newmont Corporation, the world's largest gold mining company, operates the Elénore gold mine. The company has $3.5M in non-core assets and has low expenses. Given the company's fundamentals and potential upside, Quebec Precious Metals has solid assets that could convince you to add the company to your watchlist.  

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