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Metal Hawk Limited (ASX: MHK, “Metal Hawk” or the “Company”) is pleased to advise that a new campaign of reverse circulation (RC) drilling has commenced at the Berehaven Project, 20km south-east of Kalgoorlie in Western Australian. Drilling will test multiple new nickel sulphide targets across the project area with a total of 3,000m planned.
- 3,000m campaign of RC drilling has commenced
- Targets include new EM conductors and follow-up drilling of nickel sulphide intercepts at the Torana and Commodore South prospects
The Company identified several late-time conductors from ground moving loop electromagnetic (MLEM) surveys carried out earlier this year across the project area. Drilling to date has focused on exploring along the western Commodore ultramafic trend, with significant nickel sulphide mineralisation identified in RC drilling north and south of the Commodore discovery at the Torana and Commodore South prospects. Whilst the current RC program is continuing to explore along this fertile western ultramafic trend, several holes are also planned to test four MLEM conductors (BVM_09 to BVM_012) further east of Commodore.
Metal Hawk’s Managing Director Will Belbin commented: “We are continuing systematic, rigorous exploration at Berehaven with this next phase of RC drilling. Since the discovery of high-grade nickel at Commodore late last year, the regional work we have carried out on this project has generated several more exciting discovery opportunities for nickel and gold.”
“Considering the proximity to nearby hits of nickel sulphide along strike to the north at the Euston and Blair North prospects, there has been very little exploration carried out in the vicinity of these eastern EM anomalies. Our consulting geophysicists at Newexco have carefully refined and prioritised these drill-ready conductors.”
“We are also going to be drilling more RC holes at Torana, and plans are being prepared for deeper diamond drilling to test the strong off-hole DHEM conductor situated beneath a zone of thick mineralised ultramafic rocks.”
Figure 1. Berehaven Project - EM targets shown in red.
BEREHAVEN REGIONAL
Four (4) late-time bedrock conductors with steep to moderately west-dipping modelled plates, BVM_09 to BVM_12 (Figure 1), are located from 3km to 5km east of the Commodore ultramafic trend, and present as priority untested RC drill targets. The weathering at this central part of the project area is notably shallower than that observed along the Commodore trend, where the effectiveness of surface EM has been limited by the deeply weathered rocks and the transitional nature of the nickel sulphides present.
Several RC holes have been designed to intersect the conductive target zones at between 150m to 220m depth, with follow-up downhole electromagnetic (DHEM) surveys to be carried out in order to detect any conductive responses related to nearby accumulations of massive nickel sulphide mineralisation.
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This article includes content from Metal Hawk Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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Metal Hawk Limited
Investor Insight
Metal Hawk has a solid strategy to increase shareholder value through early-stage exploration success, leveraging a strong gold market and driven by a highly experienced team with a track record of successful discoveries.
Overview
Metal Hawk Limited (ASX:MHK) is an Australian exploration company with a primary focus on gold and nickel discoveries. The company is driven by a technically proficient team with a proven track record of identifying high-potential mineral exploration projects and executing early-stage discoveries.
Founded with a strong commitment to disciplined exploration, Metal Hawk’s portfolio is primarily concentrated in the prolific Eastern Goldfields of Western Australia. The company’s exploration strategy combines traditional geological methods with innovative technologies to unlock the full potential of its tenements.
The main focus of Metal Hawk’s current exploration activities is its Leinster South project, which has shown significant promise following the discovery of high-grade gold at the Siberian Tiger prospect. Metal Hawk is advancing towards securing the necessary permits for further exploration and a maiden drilling program at Leinster South. Metal Hawk is finalising heritage negotiations and intends to undertake a heritage clearance survey as soon as possible, which will allow for the commencement of a maiden reverse circulation (RC) drilling program at Siberian Tiger. This drilling campaign will test the depth extent and continuity of the high-grade gold mineralization identified at surface.
The company also maintains a diversified exploration portfolio with other projects such as Berehaven, Yarmany and Kanowna East, all of which hold strong potential for gold and nickel mineralisation.
Company Highlights
- A gold-focused exploration company backed by a highly experienced technical team with a track record of identifying high-potential projects and making early-stage discoveries.
- The company’s flagship project is the Leinster South project, which hosts the high-grade Siberian Tiger gold prospect.
- Recent rock chip sampling at Siberian Tiger returned assays as high as 20.2 g/t gold.
- Metal Hawk has completed a UAV magnetic survey at Leinster South to assist with drill targeting.
- The company is progressing through heritage negotiations and awaiting approval for a maiden RC drilling campaign at Siberian Tiger.
Key Projects
Leinster South – Flagship Project
Leinster South, Metal Hawk’s flagship project, is located 30 kilometers south of Leinster in Western Australia’s Eastern Goldfields region. Covering approximately 127 square kilometers of granted tenure, this project is highly prospective for gold and nickel mineralization. Its proximity to the Agnew-Lawlers mining center, which has produced over 5 million ounces of gold at an average grade of 5 grams per ton (g/t), further enhances its significance. The project sits within the Agnew-Wiluna greenstone belt and along the eastern limb of the Lawlers Anticline, a key structural feature associated with major gold discoveries in the region.
The Siberian Tiger prospect within Leinster South is the focal point of Metal Hawk’s exploration efforts. Recent rock chip sampling from quartz veins has returned high-grade gold results, with assays reaching up to 20.2 g/t. This high-grade discovery has accelerated the company’s exploration activities, with further sampling and mapping identifying additional gold anomalies along strike from the Siberian Tiger prospect.
The prospect has also been the subject of geophysical surveys by Metal Hawk, including a UAV magnetic survey, which has provided detailed data on the geology and helped identify several drill targets. These findings confirm the presence of prospective stratigraphy along the eastern limb of the Lawlers Anticline, setting the stage for a maiden RC drilling program. Heritage negotiations with traditional owners are progressing, and once complete, the company will begin drilling to test the depth and continuity of the mineralization.
Metal Hawk’s exploration strategy at Leinster South combines geophysical surveys, geochemical sampling, and geological mapping to systematically assess the project’s potential. While the focus is on drill testing surface gold mineralization at Siberian Tiger, the company is also exploring other areas of the tenement for additional targets. The broader project area contains a variety of mafic and ultramafic rocks, which are known to host both gold and nickel mineralization.
Berehaven
The Berehaven project is located in a well-established mining region, known for its gold and nickel potential. Metal Hawk’s exploration efforts here have focused on identifying structurally controlled gold mineralization. The project area is characterized by mafic and ultramafic rock sequences, which are highly prospective for hosting both gold and nickel deposits. While still in the early stages of exploration, Berehaven represents a valuable asset in Metal Hawk’s portfolio.
Yarmany
Yarmany is another key project in Metal Hawk’s portfolio, located in the Western Australian Goldfields. This project is highly prospective for gold, with several historic workings and gold anomalies identified through surface sampling. The project’s proximity to known gold deposits adds to its appeal, and Metal Hawk is planning further exploration to delineate drill targets.
Kanowna East
The Kanowna East project is located near the world-class Kanowna Belle gold mine, which has produced millions of ounces of gold over its operational life. Metal Hawk’s tenements in this region are prospective for both gold and base metals, and the company is planning additional exploration activities to test the area’s potential.
Management Team
Mike Edwards - Non-executive Chairman
Mike Edwards is a geologist and economist with over 25 years’ experience in senior management roles within both the public and private sectors. Edwards worked for Barclays Australia in the commercial and corporate finance department, before returning to university to complete a Bachelor of Science in geology. Edwards then spent eight years as an exploration and mine geologist, principally working in Australia with a focus on Archaean gold and base metals. Over the past 10 years, Edwards has held numerous executive and non-executive director roles, predominantly with ASX-listed companies. Most recently, he was the non-executive chairman of Firefly Resources (ASX:FFR), which successfully merged with Gascoyne Resources (ASX:GCY). Edwards holds a Bachelor of Business (economics and finance) from Curtin University of Technology, and a Bachelor of Science (geology) from the University of Western Australia.
Will Belbin - Managing Director
Will Belbin has over 20 years’ experience working in gold and base metals exploration, with extensive experience in project generation and evaluation. He was an integral part of the Fisher East nickel sulphide discoveries as exploration manager for Rox Resources. Previously, Belbin worked with Newexco as a senior geologist at Western Areas’ Forrestania nickel project. He holds a geology degree from the University of Western Australia and a Master of Mineral Economics from Curtin University's Graduate School of Business.
David Pennock - Executive Director
David Pennock is a corporate geologist from the WA School of Mines, with over 15 years of experience in the resources sector and has strong business development skills.
Scott Glasson - CFO
Scott Glasson is an experienced CFO and qualified chartered accountant with a strong knowledge of financial markets, corporate governance and accounting practices.
Accelerated Non-Renounceable Entitlement Offer Results
Under the Entitlement Offer, eligible shareholders were invited to subscribe for one (1) New Share for every four (4) existing Shares held at an offer price of $0.03 per share.
The Company has now closed the retail component of the Entitlement Offer with applications totalling 2,767,788 shares including additional acceptances to be issued at $0.03 on top of the 18,650,023 shares issued under the institutional component of the Entitlement Offer on 15 November 2024. In accordance with the timetable, the New Shares will be issued on or before 4 December 2024.
The retail component of the Entitlement Offer is partially underwritten by Nanjia Capital Limited “(Nanjia”) for the amount of approximately $1.09m. Accordingly, Nanjia will now subscribe for 36,349,900 New Shares in accordance with the underwriting arrangements summarised in section 7.4(b) of the Prospectus and the Company expects to finalise this process within the next week.
Shortfall Share Placement
A total of 74,946,591 New Shares were not taken up under the Entitlement Offer by eligible securityholders or issued to Nanjia as underwriter (“Shortfall Shares’”) The directors will work with the lead manager to the Entitlement Offer and the major shareholders to place the shortfall within three (3) months of the closing date, subject to requirements of the ASX Listing Rules and Corporations Act 20021 (Cth) continuing to be met. Please refer to the Prospectus dated 4 November 2024 for further details on the issue of the shortfall.
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This article includes content from Blackstone Minerals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
FPX Nickel
Investor Insight
As FPX Nickel strengthens its position in the critical metals space, investors seeking exposure to the green energy transition may find FPX Nickel an intriguing prospect, given its potential to become a low-cost, environmentally responsible nickel producer in a stable jurisdiction.
Overview
FPX Nickel (TSXV:FPX,OTXQB:FPOCF) is an exploration and development company focused on its advanced-development-stage Tier 1 Baptiste project in the Decar Nickel District in central British Columbia. The project has the potential to supply high-concentration nickel and cobalt sulfates suitable for the growing electric vehicle battery industry, as well as more traditional markets for nickel, such as stainless steel.
Nickel plays a vital role in electric vehicle (EV) and battery manufacturing, a sector that sees rapid expansion year after year. Market research projects a growing nickel demand for EVs to reach 1.3 million metric tonnes per annum by 2030, as nickel content in electric vehicles increases to over 40 kilograms per car battery.
Despite its significant role in powering a global shift to greener energies, analysts also project an undersupply of nickel for the next several years due to decreasing production and a lack of new active mines. Mining companies advancing high-margin nickel projects offer investors exposure to a market with great economic growth and success potential.
FPX Nickel’s Baptiste project leverages a 2023 preliminary feasibility study( PFS) and an updated mineral resource estimate that includes total nickel and potential by-product elements, cobalt and iron.
The PFS for Baptiste indicated an after-tax NPV of $2.01 billion and an IRR of 18.6 percent at $8.75-pound nickel for a 29-year mine life producing an average of 59,100 tonnes of nickel per year.
The positive geological interpretation of the Van target at the Decar Nickel District offers further blue-sky potential for the Baptiste project, potentially mimicking the successes of its geographic neighbors in central British Columbia, such as Artemis Gold’s C$1.8 billion Blackwater Gold open-pit project.
The Baptiste project presents FPX Nickel with the potential to produce nickel at a significantly lower carbon footprint than other sources of production in the global nickel industry. Recent leach testing of awaruite nickel concentrates produced from Baptiste achieved nickel recoveries of 98.8 percent to 99.5 percent in producing a high-purity chemical solution containing 69.4 to 70.1 g/L nickel.
In keeping with FPX Nickel’s aim to build a carbon-neutral mining operation at the Baptiste project, the company co-founded a multi-university research program to study carbon capture and storage at mining sites. The program is in collaboration with Anglo-American majority-owned (LSE:AAL,OTCQX:AAUKF) DeBeers, and the Government of Canada.
Metallurgical testing conducted by FPX Nickel for the production of high-grade (> 65 percent nickel) awaruite concentrate has included three campaigns with successful pilot-scale test work. This large-scale pilot test work validates the processing strategy for Baptiste, leveraging awaruite's ferromagnetism, high density, active surface properties, and very high nickel content.
Baptiste’s awaruite mineralization promotes a simple three-stage process for the production of nickel sulphate from concentrate. It has the potential to be more efficient than the typical five-stage process required to convert sulphide and laterite ores into nickel sulphate. Rapid nickel extraction of more than 98 percent in 60 minutes is achieved under mild pressure leaching conditions with significantly lower equipment size/risk, power consumption, pressure and temperature requirements than typical high-pressure acid leach (HPAL) operations.
In January 2024, FPX Nickel closed a C$14.4 million strategic equity investment from Sumitomo Metal Mining. Net proceeds of the private placement will be used to fund exploration and development activities at its Baptiste nickel project, and continue ongoing environmental baseline activities, feasibility study readiness activities, and general corporate and administrative purposes.
FPX Nickel’s partially-owned subsidiary CO2 Lock, specializing in carbon capture and storage (CCS) via permanent mineralization, has completed a comprehensive field program at its SAM site in central British Columbia including the first-ever successful injection of CO2 into a brucite-rich ultramafic mineral project. This achievement marks a significant milestone in the development of CO2 Lock's innovative in-situ CO2 mineralization technology.
FPX Nickel’s management team consists of highly experienced capital markets and mining professionals, including Canadian Mining Hall of Fame member Dr. Peter Bradshaw, and veteran geologist Rob Pease.
Company Highlights
- FPX Nickel is a Canadian resource company focused on exploring and developing its wholly owned advanced-development-stage Baptiste nickel project in the Decar Nickel District, central British Columbia.
- The company favorably leverages low-cost operation and mining best practices. It is advancing one of the few major nickel deposits in the mining-friendly jurisdiction of British Columbia.
- The Baptiste property hosts high-tenor nickel mineralization with low impurities and little to no sulfides. The high-value nickel product has potential applications for direct feed to the stainless steel or the electric vehicle battery market, with high projected recoveries and low estimated operating cost.
- FPX Nickel operates a tight share structure consisting largely of management (which holds 14 percent of the company’s shares) and three large corporate strategic investors (which collectively hold 30 percent of the company).
- Baptiste offers a tremendous opportunity for lowering the carbon footprint of nickel.
- Preliminary feasibility study for Baptiste indicated an after-tax NPV of $2.01 billion and IRR of 18.6 percent at $ 8.75-pound nickel for a 29-year mine life producing an average of 59,100 tonnes per year of nickel.
- In early 2024, FPX Nickel closed a C$14.4 million in private placement financing from Sumitomo Metal Mining Canada (SMCL), a wholly owned subsidiary of Sumitomo Metal Mining (TSE:5713)
- The company has commenced the development of a standalone nickel sulphate refinery study which will be completed in the first quarter of 2025.
Key Project
Decar Nickel District - Baptiste Project
The Decar Nickel District covers over 410 square kilometers and is 80 kilometers west of the Mt. Milligan mine, central British Columbia. The property hosts the highly prospective Baptiste nickel project, which is one of the world’s largest development-stage nickel projects. The asset is accessible via logging and paved roads, with railway and hydropower nearby.
Baptiste hosts nickel-iron alloy mineralization, with NI 43-101 compliant indicated resources at an average grade of 0.123 percent DTR nickel for 2.3 million tons and 391 million tonnes of inferred resources with an average grade of 0.115 percent DTR nickel.
In September 2022, the company completed a 2,504-meter step-out drilling program at its Van target, located 6 km north of Baptiste in the Decar Nickel District. The completed holes stepped out aggressively from the initial discovery area, testing the potential for nickel mineralization up to 1 kilometer west of the holes drilled in 2021.
Baptiste Project 2023 PFS
In 2023, the company released the preliminary feasibility study results for the Baptiste nickel project indicating an average production of 59,100 tons of nickel per year in concentrate over a 29-year mine life. The project will be developed in a phased approach, with an initial mill throughput rate of 108,000 tons per day (Phase 1), followed by an expansion to 162,000 tons per day (Phase 2).
In line with the project’s robust economics, FPX Nickel has commenced the development of a standalone nickel sulphate refinery study which will be completed in the first quarter of 2025.
In 2023, FPX Nickel signed a non-binding memorandum of understanding with Japan Organization for Metals and Energy Security (JOGMEC) and the Prime Planet Energy & Solutions (PPES) joint venture between Toyota Motor Company and Panasonic, setting out a framework for FPX and PPES to explore collaborative opportunities for the vertical integration of nickel production at the Baptiste project and the production of nickel sulphate and cathode active materials for the PPES supply chain.
In 2024, FPX Nickel completed pilot-scale hydrometallurgy refinery testwork and produced battery-grade nickel sulphate. This milestone marks the completion of the campaign funded in part by a grant from Natural Resources Canada (NRCan) under the Government of Canada's Critical Minerals Research, Development and Demonstration (CMRDD) program.
Management Team
Martin Turenne - President, CEO and Director
Martin Turenne is a senior executive with over 15 years of experience in the commodities industry, including over five years in the mining industry. He has extensive leadership experience in strategic management, fundraising, economic analysis, financial reporting, regulatory compliance and corporate tax. Turenne formerly served as CFO of First Point Minerals Corp. from 2012 to 2015 and in positions at KPMG LLP and Methanex Corporation. He is a member of the Canadian Institute of Chartered Accountants.
Andrew Osterloh - Vice-president, Projects
With more than 20 years in the industry, Andrew Osterloh is experienced in process engineering, plant metallurgy and project management. He was formerly the project director and head of studies for Fluor Canada, leading feasibility study work for large base metal assets. He was formerly project director and manager of studies for Fluor Canada, where he led feasibility studies for several large base metal assets in the Americas for Glencore, Freeport-McMoRan, Teck and Newmont. Osterloh is a member of the Association of Professional Engineers of British Columbia and holds a Bachelor of Applied Science in mineral process engineering from the University of British Columbia.
Felicia de la Paz - Chief Financial Officer and Corporate Secretary
Felicia de la Paz started her professional career with KPMG LLP's audit practice in Vancouver, culminating with her role as a senior manager leading large teams in the execution of audit engagements for a variety of large and complex organizations across multiple industries. After joining Equinox Gold as the corporate controller in 2017, she was part of a core financial leadership team overseeing corporate accounting, financial reporting and system development, managing the successful integration of several new acquisitions across multiple jurisdictions, including both operating mines and large-scale development projects. She acted as the vice-president of finance for Vida Carbon, a carbon royalty and streaming company, and has more recently been providing financial and systems advisory services to public companies in the mining sector. She is a chartered professional accountant and holds a Bachelor of Commerce (Honours) from the University of British Columbia.
Dr. Peter M. D. Bradshaw - Chairman
Dr. Peter Bradshaw is a geologist with more than 45 years of international mineral exploration experience in over 30 countries with Barringer Research, Placer Dome, and Orvana Minerals. He is a member of the Canadian Mining Hall of Fame. Bradshaw’s key discoveries and project involvement include Porgera Gold Mine, Papua New Guinea; Kidston Gold Mine, Queensland, Australia; Misima Gold Mine, Papua New Guinea; Big Bell Gold Mine, Western Australia; Omai Gold Mine, Guyana; Decar Nickel Project, British Columbia, Canada; director of Aquila Resources; co-founder and first chairman of the Mineral Deposit Research Unit, University of British Columbia.
Nigel Fisher - Director, Environment
Nigel Fisher brings 20 years' experience leading environmental assessments, permitting and management systems, developing and executing on regulatory strategy and advancing governance and funding agreements with Indigenous governments across British Columbia. He has held progressively senior roles with New Gold, Teck Resources, Woodfibre LNG, and most recently, Skeena Resources as director of environment and regulatory affairs. In his prior roles, he successfully obtained multiple regulatory approvals for large-scale resource projects while maintaining compliance with existing and changing legislation.
Jarett Lalonde - Director, Government and Public Affairs
Jarett Lalonde is a highly regarded public affairs leader with over 20 years' experience in the natural resources, technology and regulated products sectors. In his most recent role as global head of product policy at Shopify, Lalonde was instrumental in crafting compelling public affairs narratives for the company's diverse product offerings, and spearheading engagement with policy makers across North America and Europe. Before joining Shopify, he worked with Global Public Affairs, a leading government relations and strategic communications firm, where he performed advisory work for numerous companies advancing large-scale natural resource projects in British Columbia and across Canada. Lalonde previously served as chief of staff to the Attorney General & Minister of Justice for the province of British Columbia, and as policy advisor to the Minister of Natural Resources Canada.
Rob Pease - Director
Rob Pease is a geologist with more than 30 years of experience in exploration, mine development and construction. He is the former CEO of Terrane Metals, acquired by Thompson Creek for C$650 million. Pease was also the former director of Richfield Ventures, acquired by New Gold for C$500 million. He is a director of Pure Gold Mining Inc. and Liberty Gold.
William H. Myckatyn - Director
William Myckatyn is a mining engineer with more than 34 years of experience in the mining industry. Myckatyn is the founder and CEO of Quadra Mining Ltd. He served as chairman and subsequently co-chairman of Quadra FNX Mining until its takeover in 2012. Prior to this, Myckatyn was chairman, president and CEO of Dayton Mining., where he led the restructuring and merger with Pacific Rim Mining. He was the former president and CEO of Princeton Mining and Gibraltar Mines. For over 17 years, he worked for various operations controlled by Placer Dome and its associated predecessor companies, including four separate mines in Australia and the Philippines. He is a director of San Marco Resources and OceanaGold.
Peter Marshall - Director
Peter Marshall is a mining engineer with 30 years of experience in mine development and construction. Marshall was formerly VP of project development at New Gold and SVP project development at Terrane Metals. He has extensive mine development experience in central British Columbia, including completing the Blackwater gold project feasibility study and development, and early construction of Mt. Milligan copper-gold mine, acquired by Thompson Creek for C$650 million in 2010.
James S. Gilbert, - Director
James Gilbert has more than 30 years of investment and transaction execution experience, with more than 20 years focused on the international mining and metals industry. Gilbert held senior management positions with Rothschild, Gerald Metals Inc. and Minera S.A., a private mining investment company. His experience covers mergers and acquisitions, debt and equity financing, off-take and specialty refining agreements, joint venture negotiations and strategic marketing. He was formerly director of AQM Copper Inc., acquired by Teck Resources in 2016.
Anne Currie - Director
Anne Currie is a recognized leader in the permitting of major Canadian mining projects, with over 30 years of experience in the private and public sector, including as a former senior partner with leading global consultancy Environmental Resources Management. She was British Columbia's chief gold commissioner, the chief regulatory authority for the Mineral Tenure Act., and has an exceptional track record in steering the environmental assessment and permitting processes for major mining projects in British Columbia, including for the KSM, Brucejack, Kemess Underground and Blackwater projects.
Kim Baird - Director
Kim Baird is an accomplished leader and strategic advisor working with indigenous communities, governments, businesses and other organizations. In her prior role as the elected chief of the Tsawwassen First Nation, she negotiated and implemented British Columbia's first modern urban treaty, establishing for the Tsawwassen People ownership and governance over their land and resources.
Dan Apai - Engineering Manager
Dan Apai has over twenty years of mining industry experience in civil engineering and engineering management over a diverse range of projects. In his previous role as a principal civil engineer for Fluor Canada, he led the study and detailed engineering works for numerous large-scale mining projects for clients including Teck, Newmont, BHP, First Quantum, Glencore, Josemaria Resources and Newcrest. Apai's technical expertise includes site layout, earthworks, water management, linear facilities (i.e., roads, powerlines, pipelines), and water supply systems – all elements that strongly influence the capital intensity, permitability, and operability of mining projects. Apai is a member of the Association of Professional Engineers of British Columbia and holds a Bachelor of Engineering from the University of Western Australia.
Tim Bekhuys - SVP, Sustainability and External Relations
Tim Bekhuys is a senior mining executive with over 40 years’ experience in community engagement, environmental assessment and permitting. He was formerly VP environment, health, safety and sustainability for SSR Mining, where he led all aspects of sustainability reporting, environmental assessment and permitting activities. He also previously acted as director of environment and sustainability for New Gold, where he successfully led the government, permitting, Indigenous and community relations programs for the Blackwater project in central B.C. Bekhuys was a former member of the boards of directors of the Association for Mineral Exploration British Columbia, the Mining Association of British Columbia, and the Mining Association of Canada.
Keith Patterson - Vice-president, Generative Exploration
Keith Patterson is a senior geologist with over 25 years’ experience in greenfield exploration throughout North America, South America, Europe and Asia. He was formerly director of project generation and greenfield strategy with Eldorado Gold where he managed global exploration and project generation. Patterson acted as vice-president of exploration for Jinshan Gold Mines where he was responsible for the execution of exploration programs and project evaluations in China. He is a registered professional geoscientist with the Engineers and Geoscientists of British Columbia and holds a Master of Geological Sciences and a Bachelor of Geological Engineering, both from the University of British Columbia.
Nickel Price Update: Q3 2024 in Review
How did the nickel price perform in Q3?
The third quarter opened with the price of nickel facing a downward trend that started after it reached a yearly high of US$21,615 per metric ton on May 20. The price on July 1 had fallen to US$17,357. The following week saw a pause in the downward trend and was briefly lifted to US$17,473 before resuming its downward trajectory to US$15,769 on July 25.
Nickel price, July 1 to October 1, 2024.
Chart via Trading Economics.
After bottoming out, the price quickly climbed to US$16,604 on July 31.
Nickel remained largely rangebound between US$16,150 and US$16,500 for the start of August, but saw upward momentum in the middle of the month that pushed the price to US$17,136 on August 27.
The beginning of September saw the price collapse again, reaching a quarterly low of US$15,741 on September 10 and just shy of the year-to-date low of US$15,668 set on February 9. However, pricing pressure wasn’t to last and the price of nickel saw rapid gains through to the end of September reaching a quarterly high of US$17,698 on October 1.
Supply
The big story for the last several quarters has been an oversupply of nickel from Asian markets, particularly Indonesia and Q3 2024 was no different.
According to data from S&P Global, mined nickel production from the country increased by 99,000 metric tons during the quarter and is forecast to be in the 2.4 million metric ton range by the end of 2024, representing 57 percent of total global production.
However, due to Indonesia’s permitting and quota system, sourcing consistent supply from the country has presented challenges for Chinese smelters who were forced to temporarily curtail output due to a shortage in feeder supply.
Despite having a large percentage of global supply, refiners in Indonesia have increasingly been turning to nickel imports from the Philippines, the number two nickel supplier, to maintain operations. The first seven months saw imports rise to 3.37 million metric tons versus just 374,454 tons produced in 2023.
Although China remains the biggest benefactor and investor of Indonesia’s nickel industry, Indonesia has been working to distance it economically from its partner as it tries to work out deals with Western partners.
While Indonesia has been working to distance itself from Chinese investment over the past few years to better position its nickel market for Western markets and inclusion under the US Inflation Reduction Act, a new trade pact looks to solidify ties with China.
Multiple cooperation deals were signed following a November 9 meeting between Chinese President Xi Jinping and Indonesian President Prabowo Subianto, which would see China investing more than US$10 billion into strategic sectors including nickel.
Among the investments is $1.42 billion agreement between Chinese battery material producer GEM (SZSE:002340) and Indonesian miner PT Vale (OTC Pink:PTNDF,IDX:INCO) for the construction of a high-pressure acid leaching (HPAL) plant. The new processing facility is necessary for the production of battery-grade nickel.
Additionally, Zhejiang Huayou Cobalt (SHA:603799) is working to raise US$2.7 billion in financing for a nickel refining and smelting project in partnership with Ford Motor Company (NYSE:F) and PT Vale. The project will also use HPAL processing and is expected to produce 120,000 metric tons of mixed hydroxide precipitate for use in electric vehicle batteries.
China demand lagging
Even though demand for batteries continues to grow, it hasn’t been able to outpace the oversupply situation, this has largely been due to a weak Chinese economy.
China is the largest consumer of nickel in the world, with a majority of the metal destined to be used in the production of stainless steel, but a beleaguered real estate sector and broad economic deflation have dampened demand.
Nickel found pricing support in September as the Chinese government introduced a raft of stimulus measures that were intended to boost economic growth in the country. Among the measures included a 0.5 percent interest rate cut to existing mortgages and reduce the downpayment to purchase a home to 15 percent from 25 percent.
Although the package was responsible for a surge in nickel prices, in the weeks following the announcement nickel prices retreated, once again approaching yearly lows.
In another attempt to jump-start the economy, China introduced a US$1.4 trillion dollar debt swap on November 11 aimed at tackling “hidden debt” and freeing up funds at the local level by reducing interest payments on debt and helping drive growth.
Additionally, the Chinese government is planning to cut the deed tax for homebuyers to 1 percent from the current 3 percent in a further attempt to prop up the country’s economy.
Western governments may not be working hard enough for critical supply
In Canada, the government pledged C$46 billion for the development of four EV battery production plants that will require more raw materials than the Canadian mining sector can currently supply.
At his address to the Greater Vancouver Board of Trade on September 17, Mining Association of Canada President Pierre Gratton suggested Canada is too focused on downstream development and that in order to meet supply the four EV plants will need the support of 15 new mines.
“That’s only speaking from the standpoint of the four battery factories, to say nothing about all of the other needs that our economy requires, or that the US requires, including its defence industries. Unless we achieve the above, and this is the irony, our reliance on foreign sources for minerals and metals is only going to increase,” he said.
Overall, Gratton believes that there needs to be an additional C$32 billion in financing for mining and midstream processing projects.
In Europe, the implementation of its new Carbon Border Adjustment Mechanism (CBAM) that places a tariff on carbon-intensive products is drawing concern from the industry. The regulation is a complex system designed to balance prices and prevent an exodus of carbon-intensive manufacturing to nations with fewer emission controls.
Some are suggesting CBAM has no benefit for the European stainless-steel industry as it limits pricing to scope 1 emissions and doesn’t include downstream emissions from power generation and transpiration.
European steelmakers have become more dependent on nickel pig iron imports from Indonesia, so far 87,485 metric tons through the first eight months of 2024 versus just 1,006 metric tons in 2023. The increase has come alongside a wave of curtailments as the industry reacts to a flood of Indonesian nickel.
What will happen to the nickel price in 2024?
Investors should consider China’s outsized influence over the nickel market, both in terms of control over refined supply and demand from real estate and battery sectors.
Even though the EV sector in China has shown year-over-year growth of 32 percent through the first nine months of 2024, the industry's nickel demand hasn’t made up for shortcomings in the broader economy.
Surplus scenarios are expected to continue over the next few years with a 5.8 percent compound annual growth rate between 2023 and 2028. This will present a challenge for producers who are looking to restart operations in the short term as prices are expected to remain flat.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
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