Voyageur Pharmaceuticals (CVE:VM) How Barium and Iodine are Used to Help the Health Care Industry

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Voyageur Pharmaceuticals Ltd (CVE:VM) CEO Brent Willis joins Midas Letter to discuss how the company are helping the medical industry by developing Active Pharmaceutical Ingredient (API) minerals. Barium and iodine reflect radiation and help with diagnosing problems in the human body when used in conjunction with imaging tests like X-rays. Mr Willis discusses Voyageur’s barite projects in BC, Canada and its Iodine & lithium brine projects in Utah USA to manufacture their materials. Voyageur are developing its industrial grade barite deposit while developing barium contrast suspension products for the pharmaceutical industry.  The company has coined the term “from the earth to the bottle” and believe they have the lowest ingredients cost in the industry, allowing for a competitive advantage.

Transcript

James West: Our next guest is Brent Willis. He’s the president and CEO of Voyageur Pharmaceuticals, trading on the TSX Venture under the symbol VM. Brett, welcome.

Brent Willis: How are you? Thank you for the opportunity, I appreciate being on your show.

James West: You bet. Brett, let’s start with an overview: what is the business of Voyageur Pharmaceuticals?

Brent Willis: At Voyageur Pharmaceuticals, we’re focused on radio contrast products for the health care industry based on barium and iodine minerals. And we are moving forward to fully integrate from mining to the bottle, getting it out to pharmaceutical industry, and becoming fully integrated. We coined the term ‘from the earth to the bottle’, and by doing so, we believe we have the lowest ingredients cost in the industry, allowing us to be very competitive moving forward.

James West: Global marketplace like for barium and iodine?

Brent Willis: It’s roughly around $7 billion a year. We’re focused on North America to start our project, which is around 1.6 billion a year for iodine and barium contrast.

James West: Okay. And so tell me abut the projects where you’re going to mine these substances?

Brent Willis: Well, our barium resources are in BC, and our iodine resources are in Utah.

James West: Okay, so barium and iodine don’t occur in the same mineral deposit?

Brent Willis: No, so barium is hard rock; you know, I have a sample here of barite. It’s white, it’s environmentally friendly, it’s hosted within a dolomite – you can see the dolomite on the side – and we just crush it, and gravity separate it, and it comes into a small chunk like that and gets shipped to a milling facility and is turned into a powder, which goes into a bottle of barium contrast.

James West: Okay, so, a lot of people don’t really know what is barium and iodine used for in the pharmaceutical industry.

Brent Willis: Well, with barium and iodine, they reflect radiation. So they’re used to contrast within the body, let’s say you’re looking for a tumour or have heart issues; barium contrast is taken, is swallowed or with an enema, and iodine contrast is injected. So we have injectables with iodine, and oral consumables with barium sulphate.

So, a lot of people recognize it as what’s called a barium swallow; a lot of people have taken barium swallows for throat issues and problems in the stomach.

James West: Okay. So what point of development are you at in these deposits?

Brent Willis: Well, our Frances Creek deposit, we drilled that in 2017. We defined a resource; we have approximately 62,000 tonnes of barium sulphate that is indicated, and another 69,000 tonnes that’s inferred. And to give you a rough idea for our contrast business, 60,000 tonnes would be a 30-year mine life. So it’s a very high-margin business, and you don’t need a lot of it.

What’s very unique about this is, the purity of this deposit. We believe it’s the highest grade deposit in the world; we just verified that with testing with SGS minerals, which came back with over 90 percent barium sulfate content within our barium, which is very significant in this business.

James West: I see. And what does the supply picture look like globally for barium and iodine, at this point?

Brent Willis: Well, on the barium side, there’s only one supplier of natural occurring pharmaceutical grade barium, and that’s out of China, and they’re only allowed to export five percent of their production worldwide. So we’ll have the only natural barium sulphate deposit outside of China. 

Our competitors, the majority of them are buying manmade, what’s called barium precipitate or blank fix; it’s very expensive product, and on the iodine component of it, it’s, iodine is – there’s an abundance of iodine; it’s easily produced from bine water, and there’s producers out of the United States that we have access to begin our project by buying iodine flake. And how it works is, iodine flake is then turned in to what’s called iopamidol. And we’re looking at building an iopamidol plant, which will allow us to be highly competitive in that business, as well.

So we are looking at producing our own iodine, and just as we’re producing our own barite. So we are fully integration on both products, and we can start both projects by importing third party minerals and begin cash point prior to getting our mines up in production.

James West: I see. And when do you expect the mines to be in production?

Brent Willis: Within the next two years is our goal. We should be doing a bulk sample on our barite project next year, which will supply us with a number of years of supply for our contrast business. And with the iodine, we’ll be moving that forward over the next two to three years, and those are the kind of the timelines on actual production.

James West: Sure. All right. And tell me, how much do you need to get, how much CapEx do you need to get to production on both these projects?

Brent Willis: Well, the CapEx on the barium sulphate side is roughly between 8 and 12 million. We’re working with SGS Minerals currently; we’re doing a preliminary economic assessment that should have all the CapEx information for us within the next six months. And upon finalizing the engineering on the project, we’ll be moving forward with the financing to raise the CapEx for that.

So relatively, it’s a simple project, it’s, you know, it’s not like a gravel pit, so to speak; it’s going to be a quarry, not a mine on the barium, so it’s a very low CapEx with high margin.

James West: Sure. Okay, and on the iodine side, what’s the mineral mining technique you anticipate?

Brent Willis: Well, on the iodine, iodine is produced from brine water, saltwater brines, and it’s one of the easiest minerals to extract from a brine water. A CapEx on a 200-tonne-a-year blow down iodine plant is roughly between $3 million and $4 million USD for a plant, and then to build a iopamidol plant, that is, we’re currently working with an engineering company out of the US. It’s just, when you start looking at that, our estimates are around 50 million for an iopamidol plant.

James West: Uh huh. Okay, so I’m curious as to – I mean, there’s such a small source of supply for barium. Are there other deposits in the world? Like, I’m just trying to get a sense of the potential competitive landscape in the future, if barium actually finds itself in short supply.

Brent Willis: Well, there’s a lot of barite in the world, but it’s a matter of finding barite that is pure. The purity for pharmaceutical, for a human being to ingest it, the metal content has to be extremely low, and barium sulphate is associated with base metals. So the Frances Creek deposit is very unique in that it’s very clean.

You know, my brother and I, we’ve been in the barium sulphate business for over 30 years; we’ve looked at all the deposits in Western Canada, we’ve been around the world looking at barite, and we’ve never seen a deposit that is so uniquely clean. There’s no mercury, there’s no arsenic, there’s no – there’s very clean deposit.

James West: Uh-huh. Well, that’s great. And it strikes me that these are not exactly household words; is the reception among the institutional investor marketplace pretty positive for this type of thing, or is it something that you have to educate before they actually are willing to invest?

Brent Willis: Well, it’s definitely a challenge when people have never heard of the term barium sulphate or barite or barium contrast, or iodine contrast. But once people understand the market and our full integration plan, all of a sudden they start really understanding that this is a great opportunity, and we have a lot of upside moving forward.

James West: Okay, great. Brett, we’re going to leave it there for now. I wish you the best of luck on your development, and I’ll look forward to following the story. Thanks for joining me today.

Brent Willis: Thank you for your time. Thank you very much.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.