Meet the junior nickel-cobalt-palladium exploration and development company,
Canada Nickel Company Inc. (CNC) (
TSX-V.CNC,
Forum), and the man leading the company, Chairman & CEO, Mark Selby.
CNC is advancing the next generation of high-quality, big-potential nickel-cobalt sulphide and PGM projects to deliver the necessary metals for the electric vehicle (EV) revolution and to feed the high-growth stainless steel market.
The Company owns 100% of the Crawford Project – a new nickel, cobalt, palladium, and platinum discovery with large scale potential that is located in an established mining camp adjacent to existing infrastructure near Timmins, in northern Ontario.
Canada Nickel makes a compelling business case for investment. Here is why:
- Initial resource already places Crawford in the top 12 nickel sulphide resources globally, based on metrics used by Wood Mackenzie, with only 20% of the entire structure yet drilled!
- Initial mineralogy test results show 89% of contained nickel is nickel sulphide and nickel-iron alloy minerals within the higher grade section.
- Recently the company established another new nickel discovery in the East Zone and Main Zone of Crawford – thereby doubling the strike length of the existing mineralization to approximately 5 kilometres.
- A separate PGM Zone was also discovered, which would deliver added value from palladium and platinum by-product credits.
- Location, location, location! This deposit is located in a Tier 1 jurisdiction in an established mining camp in northern Ontario, with access to existing power and transport infrastructure, a skilled workforce and low geopolitical risk.
- Crawford is similar to other ultramafic hosted deposits where serpentinized waste rock and tailings can capture CO2, providing the potential for a low-carbon footprint and sustainable mining operation.
- Canada Nickel has a strong balance sheet, recently completing $4.4 million financing in May 2020 to advance their active work program.
- The company is aggressively drilling to find higher grade ore while simultaneously starting the Preliminary Economic Assessment with Ausenco, which is expected to be complete by the end of the 2020 calendar year.
Stockhouse Editorial caught up with Mr. Selby to discuss the exciting news that has been coming from the company and what investors can expect from Canada Nickel moving forward.
SH: To start off, Mark, can you update our investor audience and your Canada Nickel shareholders on any new company developments – especially in the wake of the COVID-19 pandemic?
MS: We own 100% of the Crawford Project, which is one of only a handful of new nickel sulphide projects globally with large scale and multi-decade potential.
Since we commenced drilling in 2019, we have already established one of the twelve largest nickel-cobalt sulphide resources in the world, with less than 20 per cent of the entire structure yet drilled.
We are very well-positioned to advance this project, which we believe will be key to delivering the strategic metals needed to feed the high growth electric vehicle and clean energy storage market. Nickel and cobalt are critical minerals to advanced battery technologies for Li-ion batteries which power EVs. They are also key ingredients for strengthening steel.
As governments around the world look for ways to reignite their economy post-COVID19, there will be significant investments made into domestic infrastructure projects as well as incentives to fight climate change – and the market for electric vehicles is a big part of this.
The world is going to need A LOT more nickel in the near future.
SH: Canada Nickel has been busy, and you have recently announced exciting initial results from your infill drilling on the Main Zone at the Crawford Nickel-Cobalt Sulphide project. Can you walk us through the results?
MS: We are encouraged by the results of our active drilling program, which expanded our nickel-cobalt zones, as well as led to the discovery of multiple platinum-palladium zones.
In June 2020, we announced outstanding results from the first hole in our infill drilling program, which yielded 306 metres of 0.42% nickel and 0.017% cobalt and 0.05 g/t PGMs. Across the entire core length, grades are nearly one-third higher than our average high grade core resource of 0.31% nickel.
Overall a higher grade core of 96Mt of 0.34% Ni including 28Mt at 0.38% was defined within resource. This remains open in multiple directions. This core was previously defined as part of the resource estimate we announced back in February 2020, and dips steeply within the ultramafic unit with a true thickness that varies from 40 to 160 metres. We have drilled 14 holes so far as part of the current infill drilling and assays are pending on a number of them, which we expect to release over the next few months.
This is a fantastic preliminary result that adds further confidence to our belief that Crawford has the potential to be a new world-class Nickel Cobalt Sulphide deposit.
As more assay results become available, we plan to use this information to deliver a resource update by the end of July that we will use in our Preliminary Economic Analysis (PEA) for development of the project, which is scheduled to be completed by the end of the year.
SH: And as a follow-up, your discovery of high-grade multiple palladium-platinum zones in May. This must have been a bit of a bonanza find!
MS: It is a fantastic result – like icing on the cake – to have not only the nickel and cobalt sulphide deposit but also PGM as a value-add for our investors and project.
The additional value we would receive from by-product credits would increase the overall project returns, which we anticipate will be more fleshed out when the PEA is completed at the end of this year.
SH:Nickel continued to have the highest demand growth of the major base metals in both 2018 and 2019. How does this translate into intrinsic stock value for your shareholders?
MS: Nickel was the best performing base metal of the last two years, and I believe that trajectory will continue in 2020 although all markets were temporarily affected with the interruption from the COVID19 virus. We see that some stocks have already rebounded, and we will see others do the same as confidence comes back. We know that macroeconomic factors are something we cannot control but play a role in valuations for companies.
Putting that aside and focusing on what we can control, there still remains substantial upside potential for Canada Nickel shareholders because of our intrinsic value.
We are in the right location.
- Crawford is located in a well-established mining camp with a well-known history of its geology and the area we are in is heavily under-explored.
- Critical infrastructure such as roads, railway, water and power and local skilled labour are already in place.
- And our local stakeholders from residents, business community, local government and First Nations are familiar and supportive of mining boosting the economic viability of the region.
We’ve established a world class resource.
- Nickel and Cobalt Sulphides, as well as Palladium and Platinum precious metals.
- Our maiden resource announced in February after only six months of drilling already sits as one of the twelve largest nickel sulphide resources in the world – and that is from drilling only around 20 percent of the entire structure.
We are well funded and have an experienced management team.
- My team and I know nickel. We have substantial experience working for publicly listed companies in the mining industry and a track record of working on world class nickel projects.
- I was previously President & CEO of RNC Minerals and led the team that successfully raised over $100 million to advance the Dumont nickel-cobalt project in Quebec from initial resource to a fully permitted, construction ready project.
- We are tightly held with strong backing from a number of long-term and sophisticated high net worth individual investors.
- We recently completed in May 2020 fundraising over $4 million dollars, which was over subscribed, which provides us funds to complete the work for the rest of this year and take us to the Feasibility Study stage.
We have an active 2020 year planned with further upside potential.
- We have an active drilling program underway.
- Recently started work on the Preliminary Economic Assessment (PEA) with global engineering firm Ausenco and appointing a Project Director to the company.
- We are working to an aggressive timeline to advance this project with the objective of the PEA being complete by the end of 2020, and then complete a Feasibility Study by year-end 2021.
Canada Nickel is well timed.
- Underinvestment in nickel exploration over the last 20 years means that there are very few new nickel sulphide projects coming online in the near future.
- There is going to be a lack of new supply to meet already strong demand, and that demand will grow further as it is accelerated by substantial requirements from the build of batteries for electric vehicles and also for steel market as governments invest in domestic infrastructure projects to help boost domestic economic recovery efforts following the corona virus pandemic lock down.
SH: Your share price has increased nearly four-fold since it began trading at end of February. What do attribute this big jump to?
MS: Canada Nickel has all of the fundamentals that savvy investors look for, especially those who take a long term view and can see that the EV movement is, and will continue to, gain real momentum now. This, combined with a tight holding from our existing investors, is what has allowed us to realize the value from rapidly advancing our project.
We have established an initial resource that already has the scale potential for attracting a major or an electric vehicle industry strategic partner. And this can grow even bigger - with several highly prospective exploration targets and new areas recently picked up adjacent to Crawford yet to be drilled.
But ultimately it comes down to not only having a sizable resource but also access to the critical infrastructure required for building a viable operation - such as roads, railway, water and power, and local skilled labour. We already have all of these in place.
Now more than ever mining companies need to be mindful that yes, the technical and financial fundamentals are important, but also is a social licence to operate.
For us, our local stakeholders from Timmins residents and the business community, to local and provincial governments and our First Nations stakeholders are all familiar with and supportive of mining as an attractive employer and beneficial contributor to the economic sustainability of the region.
Having only listed on the TSX-V five months ago, Canada Nickel has already delivered significant investor value, but we believe there is still plenty of upside potential as the project continues to be de-risked.
SH: Can you tell our audience a little bit about your corporate management team, along with their experience and innovative ideas they bring to the metals & mining space?
MS: My team and I know nickel. We have substantial experience working for publicly listed companies in the mining industry and a track record of working on world class nickel projects.
I was previously President & CEO of RNC Minerals and led the team that successfully raised over $100 million to advance the Dumont nickel-cobalt project in Quebec from initial resource to a fully permitted, construction ready project.
I have also been a commodity analyst covering nickel for nearly 20 years and was Director of Commodity Research for Inco in 2001 and became VP Strategy & Business Development at Inco in 2015.
SH: What sets Canada Nickel apart from other junior mining companies in this space and what makes your business model attractive to investors?
MS: The similarities that Crawford has to Dumont, and the fact that a number of us on the team are the ones who did the work on Dumont, means we have a track record and knowledge to really target and focus our drilling at Crawford.
We have already proven this by being able to deliver a 900 million ton resource, with over 2 million tons of contained nickel, in only six months. Since then you can see that we have done a considerable amount of further work, despite working safely within the confines of being in the midst of a global pandemic.
With Crawford, our work to date indicates a discovery cost of just over a dollar per ton (US dollars). In a lot of other jurisdictions to drill off a nickel sulfide resource you're looking at $500 to $1,000 a ton.
So in terms of the ability to add value very quickly, we were able to do that because of the experience I had with Dumont and being able to really zero in on what we thought was the highest potential part of the ore body. We will continue to leverage our track record of experience and success to drive this project forward.
And as mentioned above, this project has the potential to be a world-class nickel cobalt sulphide operation at a time when nickel is about to enter another supercycle. Large greenfield nickel sulfide discoveries are pretty rare.
You get one or two per decade. In the '90s, there was Voisey's Bay and Kabanga, which is now owned by Glencore. Voisey's Bay, obviously, traded out at a multi-billion dollar price tag. You had Jubilee Mines and LionOre make some smaller-scale discoveries, which they were able to roll up into a couple other assets to become, again, nickel production of this scale or lower-scale than we would contemplate looking at for Crawford. And those went out at $4 to $5 billion.
A more recent example is Sirius Resources who discovered the Nova-Bollinger deposit in 2012. They were acquired at feasibility study stage for $1.8 billion dollars Australian just three years later in 2015. That was not during a strong market and yet and that's the kind of evaluation that it went out for because there was a scarcity of developable nickel sulfide opportunities in a lower risk jurisdiction with the potential to meaningfully move the dial in terms of EBITDA and revenue for a mid-tier or major company.
Investors have upside potential with Canada Nickel through our plan to further unlock valuable here. We will continue to build up the resource and complete the PEA and Feasibility Studies in our plans to develop a multi-decade, multi-expansion type operation. I think for investors getting in here, the next set of activities will, one, demonstrate what the economics of this project could look like and, two, really give people a sense of what the scale of Crawford could ultimately look like.
Both are going to be very exciting.
SH:And finally, Mark, what can you tell our investor audience regarding revenue traction the current valuation of your stock and why it’s a good value buy right now?
MS: We have an active 2020 work program that will deliver steady news flow to the market as we achieve project milestones over the coming months.
We will continue to aggressively advance Crawford, beginning a scoping study which is scheduled to be completed by the end of this year and a Feasibility Study which will be completed by year-end 2021. Regional exploration on the broader property will also continue.
Specifically, over the coming months we expect to be announcing:
- A series of drilling results as we look to explore further the 8km structure, with the objective of demonstrating the large size and scale of the nickel-cobalt deposit and continuing to define and extend the recently discovered palladium-platinum PGM zone.
- Simultaneously, we will continue our mineralogy and metallurgical test work to confirm the nickel, cobalt, palladium and platinum recoveries.
- We are completing a Preliminary Economic Assessment study with Ausenco by year end 2020 and then look to start a feasibility study at the start of 2021.
SH:Thank you, Mark. It certainly sounds like exciting times ahead for Canada Nickel Company and your investors!
For more information on Canada Nickel, visit their website and subscribe to get updates from the company here:
https://canadanickel.com/ and follow them on Twitter and LinkedIn.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.