The Battery Show

Recording date: 26th October 2023

Copper Bottomed, Episode 3.

This week's copper exploration news highlights both positive results and poor reporting practices. Doubleview Gold reported strong copper and scandium grades but misleadingly used copper equivalents, violating disclosure rules. American Eagle Gold also reported copper equivalents despite promising 900m of 0.5% copper. Kodiak Copper reported more copper at its MPD project but persists with questionable copper equivalents.

On the positive side, Galantas Gold properly reported 1.87 g/t gold, 1.17% copper and 1.2% zinc over 34m at its Omagh project without resorting to equivalents. However, slow progress with just 5 holes drilled in 10 months explains the stagnant share price. Excelsior Mining is being funded by BHP's Newmont to explore the Johnson Camp copper project, with good grades like 7% copper over 130m. This offers non-dilutive funding while Gunnison remains problematic.

American Pacific Mining reported an excellent 1.78% copper and 13.73% zinc over 23.4m but the share price has languished despite multiple project acquisitions. Ownership structure and plans for the Palmer project are unclear. Finally, Decade Resources reported promising copper hits and increased volume and share price traction, with mineralization outlining over 200m. However, reporting copper equivalents was unhelpful and cross-sections would aid understanding.

Overall, some promising results but poor reporting practices persist, confusing investors. Juniors need to focus on transparency, accelerating work programs, and clarifying ownership structures and financing plans to build market confidence. Adhering to disclosure rules and reporting standalone grades without questionable equivalents would also help. Promising projects need time and careful execution to prove themselves.
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Recording date: 23rd October 2023

Copper Bottomed, Episode 2. Our latest addition to the Crux Investor Batteries thematic. 

The copper price has shown resilience in recent weeks, trading around $3.60/lb, despite bearish predictions of a 467,000 tonne global surplus in 2024 from the International Copper Study Group (ICSG). Major new mines are slated to ramp up production, potentially outpacing demand growth. However, early drilling results from junior explorers around the world offer a glimmer of hope that new discoveries could help fill future supply gaps. While not without challenges, leading juniors have reported impressive early-stage intercepts, contingent on further delineation.

Double View Gold generated substantial investor enthusiasm with reported copper-equivalent grades up to 1.09% over 552 meters at its British Columbia project. However, with the actual copper grades quite modest, the company likely erred in publishing the misleading equivalents without an initial resource estimate as required by regulators. While gold, silver and scandium offer additional upside, metallurgical recoveries are still unknown. Double View also likely faces delays in its planned Q1 2024 maiden resource. More transparency around timelines and contributory metals would serve investors better than flashy copper equivalents.

Peru-focused DLP Resources fell into the same trap, touting 0.81% copper-equivalent grades that proved unsupported once underlying assays showed just 0.7% copper. By factoring in minimal credits from silver and molybdenum too early, DLP inflated perceptions of the potential copper resource. Investors should remain focused on actual metal grades rather than homogenized equivalents when reviewing early-stage exploration results.

In contrast, Hercules Silver executed an exemplary drill result release after intersecting 185m of high-grade copper at its Idaho project. Rather than wrap the results in a copper-equivalent bow, Hercules simply reported the outstanding 1.9% copper intercept transparently alongside modest silver and gold byproduct credits. Combined with releasing exceptional visual core photos, Hercules gave investors an accurate and exciting view of the discovery's world-class potential, powering a doubling of its share price.

C3 Metals also impressed by transparently outlining both significant upside and technical challenges from early drilling at its Jamaica project. Highlighting issues reaching target depth shows leadership and provides a balanced perspective. While grades currently seem modest, C3 systematically outlined an impressive scale copper-gold porphyry system with ample room for growth through further delineation.

Conversely, Aston Bay Holdings faces extreme challenges advancing a very high-grade copper-zinc discovery in remote Nunavut, Canada. The region's lack of infrastructure means only massive, exceptional deposits have hope of feasible development. Thus, impressive initial assays are currently insufficient to attract investor attention absent a dramatic increase in delineated tonnage.

Similarly, Turmalina Resources requires further drilling to prove continuity before its narrow but exceptionally high-grade Argentine copper-gold intercepts can be considered a valid development target. Promising results must evolve into contiguous, mineable mineralization to upgrade speculative appeal.

In summary, disciplined explorers with a track record of transparent reporting and communication stand the best odds of attracting investor capital amid sector volatility. While analysts call for copper market surpluses, exciting junior exploration results provide optimism that the next generation of deposits can offset the impending supply growth challenge.

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Recording date: 25th October

Nickel prices bouncing off $18,000 ($8.20) again for the balance of the week. Still expect further move lower down to $17,500 level – have seen a steady increase in LME inventories (still at a low level of 45,000) up about 1-2,000 per week

“Great convergence” – sulphate premium to briquette hanging in, NPI prices hanging it similar levels even with ore prices edging down slightly. Heading into a period where the Philippine's rainy season disrupts shipments and according to sources still seeing ore heading to Indonesia so interesting to see what will happen over the next few months as people stock up in advance

Big News out of China:

Big news overnight was Chinese stimulus which appears multiple measures to halt a slowdown in the economy.  Policy support has returned to the Chinese economy, with a plan approved to raise the fiscal deficit to 3.8% of GDP, well above the 3% target set earlier in the year. Furthermore, over and above this deficit the NPC has approved issuance of RMB1trn in long-term construction bonds, with half the funds to be spent in Q4 and half in 2024. PRC Macro note that proceeds from this issuance will be only used for infrastructure investment, mostly for hydropower and flood prevention. These funds cannot be used for building new production capacity. Meanwhile, the National Finance Conference has been confirmed to take place early next week (following President Xi’s first direct visit to the PBoC in his tenure), which will focus on containing financial risks and potentially the establishment of a permanent state equity stabilisation fund, suggesting supporting asset prices has become a policy mandate for the PBoC

Adamas Intelligence:

They look at MW of batteries installed. Remember LFP share by car is increasing but is smaller batteries on average.  High nickel batteries tend to be in bigger batteries.  In July 2023, Adamas Intelligence data shows that LFP share by MW was only up 1% to 31% and that the average passenger battery electric vehicle (BEV) sold globally contained 25.3 kilograms of nickel, up 8% year-over-year, while the average PHEV contained 6.5 kilograms, up 11% year-over-year. Multiply that by times increase in the number of cars sold.

Sharp LME price move lower driven by funds have amassed $4.6 billion in short positions against London Metal Exchange nickel contracts, helping to create a net short position valued at $2 billion, according to data from the bourse. Measured by value, that’s a record in data going back to 2018, while in tonnage terms the mismatch is near an all-time high seen in 2019.   We’ll see a move lower and also set the stage for a rebound at the end of the year (as will need to cover those shorts at some point) – given scale of the shorts is surprising nickel price not already lower !!

Company News:

Talon Metals raised $22 million to continue exploring Tamrack – a very tough market out there and good to see $ being raised.

SPC Nickel (talked about last week) – additional results from shallow infill holes WG-23-063: 1.01% Ni, 0.53% Cu over 17.00 metres (12.00 to 29.00 metres) within a wider zone grading 0.71% Ni, 0.38% Cu over 59.00 metres (2.00-59.00 metres).

Alaska Energy – first time talking about - prospect explored in 1990s by Inco.  First drilling is tapping similar historic grades over wide widths; highlights include:

• 341.6 meters averaging 0.23% nickel, 0.08% copper, 0.02% cobalt, 0.107 g/t palladium, 0.051 g/t platinum, and 0.011 g/t gold in hole EZ-23-001.

• 296.6 meters averaging 0.23% nickel, 0.09% copper, 0.02% cobalt, 0.115 g/t palladium, 0.052 g/t platinum, and 0.013 g/t gold in hole EZ-23-002.

Alaska is one of only a handful of locations where one can find nickel in the USA.

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Recording date: 9th October 2023

Copper Bottomed, Episode 1 - The inaugural show all about Copper. 

A new addition to the Crux Investor Batteries thematic. Merlin Marr-Johnson provides a succinct weekly round-up of the copper market, covering the main stories and exploration results. In this first episode, as well as quotes from BHP, Rio Tinto, and Ivanhoe Mining luminaries outlining the need for more copper projects, Merlin reviews news releases from the following companies: Faraday Copper, Aldebaran Resources, Xanadu Mines, Surge Copper, Foran Mining, C3 Metals, and Lara Exploration.  What do the results tell us about the projects? What do the new releases tell us about the companies? How does the news affect the investment case, if at all?

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Recording date: 17th October 2023

Has been 2 weeks since we last talked about the nickel market, and as expected market is trading down in the $18-$19,000 range and a few more thousand tonnes come on LME. Expect a further move over the next 6-8 weeks down to the $17,500 level before year-end as another 10,000 - 20,000 tonnes of nickel hits LME, and then rebound into year-end as EV demand re-accelerates and stainless production continues to build on recent strengths.

“Great convergence” well-underway – sulphate now back to par with briquettes, NPI discounts continue to narrow.

Rho Motion EV Sales - September 2023 Global EV sales reached a monthly record in September 2023 with over 1.3 million units, growing by 23% compared to the same period last year and 7% month-on-month, bringing YTD PC & LDV EV sales to 9.5 million. Sales in China have grown by 33% YTD, in EU & EFTA & UK by 27%, and in the US & Canada by 60%.

Was in London last week for LME week – always like it because you get to see producers, traders, and consumers in one time period to help understand the market. And then went to the US for a Stainless Steel conference.

Key LME week takeaways:
- Per the last session, nickel is in surplus but not as large as many are projecting as missing the in-process inventories.
- Cobalt market going to come under pressure from HPAL and new Chinese Congo projects
- Opportunity for meltshop growth in the United States

Nickel Industries buying 55% of Excelsior Nickel project which is an HPAL project – going to target low carbon footprint with power coming from sulphur burning for acid production and a 200 MW solar project. Projects built and operated by Tsingshan. 

ENC is expected to produce 72,000 metric tons per annum of contained nickel equivalent across the three major class 1 nickel products being mixed hydroxide precipitate (MHP), nickel sulphate and nickel cathode. ENC will be the first HPAL globally with the capacity to produce the three major class 1 nickel products,  Nickel Industries give only real public company view into Indonesian operations – use for ore grades, operating costs – will be good to have HPAL view of things.

SPC Nickel completed its infill drilling at West Graham – some very good intervals in the program and Phase 2 comprised 8,842 metres in forty holes. Will be interesting to see how resource update comes together – a few open pittable deposits in place that can ship to the mill.

Aston Minerals, our neighbour in Timmins, reported after we last talked about multiple drill holes that are seeing Crawford-like grades and extended nickel-cobalt sulphide mineralisation across multiple drilling intercepts at the B2 Prospect, strike continuity has extended by 500m. Company insiders have been buying stock as the price has come off. 

Crawford feasibility study released last week:
- $2.5 billion after-tax NPV8% and IRR of 17.1%; increasing to $2.6 billion after-tax NPV8% and IRR of 18.3% with projected Carbon Capture & Storage tax credits 
- Crawford is world’s 2nd largest nickel reserve and 2nd largest resource. Initial mineral reserve of 1.7 billion tonnes of ore grading 0.22% nickel 
- Production of 1.6 million tonnes nickel, 24 kt cobalt, 490 koz palladium & platinum, 58 million tonnes iron and 2.8 million tonnes chromium over 41-year project life 
- Annual EBITDA of $811 million, free cash flow (FCF) of $546 million, and 48ktpa of nickel production during peak 27-year period
- One of Canada’s largest carbon storage facilities with 1.5 Mtpa carbon captured and stored during peak 27-year period
- Crawford is a net negative contributor to the global CO2 footprint – with 30 tonnes of carbon capture and storage capacity per tonne of nickel remaining after accounting for the project footprint

Learn more: https://cruxinvestor.com/companies/canada-nickel

Recording date: 3rd October 2023

As expected when seeing a clear break of a very long support line, the nickel price move lower was pretty aggressive down nearly $1,500 to the mid-$18K range where we were in mid-2021. I believe we’ll see a further move lower down to the $17,500 level before we begin to move higher once again into year-end.

“Great Convergence” continued on as sulphate prices ticked up while nickel prices moved lower – sulphate and NPI discounts continued to be reduced. China is generally quiet heading into the week-long October holiday – will see what happens when get back afterwards – but not expecting anything too exciting.

Canada Nickel - FS call on 12th October 2023.

Horizonte Minerals - unfortunately, took a stumble 2 quarters before the goal line started pushing out the start date to quarters and increasing total capex by a further 35%. They hired an ops director 2 months ago and wonder if he is driving it – I DON’T KNOW the exact reasons but based on some words in the release I wonder if is water management - something investors don’t pay much attention to, but critical from a reliable operability perspective which required some re-work of site civils. Where it lands will depend on how greedy their partners – Orion and Glencore will be in providing additional funding. Think it looks cheap at these levels, but may want to wait to see what the re-financing package looks like before jumping in.

Glencore will halt funding the Koniambo project in New Caledonia – the total $$ destroyed on the island between Goro and Koniambo must be approaching $20 billion. Neither plant ever reached design capacity and had some technical flaws (both were new processes) in conjunction with trying to operate in a highly difficult jurisdiction. Will be interesting to see what happens – a Chinese company puts in RKEF or just exports ore. Another example of grade not being the most important thing – Koniambo was the highest grade undeveloped laterite deposit in the world!

Atlas Materials raised privately $27 million on a $115 post-money valuation for the saprolite hydro-met process. It’s going to solve 2 major problems!!

Both of its founding premises are false:
“Increasing the amount of nickel ore available to make batteries by 50% Before the Atlas Process, saprolite ore, which accounts for approximately one-third of the world’s current nickel resources, was not economically viable for battery grade applications”. Matte from saprolite works!

Hydro-met guys say, “Producing battery nickel with almost zero CO2, no waste or other emissions. All existing processes to refine nickel are costly and harmful to the environment due to their process emissions and waste dumps.” However, it can be done with the right pollution control and limited environmental equipment.

Attended INSG meetings – big surpluses, but no one can say where the surpluses are sitting!

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Nickel had another test of $20,000 and once again it held up and trading in the lower end of range of $20-$22,000 range where it has been sitting since early June. Again, have been expecting several month break below this range but this has yet to happen – trend technically squeezing against this support level and with now seeing some LME inflows (still not much 1,000 tonnes) may finally go through in the next few weeks.

Have seen continued improvements in ore and NPI prices driven by combination of a couple of factors:

• Chinese stainless production continues strong y-o-y growth – 17-20% in August and September
• Nickel has had a “shipping coal to Newcatle” moment recently as the Indonesian government investigated and dealt with illegal nickel ores and stopped the approval of new quota applications which has resulted in ore coming from the Philippines

Korea trip again interesting. Key piece is how much nickel they will need – just
one of the players at one stage - and there are multiple players at each step (precursor-cathode-battery) will need more nickel.

Indonesia talking about a free trade agreement with the US (make it IRA-eligible) – may see something limited, but Chinese control of most assets would defeat the whole purpose of the IRA to get China out of critical material supply chains.

Nickel Institute published clarification around CBAM in Europe (Carbon Border Adjustment Mechanism) – this is a mechanism which will eventually create a premium for lower carbon products (like Canada Nickel will be producing from Crawford).

From 1st October 2023, FeNi and NPI producers will have to measure the carbon footprint of their products according to the requirements defined in the Annexes of the CBAM Implementation Regulation.

From end of January 2024 onwards, data on the carbon footprint must be reported via a template submitted to the CBAM Portal.

From 2026 onwards, companies importing FeNi and/or NPI will have to purchase CBAM certificates to compensate for the carbon footprint of the imported goods. The amount of certificates that FeNi and NPI importers have to purchase will be gradually increased. In 2026, certificates for only 2.5% of the total carbon footprint of a product have to be surrendered. This will gradually be increased until 2034, when 100% of the carbon footprint has to be covered.

FPX announced solid PFS results – key drivers are low strip ratio below 1, simple process plant driven by magnetic separation, ability to sell awaruite directly to market -

• After-tax NPV8% of $2.01 Billion and IRR of 18.6% at $8.75 /lb Ni
• 29-year mine life producing an average 59,100 tonnes per year of nickel
• Phased development approach, with expansion following the 3.7-year after-tax payback period
• Life-of-mine average C1 operating cost of $3.70/lb Ni ($8,150/t), assuming no byproduct credits
• LOM average annual pre-tax free cash flow of $578 million during operating years
• Strategic product flexibility, with a Base Case high-grade nickel concentrate (60% nickel) for direct feed to the stainless steel industry, plus a Refinery Option to produce battery-grade nickel sulphate

At Canada Nickel, very keen to see this PFS – our Midlothian deposit looks like maybe a primary
awaruite deposit.

Dreadnought – the interesting early stage where First Quantum earning into 51%. Mineralization (no assays) from 14-27 metres wide relatively shallow.

Recording date: 1st September 2023

Same comment as our last call - Nickel continues to bounce along the bottom of $20,000-$22,000 ($9-$10/lb) range where it's been since early June and has only briefly broken $9/lb.  LME inventories remain near multi-year lows.

China is still split on 2 key markets – sulphate for battery continues to tread water, while stainless continues to edge higher, again despite lots of noise on Chinese weakness with both stainless prices and NPI prices moving higher once again. 

Things are quiet here in summer, however

SPC Nickel, who consolidated property in Sudbury from Vale, hit some interesting intervals.  Talked in the past about a good exploration team that is in the same neighbourhood as Magna Mining Sudbury property.

Hole WG-23-047, intersected a high-grade section that returned 1.27% Ni, 0.47% Cu over 18.00 metres from 245m to 263m within a thick zone of nickel and copper mineralization grading 0.70% Ni, 0.32% Cu over 50m from 221m to 271m.

Canada Nickel made Mann Northwest announcement - is another major discovery 

One of 11 targets larger than Crawford – target geophysical footprint of 6km2 is more than triple the size of Crawford footprint.
The first 8 holes drilled at Mann Northwest intersected well-mineralized, multi-hundred-metre intervals of mineralized peridotite and minor dunite across a combined strike length of 2.7 kilometres  - all holes were largely mineralized across the entire core length.  Initial mineralogy samples showed well-serpentinized material with heazlewoodite and pentlandite dominant nickel minerals.
Target remains open in all directions.
The big thing to talk about this week is Chalice Mining PEA – market cap has fallen by +30%.  They are the big boy with a pre-announcement market cap of $1.8 billion (which was already higher), so we need to say it like it is – particularly as PEA had some “offensive/aggressive” assumptions. Headline numbers all look great – but the market quickly realized some very aggressive assumptions.

Chalice Mining just published a PEA, a month earlier than Canada Nickel will be publishing their Feasibility Study (FS) on Crawford – their deadline for FS is 2.5-years from now.

Their biggest issue is the price deck:

Palladium price (over ½ revenue) was $2,000 – today’s price is $1,200. Remember palladium's main use is now being phased out as EV market reduces the need for catalytic converter
Nickel price was $24,000 –($11/lb) – we’ll probably be looking at the $20-$21,000 range. 
Copper price was $11,000 ($5/lb) – copper prices have NEVER been this high
When looking at the value at today’s price deck – you get to a value somewhere between negative and $500 million – Remember their market cap is still $1.3 billion!!

Chalice and  Canada Nickel are interesting comparisons.  Gonneville was discovered about the same time as Crawford so a good yardstick – the focus was nickel initially, but it turned out to be mostly PGE deposit with a scale about 1/3 less than Crawford and half the mine life.

Another thing that is interesting is capex – we’ve indicated our capex will likely be in $US1.8-1.9 billion range, Chalice is getting 1/3 bigger mine/mill operation, a leach plant, a hydromet plant for 10% LESS cost than Canada Nickel in a higher cost jurisdiction.

When the price deck is crazy aggressive, raises questions around what of the other 300-400 assumptions in there are also very aggressive! Will need a reset of expectations, and more than likely, a new owner who can take advantage of this fall from grace.

I’ll State it Again

We have talked about it in the past, but want to make sure watchers are very clear on this point.

A PEA IS ONLY AS GOOD AS THE ENGINEERING FIRM WRITING THE REPORT.  REMEMBER THERE ARE ENGINEERING COMPANIES THAT ALMOST NEVER BUILD PROJECTS, SO WRITING REPORTS IS THEIR BUSINESS AND IF THEY DON’T GIVE MINING COMPANIES THE ANSWERS THEY WANT, THEY DON’T GET THE BUSINESS.

MOST FRUSTRATING FOR ME, WHEN INVESTORS SAY WHY NOT PROJECT HAVE MID-20% IRR?  REALITY IS THAT WITH VERY FEW EXCEPTIONS – ONLY GET THOSE RESULTS FOR SMALLER, HIGH-GRADE DEPOSITS IN TOUGH JURISDICTIONS, GENERALLY WITH A COMPARATIVELY SHORT LIFE OF MINE.  IF BUILDING A MINE IN PLACE THAT GOVERNMENT WON’T TAKE IT AND A SCALE MAJORS WANT, BASE METALS PROJECTS ARE EITHER SIDE OF MID-TEENS IRR.

Nickel continues to bounce along the bottom of the $20,000-$22,000 ($9-$10/lb) range where it's been since early June and has only briefly broken $9/lb.  LME inventories remain near multi-year lows

Stainless prices are now moving higher in multiple markets which is generally a good signal for overall market conditions.  Over the last few weeks, have seen ore prices/NPI prices move higher, now joined by stainless prices in China and now in Europe as the market seems intent on restocking after spending most of the year destocking. Despite Chinese market weakness,  Chinese stainless steel production was up more than 11% in the first half 2023. Remember that stainless still more than 2/3  of global nickel demand so good sign that should see the expected demand improve through the balance of the year.

Quiet week news-wise

Talon Metals had good infill intercept using to look at the area of higher PGE content -  101.71 meters of high-grade nickel-copper mineralization grading 1.94% Ni,1.84% Cu, 0.35 g/t Pd, 0.64 g/t Pt and 0.62 g/t Au (1.61 g/t PGEt + Au) (3.04% NiEq) (see Table 1).

Everyone is entitled to their opinion, but commentator DrJimJones materially misstated a couple of facts in a recent piece on Canada Nickel Corp.

1. DrJimJones was quoting from PEA in May 2021 as to what needed to be spent for CNC to go to the next level, and then compared that amount to the June 2023 cash balance. Clearly just a mistake or conflation of data on his part. He may not have noted that since May 2021, CNC has raised nearly £$100 million in the interim to do what is needed, leaving their cash balance in a healthy position to finish their FS. I’m sure he would be willing to check and validate this, and shortly republish his thoughts using the correct assumptions.

2. It is also worth noting that Crawford produces a FeCr concentrate which has some nickel in it.  This product would make CNC the sole chrome producer in North America, and provide a low-carbon feed for the stainless market in North America (stainless steel is a mixture of nickel, iron, and chrome).  The stainless market in the United States has significant premiums -more than $800-$1,000 price premiums versus Asia, and conversion margins of $1,000 per tonne (or ~$6/lb premium per pound of contained nickel) so good to get units into this market.

3. In any technical report, always good to look at the assumptions.  Assumptions are only as good as a company that signs off on technical reports.  Lots of bad technical report companies out there.  CNC however uses Ausenco, who not only do studies but actually bid on & build these projects. Ausenco signed off on the overall report.  CNC’s work on the pricing for this material was done by CRU, a leading metal price consultancy, and SMR – the leading stainless and alloy market consultant.

4. Interestingly, iron price is not iron ore price – it is Fe scrap price in North America (which is how stainless feed material is priced) - it averaged $US407 per tonne in February 2023 according to USGS versus the $290/tonne number used in 2021 PEA. So DrJimJones talk of iron ore pricing and decline in iron ore pricing is again perhaps conflating data. Again I’m sure given the chance DrJimJones will choose to restate their thoughts and the impact of their conclusions for CNC.

5. And in addition, the current US ferrochrome price which was the basis for chromium pricing was assumed to be $1.04 per pound in the CNC 2021 PEA, whereas it averaged $3.08 in 2022, and was $2.55 per pound in June 2023.

6. Please also remember that Anglo American, one of the world’s largest mining companies, made a 9.9% investment in Canada Nickel so they must have been comfortable with the CNC project assumptions and their own year-long diligence process.

Nickel dropped down to the bottom end of $20-$22,000 range that we’ve largely been in since the beginning of May – dragged lower along with the rest of the base metal complex as China deflation concerns weighed on the market.  LME inventories are still low.

According to statistics from the Stainless Steel Branch of China Iron and Steel Association, China’s crude stainless steel production amounted to around 17.59 million tons in the first half of this year, up by 8.2% compared to the same period a year ago.  Among them, the output of Cr-Ni stainless steel (300 series) accounted for the largest proportion at 50.33%, totalling around 8.85 million tons, a year-on-year hike of 11.1%.  (we thought China was slowing down) - seeing cuts in the first half in ROW production after a big surge in 2021/22, but now seeing a turn in the West as well.  Analysts always underestimate stainless growth. 

Still not seeing any further momentum in nickel sulphate in China, but seeing more nickel directly utilized (in the form of MHP/matte) and more high nickel cathode material produced in Korea.

FPX Nickel saw a big drop this week – down by 33% on news that one of the First Nations (FN) groups has made public communications from Tl’azt’en Nation with respect to the 2012 Memorandum of Understanding (“MoU”) between Tl’azt’en Nation, family Keyoh Holders, and FPX, and concerns expressed related to resource development.

The team at FPX have done a very good job responsibly advancing the project, but sometimes best efforts can’t change the view of the local community.  The original 2012 group split into several groups – which may have different views on resource development. Elections in FN communities typically every 2-3 years so can have multiple leadership groups to deal with during the lifespan of the project (think with my old Dumont project, we had 5 different chiefs over 10 years).  The new chief came in a year ago and may be a catalyst for change, maybe another change in the future.

Permitting/First Nations risk is real – even the best management team/approach can do everything 100% right, but the community may not want resource development. Encourage every investor to look at First Nations/permitting risk – not just to country, province, but the specific region – look at whether any mines operating in the area, have any operated before, and search for public comments on mining activity in the area. Can always be the first new mine in an area, but comes with lots of risks and need to manage accordingly.

This is always been a key concern – 4 major assets that I’ve been involved with have been in established mining areas - Abitibi Quebec (Dumont), Abitibi area of Ontario (Crawford), Kalgoorlie (Beta Hunt), Manitoba/Snow Lake (Reed).  

The Metals Company (TMC) stock has moved significantly higher over the last 2 months and just completed $27 million financing (think highlighted back in June that smaller scale start-up using existing Japanese processing capacity provides a lower capex path to production).  The Metals Company aims to apply next year for a licence to start mining in the Pacific Ocean, with production expected to start as early as the fourth quarter of 2025, it said in a statement.

Magna Mining put out some nice drill holes this AM and has been busy retracing about 50% of what it gave up after the PEA announcement.
101 FW Zone

MCR-23-041: 3.0% Ni, 0.7% Cu, 1.2 g/t Pt + Pd + Au over 31.6 metres

MCR-23-042: 4.2% Ni, 1.4% Cu, 1.0 g/t Pt + Pd + Au over 27.6 metres

Good results but would asterisk them a little bit – when historic drilling – look for step out versus infill, unless filling in some pretty wide gaps.  These holes look like in between 22-003 and 22-005 drilled earlier this year which in turn were between 1003080 and 1003090 and 1163050
At the other end of step out level, our neighbour in Timmins, Aston Minerals, has started off their 2023 drilling season with some 500 metre step-outs in their B2 zone which in turn is more than 2 kilometres away from their initial Boomerang resource of 2.5 million tonnes of nickel.

On the lithium-nickel front, Widgie Nickel got approval to mine its Faraday lithium deposit – will ship ore to one of the local lithium mines to be processed.

Azure Minerals (nickel developer turned lithium developer) turned down $600 million offer from SQM.