This respected adviser just made James Bay Minerals its first lithium punt since picking Vulcan at 40c in 2020
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There are plenty of fish swimming around Canada’s James Bay region, where a tight cluster of world-class lithium projects lie within a proverbial stone’s throw of each other.
The region is showing all the hallmarks of becoming the number one lithium jurisdiction in the world, similar to Western Australia’s Outback where miners like Pilbara Minerals (ASX:PLS) have turned spodumene wealth into rivers of gold.
Its proximity to Europe and North America’s rapidly growing EV markets aside, James Bay’s prominence has exploded in the last couple of years due to its enormous hard rock lithium prospectivity, abundant spodumene showings, and extraordinary discoveries.
As a result, there’s been a huge amount of investor interest in any lithium hopeful that picks up ground there, which according to Seneca’s CEO and investment adviser Luke Laretive, is completely justified.
“There’s been some pretty impressive intersections coming through and some pretty sizeable high-grade resources – a lot of ASX companies are making decent discoveries,” he says.
“With mining being an economies of scale business, explorers need to have a significant landholding to be able to define a significant resource and to operate ideally in the first quartile of the cost curve so that we know in almost any pricing environment, the business is going to be sustainable.
“For all kinds of mineral investing, this is the most important part of the equation – scale.
“And that is why we decided to invest in James Bay Minerals.”
James Bay Minerals’ tenements sit along trend from Patriot Battery Metals’ (ASX: PMT) Corvette property, home to the ‘largest lithium pegmatite resource in the Americas’, and Winsome Resources (ASX:WR1).
The flagship Joule property encompasses a ~24km long prospective deformation zone along a regional fault which has minimal historical exploration.
All three northern properties (Joule, Aero and Aqua) have the three key ingredients required to host massive lithium-caesium-tantalum (LCT) pegmatites: the right age Archaean rocks, being located along major regional faults and lying on greenstone belts in proximity to granites.
The company also holds the option (which it intends to exercise prior to listing) to acquire the Troilus Project, further to the south near Sayona’s (ASX:SYA) Moblan lithium project and Winsome’s Sirmac-Clappier project.
As the trusted financial advisor to some of Australia’s most successful families, professionals, and business owners, Seneca is very selective in what it does.
“This is the first early-stage lithium investment we’ve made since we invested in Vulcan Energy at 40 cents back in 2020,” Laretive says.
Vulcan (ASX:VUL), which is building a “zero carbon” lithium project in Europe, would rocket to over $15 a share just one year later.
“James Bay Minerals has the same characteristics of some of our more successful investments and the company fits well into our criteria for a number of reasons,” Laretive says.
“It is backed by an experienced, aligned incentivised team first of all and there’s no options or pre-IPO stock to complicate the listing process or the post listing market,” he says.
“It’s got significant land holding in a structurally supported, growing commodity sector and their projects are relatively simple to understand from a geological perspective.
“They aren’t drilling off the coast of Africa for oil or exploring some difficult to mine base metals project – they’re in a well-established mining region in Canada that is not going to get overthrown by the government anytime soon or have its assets nationalised.
“If you look at their relative value on offer across the market, there’s plenty of other companies listing who, pretty quickly, get to a $20, $40, or $60 million market caps on the back of not much.
“James Bay Minerals on the other hand, will have a market cap of around $12.1 million when it lists on the ASX at $0.20 which in my opinion represents the best bang for your buck opportunity by far.”
The company closed its IPO last Wednesday following a successful book-build which saw applications for shares exceed the maximum $6m sought.
Under the ticker JBY, James Bay Minerals plans to officially list on the ASX this month focusing on extensive exploration across the three properties beginning with lidar surveys, aerial imagery, and field mapping.
Laretive also has his eye on a couple of other lithium players in the prolific James Bay postcode.
“Allkem have just announced a pretty big increase to their James Bay lithium resource and that looks like a really attractive deposit, one that adds value for that company over the medium term,” he says.
“Patriot Battery Metals look a bit expensive for my mind, and I reckon that deposit might be a bit harder to handle from the initial stuff they’ve put out, but who knows.
“Winsome Resources at a $350 million market cap is reasonable, not the best deal in the world in terms of value for money, but it looks like they’re putting together a pretty decent project.
“Outside of those, you’re talking about companies trading at market caps in the billions or hundreds of millions.
“With James Bay Minerals, you’re buying something down the road from these mid and large cap names, which sure, needs drilling and has exploration risk, and that costs money and takes time, but if we take what’s happening in other parts of James Bay as an indication, JBY has got a lot of potential.”
The views, information, or opinions expressed in the interview in this article are solely those of the brokers and do not represent the views of Stockhead.
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