Canadian nickel junior targets market ‘window’

Staff reporter

‘Projects like this with a negative carbon footprint are a massive attraction’

Canada Nickel Company CEO Mark Selby says the company’s proposed US$2 billion Crawford nickel project can be a “template … for another 5-6 Crawfords that will come to market over the next 10-15 years”.

“Everyone on our team believes Crawford will be our first project. But everyone on our team believes Crawford will not be our best project,” Selby told analysts this week after CNC posted a positive bankable feasibility study on the multi-metal project in Ontario’s Timmins district.

He said early-stage exploration pointed to bigger, better ultramafic nickel targets in the vicinity of Crawford.

An unprecedented level of available government subsidies and interest from offtake parties in electric-vehicle and traditional metal supply chains were keys to CNC’s ability to rapidly advance Crawford, along with the company’s plan to leverage its proprietary In-Process Tailings (IPT) carbonation process.

“We’re the only large nickel mining project that can start up before 2030 in the world outside of Indonesia,” Selby said. CNC is targeting a late-2027 production start.

“We’re in a wonderful window right now with that government money that’s available [and] with offtake partners who are keen to lock in safe, low-carbon nickel supply.

“We expect to generate just under five tonnes of carbon for every tonne of nickel we produce [and] achieve a net carbon impact, because of the project’s big carbon storage capacity, of negative-30t.

“The bulk of world nickel supply growth comes from very high-carbon nickel – anywhere from 15t to 80t of CO2 per tonne of nickel – so … projects like this with a negative carbon footprint are a massive attraction.”

CNC’s BFS, compiled by Ausenco, outlined average production over a whopping 41-year mine life of 38,000 tonnes per annum of nickel at AISC of US$1.54/lb net of by-products. During a 27-year “peak period”, production would average 48,000tpa nickel, 8000tpa cobalt, 13,000ozpa palladium and platinum, 1.6 million tonnes per annum of iron and 76,000tpa chrome.

An after-tax NPV of US$2.5 billion (using an 8% discount rate and US$21,000/t nickel price) and 17.1% IRR improved to $2.6 billion and 18.3% with projected carbon capture and storage tax credits.

CNC aims to use its IPT process to capture and store an average 1.5Mtpa of CO2 during the 27-year peak output period, the bulk of which would be sold to third parties.

Planned use of an electrically-powered mining fleet, including trolley-assist trucks, that were expected to cut diesel consumption by more than 40% versus diesel equipment would contribute to a “minimal [mine] carbon footprint” of 4.8t CO2 per tonne of nickel in concentrate and 2.3t CO2 per tonne nickel-equivalent.

Selby said the “world’s largest sulphide nickel discovery in many, many decades … would be the third largest nickel sulphide mining operation in the world if we were in production today”.

CNC CEO Mark Selby

Current proven/probable reserves total 1.7 billion tonnes grading 0.22% nickel.

Selby said a nominal 60-40 debt-equity split on a circa-$2 billion project investment meant a $800 million equity commitment from the market minnow CNC, which has seen its market value drift lower to about C$170 million over the past month.

He said he “would be disappointed if we didn’t get US$400m or more of capital” from Canadian government tax credits and other assistance, and possibly more from the US Department of Defense grant pool, and “$200-300 million, if not more, from offtake agreements”.

He also expects to finalise minor-metal streaming deals worth at least $50 million.

“We expect to own 70-80% of the project at the time of the construction decision. We’ll have two nickel offtake partners in place, unless someone comes up to take all of it and we’re comfortable with them. And then we’ll have a stainless steel alloy partner, as well, in the mix.

“We are targeting putting our financing package together by the end of 2024.”

The company is aiming to have all government permits in hand by mid-2025 when it expects to make a final construction decision.


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