Fathom Nickel: How Outstanding Exploration Above Ground Leads to Outstanding Exploration Below Ground
Inside: My intro interview to Fathom Nickel, some brief thoughts, time stamps, and a written summary of the interview.
l;dr:
I get to sit down with CEO and VPX of Fathom Nickel Ian Fraser. FNI.CN are operators on the Albert Lake and Gochager Lake nickel projects in northern Saskatchewan. Both are highly prospective nickel targets with a proven, effective, exploration thesis. I provide my video interview, my own initial thoughts on Fathom, as well as a written summary of the interview.
Overview:
Part 1: Companion Article
Part 2: Written Summary of Interview, with Hyperlinked Timestamps
First, my interview with Ian from Monday, Oct. 15:
Part 1: Companion Article
I’ve been following along with this one for a little while now. Fathom IPO’d in May of 2021 in pursuit of its flagship Rottenstone project. They first caught my eye in February of 2022 when they had something like $7 million in cash and an $8 million market cap.
The company has gotten some love from the market a few times since then, as CEO Ian Fraser (and President Doug Porter) have very successfully and aggressively pushed their two projects (Albert Lake and Gochager Lake, acquired in September of 2022) forward.
So while the tide has gone out on metals sector sentiment, it is my thought that Fathom has never been stronger than it is right now. This is because it looks an awful lot like they possess both a proven, effective, reproducible exploration thesis and a heck of a lot of multi-% Ni targets to hone in on with it And that is an obviously exciting combination.
I want to take a second and explain Ian’s geological thesis here, because it obviously plays a critical role in this story. Ian explains it during the interview, but the core thesis of his work is that, contrary to historical assumptions, the small, high-grade historical Rottenstone Mine wasn’t a one-off deposit. Ian’s belief is that because of the sheer historical grade of this magmatic system (9 g/t PGE) it implies that it must have had “unbelievably perfect” geological conditions to produce it.
Put another way, those sorts of grades simply have to have come from very large magmatic systems. This is because it takes huge amounts of sulphur to be that hungry for PGEs and a huge amount of magma to satisfy that thirst to create 9 g/t PGE. That size of magmatic venting wouldn’t end up with one small patch of nickel mineralization.
Continuing, the way this richness manifests itself is important. The magmatic intrusion travels along sills until it finds a geological “pocket” that encourages it to collect there. After the magmatic event has gone through its multiple phases, there ends up being a web of these nickel-rich pockets all interconnected. That means that if you can find one, you can begin to find others. So, again, rather than Rottenstone Mine’s ~60,000t of 3%+ Ni being a one-off, it is actually one nickel pod of many.
All well and good, right? Sometimes a fresh interpretation is exactly what is needed, but only if it yields results. So what separates Fathom from previous operators and have them succeed where others failed or didn’t even bother to try? The answer is actually faitly simple: Borehole Electromagnetic Induction (BHEM).
Fathom’s use of this well-proven tool has lead to dramatic and definitive results. This is because BHEM readings have done nothing less than redefine how these two land packages are meant to be understood. They are clear, direct, and accurate indicators of identifying and targeting these pockets.
So when I say earlier that Ian and Fathom have achieved geological mastery of their model, I mean that in a very serious and real way.
Credit where it’s due. It is no accident that Ian is the CEO of this company with these projects. Ian’s connection to Albert Lake goes back all the way to the 1990s, and continued through the decades after. After Ian and Fathom finally assumed control of the project in 2015, he leveraged that institutional-like memory of Albert Lake into a painstaking, half-decade long, exhaustive analytical process. He undertook the collection, collation, analysis, and interpretation of generations of geological data never before overlaid and produced in such a fashion. So all the seemingly sudden success Fathom is finding with the drill bit is no lucky shot, but rather the culmination of almost a lifetime’s worth of work.
For these reasons - leadership, geological confidence, and the value of the prize, I believe Fathom has clearly distinguished itself from its peers. It simply knows more, has more potential, and has a shorter, clearer path to value creation than most exploration companies I know.
All that’s left for Fathom to do is drill and see just how rich those pods can get. With assays just a couple weeks out and more drilling coming soon, I like the potential for growth here in the near term. And based on Ian’s knowledge and enthusiasm, I can’t help but feel a little excitement too. For disclosure, I am in, but am not done buying and continue to add on weakness slowly.
End Part 1.
Part 2: Written Summary of Interview, with Hyperlinked Timestamps
Click through the time stamps themselves to reach that section of the interview.
01:00: Overview of the Company
Started as a private company dedicated to proving up the region surrounding Albert Lake). Was Ian and then-CEO Brad Van Den Bussche. Spring 2021 they went public. They had wanted to go public and felt there was a window of opportunity. Managed to hit the market at the top and raise a substantial amount of (~$11.5M) money to make tremendous strides quickly publicly.
He had been looking at energy metals. Looked at graphite. Knew about the company and the project (Rottenstone Project, now Albert Lake project). Was a stranded asset. Approached the same company that they were actually consultants of to take it over. Wanted to remain focused on nickel.
Ian’s personal history with the project goes back to the late 1990s. His goal was to find PGEs for his company. Caught Ian’s attention for its richness – 9 g/t PGE with very significant nickel.
05:00: Quick overview of what’s coming for Fathom over the next 0-6 months.
Ian feels very good with what they’ve done thus far.
Albert Lake
Discusses the name “the hill of rotten stone” (geological formation “pimple” outcropping of very rich mineralisation). Their goal was to make sure the original Rottenstone deposit was not placed in isolation. They have accomplished that very successfully. “We’ve generated multiple additional targets. We’ve found a new zone.” They plan to be drilling in January of 2024.
Gochager
Historic deposit non-compliant resource. Got drilled out in the 1960s and then essentially nothing then. Ian saw it get drilled first hand in 2017. Borehole EM (BHEM) has been a critical, game-changing technology for this type of deposit. Including Albert Lake. Always been lots of nickel there. “58 meters of 1.4% nickel catches people attention.” Historical drilling missed higher-grade chutes because the ore bodies were very steeply plunging and historical drilling was being done vertically.
There are a “plethora” of targets in the 22,000 hectare project and they want to go after Gochager aggressively in 2024 to potentially get to a maiden resource.
10:20: Slide Deck Conversation
Walk through share structure. 100 million shares outstanding roughly. Fathom Nickel was struggling to raise financially as a private company. Had to give up a chunk of the company to (Crescat?) to keep going. IPOd at 70 cents and have been in chronic decline – IPOd at top of nickel market and the whole sector has been down since.
Feels they didn’t get much love in the market for what they accomplished on Albert Lake. 300+ meters of nickel mineralisation. It was another Rottenstone, albeit lower-grade – same geological characteristics, which means proof-of-concept.
14:00: Burn Rate with and without drilling
They’ve managed to reduce monthly burn rate significantly. Cutting costs. Overhead-wise: 2 man operation. Got rid of the office. There’s a bit more room – but currently about $50,000/month. The cost of being a public company is not cheap.
Drilling how they re is more expensive. Helicopter moves everything. 2 hole program last February at Gochager example of the struggle. No camp (working to amend the permit) at Gochager. Much cheaper because you don’t have to fly the helicopter to and fro every day. Moving drills site to site over land using a track vehicle would also reduce overhead drilling substantially. That’s the plan.
17:00: Cost of Drilling
$500 to $600 meter all in, including cost of camp and aviation. Nickel has to have bore hole EM – makes it more expensive. Gives you real time information. 2 person crew for the EM. While they wait for drill holes to be completed, Ian gets them doing surface grids. Point is, nickel is more expensive due to some of the geophysical add-ons.
18:40: Discussion: Fathom’s Origin Story
What work did you do from 2015-2021 to set up Fathom for success with drilling today.
Remembers working on it in the 1990s – simpler and faster. He was always fascinated by grade. Was working extensively on the project in the 1990s and at the last minute he got pulled off the project and all the core samples were bagged and put into storage without even assaying them. Was a little frustrating!
Fast forward to 2016 Ian went back for the stored drillcore and the company was surprised it even existed but Ian knew – he was the one that bagged it. Fast forward to 2021: By far the most significantly-mineralised intercept he ever saw on that project. The point is all the work over the years have been focused on getting his understanding of the deposits to what they are now, and now they get to experience that success.
23:00:
As per the pre-IPO work. Going back on the tremendous amounts of data they had. Taking old mag surveys from the old Rottenstone from before it was extracted. Taking gravity surveys. Reprocessing data. “Putting humpty dumpty back together again”. What did this look like before mining so they understand the model that they are looking for.
They know Rottenstone’s original
Gravity signature
Mag signature
2008 VTEM survey was also critical to build their understanding.
The missing bullet: Was it also conductive? (BHEM surveying proves this so importantly and successfully.)
Some of the geology actually was mislabeled in the historical data, making things even more challenging. Assaying and resampling and relogging the historic drill core to start putting the pieces together to generate additional targets.
Going slow as a private company and focusing above ground gave them time to think. When you’re drilling drilling drilling you sometimes don’t have time to stop and think about things as a geologist. All the prep work they did is to set them up to be able to prove out effectively their proof of concept, which they have.
26:00: The exploration thesis
Absolutely it remains the thesis. The Bay Island trend – 300+ meters of ultramafic mineralisation that is open at both ends and unknown width.
28:40: What’s the blue sky potential?
Ian believes that Saskatchewan and both of these projects are potential future nickel camps just like Manitoba’s Thompson belt. All the same trans-Hudson corridor. The grades of the historic deposit speaks volumes all on its own. Rottenstone was always thought historically to be a one-off deposit and it clearly is not now.
Very clearly indicative of “unbelievably perfect” geological conditions.
Those sorts of grades simply have to have come from very large magmatic systems. Takes a huge source – it takes huge amounts of sulphur to be that hungry for PGEs and a huge amount of magma to satisfy that thirst to create 9 g/t PGE.
Ian believes they are on their way for true blue sky potential realisation. To replicate historic grades found in other systems, this has to be a very large system and source. “We know now this is a very large magmatic system.”
Rottenstone was 50-60,000 tonnes. Believes there are many others. And they all will also have this common source. In the process of finding the source, they will find other pods. Geologic traps – the bigger the trap the bigger the deposit. Sulphur interacting with magma will determine grade, but they are now finding targets of considerable size and are starting to understand why deposits are where they are, enabling them to find more and more of these isolated deposits. But the ultimate goal is to find the original feeder vent.
35:00: How many targets have they compiled that could be another Rottenstone?
Soil Geochem program from 2018 and o
ther surveys helping them build. In 2021 they did another Geochem soil program. They were finding elevated hits well removed from the mine. The Tremblay-Olson claims “lights up like a house on fire”. They’ve explored less than 10% of their project and Tremblay-Olson is their brightest target. Geochemical soil analysis works. It gets you into the ballpark. Also heavily relying on the VTEM survey. Done their own gradient mag survey.
“There are lots of additional targets out there to be found”:
Ian believes the historic deposit has been offset by a fault. He believes there is a footwall of the deposit that is a little deeper – 250-300m below surface. If it has indeed been offset by a fault that would be a fantastic discovery.
Tremblay-Olson is a “tremendous target”.
2-3km south of the past deposit is a very strong conductor 450 meter strike 300m below surface. This is the one that “megacopper” on ceo.ca is excited by.
Finding incredible offhole anomalies with the BHEM: Something on the eastern flank of the Tremblay-Olson claims area
4.5 km south of historic Rottenstone: “The Dime”. 13 meters of Ultramafic rock that contained 0.5% nickel with very minimal sulfides. 1% sulfides with 0.5% nickel is potentially a very, very high metal tenor/concentration. (tenor = how much nickel in 100% sulfide).
“At least half a dozen other targets” in addition to those mentioned above.
Ian feels they have their methodology well understood now to produce high-quality targets.
42:00: Albert Lake vs. Gochager Lake
Albert Lake isn’t on the back burner. It is purely based on timing. When they were trading at 4.5 cents, things were getting desperate and they were looking for opportunities to spur some positive news so they looked to acquire another nearby land package. And it has worked out really well for them.
It is a derisking opportunity – not just a single project. The goal is always to prove both projects up. The challenge is raising enough money to do both projects.
There is a quicker path to a resource because one already exists and is well defined. Fathom has proven that the deposit is longer along strike and deeper than the historic resource. Tonnes and grade will get put together much faster at Gochager.
46:15: Is Albert Lake a good analogue for Gochager?
Ian believes they are going to end up remarkably similar.
The intrusive at the Gochager Lake project is bigger than any intrusive at Albert Lake at the moment.
At Albert Lake the intrusives are more horizontal. Sills are a conduit within the sediments that the magma oozes along until it gets stuck in a trap. In Gochager, they are more vertical, and it appears that there is an intrusive body that is mafic, not ultramafic. They believe it is a dynamic intrusive, meaning there are several phases, which is good for tenor. Gochager is more coarsely-grained, which might be more advandtageous for minerslisation. At Gochager the deeper they get it switches from mafic to ultramafic.
These globules of ultramafic mineralisation they are finding adds to the interest and potential in the system, as it is another indicator of the potential size of the intrusion. They have all the right textures at Albert Lake and are seeing all the same textures at Gochager. Ian believes he is on the verge of tapping into a nice massive sulphide pool. Comparable and equal upside potential.
50:00: How is Fathom’s approach different than historical operators?
From being private and then public and well-funded, it allowed them to be patient. Heavy focus on above ground work, non-drilling work developing targets. The BHEM has been “incredibly successful” at both projects.
BHEM “had never really been used systematically before”. Other things like drilling on ice. BHEM has been “tremendous”, though. Having it real time is a game changer. We know that these semi-massive to massive sulphides contain nickel. We know they respond beautifully to the BHEM and that it is pointing us to zones of conductivity.
Numerous targets over a large area. Time to do boots on the ground exploration across more of the massive land package as they go. Need the capital to have the time to do things in a systematic and ultimately rewarding process.
55:30: Assays Outstanding
7 holes drilled at Gochager. Will restart on both projects in January. Lots of core with pentlandite, which is to say nickel. “There will be zones favourable to nickel assays.” Only 7 holes and part of a larger plan, but still excited by potential, again because of the BHEM. Being able to identify targets off hole has been a decisive asset. When they target those EM anomalies, they intersect lenses of massive sulphides which contains nickel.
Global resource: “Speculative and wishful thinking” but “if there’s 25mt of 0.6% Ni near surface, that’s coming out the ground, but it’s not us that is going to be doing it.”
58:30: When is the right time to make a transaction?
What does it mean to have potentially two emerging nickel caps? Don’t sell early, but it has to be in a position of strength. Don’t jump in bed too soon - not always the best deal.
60:40: What are your next targets?
Just talked about this with a colleague over the weekend. He likens it to a sandbox approach. And a very large one to explore in. No limits.
4, 9, 10, 8 are holes that came up too short. BHEM told them to keep going but only after the fact. Wish they could get budget for real time BHEM. There is about 500m of drilling just to finish off holes that finished too short. Multiple other targets mentioned by name.
65:45: Final Thoughts to Ian
Very excited. Two fantastic projects. Shoutout to project manager Vanessa and TerraLogic Exploration. Grateful to have caught the attention of some nickel experts. Having conversations with the Vales and Glencores and Rios of the world, and now some intermediaries.
And that’s where I will end it. Hope you enjoyed the interview. If you haven’t noticed yet, I am excited to be working with Fathom. I think Ian is exactly the guy you need to unlock these two projects, and am excited to see what he manages to do with that BHEM.
Thanks,
Matthew
