Alaska Energy Metals | Q3 2024 Research Report

Things You Need to Know

Crucial Role in U.S. Energy Independence: With the U.S. relying entirely on imports for its nickel supply, AEMC’s flagship Nikolai Project offers a critical domestic solution.
Significant Nickel Resource Expansion: The Nikolai Project’s updated mineral resource estimate shows 3.9 billion pounds of indicated nickel (813 Mt @0.22% nickel) and over 4 billion pounds of inferred nickel (896 Mt @ 0.21% nickel), a 180% increase in inferred resources.
Secondary Growth Opportunity with Angliers-Belleterre: AEMC’s Angliers-Belleterre project in Quebec offers promising nickel-copper mineralization, bolstered by the potential discovery of natural hydrogen on-site.

Alaska Energy Metals *One-Year Performance (11/07/2023 to 11/07/2024)*

Thesis

Alaska Energy Metals is uniquely positioned to address one of the most pressing needs in the U.S. clean energy transition—securing a domestic supply of critical minerals like nickel. Nickel is essential for energy storage solutions, particularly in lithium-ion batteries, where it enhances durability, performance, and safety. The rising demand for clean energy technologies is driving an extraordinary surge in the need for nickel, cobalt, and lithium, with U.S. demand projected to grow 23-fold by 2035 (S&P).

However, the U.S. faces a stark supply gap. It contributes only a fraction of the global nickel supply and relies on imports for 100% of its consumption, making it vulnerable to geopolitical disruptions. This is compounded by the fact that by 2030, Indonesia and China are expected to control 71% of global nickel production. The need for a secure, domestic source of nickel has never been more critical, and Alaska Energy Metals, through its flagship Nikolai Project, offers a compelling solution.

Business Catalysts

Expansion of the Nikolai Project’s Resource Base: The recent drilling and exploration efforts at the Nikolai Project, which identified nearly 3.9 billion pounds of indicated nickel and over 4 billion pounds of inferred nickel, represent a significant increase in the company’s mineral resources.
Strategic Importance in Energy Independence: With the U.S. importing 100% of its nickel and facing a supply shortfall, AEMC’s domestic nickel deposits become critical for energy storage and electric vehicle production. As the U.S. government emphasizes supply chain security for critical minerals, AEMC is well-positioned to benefit from increased government investment.
Development of the Angliers-Belleterre Nickel-Copper Project: AEMC’s Angliers-Belleterre project in Quebec offers a secondary growth opportunity. With ongoing exploration, the project could uncover new high-grade mineralization.

Project Overview

The Nikolai Project

Location: 80 kilometers (50 miles) south of the town of Delta Junction, Alaska
Ownership: 100% ownership of Eureka Zone & Option to Acquire 100% of Canwell Block
Land Claim 6,863 hectares at Eureka, 3,820 hectares at Canwell
Commodities: Nickel, Copper, Cobalt, Platinum, Palladium, Gold, Iron & Chromium

The Nikolai Project, Alaska Energy Metals’ flagship asset, is emerging as a significant player in the U.S. energy metals market. Located in Alaska, the project has shown immense potential, bolstered by an updated NI 43-101 Mineral Resource Estimate (MRE) announced in March 2024. Following a 2023 drilling program in the Eureka Zone, which included eight diamond drill holes spanning 4,138 meters, the results revealed substantial deposits of critical minerals.

The indicated resource stands at 813 million tonnes grading 0.29% NiEq, containing:

3.871 billion pounds of nickel
1.276 billion pounds of copper
303 million pounds of cobalt
4.0 million ounces of platinum, palladium, and gold

In addition, the inferred resource amounts to 896 million tonnes grading 0.27% NiEq, comprising:

4.225 billion pounds of nickel
1.040 billion pounds of copper
327 million pounds of cobalt
3.4 million ounces of platinum, palladium, and gold

These impressive figures reflect a 180% increase in inferred resources. Moreover, the project’s economics have improved with a reduced strip ratio from 3.7:1 to 1.5:1, enhancing profitability while also reducing its environmental impact. The discovery of a high-grade core zone, with a NiEq grade of 0.34%, further solidifies the project’s commercial viability.

In addition to the Eureka Zone, AEMC is advancing exploration at the nearby Canwell prospect, which covers 10,683 hectares of Alaska’s tier-1 pro-resource jurisdiction. With continued metallurgical testing and new drill results expected, the Nikolai Project is poised to become a vital resource for securing a domestic supply of energy metals, essential for battery manufacturers and the U.S. government’s clean energy ambitions.

Angliers-Belleterre Nickel-Copper Project

Location: Témiscamingue region of western Quebec
Ownership: 100% ownership
Land Claim 26,417.4 hectares
Commodities: Nickel & Copper

The Angliers-Belleterre Project, a 100%-owned nickel-copper venture in Quebec, offers Alaska Energy Metals (AEMC) a compelling secondary opportunity to boost its resource base significantly. Known for its high-grade Kambalda-style nickel-copper mineralization, this project has become a critical area of focus for AEMC’s exploration efforts.

To unlock its full potential, AEMC recently conducted a machine-learning Mineral Potential Index (MPI), integrating historical and current data to identify four key exploration targets. The company followed this with a VTEM Max electromagnetic geophysical survey, covering 1,568 line kilometers to detect conductive anomalies that could signal metallic sulfide mineralization. Additionally, 4,971 soil samples were collected to trace metal ions that may indicate valuable mineral deposits. The results, expected in Q4 2024, will guide the next phase of drilling, potentially bringing the project closer to resource validation.

Adding to the project’s intrigue, AEMC announced the possibility of natural hydrogen (white hydrogen) accumulations on the property. If confirmed, this could represent a breakthrough, creating a new revenue stream from a renewable, low-emission energy source. The company plans to carry out soil gas sampling to assess this potential.

Overall, the Angliers-Belleterre Project presents a high-potential growth opportunity for AEMC. Its combination of promising nickel-copper mineralization and the prospect of clean hydrogen extraction adds significant value, complementing AEMC’s flagship Nikolai Project and strengthening its portfolio of strategic energy metals.

Points of Criticism

Cash Constraints: Despite raising more than $8.68 million through recent offerings, AEMC continues to depend on outside capital to fund its large-scale exploration and development activities. These projects are capital-intensive, and limited cash reserves could slow progress, delay key milestones, and hinder the company’s ability to remain competitive in the race to supply critical energy metals.
Market Risk from Indonesia and China: Indonesia and China’s dominance in global nickel production poses a threat to AEMC’s market position. If these countries continue to flood the market with nickel, oversupply could drive down prices, making it difficult for smaller companies like AEMC to compete.

Notable Updates in Q3 2024

10/16/2024: Alaska Energy Metals is planning to conduct a hydrogen soil gas survey at its Angliers-Belleterre Project in Quebec to assess the potential for natural white hydrogen accumulations. This exploration follows recent data from a neighboring claim, suggesting that the region’s geological features may support hydrogen formation and storage, adding a new dimension to AEMC’s focus on nickel-copper targets.
10/04/2024: Kevin Ma was appointed as Alaska Energy Metals’ new Chief Financial Officer, replacing David Cross who served since 2020. Cross will assist with the transition, while Ma brings extensive experience as a Chartered Professional Accountant and CFO for multiple mining companies.
10/01/2024: Alaska Energy Metals completed its drilling program at the Canwell block of claims within its Nikolai Project, focusing on promising geological targets. Three drill holes totaling 1,048 meters were finished, with results expected later this quarter, alongside downhole electromagnetic surveys to identify potential mineralized zones for follow-up drilling.
09/20/2024: Alaska Energy Metals completed a helicopter-borne VTEM Max survey and a large soil geochemical survey over its Angliers-Belleterre project in Quebec, aimed at identifying targets for valuable nickel-copper mineralization. The surveys, which were part of a broader exploration program, are expected to yield results in the fourth quarter of 2024, helping to define potential drill targets for 2025.
09/18/2024: Alaska Energy Metals partnered with the Colorado School of Mines and Virginia Polytechnic Institute to research the carbon sequestration potential of ultramafic rocks and tailings at its Eureka Deposit in Alaska, utilizing a grant from the Advanced Research Projects Agency-Energy. This innovative study aims to evaluate how finely ground mine tailings can effectively sequester carbon dioxide, contributing to both sustainable mining practices and the reduction of greenhouse gas emissions.
09/05/2024: Alaska Energy Metals successfully closed a non-brokered offering of special warrants raising $4.52 million and a concurrent private placement of units for $480,000, bringing total gross proceeds from recent financings to $8.68 million. President and CEO Gregory Beischer highlighted that this financing reflects confidence in the quality of the Nikolai Nickel Project and the company’s strategic direction under its new directors.

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