GnuckyT wrote: I've been in for a while got in at about 1.50 and averaged up to 2.45. I hope I'm wrong and posteres here make money but will only jump back in until the following are addressed. Essentially the reasons I sold are as follows:
1. No evidence that this is a viable mine at .3 There is no other miner involved in deposits like this one.
2. What technology will be used to make this profitable? What are the costs for per KT?
3. Ultimately, are miners going to involve themselves in the near future on a deposit that will take years to recoup investments and where nickel prices may come down again.
https://www.mckinsey.com/~/media/McKinsey/Industries/Metals%20and%20Mining/Our%20Insights/The%20future%20of%20nickel%20A%20class%20act/The%20future%20of%20nickel%20A%20class%20act.ashx
Thank you for posing this. Some points jumped out at me. There are a number of risks I'm comfortable with and others are deal breakers. The deal breakers can be answered through research but so far haven't been able to address these: 1. Changes in the EV industry have been and continue to be fast paced where today’s understanding and how the industry actually evolves most likely will continue to evolve in unexpected ways as there are many questions. Risk I'm willing to accept but the longer CNC takes executing the more risk you incur.
2. New disruptions include changes in battery technology that are different to today’s leading technologies/chemistries whereby nickel use may be limited or not used at all. Risk which I'm willing to accept.
3. Government regulations may impact use of nickel. BYD has not been using nickel due to regulations set by China. These regulations may have been relaxed recently and may change this for BYD and other Chinese companies but this remains to be seen. Possibily positive.
4. Consumer preference in vehicles may be a factor in vehicles and battery types that will be in demand (nickel batteries or nickel free batteries). Acceptable risk.
5. Cobalt which is required for nickel batteries available at this time is experiencing a shortage and there are no indicators that this will improve in the future. Cobalt is expensive making some nickel battery options not viable and making the lithium nickel free batteries used by BYD, Nissan and Ford more viable. Acceptable risk.
6. Shifting production from nickel cathode to low yielding mines using nickel sulfate or refining nickel intermediates at this point seem unlikely due to the prohibitive costs. I’ve exhaustively searched for companies with low yielding nickel-sulfate deposits of .3 that Canada Nickel assays have reported and could not find any. BHP has a mine in Australia that has over 100% greater nickel sulfate yields compared to Canada Nickel and their mining costs are high. Deal breaker need to confirm otherwise.
7. Given the price collapse nickel experienced years ago companies are reluctant to invest in mines with class 1 nickel cathode or the class 2 mine involving nickel sulfate. Deal breaker.
8. Technology breakthroughs are needed to make now yielding nickel sulfate deposits viable. What are these technologies that can be used at Canada Nickel? What are the names of these companies? Where have they been used and what is their track record of results? Have not been able to determine this. Deal breaker need to see this successfully implemented elsewhere.
9. Recycling capacity may impact nickel demand in the future and over a long term basis. Investments in recycling technologies warrants further research. Acceptable risk.
10. Class 1 nickel cathode from high yielding mines with high dissolvability is the ideal for the processing of nickel. Canada Nickel is a Class 2 low yielding mine and its unknown whether companies will invest in low yielding deposits because it may take many years before profits are realized. Given the considerable volatility in changes in battery preferences and which battery chemistry dominates and whether its nickel-free unlikely investments will be made soon.
11. There are five main chemistries with new ones emerging for batteries. This include: Lithium Cobalt Oxide, Nickel Manganese Cobalt, Lithium Nickel Cobalt aluminum, Lithium Iron Phosphate and Lithium Manganese Oxide. For Canada Nickel to work out the Nickel Manganese Cobalt and Lithium Cobalt Aluminum needs or other nickel chemistry needs to be scaled broadly. For this to happen Cobalt prices need to go down considerably. No indications that this will happen. Also there are advantages and disadvantages to the Nickel based chemistries and as different automakers use different chemistries car model preferences may make nickel-free batteries more popular. BYD is a leader in the nickel-free battery space and has the Chinese and international market to grow in. The selection of the battery chemistry was based on the energy density, vehicle range, safety, battery durability and availability and pricing of required materials such as cobalt and nickel.
11. Low yielding deposits like Canada Nickel require high costs to purify which makes it cost prohibitive. BHP in Australia West is a nickel sulfate mine with high processing costs. They also have over double the yields that Canada Nickel has. Non-ferrous deposits may be a contender in the future as well but this remains to be seen. Sulphide deposits have processing costs that cost between $30,000 to $40,000 USD per metric ton.
12. According to the report sulphide deposits have been depleted requiring new exploration.
13. Complex laterite ores like in Africa cost $90,000 US processing costs per ton. Why did BHP overlook Canada Nickel and set their eyes on Africa? Obviously even though costs are high in Africa could it be that Canada Nickel costs in its own backyard are more costly making it worth taking on additional geo-political risks in Africa?
14. The report states that miners already face significant start up costs to mine any deposit let alone the low yielding ones like Canada Nickel. They may be interested but this may take a number of years before they are. BHP West invested $43.5 million which may take years to recuperate and that was a higher yielding deposit.
15. Solid state batteries have potential to displace nickel in the upcoming years. Why would a miner invest in a now yielding deposit where a long term timeline is needed as there exists this threat in the long term?