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Canada Nickel (CNC) - NetZero Nickel Sulphide Projects go to the Front of the Queue

July 30 2020, 11:33 GMT+01:00

Canada Nickel (CNC)

  • TSX-V: CNC
  • Shares Outstanding: 57M
  • Share price C$2.52 (30.07.2020)
  • Market Cap: C$144M

Canada Nickel was already looking like a tempting proposition. Selby is a renowned nickel commentator and previously developed Karora Resources' (RNC Minerals) Dumont Nickel-Cobalt Project from early exploration to advanced-stage development. He has a track record of creating accretive value with nickel assets by de-risking and developing them.

Moreover, Canada Nickel's Crawford Nickel-VMS Project is a nickel sulphide project that has impressed the market with the company's share price skyrocketing. It's already the 12th largest nickel sulphide resource on the planet after just 6-months of development; imagine what it will look like after a further 6-month programme of development...

Matthew Gordon talks to Mark Selby, 27th July 2020


It's a bulk-tonnage, low-grade nickel story, but we recently spoke to Selby about some high-grade drill results that had come up. He discussed how they carry the potential to create an even more exciting value proposition for the company.

Today, we spoke to him about a really exciting development for the company. Canada Nickel has created a wholly-owned subsidiary, 'NetZero Metals.' It will use this subsidiary to commence the research and development of a processing facility, located in the Timmins, Ontario region, with the goal of utilising existing technologies to produce zero-carbon nickel, cobalt and iron products. 

Canada Nickel has also applied for a series of trademarks: NetZero NickelTM, NetZero CobaltTM, and NetZero IronTM in the US, Canada and other jurisdictions. Canada Nickel will be looking to build downstream facilities in the area next to its mines. It will be able to take the gas produced by the processing plant and route it through the tailings and waste rock, making the carbon issue "disappear." The tailings and waste rock will simply "soak up" the CO2. It will take advantage of existing hydro-electrical power in the region too. Should other companies be looking to do this? Should the mining industry at large be looking to engage in this process?

We've discussed on this platform with numerous battery metals producers about how there is a new wave of momentum behind the ESG component of mining. Both battery manufacturers and EV manufacturers are assessing their supply chain with much more scrutiny because of pressure created by consumers, environmental groups (thanks, Greta) and regulatory bodies. National governments, like the UK, have pledged for their countries to go carbon neutral by 2050, as have most large resource companies. Potential aggressive subsidisation packages for strategic battery metals companies and EV manufacturers are further incentives for individuals to clean up their supply chains. We have already seen it with the Responsible Cobalt Initiative with companies like Daimler, Panasonic and Tesla all pledging to reduce, or eliminate, cobalt from their products due, in part, to ethical issues surrounding child labour in the DRC.

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The most recent, and perhaps significant, development comes from Elon Musk's quarterly conference call. He has called for nickel miners to produce as much green, efficient and sustainable nickel as possible. He has big plans to kick off the post-COVID EV renaissance with boosted production. The new mid-tier Model 3 is intended to be the bulk-sale cash cow for the company on the back of the success of the Model S and Model X. In order to make this a reality, he's going to need a lot of nickel, and there are plenty of challenges surrounding this, especially given the pressure to keep it green.

We've previously discussed the differences between two different classes of nickel: nickel sulphide and nickel laterite. However, we didn't discuss a crucial issue for investors: environmental footprint.

SOURCE: CNW Group/Canada Nickel Company Inc. Y-axis = tonnes CO2/tonne of nickel produced

It's quite clear then. Sulphide projects are expensive to mine but cheap to process via conventional smelting techniques. Laterite is cheap to mine but extremely expensive to process; it requires an HPAL plant, which has only ever been successfully constructed for over US$1Bn. With such a large CAPEX and a much more damaging environmental footprint, does this put nickel laterite projects at the back of the queue when it comes to getting financed? It certainly looks that way. Are you invested in a company with a nickel laterite project? What is your take on all of this?

How exactly will this all play out? Will the old boys throw their toys out of the pram? It would cost them billions in infrastructure after all...

Let's hear your thoughts below! It's both an exciting and controversial topic and we'd love to hear your take on it.

Company Website: https://canadanickel.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

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Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

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