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March 2022 Quarterly Report
Queensland Pacific Metals Ltd (ASX:QPM) (“QPM” or “the Company”) is pleased to present a summary of activities from the March 2022 quarter
Highlights
- Conditional finance support received from Korea Trade Insurance Corporation (“K-SURE”) for the provision of debt funding for the TECH Project, reinforcing QPM’s ties with Korea.
- Baseload ore supply contract executed with Société Le Nickel (“SLN”) and approved by New Caledonian government.
- Continuing to advance through the Definitive Feasibility Study (“DFS”), with extensive testwork being undertaken during the quarter with key vendors to ensure commercial equipment is fit for purpose and optimised.
- First High Purity Alumina (“HPA”) made from New Caledonia ore in testwork with Lava Blue.
- Regulatory approvals required to construct the TECH Project are progressing on schedule
- Residue testwork and discussions with Queensland State Government regarding use as engineered landfill have been positive – pathway to zero solids waste and reinforcement of QPM’s ESG credentials
K-SURE Funding
Ever since the investment and binding offtake agreement signed with LG Energy Solution and POSCO, QPM has targeted Korean export credit agencies as potential financiers of the project. QPM commenced discussions with K-SURE in 2021, culminating in the provision of a formal Expression of Interest letter from K-SURE to QPM.
The Expression of Interest from K-SURE is a significant milestone in their internal consideration for the provision of debt funding. K-SURE has indicated that its participation in the debt syndicate will be in line with the terms and conditions of Export Finance Australia (“EFA”), which has previously provided a letter outlining $250m of conditional financing support. The letter received from K-SURE does not constitute a commitment or an offer and any provision of debt funding will be subject to due diligence and typical terms and conditions.
The Korean and Australian governments have recently focused on formal cooperation regarding critical minerals. In December 2021, the Australian and Korean governments entered into a Memorandum of Understanding (“MOU”) regarding cooperation in Critical Minerals Supply Chains. Following this, both countries’ Export Credit Agencies (K-SURE and EFA) entered into an MOU to strengthen their capacity to work together and undertake joint financings.
QPM’s strong ties to Korea have positioned it well to access financing from both Australian and Korean export credit agencies and strong progress has been made. As the project progresses towards financial close, QPM is confident that these strong Korean-Australian ties will assist in obtaining credit approval for debt funding from these parties
Ore Supply
QPM and SLN have been in discussions and negotiating terms for ore supply since the execution of an MOU in April 2021. In parallel, SLN had been working with the New Caledonia government to obtain the requisite approvals it required to export ore to QPM.
In February 2022, a press conference was held by the President of New Caledonia, Louis Mapou, and SLN. At the press conference, it was announced that the Government of New Caledonia had approved an increase in the annual nickel ore export quota of SLN. This increase includes the supply of up to 1,000,000 wet metric tonnes (“wmt”) of nickel ore per annum to QPM. The approval is valid through to 2029, in line with SLN’s existing export approvals that are currently in place.
Shortly after receiving government approval, QPM and SLN executed a binding contract for up to 1,000,000 wmt of nickel ore per annum. The key terms of the agreement are set out in the table below:
The execution of this contract is a major de-risking milestone for QPM with regards to its ore supply and demonstrates the support of the project from New Caledonia and SLN.
QPM is in active discussions with other ore suppliers for the balance of its ore required at full production.
Click here for the full ASX Release
This article includes content fromQueensland Pacific Metals Ltd , licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Element 25 Signs US$85M Supply Deal with GM for Manganese Sulphate
Element 25 (ASX:E25) has signed a deal with General Motors (NYSE:GM) to supply the car manufacturer 32,500 tonnes of manganese sulphate annually, according to a news report by Reuters.
The news follows GM’s announcement to take an equity stake in Queensland Pacific Metals (ASX:QPM) for a new source of nickel and cobalt for battery cells, in a move to secure the car maker’s supply of battery minerals for its North American electric vehicle production, the report said. This is also Element 25’s second major supply agreement after a deal with global mobility provider Stellantis was sealed earlier this year.
The GM deal will provide Element 25 with US$85 million to fund its Louisiana battery-grade high-purity manganese sulfate (HPMSM) facility, which is scheduled to open in 2025.
To read the full article, click here.
Click here to connect with Element 25 (ASX:E25) for an Investor Presentation.
ASX Nickel Stocks: 5 Biggest Companies in 2024
Nickel has traditionally been used in alloys such as stainless steel. However, in recent years, growing demand for lithium-ion batteries has brought attention to its role in the quickly developing battery sector.
In Australia, the country's largest nickel-mining stocks are providing key support for both markets.
Nickel saw strong volatility in the first half of 2024 as Indonesian supply continued to flood the market, with some companies curtailing their production as the price fell below the US$16,000 per tonne mark in February.
A broad increase in commodities prices in April and May pushed nickel to a year-to-date high of US$21,615, but the base metal quickly fell again toward yearly lows. Its price on August 21 was US$16,862.
Given the challenges for nickel in 2024, share prices for many Australian producers have declined. With nickel prices projected to remain around the US$17,000 mark in 2024 before increasing to US$23,000 in 2028, there may be opportunities for less risk-averse investors to find good entry points to the Australian nickel sector.
Below are the five largest nickel stocks on the ASX by market cap. Data for this list was gathered using TradingView's stock screener, and all values were accurate as of August 20, 2024.
1. BHP (ASX:BHP)
Market cap: AU$201.44 billion; share price: AU$40.25
BHP is a diversified mining company with headquarters in Melbourne, Australia. Worldwide, BHP runs dozens of mines that span North and South America and Australia. The company produces nickel sulphide ore out of its operations in Western Australia's Northern Goldfields area. It covers the mining, development and production of nickel until both matte and metal are ready to be shipped to buyers. BHP sells over 85 percent of its nickel to the electric vehicle (EV) industry.
BHP is on its way toward net-zero nickel production. In September 2022, its Nickel West division signed a deal with renewable energy company Enel Green Power to begin construction of the Flat Rocks wind farm in Western Australia. The project is set to include 18 wind turbines, and they will be the tallest wind turbines in Western Australia. As of October 2023, more than half of the wind turbines were already in place. The first stage of the wind farm is expected to provide enough energy to power BHP's Kalgoorlie nickel smelter and Kambalda concentrator once complete.
In the operational review for its 2024 fiscal year, which ended on June 30, BHP reported production of 81,600 tonnes of nickel during the period, a 2 percent increase compared to its 2023 fiscal year.
This came in at the middle range of its 2024 guidance, which was set at 77,000 to 87,000 tonnes. In the report, BHP also notes that it will be temporarily suspending nickel production starting in October due to low prices, but will continue to invest in the site to enable a restart and support. It will review the decision by February 2027.
2. IGO (ASX:IGO)
Market cap: AU$3.77 billion; share price: AU$5.03
IGO is a diversified miner that produces several different metals, but its focus is on its 100 percent owned Nova nickel-copper-cobalt operation. Nova is located in Western Australia's Fraser Range and primarily produces nickel. IGO's other nickel production operation is Forrestania, located 400 kilometres east of Perth.
The company's results for its fourth fiscal quarter of 2024 show that nickel production from Nova came in slightly below guidance at 20,806 tonnes, despite a recovery in both grade and mill performance. Forrestania put out 7,571 tonnes, marginally above guidance, although continued seismic activity challenged ore availability.
IGO also has a 49 percent stake in the Tianqi Lithium Energy Australia joint venture with Tianqi Lithium (SZSE:002466,HKEX:9696). The joint venture has 51 percent ownership of Greenbushes, Australia's largest lithium mine.
3. Nickel Industries (ASX:NIC)
Market cap: AU$3.54 billion; current share price: AU$0.825
New South Wales-based Nickel Industries, formerly Nickel Mines, is a significant producer of nickel pig iron, a critical component in manufacturing stainless steel. The company began producing high-grade nickel matte for EVs in 2022.
Nickel Industries has 80 percent interests in multiple nickel rotary kiln electric furnace (RKEF) operations in Indonesia: Hengjaya Nickel; Oracle Nickel and Ranger Nickel in the Morowali Industrial Park; and Angel Nickel in the Weda Bay Industrial Park. It also has an 80 percent interest in the Hengjaya nickel mine near the Morowali Industrial Park.
In the company's 2023 annual report, it reported that its operations set a nickel production record of 131,126 tonnes. This included contained nickel in the 834,192 tonnes of nickel pig iron it produced with an average grade of 12.9 percent nickel, along with additional low-grade matte production of 119,822 tonnes grading 17.1 percent.
In its June quarterly report, the company reported that it had brought its interest in the Excelsior nickel-cobalt project up to 44 percent, an increase of 30.25 percent. The project is currently under construction and is expected to commissioned ahead of October 2025. So far in 2024, production levels have been down slightly from 2023, attributed to higher-than-average seasonal rainfall, which "impacted levels of nickel ore sold into the IMIP."
4. Centaurus Metals (ASX:CTM)
Market cap: AU$156.3 million; share price: AU$0.345
Centaurus Metals is a mining and development company based in Brazil. According to the company, its goal is to become a major supplier of nickel sulphide to help provide a cleaner and greener future. The firm has its sights set on the development of its wholly owned Jaguar nickel-copper-cobalt project, which is located in Brazil's Carajás mineral province.
On July 2, the company released a feasibility study for Jaguar forecasting an after-tax net present value of AU$997 million with an internal rate of return of 31 percent and payback period of 2.7 years from first production.
Jaguar's measured and indicated reserves stand at 737,800 tonnes of nickel from 86.6 million tonnes of ore with an average grade of 0.85 percent nickel, while its inferred resources come in at 211,000 tonnes from 22.6 million tonnes of ore grading 0.93 percent nickel. Maiden proven and probable open-pit ore reserves for the project are estimated at 459,200 tonnes of nickel from 63 million tonnes grading 0.73 percent nickel.
The company estimates annual production of 18,700 tonnes of nickel with an initial life of mine of 18 years.
5. Ardea Resources (ASX:ARL)
Market cap: AU$93.85 million; share price: AU$0.46
Ardea Resources is developing its wholly owned Kalgoorlie nickel-cobalt project in Western Australia, which includes the Goongarrie Hub deposit. The company has said the project “hosts the largest nickel-cobalt resource in the developed world.” Ardea is currently working toward a planned definitive feasibility study (DFS).
A 2023 prefeasibility study for Goongarrie Hub shows an ore reserve of 194.1 million tonnes at 0.7 percent nickel and 0.05 percent cobalt, resulting in 1.36 million tonnes of contained nickel and 99,000 tonnes of contained cobalt. The study indicates an open-pit operation with a 40 year life and annual output of 30,000 tonnes of nickel and 2,000 tonnes of cobalt.
In July 2023, the company signed a memorandum of understanding to develop Goongarrie Hub with a Japanese consortium consisting of Sumitomo Metal Mining (TSE:5713), Mitsubishi (TSE:8058) and Mitsui (TSE:8031). On February 29, Ardea shared that it has agreed with the consortium on a DFS budget and the scopes of work for the study.
The company announced on August 14 that it had been notified that the consortium had obtained approval from the Australian Foreign Investment Review Board for its investment; it also obtained merger control clearance from the Korea Fair Trade Commission. Ardea also provided an update on DFS progress in the announcement.
FAQs for nickel investing
What is nickel used for?
Nickel has a variety of applications. Its main use is as an alloy material for products such as stainless steel, and it is also used for plating metals to reduce corrosion. As its name suggests, nickel is used in coins as well, such as the 5 cent nickel in Australia, the US and Canada; Australian and US nickels are made up of 25 percent nickel and 75 percent copper, while Canada's nickel has nickel plating that makes up 2 percent of its composition.
Nickel demand is increasing from EVs, where the metal is a component of certain lithium-ion battery compositions; it has gotten extra attention thanks to that purpose.
Is nickel a good investment?
Nickel's role in EV batteries has seen it gain increased investor attention. In fact, its price spiked to an all-time high in 2022, and it remains at levels not seen in over a decade. For investors looking to invest in green metals, nickel could be a strong choice, but everyone should perform their own due diligence to decide whether it is the right portfolio fit.
How to invest in a nickel ETF?
Although there are no pure-play nickel ETFs, some ETF options to add the metal to your portfolio include the iShares S&P/TSX Global Base Metals Index ETF (TSX:XBM) and the VanEck Green Metals ETF (ARCA:GMET).
Exchange-traded funds (ETFs) can be a good option for investors who prefer a safer approach to investing in a sector. ETFs can be purchased the same as any other stock, which means you can invest in them using stock brokers and investing apps.
Article by Dean Belder; FAQs by Lauren Kelly.
This is an updated version of an article first published by the Investing News Network in 2018.
Don’t forget to follow us @INN_Australia for real-time updates!
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
Noble Grants Options and RSUs
Noble Mineral Exploration Inc. ( “Noble” or the “Company” ) (TSX-V:NOB, FRANKFURT: NB7, OTCQB:NLPXF) announces that effective as of August 13 , 202 4 (the “ Date of Grant ”), the Company’s Board approved the grant of a total of 4,300 ,000 stock options (the “ Options ”) and 2,540 ,000 restricted share units (“ RSUs ”) to officers, directors, and certain consultants of the Company. The Options were granted for services rendered and to be rendered . 150 ,000 of the Options were granted to a party who provides investor relations services to the Company, and therefore vest in tranches of 25% every three months. The balance of the Options vest immediately. The RSUs, which vest one year after the Date of Grant, were granted for services to be rendered over the next year. The Options and RSUs were granted pursuant to the Amended and Restated 2022 Equity Incentive Plan approved at the Company’s shareholder meeting on February 2 8 , 202 4 .
The Options have an exercise price of $0. 05 per common share of Noble and are exercisable for three years from the Date of Grant. Out of the total number of Options and RSUs granted, 2 , 85 0,000 Options and 2, 3 00,000 RSUs were granted to directors and officers of the Company. Upon being fully vested, the RSUs may be settled in the corresponding number of common shares of the Company, in the cash equivalent of those shares, or in a combination of shares and cash .
The grant of Options and RSUs is subject to compliance with TSX Venture Exchange requirements. Following the grant of Options and RSUs, the Company has a total of 7 , 8 00,000 stock options outstanding and 2 , 54 0,000 RSUs outstanding.
About Noble Mineral Exploration Inc.
Noble Mineral Exploration Inc. is a Canadian-based junior exploration company which, in addition to its holdings of securities in Canada Nickel Company Inc., Homeland Nickel Inc., Go Metals Corp. and MacDonald Mines Exploration Ltd., and its interest in the Holdsworth gold exploration property in the area of Wawa, Ontario, will continue to hold ~25,000 hectares of mineral rights in the Timmins-Cochrane areas of Northern Ontario known as Project 81, as well as an additional 20% interest in ~11,000 hectares in the Timmins area and ~175 hectares of mining claims in Central Newfoundland. Project 81 hosts diversified drill-ready gold, nickel-cobalt and base metal exploration targets at various stages of exploration. It will also hold its ~14,600 hectares in the Nagagami Carbonatite Complex and its ~4,600 hectares in the Boulder Project both near Hearst, Ontario, as well as ~3,700 hectares in the Buckingham Graphite Property, ~10,152 hectares in the Havre St Pierre Nickel, Copper, PGM property, and ~482 hectares in the Cere-Villebon Nickel, Copper, PGM property, all of which are in the province of Quebec. Noble’s common shares trade on the TSX Venture Exchange under the symbol “NOB”.
More detailed information on Noble is available on the website at www.noblemineralexploration.com .
Cautionary Statement
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
Contacts
H. Vance White, President
Phone: 416-214-2250
Fax: 416-367-1954
Email: info@noblemineralexploration.com
Investor Relations: ir@noblemineralexploration.com
Gold Prospectivity Enhanced at Black Swan and Lake Johnston
Poseidon Nickel (ASX: POS, the Company) is pleased to provide an update of its gold exploration programs across its three projects.
- Geological setting at Black Swan confirmed to be favourable for gold
- Gold bearing structures identified throughout the geological sequence
- Geological setting shown to be very similar to nearby gold mines including Kanowna Belle and Gordon Sirdar
- 52 gold nuggets found so far from the interpreted gold bearing structures
- Low-cost soil sampling program to be completed this month to better define the emerging gold trends. Anomalies identified will be followed up with drilling
- Felsic intrusive copper-gold system indicated at Lake Johnston
- LJPD0032 intersection of 2.26g/t Au and 2.36% Cu confirmed as a mineralised felsic intrusive
- Association of a broad, open ended, Cu-Au soil anomaly at Billy Ray and the likely link to the mineralised Cu-Au drill intersection beneath supports the prospectivity for a larger Cu-Au system
- The Billy Ray Cu-Au soil anomaly is open and strikes into the newly acquired Mantis tenement, presenting a high priority opportunity to undertake a systematic, multi-element soil sampling program for the first time
- Windarra along trend of known gold mineralisation
- Windarra is interpreted to contain strike extensions to the main mineralised gold trend which controls nearby gold camps – Lancefield and Beasley Creek
- Promising gold in soil anomalies within the tenements and over this prospective corridor will also be followed up with modern day soil programs
CEO, Brendan Shalders, commented, “Recent exploration activities have further enhanced the gold prospectivity at Black Swan and Lake Johnston.
Black Swan is located within the Boorara Geological Domain which hosts a number of gold mines including the nearby Kanowna Belle, Mungarra and Gordon Sirdar projects. The 52 gold nuggets recovered to date enhances the prospectivity of the interpreted gold structures that intersect with the geological sequences at Black Swan.
The team plans to complete a soil sampling program at Black Swan this month to further test the gold prospectivity at the project.
At Lake Johnston, further assessment of the open-ended broad Billy Ray gold in soil anomaly has also confirmed coincident copper anomalism. When considering the likely link to the previously reported LJPD0032 drill intersection grading 2.26g/t Au and 2.36% Cu in a mineralised felsic intrusive, support is building for a larger Cu-Au system in the area. Planned soil sampling across the Mantis tenement will include other important pathfinder elements useful in targeting intrusive related gold systems (Bi-Sb-Tb- As-Te-Ag), which were not assayed historically.
When considering the historical nickel focus at all of our projects, there has been very little sustained exploration for other commodities despite all three projects being located in the heart of the Eastern Goldfields region of Western Australia.
The recently reported gold anomalies at Windarra, the increased gold prospectivity at Black Swan and the growing Cu-Au potential at Lake Johnston all offer exciting opportunities to carry out low-cost, high reward exploration programs whilst maintaining our nickel resources and infrastructure options.
The pleasing progress reported today and planned programs remain consistent with our strategy to assess the greenfields potential for multiple commodities across all three of Poseidon’s projects.”
Black Swan Geology Setting Favourable for Gold Mineralisation
The Black Swan project is situated west of the Mt Monger Fault amongst a series of interpreted secondary structures emanating from the primary fault which are commonly associated with gold mineralisation. The secondary structures are similar to those controlling the Golden Valley and Kanowna Sequence which hosts a number of large gold deposits including Kanowna Belle and Gordon Sirdar (see Figure 1).
Figure 1: Black Swan Regional Geology Map & Tenement Locations
Komatiitic nickel deposits such as Black Swan occur as channel like features that are interpreted to be following very early-stage crustal scale structures that remain active throughout the Earth’s geological history. These long-lived structures may become reactivated during the gold mineralising events meaning that separate nickel and gold mineralisation events can share common structural associations (i.e. Beta Hunt).
Following on from the recently reported gold nuggets discovered at Black Swan, metal detecting programs have so far recovered a total of 52 gold nuggets with a combined weight of 17.9 grams.
The nuggets are small in size (typically <0.6 grams in weight) and angular, indicating limited mobility and in-situ formation from a likely nearby source. The nuggets have been found clustered in a single area with the remainder of the tenements not yet tested.
A recent field trip noted the gold nuggets are mapped within hangingwall felsic volcanics with areas of quartz veining and breccias, and ferruginous lag which could be a source for gold mineralisation.
Click here for the full ASX Release
This article includes content from Poseidon Nickel Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Nickel Price Update: Q2 2024 in Review
The first quarter of the year saw the nickel price under threat from a market glut as Indonesian supply flooded the market, forcing western producers to begin cutting production amid low profitability.
March brought a great deal of volatility, with nickel breaking through the US$18,000 per metric ton (MT) mark; however, by April 1 the base metal had once again slumped, opening the second quarter at US$16,568.
As Q2 progressed, commodities saw broad gains and nickel hit a year-to-date high of US$21,615 on May 20.
After reaching that high point, nickel couldn't find support and fell rapidly to close the second quarter at US$17,291. Since then, the price of nickel has continued to decline, approaching yearly lows of US$16,090 on July 30.
Nickel prices, April 1 to August 8, 2024.
Chart via Trading Economics.
Russian nickel faces western sanctions
During Q1, nickel prices were negatively affected as Indonesian producers continued to flood the market; however, the base metal began seeing positive momentum as the country experienced delays in approving mining output quotas, and amid speculation that Russian nickel could be sanctioned by the US and UK.
Ultimately, nickel wasn't sanctioned by those countries at the time, and as mining quotas began to work their way through Indonesian red tape, nickel prices once again experienced declines.
However, momentum began to shift again for nickel at the start of Q2. On April 12, news broke that Washington and London had banned US and UK metal exchanges from admitting new aluminum, copper and nickel from Russia. Taking immediate effect, the prohibitions also halted the import of those metals.
In July, the London Metal Exchange extended trading sanctions to Russian miner Norlisk Nickel’s Finnish operations for the trading of briquettes and cathodes; these restrictions are set to come into effect in October.
Joe Mazumdar, editor of Exploration Insights, suggested this move will have little impact on the sector.
“That nickel is still going to make it into the market, it’s just going to go to a different exchange, probably Shanghai … So I could still see that nickel moving and getting consumed in the global market — it’s just not coming to the west,” he explained to the Investing News Network in an interview.
Nickel continued to climb through April and May as a combination of factors drove metals prices more broadly. Dovish statements from the US Federal Reserve helped provide momentum, as did cooling inflation data.
Ultimately nickel prices fell back, with London Metal Exchange stockpiles of the metal increasing through the second quarter, rising from 77,604 MT on April 1 to 95,436 MT on June 28.
Western nickel producers cut output amid low prices
The overhang in the nickel market caused producers to begin curtailing their production in the early part of the year. This trend continued into the second quarter as more producers started to slow output or shut mines altogether.
Among the hardest-hit regions in the latest round of closures has been Australia, where low prices and high operating costs forced First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) to place its Ravensthorpe operations on care and maintenance at the end of April. The mine had been operating at lower capacity through the start of the year as it worked through aboveground stockpiles and used a lower-cost atmospheric leach circuit to process ore.
BHP (ASX:BHP,NYSE:BHP,LSE:BHP), which had been considering cuts earlier in the year, announced on July 11 that it would be suspending operations at its Nickel West operations and West Musgrave project.
In its announcement, it cites oversupply in the global nickel market and indicates consensus that nickel prices will be lower over the next half-decade due to growth in alternative, low-cost supply. BHP said it would begin transitioning its operations starting immediately, with the full suspension being completed between October and December of this year. The company notes that the closure is temporary and said it will review its decision in February 2027.
Mazumdar explained that Indonesia has a competitive advantage, but as more operations begin to cut production it will start to eat into the market surplus, which will be a positive for the nickel market.
“They can’t compete on a cost basis with Indonesia, nobody can. So Indonesia continues to oversupply the market, and now there’s an overhang. What happens is once you get these production cuts, there’s less supply in the market and then that overhang will recede. That’s the best thing that can happen to the nickel market,” he said.
Can government incentives boost western nickel output?
Amid these challenges, the US has set up a number of programs, including tax credits through the Inflation Reduction Act (IRA), to bolster domestic and allied production of nickel and other critical minerals.
The IRA was announced in 2022, but more recently, the Biden administration authorized the US Department of Energy’s Clean Energy Financing Program, which establishes a US$72 billion fund that will be used to provide guaranteed loans to “projects that increase the domestically produced supply of critical minerals.”
Mazumdar doesn’t think incentives like this will be enough to get new projects into the nickel space.
“The west can offer cheap loans to get people to build it, but they’re not going to make any money to pay back the loan no matter how cheap it is unless they give them a grant,” he said.
He explained that to get these projects off the ground, the nickel price would need to go higher to incentivize development, or governments would need to provide a guaranteed price to buy the nickel and build their own stockpiles.
Back-and-forth pressures between government initiatives and Chinese dominance have created a bifurcated market and left Indonesia with few options to diversify its exports, even as it negotiates a trade partnership with the US.
This has led to attempts from Indonesia to restructure investment deals with Chinese firms that would allow Indonesian nickel products to qualify for incentives under the IRA.
What factors are driving nickel demand?
Despite the nickel market's oversupply, there is still high demand, much of it from China.
China is the largest consumer of nickel in the world, accounting for around 65 percent of total consumption, with the bulk of it destined for steel products. However, as China’s real estate market has stalled out, so too has demand for steel products, with consumption slumping 3.3 percent during the first half of the year.
Total 2024 consumption is projected to fall to around 900 million MT, down from 933.4 million MT in 2023.
Despite the decline, nickel demand has been bolstered by increasing sales of battery electric vehicles (BEVs) in recent years. Even though reports indicated that demand for BEVs had waned at the start of 2024, growth in the segment has remained resilient, with BEVs' global share of the light vehicle market expected to reach 19.2 percent in 2024.
In China, the uptake has also been enormous, with sales from Chinese BEV producer BYD (OTC Pink:BYDDF,SZSE:002594) projected to exceed those of North American rival Tesla (NASDAQ:TSLA) in 2024.
Additionally, demand for hybrid vehicles is expected to exceed demand for traditional internal combustion engine (ICE) cars. While batteries for hybrids aren’t as large, they still use more nickel than ICE vehicles.
The amount of nickel used in batteries has been increasing in recent years as consumers demand greater range. BEVs use 25.3 kilograms of nickel on average, while hybrids use an average of 6.5 kilograms.
What will happen to the nickel price in 2024?
While production cuts should bring the market more into balance, the nickel price is likely to be determined by supply coming from Indonesia and demand from Chinese steel and battery production.
Even though governments have created initiatives to stimulate western production, they’re not likely to have much ability to increase mining operations as long as nickel prices remain depressed.
As pricing for nickel bottoms out, there may be opportunities for investors who are willing to be patient; however, it could be some time before prices rebound sufficiently for miners to begin restarting their operations.
Long-term predictions show nickel in the US$17,000 range for 2024, slowly improving to US$23,000 level in 2028.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Top 3 Canadian Nickel Stocks of 2024
After trending down in 2023, nickel prices climbed to a 10 month high in late May; however, they've since pulled back. While this environment has been tough for nickel companies, some stocks are still thriving.
Supply is expected to outflank demand over the short term, but the longer-term outlook for the metal is strong. Demand from the electric vehicle industry is one reason nickel's future looks bright further into the future.
“Global nickel consumption is expected to increase due to recovery of the stainless steel sector and increased usage of nickel in electric vehicle batteries. Batteries now account for almost 17 percent of total nickel demand, behind stainless steel," Ewa Manthey, commodities strategist at financial services firm ING, said in the lead-up to 2024.
“The metal’s appeal to investors as a key green metal will support higher prices in the longer term."
As for Canada's nickel market, the critical metal is listed as one of the top priorities in the Canadian government's Critical Minerals Strategy, which was announced in 2023. The country is the world's fifth largest producer of nickel, with much of its production coming from mines in Ontario's Sudbury Basin, including Vale’s (NYSE:VALE) Sudbury operation and Glencore's (LSE:GLEN,OTC Pink:GLCNF) Sudbury Integrated Nickel Operations.
In February, Canada Nickel Company (TSXV:CNC,OTCQX:CNIKF) announced its subsidiary NetZero Metals is planning to develop a US$1 billion nickel processing plant in Ontario that will become North America’s largest once complete.
How are Canadian nickel stocks performing in 2024? Below are the top nickel stocks in Canada on the TSXV and CSE by share price performance so far this year. TSX stocks were considered, but didn't make the cut.
All year-to-date and share price data was obtained on July 30, 2024, using TradingView’s stock screener. The top nickel stocks listed had market caps above C$10 million at that time.
1. Class 1 Nickel and Technologies (CSE:NICO)
Year-to-date gain: 233.33 percent; market cap: C$32.66 million; share price: C$0.20
Class 1 Nickel and Technologies' flagship property is its Alexo-Dundonald nickel project near Timmins, Ontario. The past-producing asset hosts four nickel sulfide deposits. The company’s pipeline also includes the past-producing Somanike nickel-copper project near Val-d’Or, Québec, and the River Valley platinum-group metals project near Sudbury, Ontario.
Class 1 Nickel released resource estimate updates for the Alexo South and Alexo North deposits in April and May of this year, respectively. The company said it expects to start work on a preliminary economic assessment for Alexo-Dundonald in the near term as part of its plan to bring the asset back into production.
The Canadian nickel exploration company's share price started off the year at C$0.06, and it began climbing in April to reach a year-to-date high of C$0.21 on July 26.
2. Power Nickel (TSXV:PNPN)
Year-to-date gain: 158.33 percent; market cap: C$119.22 million; share price: C$0.62
Power Nickel is developing its 80 percent owned Nisk polymetallic property in Québec, which hosts nickel, copper, platinum and palladium mineralization. According to the company, it plans to create Canada's first carbon-neutral nickel mine. The polymetallic nature of the project is a plus for the economic case for future nickel production in a low price environment.
This ongoing work has generated positive news flow for the company so far in 2024. After starting the year at C$0.24, Power Nickel began gaining in mid-April following two key announcements. First came drill results from the newly discovered Lion zone 5 kilometers northeast of the main Nisk deposit. Shortly after, the company announced the completion of its option to earn an 80 percent stake in Nisk from Critical Elements Lithium (TSXV:CRE,OTCQX:CRECF).
Power Nickel’s share price jumped more than 15 percent on May 10 to reach C$0.64 following news that drilling continued to expand the high-grade, near-surface Lion discovery, with notable assays including 14.42 meters at 0.59 grams per metric ton (g/t) gold, 69.14 g/t silver, 8.17 percent copper, 6.25 g/t palladium, 8.44 g/t platinum and 0.58 percent nickel.
In June, Power Nickel commenced an 8,000 meter summer drill program at Nisk, and closed a flow-through offering for gross proceeds of over C$20 million. Some of the biggest names in mining — Robert Friedland and Rob McEwen — participated. The company continued to climb before peaking at a year-to-date high of C$0.88 on June 21.
3. EV Nickel (TSXV:EVNI)
Year-to-date gain: 83.33 percent; market cap: C$48.01 million; share price: C$0.55
EV Nickel’s primary project is the 30,000 hectare Shaw Dome asset near Timmins, Ontario. The property includes the high-grade W4 deposit, which has a resource of 2 million metric tons at 0.98 percent nickel for 43.3 million pounds of Class 1 nickel across the measured, indicated and inferred categories.
Shaw Dome also holds the large-scale CarLang A zone, which has a resource of 1 billion metric tons at 0.24 percent nickel for 5.3 billion pounds of Class 1 nickel across the indicated and inferred categories.
EV Nickel is working on integrating carbon capture and storage technology for large-scale clean nickel production, and has procured funding from the Canadian government and Ontario's provincial government. In late 2023, the company announced it was moving its carbon capture research and development to the pilot plant stage.
The company's news so far in 2024 includes the closure of a flow-through financing in March that ultimately saw EV Nickel raise C$5.12 million to fund the development of its high-grade, large-scale nickel resources.
In April, EV Nickel launched its 2024 exploration program, which is aimed at advancing the CarLang trend and exploring other nickel targets. The most recent news out of the program came in mid-June with the announcement that diamond drilling on the Langmuir 2 high-priority nickel target had commenced, and plans were in place to begin drilling on high-grade nickel targets contained within the Shaw Dome project starting in mid-June.
The Canadian nickel exploration company's share price started off the year at C$0.30 before steadily climbing to reach a year-to-date high of C$0.79 on May 17.
FAQs for nickel investing
How to invest in nickel?
There are a variety of ways to invest in nickel, but stocks and exchange-traded products are the most common. Nickel-focused companies can be found globally on various exchanges, and through the use of a broker or a service such as an app, investors can purchase companies and products that match their investing outlook.
Before buying a nickel stock, potential investors should take time to research the companies they’re considering; they should also decide how many shares will be purchased, and what price they are willing to pay. With many options on the market, it's critical to complete due diligence before making any investment decisions.
Nickel stocks like those mentioned above could be a good option for investors interested in the space. Experienced investors can also look at nickel futures.
What is nickel used for?
Nickel has a variety of applications. Its main use is an alloy material for products such as stainless steel, and it is also used for plating metals to reduce corrosion. It is used in coins as well, such as the 5 cent nickel in the US and Canada; the US nickel is made up of 25 percent nickel and 75 percent copper, while Canada's nickel has nickel plating that makes up 2 percent of its composition.
Nickel's up-and-coming use is in electric vehicles as a component of certain lithium-ion battery compositions, and it has gotten extra attention because of that purpose.
Where is nickel mined?
The world's top nickel-producing countries are primarily in Asia: Indonesia, the Philippines and New Caledonia make up the top three. Rounding out the top five are Russia and Canada. Indonesia's production stands far ahead of the rest of the pack, with 2023 output of 1.8 million metric tons compared to the Philippines' 400,000 MT and New Caledonia's 230,000 MT.
Significant nickel miners include Norilsk Nickel (OTC Pink:NILSY,MCX:GMKN), Nickel Asia, BHP Group (NYSE:BHP,ASX:BHP,LSE:BHP) and Glencore (LSE:GLEN,OTC Pink:GLCNF).
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Canada Nickel Company is a client of the Investing News Network. This article is not paid-for content.
Geophysics and Drilling Discovers New Mineralised Structure West of Horden Lake, further Potential along Strike.
Pivotal Metals Limited (ASX: PVT) (‘Pivotal’ or the ‘Company’) is pleased to provide results from two further drill holes and a new airborne magnetic survey that highlights the regional scale growth potential of its 100% owned Horden Lake Project in Quebec, Canada.
Newly discovered mineralised zone adjacent to Horden Lake
- Airborne survey delineates 1.8km parallel magnetic anomaly, “Horden West”, 400m west of the main Horden Lake trend.
- First ever drill hole into Horden West provides strong encouragement for this new zone, highlights of HN-24-113:
- 2.2m @ 0.77% CuEq from 10.6m
- 1.1m @ 0.4% CuEq from 45m
- 1.5m @ 0.84% CuEq from 241m
- Geophysical surveys and follow up drilling are planned to fully investigate the potential of this new discovery.
Additional 600m strike extension potential south of Horden Lake main zone
- 2024 drilling, DHEM and drone magnetics defines up to 600m of potential strike extension to the southwest of Horden Lake.
- 3.2m @ 1.06% CuEq from 180.7m drilled in HN-24-108, in a low mag anomaly.
- Off-hole DHEM conductor coincides with strengthening magnetics to the SW.
- Shallow historical drilling results, which lie outside the Horden Lake 2022 resource boundary, highlight the potential of this extension
- 23.7m @ 1.24% CuEq from 33.4m, incl 7.9m @ 2.16% CuEq in HOR-13-02
- 54m @ 0.56% CuEq from 59.9m in H26820
Pivotal work program delivering
- Significant growth potential shown through drilling and geophysics completed by Pivotal on the Horden Lake property.
- Assay results from 16 holes from the 2024 drilling results are still pending.
- Metallurgical testwork in progress, with resource update expected in Q4 2024.
- Follow up geophysics to refine regional targets planned for Q4 2024.
- Follow up drilling planned for Jan 2025.
Managing Director, Mr Fairhall said:
“The best place to look for a deposit, is next to a deposit. This parallel corridor is a major development in expanding the potential of the project. Previously undrilled, so hitting mineralisation in the first hole is a great first step in developing this into a potentially significant target source of feed to complement the main Horden Lake deposit.
Elsewhere, along strike from Horden Lake, we have further defined a prospective 600m potential strike extension. The new data, combined with exciting intersections in historical drilling, provide clear targets to prioritise as the Company builds its open-pit resources.
Like our successful down-plunge step-out drilling, these are important evidence of the significant potential to enlarge the resource base and bulk-up what is already a sizeable and compelling copper development opportunity.
Overview
Horden Lake is a copper dominant Cu-Ni-Au-PGM-Co Project located 131km north-northwest of Matagami, in Quebec Canada. The Project hosts an indicated and inferred mineral resource estimate of 28mt at 1.5% CuEq, as a result of over 52,464m of drilling previously completed on the property. Pivotal has recently completed a 7,097m / 34 hole diamond drilling campaign of which 3,333m / 16 holes have been reported prior to this announcement.
The main objectives of the drilling program were to infill missing by-product multi-element assay information, target resource expansion potential (which remains open at depth across its full extent) and collect a distribution of metallurgical sample for a complete test work program. Downhole EM surveys have also been completed to dimension future exploration potential targets.
Click here for the full ASX Release
This article includes content from Pivotal Metals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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