Interview with Anthony Milewski and Martin Vydra of Conic Metals Corp. Conic Metals Corp. is a Canadian base metals play offering access to nickel.
The company was officially formed in late October, with Anthony Milewski installed as the Chairman and Martin Vydra featuring as Conic’s head of strategy. Conic are looking to clamber aboard the EV train, with an attempt at transitioning to battery production with vastly greater amounts of nickel and reduced cobalt/manganese. Conic’s primary excitement comes from the future nickel demand created by electric vehicles. As many Crux Investor spectators will know, Milewski has a track-record in the base metals industry, with experience leading Cobalt27, a royalty and streaming business. This experience will likely worry investors because Cobalt27 saw a drastic downturn in share price after rapid initial success. While Milewski puts it down to a de-stock of cobalt inventories in China and a simultaneous spike in artisanal supply, many investors will worry another boom and bust scenario could be about to play out with Conic Metals Corp. Cobalt 27 was extremely successful (as any solid cobalt play should have been) when cobalt prices spiked in April 2018. However, Milewski’s ambition has been viewed by some investors as cavalier; when the spot price of cobalt fell, he had no visible contingency plans in place. An abundance of royalty streaming deals did nothing to offset the company’s fall, and despite Swiss firm Pala Investments taking a 20% stake, the share price and market cap decimated to around a quarter of its peak. Pala eventually offered shareholders a reprieve and took the company over. With an erratically priced commodity like nickel, which moves in sweeping super-cycles, investors will be keen to learn if they can expect Conic to last longer than Milewski’s previous ventures. No structure is currently in place, but Milewski claims it will be the largest investable nickel ‘pure play’ on the TSX when it launches. He feels it is a unique opportunity for Canadian investors to gain exposure. Conic warn the EV market move is still several years away, so any market fluctuations are not yet being driven by electric vehicle demand. Conic are keen not to go “too hard too quickly” this time around, which will be words of reassurance to prospective investors. There is a second wave of potential here once the EV economy gets into full swing and such honesty is admirable. Key to Conic’s success will be forming a retail shareholder base. Milewski’s previous venture was a heavily institutional stock, with big hedge funds chasing the EV thematic, rather than providing a stable structure for Cobalt 27 to grow. Conic Metals’ flagship asset is the ‘Ramu Asset’ in Papua New Guinea, one of the “best overall performing assets in the world.” Some third-party publications have placed Ramu in the bottom quartile for costs. Papua New Guinea is a good jurisdiction for nickel mining and has strong relationships with Australia and China. The asset itself has a long life with resources to take the project beyond 20 years. The company is also debt-free. However, Conic only has $5 million in cash to play with. Will this be enough to help them take off and will it last?
We Discuss: 00:00 – Introduction 0:55, 11:05 – Nickel Market and Comments on the EV Story 2:53, 12:23 – Cobalt Drops & Cobalt 27: What Happened? What are the Lessons Learned? 8:14 – Structuring the New Entity: Why will Conic Metals Survive? 15:32 – The Ramu Asset & Comments on Ethical Mining 24:59 – Investment Hacks: Who Else are They Invested in and Why? Anyone Else to Look Into? 28:15 – Company Financials: is $5M Enough? 30:38 – Selling the Story and the Future of Conic Metals