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Canada Nickel (CNC) - Now Trading on OTCQB Market Under Ticker CNIKF

October 27 2020, 18:20 GMT

Canada Nickel Company

  • TSX-V: CNC
  • Shares Outstanding: 80M
  • Share price C$1.95 (27.10.2020)
  • Market Cap: C$150M

The story of Canada Nickel Company (TSX-V: CNC, OTCQB: CNIKF) is a story that combines futuristic potential with strong corporate leadership. The nickel explorer and developer is led by nickel veteran, Mark Selby.

We have previously outlined how the higher-grade core in the Main Zone had the potential to transform the economics of this bulk-tonnage story, and this was recently proved correct with Canada Nickel doubling its M&I resource and making a third major discovery at Crawford.

According to Selby, there are “nowhere near enough” nickel projects in the pipeline to satiate lofty projections like a 50% increase in battery-grade nickel demand by 2030. Canada Nickel is hoping to leverage this growing supply-demand gap and the favourable mining code of Ontario to generate accretive growth for the benefit of both shareholders and insiders.

One of latest major pieces of news to come out of the nickel junior regards its new listing on the OTCQB Venture Market: an American financial market providing price and liquidity information for almost 10,000 over-the-counter securities, with a primary focus on early-stage and developing U.S. and international companies. This listing became effective on October 14, as Canada Nickel graduates from the OTC Pink Sheets. What could this new listing mean for nickel investors and Canada Nickel shareholders?

Let’s start with Selby’s take on this latest move. He commented, “Trading on the OTCQB will make the Company accessible to a much broader range of U.S. investors and assist in our goal of increasing liquidity and visibility in the U.S. We look forward to introducing our Crawford nickel-cobalt sulphide project, located in one of the world’s best mining jurisdictions, to this new group of investors.”

This appears to be another clear indication of Selby’s confidence in both the nickel macro story and the quality of Crawford as an asset. Crawford is now the 7th largest nickel sulphide resource on the planet; it isn’t in the small leagues anymore. With potential major strategic partners like Tesla making all the right noises regarding increased clean nickel production, and with nickel up well above $7/lb, Selby appears to be pulling the trigger for aggressive exploration and development, as evidenced by recent drill results and plans for future drill programmes. With a PEA due by the end of the year, is he timing this to perfection? Will Canada Nickel hit the next cycle at the right time? We’d love to hear what EV and battery metal investors think about this listing.

Selby has previously explained to us that the CVE is a great exchange for exposure to Canadian investors: a large proportion of which are amenable to the idea of an EV revolution and the economics surrounding it. However, he seemed acutely aware of the limitations of this single listing. The EV narrative is gathering pace in North America, and the huge number of nickel investors will now be able to invest in the company more easily. Moreover, Canada Nickel’s presence in the U.S. will be strengthened, and liquidity should be enhanced. 

Having just explained Canada Nickel’s aim to create an accelerated monetisation event, let’s look at another recent development that was highly indicative of this strategy. Canada Nickel has been going out to the market regularly in recent months. On September 10th, the company closed a private placement financing worth $1,774,500, upsized from $1.5M due to “strong market demand.” By September 14th, Canada Nickel announced that it had increased the size of the previously announced bought deal offering from c. $6.5 million to c. $13 million: another demonstration of the market’s interest in the nickel player.

These financings were conducted against a backdrop of strong drill results, and by September 30th, Canada Nickel had closed the first tranche of its bought deal private placement to the tune of $8M worth of units. By the 15th of October, with $5 in flow-through shares, the company closed the second tranche of the $13M financing.

Public offerings generally result in dilution, but because of Crawford’s increasing promise, Canada Nickel has managed to raise capital on favourable terms whilst continuing to provide growth where it counts: its share price.

This flurry of recent financings appears to show that Canada Nickel is working quickly, confidently and intelligently. The company is aware of the level of investor interest, and with this latest listing, seems keen to strike while the iron is hot.

What do you make of all this? Is Canada Nickel a desirable investment proposition? What would you like to see the management team do next? Comment below and we will ask Selby the next time we speak to him.

To read more about the Canada Nickel story, head over to the company's website.


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