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Canada Nickel continues fast pace on Crawford deposit near Timmins

Aug 12, 2021

The Abitibi Greenstone Belt has produced enormous amounts of gold, silver, copper and zinc over the past century and now there are several companies looking to add nickel to that list- and the company that is taking center stage is Canada Nickel.

By Kevin Vincent, Mining Life
Canada Nickel Company filed its first-ever PEA on July 12th and it suggests a 25-year mine life assuming they get from here to production.
It has been a whirlwind year and a half since the junior explorer released a maiden set of drill results that suggested there is a massive nickel-cobalt deposit approximately 40 km to the north of Timmins’ world-renowned Kidd Creek mine complex.
At the recent Mining the Abitibi Conference hosted by Virtex, Canada Nickel Chair and CEO Mark Selby outlined where the company is at and where it is headed.
 “It’s a new discovery we made a year ago September. Since that time, we’ve already defined what is one of the 10 largest sulfide resources globally,” said Selby. “We have a huge amount of exploration potential to go. In my past life, I advanced the Dumont project (Quebec) from resource stage to fully permitted construction-ready stage with a broad base of community support. Having assembled much of the former Dumont team at Canada Nickel, we intend to repeat that here.”

Selbey pic
A Top 5 Nickel Sulphide Operation Globally – Mark Selby (R), Chair and C.E.O., Canada Nickel, meets with exploration geologists at Crawford Nickel Sulphide Project Camp to review latest drill program. 

Selby says one of the key pieces was an excellent relationship with the local community and local First Nations. He says CNC has been off to an excellent start with Taykwa Tagamou Nation (New Post) , Matachewan, and Mattagami. “One of the key dimensions of this project in a decarbonizing world you’ve seen more and more press over the last 12 months about how important and how many companies are focused on net-zero carbon goals going forward. And what is very exciting about the project, in addition to it being one of the world’s largest sources of nickel for the next generation, is the ability for us to produce large quantities of nickel. We believe that’ll be zero carbon nickel, cobalt and zero carbon iron.”
Selby says the company has mineralization that when it is exposed to air, has the potential to spontaneously absorb CO2 and permanently sequester it out. “Again, being in the Timmins region, we’re very fortunate to have access to zero carbon, low-cost hydroelectricity and we’re able to substitute some of the diesel we use by using electricity with trolley trucks and that puts us in great position to be able to deliver on that zero carbon promise,” he said.
In June, CNC announced the results of its PEA - US$1.2 billion dollar after tax NPV8%, IRR of 16%. “We’ll be producing nearly two billion pounds of nickel at just over $1 per pound of nickel C1cash costs and just under $2 per pound all-in sustaining costs, and this also includes a substantial amount of iron and chrome by-product revenues.”
CNC is looking at a downstream approach with processing in the Timmins region. Selby says the company is just getting started.
The PEA indicates a 25-year mine plan based on a phased 120,000 tonnes per day open pit mine and processing operation using conventional nickel sulphide concentrator, producing nickel concentrates and magnetite concentrate.
Over the 25-year mine life Crawford is expected to produce 842,000 tonnes of nickel, 21 million tonnes of iron and 1.5 million tonnes of chrome valued at $24 billion using long-term price assumptions. Annual average nickel production of 75 million pounds (34,000 tonnes) with peak period annual average of 93 million pounds (42,000 tonnes), with significant iron and chrome by-products of 860,000 tonnes per annum and 59,000 tonnes per annum, respectively.

Canada Nickel Chart
Crawford expected to be one of the largest and lowest-cost nickel sulphide operations globally – PEA of Canada Nickel’s 100% owned Crawford Nickel Sulphide Project released in May 2021, using forecast long-term prices of US$7.75/lb for nickel, US$1.04/lb for chromite, $290/t for iron and a Canadian exchange rate of US$0.75.  Over a 25-year life, planned payable production from the project is expected to include 1,689 Mlbs nickel, 1,388 Mlbs chromite and 15 Mt iron, at first quartile net C1 cash cost of US$1.09/lb and net all-in sustaining cost of US$1.94/lb Ni.

“For a lot of junior mining companies, the PEA comes after multiple years of exploration. In this case, this resource was locked down just 13 months after we had started drilling and we continued to drill since that time. So, we still have a tremendous amount of exploration potential and a number of other opportunities. We want to get our feasibility study out by mid next year, it’s an aggressive goal and we’re going to push hard to get there.”
Selby says the reason CNC is pushing so hard is their team’s experience with other nickel projects. “We believe we can execute on this kind of a timeline and then, we really believe that nickel is going to enter one of its super cycles which you’ve seen in the late 60s, the late 80s, the mid-2000s and now we expect to see by the middle part of this decade with strong demand growth from the electric vehicle sector on top of continued strong demand growth from the stainless-steel side. And the reality is there are very few nickel-investible opportunities outside of Indonesia.”
The CNC chairman says there are some key dimensions of the nickel market that Crawford is ideally positioned to take advantage of. First, nickel has always been a high growth metal, much higher growth than copper and zinc, some of the other local metals in the Timmins region. And because the demand grows quickly, you need to continue to find additional sources of supply going forward.
“Glencore’s forecast from a few years ago, they recently updated and they’re forecasting that we will need 9 million tons of nickel by 2050, now that’s versus just 2.5 million tons today,” said Selby. “By 2030, they’re expecting well over a million tons of nickel required just for electric vehicles versus almost nothing a few years ago. When you combine that continued strong demand growth from historic uses like stainless steel and again, we do not expect that underlying growth rate to slow down. Stainless steel is an excellent product for a low carbon, low impact economy.”
Selby says the demand growth from EV suggests a need to double supply by 2030 versus where we were in 2018. “If you think of all the nickel operations that were in existence a few years ago, we need to find that equivalent amount of production, get it ready, get it built, and get it in production by the later part of this decade. It’s a massive amount of supply that’s necessary and again, very little visibility on new supply outside of Indonesia.”
“When Elon Musk was wanting to decarbonize the planet by introducing electric vehicles using lots and lots of nickel that comes with a massive carbon footprint was not what he had had in mind in terms of the kind of cars that he wanted to produce. Nickel sulfides in general are much lower carbon intensity,” he said.
“Robert Friedland (of Ivanhoe Mines) referred to nickel as the new gasoline on several occasions and if you look at the structure of oil supply using that gasoline analogy, OPEC at its peak back in the early 70s was just over half of the oil market. Today in the nickel space, just three countries: Indonesia, the Philippines and New Caledonia already produce more than half of current nickel supply. And given that the bulk of supply growth for the next five to ten years will likely be almost exclusively coming from Indonesia with a few exceptions from projects like ours. That supply dominance is going to be very, very challenging to the industry,” said Selby.

Canada Nickel Carbon Chart
Crawford Nickel-Sulphide Project is expected to have an industry leading low carbon footprint, lower than 99.7% of existing global nickel production.  Based on a study undertaken by economic geologists Skarn, when in operation, Crawford is expected to produce 2.05 tonnes of carbon dioxide (CO2) per tonne of nickel-equivalent production over the life of mine, 93% lower than the industry average of 29 tonnes of CO2.  Source:  Skarn Associates and Canada Nickel Company

The CNC chairman says if you’re a western automaker or a European automaker, do you really want to tie your supply chain to production that’s largely Chinese-controlled in that part of Indonesia and in places where countries are short of cash and they have intervened in their mining sector? “So do you want to create that kind of supply chain risk in your production pipeline? And we think that projects like Crawford will be very well sought after by a number of end-users who don’t want to take on that supply risk.”
CNC’s early plans suggest Crawford will be a large-scale open pit mine operation. “We’ll start out at 42,500 tonnes a day and then through two expansions, ramp up to 120,000 tonnes a day. Life of mine strip ratio is just over 2:1, but in the early years is lower than that. Again, one of the key things is the access to low-cost hydroelectricity and the fact that that’s zero carbon and we can substitute that for the use of diesel fuel by using trolley trucks and electric shovels. In terms of the mill itself, it’s equipment that you’d see pretty much in every mill, sag mill, ball mill floatation, and mag separation.”
The company is expecting to produce three products - nickel concentrate which they believe will be among the highest grade in the world at 35%. Taking advantage of the mineralogy, they will produce a low grade 12% concentrate which is in line with standard grade concentrate consistent with other sulfide concentrates and then a magnetite concentrate which CNC intends to process locally with just under 50% iron and an average of three percent chrome.
“Based on results of the preliminary economic assessment, Crawford would be the fifth largest nickel sulfide project globally just behind Sudbury, which would make it the largest single mine outside of Russia and China. We would be the largest base metal operation in Canada, larger than Highland Valley, Raglan, and Voisey’s Bay, where they’re producing on a go-forward basis. You can see what the nickel equivalent production looks like. This is the scale of the project that we expect and hope to start building in Timmins in the not too distant future.”

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