Talon Metals Reports More High-Grade Massive Sulphide Intercepts Outside of the Resource Area at the Tamarack Nickel Project

Talon Metals Corp. (TSX: TLO) ("Talon" or the "Company") is pleased to provide an update on the Tamarack Nickel-Copper-Cobalt Project ("Tamarack Nickel Project"), located in Minnesota, USA. The Tamarack Nickel Project comprises the Tamarack North Project and the Tamarack South Project.

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Figure 1: 5.1 Meters (16.7 feet) of massive sulphide mineralization at 171 meters depth grading 4.99% Ni, 1.66% Cu, (6.03% NiEq or 16.09% CuEq) in Drill Hole 21TK0283

To view an enhanced version of Figure 1, please visit:
https://orders.newsfilecorp.com/files/2443/82755_b9fdeb9544476b82_001full.jpg

HIGHLIGHTS

  • Talon has consistently intersected high-grade nickel-copper mineralization at shallow depths in an area that extends approximately 700 meters north-east of the Tamarack Nickel Project's resource area. The area is referred to as the CGO East area.

  • Drill hole 21TK0283 intersected 30.36 meters (99.6 feet) grading 1.30% Ni, 0.59% Cu, including 5.1 meters (16.7 feet) grading 4.99% Ni, 1.66% Cu (6.03% NiEq1 or 16.09% CuEq2)starting at only 171.26 meters.

  • Drill hole 21TK0290 intersected 31.73 meters (104.1 feet) grading 1.00% Ni, 0.58% Cu (1.39% NiEq or 3.70% CuEq), starting at 153.00 meters, including 1.59 meters (5.2 feet) grading 5.21% Ni, 1.73% Cu (6.37% NiEq or 17.00% CuEq) starting at only 183.14 meters.

  • Drill hole 21TK0295 intersected two separate zones of sulphide mineralization, including 4.55 meters (14.9 feet) grading 3.39% Ni, 1.26% Cu (4.19% NiEq or 11.17% CuEq) starting at only 161.35 meters.

  • Drill hole 20TK0267 intersected 16.99 meters (55.7 feet) of sulphide mineralization, including 1.33 meters (4.4 feet) grading 3.35% Ni, 0.89% Cu (4.18% NiEq or 11.15% CuEq) starting at only 247.66 meters.

  • These assay results start to confirm the extent and grade of nickel-copper mineralization in the CGO East area that was modelled by Talon from surface and borehole EM data (geophysics) and subsequently drilled (see Talon's press release dated March 31, 2021 for details).

  • Talon continues to drill this large area with the goal of delineating a new resource that could be added to the current mine plan. The Company plans to deliver a new resource estimate later this year.

"The nickel grades we are seeing in the CGO East Area, and even in the CGO West Area for that matter, are turning out to be higher than expected," said Brian Goldner, Head of Exploration for Talon. "What is really exciting is that we are now seeing that there is a very large trend of shallow, high-grade nickel-copper mineralization that starts several hundreds of meters to the north and heads back towards our resource area. All of this will be taken into account as part of our next iteration of the mine plan. Given the excellent results so far in both CGO East and CGO West areas, we plan to continue with our drilling efforts in these areas over the next couple of months. Our ultimate goal is to increase the resource size, and deliver a new resource estimate later this year."

SUMMARY

The CGO East area is a new zone that Talon has been drilling outside of the Tamarack Nickel Project's resource area (see Talon's press release dated March 31, 2021 for details). Drill results combined with new assays are showing a consistent pattern that begins with a large, shallow zone of disseminated nickel-copper mineralization above a sheet of higher-grade massive and mixed massive nickel-copper mineralization.

The assays from these holes confirm the potential for the CGO East area to be included in the current mine plan, thereby extending the mine life. The extremely shallow location of the mineralized zone suggests that the mineralization can potentially be accessed early in the mine life, bringing first production forward in time.

The assay results from the CGO East area include the following:

  • Drill hole 21TK0283 intersected 30.36 meters (99.6 feet) of nickel-copper mineralization grading 1.30% Ni, 0.59% Cu, 0.04% Co, 0.15 g/t Pd, 0.27 g/t Pt and 0.13 g/t Au (1.68% NiEq or 4.49% CuEq) starting at 146 meters, including 5.1 meters (16.7 feet) of mixed and massive sulphide mineralization grading 4.99% Ni, 1.66% Cu, 0.14% Co, 0.31 g/t Pd, 0.57 g/t Pt and 0.20 g/t Au (6.03% NiEq or 16.09% CuEq) starting at 171.26 meters.

  • Drill hole 21TK0290 intersected 31.73 meters (104.1 feet) of nickel-copper mineralization grading 1.00% Ni, 0.58% Cu, 0.03% Co, 0.15 g/t Pd, 0.28 g/t Pt, and 0.17 g/t Au (1.39% NiEq or 3.70% CuEq) starting at 153.00 meters, including 1.59 meters (5.2 feet) of mixed and massive sulphide mineralization grading 5.21% Ni, 1.73% Cu, 0.16% Co, 0.33 g/t Pd, 0.42 g/t Pt and 0.62 g/t Au (6.37% NiEq or 17.00 CuEq) starting at 183.14 meters.

  • Drill hole 21TK0295 intersected two distinct zones of nickel-copper mineralization:

    • 8.94 meters (29.3 feet) grading 0.59% Ni, 0.38% Cu, 0.02% Co, 0.11 g/t Pd, 0.18 g/t Pt and 0.09 g/t Au (0.84% NiEq or 2.23% CuEq) starting at 139.06 meters; and

    • 10.45 meters (34.3 feet) grading 1.99% Ni, 0.85% Cu, 0.05% Co, 0.19 g/t Pd, 0.33 g/t Pt, 0.19 g/t Au (2.53% NiEq or 6.75% CuEq) starting at 155.45 meters, including 4.55 meters (14.9 feet) of mixed and massive sulphide mineralization grading 3.39% Ni, 1.26% Cu, 0.09% Co, 0.28 g/t Pd, 0.43 g/t Pt and 0.22 g/t Au (4.19% NiEq or 11.17% CuEq) starting at 161.35 meters.

  • Drill hole 20TK0267 intersected 16.99 meters (55.7 feet) of nickel-copper mineralization grading 0.87% Ni, 0.5% Cu, 0.03% Co, 0.17 g/t Pd, 0.33 g/t Pt and 0.18 g/t Au (1.23% NiEq or 3.29% CuEq) starting at 232 meters depth, including 1.33 meters (4.4 feet) of mixed and massive sulphide grading 3.35% Ni, 0.89% Cu, 0.13% Co, 0.44 g/t Pd, 0.79 g/t Pt, 0.29 g/t Au (4.18% NiEq or 11.15% CuEq) starting at 247.66 meters.

Talon looks forward to updating the market on the results of this new zone as drilling continues and new assays are received.

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Figure 2. Plan view map of the CGO East location and north portion of the Tamarack resource area. The green text boxes show the locations of the drill assay intervals discussed in this press release.

To view an enhanced version of Figure 2, please visit:
https://orders.newsfilecorp.com/files/2443/82755_b9fdeb9544476b82_002full.jpg

Table 1: Assays Results from Holes within the CGO East Target Area Discussed in this Press Release

Drill HoleFromToLengthResults
#(m)(m)(m)Ni
(%)
Cu
(%)
Co
(%)
Pd
(g/t)
Pt
(g/t)
Au
(g/t)
NiEq
(%)
CuEq
(%)
20TK0267232248.9916.990.870.500.030.170.330.181.233.29
Including247.66248.991.333.350.890.130.440.790.294.1811.15
21TK0283146176.3630.361.300.590.040.150.270.131.684.49
Including171.26176.365.14.991.660.140.310.570.206.0316.09
21TK0290153184.7331.731.000.580.030.150.280.171.393.70
Including183.14184.731.595.211.730.160.330.420.626.3717.00
21TK0295139.061488.940.590.380.020.110.180.090.842.23
And155.45165.910.451.990.850.050.190.330.192.536.75
Including161.35164.534.551.263.390.090.280.430.224.1911.17

 

Length refers to drill hole length and not True Width.
True Width is unknown at the time of publication.
All samples were analysed by ALS Minerals. Nickel, copper, and cobalt grades were first analysed by a 4-acid digestion and ICP AES (ME-MS61). Grades reporting greater than 0.25% Ni and/or 0.1% Cu, using ME-MS61, trigger a sodium peroxide fusion with ICP-AES finish (ICP81). Platinum, palladium and gold are initially analyzed by a 50g fire assay with an ICP-MS finish (PGM-MS24). Any samples reporting >1g/t Pt or Pd trigger an over-limit analysis by ICP-AES finish (PGM-ICP27) and any samples reporting >1g/t Au trigger an over-limit analysis by AAS (Au-AA26).
NiEq% = Ni%+ Cu% x $3.00/$8.00 + Co% x $12.00/$8.00 + Pt [g/t]/31.103 x $1,300/$8.00/22.04 + Pd [g/t]/31.103 x $700/$8.00/22.04 + Au [g/t]/31.103 x $1,200/$8.00/22.04
CuEq% = Cu%+ Ni% x $8.00/$3.00 + Co% x $12.00/$3.00 + Pt [g/t]/31.103 x $1,300/$3.00/22.04 + Pd [g/t]/31.103 x $700/$3.00/22.04 + Au [g/t]/31.103 x $1,200/$3.00/22.04
No adjustments were made for recovery or payability.

QUALITY ASSURANCE, QUALITY CONTROL AND QUALIFIED PERSONS

Please see the technical report entitled "NI 43-101 Technical Report Updated Preliminary Economic Assessment( PEA) #3 of the Tamarack North Project - Tamarack, Minnesota" with an effective date of January 8, 2021 prepared by independent "Qualified Persons" (as that term is defined in National Instrument 43-101 ("NI 43-101") Leslie Correia (Pr. Eng), Andre-Francois Gravel (P. Eng.), Tim Fletcher (P. Eng.), Daniel Gagnon (P. Eng.), David Ritchie (P. Eng.), Oliver Peters (P. Eng.), Volodymyr Liskovych (P.Eng.), Andrea Martin (P. E.) and Brian Thomas (P. Geo.) for information on the QA/QC, analytical and testing procedures at the Tamarack Project. Copies are available on the Company's website (www.talonmetals.com) or on SEDAR at (www.sedar.com). The laboratory used is ALS Minerals who is independent of the Company.

Lengths are drill intersections and not necessarily true widths. True widths cannot be consistently calculated for comparison purposes between holes because of the irregular shapes of the mineralized zones. Drill intersections have been independently selected by Talon. Drill composites have been independently calculated by Talon. The geological interpretations in this news release are solely those of the Company.

The locations and distances highlighted on all maps in this news release are approximate.

Dr. Etienne Dinel, Vice President, Geology of Talon, is a Qualified Person within the meaning of NI 43-101. Dr. Dinel is satisfied that the analytical and testing procedures used are standard industry operating procedures and methodologies, and he has reviewed, approved and verified the technical information disclosed in this news release, including sampling, analytical and test data underlying the technical information.

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, comprised of the Tamarack North Project and the Tamarack South Project. Talon has an earn-in to acquire up to 60% of the Tamarack Project. The Tamarack 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
Talon Metals Corp.
Tel: (416) 361-9636 x102
Email: werger@talonmetals.com

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 statements relating to the timing and results of the exploration program, including assay results, grades, potential and results, and drilling plans; the potential to increase the current resource and add to the current mine plan; the potential to increase the mine life of the Tamarack Nickel Project; the potential to access the CGO East area early in the mine life; the ability to bring first production forward in time; and the goal of delineating a new resource estimate later this year. 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.

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.

Table 2: Collar Locations of Drill Holes Referred to in this Press Release

CGO EAST
HOLEIDEasting
(m)
Northing
(m)
Elevation
(masl)
AzmDipEnd Depth
(m)
21TK0283491303.85169144.8388.0259.2-78.0203.3
21TK0288491298.55169148.4388.0311.9-75.2198.3
21TK0289491178.05168988.0388.023.6-79.5233.9
21TK0290491300.35169144.9388.0214.1-71.8209.7
21TK0291491178.25168985.8388.0237.5-80.1247.5
21TK0294491178.05168985.0388.0222.3-72.9301.1
21TK0295491294.05169149.9388.0345.3-67.3188.5
21TK0296491176.05168998.0388.049.573.9236.7
20TK0266491022.05168949.1388.0110.0-82.5283.5
20TK0267491021.25168949.1388.078.7-70.1295.5
20TK0268491021.95168951.8388.0218.1-66.2388.8
20TK0271491019.05168955.0388.0111.0-78.5299.6

 

Collar coordinates are UTM Zone 15N, NAD83.

Azimuths and dips are taken from survey record at collar unless otherwise noted

Table 3. Assay Results from All Drill Holes within the CGO East Target Area

Drill HoleFromToLengthResults
#(m)(m)(m)Ni
(%)
Cu
(%)
Co
(%)
Pd
(g/t)
Pt
(g/t)
Au
(g/t)
NiEq
(%)
CuEq
(%)
20TK0267232248.9916.990.870.500.030.170.330.181.233.29
including247.66248.991.333.350.890.130.440.790.294.1811.15
21TK0283146176.3630.361.300.590.040.150.270.131.684.49
including171.26176.365.14.991.660.140.310.570.206.0316.09
21TK0290153184.7331.731.000.580.030.150.280.171.393.70
including183.14184.731.595.211.730.160.330.420.626.3717.00
21TK0295139.061488.940.590.380.020.110.180.090.842.23
and155.45165.910.451.990.850.050.190.330.192.536.75
including161.35164.534.551.263.390.090.280.430.224.1911.17
20TK026620323633Assays pending
20TK0266236247.7511.751.030.720.030.140.310.251.53.99
including246.5247.751.252.31.090.090.150.270.32.997.96
20TK0268287.12312.5925.07Assays pending
20TK0271236245.559.552.120.970.060.140.280.232.717.22
including242.84245.552.715.131.700.160.200.350.216.1516.41
21TK0288148.6169.520.9Assays pending
21TK0289181.52211.9430.42Assays pending
21TK0291210.61224.5213.91Assays pending
21TK0294213.9230.216.3Assays pending
21TK0296190210.320.3Assays pending

 

Length refers to drill hole length and not True Width.
True Width is unknown at the time of publication.
All samples were analysed by ALS Minerals. Nickel, copper, and cobalt grades were first analysed by a 4-acid digestion and ICP AES (ME-MS61). Grades reporting greater than 0.25% Ni and/or 0.1% Cu, using ME-MS61, trigger a sodium peroxide fusion with ICP-AES finish (ICP81). Platinum, palladium and gold are initially analyzed by a 50g fire assay with an ICP-MS finish (PGM-MS24). Any samples reporting >1g/t Pt or Pd trigger an over-limit analysis by ICP-AES finish (PGM-ICP27) and any samples reporting >1g/t Au trigger an over-limit analysis by AAS (Au-AA26).
NiEq% = Ni%+ Cu% x $3.00/$8.00 + Co% x $12.00/$8.00 + Pt [g/t]/31.103 x $1,300/$8.00/22.04 + Pd [g/t]/31.103 x $700/$8.00/22.04 + Au [g/t]/31.103 x $1,200/$8.00/22.04
CuEq% = Cu%+ Ni% x $8.00/$3.00 + Co% x $12.00/$3.00 + Pt [g/t]/31.103 x $1,300/$3.00/22.04 + Pd [g/t]/31.103 x $700/$3.00/22.04 + Au [g/t]/31.103 x $1,200/$3.00/22.04.
No adjustments were made for recovery or payability.


1 Where used in this news release: NiEq% = Ni%+ Cu% x $3.00/$8.00 + Co% x $12.00/$8.00 + Pt [g/t]/31.103 x $1,300/$8.00/22.04 + Pd [g/t]/31.103 x $700/$8.00/22.04 + Au [g/t]/31.103 x $1,200/$8.00/22.04

2 Where used in this news release: CuEq% = Cu%+ Ni% x $8.00/$3.00 + Co% x $12.00/$3.00 + Pt [g/t]/31.103 x $1,300/$3.00/22.04 + Pd [g/t]/31.103 x $700/$3.00/22.04 + Au [g/t]/31.103 x $1,200/$3.00/22.0

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/82755

News Provided by Newsfile via QuoteMedia

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Nickel Investor Report

Nickel Investor Report

2024 Nickel Outlook Report

Five times the amount of nickel will be needed to meet global demand by 2050. Don't miss out on investing in a metal that is crucial to the EV revolution!

The Investing News Network spoke with analysts, market watchers and insiders to get the scoop on the trends and stocks that you need to watch to stay ahead of the markets in 2024.

Table of Contents:

  • Nickel Price Update: Q1 2024 in Review
  • Nickel Price Update: Q2 2024 in Review
  • Top 3 Canadian Nickel Stocks of 2024
Nickel Outlook

A Sneak Peek At What The Insiders Are Saying

“Global nickel consumption is expected to increase due to recovery of the stainless steel sector and increased usage of nickel in EV batteries. Batteries now account for almost 17 percent of total nickel demand, behind stainless steel."

— Ewa Manthey, ING

"While LME nickel prices are expected to find support from a weaker US dollar in 2024 as the Federal Reserve eases monetary policy, we expect prices to remain subdued as further primary nickel output growth from Indonesia and China keeps the market in a surplus for the third consecutive year."

— Jason Sappor, S&P Global Commodity Insights.


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Nickel and the Battery Boom in 2024

Nickel Price Update: Q1 2024 in Review

At the start of the year, experts were predicting that nickel prices would be rangebound in 2024.

With the first quarter in the books, that story seems to largely be playing out. After opening the year at US$16,600 per metric ton (MT) on January 2, nickel was stable during January and February. However, March brought volatility to the sector, with strong gains pushing the base metal to a quarterly high of US$18,165 on March 13.

Nickel's price rise failed to hold, and it once again dropped below the US$17,000 mark by the end of the month. Ultimately, the metal fell to US$16,565 on March 28, resulting in a slight loss for the quarter.

Indonesian supply dampens nickel prices

Lackluster pricing in the nickel market is largely the result of the metal's ongoing oversupply position.

The largest factor is elevated production from Indonesia, which is the top producer of the metal by far. The country produced 1.8 million MT of nickel in 2023, according to the US Geological Survey, representing half of global supply.

Indonesia's output has climbed exponentially over the past decade, and has been exacerbated by government initiatives that placed strict limits on the export of raw materials to encourage investment in production and refinement.

In an email to the Investing News Network (INN), Exploration Insights Editor Joe Mazumdar wrote, “The growth in electric vehicle (EV) production and the escalating demand for nickel in batteries prompted the Indonesian government to mandate increased local refining and manufacturing capacity from companies operating in the country.”

Despite the lower quality of material coming from Indonesia, the investment was made to shore up supply lines for Chinese battery makers and was earmarked for EV production. However, EV demand has waned through 2023 and into 2024 due to high interest rates, range anxiety and charging capacity, increasing nickel stockpiles.

A report on the nickel market provided by Jason Sappor, senior analyst with the metals and mining research team at S&P Global Commodity Insights, shows that short positions began to accumulate through February and early March on speculation that Indonesian producers were cutting operating rates due to a lack of raw material from mines.

The lack of mined nickel, which helped push prices up, was caused by delays from a new government approval process for mining output quotas that was implemented by Indonesia in September 2023. The new system will allow mining companies to apply for approvals every three years instead of every year. However, the implementation has been slow, and faced further delays while the country went through general elections.

The nickel market found additional support on speculation that the US government was eyeing sanctions on nickel supply out of Russia. Base metals were ultimately not included in the late February sanctions, and prices for the metal began to decline through the end of March as Indonesian quota approvals accelerated.

Western nickel producers cut output on low prices

According to Macquarie Capital data provided by Mazumdar, 35 percent of nickel production is unprofitable at prices below US$18,000, with that number jumping to 75 percent at the US$15,000 level.

Mazumdar indicated that nickel pricing challenges have led to cuts from Australian producers like First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) and Wyloo Metals, which both announced the suspension of their respective Ravensthorpe and Kambalda nickel-mining operations. Additionally, major Australian nickel producer BHP (ASX:BHP,NYSE:BHP,LSE:BHP) is considering cuts of its own.

Nickel price, Q1 2024.

Nickel price, Q1 2024.

Chart via the London Metal Exchange.

Meanwhile, the nickel industry in French territory New Caledonia is facing severe difficulties due to faltering prices.

The French government has been in talks with Glencore (LSE:GLEN,OTC Pink:GLCNF), Eramet (EPA:ERA) and raw materials trader Trafigura, which have significant stakes in nickel producers in the country, and has offered a 200 million euro bailout package for the nation's nickel industry. The French government set a March 28 deadline for New Caledonia to agree to its rescue package, but a decision had not yet been reached as of April 11.

Earlier this year, Glencore announced plans to shutter and search for a buyer for its New Caledonia-based Koniambo Nickel operation, which it said has yet to turn a profit and is unsustainable even with government assistance.

For its part, Trafigura has declined to contribute bailout capital for its 19 percent stake in Prony Resources Nouvelle-Caledonie and its Goro mine in the territory, which is forcing Prony to find a new investor before it will be able to secure government funding. On April 10, Eramet reached its own deal with France for its subsidiary SLN’s nickel operations in New Caledonia; the transaction will see the company extend financial guarantees to SLN.

The situation has exacerbated tensions over New Caledonia's independence from France, with opponents of the agreement arguing it risks the territory's sovereignty and that the mining companies aren’t contributing enough to bailing out the mines, which employ thousands. Reports on April 10 indicate that protests have turned violent.

While cuts from Australian and New Caledonian miners aren’t expected to shift the market away from its surplus position, Mazumdar expects it will help to maintain some price stability in the market.

“The most recent forecast projects demand (7 percent CAGR) will grow at a slower pace than supply (8 percent CAGR) over the next several years, which should generate more market surpluses,” he said.

Miners seek "green nickel" premium for western products

In an email to INN, Ewa Manthey, commodities strategist at financial services provider ING, suggested western nickel producers are in a challenging position, even as they make cuts to production.

“The recent supply curtailments also limit the supply alternatives to the dominance of Indonesia, where the majority of production is backed by Chinese investment. This comes at a time when the US and the EU are looking to reduce their dependence on third countries to access critical raw materials, including nickel,” she said.

This was affirmed by Mazumdar, who said the US is working to combat the situation through a series of subsidies designed to encourage western producers and aid in the development of new critical minerals projects.

“The US Inflation Reduction Act promotes via subsidies sourcing of critical minerals and EV parts from countries with which it has a free trade agreement or a bilateral agreement. Indonesia and China do not have free trade agreements with the US,” he said. Mazumdar went on to suggest that the biggest benefactors of this plan will be Australia and Canada, but noted that with prices remaining depressed, multibillion-dollar projects will struggle to get off the ground.

Western producer shope their material may eventually see a "green nickel" premium that plays into their focus on ESG. However, this idea hasn’t gained much traction. The London Metal Exchange (LME) believes the green nickel market is too small to warrant its own futures contract, and Mazumdar said much the same. “There is little evidence that a premium for ‘green nickel’ producers or developers has much momentum, although an operation with low carbon emissions may have a better chance of getting funding from institutional investors in western countries,” he noted.

Even though there might not be much interest in green nickel on the LME, there are vocal proponents, including Wyloo’s CEO, Luca Giacovazzi. He sees the premium as being essential for the industry, and has said participants should be looking for a new marketplace if the LME is unwilling to pursue a separate listing for green nickel.

The calls for a premium have largely come from western producers that incur higher labor and production costs to meet ESG initiatives, which is happening less amongst their counterparts in China, Indonesia and Russia.

Western producers were caught off guard early in March as PT CNGR Ding Xing New Energy, a joint venture between China’s CNGR Advanced Material (SHA:300919) and Indonesia’s Rigqueza International, applied to be listed as a “good delivery brand” on the LME. The designation would allow the company, which produces Class 1 nickel, to be recognized as meeting responsible sourcing guidelines set by the LME.

If it is approved, which is considered likely, the company would be the first Indonesian firm to be represented on the LME. There has been pushback from western miners on the basis of ESG and responsible resourcing challenges.

Investor takeaway

As the nickel market faces strong production from Indonesia, experts expect more of the same for prices.

“Looking ahead, we believe nickel prices are likely to remain under pressure, at least in the near term, amid a weak macro picture and a sustained market surplus,” Manthey said. The continued surplus may provide some opportunities for investors looking to get into a critical minerals play at a lower cost, but a reversal may take some time.

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.

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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.

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.

Additional information on Nickel stocks investing — FREE

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)

Company Profile

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)

Company Profile

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)

Company Profile

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.

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.

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