Saturday, July 13, 2024

Alaska Energy is Moving Forward with Acquisitions and Sales (TSX-V: AEMC, OTCQB: AKEMF)

Date:

Alaska Energy Metals Corporation (AEMC) has recently announced the successful acquisition of 1413336 B.C. Ltd., the owner of the Angliers-Belleterre nickel-copper project in western Quebec. This strategic move positions AEMC as a key player in the nickel-copper industry, with access to significant cash reserves and promising mineral deposits. In this article, we will explore the details of the acquisition, the geological potential of the Angliers project, its recent sale, the share structure and the stock price movement. 

The Angliers-Belleterre Nickel-Copper Project

The Angliers-Belleterre nickel-copper project, situated in western Quebec, represents a significant opportunity for AEMC, given its geological prospects. The project area is primarily composed of komatiitic ultramafic flow rocks and differentiated gabbro rocks. These rock types are notably similar to those found in the Kambalda nickel district in Australia, a region known for its high-grade massive sulfide deposits. This geological similarity suggests a strong potential for the Angliers-Belleterre project to host similar types of deposits.

Enhancing the project’s prospects is the presence of notable nickel deposits in the surrounding area. One such example is the Midrim nickel prospect, which is believed to extend into the Angliers-Belleterre project area. Additionally, the Quebec government has identified a six-kilometer-long belt of nickel-enriched rocks within the northern part of the claim block, further underlining the area’s mineral potential.

To better understand and evaluate this potential, AEMC undertook an advanced “artificial intelligence” analysis conducted by 141 BC. This analysis provided valuable insights, particularly highlighting the promise of both southern and northern mineralized trends within the project area. These findings are instrumental in guiding AEMC’s future exploration strategies.

Moving forward, AEMC plans to leverage all available public data and carry out targeted geophysical surveys. The goal of these surveys is to develop precise drill targets, thereby advancing the exploration and potential development of the Angliers-Belleterre project.

Here is the Breakdown for the Acquisition

AEMC’s acquisition of 1413336 B.C. Ltd. marks a significant milestone for the company. The transaction was completed through a Share Exchange Agreement, with AEMC acquiring 100% of the issued and outstanding securities of 141 BC. As part of the agreement, AEMC issued a total of 31,827,720 AEMC shares and 4,105,958 AEMC warrants to the security holders of 141 BC. The transaction also included approximately $2.8 million in cash assets.

As part of the acquisition, AEMC has agreed to an area of mutual interest for a term of five years, covering three kilometers of the outer boundaries of the Angliers project. The property is also subject to a 2.5% net smelter returns production royalty, which can be reduced to 1.5% by paying the royalty holders $1.5 million.

The company has received conditional approval for the acquisition from the TSX Venture Exchange (TSX-V). However, the National Instrument 43-101 Technical Report conducted on the Angliers project will not be posted on SEDAR+ until all remaining TSX-V comments have been resolved.

The Company Made a Sale to Generate Profits

AEMC has made a strategic move by selling a portion of its exploration data to a subsidiary of KoBold Metals Company. This sale is significant as KoBold Metals is renowned for its innovative application of machine learning and artificial intelligence in mineral exploration. The data sold is specifically related to the Skolai Project, an initiative of KoBold Metals, which is located adjacent to AEMC’s own Nikolai Nickel Project in Interior Alaska.

The President & CEO of AEMC expressed satisfaction with the transaction, noting that it allowed for the recoupment of some costs associated with their earlier purchase of the exploration data. This dataset includes a comprehensive range of exploratory information such as assay results from rock and soil samples, stream sediment analyses, drill core assays and logs, as well as detailed geophysical surveys. Importantly, the data has been meticulously tailored to align with the specific boundaries of KoBold’s Skolai claim block.

The sale, valued at US$175,000, is expected to significantly enhance KoBold’s exploration activities in the area. It is anticipated that the data will accelerate their efforts in discovering magmatic nickel-copper sulfide deposits within this emerging nickel district.

But Who Are Behind KoBold Metals?

You might have heard their name somewhere… Indeed, Bill Gates, founder of Microsoft, and Jeff Bezos, founder of Amazon, are backing KoBold. 

Berkeley-based KoBold Metals recently secured $195 million from prominent investors. This AI-driven company specializes in mining essential metals like cobalt, copper, nickel, and lithium, crucial for battery production in sectors like electric vehicles. They’ve developed a comprehensive Earth’s layers database and employ algorithms to predict global mineral deposit locations. Notably, KoBold Metals isn’t a stranger to significant funding, having previously closed a $192.5 million Series B in February 2022, with contributions from Apollo Projects, Bond Capital, BHP Group, and the Canada Pension Plan Investment Board.

Regarding the Latest Financials

Alaska Energy, following its recent share issuance to acquire the Angliers Belleterre Nickel-Copper project, has released its financial statements for the period ending June 30. The company reported a solid financial position, with $918.2k in cash and significant investments in exploration and evaluation assets, totaling $5.2M. This brings its overall assets to a value of $7.1M.

A notable aspect of Alaska Energy’s expenditure is its focus on “promotion and investor relations.” This strategic allocation of funds aims to ensure widespread awareness of the company’s activities and facilitates direct access to crucial information for investors. This approach underscores the company’s commitment to transparency and investor engagement.

However, despite these efforts, the company incurred a total loss of $1.4M during the trimester. 

Regarding the company’s share structure, as of August 21, there were 51M shares issued and outstanding. In addition to these shares, the company has 4.7M options and 13.6M warrants.

On a technical basis, warrants and options include: 

Warrants

● 626,410 Finder’s Wts ex to May 30, 2024

● 8,056,250 Brokered Unit Wts ex at $0.80 to July 27, 2025

● 1,007,750 Compensation Options ex at $0.60 to July 27, 2025

● 3,818,750 NonBrokered Unit Wts ex at $0.80 to Aug 4, 2025

● 158,100 Finders Wts ex at $0.60 to Aug 4, 2025

Stock Options

● 145,500 @ $0.90 to Sept 30, 2024

● 168,000 @ $1.35 to Feb 28, 2025

● 149,000 @ $1.05 to Nov 23, 2025

● 307,500 @ $0.65 to Feb 24, 2027

● 1,700,000 @ $0.52 to Jul 7, 2028

● 2,250,000 @ $0.46 to Aug 17, 2028

Stock Price Movement

Over the past year, AEMC has outperformed many of its peers in the mining sector. Currently, its stock is valued at $0.40 per share, demonstrating stability for investors who have held onto their shares since last year. The stock did hit a yearly peak of $0.67 but experienced a downturn, largely attributed to the dilution of shares following a recent acquisition. This dilution occurred when about 31.8 million shares were issued at $0.315 each, leading to a higher volume of shares being sold daily.

The company’s short-term market dynamics are also evident in its Relative Strength Index (RSI), which was at 32 as of November 28. An RSI near or below 30 often suggests that a stock is being oversold.

However, the overall trend for AEMC’s stock remains positive when looking at moving averages. The 50-day moving average (MA) stands at $0.52, while the 200-day MA is at $0.43, indicating a bullish trend in the stock’s trajectory.

What You Need to Remember

● AEMC successfully acquired 1413336 B.C. Ltd., gaining full ownership of the promising Angliers-Belleterre nickel-copper project in western Quebec. This acquisition, facilitated through a Share Exchange Agreement, included the issue of over 31 million AEMC shares, 4 million AEMC warrants, and roughly $2.8 million in cash assets.

● The Angliers-Belleterre project is geologically significant, with komatiitic ultramafic flow rocks and differentiated gabbro rocks indicating potential for high-grade massive sulfide deposits. 

● Sale of Exploration Data to KoBold Metals Company: AEMC announced the partial sale of its exploration data to KoBold Metals Company. This data sale, totaling US$175,000, is for KoBold’s Skolai Project adjacent to AEMC’s Nikolai Nickel Project in Alaska.

● AEMC’s recent financial report shows assets totaling $7.1M, with significant expenses in promotion and investor relations, and a total loss of $1.4M. The company’s stock price has been fluctuating, recently decreasing due to share dilution from the acquisition, but the overall market outlook remains bullish with its moving averages indicating positive trends.

Bob Beaty
+ posts

For over 30 years, Bob Beaty has been explaining concepts and companies to the global investment community. One of the original writers for Jim Cramer’s Thestreet.com, he also wrote for AOL (Can/US), the Globe and Mail, and the Huffington Post. Over that period, he illuminated small-cap companies to investors with wit and pith but mostly opinion and facts. Investing should be fun. Pedantic, staid content is no fun.

Before embarking on his writing career, Bob had a successful international journey in the finance industry. He served as a broker, derivatives product manager, and a Director of London's Credit Suisse subsidiary. His career spanned across major financial hubs including Toronto, Vancouver, and the UK, giving him a unique global perspective. (He is still fondly remembering those English client lunches.)

Other than everything Groucho Marx and George Carlin ever said, Bob lives by a simple credo;

‘Never do anything the person standing in front of you can't understand.’ Hunter S. Thompson.

Let’s go.

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