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FANCAMP EXPLORATION LTD. (FNC.V)

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Company description

Fancamp Exploration Ltd. (TSXV:FNC) is a junior exploration company, with a portfolio of various assets, varying from a substantial equity position in an iron ore producer (Champion Iron Ore > TSX:CIA) to royalties to numerous mineral resource properties in Quebec, Ontario and New Brunswick, including chromium, strategic rare-earth metals, gold, zinc, titanium and more. Fancamp’s chromium properties in the highly sought-after Ring of Fire in Northern Ontario are strategically located. Its rare earth element properties in Quebec are a special focus, and lastly Fancamp is developing energy reduction technology with its advanced titanium extraction strategy.

The Fancamp management team consists of an experienced group of executives and geologists, with the most notable names being President and CEO Rajesh Sharma, VP Exploration Francois Auclair and Director Aswath Mehra. Rajesh Sharma has been, among others, the CEO of Tata Steel Canada, and an executive at one of the largest investment funds in Canada (Investissement Quebec), and has 25 years of leadership experience in mining, exploration, metals and international trade.
Francois Auclair is a professional geologist with over 25 years of experience both in Canada and globally, and led mining exploration programs for several companies, including Algold, Nimini Gold, Diabras (Sierra Metals), Axmin, Rio Narcea Gold Mines, Ashanti Goldfields, Aur Resources, etc. Aswath Mehra is a very successful investor, and an advisor to venture capital firms in real estate, mining, tech and bio-tech. He was the co-founder of GT Gold, which was sold to Newmont in 2021 for C$393M. Furthermore, the board consists of 6 members all of which have had CEO or executive level experience in mining.

Regarding their assets, for starters Fancamp has the luxury of owning 3.1M very liquid shares of iron ore producer Champion Iron Ore (CIA.TO, market cap of C$3B), and lots of cash, accounting in total for C$25M in cash and equity. Besides this, the company owns over 90 properties, royalties and technology, and management realized this was a bit much.
Therefore, Fancamp has developed a first stage, three-pronged strategy, which consists of:
• sifting through all exploration properties, in order to hold on to and advance about 5-8 selected properties, and market all other properties for optioning out, JV, sale and/or create royalties on it with the goal of building a significant royalty portfolio;
• Doing strategic investments and acquire advanced projects with potential for near term monetization or near term cash flow;
• Monetizing titanium technology, by developing and patenting the in-house proprietary technology, following a trajectory of forming a strategic partnership with an industry player, obtain funding for a pilot plant and spin off the complete package in a separate listed company

Fancamp already divested several projects since determining the new strategy, made several strategic investments (NeoTerrex-REE’s, Vision Lithium-lithium, EDM Resources-zinc), and arranged drill programs for the Clinton and Harvey Hill copper projects, with a 2,000m program for Clinton already underway. Regarding the exploration assets, the most important asset is the 50% interest in the Koper Lake project, a large chromite project in the Ring of Fire. Koper Lake has a 85.9Mt @ 34.5% Cr2O3 (chromite) 2015 Inferred resource, which is NI43-101 compliant. The property is surrounded by Noront ground, which was the focus of the very recent bidding war between BHP and Wyloo, resulting in a buyout price of C$616.9M.
It will be interesting to see how the downsizing of the current, very extensive project portfolio will pan out, how non-focus projects can be monetized, what the new focus projects will be, and most importantly how Fancamp could add value to these projects, in addition to their strategic investments and equity holdings.

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