Guardian Metal Resources PLC Secures Water Rights for Pilot Mountain Project

Guardian Metal Resources PLC (AIM:GMET, OTCQX:GMTLF), a mineral exploration company focused on tungsten within Nevada, USA, has announced a significant milestone in its quest to develop domestic U.S. tungsten production. The company has executed a definitive water rights purchase and sale agreement for Permit 87850 in Nevada's Kibby Basin Valley, adjacent to its flagship Pilot Mountain Project. This strategic acquisition ensures a steady water supply for mine development and ongoing operations, derisking the project and positioning Guardian Metal as a key player in the critical defense metal market.

The water rights over Permit 87850 include production of 1,447.94 acre feet annually and consumptive use of 130.055 acre feet annually for mining, milling, and domestic use per year. With water access points less than 3km from planned mining infrastructure, the Project represents a low-capex option for domestic U.S. tungsten production. The purchase price for Permit 87850 includes US$350,000 already paid and a further US$200,000 payable at completion on or before 31 January 2025.

Oliver Friesen, CEO of Guardian Metal, commented on the acquisition: "Water rights are a crucial requirement for mine development and ongoing operations. When the opportunity arose to purchase the water rights within the basin directly adjacent to Pilot Mountain, we jumped at the opportunity as this represents a significant derisking step for our flagship asset. With these rights now in hand, we push forward with further confidence towards our goal of being the only domestic U.S. miner of the critical defense metal, tungsten."

The acquisition of water rights for the Pilot Mountain Project significantly reduces capital expenditure (capex) required for Guardian Metal's mining operations. By securing water access points close to planned mining infrastructure, the company avoids the costs of constructing and maintaining long-distance water pipelines. Additionally, the purchase price of US$550,000, with US$350,000 already paid, is a fraction of the capex required for building new water infrastructure. This strategic move allows Guardian Metal to focus its capex on other critical aspects of mine development, such as mining and milling infrastructure, while ensuring a stable water supply for operations.

The strategic location of the water rights, adjacent to the Pilot Mountain Project, significantly enhances its feasibility and accelerates the project timeline. The water access points are less than 3km from the planned mining infrastructure, reducing capital expenditure needs for water transportation. Additionally, the availability of existing power infrastructure and well-maintained roads further minimizes development costs and expedites the project's timeline. This acquisition represents a pivotal milestone in developing domestic U.S. tungsten production, positioning Guardian Metal Resources PLC as a key player in the critical defense metal market.

However, the acquisition of water rights by Guardian Metal Resources PLC for the Pilot Mountain Project in Nevada's Kibby Basin Valley could have significant impacts on the local water supply and ecosystem. According to WRI's research, at least 16% of global critical mineral mines are located in areas facing high or extremely high water stress. The Kibby Basin Valley may fall into this category, as it is already experiencing water scarcity and competition among agricultural, industrial, and domestic users. The mining process requires substantial water for separating minerals, cooling machinery, and controlling dust, which could exacerbate water stress in the region. Additionally, waste from mining and processing can contaminate water sources, further straining limited freshwater supplies and potentially harming local ecosystems. Guardian Metal must prioritize water management and pollution control to mitigate these risks and ensure the sustainability of the Pilot Mountain Project.

In conclusion, Guardian Metal Resources PLC's acquisition of water rights for the Pilot Mountain Project in Nevada's Kibby Basin Valley is a strategic move that reduces capital expenditure, enhances project feasibility, and accelerates the project timeline. However, the company must be mindful of the potential impacts on the local water supply and ecosystem, prioritizing water management and pollution control to ensure the project's long-term success and sustainability. As Guardian Metal continues to develop the Pilot Mountain Project, investors should monitor the company's progress and its ability to navigate the challenges and opportunities presented by the critical defense metal market.