The U.S. has long relied on imported nickel – a fact that Gregory Beischer, a seasoned geologist and CEO of Alaska Energy Metals AKEMF, wants to change.
Talking to Benzinga, he shared his opinions about Alaskan mining, nickel's importance, and the state of the commodity market.
BZ: Could you describe your company to our readers?
Beischer: We are a new company, only about 15 months old. We're a pre-production junior miner that has documented a very large deposit of nickel, along with other critical and strategic metals such as copper, cobalt, platinum, palladium, and chromium, in Alaska, just south of Fairbanks, near the highway. We are expanding the deposits through more drilling and searching for high-grade pods.
We create value by advancing the project, proving the metal is in the ground, calculating the feasibility of extraction, and then obtaining permits. This process takes years, but we create value for our shareholders by proving the value of the deposits in the meantime.
BZ: Given your vast experience with Alaskan mining and governing agencies, what makes Alaska a special district?
Beischer: Alaska’s geology and mineral potential make it special. The geology here is similar to that along the western coast of North America, extending from British Columbia to the Yukon and into Alaska. However, Alaska is less explored than places like British Columbia, mainly due to historical reasons and a lack of infrastructure such as roads and power. The mineral deposits and mines are there to be found; it just requires the effort to explore them. There’s much more to be discovered in Alaska.
BZ: Your flagship project, the Nikolai Project, is located in interior Alaska. When people think of Alaska, they often think of wilderness, and investors worry about infrastructure. Can you tell us more about this project’s accessibility?
Beischer: Alaska does have some infrastructure, including paved highways, a power grid connecting our cities, and a railroad running between the state’s two main cities. However, it is a vast land with large areas lacking infrastructure. Exploration in remote areas requires finding spectacular deposits to justify the effort.
For the Nikolai Project, we are close to the existing infrastructure. Our claims are near the paved Richardson Highway, which runs between Anchorage and Fairbanks. The railway is about 80 kilometers to the west, and the power grid is approximately 50 kilometers from the project site. While it’s in the northern area, it’s not extremely remote, making it relatively accessible.
BZ: How did you decide to focus on nickel? Was it accidental, or did it come from your experiences over the years?
Beischer: It was no accident. Early in my career, I specialized in nickel exploration. My first job as a young geologist was with International Nickel Company (INCO), the largest nickel mining company in the world at that time, now part of Vale VALE. In the 90s, Inco sent me to the Nikolai Project. My team discovered nickel there, but the concentration wasn’t high enough for Inco back then. Years later, I saw the growing demand for nickel and realized that the large but lower concentration deposit at Nikolai could become valuable. I reacquired the mineral rights and started Alaska Energy Metals.
BZ: Given the reshaping of global nickel production, factors like Indonesia and Australia, and the recent downturn in Australian output, how do you see this playing out?
Beischer: Nickel’s primary use has always been stainless steel manufacturing, but now it's crucial for electric vehicle batteries. The average EV battery contains about 29 kilograms of nickel. S&P Global’s projections are that the demand for nickel will increase substantially—about 23 times, not 23%, but 23 times by 2035 compared to 2021.
With China’s help, Indonesia has rapidly increased production, keeping prices low. However, this isn’t sustainable. The country is depleting its highest-grade deposits, leaving environmental degradation in its wake and not adhering to responsible environmental practices. While some companies, like Vale, maintain high standards, newer operations often do not follow the same ethical guidelines.
Additionally, nickel production in Indonesia is energy-intensive, relying heavily on coal power. This approach undermines the environmental benefits of electric vehicles, as the carbon emissions from nickel refining offset the gains from using EVs. Therefore, environmental governance should enforce ethically sourced and environmentally responsible nickel use.
Europe is leading this effort by advocating for a “green passport” for metals, ensuring they come from sustainable sources. North America, particularly the United States and Canada, which have high mining standards, should increase domestic metal sourcing to meet demand while maintaining ethical and environmental integrity. However, the U.S.’s significant demand for nickel often necessitates imports from non-free trade countries that do not share the same environmental and ethical standards.
BZ: The Supreme Court shut down the Pebble Mine project in Alaska earlier this year. What's your opinion on this matter?
Beischer: The Pebble deposit is spectacular, with significant copper, gold, and silver credits. However, it’s in a sensitive area with valuable salmon fisheries, leading to strong resistance. While I believe a mine could have been developed without harming the fisheries, the current administration has avoided permitting controversial projects.
Every geologist would love to find a deposit like Pebble, but its location in a sensitive area raises concerns. Alaska is renowned for its fisheries, especially its valuable salmon resources in that region. There was significant worry about the potential impact of mining on these fisheries. As a mining engineer, I believe a mine could be developed without harming the fishery, but the resistance was strong.
Modern miners must consider environmental issues, infrastructure, and other factors. If these align, you might have a valuable project. Fortunately, our project is in a more permit-friendly location without the same ecological sensitivities.
BZ: Given your involvement with government agencies – Do you think the government is doing enough for the sector?
Beischer: I’ve actively engaged with the government on commodity production. With its small population of 700,000, Alaska allows for direct interaction with politicians. I’ve been involved with the Alaska Miners Association, which interfaces with the state government. Our state government is pro-resource, understanding that resource development funds much of our state. The entire state constitution is predicated on resource development, justifying Alaska joining the United States in 1959. This resource development ethos is embedded in Alaskan identity.
At the federal level, the current administration encourages the electrification of society, including electric vehicles and renewable power, which require metals. They are providing funds to assist developers. For example, Graphite One received a substantial grant from the U.S. Department of Defense under the Defense Production Act. This act, dating back to World War II, has been reenacted to support metal production for modern needs, including electrification and defense. Our company has applied for grant funding through the Department of Defense, and we’re hopeful about our chances as our project aligns with the strategic needs for critical metals like nickel, copper, cobalt, and platinum.
BZ: The latest study from S&P Global indicates that the U.S. is the second worst place in the world for developing a mine, taking about 29 years. Some agencies are trying to address this by reviving the U.S. Bureau of Mines, which has been dormant since 1996. Do you believe that this will help solve the problem?
Beischer: A reformulation of the Bureau of Mines would significantly help elevate the recognition of the importance of the mining industry and metal production in the United States. We are very vulnerable right now; if supply lines were cut off, the country would come to a grinding halt. I’m old enough to remember the energy crisis of the 1970s when there was no gasoline at the pump in the United States, and it caused a lot of problems. A similar situation could occur with metals because we closed the Bureau of Mines years ago and haven’t given the mining industry the recognition and importance it needs.
Additionally, other federal agencies regulating mines on federal lands must change their mindset. Agencies should approach permit applications to find a way for projects to work while protecting the environment and other land uses. Currently, this attitude seems not always present, making it difficult to permit a mine. No one in the U.S. mining industry is asking for weaker regulations, but we need timely responses to permit applications and a constructive attitude toward projects.
BZ: What should people look for when investing in junior mining companies?
Beischer: It comes down to the people managing the company, their diligence, and track record. The project’s specifics and the commodity’s demand are also crucial. Investing in companies with strong management and high-demand commodities is a good strategy.
BZ: What’s next for you, and what do you see coming down the road?
Beischer: We’re very active regarding our Nikolai project. We’ve just raised funding through equity financing, essentially selling shares in our company to generate capital.
Last year, we developed a series of drill targets to find high-grade, rich mineralization. We’ve found surface indications and conducted geophysical and geochemical surveys to create these drill targets. Now, it’s testing time. We’re drilling exploratory holes beneath the surface, hoping to discover the rich, high-grade nickel sulfide mineralization we’ve seen at surface levels in certain areas. Additionally, we’ll drill a few holes to expand upon the known deposit we documented a few months ago.
We published a 43-101 report documenting a significant nickel resource in the ground. It’s a large deposit, and we aim to make it even bigger. Afterward, we can move into calculating the economics and, eventually, the feasibility of a mining operation. These are exciting and active times for the company.
Read Next:
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
