Episodes
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Recording date: 29th January 2025
Kung Hei Fat Choi – Happy New Year
Over the past 2 weeks, nickel made a strong break of over 16,000 per tonne off the $15,000 low set earlier in the month but couldn’t escape the Trump turbulence, which dragged metals prices back down, although nickel has dropped less than some other metals like zinc. Over the last 2 weeks, we have seen NPI prices and stainless prices edge higher in China, suggesting the production chain is tightening up despite Trump turbulence – today is the Chinese New Year – so we will get a better view over the next 2 weeks. Chinese are trying to talk down the market while supply is tightening. Remember, Tsinghsan got it wrong 3 years ago, and prices moved higher quickly last year in the first quarter. I still think we will see a higher squeeze.The latest INSG data supports the market that Indonesia took the foot off the brake, showing mine production back up about 15% in October/November – government talked about a 200 Mt quota for 2025, so we will see in January/February what happens – have a case about why Indonesia should want to see prices higher back towards $20,000 earlier.
INSG data also showed global demand for the year now at 4.9%, with China up 3.8% - like last year, expect both numbers to be upgraded as Chinese 300 series stainless steel production was reported to be up 9.5% in 2024 – this is the largest single use of nickel globally – SMM (china agency) reporting global demand growth up 6.3%Company News
Good news from Centaurus Metals – significant increase in nickel concentrate grade to 34% nickel from 12% nickel – a huge shift in downstream costs, particularly as the amount of nickel relative to zinc and fluorine content (which smelters don’t like) has increased significantly.
Canada Nickel – more news on the regional program – best overall regional drill hole at Midlothian – highest grade drill results – 0.29% over the entire core length and multiple holes with grades at the upper end of 0.2-0.3% range. Announced results from 3 other targets as well and added an additional resource to be published this year – eight regional resources and nine total, including Crawford.
Crawford permitting is progressing well – public consultation phase for this part of the process – the first meeting only had ten people attend and three questions // tribute to our team who have actively consulted communities from very early on in the project. A report in Timmins Today on one group talking about the impact on North Driftwood River – we welcome comments during this period – is the purpose of this phase. This is an issue we studied extensively – a cheaper and easier option for us would be to discharge in the much larger Mattagami River, but as they said, North Driftwood is “small stream”, and we are impacting a higher proportion of flow in this watercourse so we are taking the steps to be able to discharge in this stream.
Aston Minerals announced merging to create a gold-focused company – two companies with gold assets in Australia and Canada merging – nickel asset seen as the future option value.Vale announced the sale process for Thompson assets – these assets used to produce 40ktpa of nickel and are now producing 10ktpa nickel. These are assets our team knows well, and our knowledge of ultramafic nickel deposits and processing can add significant value.
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Recording date: 12th of January, 2025
Indonesia, controlling roughly two-thirds of global nickel supply, is positioned to significantly influence nickel prices in 2025 by actively managing its output. The country is expected to target prices in the $20,000-$21,000 per tonne range, according to Canada Nickel CEO Mark Selby. This price target reflects Indonesia's strategic interests, as nickel and stainless steel exports have become crucial to its trade balance.
The nickel market shows promising growth prospects for 2025, with demand expected to increase by 8-10% overall, potentially reaching 20-25% growth in the electric vehicle (EV) battery sector. Despite facing headwinds from U.S.-China trade tensions in 2024, the market still managed to grow by over 4%, outperforming most other base metals.
A notable market discrepancy has emerged over the past three years. While analysts reported cumulative surpluses of 600,000 tonnes, actual visible inventory increases were less than 100,000 tonnes, suggesting stronger underlying demand than recognized.
The geopolitical landscape is adding another dimension to the nickel market. Western governments are increasingly viewing nickel supply as a national security issue, pushing to reduce dependence on China. This shift is driving efforts to reshape supply chains and develop new sources of nickel outside of Indonesian control.
However, viable large-scale nickel projects outside Indonesia are scarce, particularly at current price levels. Most curtailed production would require prices above $22,000/tonne to restart, reinforcing Indonesia's market influence.
In this context, Canada Nickel's Timmins district projects are gaining attention as a potential significant non-Indonesian supply source. The company is advancing its flagship Crawford project toward a construction decision by late 2025, attracting increased interest from downstream stainless steel and alloy producers seeking supply diversification.
The market dynamics create opportunities for companies that can provide secure nickel supply from stable jurisdictions. End-users are increasingly looking to diversify their sourcing away from Indonesian dominance, driven by both supply security concerns and the growing demands of the EV battery sector.
As Selby notes, "2025 is year one of the ONEC era," suggesting a transformative period ahead for the nickel market. The combination of Indonesia's supply management, accelerating EV demand, and Western governments' push for supply chain security points to a potentially significant market shift, with particular opportunities for well-positioned projects in stable jurisdictions.
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Episodes manquant?
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Interview with
Tim Moody, President & CEO of Pan Global Resources Inc.
Andy Home, Senior Metals Correspondent, ReutersRecording date: 8th January 2025
The tin market is experiencing significant transformation as the metal's role in the global energy transition becomes increasingly critical. As a crucial component in electronics soldering and solar panel coatings, tin demand is expected to grow with the expansion of electrification and renewable energy infrastructure.
Industry experts project a potential supply deficit of 13,000 tons by 2030 without new mining investments, driven by anticipated demand growth of 2-3% annually. This shortfall is complicated by mounting supply risks from key producing regions.
Indonesia, a top refined tin producer, is pursuing policies to restrict raw material exports and develop domestic downstream processing capabilities. According to Reuters senior metals columnist Andy Home, while Indonesia's ambitions mirror its successful nickel export ban, the country faces unique challenges in developing downstream tin industries due to tin's specialized electronics applications.
Meanwhile, Myanmar, another top tin producer, continues to impact market dynamics. An ongoing ban on new mining at one of the world's largest tin deposits has affected supply, particularly to China. This has led to declining inventory levels on the Shanghai Futures Exchange, which dropped from over 20,000 tons in early 2024 to approximately 6,000-7,000 tons, prompting China to become a net importer of refined tin.
Europe is responding to these supply chain vulnerabilities by considering adding tin to its critical minerals list. Tim Moody, CEO of PanGlobal Resources, notes the strategic advantage of developing tin projects in Europe, where almost all tin is currently imported except for recycled material.
While substitution risks exist, particularly in traditional applications like canning, the electronics industry's trend toward miniaturization is making tin increasingly indispensable in soldering applications. Advanced electronics require high-tin content solders with ultra-fine pitches, making alternatives less viable.
Looking ahead to 2025, the tin market faces potential volatility. While demand concerns persist due to China's slow economic recovery and recession risks in developed markets, supply-side factors are expected to dominate price movements. The market will be particularly sensitive to China's inventory levels and import patterns as it adapts to constrained supply from Myanmar and potential disruptions from Indonesia.
The combination of growing demand from the energy transition sector, limited new mining projects, and supply chain risks presents both challenges and opportunities in the tin market, particularly for projects in stable jurisdictions that can help diversify global supply.
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Recording date: 20th December 2024
The global copper market is poised for significant growth, with BHP projecting a 70% increase in demand through 2050, driven by economic development, energy transition, and digital infrastructure expansion. This growth trajectory, averaging 2% annually, builds on historical demand that grew at 3.1% annually over the past 75 years.
The current market comprises 31 million tonnes of total demand, with 10 million tonnes met through scrap and 21-22 million tonnes from primary mine supply. However, the industry faces substantial challenges, including aging infrastructure, with over 50% of producing mines exceeding 21 years in age. Declining ore grades and increasing capital intensity further complicate the supply outlook, with brownfield project costs rising 65% over the past 15 years.
Despite recent price weakness relative to gold, strategic investors continue to make significant investments in copper projects. Notable transactions include BHP's $4.1 billion acquisition of Filo Mining, Agnico Eagle's $40 million investment in ATEX, and South32's $29 million stake in American Eagle.
Several exploration companies are showing promising developments. Hercules Metals recently reported encouraging results, including 338 meters of 0.47% copper with mineralization increasing at depth. American Eagle, with a market capitalization of $107 million, plans to expand its drilling program to 25,000 meters in the coming year. Pan Global is advancing multiple projects in Spain, while Gladiator Metals has reported significant drilling results and completed a $12.6 million private placement.
Industry veteran Merlin Marr-Johnson, discussing his own company Fitzroy Minerals, highlighted a new copper discovery in Chile's coastal copper belt, reporting intersections of 30m at 3.5% copper and 135m at 0.73% copper.
The sector's investment landscape suggests focusing on projects with lower capital intensity and stronger economics may offer better risk-adjusted returns. Infrastructure advantages and shorter paths to production are becoming increasingly important factors. While near-term price action remains challenging, continued strategic investment activity indicates long-term confidence in the sector.
For investors, the key considerations include project quality, infrastructure advantages, strategic interest from major mining companies, and consistent exploration success. The fundamental supply-demand picture suggests strong long-term prospects, particularly for well-positioned exploration and development companies with efficient capital management and strong execution capabilities.
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Mark Selby, CEO of Canada Nickel Corp
Recording date: 20th December 2024
Mark Selby, a prominent nickel industry expert, predicts nickel prices will reach $20,000 per ton by the end of February 2025, driven by supply constraints and steady demand growth. Despite current prices hovering around $15,000 per ton after sliding from a $21,000 peak in May 2024, several factors point to an imminent price recovery.
Indonesia's dominant position in the global nickel market emerges as a crucial factor. Now accounting for nearly two-thirds of world supply, Indonesia has earned the moniker "OPEC of nickel." As nickel represents one of Indonesia's largest exports, the government has strong incentives to maintain higher prices through supply management. Recent indicators suggest Indonesian supply will remain flat or potentially decrease in 2025.
Global supply faces additional constraints, with nickel mine production declining for five consecutive months. The situation is further complicated by the Philippines' seasonal production slump during its rainy season, when output typically falls by half. This reduction becomes particularly significant given the substantial Philippine ore already directed to Indonesia throughout 2024.
On the demand side, the electric vehicle sector continues to show robust growth despite regional variations. China leads with 40% growth in EV sales during 2024, while North America achieved 10% growth. Although Europe experienced a slight decline, global EV sales maintained an overall growth rate of 25%. The increasing adoption of nickel-containing NCM batteries in EVs supports sustained demand growth.
In corporate developments, Canada Nickel Company secured a significant $20 million investment from First Nations groups and achieved key permitting milestones for its Crawford nickel sulfide project in Ontario. The company also reported promising results from regional drilling at its Mann South target, which shows potential comparable to the Crawford project.
The market outlook appears increasingly favorable as multiple factors converge: Indonesia's supply management, global production constraints, the Philippines' seasonal slowdown, and sustained EV sector growth. While current prices remain soft due to Asian buyers' cautiousness over potential Trump tariffs impacting Chinese growth, Selby anticipates these concerns will resolve post-inauguration, setting the stage for a significant price recovery.
This combination of supply constraints and steady demand growth suggests the nickel market could tighten considerably in early 2025, potentially creating favorable conditions for price appreciation. The situation warrants close attention from investors and industry stakeholders as the market dynamics continue to evolve.
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Recording date: 25th November 2024
The nickel market has faced some headwinds in recent months due to concerns over Chinese economic growth and the potential impacts of U.S. tariffs on trade. However, nickel prices have shown resilience, bouncing back over the $16,000 per ton level after dipping to lows around $15,500 earlier in the year.
One of the key factors supporting the bullish outlook for nickel is the constrained supply picture. According to the International Nickel Study Group, global nickel supply rose just 4% year-over-year through September. Notably, Indonesian mine supply growth has been flat in recent months as ore availability has become a challenge. Mark Selby, CEO of Canada Nickel Company, believes this dynamic, coupled with the upcoming rainy season in the Philippines which will hamper production there, is likely to lead to a supply squeeze and set the stage for nickel prices to trend back towards $20,000 per ton in early 2025.
On the demand side, nickel consumption increased by 5% year-over-year through September, driven in large part by the rapidly growing electric vehicle battery sector. While there is some uncertainty around EV subsidy policies in the U.S. going forward, the broader incentives put in place by the Inflation Reduction Act to support domestic critical minerals supply chains are expected to remain intact and underpin nickel demand.
The tightening market fundamentals are starting to be reflected in the performance of nickel-focused miners and explorers. Canada Nickel and Asian Battery Metals both reported high-grade nickel sulfide discoveries at their projects recently. Meanwhile, Alliance Nickel released a positive feasibility study on its nickel-cobalt heap leach project in Australia.
For investors looking to gain exposure to the strengthening nickel market, key considerations include targeting companies with high-quality nickel sulfide assets in stable jurisdictions, royalty and streaming firms to mitigate operational risks, and integrated producers with exposure to the entire nickel value chain. The recent pullback in nickel prices could also provide attractive entry points, as development-stage assets have historically seen significant re-rating potential once the market narrative shifts to undersupply conditions.
While risks remain, the overall outlook for the nickel market appears increasingly bullish based on the tightening supply and demand fundamentals. The ongoing energy transition and global focus on developing secure critical minerals supply chains should provide a favorable long-term backdrop for nickel prices and equities. As always, investors should conduct thorough due diligence on individual companies and projects before allocating capital.
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Recording date: 7th November 2024
The often overlooked tin market is poised for a potential supply crunch in the coming years as strong demand from the electronics and electric vehicle sectors collides with increasing disruption risks from dominant producers Myanmar and Indonesia.
Over half of global tin consumption goes into soldering for circuit boards and semiconductors, making it a direct play on the rapid growth of 5G smartphones, IoT devices, data centers, renewable energy and electric vehicles. The ongoing boom in these technologies is set to underpin healthy tin demand through the late 2020s. As Andy Home, Senior Metals Columnist at Reuters, explains, tin is "the metal that holds - that glues - the internet together."
However, the tin market faces major near-term supply risks due to the shutdown of Myanmar's Man Maw mine, which accounts for 7% of worldwide output. The mine was ordered to suspend operations in August 2022 by the United Wa State Army, one of Myanmar's largest ethnic militias, and there is no timeline for when production will resume. The disruptions have caused Chinese tin concentrate imports from Myanmar to collapse over 90% year-to-date.
"Our best gauge of what's going on, since we don't get any production figures, is to look at how much raw material China is importing from its neighbor. That tells me that whatever is going on there, no one's actually mining again," Home states. The longer the Myanmar shutdowns persist, the more likely it is that tin prices react to the loss of supply as Chinese smelters face "genuine distress" and are forced to cut production.
The other key supply risk is Indonesia's ambitions to ban exports of tin and other unprocessed metals, emulating its success in nickel. As the world's largest shipper of refined tin, any restrictions on Indonesian cargoes could significantly tighten the global market. However, tin faces unique challenges in trying to force electronics and semiconductor firms to invest downstream in Indonesia compared to nickel's more straightforward stainless steel supply chain.
While near-term supply risks remain elevated, tin also has a bullish long-term fundamental outlook. The pipeline of new tin mines is limited and over 80% of global reserves are controlled by just five countries - China, Indonesia, Peru, Bolivia, and Brazil. The surging demand from electronics, EVs and renewable energy could leave the tin market facing structural deficits by the end of the decade.
For investors looking to gain exposure to these tin dynamics, the options are buying physically-backed tin ETFs, shares of major listed producers like Yunnan Tin and Malaysia Smelting Corp, or investing in diversified miners with some tin output like Rio Tinto and Glencore. When allocating to tin equities or futures, it's key to have a multi-year time horizon and be prepared for volatility given the small size of the market at just 400,000 tons annually.
The critical applications, Myanmar disruptions and Indonesian export policy risks mean tin could fly under the radar to be one of the best performing metals of the coming years. As Home concludes, "If you want to know why tin's outperformed on the futures markets this year, it's that - that's the risk premium. Everyone knows there's a problem here, and we all know that we have no idea when the problem's going to be resolved."
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Recording date: 4th November 2024
The nickel market is on the cusp of a major inflection point. Prices look poised to surge back towards $20,000 per ton by year-end and could have much further to run as a structural supply deficit emerges.
The key driver is the rapid electrification of the global auto fleet. Electric vehicle sales are defying skeptics, soaring 22% through September to hit a record monthly high. Demand for nickel-bearing batteries is getting a further boost as hybrid vehicle sales take off, jumping 45% this year. With auto giants rapidly shifting production to EVs, securing adequate battery metal supplies is becoming a strategic imperative.
On the supply side, Indonesia, which now controls nearly two-thirds of global nickel output, is weaponizing its position, restricting ore exports to China in a bid to maximize prices and margins. The impact is already showing up in the data, with Chinese nickel pig iron production declining and ore imports from the alternative supplier, the Philippines, surging. But with the Philippines heading into the rainy season, ore supplies look set to tighten meaningfully.
The current low inventories on the London Metal Exchange, equivalent to less than two weeks of consumption, suggest the market is much tighter than the analyst consensus, which is still calling for surpluses. The potential for Indonesia to take a page out of OPEC's playbook and exert more control over nickel supply is a major wildcard that is underappreciated by many market participants. For investors, this backdrop creates opportunities in nickel explorers and developers. Projects that can deliver scalable, battery-grade supply from stable jurisdictions look particularly well positioned to fill the looming supply gap and benefit from government efforts to build homegrown supply chains. The US is kickstarting this trend, allocating $4 million for engineering studies at Canada Nickel's Crawford project in Ontario, with billions more earmarked to build out domestic critical mineral capacity.
Other junior miners are also making promising discoveries. Power Nickel hit 40 meters of high-grade mineralization in Quebec. Talon Metals intersected nearly 100 meters of nickel in Michigan. FPX Nickel is advancing a major new nickel deposit in British Columbia. Each success increases the odds that the battery industry can diversify supplies beyond Indonesia.
The next few months could provide a lower-risk window to build positions ahead of the expected upturn in nickel prices. Selby points to the 1970s, when investing in oil projects outside of OPEC after the embargo proved to be a winning strategy for the next two decades. While near-term volatility is likely, the long-term supply-demand fundamentals for nickel look highly compelling. As Selby sums it up: "Being investing in a commodity that's being managed effectively by a group is a generational opportunity to make a lot of money."
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Recording date: 17th October 2024
Interview with Andy Home, Senior Metals Columnist, ReutersThe global metals market is experiencing significant volatility and transformation, driven by the ongoing energy transition and geopolitical tensions. This dynamic landscape presents both challenges and opportunities for investors looking to capitalize on the critical minerals sector.
Lithium, a key component in electric vehicle batteries, has seen dramatic price fluctuations. After reaching record highs, prices have plummeted due to increased supply and slower-than-expected EV sales growth. However, the long-term outlook remains bullish, as evidenced by Rio Tinto's recent $6.7 billion acquisition of Arcadium Lithium. This deal, which will make Rio Tinto the world's third-largest lithium producer, signals confidence in the metal's future and highlights the importance of innovative technologies like direct lithium extraction (DLE).Copper, often considered an economic bellwether, has shown resilience with prices recently breaking above $10,000 per metric ton. Despite projections of supply surpluses in 2024 and 2025, the metal's crucial role in renewable energy infrastructure and electric vehicles underpins its long-term demand prospects. Investors should note the current tightness in the raw materials segment, with near-zero treatment charges for copper concentrates indicating potential supply chain bottlenecks.
The zinc market faces a supply deficit in 2024 due to declining mine production and smelter output reductions. This situation has led to negative treatment charges for zinc concentrates, squeezing smelter margins. While a recovery is anticipated in 2025, ongoing volatility in the supply chain presents both risks and opportunities for investors.Lead has seen an unexpected shift in trade patterns, with China becoming a net importer for the first time since 2020. This change, triggered by a squeeze on the Shanghai Futures Exchange, highlights the potential for regional imbalances to impact global markets despite overall supply adequacy.
Geopolitical considerations are increasingly shaping the metals market. The United States and its allies are pursuing strategies to develop domestic battery supply chains and reduce dependence on Chinese imports. These efforts include significant government investments, tariffs on Chinese imports, and international partnerships to develop new resources. For investors, these initiatives could create opportunities in companies positioned to benefit from government support and shifting supply chains.Recycling and technological innovation are emerging as critical factors in the metals sector. The potential for increased "urban mining" in China could significantly impact global copper supply, while advancements in extraction technologies like DLE could reshape the competitive landscape in lithium production.
Despite short-term volatility, the long-term outlook for critical minerals remains strong. The International Energy Agency projects that demand for these materials could increase by up to six times by 2040 in a scenario consistent with meeting Paris Agreement goals. This growth trajectory presents compelling opportunities for investors willing to weather short-term fluctuations.
To navigate this complex landscape, investors should consider a balanced approach that includes exposure to established producers, innovative junior miners, and companies developing new technologies in extraction and recycling. Staying informed about policy developments, technological breakthroughs, and shifting market dynamics will be crucial for identifying opportunities and managing risks in this rapidly evolving sector.
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On prices, First half of the month, nickel briefly touched prior lows around $15,500 per tonne but bounced back up into $16-$16,500 range, where they have spent the bulk of recent time, but saw a big rally where prices moved more than $2,000,$1/lb over $18,000 per tonne (Now at $17,600) as concern about ore supply keeping market tight despite demand weakness. Nickel inflows into inventory a little heaver –but consistent with seeing additional exchange deliveries before market balances. One of the key themes from LME week was some optimism from Chinese participants as the latest dose of stimulus is having a change in sentiment – good because Chinese macro issues have an impact on both stainless and battery markets. Sulphate prices have come off a bit, and ore squeeze driving prices have paused and have seen prices for ore/NPI/stainless come off a little bit. Continued weakness in lithium prices is dampening any need for the battery supply chain to order raw materials, and they are happy to continue to destock.
Monthly INSG report – global mine supply only up 1.5%, most notably seeing no growth in Indonesia supply – has stayed flat now for the last 9-months and with announced mine closures, ROW mine supply has declined. In terms of nickel output, Indonesia has also been flat for the last 9-months (1st half year still had 15% growth, but unless the pace of output picks up, it will show almost no growth in 2nd half). Demand growth has slowed to 5.5% for 1st half of 2024 – lack of restocking in the battery sector and macro weakness in China having an impact. Things will improve into year-end, but may not get to a double-digit forecast.
INSG also had a bi-annual meeting. World primary nickel production was 3.360Mt in 2023, and is forecast to reach 3.516Mt in 2024 and 3.649Mt in 2025. The estimates do not include an adjustment factor for possible production disruptions. World primary nickel usage was 3.193Mt in 2023. The INSG forecasts an increase to 3.346Mt in 2024 and 3.514Mt in 2025. Therefore, the implicit market balances are surpluses of 167kt in 2023, 170kt in 2024 and 135kt in 2025. NOTE: THIS FORECAST does NOT have disruption allowance in supply (typically 3-5%), which would put 2025 in deficit – particularly with only 5% forecast demand growth (has been slow in 2024, which should mean stronger in 2025).
The critical number to watch is ore imports into Indonesia from the Philippines – up another 66% month-over-month and now representing 5% of global supply. Some funny numbers in reported Chinese ore inventory levels (remember China needs to stock ore in advance of the Philippines rainy season) – The top 7 ports have been shrinking to flat for the last 6-weeks, but total port inventories have been magically reported to continue to climb up magically – remember that they fiddled with stainless production numbers!!
Chinese participants showed optimism at LME Week due to recent stimulus measures.
Sulphate prices have decreased slightly, along with ore/NPI/stainless prices.
Lithium price weakness is causing battery supply chain destocking.INSG Report Highlights:
Global mine supply up only 1.5%, with Indonesian supply flat for 9 months.
Demand growth slowed to 5.5% for H1 2024.
2023 production: 3.360Mt; forecasts for 2024: 3.516Mt, 2025: 3.649Mt.
2023 usage: 3.193Mt; forecasts for 2024: 3.346Mt, 2025: 3.514Mt.
Projected surpluses: 167kt (2023), 170kt (2024), 135kt (2025).
Note: Forecast doesn't include typical 3-5% disruption allowance.Key Trends:
Indonesian ore imports from Philippines up 66% month-over-month.Possible supply squeeze expected in November/December.EV market grew 20% in Jan-Aug 2024 vs. 2023 (BEVs +10%, PHEVs +46%).European EV market declined 4%, while Chinese market grew 33%.Company News:
Canada Nickel (CNC) - LOI from Export Development Canada for $500 million USD.
New advisory board and senior management appointments.
Positive exploration results and Environmental Impact Statement filing.Magna Mining - Acquired Sudbury assets from KGHM.
Crean Hill underground mining startup with positive NPV and IRR.Western Mines Group - Reported good bulk ultramafic grades and high-grade intervals.Perseverance Metals - Confirmed high-grade drilling at Lac Goyot project in Quebec.SPC Nickel - Positive exploration results from Muskox project in Nunavut.
Good infill drilling results at West Graham.Power Nickel - Widest interval to date with significant Cu-PGM values.Overall, the nickel market is experiencing supply concerns and price volatility, while the EV sector shows mixed growth across regions. Several mining companies reported positive exploration results and strategic developments.
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Recording date: 4th September 2024
Nickel continuing back into range of $16-$16,500 per tonne after flirting with $17,000 per tonne last time we talked 2 weeks ago. Exchange inventories continue to tick up at 2-3kt per week and expect to see another 20-30kt of nickel delivered before market comes back to balance.
The “R” word is pummeling the equity markets, and it remains to be seen whether banks will cut interest rates quickly enough to prevent an economic slowdown. Given the macro overhang, nickel prices may have a further test of prior downside, but I think the downside is limited as it is still pushing deep into cost support. We’ll see prices rise to $20K by year-end as we should see a stronger fall market for the EV supply chain and stainless squeezed by ore supply tightness.
In the China/Indonesia markets, the main stories continue to be ore tightness, with ore prices for key grades increasing $1/tonne each week over the last 2 weeks. We are seeing some improvement in stainless and battery sulphate prices, but we are not seeing strong demand in either market. However, we see restocking in the battery sector as we head into the traditionally strong fall season. It will be interesting to see how ore imports from the Philippines have continued to trend and what happens when the Philippines’ rainy season comes into view later in the year.
INSG stats for 1st half 2024 – mine supply up 2.8%, refined output up 5.8%, demand up 7.5%. 1st half surplus of 35kt (70kt annualized-just over 2%). Please remember that at the start of the year this number a lot of analysts had 250kt+ forecasts for this year
Quiet few weeks on the news front as typical at the end of August in terms of company news, but some important news:
Canada Nickel published the first of seven additional resources from its Deloro project, which it expects to publish by mid-next year, and is going to give an update on the regional exploration program.
It was good to see news from FPX that the Province of British Columbia has identified the Baptiste nickel project as a project to be included in the province's newly established Critical Minerals Office concierge service initiative, a foundational strategy action to enable the prioritization of critical mineral projects in B.C.
I think you’ll see more initiatives like this in more countries. Jurisdictions tried to have wide-open processes but realised that to prioritize limited resources. It is best to focus on a smaller set of priority projects.
The big news was about price support from the U.S. government for critical minerals.
An official from the Energy Department told the publication that the new policy would involve setting a price floor and agreeing to pay the difference when market prices fall below that threshold for critical minerals produced in the US.
More importantly, it would lessen America’s reliance on China, which dominates the global supply chain for critical minerals. “If we move forward on anything like this, the intent would be to give the nudge needed to set off the flywheel, versus create a permanent subsidy or cushion for a particular sector or company going forward,” the Energy Department official told POLITICO.
Other big news underscoring the strategic importance of domestic supply chains was antimony.
US Geological Survey data showed that China, the world's largest producer of antimony, a strategic metal used in flame retardants, batteries, munitions, and photovoltaic equipment, accounted for 48% of global antimony mine production last year.
The limits, effective from September 15, apply to six kinds of antimony-related products including antimony ore, antimony metals and antimony oxide, the ministry said in a statement.
The US government had provided a substantial funding package to Perpetua Resources who is building a gold-antimony mine.
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Interview with Mark Richard Gasson, Executive Chairman, and Paul Anthony Barrett, CEO of Rome Resources PLC
Recording date: 30th August 2024
Tin, often overlooked in discussions of critical metals, is emerging as a key player in the global transition to advanced technologies and renewable energy. With demand projected to double over the next two decades, tin presents a compelling investment case worthy of attention.
The fundamentals of the tin market are shifting dramatically. Historically stable at around 200,000 tons per year, global tin consumption has risen to 400,000 tons annually, driven primarily by growth in electronics manufacturing. Looking ahead, the International Energy Agency projects a doubling of tin demand by 2040, even in conservative scenarios.
This surge in demand is fueled by several key factors:
Electronics and Semiconductors: Tin remains irreplaceable in soldering applications, serving as the "connective tissue" of electronics.
Artificial Intelligence and Data Centers: The rapid expansion of AI and computing infrastructure is driving increased tin consumption.
Renewable Energy: Solar panel production, currently accounting for 5% of tin usage, is expected to grow significantly.
Electric Vehicles: Each electric vehicle requires approximately three times more tin than a conventional car.On the supply side, constraints are evident. With limited new mines in development and challenges at existing operations, meeting the projected demand growth could prove challenging. This supply-demand imbalance is expected to exert upward pressure on tin prices in the coming years. The Democratic Republic of Congo (DRC) is emerging as a significant player in tin production, offering high-grade deposits and potentially faster development timelines compared to other jurisdictions. Despite historical perceptions of risk, the DRC's mining code is considered stable and supportive of responsible mining operations.
For investors, gaining exposure to tin currently presents challenges due to limited public market options. Most major tin producers are private companies or tin is produced as a byproduct of other mining operations. However, as exploration companies advance their projects and attract institutional interest, investment opportunities are expected to expand.
Risks to consider include the relatively small size of the tin market, which can lead to price volatility, geopolitical factors in key producing regions, and the usual risks associated with mining project development. Additionally, while currently limited, the potential for technological substitution in certain applications cannot be entirely ruled out.
Despite these challenges, tin's critical role in technologies driving the green energy transition and the digital revolution positions it as a metal of increasing strategic importance. The long-term outlook for tin demand and pricing appears favorable, supported by its diverse applications ranging from traditional uses to cutting-edge technologies.
For investors seeking exposure to the materials powering our technological future, tin represents an intriguing opportunity. As the market evolves and public investment options potentially expand, keeping a close eye on developments in the tin space could prove rewarding. Whether through diversified mining companies, specialized explorers, or future pure-play producers, tin's growing importance in the global technology landscape makes it a commodity worth serious consideration in forward-looking investment strategies.
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Recording date: 28th August 2024
The Battery Show (Copper Bottomed, Episode 17)
The copper market has seen significant volatility in recent months, with prices ranging from $3.92 to $5.25 per pound before settling around $4.25. This fluctuation was driven by Chinese housing market weakness and fund positioning, rather than fundamental demand. While Chinese demand remains soft, ex-China demand, particularly from the US, has been strong. Most analysts maintain a bullish long-term outlook on copper due to supply constraints and growing demand from electrification and decarbonization trends.
A major development in the sector was the $3 billion joint venture between Lundin Mining and BHP to acquire Filo Mining, highlighting the premium value placed on high-quality copper assets. This deal could have positive implications for Argentina's mining sector.
Several reports, including from Wood Mackenzie and S&P Global, emphasize the looming copper supply deficit. Wood Mackenzie projects a 75% increase in copper demand by 2050, reaching 56 million tonnes annually. However, new major copper discoveries have become increasingly rare, with the average timeline from discovery to production now stretching to 18 years for mines in general, and potentially 25-30 years for large copper projects.
Major producers like Freeport-McMoRan and BHP are struggling to show significant production growth. Both companies are heavily investing in leaching technologies to extract more copper from existing operations, but the effectiveness and cost-efficiency of these new methods remain uncertain. BHP, for instance, is projecting only modest production growth over the next decade despite substantial investments.
In the junior mining space, two companies stood out. Arizona Sonoran Copper Company released a Preliminary Economic Assessment (PEA) for its Cactus Open Pit Project, showing promising economics with a 24% IRR. However, the presenter noted potential underestimations in operating costs and capital expenditures that investors should scrutinize. American Eagle Gold, despite a recent share price decline, continues to report encouraging drill results from its NAK project, demonstrating a large copper-gold system with good grades near the surface and excellent infrastructure.
The overall narrative for copper remains bullish, driven by increasing demand from population growth, urbanization, rising living standards, and the energy transition. However, supply growth is constrained by the scarcity of new discoveries, long lead times for project development, and the challenges of extracting copper from lower-grade or more complex deposits. For investors, this suggests potential opportunities in both major producers investing in efficiency improvements and junior explorers with promising projects, particularly those with high-grade, near-surface mineralization and good infrastructure. The sector may require patience, as the market sometimes expects linear improvement in exploration results, but the long-term fundamentals appear strong for well-positioned copper assets.
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Recording date: 22nd August 2024
Nickel prices bounced around $16-$16,500 for the last 2 weeks – popped up yesterday to $16,800, and flirted with $17,000.
Ore prices have marched higher and increased each of the last 2 weeks – 1.5% Philippine ore key benchmark has climbed by $6/tonne or 12.5% to $54/tonne – flows right through to the cost floor. This is even with demand not quite as strong as we expected at the start of the year as Chinese economy weakness and lithium weakness slowing restocking in the EV segment (still good 8% y-o-y but not at double-digit rates).
As of June, Indonesia now imports 3% of its global ore supply from the Philippines (some good charts from Macquarie). This underscores the theme that Indonesia doesn’t have an unlimited supply of ore and is facing real ore grade is seen high-grading three ways: nickel grade, Fe/Ni ratio, and slag chemistry. Given that weakness, NPI and stainless prices haven’t followed suit with ore prices. Price compression is still happening as NPI discounts narrowed again and sulphate at a small discount.
A little bit of news, but generally, it is a quiet summer:
Electra Battery Metals - $US20 million from DOD – restarting and expanding existing cobalt refinery. They will be processing material from the Congo into finished cobalt products - which underscores the government’s focus on this stage of processing – one of the key drivers as to why Canada Nickel is setting up a downstream business.
Canada Nickel - We continued with good regional exploration news: Best Reid interval to date – 661m of 0.29% nickel, including 100m of 0.42% nickel and 40m of 0.51% nickel in REI-24-35; all eight holes targeting the Reid central core intersected core lengths greater than 620m, with average grades of 0.21% to 0.29%.
SPC Nickel released more in-fill holes from West Graham, with some good, shallow intervals - Hole WG-24-092 intersected 1.15 per cent nickel and 0.29 per cent copper over 12.0 metres from 15m to 27m. This interval is part of a wider interval that returned 0.75 per cent nickel and 0.24 per cent copper over 34.85 metres from 1.15 to 36.0 metres.
Power Nickel (may be renamed to Power Copper-PGM) last few holes from winter program – some more good copper-PGM intervals N-24-060 returned: 10.39 metres (m) of 0.19 gram per tonne (g/t) gold (Au), 14.17 g/t silver (Ag), 2.12 per cent copper (Cu), 2.08 g/t palladium (Pd), 0.4 g/t platinum (Pt) and 0.14 per cent nickel (Ni); Including 4.05 m of 0.31 g/t Au, 18.64 g/t Ag, 2.75 per cent Cu, 2.81 g/t Pd, 0.75 g/t Pt and 0.14 per cent Ni; With 1.7 m of 0.58 g/t Au, 38.61 g/t Ag, 5.95 per cent Cu, 4.54 g/t Pd, 0.95 g/t Pt and 0.19 per cent Ni; PN-24-050 returned 5.45 m of 0.13 g/t Au, 4.2 g/t Ag, 0.61 per cent Cu, 1.32 g/t Pd, 0.52 g/t Pt and 0.11 per cent Ni; Including 2.6 m of 0.17 g/t Au, 7.3 g/t Ag, 0.81 per cent Cu, 2.38 g/t Pd, 0.72 g/t Pt and 0.05 per cent Ni; And 1.25 m of 0.18 g/t Au, 2.72 g/t Ag, 0.95 per cent Cu, 0.76 g/t Pd, 0.76 g/t Pt and 0.29 per cent Ni.
Premium Nickel initial 43-101 resource (an increase from historic resource) Selebi Main Deposit - Inferred Mineral Resource Estimate of 18.89 million tonnes at 3.51% CuEq or 1.70% NiEq. Contained metal Inferred - 165,000 tonnes nickel and 319,000 tonnes copper. Selebi North Deposit - Indicated Mineral Resource Estimate of 3.00 million tonnes at 2.92% CuEq or 1.42% NiEq. Contained metal Indicated - 29,000 tonnes nickel and 27,000 tonnes copper. Inferred Mineral Resource Estimate of 5.83 million tonnes at 3.11% CuEq or 1.51% NiEq. Contained metal Inferred - 62,000 tonnes nickel and 52,000 tonnes copper. — Learn more: https://cruxinvestor.com/categories/commodities/nickel Sign up for Crux Investor: https://cruxinvestor.com
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Recording date: 2nd August 2024
The Nickel Market: A Strategic Investment in the Green Energy Transition
Down 5%, back up 7% - welcome to the nickel world. Nickel back up to $16,500 range ($7.50/lb) after getting all the way down to $15,500 when we last spoke 2 weeks ago
The “Great Compression” continues – NPI discounts continue to narrow- have narrowed by nearly 25% over the last 2 weeks. Sulphate at a premium. The increase in nickel price this past week will push back out again, but NPI prices will rise again based on ore tightness in Indonesia. It also feeds into increases in stainless steel prices and stainless scrap. Stainless inventories also declined. We will see how this trend continues, but I think we are forming the bottom here to move back towards $20K year-end forecast for nickel prices.
APNI announces Indonesian Metals Exchange for 2025
The Indonesian Nickel Miners Association (APNI) announced yesterday that it plans to introduce the Indonesia Metals Exchange (IME) in 2025. With this, APNI wants to decouple Indonesia, as the owner of the largest currently known nickel reserves and the world’s most important nickel exporter, from foreign commodity exchanges, which currently determine the benchmark prices. APNI is sometimes a big talker, but it indicates how Indonesia feels about “managing the nickel market.”
Delong – 2nd largest Chinese NPI and stainless producer, declared bankruptcy in the last 2 weeks. Had been struggling for a while – again, a good indication that these prices are at a bottom and well-supported at these levels
US dollar remains strong – want to emphasize pricing in commodity currency. See through the gloom – nickel prices in $C are higher (other than recent spike) since 2011 !!!
Market Dynamics and Price Recovery
After a period of price compression, nickel has rebounded by 7%, reaching $16,500 per ton or $7.50 per pound. This recovery suggests that the market may be forming a bottom, potentially setting the stage for further growth. Industry expert Mark Selby points to a phenomenon he calls the "great compression," which has been affecting the nickel market for the past 18-24 months. This situation appears to be resolving, with discounts on intermediate products narrowing and stainless steel inventories declining.Indonesia's Growing Influence
Indonesia, a major player in the global nickel market, is taking steps to assert greater control over nickel pricing. The country plans to create an Indonesian Metals Exchange by 2025 to decouple local nickel prices from London Metal Exchange fluctuations. This move underscores Indonesia's strategy to maximize revenue from its substantial nickel resources and could lead to more stable pricing in the long term.Unlike China, which has historically provided cheap raw materials, Indonesia is prioritizing the profitability of its mining and processing operations. This stance has already contributed to the country's shift from trade deficits to surpluses, largely driven by nickel and stainless steel exports.
Currency Effects and Regional Competitiveness
An often overlooked factor is the impact of currency fluctuations on nickel pricing. When viewed in Canadian or Australian dollars, current nickel prices are at their highest levels since 2011, excluding the past two years. This currency effect creates favorable conditions for nickel producers in these countries, potentially stimulating increased supply and investment in these regions.Key Projects and Technological Advancements
Several nickel mining companies are making significant progress in developing their projects, which could have important implications for future nickel supply:FPX Nickel is advancing towards a feasibility study, implementing cost reductions and environmental improvements, such as trolley systems, to reduce its carbon footprint.
Lifezone Metals is developing the high-grade Kabanga mine and exploring refinery options, though it faces challenges due to location and processing technology.
Canada Nickel Company is making rapid progress on its Crawford project, achieving high-grade nickel concentrate in tests and showing potential for improved economics.
Environmental Considerations
The nickel industry is increasingly focusing on reducing its environmental footprint, a crucial factor for investors considering the growing emphasis on ESG criteria. Projects incorporating design elements to minimize carbon emissions are likely to become key differentiators in the market, particularly as demand from the electric vehicle and renewable energy sectors continues to grow.However, investors should remain aware of potential challenges, including geopolitical risks related to Indonesia's growing influence, technological developments in battery chemistry that could impact nickel demand, and the success or failure of new processing technologies.
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Recording date: 18th July 2024
The Battery Show (Copper Bottomed, Episode 16)
The copper market has seen significant action over the past two months, with prices rising to around $5/lb before pulling back to current levels of $4.41/lb. This volatility has been driven by fund flows and aggressive trading by financial institutions, sometimes at odds with on-the-ground market conditions in China. While Chinese copper traders were seeing weakness in housing completions, which typically drive copper demand, prices rose due to strong US demand and bullish sentiment around copper's long-term prospects.
Demand for copper continues to grow from electric vehicles, with global EV sales expected to reach 17 million units this year. The rapid growth of data centers is also driving significant copper demand, with global data center electricity usage now exceeding that of most countries. However, there are some headwinds, including China's state grid shifting to aluminum for some high-voltage transmission lines.
The long-term outlook for copper remains very bullish due to the difficulty in bringing new supply online. It takes an average of 23 years from discovery to production for new copper mines, and the pipeline of new projects is insufficient to meet projected demand growth. This supply crunch is expected to drive significant price volatility in the coming years.
M&A activity is heating up in the copper space as major miners look to acquire assets rather than develop them from scratch. There are rumors of potential bids for companies like Teck Resources and Filo Mining. Meanwhile, developers like Marimaca Copper and Foran Mining have successfully raised capital to advance their projects.
On the exploration front, several companies reported promising drill results. Highlights include Filo Mining's continued expansion of its high-grade zone, NGX Minerals' bonanza-grade intercepts at its Luna project, and Solaris Resources' restart of drilling at Warintza. Smaller explorers like Atex Resources, Aldebaran Resources, and C3 Metals also reported encouraging results that expand the potential of their respective projects.
For investors, the copper sector offers opportunities across the risk spectrum. Major producers and advanced developers provide more stable exposure to rising copper prices. Exploration-stage companies offer higher risk-reward potential, with the possibility of significant share price appreciation on discovery success. Given the strong long-term fundamentals, a basket approach of copper-focused investments could be an attractive way to gain exposure to the sector.
Key factors for investors to watch include Chinese copper demand trends, particularly in the property sector; the pace of global EV adoption and grid infrastructure buildout; progress on permitting and construction of new mines, especially in challenging jurisdictions; and potential technology breakthroughs in areas like extraction techniques or recycling that could impact the supply-demand balance. Overall, the copper market appears poised for an extended period of tight supply and rising prices, creating a favorable environment for well-positioned companies across the value chain.
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Recording date: 16th July 2024
It has been a big couple of weeks on the nickel market front.
Nickel prices gave up 5% last week driven by the news flow – have seen inventories climb another few thousand tonnes (as expected). Sulphate prices in China have held steady, while stainless has gone a little soft.
The big news since we last talked is BHP's announcement that it will close all of its Western Australian operations later this year until at least 2027. We’ve talked at length in the past about how their February market statement was completely off-base. This has impacted a number of operations that depended on the BHP mill to process their ore - expect another mill to emerge to process ore in the region.
This closure is much more an indictment of Western Australia's cost structure than the nickel market. Nickel prices today still above $16,500 (or $7.50 a pound) - if we can’t generate cash at these levels (we used $7.75 for LT nickel price in 2019 for Dumont project (and we’re comfortable given change in underlying costs structures then the $21,000 we used for Crawford for 40 years starting in 2027), then you have some real operational issues (more of a result of WA labour & energy costs, and lack of investment in new mine production!)
IGO and Wyloo also shelved plans to build a $1 billion precursor plant in Western Australia. In my view, it is stupid for mining companies to look at something like precursors, which are continually evolving products that require specialized refining and technical know-how. Just make the best, cheapest product that battery and alloy consumers can use.
This follows on the heels of Vale Base Metals’ strategy announcement two weeks ago, which effectively just had mines attempting to ramp back up to recent levels with really no new projects and no real North American growth – other than some vague 2030+ potential projects.
Why is this good news for Canada Nickel and other new nickel projects?
Companies need IRA-compliant nickel—hundreds of thousands of tonnes—just add up the battery plants under construction. Companies want to source nickel that’s not Indo-Chinese “blood nickel.” They just lost another big chunk of clean, safe supply, and one of the other major producers isn’t going to expand production anytime soon.Now for a few market facts that may counter the oversupply narratives ….
INSG just put out their July report (which is YTD May) – The market was in a small DEFICIT over the last 3 months, YTD 2024 demand is up 8% (less than my forecast, but still 7 months to go), but because refined production only up 6% and mine production less than 3%, the market has been in deficit. Indonesia has limited ore supply growth either by managing quotas or lack of higher grade supply (still importing from the Philippines)
On the EV front:
Plug-in car registrations for May (YOY change): up 23%, BEVs up 17%, hybrids up 37%. US/Canada up 18%. YTD May up 25% - thought was collapsing ?!?!?
Onto company news:
Canada Nickel announced a 6-month bridge facility with Auramet – done 3 times previously, all too significant events – the last one was to Samsung SDI financing. Also announced the creation of ExploreCo taking the existing 80/20 Mann JV with Noble and spinning our Eastern properties into a new subsidiary 80/20 with Noble Minerals, in which we received remaining surface rights and other patents/claims around Crawford, making it easier to begin construction.
Chalice announced an MOU that sets out a framework for ongoing collaboration and assistance between Chalice and Mitsubishi concerning the development of the Project. The aim is to explore the possibility of further joint engagement with Chalice, including a potential binding partnership following the completion of the Gonneville Pre-Feasibility Study (“PFS”), which is expected to be completed by mid-CY25.
Centaurus announced good feasibility study results – NPV of $US 700 million, IRR 31% on $US 370 million initial capital and $US 600 million LOM capital. 5:1 strip ratio, 73% nickel recovery, 12% LOM nickel grade concentrate. only considers open pit nickel sulphide ore over an initial 18-year mine life, delivering nickel sulphide feed to a 3.5Mtpa conventional nickel flotation plant to produce approximately 18,700 tonnes of recovered nickel metal per year at a low life-of-mine (LOM) C1 operating cost of US$2.30/lb and AISC of US$3.57/lb, on a contained nickel basis. Reserves of 63.0Mt @ 0.73% Ni for 459,200t Contained Ni
Good results from Sudbury–Magna and SPC Nickel:
SPC Nickel doing near-surface infill drilling in in-pit areas with some excellent open-pit results:Hole WG-24-087 intersected 1.05 per cent Ni and 0.30 per cent Cu over 16.0 metres from 32.0 to 48.0 metres. This interval is part of a wider interval that returned 0.63 per cent Ni and 0.24 per cent Cu over 41.0 metres from 10.0 to 41.0 metres. Hole WG-24-088 intersected 1.41 per cent Ni and 0.33 per cent Cu over 16.0 metres from 20.0 to 36.0 metres. This interval is part of a wider interval that returned 0.87 per cent Ni and 0.32 per cent Cu over 37.95 metres from 13.0 to 42.0 metres.
Magna Metals also had some good infill results (within 200 metres of surface) from 109FW zone (mostly copper and PGM): MCR-24-087: 5.0 per cent copper, 0.7 per cent nickel, 12.8 grams per tonne platinum plus palladium plus gold over 15.2 metres Including 11.7 per cent Cu, 1.0 per cent Ni, 5.8 g/t Pt plus Pd plus Au over 5.2 metres; MCB-24-080: 0.6 per cent Cu, 0.2 per cent Ni, 20.2 g/t Pt plus Pd plus Au over 15.1 metres; MCB-24-082: 2.6 per cent Cu, 0.7 per cent Ni, 13.2 g/t Pt plus Pd plus Au over 6.4 metres.
On the financing front:
Talon Metals sold an additional 1.67% royalty to Triple Flag (one of leading royalty Cos) for $US 8 million.Alaska Energy raised $3.3 million to advance their Nikolai project and made a number of Board changes.
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Recording date: 2nd July 2024
Nickel climbed back up to the $17,500 range. LME inventories are up about 5,000 tonnes (another China/Indonesia refinery had product certified last month) to 93 kt, while SHFE inventories dropped up 2,000 tonnes to 22.5 kt. LME inventories are at 2 years high - this was expected by me – we’re now up about 80kt across both exchanges since the market bottom – while that may sound ominous, please remember some analysts have 200+kt surpluses over the last 2 years. I believe that we had ~100kt last year and are running a small surplus heading to balance this year, so it would make sense that this amount of inventory would work its way onto inventories.
More uncertainty over near-term expectations for EV sales combined with a renewed drop in lithium prices has slowed expected restocking. I still expect to see the overall nickel demand climb by 10% once we get through this uncertainty. INSG reported nickel demand YTD April up over 8% and a balanced market in April (~12kt surplus annualized)
With EV/lithium seeing sulphate prices in China come off and back to a discount (where we expect), stainless prices are holding steady, and inventories in China have come off.
Changes in another commodity will support stainless prices. We saw major incidents at 2 met coal mines in Australia and the US, which are pushing met coal prices higher. Metallurgical coal/coke is a significant cost component for NPI/stainless production in China and Indonesia.
Per last session, after halt, *Western Mines Group* announced $1.5 million investment from Dundee Corp – Canadian merchant investor and have subsequently announced another good drill hole from Mulga Tank – first 600 metres continuously mineralized at 0.29% nickel with intervals of 0.3-0.4% nickel and had one 1 metre sample of 1.5% nickel.
Canada Nickel announced a $US15 million bridge facility from Auramet, our long-standing financing partner. We’ve done 3 of these before, having bridged to financing/partners, including Anglo-American and Samsung/Agnico, in the past. We are targeting a bridge to completing the JV/equity financing required for Crawford.
Magna Mining announced results from infill drilling in surface bulk sample area for low Cu-Ni, high PGM, which delivered results showing 5-20 g/t intervals.
Premium Nickel continues to deliver drill results – 10 more holes to be utilized in their upcoming resource (which will come through in “coming weeks”) – saw core lengths and grades consistent with prior holes.
lSPC Nickel announced drilling at the Muskox intrusion in Nunavut, Northern Canada. It is a remote location but a large intrusion that produced some splashy intersections in historical work done in the 1960s/1970s. We should see some interesting news flow through the fall.
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Recording date: 20th June 2024
Nickel — I was wrong on the short-term move. I got the dip below $19K but didn’t see it breaking down all the way to $17,300 (just under $8/lb). It's still 15% off the lows and generally in place where expected. The drop in the lithium price is taking some steam out of restocking, but according to INSG, nickel demand was up 9% in Q1.
With the drop in nickel price, discounts on NPI narrowed further – again, expect to see continued convergence throughout the year. Stories this past week from the Indonesian nickel conference around preserving high grade, high grade running out by 2029 (I don’t think that is the case, but declining grades will continue to happen and is one of the factors most analysts are not factoring into Indonesian production). Other big news from the Indo conference was a discussion of a moratorium on new NPI smelters being considered – the question of whether it will apply to already permitted facilities or just new permits
Big news of the week was the Bloomberg story and video – great insight into labour, environmental and community issues caused by nickel mining.
Story: https://www.bloomberg.com/features/2024-indonesia-sulawesi-nickel-fire/?utm_medium=deeplink&embedded-checkout=true
Video: https://www.youtube.com/watch?v=fBEZzW5LB4M
Plug-in vehicles were up 30% year over year in April, with BEVs up 14% year over year and Plug-in hybrids up 51% year over year. China drove EV sales up 30% year over year, while ROW major markets were up 5%.
Chinese stainless steel production is up 12% YTD May, with 300 series up 15%YTD May.
Bad forecasts – CRU did June quarterly update – surpluses in 2-3% per year, have total demand down to 4-5% by 2027-28 driven by stainless production growth down to 2-3% per year – makes no sense.
Company News
Magna Mining announced the award of advanced exploration mining with a surface bulk sample of approximately 20,000 tonnes from the 109-footwall zone. The mobilization and site preparation are scheduled to begin in June, with drilling and blasting commencing in July, followed by processing at Glencore's Strathcona facility. The initial capital required to commence the surface bulk sample program at Crean Hill is expected to be financed from Magna's existing cash balance.
EV Nickel surface samples - of the 148 samples submitted for analysis, 123 of the samples were from the targeted peridotites and dunites, where 79% of the assay samples graded 0.24% nickel or better, ranging from 0.15% Ni to 0.34% nickel, indicating that the CarLang B area represents another potential zone of similar grade material as the Company's flagship CarLang A Deposit.
In Australia, Western Mines Group halted stock for release by Monday. It will be interesting to see what comes out. The stock had hit some higher grade at contact of the disseminated Mulga Tank orebody.
Earlier in the month, Lunnon Metals put out resources on Baker – at the south end of structures in Kambalda which host Beta Hunt - 1 million tonnes @ 3.3% nickel +Cu, Co.
Some financings - Power Nickel $20 million flowthrough, Premium Nickel’s $15 million first tranche.
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Recording date: 4th June 2024
Nickel is continuing to retrace a big move along with copper. Now trading just over $19,000 – in line with my expectations of seeing some consolidation at these $19-$20K levels. We may see a brief dip below $19K as copper breaks down through $10K (as I expected - copper physical market lousy, inventories in Shanghai highest since 2020)
Nickel should be well-supported at these levels. Interestingly, with the nickel sell-off, sulphate and stainless prices edged higher. Suphate is now at an unsustainable premium, which means nickel prices should rebound or sulphate prices drop - likely the former rather than the latter. This is a good sign of a fundamental demand in the product pipeline, as people are not waiting for intermediate prices to drop before buying. LME and Shanghai inventories both edged lower.
Company News
Canada Nickel Corp released 11 holes from its Deloro project – good long intervals of grades 0.25% nickel just 8km south of Timmins, with 9 metres of overburden. A footprint of 1.2km x 700 metres multiplied by 300 metres can easily see 500 million tonnes and 1 million tonnes contained nickel. This will be the first of 7 resources expected to be published in the next 12 months.
Power Nickel's next set of holes is filling out its discovery -5-17 metres with 2-5 metres of very high-grade Cu + PGMs. Again – next level will require stepping out beyond discovery (good graphics in release outlining current size) or finding another parallel one:
- PN-24-059 returned: 17.25 m of 0.66 g/t gold (Au), 27.20 g/t silver (Ag), 3.33 per cent copper (Cu), 2.04 g/t palladium (Pd), 1.49 g/t platinum (Pt) and 0.18 per cent nickel (Ni), including: 5.59 m of 1.91 g/t Au, 73.48 g/t Ag, 9.88 per cent Cu, 6.23 g/t Pd, 4.56 g/t Pt and 0.49 per cent Ni, with: 3.01 m of 0.86 g/t Au, 110.5 g/t Ag, 13.92 per cent Cu, 8.55 g/t Pd, 7.69 g/t Pt and 0.48 per cent Ni.
- PN-24-058 returned: 8.27 m of 0.19 g/t Au, 7.12 g/t Ag, 0.64 per cent Cu, 3.43 g/t Pd, 0.84 g/t Pt and 0.25 per cent Ni, including: 5.20 m of 0.15 g/t Au, 10.18 g/t Ag, 0.90 per cent Cu, 4.84 g/t Pd, 1.17 g/t Pt and 0.38 per cent Ni, with: 2.20 m of 0.16 g/t Au, 22.43 g/t Ag, 1.87 per cent Cu, 7.53 g/t Pd, 1.15 g/t Pt and 0.83 per cent Ni.- PN-24-057 returned: 5.20 m of 0.37 g/t Au, 36.23 g/t Ag, 2.57 per cent Cu, 5.72 g/t Pd, 2.45 g/t Pt and 0.19 per cent Ni, including: 2.17 m of 0.57 g/t Au, 78.62 g/t Ag, 5.53 per cent Cu, 12.42 g/t Pd, 5.62 g/t Pt and 0.24 per cent Ni.
- PN-24-056 returned 4.60 m of 0.72 g/t Au, 5.38 g/t Ag, 0.88 per cent Cu, 2.67 g/t Pd, 1.42 g/t Pt and 0.12 per cent Ni, including 2.45 m of 1.33 g/t Au, 9.66 g/t Ag, 1.58 per cent Cu, 4.25 g/t Pd, 0.66 g/t Pt and 0.15 per cent Ni.
Magna Metals announced a toll milling agreement for a bulk sample with Glencore. It's good to see that they can use other processing in the region rather than Vale.
Talon Metals extends nickel-copper mineralization in the Raptor Zone from 250 meters of strike to over 350 meters (see Figure 2) with a new hole with ~ 2 metres of massive sulphide. Talon intends to continue exploration in the Raptor Zone, as the mineralization is open in all directions.
SPC Nickel reports high-grade channel sampling results at the West Graham Project, including 0.94% NI and 0.44% CU OVER 17.0 METRES
Fathom Nickel announced results from their Gochager property in Saskatchewan
GL24016: 7.39 m of 1.43 per cent Ni, 0.38 per cent Cu, 0.11 per cent Co (1.80 per cent NiEq) from 182.05m downhole; including:2.94 m of 2.43 per cent Ni, 0.55 per cent Cu, 0.19 per cent Co (3.00 per cent NiEq) from 186.50m downhole; within:48.54 m of 0.64 per cent Ni, 0.19 per cent Cu, 0.05 per cent Co (0.82 per cent NiEq) from 172.00m downhole; within:185.49 m of 0.31 per cent Ni, 0.09 per cent Cu, 0.03 per cent Co (0.40 per cent NiEq) from 101.70m downhole.
GL24013: 3.96 m of 2.28 per cent Ni, 0.51 per cent Cu, 0.18 per cent Co (2.82 per cent NiEq) from 354.77m downhole; within:21.31 m of 0.64 per cent Ni, 0.20 per cent Cu, 0.05 per cent Co (0.76 per cent NiEq) from 349.09m downhole.
GL24012: 4.32 m of 1.15 per cent Ni, 0.16 per cent Cu, 0.10 per cent Co (1.38 per cent NiEq) from 417.91m downhole.—
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