North American Nickel Talks Greenland and the Nickel Market

In the interview below, Richardson discusses recent developments at North American Nickel’s Greenland-based Maniitsoq project, including news from the company’s latest press release. He also touches on the company’s plans for its projects in Ontario and Manitoba and shares his thoughts on where nickel prices are headed in the short and long term.

NIN: Can you start off by giving a quick rundown of the key things investors should know about North American Nickel?

Neil Richardson:North American Nickel is a junior exploration company focused on nickel and platinum-group elements (PGE) mineralization in North America, mainly in Sudbury, Canada, as well as the Thompson Nickel Belt area in Manitoba. We have completed some exploration work at those projects, but our main project, which is near the community of Maniitsoq in Greenland, is the focus of our current exploration work.

NIN: What is the relationship between North American Nickel and VMS Ventures?

NR: VMS owns a 27.5-percent interest in North American Nickel. North American Nickel was formed back a few years ago by spinning out the nickel assets that we had in VMS; the team that runs VMS is the same team that runs North American Nickel.

Along with our strategic partner, the Sentient Group, VMS holds a large percentage of the shares. Sentient has upped its share to 30 percent, so the two teams, VMS and Sentient, control over 57 percent of the corporation.

NIN: Earlier this month you acquired additional ground at Maniitsoq. How will that benefit the company?

NR:These exploration licenses were just granted recently by the Bureau of Mines and Petroleum, the BMP. We have the documentation in our office now for signing. That includes about 123 square kilometers of additional ground, putting the total up to 5,106 square kilometers of property.

Where we feel this is beneficial to us — we’re flying this ground as we speak — is that it adds more areas into our norite belt that we felt we were missing. Previous landowners in the area have lapsed their licenses and we have taken on about five different new licenses to complete our land package.

NIN: You also recently began drilling at Maniitsoq. What is the status of that program? I saw you put out an update today [July 30].

NR:Right now at Maniitsoq we’re on a two-week break. We were there for six weeks and completed the first phase of our two-phase program, 10 holes for just over 1,500 meters of drilling.

Today’s update is really on that first phase. During the first six-week phase at Maniitsoq we checked over 100 electromagnetic anomalies that we’ve assembled up over the last two years of flying over the belt. With this drilling, to date we’ve collected 567 core samples. We did an extensive channel sampling on some of these areas and submitted 249 channel and surface grab samples. All that data now has been submitted to ALS Chemex and I anticipate results coming back in five to six weeks.

During the two-week break we’re flying an additional 700 line-kilometers of Geotech versatile time domain EM survey (VTEM), our main EM system that we use over there and in our projects for VMS as well. We’ll be following up these targets as well in the second phase.

We’ll be starting the second phase on August 2 and going for another six or seven weeks, wrapping up the program with another 10 holes, or 1,500 to 1,600 meters of drilling.

NR: Good. The Greenland government is very open to exploration companies. The BMP has guidelines and all you do is follow those guidelines. We have a very good rapport with a company called Xploration Services Greenland ApS. They take care of all our logistical requirements over there, so camp set up and everything like that, organizing sample shipments, is through them as well. They’re a very good exploration logistics company and they make sure we follow the guidelines that BMP stipulates.

Just like Canada, as long as you follow the rules and regulations, you’ll be fine. We’ve done above and beyond what the regulations require and have hired as many people from Greenland as possible — and of course our air support over there is from Air Greenland.

NIN: You mentioned that you’re focusing on Greenland right now, but you also have projects in Ontario and Manitoba. Could you talk a little about your plans there?

NR: We have two projects in Sudbury, Post Creek and Halcyon, they’re side by side. We’ve completed quite a bit of work such as trenching and surface mapping, diamond drilling and some surface geophysics. The one in Sudbury is on care and hold for now, we’re still looking for a strategic partner for this project.

The projects up in Thompson, Manitoba, we’ve completed the airborne surveys, have the interpretation in. We are looking into possibly drilling these targets this upcoming winter season, which would be the winter of 2014. We have somewhere in the neighborhood of four to six holes outlined to date. So that’s our plan. It’ll be VTEM follow-up diamond drill holes for our North Thompson project this winter. We’re looking forward to getting that work underway.

NIN: Your website notes that you’re open to seeking strategic partnerships to advance your properties. Are you currently doing so?

NR: We do have a strategic partner already in Maniitsoq. Our strategic partner there is the Sentient Group. We’re still looking for a partner for our Sudbury project. We are in talks with a few companies, but so far we’re just in discussions.

NIN: The International Nickel Study Group has said nickel could record a 90,000-MT surplus this year. When you start producing, will there be demand for your product?

NR: Obviously demand is a big concern. And you’re correct, although I didn’t see 90,000, I have 70,000 to 80,000, which is not that far off. So short term, there will be a very strong surplus of nickel in the market. A report put out by Wood Mackenzie that looks at nickel supply says that for 2013, 2014, 2015 and even 2016, we’re going to have a surplus in nickel supply, but after there should be a shortcoming in nickel supply.

Now, this is from one group. It’s just like trying to predict the gold price. Some guys were saying $2,000 gold, but we’ve seen the gold price crash before we even got there. I think the supply of nickel is the same. It’s very country dependent, as in who’s consuming it. The big ones are China and Europe. If we are starting to see a rebound in European demand, maybe this will come through. But obviously we do anticipate a little bit of a slowdown in China, although their GDP is still pretty impressive at 7 percent, 8 percent. The next place we’re seeing a strong rebound in the market is Japan, and with auto sales doing well in North America, that might help with nickel consumption, but really it comes down to China playing a large role. It’s a big consumer of a lot of base metals.

NIN: Thank you very much for speaking with me.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: North American Nickel and VMS Ventures are clients of the Investing News Network. This article is not paid-for content.

Editorial Disclaimer: Interviews conducted by the Investing News Network are edited for clarity. The Investing News Network does not guarantee the accuracy or thoroughness of the information reported. The opinions expressed in these interviews do not reflect the opinions of INN and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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