Talon Metals Announces Updated PEA on the Tamarack Nickel Project: After-Tax NPV Increases 96% to US$569 Million

PEA Demonstrates Robust Economics and Optionality to Produce Nickel for the Electric Vehicle or Stainless Steel Markets

Talon Metals Corp. (TSX: TLO) ("Talon" or the "Company") is pleased to announce that it has completed an updated Preliminary Economic Assessment (the "February 2021 PEA") in respect of the Tamarack Nickel-Copper Cobalt Project (the "Tamarack Nickel Project"). Talon currently has the right to acquire up to a 60% ownership interest in the Tamarack Nickel Project upon the satisfaction of certain terms and conditions1.

Highlights

  • The February 2021 PEA provides economics for three considered scenarios:
    1. nickel sulphates used for the electric vehicle (EV) market ("Nickel Sulphate Scenario");
    2. nickel concentrates used to produce refined nickel powders for the electric vehicle (EV) market ("Nickel Powder Scenario"); and
    3. nickel concentrates used for the traditional stainless steel market ("Nickel Concentrate Scenario");
  • After-tax NPV's of:
    • US$569 million (after-tax IRR of 31.9%) (Nickel Sulphate Scenario);
    • US$567 million (after-tax IRR of 48.3%) (Nickel Powder Scenario); and
    • US$520 million (after-tax IRR of 45.6%) (Nickel Concentrate Scenario),
      using base case metal price assumptions of $8.00/lb nickel and $3.00/lb copper and a discount rate of 7%;
  • At incentive metal prices of $9.50/lb nickel and $3.50/lb copper, the after-tax NPV's increase to:
    • US$769 million (after-tax IRR of 38.6%) (Nickel Sulphate Scenario);
    • US$744 million (after-tax IRR of 57.7%) (Nickel Powder Scenario); and
    • US$695 million (after-tax IRR of 55.1%) (Nickel Concentrate Scenario).
  • The above-noted economics exclude the Company's recent positive drilling results both within the Tamarack Nickel Project's current resource area (see the Company's press releases dated January 12, 2021 and January 26, 2021) and approximately 350 meters up-dip to the north-east of the Tamarack Nickel Project's current resource area (i.e., drill results form the area known as CGO East, as discussed in the Company's press releases dated September 16, 2020 and November 2, 2020).
  • Low C1 Costs2 and All-in Sustaining Cost (net of by-product revenue) for all three contemplated scenarios, including a C1 Cost of $2.05/lb nickel and an All-in Sustaining Cost of $3.01/lb nickel under the scenario of selling nickel concentrates to the stainless-steel market (Nickel Concentrate Scenario);
  • Pre-tax payback period ranging from 1.4 to 1.8 years and after-tax payback period ranging from 1.5 to 2.1 years;
  • EBITDA margins ranging from 64% to 68%;
  • Overall tonnage included in the mine plan has increased by 119% from 4.9 million tonnes[3] to 10.8 million tonnes; and
  • Processing rate has increased 80% from 2,000 tonnes per day to 3,600 tonnes per day.

"The 96% increase in the after-tax NPV from US$291 million to US$569 million excludes drilling results announced since September 2020, as these drilling results are either outside of the Tamarack Nickel Project's resource area and/or assays are still pending.Our focus continues to be a systematic approach of resource expansion. The Talon team has successfully reduced exploration costs to very low levels, while predicting mineralization with great accuracy using both borehole and surface electromagnetic surveys (geophysics). Carefully designed drill holes are intercepted with precision. The utility of data collected from each drill hole is then maximized through detailed logging procedures, test programs and continual mine modelling," said Henri van Rooyen, CEO of Talon. "Our end game is producing low cost, Green NickelTM during a predicted period of unprecedented nickel shortages, whether it is to supply the electric vehicle (EV) or stainless steel market."

"Today's announcement of the updated Preliminary Economic Assessment, which demonstrates strong economics across a number of scenarios, is a significant milestone for our Company", said Sean Werger, President of Talon. "Having said that, there is much more to come. Indeed, this is evidenced by the fact that today's economics exclude the tremendous drilling success we have recently announced both within our current resource area (where we have announced extensions of massive sulphide mineralization) and approximately 1/3 of a kilometer north-east and up-dip of our resource area (where we have announced shallow, sheet-like mineralization). We are pleased to report that we now have three drill rigs running at site, so shareholders should expect plenty of drilling news over the coming days, weeks and months. With approximately C$15.4 million currently in the bank, we are well equipped to progress our strategy of growing the resource further and getting ready for feasibility studies."

"This updated Preliminary Economic Assessment (PEA) illustrates a high after-tax IRR, low All-in Sustaining Cost, low capital intensity, a modest initial capital investment, and a quick payback. These metrics are the hallmarks of a high quality mining project. The PEA also demonstrates that the Tamarack Nickel Project has the optionality to produce (1) nickel sulphates for the electric vehicle (EV) market; (2) nickel concentrates to be used for refined nickel powders also for the electric vehicle (EV) market; or (3) nickel concentrates for the traditional stainless steel market, and that all three contemplated scenarios have robust economics. None of the three scenarios include a nickel price premium for ESG-sensitive nickel production which we refer to as Green NickelTM", said Vince Conte, CFO of Talon. "With additional drilling and engineering in 2021, we are aiming to further increase the NPV of the Tamarack Nickel Project."

____________________
1
All amounts are presented on a 100% ownership basis and all dollar amounts are expressed in United States dollars unless indicated otherwise.
2
C1 cost includes value of metal claimed by smelter (metal units, treatment charges and refining charges), insurance, losses and transportation costs, less the value of by-products such as copper and cobalt. C1 cost is not an IFRS (International Financial Reporting Standards) measure and, although it is calculated according to accepted industry practice, the C1 cost may not be directly comparable to calculations carried out by other companies.
3
See the technical report entitled "NI 43-101 Technical Report Updated Preliminary Economic Assessment (PEA) of the Tamarack North Project - Tamarack, Minnesota" with an effective date of March 12, 2020 (the "March 2020 PEA") for comparisons in this news release. The March 2020 PEA is available under the Company's issuer profile on SEDAR (www.sedar.com) or on the Company's website (www.talonmetals.com).

Product Optionality to Meet the Needs of the Electric Vehicle (EV) Battery Supply Chain or Traditional Nickel Smelters

The February 2021 PEA has modelled three scenarios, as follows:


ScenarioDescription
1Nickel Powder ScenarioNickel concentrates produced at site and thereafter used to produce refined nickel powder by a third party for the EV market
2Nickel Sulphate ScenarioNickel sulphates produced at site for the EV market
3Nickel Concentrate ScenarioNickel concentrates produced at site and sold to a smelter, which produces LME grade nickel primarily for the stainless steel market

 

The following chart illustrates the three separate potential offtake options that Talon is pursuing. All three options are economic, which enhances the strategic optionality of the Tamarack Nickel Project.

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Figure 1: Talon's Proposed Nickel Supply Chain Options for Batteries Compared to the Current (Inefficient) Nickel Supply Chain for Batteries

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Comparison of the March 2020 PEA to Scenarios Modelled in the February 2021 PEA

The following table provides the key metrics of the three scenarios modelled in the February 2021 PEA, with the results from the historical March 2020 PEA provided for comparative purposes.

Table 1: Key Metrics of February 2021 PEA compared to March 2020 PEA

All amounts in
United States dollars
March 2020 PEA(1)February 2021 PEA
NICKEL POWDER SCENARIONICKEL SULPHATE SCENARIONICKEL CONCENTRATE SCENARIO
After-Tax NPV(2), (3)$291 million$567 million$569 million$520 million
After-Tax IRR(2)36.0%48.3%31.9%45.6%
Initial CAPEX and Working Capital$219 million$316 million$553 million$316 million
Payback Period, pre-tax(4)2.3 years1.4 years1.8 years1.4 years
Payback Period, after-tax(4)2.5 years1.5 years2.1 years1.6 years

 

(1) The March 2020 PEA is available under the Company's issuer profile on SEDAR (www.sedar.com) or on the Company's website (www.talonmetals.com). The March 2020 PEA was based on a nickel concentrate scenario.
(2) Metal prices of $8.00/lb Ni, $3.00/lb Cu, $25.00/lb Co, $1,000/oz Pt, $1,000/oz Pd and $1,300/oz Au. The same metal prices have been used in both the March 2020 PEA and the February 2021 PEA.
(3) Discount rate of 7%. NPV calculated from the start of construction.
(4) From the start of production.

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Figure 2: After-tax NPV, Initial CAPEX and After-tax IRR for the Nickel Powder, the Nickel Sulphate and Nickel Concentrate Scenarios, including results from the March 2020 PEA for comparative purposes

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At current metal prices and incentive metal prices, the after-tax NPV and after-tax IRR are as follows:

Table 2: After-tax NPV and After-tax IRR of February 2021 PEA using Current Metal Prices and Incentive Metal Prices

All amounts in
United States dollars
February 2021 PEA
NICKEL POWDER SCENARIONICKEL SULPHATE SCENARIONICKEL CONCENTRATE SCENARIO
Current Metal Prices of $7.98/lb Ni and $3.55/lb Cu
After-Tax NPV(1), (2)$602 million$597 million$565 million
After-Tax IRR(1)50.1%32.9%48.0%
Incentive Metal Prices of $9.50/lb Ni and $3.50/lb Cu
After-Tax NPV(3), (2)$744 million$769 million$695 million
After-Tax IRR(3)57.7%38.6%55.1%

 

(1) Metal prices of $7.98/lb Ni, $3.55/lb Cu, $19.97/lb Co, $1,107/oz Pt, $2,348/oz Pd and $1,834/oz Au as of February 3, 2021
(2) Discount rate of 7%. NPV calculated from the start of construction.
(3) Metal prices of $9.50/lb Ni, $3.50/lb Cu, $30.00/lb Co, $1,000/oz Pt, $1,000/oz Pd and $1,300/oz Au. Incentive price is an estimated price believed to be required to incentivize new mines to be constructed. Selected incentive price based on research, however may be higher or lower dependent on numerous factors such as: inflation, future volume of demand for nickel, required return on capital and cost profile (both CAPEX and OPEX) of new projects that potentially could be constructed to meet a supply shortfall among other factors. Incentive price represents a possible price during periods of nickel demand growth such as due to the projected growth in the EV market.

Additional metrics of the February 2021 PEA compared to the March 2020 PEA are included in the following table:

Table 3: Additional Metrics of February 2021 PEA compared to March 2020 PEA

All amounts in
United States dollars
March 2020 PEAFebruary 2021 PEA
NICKEL POWDER SCENARIONICKEL SULPHATE SCENARIONICKEL CONCENTRATE SCENARIO
Mine Plan Tonnage4.9 million 10.8 million10.8 million10.8 million
Mill Treatment Capacity2,000 tpd3,600 tpd3,600 tpd3,600 tpd
Mine Life from Start of Production8 years9 years9 years9 years
Ni Tonnes in situ103,000144,000144,000144,000
NiEq Grade of Mill Feed(1)2.82%1.85%1.85%1.85%
Ni Grade of Mill Feed2.10%1.34%1.34%1.34%
Cu Grade of Mill Feed1.06%0.76%0.76%0.76%
Ni Recovery83.4%(2)82.1%(2)78.0%(3)82.1%(2)
Total Cu Recovery94.4%(4)86.9%(4)84.5%(5)86.9%(4)
Recovered Metal
- Ni tonnes
- Cu tonnes

86,000
48,900

118,000
70,700

112,000
68,600

118,000
70,700
Ni Concentrate Grades13.30% Ni,
1.13% Cu
10.57% Ni,
0.95% Cu
n/a10.57% Ni,
0.95% Cu
Cu Concentrate Grade27.60% Cu,
2.91 g/t Au
27.04% Cu,
5.02 g/t Au
26.45% Cu
4.3 g/t Au
27.04% Cu,
5.02 g/t Au
Tonnes of Product Produced over Life of Mine (DMT)
- Nickel Concentrate
- Copper Concentrate
- Nickel Sulphate
647,000
151,000
n/a
1,117,000
222,000
n/a
n/a
260,000
505,000
1,117,000
222,000
n/a
Initial CAPEX and Working Capital$219 million$316 million$553 million$316 million
Total CAPEX (including Sustaining CAPEX)$259 million$395 million$646 million$395 million
Capital Intensity (Total CAPEX per Annual Tonne of Nickel-equivalent Production)(6)$21,000$23,000$40,000$23,000
EBITDA Margin60%68%64%64%
Pre-tax Cash Flow (EBIT) Margin43%50%41%46%
Revenue Split Ni/Cu/Other(7)77%/19%/4%76%/20%/4%79%/15%/6%74%/20%/6%
Ni Sulphate Premium(8)n/an/a$1.25/lb of Nin/a

 

(1) NiEq grade based on base case metal prices of $8.00/lb Ni, $3.00/lb Cu, $25.00/lb Co, $1,000/oz Pt, $1,000/oz Pd and $1,300/oz Au using the following formula: NiEq% = Ni%+ Cu% x $3.00/$8.00 + Co% x $25.00/$8.00 + Pt [g/t]/31.103 x $1,000/$8.00/22.04 + Pd [g/t]/31.103 x $1,000/$8.00/22.04 + Au [g/t]/31.103 x $1,300/$8.00/22.04. No adjustments were made for recovery or payability.
(2) To nickel concentrate
(3) To nickel sulphate
(4) To nickel and copper concentrate
(5) To copper concentrate
(6) Calculated as total CAPEX divided by average annual NiEq production during years 2 through 8.
(7) Other includes cobalt, platinum, palladium and gold
(8) Relative to LME Ni price

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Figure 3: Long-Section (looking west) of the February 2021 PEA Conceptual Mine Plan Development and Stopes in Relation to the Mineral Domains

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Updated Mineral Resource Estimate

The mineral resource estimate for the Tamarack North Project has been estimated in conformity with November 2019 CIM "Estimation of Mineral Resource and Mineral Reserves Best Practice" guidelines.

Mineral resources are not mineral reserves and do not necessarily demonstrate economic viability. There is no certainty that all or any part of this mineral resource will be converted into a mineral reserve.

This mineral resource estimate has been prepared by Mr. Brian Thomas (P.Geo), Senior Resource Geologist of Golder Associates Limited (Golder). The effective date of the mineral resource estimate is January 8, 2021. Mr. Brian Thomas is an independent "Qualified Person" as defined in National Instrument 43-101: Standards of Disclosure for Mineral Projects ("NI 43-101").

The mineral resource estimate has four domains:

  1. Upper Semi-Massive Sulphide Unit ("USMSU")
  2. Lower Semi-Massive Sulphide Unit ("LSMSU")
  3. Massive Sulphide Unit ("MSU")
  4. 138 Zone ("138")

The updated mineral resource estimate is based on a block modeling methodology consisting of 5m x 5m x 5m blocks for the USMSU, LSMSU and 138 Domains and 2.5m x 2.5m x 2.5m blocks for the MSU. All Domains were "unfolded" and had top cuts applied to restrict outlier values (Pt, Pd and Au). Resources were estimated using either Ordinary Kriged or Inverse Distance methodologies to interpolate grades (Ni, Cu, Co, Pt, Pd and Au) from 1.5m composited drill hole samples. Density values were based on specific gravity measurements and regression formulas where absent. The mineral resource estimate is reported at a 0.5% nickel cut-off and was determined to have reasonable prospects for mining.

Table 4: Tamarack North Mineral Resource Estimate: Effective January 8, 2021

DomainClassification%Ni
Cut-Off
Tonnes
(000)
Ni
(%)
Cu
(%)
Co
(%)
Pt
(g/t)
Pd
(g/t)
Au
(g/t)
NiEq
(%)
USMSUIndicated Resource0.51,4621.320.780.040.170.110.111.81
LSMSUIndicated Resource0.52,3402.081.100.050.550.340.252.87
MSUIndicated Resource0.51245.722.360.120.600.460.237.23
TotalIndicated Resource0.53,9261.911.020.050.410.260.202.62
USMSUInferred Resource0.52,6520.760.470.020.250.140.121.10
LSMSUInferred Resource0.51150.860.510.020.570.360.241.34
MSUInferred Resource0.54435.932.520.120.700.520.267.53
138Inferred Resource0.53,9530.820.630.020.210.120.141.21
TotalInferred Resource0.57,1631.110.680.030.260.160.141.57

 

All resources reported at a 0.5% Ni cut-off.
No modifying factors have been applied to the estimates.
Tonnage estimates are rounded to the nearest 1,000 tonnes.
Metallurgical recovery factored into the reporting cut-off.
NiEq grade based on base case metal prices of $8.00/lb Ni, $3.00/lb Cu, $25.00/lb Co, $1,000/oz Pt, $1,000/oz Pd and $1,300/oz Au using the following formula: NiEq% = Ni%+ Cu% x $3.00/$8.00 + Co% x $25.00/$8.00 + Pt [g/t]/31.103 x $1,000/$8.00/22.04 + Pd [g/t]/31.103 x $1,000/$8.00/22.04 + Au [g/t]/31.103 x $1,300/$8.00/22.04. No adjustments were made for recovery or payability.

Table 5: Tamarack North Mineral Resource Estimate In Situ Metal (Undiluted)

ClassificationTonnes of
Ni In Situ
Tonnes of NiEq(1) In SituMillion lbs of
Ni In Situ
Million lbs of NiEq(1) In Situ
Indicated Resource74,987102,795165227
Inferred Resource79,509112,352175248

 

(1) NiEq based on base case metal prices of $8.00/lb Ni, $3.00/lb Cu, $25.00/lb Co, $1,000/oz Pt, $1,000/oz Pd and $1,300/oz Au. No adjustments were made for recovery or payability.

February 2021 PEA Results

The basis of design of the February 2021 PEA, which was completed on the USMSU, LSMSU, MSU and the 138 Domains, is summarized in Table 6 below. TheFebruary 2021 PEA is preliminary in nature and includes inferred mineral resources. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the February 2021 PEA will be realized.

Table 6: Basis of Design: February 2021 PEA(1)

NoParameterDescription
1Approach and MandateImplement best available technologies to protect the environment, while creating a catalyst for establishing a long-term, sustainable industry.
2Mine Access MethodDecline ramp from surface with a road header
3Mine MethodsLong-hole stoping and drift and fill. Lateral development completed primarily with a road header.
4Mine OperationsContract labour mining with owner equipment supply. Mobile equipment is purchased.
5Material FlowVertical conveyor (primary) with some truck haulage
6Mill Feed10.8 Mt milled at 1.34% Ni, 0.76% Cu, 0.035% Co, 0.27 Pt g/t, 0.17 Pd g/t and 0.14 Au g/t equating to 1.85% NiEq(3).
7Type of Metallurgical ProcessBulk rougher flotation followed by cleaning of the bulk rougher concentrate and Cu/Ni separation. In the case of the Nickel Sulphate Scenario, additional hydrometallurgical processing.
Hydrometallurgical refinery (Nickel Sulphate Scenario only): Pressure oxidation leach, neutralization, Cu recovery, solvent extraction, nickel sulphate and cobalt sulphide production.
8Separation of TailingsBulk rougher tailings are treated in a desulphurization stage to produce a low-mass high sulphur stream and high-mass low sulphur tailings.
9BackfillCemented paste backfill utilizing all high sulphur tailings generated and low sulphur tailings.
10Co-disposed Filtered Tailings Facility ("CFTF")Filtered low sulphur tailings (at 85% solids) co-disposed with waste rock in a lined surface facility. The liner system of the facility will consist of a composite liner overlain by a drainage layer. Contact water from the facility will be collected in perimeter ditches and subsequently treated. Upon closure, the CFTF will be encapsulated by a composite cover. The Company is studying the potential for sequestrating CO2 within the CFTF.
11Mill Treatment Capacity3,600 t/d for concentrator/mill
475 t/d for hydrometallurgical refinery in the Nickel Sulphate Scenario.
12Mine Life9 years (excluding construction period).
13Existing Project InfrastructurePaved highway, grid power, railway line across site, port.
14Sustainable DevelopmentThe Company is studying the potential of establishing a solar garden to generate energy during and post mining.

 

(1)See February 2021 PEA for further details in respect of this table to be published under the Company's issuer profile on SEDAR (www.sedar.com) within 45 days of this news release.
(2) Resources included in the Life of Mine Mined Tonnes were evaluated by calculating the NSR, using the following metal prices: $8.00/lb Ni and $3.00/lb Cu. Revenue from Co, Au, Pt and Pd was not considered to be conservative. Relevant functions were applied such as metal recovery curves, smelting and refining terms, transportation costs and state royalties as applicable. The calculated NSR was then compared to the operating cost per tonne to determine inclusion or exclusion of resource into the mine plan based on value addition or destruction.
(3) NiEq% = Ni%+ Cu% x $3.00/$8.00 + Co% x $25.00/$8.00 + Pt [g/t]/31.103 x $1,000/$8.00/22.04 + Pd [g/t]/31.103 x $1,000/$8.00/22.04 + Au [g/t]/31.103 x $1,300/$8.00/22.04. No adjustments were made for recovery or payability.

Capital and Operating Costs

Capital costs for the Tamarack North Project were estimated by DRA Americas Inc. for the mine, process and surface facilities, by Paterson & Cooke Canada Inc. for the paste backfill and by SLR Consulting (Canada) Ltd. for the CFTF. All cost estimates have been forecast in US dollars using constant, fourth quarter 2020 dollars, (i.e. in "real" dollars), without provision for inflation or escalation, and are subject to change if new information is received or circumstances change.

Mine capital costs were mostly based on budgetary quotes from vendors and/or guidance from contractors. The remaining process and surface infrastructure, as well as some minor mine infrastructure costs, were based on consultant database information. Mine, process and surface operating costs are based on a combination of both budgetary quotes and consultant database information. Various operating parameters are based on historical information or are based on vendor support.

Capital Costs

The total estimated capital cost for each of the Nickel Powder Scenario or the Nickel Concentrate Scenario is US$394.99 million of which US$315.80 million is the initial cost required during the first three years, including the first production year. The total estimated capital cost of the Nickel Sulphate Scenario is US$646.44 million, of which US$552.61 million is the initial cost required during the first three years, including the first production year. The amounts include indirect costs and contingency.

Table 7: Capital Costs

US$ millionsNickel Powder Scenario or
Nickel Concentrate Scenario
Nickel Sulphate Scenario
AreaInitial
Cost
(US$M)
Sustaining Cost (US$M)Total
Cost
(US$M)
Initial
Cost
(US$M)
Sustaining Cost (US$M)Total
Cost
(US$M)
Mine$130.15 $70.32 $200.47 $130.15 $70.32 $200.47
Process and Surface Facilities$167.51 $22.01 $189.51 $390.56 $50.41 $440.97
Closure Costs other than CFTF - $10.00$10.00 - $10.00$10.00
Salvage Value of Mill - ($5.00)($5.00) - ($5.00)($5.00)
Sub Total$297.66 $97.33 $394.99 $520.71 $125.73 $646.44
Working Capital$18.15 ($18.15) - $31.90 ($31.90) -
Total$315.80 $79.18 $394.99 $552.61 $93.83 $646.44

 

Operating Costs

The average operating cost for the 9 year mine life is US$48.15/tonne of mill feed in the Nickel Powder Scenario, US$75.99/tonne of mill feed in the Nickel Sulphate Scenario and US$56.54/tonne of mill feed in the Nickel Concentrate Scenario, and detailed in the following table.

Table 8: Operating Cost per Tonne of Mill Feed

Cost CategoryOperating Cost (US$/t of Mill Feed)
Nickel Powder ScenarioNickel Sulphate ScenarioNickel Concentrate Scenario
Mining$27.49$27.49$27.49
Processing (milling/concentrating)$14.25$14.25$14.25
Hydrometallurgical Refining-$26.68-
Product Handling, Transportation, Losses, and Insurance$1.90$2.22$10.29
Co-disposed Filtered Tailings Facility (CFTF) $0.75$0.75$0.75
General & Administrative$3.76$4.60$3.76
Total OPEX$48.15$75.99$56.54

 

Mining costs include variable and allocated fixed operational costs only. All mobile and other equipment, as well as all development costs, are included in initial and sustaining capital costs.

A review of the underground mine plan was completed with the objective of reducing mine capital and operating costs and accelerating time to first production. Several opportunities were evaluated and incorporated into the February 2021 PEA. These are summarized in the following table.

Table 9: February 2021 PEA Mine Design Updates Compared to March 2020 PEA


March 2020 PEAFebruary 2021 PEA
Primary AccessShaftDecline
Primary Development MethodDrill / BlastRoad Header
Longhole Stope Sizes7.5m W x 15m H x 15m L15m W x 25m H x 30m L
Drift and Fill Size3.0m W x 3.0m H6.5m W x 5.0m H
Mobile EquipmentLeased (opex)Purchased (capex/sustaining)
Material HandlingHoisting (Skips)Vertical Conveyor
Main InfrastructureUndergroundSurface

 

The overall mining cost is US$27.49/t of mill feed and consists of direct mining costs, backfill, cross cut development, material flow, truck haulage, services, management, engineering and supervision.

The breakdown of tonnes milled and cost by mining method is shown in the following table:

Table 10: Mining Operating Cost by Mining Method

Mining MethodTonnes MinedPercentage of TotalMine Operating Cost
(US$/t of mill feed)
Drift & Fill779,3827.2% $39.95
Long hole Stoping8,456,39778.6% $22.86
Ore Development1,523,01714.2% $46.88
Totals10,758,796100.0% $27.49 (weighted average)

 

Processing costs include variable and allocated fixed costs related to processing of mineralized material, from milling through to concentrate or sulphate production (depending upon the selected scenario).

Product handling, transportation losses and insurance are higher for the Nickel Concentrate Scenario, as the nickel concentrate is sold on a Cost Insured Freight ("CIF") basis. In contrast, in the Nickel Powder Scenario, the nickel concentrate is sold on a Free on Board ("FOB") basis at the mine gate. In the Nickel Sulphate Scenario, nickel sulphates are sold on an FOB basis. In all scenarios, the copper concentrate is sold on a CIF basis.

The cost of the CFTF consists of all variable and allocated fixed costs from the mill through to mine closure.

C1 Cost and All-in Sustaining Cost ("AISC")

A)Nickel Powder Scenario

No benchmark has been set for expressing C1 cash cost or AISC for selling nickel powders to the EV industry in large quantities.

To be consistent with the nickel-to-stainless steel industry best practices, the following methodology has been used:

C1 Cash Cost: The cash cost of producing a pound of nickel in concentrate sold FOB at the mine gate less all by-product credits is shown in the following table:

Table 11: C1 Cash Cost of the Nickel Powder Scenario

Cost$/lb Ni in Concentrate
On-site Cash Costs$1.91
Off-site Costs of By-products$0.19
Less: By-product Revenue($2.01)
Net Cost of Producing Nickel in Concentrate at the Mine Gate$0.08*

 

*Does not total due to rounding

Nickel concentrates need to be refined to produce nickel powder for the EV industry, which will require additional capital and operating costs: For instance, if it costs $1.17/lb to convert nickel concentrate to a nickel powder, the C1 cash cost of producing nickel powder would be $1.25/lb of nickel. Talon is working towards developing a flowsheet to determine the cost of converting nickel concentrates to nickel powder at the mine site.

AISC: The AISC of producing a pound of nickel in concentrate sold FOB at the mine gate is the C1 cash cost plus royalties and sustaining CAPEX as shown in the following table.

Table 12: AISC of the Nickel Powder Scenario

Cost$/lb Ni in Concentrate
C1 Cash Cost$0.08
Government and Private Royalties$0.62
Sustaining CAPEX$0.37
AISC of Producing Nickel in Concentrate at the Mine Gate$1.07

 

In the Nickel Powder Scenario, nickel concentrates are sold at a discount to the LME nickel price, similar to the Nickel Concentrate Scenario. However, the discount to the LME nickel price is expected to be smaller for the Nickel Powder Scenario as compared to the Nickel Concentrate Scenario, given the supply chain from mine to battery removes several processing and transportation steps (thereby creating a win-win for both the mining company and the battery company).

Should the facility that converts nickel concentrates to nickel powders for the EV industry be co-located at the mine site, transportation costs will be extremely low compared to the Nickel Concentrate Scenario: Nickel powders for the EV industry require 99.99%+ purity and therefore, almost no waste is transported. In contrast, nickel concentrates at approximately 11% by mass of valuable metals requires the transportation of 89% waste. As with the Nickel Sulphate Scenario, the product under the Nickel Powder Scenario is sold FOB at the mine gate.

Nickel concentrates need to be refined to produce nickel powder for the EV market, which will require additional capital and operating cost: For instance, if it costs $1.17/lb to convert nickel concentrate to a nickel powder, the AISC of producing nickel powder would be $2.24/lb of nickel. Talon is working towards developing a flowsheet to determine the actual cost of converting nickel concentrates to nickel powder at the mine site.

B)Nickel Sulphate Scenario

Nickel sulphates produced at site will be sold FOB at the mine gate and therefore, the C1 cash cost is calculated as shown in the following table:

Table 13: C1 Cash Cost of the Nickel Sulphate Scenario

Cost$/lb Ni in Ni Sulphates
On-site Cash Costs$2.05
On-site Cost of Converting a Nickel Concentrate to a Nickel Sulphate$1.16
Off-site Costs of By-products$0.23
Less: By-product Revenue($2.42)
Net Cost of Producing Nickel in Nickel Sulphates at the Mine Gate$1.02

 

On site cash costs are higher for the Nickel Sulphate Scenario (before accounting for the cost of converting nickel concentrate to a nickel sulphate), as 95% of nickel in concentrates is expected to be recovered in the hydrometallurgical process, thereby reducing the denominator (pounds of nickel shipped) and increasing the overall cost per pound of nickel.

The higher by-product revenue compared to the Nickel Powder Scenario is due to higher cobalt revenues, as the Nickel Sulphate Scenario produces a cobalt sulphide, which due to its grade has high payabilities (compared to the lower payabilities assumed in the Nickel Powder Scenario).

AISC for nickel sulphates produced at site is calculated as shown in the following table:

Table 14: AISC of the Nickel Sulphate Scenario

Cost$/lb Ni in Ni Sulphates
C1 Cash Cost$1.02
Government and Private Royalties$0.78
Sustaining CAPEX$0.51
AISC of Producing Nickel in Nickel Sulphates at the Mine Gate$2.31

 

In the Nickel Sulphate Scenario, nickel sulphates are sold as opposed to nickel concentrates. The traditional supply chain requires the production of LME grade nickel that is used as a feedstock to produce nickel sulphates. Nickel sulphates are therefore typically sold at a premium to the LME nickel price. In the case of the Tamarack Nickel Project, nickel sulphates could be produced directly from nickel concentrates at site, thereby reducing the number of process and transportation steps. The premium to market price applies irrespective of processing route.

Royalties per pound are higher in the Nickel Sulphate Scenario compared to the Nickel Powder Scenario because under the Nickel Sulphate Scenario, a value-added product (that results in a premium price) is sold.

AISC under the Nickel Sulphate Scenario is higher than the Nickel Concentrate Scenario because of the incremental CAPEX associated with the hydrometallurgical refinery.

C)Nickel Concentrate Scenario

The Nickel Concentrate Scenario contemplates the traditional nickel-to-stainless steel supply chain.

C1 Cost: The cost of producing a pound of nickel in concentrate sold CIF to the smelter less all by-product credits is shown in the following table:

Table 15: C1 Cost of the Nickel Concentrate Scenario

Cost$/lb Ni in Concentrate
On-site Cash Costs$1.91
Less: Value of By-products in Concentrate ($2.95)
Net Cost of Producing Nickel in Concentrate at the Mine Gate($1.03)*
Product Handling, Transportation, Insurance and Losses$0.43
Smelting, Refining and Deductions by the Smelter/Refiner $2.66
C1 Cost of a lb of Nickel in LME Grade Briquettes$2.05*

 

*Does not total due to rounding

Under the Nickel Concentrate Scenario, by-product revenue is the highest because the by-products are calculated using the gross value of metal in the concentrate transported to the smelter.

Product handling, transportation insurance and losses in the Nickel Concentrate Scenario are high because of the need to transport both the nickel and copper concentrates from the mine to smelters.

The smelting, refining and deductions line item consists of both cash charges by the smelters/refiners such as treatment charges and refining charges as well as deduction of metal units sent to the smelter but not paid to the mine.

AISC: The AISC of producing a pound of nickel in concentrate sold CIF to the smelter less all by-product credits less all sustaining capital.

Table 16: AISC of the Nickel Concentrate Scenario

Cost$/lb Ni in Concentrate
C1 Cost$2.05
Government and Private Royalties$0.59
Sustaining CAPEX$0.37
AISC of a lb of Nickel in LME grade briquettes$3.01

 

In the Nickel Concentrate Scenario, nickel concentrates are sold at a discount to the LME nickel price. This discount to the LME nickel price is expected to be higher for the Nickel Concentrate Scenario compared to the Nickel Powder Scenario, as the traditional supply chain from mine to stainless steel requires more processing and transportation steps. Traditionally, transportation and insurance costs are incurred by the mining company and is therefore included in the cost calculation.

The C1 cost of $2.05/lb nickel to produce a nickel briquette calculated for the February 2021 PEA is lower than the C1 cost of $2.67/lb Ni in the prior March 2020 PEA. By way of explanation, although there was an initial cost increase due to the addition of lower grade disseminated sulphide materials to the mine plan from both the 138 and USMSU Domains, this cost increase was more than offset by the reduction in costs due to economies of scale realized from increasing the production rate from 2,000 tpd to 3,600 tpd, as well as major improvements to mine access, development and stoping costs and the application of the latest publicly available smelting and refining terms, which have improved since the March 2020 PEA. In total, this resulted in a C1 cost reduction.

Similarly, the AISC of $3.01/lb nickel to produce a nickel briquette calculated for the February 2021 PEA is lower than the AISC of $3.57/lb Ni in the prior March 2020 PEA: royalties have decreased because of the inclusion of lower grade material in the mine plan and sustaining CAPEX on a per lb basis has increased.

Economic Analysis

At the assumed base case metal prices, key metrics of the February 2021 PEA of the Tamarack North Project are summarized in the following table.

Table 17: Key Metrics of February 2021 PEA

All amounts in
United States dollars
February 2021 PEA
NICKEL POWDER SCENARIONICKEL SULPHATE SCENARIONICKEL CONCENTRATE SCENARIO
After-Tax NPV(1), (2)$567 million$569 million$520 million
After-Tax IRR(1)48.3%31.9%45.6%
Initial CAPEX and Working Capital$316 million$553 million$316 million
Payback Period, pre-tax(3)1.4 years1.8 years1.4 years
Payback Period, after-tax(3)1.5 years2.1 years1.6 years
Mine Life(3)9 years9 years9 years

 

(1) Metal prices of $8.00/lb Ni, $3.00/lb Cu, $25.00/lb Co, $1,000/oz Pt, $1,000/oz Pd and $1,300/oz Au.
(2) Discount rate of 7%. NPV calculated from the start of construction.
(3) From the start of production

Metal prices used for the base case financial evaluation, as well as for sensitivity cases, are summarized in the following table. Base case prices were based on analyst consensus long-term prices. "Low" was used to estimate a pessimistic scenario. Incentive pricing is based on an estimated price required to incentivize the construction of new mines to meet the projected increased demand for battery metals such as nickel and cobalt during the next decade.

Table 18: Assumed Metal Prices


UnitLowBase CaseIncentive Pricing
NiUS$/lb$6.75$8.00$9.50
CuUS$/lb$2.75$3.00$3.50
CoUS$/lb$15.00$25.00$35.00
PtUS$/oz$1,000$1,000$1,000
PdUS$/oz$1,000$1,000$1,000
AuUS$/oz$1,300$1,300$1,300

 

Pre-tax and after-tax NPV at various discount rates, pre-tax and after-tax IRR, EBITDA and EBIT margin over the life of mine, and payback period from start of production in years for the three metal price cases (Low, Base Case and Incentive Pricing) are summarized in the following table.

Table 19: After-tax and Pre-tax NPV, After-tax and Pre-tax IRR, EBITDA and EBIT Margin over Life of Mine and Payback Period Using Low, Base Case and Incentive Metal Price Assumptions

  Nickel Powder ScenarioNickel Sulphate ScenarioNickel Concentrate Scenario
 Discount rateMetal Price CaseMetal Price CaseMetal Price Case
 LowBaseIncentiveLowBaseIncentiveLowBaseIncentive
Pre-tax NPV7%          496           688           917           478 711970          439           629           854
US$ millions8%          463           646           863           438 660906          409           589           803
 10%          404           570           767           367 568790          355           518           712
Pre-tax IRR 45.0%56.0%67.4%29.2%37.6%45.7%41.5%52.6%64.2%
After-tax NPV7%          415           567           744           387 569769          369           520           695
US$ millions8%          386           530           698           351 524714          342           485           651
 10%          333           463           616           286 443615          293           423           573
After-tax IRR 39.3%48.3%57.7%25.1%31.9%38.6%36.4%45.6%55.1%
EBITDA margin64%68%70%60%64%66%60%64%67%
EBIT margin43%50%55%34%41%47%39%46%52%
Payback from start of production (pre-tax, undiscounted)         
           1.6            1.4            1.2            2.2            1.8            1.6            1.7            1.4            1.2
Payback from start of production (after-tax, undiscounted)
 

 

  
           1.8            1.5            1.3            2.4            2.1            1.8            1.9            1.6            1.4

 

Recommendations

It was previously recommended that Talon should determine whether it should sell nickel concentrates or nickel sulphates by developing and contrasting the economic impact of these two scenarios. The Company's targeted completion date to achieve this milestone was at the end of February 2021.

Talon has now achieved this objective.

Since that time, Tesla, Inc. has articulated that it has the goal of consuming raw nickel powder, which will dramatically simplify the nickel to battery supply chain. Talon's nickel powder scenario contemplated in the February 2021 PEA is based on selling nickel concentrates to a co-located refinery that produces high purity nickel powders. Talon believes, however, that the same refinery could potentially produce high purity iron powders as a by-product. It is therefore recommended that going forward, the economic impact of a scenario where Talon produces both refined nickel and iron powders is quantified.

If successful, Talon could potentially produce three products:

  • Refined nickel powders for the nickel battery cathode market;

  • Refined iron powders for the lithium iron phosphate (LFP) market; and

  • Copper concentrates.

Talon's next milestone should therefore be to develop a flowsheet in addition to CAPEX and OPEX estimates for the above scenario. A successful outcome could allow Talon to lower its cut-off grade and therefore, increase the amount of metal it could produce from the Tamarack Nickel Project. This, in turn, would lead to a different resource envelope and consequently, mine plan.

Once Talon has decided whether it should produce nickel concentrates, nickel sulphates or nickel and iron powders, the Company will complete a prefeasibility study.

In the meantime, going forward Talon should focus on resource expansion and definition drilling in order to progress towards prefeasibility and feasibility studies assuming the Company proceeds with the Nickel Powder Scenario contemplated in the February 2021 PEA. It is estimated that between 25,000 and 30,000 meters of drilling will be required, mostly focussed on expansion of the Tamarack Nickel Project's current resource area. Talon's in-house team of experienced specialists operate their own drilling and geophysical equipment efficiently and at low cost. It is therefore expected that this recommendation is achievable during 2021.

Talon also has a comprehensive geotechnical logging program in place and should therefore continue with laboratory testing of drill core, collecting down hole data using acoustic televiewer and full wave sonic technology, as well as in-situ stress measurement testing. Hydrological work should be conducted as appropriate for each level of study. Installation of multilevel vibrating wire piezometers in selected historical drill holes and additional aquifer property testing within the glacial till and bedrock aquifers are also recommended.

Geo-metallurgical testing programs should continue and should be based on the predicted Life-of-Mine feed bearing in mind the specific requirements of each of the possible customers for the different products listed above. It is recommended that Talon maintains optionality and complete the second phase of hydrometallurgical testing to produce nickel sulphates. Waste products from geo-metallurgical testing programs should be used to continue environmental test work.

Conclusions

The February 2021 PEA illustrates a high after-tax IRR, low All-in Sustaining Cost (AISC), low capital intensity and a quick payback for the Tamarack Nickel Project. The February 2021 PEA also clearly demonstrates that the Tamarack Nickel Project has the optionality to produce either nickel sulphates or nickel concentrates for refined nickel powders to be used for the EV market or nickel concentrates for the stainless steel market, with all contemplated scenarios having extremely robust economics.

As discussed, the February 2021 PEA does not include any of the Company's recent positive drilling results both within the Tamarack Nickel Project's current resource area (see the Company's press releases dated January 12, 2021 and January 26, 2021) and approximately 350 meters up-dip to the north-east of the Tamarack Nickel Project's current resource area (i.e., drill results from the area known as CGO East, as discussed in the Company's press releases dated September 16, 2020 and November 2, 2020).

The February 2021 PEA will be filed on SEDAR (www.sedar.com) and on the Company's website (www.talonmetals.com) within 45 days.

Quality Assurance, Quality Control and Qualified Persons

For the purposes of the February 2021 PEA and this press release, the Qualified Persons("QP"), as such term is defined in NI 43-101 are as follows:

The mineral resource estimate contained in this news release was prepared by or under the supervision of Mr. Brian Thomas (P.Geo.), who is a geologist independent of Talon and an employee of Golder Associates Ltd. In addition, Mr. Thomas has reviewed the sampling, analytical and test data underlying such information and has visited the site and reviewed and verified the QA/QC procedures used at the Tamarack North Project and found them to be consistent with industry standards. In Golder's opinion, the mineral resource estimate disclosed herein has been prepared in accordance with CIM best practice guidelines.

The overall February 2021 PEA NI 43-101 report was compiled (with inputs from other QPs as indicated) by Mr. Tim Fletcher, P. Eng., a Senior Project Manager with DRA Americas who is independent of the Company.

The mining methods, including mine development and mine plan, were developed by Mr. Andre-Francois Gravel, P. Eng., a Senior Mining Engineer with DRA Americas who is independent of the Company.

The mine CAPEX and OPEX were developed by Mr. Daniel M. Gagnon, P. Eng., a Senior Mining Engineer and VP Mining and Geology for DRA Americas who is independent of the Company and who has visited the site.

A summary of metallurgical test work and proposed mineralized and hydrometallurgical processing methods for the project were compiled by Mr. Oliver Peters, P. Eng., Principal Metallurgist and President of Metpro who is independent of the Company.

Proposed hydrometallurgical processing methods for the project were reviewed by Dr. Volodymyr Liskovych, PhD, P Eng., a Principal Process Engineer with DRA Americas, who is independent of the Company.

The economic analysis, including pre-tax and after-tax financial results and sensitivity analysis was completed by Mr. Christian Hizmeri, MBA, Financial Analyst for DRA Americas (under the supervision of Mr. Daniel M. Gagnon, P. Eng.) who are both independent of the Company.

The conceptual design of the CFTF was completed by Mr. David Ritchie, P.Eng., Engineering Manager with SLR Consulting (Canada) Ltd. who is independent of the Company.

The requirements for the backfill paste recipe and underground distribution methodology were reviewed by Mr. Leslie Correia, Pr. Eng., Engineering Manager for Paterson & Cooke Canada Inc., who is independent of the Company.

Environmental considerations and permitting were addressed by Ms. Andrea Martin, P.E., Foth Infrastructure & Environment, LLC, De Pere Wisconsin, who has reviewed and verified detailed environmental study requirements used by Talon for the Tamarack North Project and found them to be consistent with industry standards. She is independent of the Company and has visited the site.

About Talon

Talon is a TSX-listed base metals company in a joint venture with Rio Tinto on the high-grade Tamarack Nickel-Copper-Cobalt Project located in Minnesota, USA, which comprises the Tamarack North Project and the Tamarack South Project. Talon has an earn-in to acquire up to 60% of the Tamarack Nickel Project. The Tamarack Nickel Project comprises a large land position (18km of strike length) with numerous high-grade intercepts outside the current resource area. Talon is focused on expanding its current high-grade nickel mineralization resource prepared in accordance with NI 43-101; identifying additional high-grade nickel mineralization; and developing a process to potentially produce nickel sulphates responsibly for batteries for the electric vehicles industry. Talon has a well-qualified exploration and mine management team with extensive experience in project management.

For additional information on Talon, please visit the Company's website at www.talonmetals.com or contact:

Sean Werger, President
Email: werger@talonmetals.com
Telephone: 416-361-9636

Forward-Looking Statements

This news release contains certain "forward-looking statements". All statements, other than statements of historical fact that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Such forward-looking statements include, among other things, statements relating to the results of the February 2021 PEA, including with respect to estimates of mineral resource quantities and qualities, the mining method, mine life, the basis of design of the February 2021 PEA, optionality, capital and operating costs, NPV (and future increases to NPV), IRR, EBITDA, EBIT, payback, cash costs (C1 cash cost and AISC), targets, goals, objectives and plans, including statements relating to the timing, results and costs of future exploration, including resource expansion, geophysical potential and results, and drilling plans, quantification of producing both refined nickel and iron powders, and assumptions in respect of metal pricing, future news and future studies, including a prefeasibility study and feasibility study.

Forward-looking statements are subject to significant risks and uncertainties and other factors that could cause the actual results to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to: failure to establish estimated mineral resources, the grade, quality and recovery of mineral resources varying from estimates, the uncertainties involved in interpreting drilling results and other geological data, inaccurate geological and metallurgical assumptions, including with respect to the size, grade and recoverability of mineral reserves and resources, uncertainties relating to the financing needed to further explore and develop the properties or to put a mine into production and other factors including exploration, development and operating risks, uncertainties with economic estimates, capital and operating costs, mine plan and development issues.

Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

The mineral resource figures disclosed in this news release are estimates and no assurances can be given that the indicated levels of nickel, copper, cobalt, platinum, palladium and gold will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that the resource estimates disclosed in this news release are accurate, by their nature resource estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Company.

Mineral resources are not mineral reserves and do not have demonstrated economic viability. Inferred mineral resources are estimated on limited information not sufficient to verify geological and grade continuity or to allow technical and economic parameters to be applied. Inferred mineral resources are too speculative geologically to have economic considerations applied to them to enable them to be categorized as mineral reserves. There is no certainty that mineral resources can be upgraded to mineral reserves through continued exploration.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/73628

News Provided by Newsfile via QuoteMedia

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Nickel bars in front of a world map.

Top 9 Nickel-producing Countries

The top nickel producing countries list has been shaken in recent years by Indonesia's rapid rise to the top, beating the Philippines and New Caledonia.

Demand for nickel is mounting. Stainless steel accounts for the vast majority of nickel demand, but electric vehicle (EV) batteries represent a growing application for the base metal as the shift toward a greener future gains steam.

But while nickel's long-term outlook appears bright, it may face headwinds in the short term. Nickel prices have been trending down since breaking US$20,000 per metric ton in May 2024 as weak usage coincides with strong output from top producer Indonesia.

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First Atlantic Nickel to Attend Benchmark Mineral Intelligence's GIGA USA 2025 Conference, Highlighting Atlantic Nickel Project's Smelter-Free Processing for North America's Critical Minerals Supply Chain

First Atlantic Nickel Corp. (TSXV: FAN) (OTCQB: FANCF) (FSE: P21) ("First Atlantic" or the "Company") is pleased to announce its participation at the Benchmark Mineral Intelligence GIGA USA 2025 conference, taking place June 3-4, 2025, in Washington, DC. The Company will participate in strategic meetings during this critical mineral conference to demonstrate how its Atlantic Nickel Project addresses the growing need for nickel mining that can be completely processed in North America. The Atlantic Nickel Project contains nickel in the form of awaruite, a naturally occurring, sulfur-free, highly magnetic mineral with approximately 75% nickel content. These unique properties enable direct processing through magnetic separation and flotation, eliminating reliance on foreign overseas smelting or roasting operations. This simplified mineral processing method significantly lowers energy requirements and reduces environmental impacts, strengthening the development of a resilient, domestic critical minerals supply chain.

The GIGA USA conference brings together key players from across the critical minerals sector for two days of networking, dealmaking, and policy discussions. Attendees include major automakers such as Tesla, Ford, General Motors, Rivian, Mercedes-Benz, and Volkswagen; battery manufacturers like LG Energy Solutions, Samsung SDI, and Panasonic Energy; and global mining companies including Rio Tinto, Vale, Glencore, South32, and Anglo American. Government representatives from the U.S. Department of Energy, U.S. Department of Commerce, U.S. Department of Defense, U.S. Department of State, the Government of Quebec, the Embassy of Canada, and the Delegation of the European Union will also attend. Conference topics will address the expansion of the United States' lithium-ion battery gigafactory industry and the need to establish secure, sustainable supply chains for critical raw materials, including lithium, nickel, graphite, cobalt, manganese and rare earth elements.

The conference addresses key areas of focus including strengthening the U.S. critical minerals supply chain through domestic production and expanded gigafactory capacity, examining policy and trade impacts, such as the Inflation Reduction Act (IRA), and enhancing national security through critical mineral independence. The conference will also focus on investment and financing opportunities for next-generation mining projects, innovations in battery technology and sustainability, and the importance of global collaboration and strategic partnerships.

The Company's Atlantic Nickel Project offers a secure and reliable solution for domestic nickel production. By leveraging awaruite's sulfur-free composition, high nickel content and magnetic properties, the project enables simple processing through magnetic separation and flotation without the need for secondary processing such as smelting or roasting. Unlike traditional nickel sulfide and laterite projects that undergo energy-intensive processes creating harmful waste and emissions, awaruite's metallurgical properties enable complete domestic nickel production while eliminating reliance on overseas processing. The lower energy requirements and sulfur-free nature of awaruite result in a reduced carbon and environmental footprint. The Company remains committed to strengthening North American critical minerals supply chains, with the Atlantic Nickel Project positioned to provide a secure, reliable nickel source for North American industries including electric vehicles, batteries, defense, and stainless steel manufacturing.

Conference Meeting Requests

First Atlantic welcomes the opportunity to meet with strategic partners, shareholders and investors during the GIGA USA 2025 conference. Interested parties are encouraged to contact Rob Guzman at rob@fanickel.com or by phone at 844-592-6337 to arrange meetings. The conference takes place June 3-4, 2025 in Washington, DC.

Phase 2 Drilling Update

The Phase 2 drilling program is currently underway and successfully expanding the awaruite mineralization identified in multiple drill holes during the Phase 1 campaign. Technical improvements, including optimized HQ/NQ drill configurations and enhanced drill bit selection, have enabled the current program to reach greater depths than previously achieved. The Company anticipated providing updates on the Phase 2 drill holes in the coming weeks.

For further information, questions, or investor inquiries, please contact Rob Guzman at First Atlantic Nickel by phone at +1-844-592-6337 or via email at rob@fanickel.com

Corporate Update

The Company also announces that on May 21, 2025 it closed the definitive agreement dated May 6, 2025 (the "Purchase Agreement") to acquire a 100% interest in eight mineral licenses totaling approximately 3,350 hectares. These licenses are strategically located around the Company's Atlantic Nickel Project in central Newfoundland, in the Cold Spring Pod and Coy Pond areas. Under the terms of the Purchase Agreement, the Company has issued 1,000,000 Shares at a deemed price of $0.205 per Share. These Shares are subject to a statutory hold period of four months and one day, in accordance with applicable Canadian securities laws. And further to its May 6, 2025 news release, it closed the previously announced settlement agreement (the "Settlement Agreement") on May 22, 2025, to settle outstanding obligations totaling $202,950 owed to an arm's length creditor (the "Creditor") related to accounting services provided under a consulting agreement dating back to 2017. Pursuant to the Settlement Agreement, the Company has issued an aggregate of 312,500 common shares (each, a "Share") at a deemed price of $0.32 per Share. These Shares will be released in three equal tranches over a 12-month period and are subject to a statutory hold period of four months and one day, in accordance with applicable Canadian securities laws.

Awaruite (Nickel-iron alloy Ni₂Fe, Ni₃Fe)

Awaruite, a naturally occurring sulfur-free nickel-iron alloy composed of Ni₃Fe or Ni₂Fe with approximately ~75% nickel content, offers a proven and environmentally safe solution to enhance the resilience and security of North America's domestic critical minerals supply chain. Unlike conventional nickel sources, awaruite can be processed into high-grade concentrates exceeding 60% nickel content through magnetic processing and simple floatation without the need for smelting, roasting, or high-pressure acid leaching 1 . Beginning in 2025, the US Inflation Reduction Act's (IRA) $7,500 electric vehicle (EV) tax credit mandates that eligible clean vehicles must not contain any critical minerals processed by foreign entities of concern (FEOC) 2 . These entities include Russia and China, which currently dominate the global nickel smelting industry. Awaruite's smelter-free processing approach could potentially help North American electric vehicle manufacturers meet the IRA's stringent critical mineral requirements and reduce dependence on FEOCs for nickel processing.

The U.S. Geological Survey (USGS) highlighted awaruite's potential, stating, "The development of awaruite deposits in other parts of Canada may help alleviate any prolonged shortage of nickel concentrate. Awaruite, a natural iron-nickel alloy, is much easier to concentrate than pentlandite, the principal sulfide of nickel." 3 Awaruite's unique properties enable cleaner and safer processing compared to conventional sulfide and laterite nickel sources, which often involve smelting, roasting, or high-pressure acid leaching that can release toxic sulfur dioxide, generate hazardous waste, and lead to acid mine drainage. Awaruite's simpler processing, facilitated by its amenability to magnetic processing and lack of sulfur, eliminates these harmful methods, reducing greenhouse gas emissions and risks associated with toxic chemical release, addressing concerns about the large carbon footprint and toxic emissions linked to nickel refining.

First Atlantic Nickel Corp.

Figure 1: Quote from USGS on Awaruite Deposits in Canada

The development of awaruite resources is crucial, given China's control in the global nickel market. Chinese companies refine and smelt 68% to 80% of the world's nickel 4 and control an estimated 84% of Indonesia's nickel output, the largest worldwide supply 5 . Awaruite is a cleaner source of nickel that reduces dependence on foreign processing controlled by China, leading to a more secure and reliable supply for North America's stainless steel and electric vehicle industries.

Investor Information

The Company's common shares trade on the TSX Venture Exchange under the symbol " FAN ", the American OTCQB Exchange under the symbol " FANCF " and on several German exchanges, including Frankfurt and Tradegate, under the symbol " P21 ".

Investors can get updates about First Atlantic by signing up to receive news via email and SMS text at www.fanickel.com . Stay connected and learn more by following us on these social media platforms:

https://x.com/FirstAtlanticNi

https://www.facebook.com/fanickelcorp

https://www.linkedin.com/company/firstatlanticnickel/

FOR MORE INFORMATION:
First Atlantic Investor Relations
Robert Guzman
Tel: +1 844 592 6337
rob@fanickel.com

Disclosure

Adrian Smith, P.Geo., a director and the Chief Executive Officer of the Company is a qualified person as defined by NI 43-101. The qualified person is a member in good standing of the Professional Engineers and Geoscientists Newfoundland and Labrador (PEGNL) and is a registered professional geoscientist (P.Geo.). Mr. Smith has reviewed and approved the technical information disclosed herein.

About First Atlantic Nickel Corp.

First Atlantic Nickel Corp. (TSXV: FAN) (OTCQB: FANCF) (FSE: P21) is a Canadian mineral exploration company developing the 100%-owned Atlantic Nickel Project, a large-scale nickel project strategically located near existing infrastructure in Newfoundland, Canada. The Project's nickel occurs as awaruite, a natural nickel-iron alloy containing approximately 75% nickel with no-sulfur and no-sulfides. Awaruite's properties allow for smelter-free magnetic separation and concentration, which could strengthen North America's critical minerals supply chain by reducing foreign dependence on nickel smelting. This aligns with new US Electric Vehicle US IRA requirements, which stipulate that beginning in 2025, an eligible clean vehicle may not contain any critical minerals processed by a FEOC (Foreign Entities Of Concern) 6 .

First Atlantic aims to be a key input of a secure and reliable North American critical minerals supply chain for the stainless steel and electric vehicle industries in the USA and Canada. The company is positioned to meet the growing demand for responsibly sourced nickel that complies with the critical mineral requirements for eligible clean vehicles under the US IRA. With its commitment to responsible practices and experienced team, First Atlantic is poised to contribute significantly to the nickel industry's future, supporting the transition to a cleaner energy landscape. This mission gained importance when the US added nickel to its critical minerals list in 2022, recognizing it as a non-fuel mineral essential to economic and national security with a supply chain vulnerable to disruption.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-looking statements:

This news release may include "forward-looking information" under applicable Canadian securities legislation. Such forward-looking information reflects management's current beliefs and are based on a number of estimates and/or assumptions made by and information currently available to the Company that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information.

Forward-looking information in this news release includes, but is not limited to: statements regarding: the timing, scope and results of the Company's Phase 1 and Phase 2 work and drilling programs; future project developments; the Company's objectives, goals, and future plans; statements and estimates of market conditions; the viability of magnetic separation as a low-impact processing method for awaruite; the strategic and economic implications of the Company's projects   ; and expectations regarding future developments and strategic plans;   Readers are cautioned that such forward-looking information are neither promises nor guarantees and are subject to known and unknown risks and uncertainties including, but not limited to, general business, economic, competitive, political and social uncertainties, uncertain and volatile equity and capital markets, lack of available capital, actual results of exploration activities, environmental risks, future prices of base and other metals, operating risks, accidents, labour issues, delays in obtaining governmental approvals and permits, and other risks in the mining and clean energy industries. Additional factors and risks including various risk factors discussed in the Company's disclosure documents which can be found under the Company's profile on http://www.sedarplus.ca. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

The Company is presently an exploration stage company. Exploration is highly speculative in nature, involves many risks, requires substantial expenditures, and may not result in the discovery of mineral deposits that can be mined profitably. Furthermore, the Company currently has no mineral reserves on any of its properties. As a result, there can be no assurance that such forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking information, except as required by applicable securities laws.

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