Canada Nickel deposits akin to ‘Sudbury’s endowment’

[Redator]

New initial resources for Canada Nickel’s (TSXV: CNC) deposits add almost 275 million measured and indicated tonnes to the company’s portfolio, with the Texmont deposit boasting grades higher than all its other targets in northern Ontario’s Timmins region.

Mann Central hosts 236.7 million indicated tonnes grading 0.22% nickel for 520,000 million tonnes of contained nickel, and 543.2 million inferred tonnes at 0.21% nickel for 1.15 million tonnes of metal, the company reported Tuesday. Mann Central is located 23 km east of the company’s main Crawford project and 40 km northeast of Timmins.

Texmont holds 37.9 million measured and indicated tonnes grading 0.29% nickel for 109,000 tonnes of contained metal; and 57.7 million inferred tonnes at 0.25% nickel for 143,900 contained tonnes. Texmont is 36 km south of Timmins.

“The addition of these two new resources brings published mineral resources for Canada Nickel’s six Timmins area properties to 9.2 million tonnes of contained nickel metal in the measured and indicated categories, and 9.5 million tonnes of contained nickel metal as inferred resources,” Cantor Fitzgerald analyst Matt O’Keefe said in a note on Tuesday, giving Canada Nickel a buy rating. “The expanding base underscores the large-scale potential of the developing Timmins nickel district.”

The contained nickel discoveries in the new resources are now comparable to the total amount of Sudbury’s historical nickel endowment, Canada Nickel CEO Mark Selby told The Northern Miner by phone on Tuesday. The Sudbury nickel district contained around 19 million tonnes of nickel before about half was mined in the 20th century, according to a 2010 report from the USGS.

“What’s happening here in Timmins…is really the only new source of nickel that’s been discovered of any scale. This is the kind of a scale that a BHP (NYSE, LSE, ASX: BHP) or a Rio Tinto (ASX, LSE: RIO) would ultimately want to own,” Selby said.

Canada Nickel plans to complete another three resources for its deposits by the end of the year, bringing the total to nine resources, Selby said.

Shares fall

Despite the new resources, Canada Nickel’s share price fell 1.1% to C$0.85 apiece on Tuesday afternoon in Toronto, for a market capitalization of C$183 million. The stock has traded in a 12-month range of C$0.73 to C$1.22.

Selby attributes the drop to nickel being currently “out of favour.”

“That’s the overhang on the story right now,” he said. “[But] nickel will come back in favour. It’s a critical mineral.”

The new reports follow several months of milestones for Canada Nickel, including an initial resource for Mann West last month and the provincial government’s recognition of Crawford as a strategic critical mineral project. Last October, the company filed its federal impact statement for Crawford, a key step in obtaining federal permits for the project, which hosts the world’s second largest nickel reserves.

At an 8% discount rate, Crawford has an after-tax net present value of $2.6 billion and an internal rate of return of 18.3%, according to the feasibility study released in October 2023. The mine, consisting of two open pits, has an estimated capital cost of $3.5 billion. Over a 41-year life, the mine is projected to produce 3.5 billion lb. of nickel, 52.9 million lb. of cobalt, 490,000 oz. of palladium and platinum, 58 million tonnes of iron and 6.2 million lb. of chromium.

Larger geological footprint

Though the deposits aren’t as large as Crawford, Mann Central’s geophysical footprint at 3.1 sq. km is almost double the size of Crawford’s 1.6-sq.-km footprint.

The Mann Central resource was based on 12,563 metres of drilling across 32 drill holes. Texmont was based on 44,528 metres from 144 drill holes.