Despite applications abounding in the multi-billion global boron market dominated by just two companies – Rio Tinto (NYSE:RIO) and Turkey state-owned Eti Mine Works – the opportunity is frequently overlooked by the investment community. Boron is relatively abundant, but the extraction and refining processes complex. Furthermore, certain important boron ores, such as colemanite, are much rarer. As it happens, all the world’s colemanite production today comes from Eti.
That could change as Erin Ventures Inc. (TSX-Venture:EV) looks to disrupt the market with its Piskanja Boron Project in Serbia, roughly 750 miles northwest of Eti. Per an NI 43-101 report amended in February 2019, Erin’s wholly owned boron deposits have an indicated mineral resource of 7.8 million tonnes (averaging 31.0 percent B2O3 (boron trioxide)), and an inferred resource of 3.4 million tonnes (averaging 28.6 percent B2O3).
Projections are for decades-long mine life with the potential to generate $100 million+ in high-margin annual revenue. To wit, Erin is charting a course to join the elite group of miners producing high-grade boron and potentially challenge Eti with respect to colemanite, considering a far more favorable arsenic ratio from Piskanja ore compared to Eti.
Against the backdrop of the COVID-19 pandemic seriously hamstringing exploration activity, Erin applied for and in May received a new license renewal. The license gives Erin until September 25, 2023 to complete the necessary studies and gain approval for the "Certification of Reserves" and the "Approval of the Exploitation Field", as the first two (of three) steps in the mineral exploitation and mine licensing approval process.
Erin isn’t going to do the heavy lifting at Piskanja thanks to a new partnership with fellow Canadian company Temas Resources Corp. (CSE:TMAS) (OTCQB:TMASF). The finalization of the JV is imminent pursuant to which Temas can earn up to 50% equity interest in Balkan Gold (Erin's wholly-owned subsidiary and holder of the license to the Piskanja Boron Project) by expending a total of €10.5 million (~US$12.73 million, CDN$15.4 million) towards the development of Piskanja, within a 36-month period.
Erin will also become a shareholder in Temas. Upon consummating the deal, Temas is obligated to give Erin 250,000 shares of TMAS plus warrants entitling Erin the opportunity to buy 250,000 more shares at C$1.00 each over the subsequent 48 months.
Temas completed its due diligence on the Piskanja project in April and agreeing to move forward with a definitive agreement in April. To that point, investors are surely looking for the announcement soon.
It looks like coronavirus is getting out of the way too. Serbia has been praised for its handling of the pandemic and distribution of COVID-19 vaccines to its citizens. The country’s seven-day average of new cases through June 2 was just 268. With the virus spread seemingly stemmed, Belgrade is easing restrictions, including those related to dining, movies and the number of people that can gather for business. The timing is right for Temas stepping in an advancing the project to earn its stake.
The opportunity cannot go understated. It’s difficult to grasp the versatility nature of boron, which is used in more than 500 products, including fiberglass, fertilizer, detergents, semiconductors, healthcare, EVs, and smartphones. It recently was proven to be the toughman of 2D materials, with hexagonal boron nitride (h-BN) shown to be much more resistant to fracture than its popular cousin graphene.
Also recently, Ford (NYSE:F) raised the bar in its new Bronco Sport by using boron steel for the safety cell, increasing the hardenability to the point that the BoronExtrication YouTube channel has videos showing first responders proper procedure with the hydraulic "jaws of life" to get through it.
Irreplaceable existing uses and new uses being realized in advanced technology paint a very favorable future for the industry and for up-and-coming companies like Erin Ventures that could carve out a nice chunk of market share by presenting new options in the value chain.
