Research Capital Initial Results from Midlothian Look Promising
Developing a New "Sub-Camp" to Compliment Crawford
On April 13, 2023, Canada Nickel Company Inc. (CNC) announced preliminary results
from its first four holes drilled at the Midlothian project south of Timmins, Ontario. While
assays remain pending for the holes, the preliminary analyses are quite promising. In
our opinion, CNC is defining a new “sub-camp” of deposits south of Timmins including
Midlothian, Sothman and Bannockburn (see Figure 1). Given their proximity to each other,
these deposits together may one day for a very large-scale nickel operation.
Thin Overburden, Well Serpentinized and
CNC is earning a 100% interest in the Midlothian property through a combination of
exploration expenditures totaling $2.5 million, cash payments totaling $1.05 million,
450,000 shares and an NSR (including a buy-down provision).
CNC has drilled four holes totaling 1,548m for its initial drill testing of Midlothian
which is defined by a 2.7km by 800m geophysical anomaly (see Figure 2). As noted,
no assays have been reported yet for the four holes (MID23-01 to MID23-04), however,
some other important information was reported. The drilling has shown that Midlothian’s
overburden (barren soils, rocks, till, grave, etc. lying above the bedrock) is quite low (~5m),
unlike Crawford which has an average overburden depth of approximately 50m. This
alone is a notable improvement as the overburden must stripped before mining of ore can
start.
All four holes appear to have intersected the right host rocks with strong serpentinization
noted in the holes (the degree of serpentinization correlates with recoverable nickel).
Historical drilling at Midlothian is highlighted by hole LM08-01 which cut 0.24% nickel
over 345m including 42m grading 0.30% nickel.
Also of interest is the significantly higher brucite content noted in two of the holes which
were examined using QEMSCAN. The brucite content ranged between 0.74% and 10.91%
(see Figure 3) compared to the average for Crawford of 1.9%. Brucite is potentially very
important as it is the mineral in these deposit types that can sequester carbon dioxide into
a stable mineral and is one of the key elements to CNC’s net zero carbon strategy. The
higher brucite content may imply that the Midlothian deposit my allow for a much higher
level of sequestration.
A Good Start with Lots of Work Ahead
Although these results are preliminary and the assays will be required to properly assess
the success of the four drill holes, we think the initial results reported are quite promising.
There remains much work to do on Midlothian, Sothman and Bannockburn to determine
the viability of a large nickel mining operation in the future, but in our view CNC has made
a good start. We reiterate our SPECULATIVE BUY rating and target price to $3.25/sh