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Canada Nickel announces $2.5Bn-NPV Feasibility Study for Crawford Project

Oct 12, 2023

Canada Nickel Company Inc. today released results from the Bankable Feasibility Study (“BFS”) for its innovative and wholly-owned Crawford Nickel Sulphide Project ("Crawford"), confirming significantly improved economics from its Preliminary Economic Analysis (“PEA”), with an after-tax NPV8% of $2.5 billion and IRR of 17.1%. The BFS was prepared by Ausenco Engineering Canada Inc. (“Ausenco”) in accordance with National Instrument 43-101 (“NI 43-101”).

Crawford, located in Timmins, Ontario, Canada, is the world’s second largest nickel reserve. Once in production, it is also expected to become one of Canada’s largest carbon storage facilities and be a net negative contributor of CO2 over the project life.

Mark Selby, CEO of Canada Nickel, said, “This bankable feasibility study is a significant milestone for Crawford and a major step forward in demonstrating the value of our Timmins Nickel District and its potential to anchor a Zero Carbon Industrial Cluster in the Timmins-Cochrane region. Crawford is poised to be a leader in the energy transition through the large-scale production of critical minerals, including nickel and cobalt, and is expected to become the sole North American producer of chromium2, while also supporting Canada’s climate objectives through industrial-scale carbon capture and storage.”

Mr. Selby continued, “I am very proud of our team for accomplishing this milestone in a very short ` of time. Just four years ago, Crawford had only five drill holes. Today, we believe it is a world-class project with tremendous momentum. We are fully focused on pursuing our next milestones of obtaining permits, developing a financing package, and moving towards a production decision by mid-2025, with a goal of first production by the end of 2027.”

Crawford 2023 BFS Highlights

  • Robust economics
    • After-tax, $2.5 billion NPV8% and 17.1% IRR; increasing to $2.6 billion NPV8% and 18.3% IRR with projected Carbon Capture and Storage tax credits
  • Large initial mineral reserve anchored by significantly larger mineral resource
    • Proven & Probable reserves of 3.8 million tonnes contained nickel from 1.7 billion tonnes ore grading 0.22% nickel make Crawford the world’s 2nd largest nickel reserve3. Reserves are hosted in a Measured & Indicated resource which increased by 74% (compared to the 2022 resource estimate) to 6.0 million tonnes. With additional Inferred mineral resources of 3.7 million tonnes contained nickel, Crawford is the world’s 2nd largest nickel resource3.
  • Large scale, low cost, long-life
    • Annual average nickel production of 83 million pounds (38k tonnes) over a 41-year life, with production of 48 ktpa nickel, 0.8 ktpa cobalt, 13 koz palladium and platinum, 1.6 Mtpa iron and 76 ktpa chrome over 27-year peak perio
    • Net life-of-mine C1 cash cost of $0.39/lb nickel (by-product basis) place Crawford in the first quartile of the cost curve3. The net AISC cost, on a by-product basis, is $1.21/lb nickel
    • Projected revenue exceeds $48 billion, or more than $1 billion annually over project life.
  • Significant improvement in recoveries from PEA:
    • Nickel: 10% improvement life-of-mine (41% versus 37% used in PEA), and a 23% improvement in Phase I/Phase II compared to PEA (46% versus 37% in the PEA)
    • Improvements to life of mine recovery for Iron: 46%, Cobalt: 38%, and Chrome: 5%
  • Significant earnings and free cash flow generation
    • Projected annual EBITDA of $810 million and FCF of $540 million over peak period, annual EBITDA of $667 million and FCF of $431 million over project life
  • Minimization of carbon footprint
    • Minimal carbon footprint of 4.8 tonnes CO2/ tonne of nickel in concentrate,2.3 tonnes CO2/tonne of nickel equivalent 4(“NiEq”); largely due to electrically powered mining fleet, including trolley-assist trucks, that are expected to reduce diesel consumption by over 40% compared to diesel powered equipment.
    • Implementation of the Company’s proprietary IPT (In-Process Tailings) Carbonation process is anticipated to allow capture and storage of 1.5 million tonnes CO2 annually during 27-year peak period, the bulk of which will be sold to third parties.
    • Anticipated net negative carbon footprint from carbon capture and storage capacity of 30 tonnes CO2 / tonne of nickel after accounting for project footprint

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