Recording date: 21st December 2023
Nickel popped up over $17,000 per tonne after the big moves of the other week and is now around $16,800. Will be interesting to see what happens through year-end. We could see some more 5% moves that we had seen a month ago in the next few weeks. Lower trading volumes during the Christmas period have historically led to commodity funds trying to “shove” the market in a new direction.
Global EV sales (BEV and hybrid) in October were up 37% and US sales are up 38% y-o-y.
A few pieces of news, drill results & resources before year-end:
Canada Nickel extended their bridge loan from Auramet by just 30 days (had the opportunity to do 90 days) – and made the comment that they expect to complete various financing and off-take discussions during that period.
Western Mines Mulga Tank – we talked about last call - Got some additional drill holes with similar wide intervals of Crawford-like grades and got a metre interval at 1.8% nickel and 4.8% copper. Again, keep an eye on this one!
Lifezone’s Kabanga project announced a new resource – the best undeveloped high-grade resource (initially discovered in 1980s), as it is in a challenging location – just over 1 million tonnes contained nickel across all categories Attributable Measured and Indicated Resources total 43.6 million tonnes grading 2.02% nickel, 0.28% copper and 0.16% cobalt (2.57% nickel-equivalent). Plus, attributable Inferred Resources totaling 17.5 million tonnes grading 2.23% nickel, 0.31% copper and 0.16% cobalt (2.79% nickel-equivalent). Measured and Indicated Mineral Resource tonnages have increased by 69% relative to the February 2023 Mineral Resource Estimate. The nickel-equivalent metal contained in Measured & Indicated Resources has increased by 30%. Inferred Resources have also increased in tonnage by 20%, with contained nickel-equivalent metal increasing by 4%.
Widgie Nickel – Armstrong deposit (one of a bunch of deposits). Total Resource of 959Kt @ 1.4% Ni for 13,820 nickel tonnes. 19% increase in Indicated resources to 13,720 nickel tonnes. Scoping study pushed into 2024.
Lunnon Metals at Foster South project delivered metallurgy results - an average of 91.4% recovery for nickel, concentrate grades of 17.3% nickel and 12.9% nickel. Premium Fe:MgO ratios of 19:1 and 17:1; negligible arsenic levels. Lunnon also added a small resource near its Baker project and Lunnon Metals’ global MRE across the KNP increased to 3.8 million tonnes @ 2.7% nickel for 104,400 contained nickel tonnes, a threefold increase in tonnes and more than 2½ times more nickel metal in MRE than at the time of the Company’s Initial Public Offering in June 2021.
Some big negative news:
Panoramic Resources filed for bankruptcy – talked about it on our last call. Almost 2% Ni-equivalent grade, deposit next to past producing mine, has its own mill already. As said last time should be a warning about automatically assuming grade equals profit – is just one variable!! One of the other companies that stumbled had a big Board change this week.
Horizonte saw former Board members “retired” and the LaMancha group, one of the key shareholders, installed one of their own as CEO and changed out multiple Board members. A very good sign is that Maryse Belanger is taking over as COO – she’s a rock star, and did a great job turning around Santa Rita for Mirabela – unfortunately, the collapse in nickel from $8.00/lb to $4.00/lb fell faster than they could cut costs. The work that she and her team did set it up for the restart of the asset by Appian a few years later.
IGO announced a review of the Cosmos project it picked up with the Western Areas acquisition. While the Review has not yet concluded, and while we continue to assess life-of-mine scenarios for the Project, IGO will transition to an ore trucking operation in the interim, rather than utilise a mechanised materials handling system as previously planned. As a result, construction on this part of the Project has been halted. Regretfully, there will be an impact on some roles, however, IGO is working on redeployments within the IGO business and is providing all the necessary support to our people through this process. IGO expects to provide the market with a further update on the outcomes of the Review in the December Quarterly Activities Report which is scheduled for release on 31 January 2024. IGO advises that it is likely to record a further impairment against the Cosmos assets in the Company’s First Half FY24 Results.
—
Learn more: https://cruxinvestor.com/categories/commodities/nickel
Sign up for Crux Investor: https://cruxinvestor.com
