Canada Nickel Company Inc V.CNC

NI for batteries, inventories, prices, & mining projects

[caramba71]

This is gonna be a bit lengthier.... Link at the bottom.

Very interesting interview by Rock Stock Channel with Matt Farnley - a professional investor and author @ batterymaterialsreview.com.
At around 12:20 it starts going into the specifics about NI-resources, chemistries, prices and investment opportunities, including mentioning of CNC.

Definitely worth listening to and a must in case you have any doubts about CNC ;-)

If you don't want to listen to the 35 minute clip, here is a recap:

General
- LFP and NMC (Ni-based) batteries will both have their markets, latter one more for higher range, LFP for mor urban focused EVs - in particular in Europe
- There will be resource bottle necks for both battery types
- LFP:
  - Environmental challenges with Phospohoric Acid batteries,
  - substantial pinchpoints for phosphate rocks and sulphuric acid (e.g. transportation, elemental composition needs to be right for wet production process)
  - iron phosphate prices rising quickly, negating the relative price advantage of LFPs
  - Much higher energy consumption in the production process compared to NMC
  - There is also a disavantage in the recycling process (less efficient and less recovery)
  - From discussions with all the major EV OEMs, it's obvious that there is no intention to move away from high-nickel cathodes
- LIP: Lithiom Iron Phospohate Battery Production is also facing a substantial bottle-neck due to the special iron required (either as a steel or titantium by-product) so NOT necessarily available in abundance


Nickel for batteries:
- There is a lack of understanding (or for better words complete misconception) amongst investors how important NI is in the energy transition
- Matt: "Of the battery materials, Ni is the one that excites me the most"
- First super-cycle peaked ~2007 with NI hitting $50,000 (compare that to the $~24,000 today), after that collapsed due to the new NI pig iron (which is lower class-2 Nickel) and the financial crash.
- Class 2 Nickel is simply not a suitable source for battery grade Nickel
- For batter-type Nickel (Class 1) you need to use a complex carbon intense NI pig iron conversion process and turn that into NI sulphate (which is done by chinese TsingShan). VERY energy intense!
- What most long-term investors don't understand is that batteries require a very tight NI-based chemistry with a low margin-of-error, so we are not talking about Ni as a commodity but a Ni speciality chemistry.
- E.g. For FE content, a 10 parts-per-million delivered versus a 3 ppm specification makes a huge difference in batttery performance.
- Purity of Nickel is now even more important due to abandoning Cobalt as a stabilizer.

Nickel mining projects (requirements for batteries)
- Based on above, there will be much more focus on material specifications to determine the true value of a resource with ridgid qualification processes in place.
- Qualification processes run by battery/cathode manufacturers will require mines to produce at least 1-5 tons to prove consistency and high-quality.
- Several steps involved in the qualification process:
-- testing materical specifications
-- cathode performance testing
-- pilot & demonstration plant
-- cell performance testing
- process takes about 2 years

Nickel inventories and prices
- Lots of interesting points here - apapas will love this!  Inventory levels to fall further (demand increase and less-than-expected output from Indonesia's HPAL processes).
- If inventory stock levels further fall (to 7-8 days), NI price could double.
- This could happen in the next 6-8-10 months
- So there is a ton of upside for Nickel at the moment.

Nickel Jr.Mining companies
- Scoreboard is showing CNC. Thinks low-grade Ni-Sulphite sources have very good potential because they usually have also the other metals in there.
- preference is for Ni-Sulphite not laterites
- high-grade Ni-Sulphite are usually underground, fairly small, highly profitable but with a relative short life-cycle hence not very compelling for the majors.
- So, high-grade Ni-Sulphite are more of a niche (e.g. Western Areas in Australia) as majors (like BHP) are looking for >20-30 year mine life with high ebitda.
- Then talks about Talon as an exmaple and the straight-forward process of producing the NI concentrate required for EV.


IMO: CNC ticks many of the boxes to be attractive for a major: long life, straight-forward process, reasonable cap-ex with long-term ebitda that will have a big impact on someones profits.


And here is the link:


https://www.youtube.com/watch?v=8nxg5qV1_Hk



GLTA

[EndZonefor7]

Thanks caramba, awesome post ! Lotsa meat to chew on there. Nickel to possibly double within a year would be an epic supercycle moment.

[Rm90090]

Fantastic post! Great video - and great summary. Large scale low grade nickel with mine life's of 20-30 years that develop a few hundred million EBIDTA a year is what Majors are looking for. CNC fits this bill.

[apapas1973]

Good video Caramba...Yeah it looks like we may be undercutting the 2020 lows in nickel inventories. I've stopped posting LME inventories cause it looks like we're going to zero. Lol.

[EndZonefor7]

Like the line " If there is profitable low grade copper mines in South America then why not low grade nickel sulphide mines? " Exactly what we've been saying.  Good point on the majors wanting large scale, low cost and economic low grade deposits. Mark has been saying this for ages. The major can get in for a couple of billion and make money for 30 years through bull and bear

[caramba71]

Seems like there is a chance that the nickel price will be on parabolic curve soon. Also, I think the partnership will pave the road for the complex certification process with the oems. Lots of work in front of the CNC team.

[caramba71]

Couldn't resist to re-post this, as there will be a lot of folks getting interested in CNC.  Also, check that price prediction in the second half of the post. I guess the doubling of the price of NI didn't take that long. ======================