Recently I featured 20 gold mining companies to keep an eye on as the market turns in favor of gold. Well, today my focus is on Nickel. Many industry leaders and professionals are predicting supply and demand issues in the coming years and I believe we are on the verge of seeing the nickel market heat up. One of the key aspects to consider is the Electric Vehicle market.
The battery market only consumes 3 percent of the available nickel but that figure is set to grow substantially. Some projections are forecasting that by 2025 there will be more that 140 million EV’s on the road, and by 2030 that number could double as the industry is leaning towards batteries with a higher nickel concentration as they tend to last longer. This makes EV’s a more attractive option to consumers and acts as an incentive to make the transition.
Before I get into junior miners that offer exposure to nickel we must first discuss the classifications and their uses within their respective industries. There are two types of nickel, Class 1 (sulphides) and Class 2 (Laterites).
Class 1, Nickel Is used in the manufacturing of Lithium ion batteries as it is a higher grade and concentration, which is perfectly suited to the process. Over the next 5-10 years demand will exceed the current production capacity of nickel sulphide deposits.
Class 2, Nickel is an ideal low-cost source for the stainless steel industry. Nickel laterite deposits are, in relative terms, abundant and located at shallow depths which makes them easier to mine.
According to the U.S Geological Survey, National Minerals Information Center
“Nickel is primarily sold for its use as refined metal (cathode, powder, briquette, etc.) or ferronickel. Around 65% of Nickel consumed by the Western world is used to make austenitic stainless steel , 12 % goes into super alloys used in aerospace engineering and combustion turbines like those found in electric power generation stations. The remaining 23% of nickel is divided between alloy steel, batteries, foundry products, and coinage amongst other things.”
Today the impact of the EV market is small in comparison to stainless steel, but future demands will play a significant role in not only the price of Nickel in my opinion but also in the economy, from the perspective of creating jobs and helping the environmental issues we face today. The demand for clean energy is on the rise in North America, while Canada is a leading producer of nickel and still has deposits that are relatively untapped.
According to the U.S. Geological Survey, Mineral Commodity Summaries
“In recent years, production of refined nickel decreased due to the fact that stainless steel producers in Asia shifted to lower cost nickel pig iron. So while mine production in countries that supply direct shipping ore to nickel pig iron operations increased, mine production supplying refineries tended to decrease. However, production of nickel chemicals nickel sulfate used in the production of batteries has increased.”
In light of all of this Nickel has been gaining strength of late and looks to be on the rise after hitting record lows in December of 2018 and has recently broke the 6 dollar mark as supply and demand outlook remains positive for future nickel prices.
There are many reasons for this as the uses for Nickel are staggering on a global scale and some of the largest nickel mines in the Philippines have recently shut down creating a bit of volatility in the spot price. However, nickel seems to be in a steady uptrend while world stockpiles have been on the decline
RNC MINERALS INC.
Rnc Minerals Inc is currently focused on their gold assets in Western Australia but has long held a stake in the world’s largest undeveloped nickel sulphide deposit. The Dumont property is a joint venture operation between RNC Minerals and Waterton and they hold a 28% stake in the property. As the managing company they have recently completed a second feasibility study that showed how Dumont would be an economically viable resource.
From their latest news release, Mark Selby is on record saying…
“With the filing of the positive feasibility study, RNC, with our partner Waterton, are well positioned to accelerate discussions with potential partners to advance the Dumont project towards construction. Once in production, Dumont will be one of the largest base metal mines in Canada, one of the top five sulphide nickel producers globally, and one of the only large scale fully permitted nickel-cobalt projects that can begin to satisfy the significant growth in nickel and cobalt demand driven by the electric vehicle sector.”
Dumont 2019 Feasibility Study Highlights1
- Large scale, low cost, long-life
- Initial nickel production in concentrate of 33ktpa ramping up to 50ktpa in Phase II expansion – production of approximately 1.2 million tonnes (2.6 billion pounds) of nickel in concentrate, over a 30-year life with an initial capital expenditure of $1.0 billion.
- Phase I C1 cash costs2 of $2.98/lb ($6,570/t). Life-of-mine C1 cash costs2 of $3.22/lb ($7,100/t Ni) and AISC of $3.80/lb ($8,380/t) of payable nickel (low 2nd quartile of cash cost curve)
- Significant earnings and free
cash flow generation support strong project economics
- $920 M after-tax NPV8% and 15.4% after-tax internal rate of return (“IRR”)
- Estimated annual EBITDA ramping up from $303 million in Phase I to $425 million in Phase II and averaging of $340 million over the life of project. Free cash flow averages $ 201 million annually over the 30-year project life
- Top tier mining asset in
- 2nd largest nickel reserve in the world of 2.8 million tonnes (6.1 billion lbs) contained nickel and 9th largest cobalt reserve with 110 thousand tonnes (243 million lbs) contained cobalt
- Once in production, a top 5 nickel sulphide operation globally, a top 3 Canadian base metal asset, and one of largest battery metal development projects globally
- Fully permitted, construction ready project located in Abitibi region in Quebec – one of world’s leading mining jurisdictions
- Impacts and Benefits Agreement successfully negotiated with local First Nation
The Study has also identified opportunities to significantly increase the return of the project:
- Implementation of autonomous truck fleet
- Larger-scale initial project phase of 75ktpd
- Sale of magnetite by-product
I believe this may be the top investing opportunity in the market for exposure to Nickel given its recent success in WA and the increasing demand for Nickel. As icing on the cake, their gold mining operation in Kambalda is actually a historic nickel mine which produced grades as high as 4.2% and still has opportunities to exploit that resource while they focus on the gold resource below the nickel. To date RNC has increased their gold resource to 1 million ounces M&I and looks to be heading towards a 100,000 ounce producer anually.
-Possible spin out of the Dumont
-announcement of joint venture to get the project underway
-Nickel spot price on the rise
-Any number of announcements from the Beta Hunt mine covered in the Golden Opportunities article
Company Website http://www.rncminerals.com/
NOBLE MINERAL EXPLORATIONS INC.
Noble Mineral Exploration Inc. is a Canadian-based junior exploration company holding in excess of 79,177 hectares of mineral rights in the Timmins/Cochrane area of Northern Ontario, upon which it plans to generate joint venture exploration programs. The Company also holds a portfolio of securities in its joint venture partners plus a gold-streaming and royalty interest in the Wawa-Holdsworth Property. The Company is focused on seeking Joint Venture Partners to further expand on all its exploration and development programs.
Noble signed a letter of intent that, upon implementation, would result in the net smelter return royalty interest on the approximate 52,000 Ha of patented mineral rights of Project 81 property being reduced from 5% to 2%. In hopes of attracting joint ventures to the incredibly large land package directly north of Kid Creek Mine, which has produced in excess of 160mm tons of high-grade base metals but have yet to announce the closing of this deal.
In the mean time they have a joint venture drilling the Crawford Township with Spuce ridge which I will cover in the next segment. Through the use of Albert Mining’s CARDS technology they identified 4 targets which produced similar numbers to the Dumont property. While they still have a lot of drilling to do to find out how big the system is and whether it is feasible, the initial metallurgical results look promising.
Vance White of Noble said…
”We are very pleased with the results that Spruce has reported and in particular the core lengths containing consistent mineralization on this massive anomaly located within easy access from Highway 655, just north of Timmins, Ontario. The mineralogy results to date are very encouraging. We feel the Crawford Nickel-Cobalt project could contain significant tonnage and is close to existing infrastructure including the Kidd Creek milling complex. We look very much forward to Spruce advancing their exploration program as we continue to source additional Option and JV Partners for our extensive 79,000 ha holdings”
The property was owned by a logging company for almost 100 years and saw little to no mining activity while the rest of the Timmins area was drilled into Swiss cheese so to speak. In hopes of finding the satellites of the Kid creek deposit, Noble did a range of geophysical work and identified many interesting targets of VMS, Gold, Nickel and copper as can be seen in this area map of identified targets.
As you can see there are 7 Nickel targets on the property and the land is near local infrastructure which could accelerate the project as they prove out the discoveries. I could go on for hours with all the grades and developments on this one but I think it’s best if you look at the company presentation to fully understand the scale of this project. While Noble Minerals should be viewed as a long term hold, the multiple other minerals found on the property align with optimism that further exploration will unlock several resources which may be viable given the regions track record of success. I highly recommend reviewing the presentation very carefully.
-Closure of the NSR agreement
-Joint Venture announcements
-Drilling campaign results (private company rumored to have drilled off the Crawford township next to Kid Creek)
-Spruce ridge 2019 drilling plans
SPRUCE RIDGE RESOURCES
Spruce ridge completed their winter drilling campaign early this year after Identifying drilling targets using geophysics and with the help of Albert Mining’s CARDS system to compile the data, they shrunk the target size of the property down to within 5% thus allowing Spruce ridge to focus their drilling efforts in a far more efficient manner than what they would have had they not had access to this revolutionary AI tool for mining exploration.
Spruce ridge announced the results on March 1st of their 2018 winter drilling campaing and they were encouraging. Four holes totalling 1,818 metres were drilled on the Crawford Ultramafic Complex. Three of the holes intersected serpentinized dunite with persistent nickel values greater than 0.25% Ni over core lengths of up to 291 metres. Using a lower threshold of 0.20% Ni, long intervals are present in all four holes, with a maximum core length of 558 metres. Individual samples of 1.5 metre core intervals reported up to 0.669% Ni. Potentially significant assays of cobalt, platinum and palladium were also reported.
Metallurgical work was recently performed on the drill cores and John Ryan of Spruce ridge had this to say…
“We are very encouraged by these preliminary results which suggest that a significant portion of the metals contained in this deposit may be recoverable by conventional metallurgical processes. We will continue to explore and evaluate the Crawford ultramafic complex, which is 3.8 kilometres long and 1.9 kilometres wide. So far, we have barely scratched the surface.”
Some of the Crawford Township highlights are as follows
-Crawford Township Property contains a total of 17 discrete HTEM conductor trends. Some of which are very continuous and some which are discontinuous (not present on every line but having the same strike direction). There are both Cu-Pb-Zn and Ni-Cu-PGM trends to consider.
-Trend 15 is a good example of Cu-Pb-Zn potential. The trend has a strike length of 2.2km and was tested with only one drill hole by Canico back in the 1960’s– Drill hole25049 intersected 0.46% Zn over 8.7 feet
.-Trend 7, is another example that covers a strongly magnetic feature that is likely a very large peridotite intrusion. This anomaly was never directly drill tested, but nearby drilling encountered over 1,500ft of mineralized host rock grading up to 0.4 % Ni (NI-CU-PGM Potential)
-Trend 9 is an east to west conductor, located in the SE corner of The Crawford Township Property and has a strike length of 1.1km. The best part of this anomaly was not drill tested. Drill holes 25073 & 25074 tested the eastern margin of this anomaly.
-Proximity to local infrastructure
What we haven’t touched on is that they have multiple other projects on top of the Crawford township that add further value as the nickel exposure is only a piece of the puzzle for this ambitious exploration company. Go check out their other projects on their website. The link is at the bottom of this summary.
–2019 exploration drilling campaign
-ongoing metallurgical testing results
-potential for a very large and viable deposit
Balmoral Resources limited
Balmoral Resources is a multi-award winning Canadian-focused exploration company actively exploring a portfolio of gold and base metal properties located within the prolific Abitibi greenstone belt. The Company’s flagship, 1,000 km2 Detour Gold Trend Project hosts the resource stage Bug and Martiniere West gold deposits and the Grasset nickel-copper-cobalt-PGE deposit. Employing an aggressive, drill focused exploration style in one of the world’s preeminent mining jurisdictions, Balmoral is following an established formula with a goal of maximizing shareholder value through the discovery and definition of high-grade, Canadian gold and base metal assets.
Back in March Balmoral ran a private placement for 2 million dollars in order to fund their 2019 exploration program. Results have been coming back from their exploration efforts from 2018 and so far they have identified several areas of interest and have returned promising results on several prospective properties. The Abitibi green belt is a historically rich area for base metals and gold discoveries which is in part why I like this company. Let’s have a look at some of their projects and the planned activities for the summer campaign.
Grasset and Grasset Central Ni Deposit
Geophysical work on the property will be taking place this summer in order to expand on their drilling from last year in order outline potential extensions to both the recently discovered Type-1 high-grade nickel-cobalt sulphide zones and the very broad, near-surface disseminated nickel deposit. So far 2 nickel sulfide systems have been discovered and drilling will commence during the winter once the conditions allow to get started.
3G Nickel Properties
They recently completed airborne surveys of the area and have provided the company further support for their geological model. Two EM anomalies were identified, each stretching for several hundred meters. This series of recently discovered nickel sulphide occurrences in the Gargoyle Lake area of the Gargoyle property have kicked off a summer surface exploration campaign prior to an initial dilling campaign.
RUM Nickel project
Ongoing exploration on the property will be targeting high-grade, near surface nickel-copper-cobalt-PGE mineralization similar to that at the nearby Lac Rocher nickel deposit as a follow up to the recently announced (April 25th) high resolution airborne magnetic/EM surveys. Geological models developed from the Lac Rocher and Lynn Lake nickel-copper-cobalt deposits in Canada, as well insights from recent nickel sulphide discoveries in the Lapland belt of Finland, have focused the Company’s attention on this underexplored region of Quebec. The goal is to have individual targets ready for drill testing by the fall of 2019.
This article is focused on Nickel but it is important to note that Balmoral controls The Martiniere Property which is the largest land position on the Sunday Lake Deformation Zone (“SLDZ”) within the Detour Gold Trend Project. Located 45 kms east of and along the same geological trend,the nearby Detour lake Gold camp hosts a Proven and Probable Reserves of 498.4 Mt @ 0.96 g/t gold for 15.4 million ounces at a 0.50 g/t cut-off grade. The area they have focusing on bears a great resemblance to the Detour Lake area. So you can understand why this is worth the mention. The company’s initial estimates released in March 2018 outlined a resource of 591,000 ounces in the indicated and 54,000 ounces inferred split 73%/27% between open pit and underground resource.
Other notable properties include
-The 46% owned Northshore Property in Ontario with over 1 million ounces of gold
-The 100% owned N2 Property with 800,000 ounces
-The 100% owned Grasset Gold Zone
-Results from summer exploration on multiple properties
-Announcement of the 2019 drilling program
-Rising demand for nickel supply and rising spot price in both gold and Nickel
FPX Nickel Corp.
FPX Nickel is a Vancouver-based junior nickel mining company developing the large-scale Decar Nickel District in central British Columbia. Decar hosts the PEA-stage Baptiste deposit, which has the potential to become one of the largest nickel mines in Canada. The Decar Nickel District, which is the company’s flagship nickel property, is a greenfield discovery of nickel mineralization in the form of a naturally occurring nickel-iron alloy called awaruite. It represents a promising target for bulk-tonnage, open-pit mining. This deposit contains little or no sulphides, meaning it has little or no capacity to generate acid mine drainage. Initial metallurgical test work demonstrates the nickel-iron alloy is recoverable using conventional two-stage grinding and magnetic separation, followed by gravity concentration – and does not require chemical reagents thereby significantly reducing another potential environmental impact.
Four targets (Baptiste, Sidney, Target B and Van) have been identified at Decar from surface samples taken at 50- to 200-metre intervals where the alloy was recognized in outcrop and confirmed by proprietary selective assaying procedures. The nickel-iron alloy is assayed by Acme Analytical Laboratories Ltd. (an ISO certified laboratory) using a selective extraction process that dissolves only the nickel present as nickel-iron alloy, without dissolving the nickel that is locked within rock-forming silicate minerals. Following independent studies to evaluate the reliability of this alloy-specific analytical method, it has been certified by Smee & Associates Consulting Ltd. This assaying procedure is proprietary to FPX Nickel and provides the Company with a significant advantage, not only in evaluating the Decar Nickel District, but also in exploring for other nickel-iron alloy targets world-wide.
In February the company announced that the metallurgical testing achieved meaningful improvements over the results of previous metallurgical test work used as a basis for the Project’s 2013 preliminary economic assessment (“2013 PEA”), demonstrating significant increases in estimated nickel recovery and final concentrate quality, using conventional processing technologies.
- Conventional flowsheet based on grinding, magnetic separation and flotation processes
- Consistent production of nickel (“Ni”) concentrates with improvements in grade and recovery, versus 2013 PEA projections, as shown in Table 1 below
- Consistent production of iron ore concentrates grading up to 64% iron (“Fe”) content, the first successful generation of a potentially commercial by-product in the Project’s testing history
A comparison of the results of the 2019 metallurgical test program with the assumptions in the 2013 PEA
Overall, this isn’t an overly active company but as far as juniors go they have very interesting nickel deposits and while it may not be ideal for the EV market, there is still a massive demand for lower grade nickel for the stainless steel market as supply runs short and demand becomes higher.
-Rise in the price of nickel
-Continued metallurgy in order to optimize the value of the Decar property
This article was meant to focus on junior mining companies with potentially large untapped resources in Canada that have potential future growth in an environment where Nickel spot price is increasing due to demand. As Nickel is considered by many to be the equivalent to petroleum for EV’s, it’s a matter of when not if the EV market will take hold and we see Nickel’s true value reflected in the Market.
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Disclosure: We hold a position in RNC but are not paid to provide any Marketing services.
Disclosure: We hold a position in AIIM and they are a client of Insidexploration, However this was not a paid service as they played a role in both the NOB and SHL discovery.
Disclosure: This article was not sponsored or a paid service and are the views of the author. This article may contain forward looking statements and should not be considered investing advice as we are not financial advisors. We recommend seeking professional advice prior to making any investing decisions and always complete your own due diligence.