Canada Nickel Announces MacDiarmid Exploration Target - Approximately 15% Larger Than Crawford Main Zone & Binding LOI with Noble Minerals

Canada Nickel Company Inc. and Noble Mineral Exploration have announced that they have entered into a binding letter of intent (“LOI”) to consolidate ownership of a recently identified high priority nickel target in MacDiarmid township.

The LOI options additional claims adjacent to the original MacDiarmid property option previously announced on July 13, 2020.  Canada Nickel has identified prospective targets on the Option Properties it obtained from Noble: Kingsmill, Mahaffy-Aubin, Nesbitt North, and Crawford Nesbitt-Aubin and drilling on several of these targets is expected to begin during the current winter season.

“With MacDiarmid’s location just west of the Kidd Creek Mine, we are thrilled by the district-scale potential of this rapidly emerging nickel sulphide corridor along Highway 655 and we look forward to unlocking the potential of MacDiarmid in addition to the other properties optioned from Noble.” said Mark Selby, Chair and CEO of Canada Nickel.

Airborne geophysics and a compilation of historical exploration activities led to the identification of the MacDiarmid target, 1.8 km long and an average 400 metre wide geophysical footprint, 15% larger than Canada Nickel’s original Crawford Main Zone discovery.  The geophysics results were further confirmed by review of historical drill logs (no assays were completed) for all seven holes drilled entirely within the target coincident anomaly which all intersected dunite or peridotite (the mineralized host rock at Crawford) across the bulk of the core length.  All seven of the holes also indicated presence of magnetite and sulphides in abundances consistent with that seen in Crawford core logs.

Vance White, President & CEO of Noble added “Today’s results support our belief that the nickel exploration potential on the set of properties that were optioned to Canada Nickel has the potential to generate as much or more return for our shareholders as the original Crawford transaction. Noble has always been very confident that the Project 81 land package has the potential to generate multiple large tonnage Nickel Sulphide deposits and with the expertise of CNC, we think we are well on our way to realize this potential.”

The Crawford Nickel-Cobalt Sulphide Project is located in the heart of the prolific Timmins-Cochrane mining camp in Ontario, Canada, and is adjacent to well-established, major infrastructure associated with over 100 years of regional mining activity.

Figures 1 & 2 – Plan view of Crawford and MacDiarmid Properties – Outline of Gravity Low and Magnetic High geophysics anomaly overlain on total field magnetic intensity, Crawford and MacDiarmid Township, Ontario.


Note: Property continues beyond map boundary.

MacDiarmid Nickel-Cobalt Sulphide Target

As Canada Nickel continues to advance its Crawford discovery, the Company has been working through the interpretation of an airborne geophysics survey program completed in September 2020, on the set of properties optioned from Noble Mineral Exploration (see Canada Nickel announcement dated July 13, 2020). The company has identified a number of nickel-cobalt targets on the MacDiarmid, Kingsmill, Mahaffy-Aubin, and Nesbitt properties – the MacDiarmid target being the most attractive. Drilling on each of the targets is expected during the current winter season. (See Figure 4 for map of properties.)

Drill results from the Crawford Ultramafic Complex have demonstrated that coincidental strong magnetic high and gravity low geophysics anomalies have generally delivered mineralization with higher grades from the Crawford project.  The Crawford Main Zone Measured & Indicated resource of 606 Mt grading 0.26% nickel, including 201 Mt grading 0.34% nickel at a 0.30% cutoff (see Canada Nickel announcement dated January 18, 2021), is hosted mainly in serpentinized dunite or peridotite.

The coincident MacDiarmid anomaly is 15% larger than Crawford, measuring a combined 1.8 km long by average 400 metres wide. Based on historic drill hole logs, the MacDiarmid target is an ultramafic intrusion with identified serpentinized dunite and peridotite, much of it was not assayed (as the historic target was not nickel sulphides).

Over 50 holes have been drilled in the area since the original Inco hole in 1946 but only eleven holes ever intersected the ultramafic intrusion. Of those only seven holes intersected the coincident magnetic and gravity anomaly portion of the intrusion. These seven holes all intersected dunite and/or peridotite over their entire length, interrupted only by narrow dykes and faults. All seven of the drill holes had similar quantities of visible magnetite and sulphides as in the Crawford drill holes, magnetite being an indicator of serpentinization which is the process that generates nickel mineralization in this type of ultramafic body.  Four holes drilled outside the anomaly (MCD32-02, MCD41-02, MAC-3, MAC-4) intersected significant sulphides within much of the volcanic rocks intersected.  While these holes did not intersect dunite or peridotite across their entire length, the presence of sulphides is a good indicator of the presence of sulphur inside the intrusion, which is critical to the formation of nickel sulphide minerals.

See below caution regarding Historical Information.

Figure 3 – Plan view of MacDiarmid Property – Outline of Gravity Low and Magnetic High geophysics anomaly with historic drilling/logs over top of gravity gradient, MacDiarmid Township, Ontario.

Note: Property continues beyond map boundary.
 
Figure 4. Plan view of Crawford, Kingsmill, Nesbitt-Aubin, Nesbit North, MacDiarmid and Mahaffy-Aubin Properties overlain on total field magnetic intensity, Ontario.

 
Table 1 – Historical Drill Hole Orientation, MacDiarmid Nickel-Cobalt Sulphide Target, Ontario*

Historical drillholes are not NI43-101 compliant. All references to UTMs are in NAD-83 Datum and Zone 17N Projection.
 
Transaction Summary

In exchange for the option, Canada Nickel has agreed to (i) issue 200,000 common shares of CNC to Noble, (ii) forgive the $160,224 amount currently owed by Noble to CNC, (iii) take all steps as are commercially reasonable to transfer $500,000 in assessment credits to Noble, and (vi) Noble to retain an NSR of up to 1.75%. Under the terms of the Option, a 60% interest in the Claims will vest in CNC provided CNC funds at least $100,000 of exploration and development expenditures on the Claims within 18 months. An 80% interest in the Claims will vest in CNC provided CNC funds at least an additional $150,000 (for a total of $250,000) of exploration and development expenditures on the Claims within 36 months. CNC will also be responsible for exploration expenditures and other costs required to maintain the Claims in good standing (and to make certain related filings).

If the conditions to earn a 60% interest or 80% interest have been satisfied, a joint venture would be formed between CNC and Noble on such proportionate basis.

The transaction is subject to certain specific conditions, including prior approval of the TSX Venture Exchange, Board approvals and third party approvals.

Next Steps

Canada Nickel has applied for exploration permits and expects to begin drilling MacDiarmid in early March.

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