Bad news for global miner BHP is great news for Canada Nickel and its ambitious plan to roll out a series of nickel projects in the Timmins area over the next decade, including a new one-million tonne resource south of the city.
“One hundred per cent,” said Canada Nickel CEO Mark Selby in a recent interview with CRUX Investor in reacting to the blue sky opportunity he sees for his company on the news that BHP is shutting down its Western Australian nickel projects until 2027, blaming plummeting metal prices and world oversupply of nickel.
It’s horrible news on the world nickel supply front, but for a Canadian mine builder like Selby, it’s “the absolute best news for us.” Global nickel buyers will have fewer choices on where to buy responsibly-sourced nickel, he said.
So-called ‘blood nickel’ producing countries like China and Russia are, geopolitically, out of the picture and nickel operations in Indonesia have a less-than-stellar reputation for environmental and worker safeguards, said Selby. Governments in Canada and U.S. are treating critical minerals like nickel as strategically important material and are fuelling an on-shoring movement to develop domestic sources of supply.
“The world needs more clean, green nickel,” said Selby, as his portfolio of Timmins projects will be one of the desired places in the world to source it, next to Sudbury.
Selby and Canada Nickel have been talking up its $2-billion flagship Crawford open-pit nickel project as a transformative, zero carbon, mine-of-the-future that will be one of the largest carbon capture storage facilities in Canada.
“The runway just got that much clearer,” he said.
Canada Nickel possesses a raft of exploration properties between Timmins and Cochrane.
Since moving into northeastern Ontario as a start-up outfit less than five years ago, the company has been aggressively promoting the area as a globally significant future nickel mining district.
This week, Canada Nickel posted a first-time million-tonne nickel resource estimate for Deloro,eight kilometres south of Timmins and seven kilometres from the processing plant at the Dome mine-mill complex.
Deloro contains an indicated resource of 81-million tonnes, grading at 0.25 per cent, for 202,000 tonnes of contained nickel. On the inferred side, there’s 357-million tonnes, at the same grade, with 885,000 tonnes of contained nickel.
It's only the beginning of truly unlocking the region’s nickel potential, Selby. Deloro is the first of seven estimates on about a half-dozen nickel prospects the company intends to publish between now and next March. Canada Nickel has deployed seven drill rigs in the field as part of a wider regional exploration program.
“It’s really about building, what we think, could be the world’s largest nickel sulphide district,” said Selby.
Canada Nickel recently spun out some of its early-stage properties into a separate company to establish a developmental pipeline of projects.
But these projects and Deloro take second stage to the company's more advanced Crawford project, 40 kilometres north of Timmins, a proposed low-grade, huge-tonnage nickel sulphide open-pit project that could be one of the biggest nickel operations in the world.
Selby said their main focus is on securing financing to move Crawford toward production. A final construction decision will be made sometime mid-2025.
The company recently cashed up, through a loan with its financier Auramet International, to take them into 2025 as they look to lasso a deep-pocketed joint venture partner to help them build the $2-billion mine project.
At the same time, they want to tap into as many government critical minerals funding pots as possible.
In his interview with CRUX, Selby said the amount of government funding available to build sizable mining projects is of the likes not seen since the Second World War.
“Today’s market, with the government funding that’s available, is a once-in-a-generation opportunity to create multi-decades worth of value with a very small amount of equity capital
“The market doesn’t understand what the size of the opportunity is. There’s only a handful of companies that are positioned to take advantage of it, and we are one of them.”
To prepare for mine development at Crawford, front-end engineering design began in April to give them a head-start on ordering equipment and machinery with long lead times.
Selby said to expect more promising news over the next 12 months on the financing front and on the government environmental approvals side as they expect to pocket both federal and provincial permits by mid-2025.
