The global nickel market is entering a more complex phase, driven largely by structural changes in Indonesia, the world’s dominant supplier. A sharp decline in Indonesian ore grades has emerged as a key concern. Average nickel content fell from about 1.66% in 2024 to 1.52% in 2025, with most traded material now in the 1.3–1.4% range. This shift reduces the amount of recoverable nickel per tonne and raises processing costs, putting pressure on margins across the value chain. It also narrows the quality gap with alternative suppliers such as the Philippines, which is gaining relative competitiveness.

At the same time, Indonesia is tightening its grip on the sector through policy tools. The government has introduced a sovereign-linked entity to route commodity transactions, primarily to improve tax compliance, particularly among offshore operators. While aimed at transparency, this added layer of oversight introduces new regulatory considerations for market participants. Quota management remains another powerful lever: production caps have already forced some operators, such as Weda Bay, to suspend mining after exhausting allocations, with restarts tied to regulatory compliance.

These measures appear to support a managed price environment, with authorities informally targeting a nickel price range of $18,000 to $21,000 per tonne in the near term. Beyond Indonesia, a pickup in mergers and acquisitions signals renewed strategic interest in nickel assets following a period of weak prices. Companies like Lifezone Metals and Sherritt International are reportedly attracting bids, reflecting expectations of tighter future supply.

Meanwhile, emerging technologies are adding a new dimension. Pilot projects exploring geological hydrogen production from nickel-bearing rocks highlight potential alternative value streams, though technical and commercial viability remains under evaluation. Overall, declining ore quality, stronger state oversight, and evolving investment activity are reshaping the nickel market’s medium-term outlook.

Sign up for Crux Investor: https://cruxinvestor.com

Our previous interview: https://www.cruxinvestor.com/posts/electric-royalties-ltd-tsxvelec-43-royalties-with-multiple-catalysts-ahead-9474

Recording date: 14th May 2026

The royalty and streaming sector is showing a sharp divide, with precious metals attracting strong investor capital while battery metals companies struggle for attention despite solid fundamentals. Electric Royalties CEO Brendan Yurik highlights this imbalance, noting that lithium prices have risen 80% over the past year—matching gold—while copper trades near record highs. Yet, unlike gold, battery metals have not seen comparable investment flows.

This gap is largely driven by investor familiarity and perceived risk. Gold benefits from its long-standing reputation as a stable store of value, while many critical minerals such as manganese, graphite, and vanadium remain poorly understood. Battery metals also face concerns around price volatility, evolving technologies, and past project failures, including significant cost overruns that have undermined confidence.

However, the sector is maturing. Pricing transparency has improved significantly, supply chains are stabilizing, and technical knowledge has advanced as more projects move into production. Yurik believes these developments will reduce risk and limit extreme price swings seen in earlier years.

A major driver of future demand is the rapid growth of artificial intelligence, which is expected to increase copper consumption by 50% over the next two decades. This adds to existing demand from electric vehicles, renewable energy systems, and grid expansion—creating a strong long-term growth outlook for battery metals that contrasts with gold’s relatively static demand profile.

Electric Royalties positions itself as deeply undervalued, with a market capitalization under $20 million despite a portfolio that could significantly enhance the value of much larger mining companies. As new investors enter the mining sector—initially drawn by gold—there is potential for capital to gradually shift toward critical minerals as understanding improves.

Overall, the battery metals royalty sector appears to be at an inflection point, combining strong demand growth with improving market fundamentals, yet still awaiting broader investor recognition.

Learn more: https://www.cruxinvestor.com/companies/electric-royalties

Sign up for Crux Investor: https://cruxinvestor.com

The global nickel market is showing notable stability, with prices holding within a narrow band of $18,500 to $20,000 per ton and currently hovering just below $19,000. This resilience is largely driven by structural changes in supply management, particularly from Indonesia, the world’s dominant nickel producer. In coordination with the Philippines, Indonesia has adopted policies to better control supply and support pricing, marking a shift away from historically volatile market dynamics.

A key feature of Indonesia’s strategy is the redistribution of value within the supply chain. Domestic mining companies now receive roughly 50% higher revenues per ton of ore, while government tax intake has increased significantly. These gains have largely come at the expense of foreign—especially Chinese—processing firms. The alignment of economic interests among miners and policymakers makes these policies difficult to reverse, reinforcing a higher long-term price floor.

At the same time, the nickel market faces a deep structural supply constraint. Despite demand rising tenfold since the 1980s to nearly five million tons annually, there have been no major new laterite discoveries. Most viable reserves remain concentrated in Indonesia, limiting diversification of global supply. Western project pipelines are especially thin, with few advanced developments competing for investment capital.

Amid this backdrop, Canada Nickel has reached a major milestone, completing draft permitting requirements after a four-year process and targeting final approval in early summer. This positions the project to benefit from Canada’s recently announced $25 billion funding initiative for critical minerals.

Meanwhile, industry developments—including sanctions impacting Sherritt’s Cuban operations and progress in deep-sea mining—highlight both geopolitical risks and emerging alternatives. Overall, constrained supply, strategic policy shifts, and limited new projects point to a supportive medium-term outlook for nickel prices.

Sign up for Crux Investor: https://cruxinvestor.com

The global nickel market has entered a structural transformation, shifting from cyclical volatility to a tightly managed pricing paradigm. Driven by tightening supply and rising input costs, nickel prices have surged to $19,200 per ton, firmly on track toward an anticipated target range of $20,000 to $21,000.

At the heart of this shift is Indonesia, the world’s dominant nickel producer, which has effectively assumed a quasi-OPEC role. By replacing its three-year ore quota system with one-year allocations, Indonesian authorities can now dynamically control market supply. The immediate impact of this strategy is already visible: Eramet recently placed its Weda Bay mining operation on care and maintenance after exhausting its 12-million-ton annual quota. Indonesia’s strategy appears carefully calibrated to stabilize prices around the $20,000 to $21,000 mark. This sweet spot ensures highly attractive margins for domestic producers while remaining safely below the $22,000 threshold required to incentivize the restart of competing Western Australian operations.

Compounding the supply squeeze are skyrocketing input costs across the supply chain. Sulfur prices have surged past $1,000 per ton—a drastic climb from $150 just 18 months ago. For high-pressure acid leach (HPAL) producers, these soaring costs add $1,000 to $1,200 per ton to production expenses. This cost-push inflation is further exacerbated by the ongoing closure of the Strait of Hormuz, which threatens critical sulfur imports. Meanwhile, globally-watched LME nickel inventories have dropped by 10,000 tons over the past two months, signaling a rapidly tightening market.

On the demand side, a recent 4% to 5% increase in stainless steel prices is triggering strong restocking cycles, which is expected to sustain healthy consumption through the year-end despite broader economic uncertainties. As Western nations defensively react—highlighted by Canada’s new $25 billion sovereign wealth fund for critical minerals—the industry must navigate a new era where strategic state management heavily dictates global prices.

Sign up for Crux Investor: https://cruxinvestor.com

The global copper market faces an unprecedented supply crisis as development timelines have tripled from six years in the 1990s to 18 years currently, with the United States experiencing delays of 29 years from discovery to production. This dramatic expansion in project timelines comes as 52% of copper projects at feasibility stage remain stalled, with 75% of delays attributed to social and environmental opposition rather than economic or technical challenges.

Current market dynamics present a complex picture. Copper prices remain elevated at approximately $5.81 per pound, yet inventory levels across global exchanges have reached historic highs exceeding one million tons. While these elevated stockpiles typically signal potential price corrections, underlying supply constraints suggest a tightening market ahead, particularly as the US government's $12 billion critical minerals reserve program may absorb portions of existing inventories.

Geopolitical disruptions compound supply concerns. The Straits of Hormuz closure has created a sulfuric acid shortage, with Gulf region supplies representing 44% of global seaborne sulfur. Middle Eastern spot prices have surged 200% year-over-year, threatening African oxide copper producers in Zambia and the Democratic Republic of Congo who depend entirely on imported sulfuric acid for hydrometallurgical processing operations.

Analysis of 77 major copper mines reveals a troubling paradox: while brownfield exploration successfully expanded resource bases by 75% since 2010, actual production increased merely 4% due to 14% grade degradation. This disconnect illustrates that resource growth fails to translate into proportional production increases as operations must process significantly greater tonnage at lower grades.

A "renewable energy paradox" has emerged whereby jurisdictions with highest metal demand—driven by wind, solar infrastructure, and advanced economy consumption—maintain the strictest environmental regulations, effectively preventing domestic mining development. Against this backdrop, Chile has emerged as the preferred jurisdiction, offering established mining culture, existing infrastructure, and streamlined permitting relative to global peers, potentially supporting valuation premiums for well-positioned projects with near-term production pathways.

Sign up for Crux Investor: https://cruxinvestor.com

The nickel market is experiencing a structural shift as Indonesia and the Philippines move toward coordinated supply management, driving prices above $18,000 per ton in late February 2026. This represents a nearly 5% single-day gain and marks a significant departure from the price pressure that has characterized the market over the previous three years.

The most dramatic development involves Indonesia's aggressive quota reduction for Eramet, one of the world's largest nickel producers. The Indonesian government slashed Eramet's ore quota from 42 million tons to 12 million tons, effectively removing approximately 300,000 tons of nickel from the market—roughly 10% of global supply. This action demonstrates Indonesia's commitment to supply discipline and may signal a pattern of targeting publicly reporting Western companies that must disclose such cuts, while reductions affecting private Indonesian operators remain invisible to markets.

Indonesia and the Philippines have formalized their cooperation through the Indo Nickel Corridor, a working group established between the mining associations of both countries. While not officially a cartel, this coordination between the world's two largest nickel ore suppliers represents a fundamental shift in market dynamics. The Philippines supplies over 300,000 tons annually, and joint coordination aims to ensure producers can achieve profitable returns rather than oversupplying a limited resource.

Physical market indicators are confirming the price rally's sustainability. Philippine ore prices to Indonesia have increased notably, and the Philippine rainy season running through March typically constrains ore availability, supporting expectations for prices in the $18,500 to $20,000 range through the first quarter.

Additional supply disruptions, including Sherritt International's operational curtailments in Cuba due to fuel shortages, are adding marginal tightness. Meanwhile, improved investor sentiment is evident in successful capital raises by junior nickel companies and Vale's sale of its Thompson asset to Exiro Minerals, which has committed several hundred million dollars to revive production at the long-declining operation.

Sign up for Crux Investor: https://cruxinvestor.com

The nickel market is establishing a more constructive outlook in early 2026, supported by Indonesian supply discipline and robust demand fundamentals. In a recent market discussion, Canada Nickel CEO Mark Selby outlined the key factors driving nickel prices and provided updates on the company's flagship Crawford project.

Nickel prices have settled into a $16,500-$18,500 per ton trading range after briefly exceeding $19,000 in early January. The strength is underpinned by Indonesia's commitment to flat-to-down ore production targets of 250-260 million tons for 2026. This supply discipline, combined with prices for nickel ore, nickel pig iron, and stainless steel all reaching three-year highs, indicates genuine market tightening rather than speculative positioning.

Selby expects nickel to move toward $20,000 per ton within the coming month as production data confirms Indonesian adherence to its targets. The country's strategy balances maximizing royalty revenues and improving trade balances while preventing prices from rising high enough to incentivize significant new global production. Indonesia has latitude to manage supply up to the $22,000 per ton range before triggering meaningful supply responses.

Electric vehicle demand continues driving market growth, with underlying expansion of approximately 20% annually. Europe posted 30% growth, China 17%, and the rest of world 48%, as the lithium supply chain completes its destocking phase. Combined with stainless steel demand, the nickel market requires approximately 200,000 tons of new annual supply—equivalent to seven Crawford phase-one projects—just to meet 6-7% demand growth.

Canada Nickel announced two significant milestones: appointing Ausenco as lead engineer for the Crawford project's process plant and infrastructure, and securing expanded bridge financing from Auramet. These developments position the company to target construction commencement by year-end 2026, subject to finalizing government partnerships. The limited pipeline of new nickel districts globally makes projects like Crawford increasingly valuable as Indonesian grade constraints emerge toward decade-end.

Sign up for Crux Investor: https://cruxinvestor.com

The nickel market experienced significant volatility in early 2026, with prices climbing $2,200 per ton to reach $18,650 following Vale's announcement of mining permit delays at its Indonesian operation. This development provided concrete evidence that Indonesian export restrictions represent material operational impacts rather than regulatory posturing. The publicly traded company's disclosure requirements made it an effective vehicle for authorities to demonstrate commitment to supply constraints.

The price movement's legitimacy was confirmed through corresponding increases across the entire supply chain. Nickel pig iron prices rose 8-9% over two weeks, while stainless steel increased 6%. Most notably, mixed hydroxide precipitate payable levels remained at 88.5% despite volatility, indicating processors remain confident in demand fundamentals. These coordinated movements suggest genuine supply-demand dynamics with consumers actively restocking inventories after a period of restraint.

The timing of Indonesian restrictions coincides with seasonal weakness in alternative supply sources. The Philippines, which produces half its annual nickel ore output in Q3, generates only one-quarter of that volume during Q1. This eliminates the most obvious alternative precisely when Indonesian restrictions take effect. Market observers anticipate prices could reach $20,000 per ton during the January-March quarter as Chinese processors face mounting pressure to secure material amid declining ore inventories.

Against this backdrop of supply concentration risk, Ontario moved decisively to support domestic production. Canada Nickel's Crawford project received "One Project, One Process" designation, making it the only Canadian project with both federal Major Projects Office endorsement and provincial accelerated permitting. Ministers Stephen Lecce and George Pirie emphasized moving at "lightning speed" and "full-tilt" to develop what they called critical infrastructure for ending China's critical mineral dominance.

The political support extends beyond rhetoric to practical financing assistance, with officials acknowledging these projects require public capital to reach construction. The government's commitment includes developing not just a mine but an entire domestic supply chain encompassing processing and downstream alloy production.

Canada Nickel reported a 46% increase in contained nickel at its Reid deposit, bringing the total resource to 5 million tonnes. Reid demonstrates superior economics compared to Crawford, featuring nearly half the strip ratio, one-third less overburden, and 15% higher chromium grades. The deposit remains open in multiple directions with over 40% of geophysical targets still unexplored, representing one of nine resources identified in the Timmins Nickel District.

This district-scale opportunity positions the region as a long-term production center. While Crawford will serve as the initial project advancing toward year-end construction, the company believes several other deposits, including Reid, may prove even more valuable.

Corporate activity has accelerated alongside strengthening prices. Nickel 28 announced an 8% share buyback, while South Korea's Sphere Corp acquired 10% of Indonesia's Excelsior Nickel Cobalt project at a $2.4 billion valuation. However, internal analysis reveals 99% of public mining equity raised over the past two years concentrated in gold, silver, and copper, leaving just 1% for other minerals. This capital constraint underscores the importance of government participation in financing critical minerals development as governments increasingly view these projects through a national security lens rather than purely economic terms.

Sign up for Crux Investor: https://cruxinvestor.com

The global copper market is approaching a critical supply crunch as electrification and decarbonization drive unprecedented demand growth while new mine development stalls, according to analysis by Merlin M Johnson, CEO of Fitzroy Minerals. Despite nominal copper prices appearing strong above $5 per pound, real prices measured in gold have declined 80% from historical peaks, reflecting nearly two decades of subdued demand and robust mine supply following the 2008 financial crisis.

The outlook has transformed dramatically as electrification accelerates. Global electricity demand grew 4.3% in 2024, substantially exceeding overall energy demand growth of 2.2% and GDP expansion of 3.2%. Electrification and decarbonization now represent approximately 30% of total copper demand, with electric vehicles requiring two to three times more copper than conventional vehicles. The International Energy Agency projects copper demand growth at 2.6% annually through 2035, requiring 600,000-700,000 tons of new supply each year.

However, new project approvals have fallen dramatically short, averaging under 300,000 tons annually for three consecutive years - roughly half of requirements. The industry lost 500,000-800,000 tons of capacity in 2024 through various disruptions, while social license issues, indigenous rights concerns, and permitting challenges constrain development across multiple jurisdictions.

Chile, producing 5.4 million tons representing 24% of global output, exemplifies the industry's mature economics. Despite $83 billion in planned investment through 2034, Chilean production is projected to increase by only 100,000 tons. BHP's Escondida mine will see production decline 20% from 1.2 million to 1.0 million tons despite $5-6 billion in spending.

These dynamics point toward sustained deficit conditions beginning in 2026, with prices projected to reach $20,000-30,000 per ton (above $9 per pound) from current levels around $11,000-12,000 per ton to incentivize necessary supply additions and offset extreme capital intensity in modern copper mining.

Sign up for Crux Investor: https://cruxinvestor.com

The nickel market is experiencing a fundamental transformation as Indonesia's coordinated supply management strategy drives prices from $14,200 to $16,500 per ton since mid-December 2025, with further advances toward $18,500-$20,000 expected . Indonesia, which controls approximately two-thirds of global nickel supply, has implemented multiple policy measures including reducing mining licenses from three-year to one-year terms, closing mines for forestry violations, and banning new HPAL and NPI processing plants . These measures respond to declining saprolite ore grades that have dropped by double-digit percentages year-over-year, representing a calculated effort to maximize value from finite resources .

Global electric vehicle sales reached 18.5 million units through November 2025, up 21% year-over-year, with Europe growing 33%, China 19%, and rest-of-world surging 48% . North America's 1% decline reflects policy reversals under the Trump administration, though strengthened Chinese content restrictions benefit North American and European nickel suppliers . The underlying EV growth rate of 20-25% supports long-term nickel demand, particularly for premium and long-range vehicles requiring nickel-intensive battery chemistries .

Prime Minister Mark Carney designated Canada Nickel's Crawford project as a National-Building Project in December 2025, targeting year-end 2026 construction start with dedicated federal financing and accelerated permitting support . The company has expanded to eight resources in the Timmins Nickel District containing over 20 million tonnes of nickel, creating district consolidation potential as Crawford alone is valued at several billion dollars against the company's C$300 million market capitalisation .

The International Nickel Study Group forecasts a 300,000-ton surplus for 2025, yet exchange inventories increased only 100,000 tons during the year and just 10,000 tons in November-December despite reported monthly surpluses of 60,000 tons . This persistent disconnect suggests official forecasts substantially overstate surplus conditions as Indonesian ore grades decline faster than models capture . The combination of Indonesian pricing discipline, underappreciated demand fundamentals, and advancing North American projects signals materially different market conditions for 2026 compared to the Chinese-controlled price suppression that characterised 2024-2025 .

Sign up for Crux Investor: https://cruxinvestor.com

Nickel prices have stayed steady within a narrow range of $15,000 to $15,500 per ton but are poised for upward movement as ore supply from the Philippines tightens through the rainy season in late 2025 and early 2026. At the same time, electric vehicle (EV) demand is robust, with global sales up 24% over the first nine months of 2025. This growth is especially pronounced in China, which led with 32%, while Europe and North America posted 24% and 11% increases, respectively. High-nickel battery chemistries are seeing increased use, fueling further nickel demand and pushing North American requirements alone higher by 300,000 to 400,000 tons.

In response to strategic resource needs, G7 nations are launching a Critical Minerals Initiative to collectively finance and accelerate critical mineral projects, particularly in resource-rich countries like Canada and Australia. In Canada, the Crawford project by Canada Nickel stands out as a major economic force, expected to contribute $70 billion to GDP and $15 billion in taxes over 40 years. The project is also notable for carbon sequestration technology capable of storing up to 15 million tons of CO2 annually. This opens the potential to create zero-carbon industrial hubs, producing hydrogen, fertilizers, and other products that are vital for the transition to a low-carbon economy.

The national focus on critical minerals is crystallizing through Canada’s forthcoming National Priority Projects list, with selection based on economic scale, Indigenous participation, near-term timelines, and decarbonization impact. Canada Nickel’s Crawford is well positioned, while new government-backed initiatives and industry partnerships hint at significant support for similar ventures. Meanwhile, investors are rotating capital from precious metals into battery metals, seeking exposure to growth driven by the EV sector and critical minerals demand. This backdrop underscores the strategic importance of projects like Crawford to economic growth, clean industry, and advancing a secure, decarbonized supply chain for the future.

Sign up for Crux Investor: https://cruxinvestor.com

The global copper market faces an unprecedented supply crisis that savvy investors cannot afford to ignore. With prices already pushing $5 per pound and heading toward $12,000 per tonne by end-2025, the red metal has become the most critical commodity play of this decade. Recent catastrophic failures at major mines have removed over 500,000 tonnes from near-term production—equivalent to an entire year's demand growth—while recovery timelines stretch into 2027. The Grasberg mud rush in Indonesia and El Teniente seismic events in Chile aren't just temporary setbacks; they represent the increasing fragility of global copper supply as miners push deeper underground into more complex geology.

Meanwhile, demand acceleration shows no signs of slowing. Artificial intelligence data centers, electric vehicle adoption, and renewable energy infrastructure are creating copper consumption patterns that dwarf traditional industrial use. Each hyperscale AI facility requires as much copper as a small town's electrical grid, while EVs need four times the copper of conventional vehicles. The math is unforgiving: the world needs the equivalent of a new major copper mine every year just to maintain 2% demand growth, yet the industry hasn't discovered a tier-one deposit in over a decade.

Chile's Codelco, the world's largest copper producer, exemplifies the industry's struggles. Starved of capital by government raids on its balance sheet, the company has shifted from growth to mere "optimization"—a euphemism for stagnation. With development timelines now stretching beyond 16 years and capital costs exceeding $35,000 per tonne of installed capacity, new supply cannot materialize quickly enough to prevent a structural deficit. For investors, this creates a generational opportunity. Whether through major miners, junior explorers, or physical copper exposure, the supply-demand fundamentals point to sustained price appreciation that could define the next decade of commodity investing.

00:00 - Introduction to Copper Market Trends
02:48 - Copper Price Dynamics and Forecasts
05:43 - Supply Disruptions and Their Impact
08:35 - Copper Demand Growth and Future Needs
11:24 - Challenges in Chile's Copper Production
14:44 - Block Caving Techniques and Challenges
17:23 - Future Production Plans and Market Outlook
20:21 - Investment Opportunities in Copper Projects
23:20 - Exploration Updates and Company Highlights
29:05 - Conclusion and Future Prospects

—

Learn more: https://cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

The critical minerals sector is experiencing a fundamental transformation as direct government equity participation drives substantial stock revaluations while nickel prices test multi-month trading range resistance. Mark Selby, CEO of Canada Nickel, recently outlined how these converging factors represent a potential inflection point for the industry.

Nickel prices have been range-bound between $15,000 and $15,500 per tonne for three to four months but are now pushing against resistance levels, with brief breakouts to $15,600. Ore prices increased $0.50 to $1.00 per tonne during China's recent October holiday, providing price support as markets return to full operation. Selby stated that "this fall is when we're going to see the first move," suggesting the breakout may be imminent.

Indonesian supply management is emerging as a critical factor for market balance. Government representatives at recent International Nickel Study Group meetings outlined plans for more aggressive supply discipline through year-end and into 2026. Key policy changes include reducing mining licences from three-year to one-year terms and implementing forestry crackdowns, with officials pointing to tightness expected in the first quarter of 2026. Indonesia now controls two-thirds of global nickel supply, making these policy shifts materially significant.

Government funding is creating dramatic stock revaluations. The US government has taken equity stakes in Lithium Americas and Trilogy Metals, with companies receiving support experiencing 2-10x stock appreciation. Lithium Americas has doubled in a month, MP Materials has tripled in three months, and The Metals Company is up tenfold since December. Canada is developing similar programmes, with priority project lists identifying large-scale, advanced-stage projects for direct government support.

Capital rotation from precious metals into critical minerals is accelerating as gold approaches $4,000 per ounce. Investors are positioning ahead of government funding announcements rather than chasing already-revalued stocks, creating opportunities in underappreciated projects meeting strategic criteria for government support.

Sign up for Crux Investor: https://cruxinvestor.com

The global nickel market is experiencing a critical inflection point as multiple supply and demand dynamics converge to potentially end the prolonged period of range-bound pricing between $15,000-$15,800 per ton that has persisted since April 2025.

Indonesia's strategic shift represents the most significant development in nickel markets. After a decade of flooding global markets with supply, the country now controls more nickel market share than OPEC commands in oil markets. This dominant position creates powerful economic incentives for price support rather than suppression. With nickel prices returning to $18,000-$20,000 per ton levels, Indonesia could generate an additional $4,000 per ton revenue that would completely eliminate the country's current account deficit.

Seasonal production patterns are amplifying supply pressures. Philippine nickel output, which produces nearly half its annual volume during the third quarter, will drop by 50% entering Q4. Simultaneously, Indonesia's regulatory crackdowns have removed 190 companies from operations, including 36 nickel producers, while transitioning mining licenses from three-year to one-year terms.

Robust electric vehicle adoption continues supporting fundamental demand. Global EV sales increased 15% year-over-year in August 2025, with Europe demonstrating particularly strong 30% growth despite previous pessimistic forecasts. The shift toward hybrid vehicles, now targeting 50% of manufacturer production versus 20% previously, maintains nickel consumption through 60% nickel battery chemistry requirements.

Nickel deployment in batteries has grown 13% annually, with monthly tracking indicating consistent demand increases across both full electric and hybrid vehicle applications. This growth trajectory supports long-term demand fundamentals even as lithium iron phosphate batteries gain market share in certain applications.

Canadian government policy has evolved dramatically in response to US trade tensions, creating unprecedented federal-provincial cooperation for critical mineral development. National priority project designation provides fast-track approval processes and enhanced funding access, with experienced financial executives appointed to key implementation roles. This framework specifically targets projects with scale, feasible development timelines, and Indigenous community support.

The convergence of supply discipline, sustained demand growth, and supportive government policies suggests the nickel sector may be emerging from years of investor skepticism toward a more balanced market environment capable of supporting sustainable higher pricing levels.

Sign up for Crux Investor: https://cruxinvestor.com

The global nickel market is experiencing a fundamental shift that presents compelling investment opportunities as supply constraints tighten and governments recognize the metal's strategic importance beyond electric vehicle applications. Current market dynamics suggest investors should consider exposure to this critical commodity as geopolitical factors and Indonesian market control reshape the industry landscape.

Indonesia has emerged as the dominant force in global nickel supply, with the metal now representing the country's largest export sector. The government has demonstrated both capability and willingness to influence prices through sophisticated mechanisms, including environmental enforcement and RKAB licensing quotas. Recent actions illustrate this control, with Indonesia halting production at four projects in Raja Ampat affecting 1-2% of global supply. Despite nickel prices remaining in the $15,000-$15,800 range, ore prices have reached two-year highs, creating margin pressure that forced even industry leader Tsingshan to announce production cuts.

Supply chain vulnerabilities are becoming increasingly apparent across the value chain. Ore imports from the Philippines are running significantly ahead of last year's levels, preventing typical inventory buildup before the rainy season. Grade deterioration in medium and high-grade deposits affects nickel pig iron production efficiency, while weather disruptions in key Indonesian regions create additional pressure points. Industry experts predict prices reaching $16,500 by late summer, with potential for $18,000-$20,000 per tonne by year-end.

The strategic importance of nickel has escalated beyond electric vehicles to national security priorities. Recent US negotiations with China over rare earth access highlight Western dependence on Chinese-controlled supply chains, reinforcing government support for domestic alternatives. Canada has placed nickel projects on its Priority Projects list, backed by $500 million in critical mineral processing funds.

Exploration successes demonstrate significant value creation potential. Talon Metals delivered exceptional drill results with 34.9 meters grading 14.86% nickel and 15.37% copper, while Canada Nickel defined over one billion tonnes containing 2+ million tonnes of nickel at Mann West. These discoveries represent rare new sources outside Indonesia, highlighting supply scarcity.

The convergence of Indonesian supply control, geopolitical priorities, and structural constraints creates an attractive investment environment for nickel exposure before supply limitations drive substantial price appreciation.

Sign up for Crux Investor: https://cruxinvestor.com

The global nickel market stands at a critical juncture as prices hover around $15,000 per tonne, positioned at the lower end of the established $15,000-$15,800 trading range. Despite recent inventory increases of 6,000 tonnes on the London Metal Exchange, underlying market fundamentals suggest potential upward momentum driven by strategic supply management and policy shifts across key producing regions.

Indonesia's dominance as the world's primary nickel supplier continues to shape global pricing dynamics, with the country effectively acting as "an OPEC of one country" for nickel markets. Indonesian producers have successfully pushed ore prices up approximately $3,000 per tonne, creating significant cost pressures throughout the supply chain. However, this aggressive pricing strategy, facilitated by Chinese company Tsingshan's high-output, low-price approach to squeeze competitors, appears to be reaching sustainability limits as market participants recognize the need for broader industry profitability.

China's implementation of "involution" policies - designed to reduce excess industrial capacity and improve profitability - represents a fundamental shift in industrial strategy with direct implications for nickel demand. These policies specifically target steel production, including stainless steel manufacturing, where overcapacity has created deflationary pressure. Early signs of this policy impact are already visible, with recent upticks in both nickel pig iron and Chinese stainless steel prices indicating genuine demand recovery rather than speculative positioning.

The next few weeks prove crucial for market direction, as all major mines operate at near-full capacity while Chinese efforts to pressure ore prices continue. The seasonal element becomes particularly significant with anticipated Philippine mine shutdowns during winter months, potentially creating substantial supply constraints during the fourth quarter.

Government support for critical mineral projects has accelerated dramatically, exemplified by MP Materials' Department of Defense contracts and Torngat Metals' $100+ million Canadian government financing. This shift addresses supply chain security concerns, particularly given Chinese control of approximately 80% of global nickel processing capacity.

The convergence of these factors - Indonesian supply management, Chinese capacity rationalization, seasonal constraints, and government intervention - creates conditions supporting price recovery toward the $18,000-$20,000 range by year-end.

Sign up for Crux Investor: https://cruxinvestor.com

The nickel market is presenting compelling investment opportunities as supply-side constraints converge with accelerating demand from both traditional and emerging applications. Recent market developments indicate a sector positioned for potential price appreciation driven by geopolitical supply concentration and robust consumption growth.

Nickel prices have stabilized in the $15,000-$15,800 per tonne range following recent volatility, with exchange inventories declining despite earlier surplus concerns. This inventory drawdown suggests underlying consumption is absorbing available supply more effectively than anticipated, indicating a market transitioning toward supply-demand balance.

Indonesia's dominance of approximately two-thirds of global nickel supply provides significant price leverage through regulatory control mechanisms. The country operates mining quotas through the RKAB licensing system and maintains discretionary enforcement of environmental regulations, creating multiple tools for supply management. Industry experts note that Indonesia has clear economic incentives to push prices higher, as the country generates more revenue at $18,000 per tonne than at $15,000.

Demand fundamentals are exceeding analyst expectations across key sectors. Chinese 300-series stainless steel production, representing up to half of global nickel consumption, has surged 12% year-over-year through early 2025. Electric vehicle battery applications are contributing additional growth of 10-15% annually, supporting increasing nickel intensity in the global economy.

Western governments are responding to supply chain security concerns with enhanced support for domestic nickel projects. The Trump administration has fast-tracked permitting for critical mineral projects, while Canadian funding programs are addressing traditional capital constraints. Automotive manufacturers specifically seek "clean green nickel" for EV production, creating premium opportunities for sustainably produced Western supply.

Recent exploration successes, including Talon Metals' exceptional drill results showing 12% nickel and 14% copper grades, demonstrate continued discovery potential in established mining districts. Combined with innovative financing structures involving government and strategic capital, these developments suggest Western nickel projects are approaching a development inflection point that could reduce global dependence on Indonesian supply while capturing premium pricing for sustainable production methods.

Sign up for Crux Investor: https://cruxinvestor.com

Nickel prices have demonstrated remarkable recovery in recent months, rebounding from $14,000 to approximately $15,750 per ton following Trump's reversal of the Liberation Day tariffs. This represents a recovery of about two-thirds of the $2,800 per ton loss experienced when tariffs were initially announced.

The market's resilience is supported by multiple factors on both the supply and demand sides. On the supply front, Indonesian production slowed during the Eid al-Fitr holiday, while domestic smelters were already operating with low inventory levels. Although the Philippine rainy season is ending, the supply chain will take time to replenish, creating temporary constraints that support pricing. The benchmark 1.5% Philippine ore has reached its highest price level since October 2023.

Demand remains robust, particularly from China's stainless steel sector, which has grown at double-digit rates through the early part of the year—exceeding most analyst expectations. This strong performance, combined with anticipated growth in the electric vehicle sector, could potentially drive nickel prices toward $20,000 per ton by year-end, according to industry executive Mark Selby.

Nickel's critical mineral status positions it favorably in the current geopolitical environment. With countries seeking to secure essential material supply chains amid US-China tensions, nickel producers outside the Chinese-Indonesian supply network stand to benefit from increased government support and funding.

Recent industry developments further reinforce investment interest in the sector. The Metals Company has seen its stock price triple after announcing plans to apply for mining permits under existing US legislation. Turkish industrialist Robert Yildirim announced plans to invest approximately $2 billion in nickel, while companies like Ardea Resources, First Atlantic Nickel, and Talon Metals reported encouraging drilling results.

The convergence of different nickel product prices indicates a maturing market where products are increasingly valued based on their nickel content rather than product-specific factors, creating a more stable pricing environment for investors.

Sign up for Crux Investor: https://cruxinvestor.com

Recent trade tensions have sent ripples through the metals market, with nickel prices retreating to 2020 levels around $14,000 per ton. Despite this 15% decline from recent highs, nickel has demonstrated greater resilience than other base metals such as copper, which has experienced losses exceeding 20%. This relative outperformance hints at nickel's stronger fundamental position in today's complex commodity landscape.

The market is approaching what industry experts call the "grand convergence," where production costs across different technologies are aligning. This convergence is creating a more stable cost floor for nickel, limiting potential downside even amid trade uncertainties. Current prices have already fallen well into the cost curve, suggesting limited additional downward pressure as production economics begin to constrain supply growth.

Indonesia's dominance in global nickel production continues to shape market dynamics. Environmental concerns surrounding "blood nickel" and challenging production conditions create persistent supply constraints despite Indonesia's expansion plans. Seasonal factors in key production regions like the Philippines also contribute to cyclical supply tightness, with evidence suggesting that structural supply limitations may outweigh these seasonal patterns going forward.

Government support for critical minerals has accelerated dramatically, creating unprecedented funding opportunities for strategically positioned nickel projects. As one industry leader noted, tariff tensions have paradoxically reinforced commitments to domestic supply chain development, with funding "going to show up much more vigorously and much more quickly than it had before." This support extends across political lines, with projects receiving endorsements from both governing and opposition parties in various jurisdictions.

Companies with the flexibility to sell into multiple markets hold significant advantages in navigating current trade disruptions. Those positioned outside the U.S. market may actually benefit from redirected supply chains and heightened domestic support. As revealed in the transcript, for development-stage projects, this environment represents "some short-term pain, but perversely super helpful for any of us in the critical mineral space who can sell our stuff anywhere in the world outside the United States."

Recent project developments across the sector illustrate both progress and challenges in expanding supply. New discoveries like Molga Tank in Australia and advanced projects like Kabanga in Tanzania represent significant nickel resources, but complex development requirements create barriers to rapid production growth. Companies have increasingly recognized that simpler development plans focused on mining rather than complex processing facilities offer more practical paths forward.

For investors, the nickel market presents an opportunity to position for longer-term structural trends despite near-term volatility. The demonstrated challenges in developing cost-effective new supply, combined with accelerating demand from energy transition applications, create a compelling fundamental case. Companies with advanced projects receiving strategic government support offer particularly interesting exposure to this critical mineral. While current market turbulence requires patience, the strategic importance of nickel continues to grow as global supply chains adapt to new trade realities.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

Nickel prices have rebounded to $16,500 per tonne ($7.50/lb), marking a 10% gain since the start of 2025. This recovery is primarily driven by significant price increases in Indonesian and Philippine ore, with Indonesian ore prices rising by $1.50-$2 per tonne (3-6%) in the latest week.

Industry experts consider the Indonesian ore price the key indicator for nickel's market direction this year. The price increases are cascading through the entire supply chain, affecting ore, nickel pig iron (NPI), and stainless steel prices, with several price points reaching levels only briefly seen in late 2024.

On the corporate front, Canada Nickel Company has established a RoyaltyCo holding a 1% royalty on most of its land package, enabling it to raise $8 million while maintaining 62% ownership. The company expects to publish six additional resource estimates by mid-year, potentially creating a resource endowment comparable to the Sudbury basin.

Other significant developments include Centaurus receiving a construction permit for its Brazilian nickel project, positioning it among the few projects that could begin production before 2030. EV Nickel reported promising drilling results from its Gemini North target, with one hole showing 280 meters of mineralization at 0.32% nickel. First Atlantic Nickel announced results from its Newfoundland project and a partnership with the Colorado School of Mines to investigate natural hydrogen potential.

Meanwhile, the London Metal Exchange was recently fined £9.2 million ($11.9 million) for its handling of the 2022 nickel trading crisis, which resulted in $12 billion in canceled trades when prices spiked to nearly $100,000 per tonne.

Government policies are increasingly supporting critical minerals projects, particularly in Canada where the Ontario government announced a $500 million fund for critical minerals processing. This shifting landscape, coupled with tariff implementations and growing emphasis on secure supply chains, is creating potentially favorable conditions for nickel investments, especially for projects in stable jurisdictions with lower carbon footprints.

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

Elbows Up, Canada & The Nickel Market

What a difference 2 weeks makes – up $2,200 a tonne since we last spoke breaking out of range $15,000-$15,800 range that we’ve been in the last 3 months.  

Multiple reports of ore availability being tighter than expected this week – but first week since Chinese New Year didn’t see an increase in Indonesia ore price – but Indonesia talking about increasing royalty rates from 10% to 14-18% which will flow through to costs.  Though, Philippine ore prices were up $1/t and we continue to see NPI prices/stainless prices tick up each week in China which is supportive to nickel prices. This royalty rate change should underscore point I’ve been making that Indonesia wants to ensure it captures additional value from its finite ore resources. 

LME nickel inventories continue to move higher as refining capacity additions in Indonesia and China are allowing any surplus to be converted into LME deliverable units – this will ensure that final stage of “Great Compression” is completed.

While have seen significant increases in LME stocks – need to remember still low on weeks of inventory basis and still a fraction of reported surpluses over last 3 years  

In sharp contrast to year ago, EV sales looking robust – YTD February up 30% globally – China up 35%, Europe up 20% (with BEV up 29% and hybrid up 2%).  Is crazy how much negative hype last year when was just impact of Germany cancelling incentives which saw big surge in sales in advance in late 2023.  These numbers are now getting the benefit of low base in Europe – underlying numbers still growing at 20-25% ! 

Some interesting company news 

Talon Metals announced earn in by Lundin minerals to its Michigan properties where they’ve seen some excellent results.  Land package they picked up about 2 years ago.  Great move by both sides – keeps Talon from having to dilute its main property to explore and Lundin is running out of ore at its Eagle mill which is short distance away from this land package.   

Canada Nickel released more exploration results from the “Three Giants” – Mann West, Reid, and Midlothian – each have bigger geophysical footprint than Crawford.  Highest grades to date at Mann West, continued solid results at Reid, and good longer higher-grade intervals at Midlothian.

Chalice Resources had big news for PDAC – announced updated flowsheet – got rid of hydromet and making concentrates.  Nickel concentrate hydromet particularly for complex concentrates hard. Concentrates great – but will run into the “oligopoly’ if producing a Ni-Cu-PGM concentrate that has to go to one of the smelters. Doesn’t produce much nickel is really a PGM with Ni, Cu byproducts at this point. 

First Atlantic Nickel – awaruite property in Newfoundland – finally released some DTR results which were long overdue. Second hole yielded similar DTR grades to FPX – leading awaruite deposit. Explanation for long delay also in this press release as DTR results from first hole they drilled had much lower grades than FPX.  Ultramafic deposits typically have variability in mineralization and most importantly for these awaruite deposits need to look at grain size as FPX work showed change in recoverability based on grain size.  So interesting result, but a lot more drilling and mineralogy work to go.

Sign up for Crux Investor: https://cruxinvestor.com

The copper market has seen moderate price strengthening in early 2025, with prices reaching $4.20-$4.30/lb despite LME inventory increases in late 2024. Major producers including BHP, Rio Tinto, Freeport, and Capstone are taking a conservative approach, focusing on brownfield expansions rather than new greenfield developments due to capital intensity concerns.

The sector is witnessing a clear dichotomy in the exploration space. Companies with large-scale potential, strong news flow, and reliable access to capital are gaining market favor, while junior explorers with limited resources or challenging deposits struggle to maintain momentum. Notable performers include ATEX Resources, which has grown to a $600M market cap with five active drill rigs, and NGEx Minerals, reaching a $2.5B valuation with a 75% share price increase over the past year.

Mid-tier producer Capstone Copper exemplifies the sector's growth potential, projecting an increase from 184kt Cu in 2024 to 220-255kt in 2025. The company aims to reach 400ktpa longer-term through its Santo Domingo project, though financing remains challenging due to capital expenditure concerns.

Several emerging players are making significant strides. Element 29 reported impressive results in Peru with a kilometer-long intersection of 0.39% copper. Power Nickel has seen its share price increase sixfold, while Marimaca Copper plans to expand production from 50ktpa to 75ktpa, supported by strategic investors including Assore Holdings and Mitsubishi.

The supply landscape faces significant challenges, including major miners' reluctance to invest in large-scale greenfield projects. This hesitancy is evident in developments like Rio Tinto's Winu project, which targets modest production of 33ktpa copper and 80koz gold from a 600Mt resource.

Key investment themes emerging in the sector include oxide copper developments, which offer lower capital intensity alternatives to traditional projects, and increased interest in stable jurisdictions amid growing geopolitical concerns in traditional copper-producing regions. Companies with strong ESG practices and those exploring copper-gold deposits are attracting premium valuations.

For investors, opportunities exist across the risk spectrum, from established producers to exploration companies. Success factors include management expertise, asset quality, and jurisdiction risk management. The market particularly favors companies that can demonstrate scale potential while maintaining strong balance sheets and consistent news flow.

The sector's outlook remains positive, driven by anticipated demand growth from the clean energy transition, though careful selection of investment opportunities is crucial given the varying performance across the sector.

Sign up for Crux Investor: https://cruxinvestor.com/categories/commodities/copper

The nickel market has maintained remarkable stability, trading between $15,000-15,800 since December 2024, with London Metal Exchange (LME) inventories showing only modest increases of 4,000 tons despite analyst predictions of significant surpluses. This stability through the Chinese New Year period suggests underlying market strength.

Indonesia's strategic decision to maintain ore supply at 200-220 million tons indicates a measured approach to market management. This comes as the Philippines introduces legislation for a five-year ore export ban, though industry experts suggest limited impact due to decades of high-grade ore depletion. According to Mark Selby, CEO of Canada Nickel, the Philippines' move comes too late: "They should have probably done this 20 years ago, when they still had some higher grade material left."

The global nickel landscape is significantly influenced by China's approximate 70% beneficial ownership of Indonesian nickel projects, creating supply chain concerns for Western manufacturers. This concentration has prompted Western nations, particularly the US, to seek alternative supplies for their aerospace, defense, and automotive industries. Selby emphasizes that "China is still Enemy Number One," noting that Western car manufacturers are actively avoiding dependence on Chinese-controlled supply chains.

In response to potential tariff scenarios, companies are diversifying their market exposure. European markets, especially those prioritizing low-carbon materials, present viable alternatives to US markets. Middle Eastern interest in nickel projects has also increased, broadening market opportunities.
The sector has attracted significant investment, with notable transactions including Power Nickel's $40 million raise, Magna Metals' $25 million financing, and several smaller deals. Canada Nickel secured $3 million in government funding for IP carbonation work, highlighting growing public sector support for strategic nickel projects.

The investment thesis for nickel remains strong, driven by several factors: secure supply concerns as China dominates Indonesian production, Western manufacturers seeking non-Chinese supply sources, anticipated supply pressure from the Philippines' export ban, and growing demand from EV, aerospace, and defense sectors. Premium pricing for low-carbon nickel production and alternative markets in Europe and the Middle East provide additional upside potential.

As the nickel market undergoes this transformation, investors are advised to focus on companies with assets in stable jurisdictions, proven management teams, and clear paths to production, while maintaining awareness of the broader geopolitical context affecting the sector.

Sign up for Crux Investor: https://cruxinvestor.com/categories/commodities/nickel

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.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

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.

Sign up for Crux Investor: https://cruxinvestor.com/categories/commodities/nickel

Recording 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.

Learn more: https://cruxinvestor.com/categories/commodities/tin

https://cruxinvestor.com/companies/pan-global-resources

Sign up for Crux Investor: https://cruxinvestor.com

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.

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.

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

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.

Learn more: https://cruxinvestor.com

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."

Learn more: https://cruxinvestor.com

Sign up for Crux Investor: https://cruxinvestor.com

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."

Learn more: https://cruxinvestor.com

Sign up for Crux Investor: https://cruxinvestor.com

The 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.
—

Learn more: https://cruxinvestor.com

Sign up for Crux Investor: https://cruxinvestor.com

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.

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.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

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.

View Rome Resources' company profile: https://www.cruxinvestor.com/companies/rome-resources

https://www.cruxinvestor.com/categories/commodities/tin

Sign up for Crux Investor: https://cruxinvestor.com

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.

—

Learn more: https://cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

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

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.
—
Sign up for Crux Investor: https://cruxinvestor.com

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.

—

Learn more: https://cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

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.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

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.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

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.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

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.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

Nickel – lots of excitement over the past week since we saw each other in London last week to end up back at the same spot.  Trading just over $20K per tonne, after climbing up to a high $21K level (nearly $10/lb) before falling back along with copper (which also hit all-time highs on LME of nearly $11K or $5/lb.  LME inventories ticked up a couple of thousand tonnes during the week. After the fireworks of the last few weeks, expect nickel prices to settle into a range of $19-$20K (remember, $20K was the year-end forecast)

In China, a big surge in nickel prices didn’t translate into higher stainless or sulphate prices, so we saw discounts widen. We will see where we end up this week.

Geopolitically, there is still unrest in *New Caledonia*; French President Macron will visit to try to calm things down.  Also, the Aussie resources minister does not sound too sympathetic to BHP – blaming their lack of investment as a primary driver of cost structure increase (remember BHP asking for help for their business) –

INSG bulletin came out – reporting March 2024 numbers – monthly deficit – only 2nd time in 2 years.  YTD demand up 9%, YTD production up 7%

In company news - Tale of Three High-Grade Intervals:

Exciting results from Talon Metals and what they’re calling as CGO East Waterfall – analogous to something they found on West side  Intercepts 4.81 meters at 4.89% Ni, 4.10% Cu, 0,06% Co, with notably high Platinum Group Elements ("PGEs"), averaging 17.45 g/t Pd+Pt+Au (9.26% NiEq);as well had  second intercept of 79.22 meters at 0.80% NiEq;
For massive sulphide, we need traps for higher-grade stuff to “settle out”, it looks like it has a structure which has done that – it will be interesting to see what the scale looks like
On the Other hand:

NiCan released more results from Wine deposit drilling. Diamond drill hole Wine 24-4 intersected 20.3m, averaging 2.88% Cu and 2.14% Ni (2.85% NiEq), 0.09% Co, and 1.19g/t PGMs. I would be cautious about this one—all drilling looks in a less than 50x50 metre area—it's starting to look like a “Garibaldi.” We need to be able to start stepping out or finding analogues rather than drilling the same spot at different angles.

Power Nickel had another good CU-PGM with some nickel intersection PN-24-055 returned 15.40 m of 0.44 g/t Au, 22.04 g/t Ag, 5.06% Cu, 13.12 g/t Pd, 3.35 g/t Pt and .015% Ni including 5.05 m of 0.61 g/t Au, 50.29 g/t Ag, 13.27% Cu, 24.62 g/t Pd, 6.73 g/t Pt, and 0.33% Ni with 3.35 m of 0.70 g/t Au, 60.36 g/t Ag, 17.26% Cu, 25.02 g/t Pd, 3.61 g/t Pt and 0.37% Ni. Great results – now they need to define the extent of this lens to see how big it will be.
—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

*Nickel's Electrifying Ascent: Riding the Wave of EV Demand to $20,000 and Beyond*

In a world rapidly embracing electric vehicles (EVs), nickel has emerged as the metal of the moment. With prices surging past $20,000 per ton, savvy investors are asking: is this just the beginning of nickel's electrifying ascent?

According to industry experts like Mark Selby, CEO of Canada Nickel, the answer is a resounding yes. As governments and automakers worldwide commit to phasing out gasoline-powered vehicles in favor of EVs, the demand for nickel—a crucial component in EV batteries—is set to skyrocket. Experts predict that this demand will only continue to swell in the coming years.

But as investors know, demand is only half the equation. The other half is supply – and that's where the excitement really builds. While nickel demand is poised for explosive growth, supply struggles to keep pace. Indonesia, the world's largest nickel producer, is grappling with rapidly depleting high-grade ore reserves. Other major producers, like the Philippines and Russia, face challenges. It's a classic supply crunch scenario that has historically been a recipe for soaring prices.

So, where should investors look to ride the nickel wave? One company that stands out is Canada Nickel. With its flagship Crawford project boasting the second-largest nickel resource in the world, and its Reid project shaping up to be potentially even larger, Canada Nickel is sitting on a veritable treasure trove of this critical metal.

But it's not just the size of these projects that's turning heads – it's the speed at which they're advancing. Canada Nickel is fast-tracking development, applying its proven extraction techniques across multiple projects simultaneously. The goal? To bring seven world-class nickel resources to the market in record time.

This aggressive strategy has caught the attention of some of the industry's biggest players. Mining giants like Glencore and Anglo American have already forged strategic partnerships with Canada Nickel, a powerful vote of confidence in the company's projects and management team.
For investors, the implications are clear. As the EV revolution kicks into high gear and nickel demand soars, companies like Canada Nickel positioned to rapidly scale up production could be poised for a truly electrifying ride.

Of course, no investment is without risk. But in the case of nickel, the potential rewards are simply too compelling to ignore. With prices already surging and demand set to explode, the question for investors isn't whether to get involved – it's how quickly they can jump on board.

In Mark Selby's words, "We're going to see double-digit demand growth... the wave is coming." For investors ready to ride that wave, companies like Canada Nickel offer an exciting opportunity to tap into the immense potential of this essential metal and potentially reap the rewards of nickel's electrifying ascent.

As the world charges towards an EV future, nickel's star is undeniably on the rise. With surging demand, constrained supply, and companies like Canada Nickel rapidly advancing world-class projects, the stage is set for a historic bull run. For investors with the foresight to seize this opportunity, the potential returns could be nothing short of electric.
—

Learn more: https://cruxinvestor.com

Sign up for Crux Investor: https://cruxinvestor.com

The global economy's accelerating transition towards clean energy and electrification has positioned copper as one of the most critical metals of the 21st century. Copper's unparalleled thermal and electrical conductivity properties make it an essential material across industries, with demand surging due to its crucial role in electric vehicles, renewable energy infrastructure, and emerging technologies like AI. However, a significant supply crunch looms as the pipeline of new copper projects remains constrained, presenting a compelling opportunity for investors to gain exposure to the red metal.

Copper prices have embarked on a strong upward trajectory, recently hitting $4.59/lb ($10,000/t), reflecting the market's recognition of the metal's crucial role in the future economy and the increasing tightness in supply. Despite this upward move, analysis shows copper prices still remain below their long-term inflation-adjusted average, suggesting room for further appreciation.
The copper industry faces a structural supply deficit in the coming years, with current production heavily reliant on a few aging mega-mines, many of which are seeing declining ore grades and depleting reserves. Even the world's largest miners have underinvested in new copper supply, electing to acquire existing mines rather than build new ones. The reluctance to develop new supply stems from the risks of cost overruns and delays, as showcased by Teck's challenges with the QB2 expansion project.

On the demand side, copper consumption is poised for substantial growth, driven by the global transition to clean energy and electrification. Electric vehicles, renewable energy, infrastructure investments, decarbonization efforts, and emerging demand drivers like AI and data centers are all expected to contribute to the growing demand for copper.

With the major miners underinvesting in copper exploration and development, junior exploration companies will be critical in discovering the new copper deposits the world needs. Juniors are taking risks to explore in prospective geologies and find the projects that will help alleviate the supply deficit in the years ahead. For investors, juniors provide direct exposure to the potential value creation from new copper discoveries.

Recent exploration results from several junior copper explorers showcase promising projects on the horizon. C3 Metals, and Metallic Minerals have all reported positive drill results, indicating the potential for meaningful new discoveries. Other companies like Imperial Metals, Aldebaran Resources, Western Copper & Gold, Nine Mile Metals, Atico Mining, BeMetals, Camino Minerals, and Arizona Metals are also advancing prospective copper projects, providing investors with a range of opportunities across jurisdictions and development stages.

Looking ahead, copper's role in enabling the technologies and infrastructure needed to support a more sustainable global economy will only become more essential. The resulting supply-demand imbalance is expected to be a strong tailwind for copper prices in the years ahead, presenting a compelling opportunity for investors positioned in copper equities.

Investors can consider a diversified approach across producers and explorers to gain exposure to the copper thesis. Major producers like Teck Resources offer exposure to large-scale, long-life assets, while mid-tier operators provide a balance of production and growth. Junior explorers offer potential for outsized returns on new discoveries, but with higher risk. Investors should monitor ongoing exploration and development results, which could be key catalysts for copper equities going forward.

In conclusion, the combination of surging copper demand and constrained supply growth is expected to generate a widening market deficit through the end of the decade, putting upward pressure on prices. This structural shift presents a compelling opportunity for investors to gain exposure to copper through a diversified portfolio of producers and explorers. As the world transitions to a cleaner, more electrified future, copper's critical role will only become more evident, positioning the metal and the companies that produce it for a bright future.

00:00 - Introduction and Rise in Copper Prices
05:07 - Challenges in Building New Copper Projects
10:02 - Importance of Copper in Modern Life
12:48 - Review of Recent Copper Exploration Results
34:27 - Challenges with Share Price
37:52 - Small Scale Mining Prospects
41:31 - Busy Exploration Programs
48:45 - Abitibi Metals' Improved Accessibility
53:30 - Exciting Prospects for Arizona Metals Corp

—

Learn more: https://cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Recording date: 2nd May 2024

Nickel bouncing around on either side of $19,000.  Post our last meeting, nickel got up to $19,700 before turning back down, dropping through $19,000 last night for the first time in 2 weeks.

LME inventories, after falling down to mid-70 thousand tonnes, have bounced back up to a high 70 thousand tonnes

The price rally has been helped by short covering – remember back to pre-Chinese New Year – funds at the largest short position ever (which helped support my case for limiting downside and case for the rally); funds now covered those shorts and are actually positioned slightly long.  Positioning pretty neutral generally helps prevent moves from getting too big.

For those of you who are long copper, the green signals I saw 5-6 months ago are long gone.  We still may see one more surge higher, but I think we’ve topped out for a while.  Take some profits

INSG put out their April forecast (they meet twice a year).  World primary nickel production was 3.060Mt in 2022 and 3.356Mt in 2023, and is forecast to reach 3.554Mt in 2024. The estimates do not include an adjustment factor for possible production disruptions. World primary nickel usage was 2.963Mt in 2022 and 3.193Mt in 2023. The INSG forecasts an increase to 3.445Mt in 2024.

Therefore, the implicit market balances are surpluses of 98kt in 2022, 163kt in 2023 and 109kt in 2024.  This compares to forecast surpluses last October of 223kt in 2023 and 239kt in 2024.

Note INSG only forecasts supply without a disruption allowance,  At a 3-5% allowance, their 2024 forecast is effectively a deficit, particularly as they only have 8% demand growth (my forecast is for 10+% this year)

First Quantum confirmed previously announced shutting down mining at Ravensthorpe and processing lower-grade stockpiles

Magna Mining got a permit to take a water–key permit which will allow them to start dewatering ramp and begin exploration development (which will allow them to mine and have ore processed)

FPX Metals announced a successful pilot plant to process 76 tonnes of material, which confirmed metallurgical performance and successfully tested some process optimizations which should further simplify their flowsheet

Ardea Resources deal with SMM and Mitsubishi – earn 50% by spending $A98 million by funding and completing feasibility study targeting 2nd half  This will be important to see what cost structures will look like for Australian laterites – most of the projects have been around since the 1970s (Inco optioned this project in the 2000s) and this is one of the bigger/better ones, SMM is a leader in HPAL production and will be interesting to see what economics will look like given cost structures in Australia

Queensland Pacific Metals (QPM) is now a gas producer – shelving nickel project – sadly not surprised, the basis of technology was the nitric acid leaching process, which historically has not been shown to work.  Attracted several auto/battery investors into the project (POSCO, LGES, GM) – project FS in late 2022 used $27K nickel prices ($25K nickel price +$2,204 sulphate premium), $60K cobalt prices

Western Mines getting some interesting results at their Mulga Tank project east of Kalgoorlie (had said one to keep an eye on)  – getting large disseminated dunite with some higher grade intervals (over1%) over narrower intervals

Aston Minerals announced metallurgical work – very good recovery numbers to good grade concentrate - flowsheet looks pretty similar to other projects 

—

Learn more: https://cruxinvestor.com/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

Recording date: 18th April 2024

The nickel price has surged by a significant margin, climbing another couple of percent to reach $18,200. This marks a substantial retracement from the previous high of $18,000s. Additionally, LME inventories have seen a 3% decrease over the past week, a factor that is expected to bolster market sentiment.

Nickel and stainless prices in China pushed higher, which squeezed sulphate premiums as sulphate prices ticked a little lower – we should see this premium continue to compress back to a small premium/discount. NPI prices ticked a little higher, but discounts widened with a spike higher in nickel prices

European stainless steel prices have experienced an upward trend due to strikes at key plants. This development is likely to have a significant impact on the market, influencing future price movements.

Rho Motion reported that Global EV sales were up 21% in Q1 y-o-y, with March sales up 12%. However, slow sales in Germany, where subsidies were cut, hurt overall growth rates.

Q1 2024 vs Q1 2023:
+21% Global
+7% EU & EFTA & UK
+31% China
+13% US & Canada
+21% RoW

Company News

Horizonte Minerals – unfortunately, another leg down – announced the inability to secure financing to continue construction on the project. The position is now where lenders can enforce security on all the company’s assets leaving investors at zero.

Aston Minerals announced an updated resource. The Indicated Mineral Resource is 231 Mt at 0.27% Ni, 0.011% Co (0.30% NiEq1), a significant 44% increase. Inferred Mineral Resource is 1,039 Mt at 0.27% Ni, 0.011% Co (0.30% NiEq1), a 17% increase to Inferred tonnes compared to the February 2023 initial resource.

Canada Nickel made two announcements: awarding the FEED contract to Ausenco and a team of engineering firms that delivered FS to continue to advance Crawford towards the mid-2025 construction decision. Its subsidiary NetZero Metals announced industry-leading engineering firms SMS and Metso for steel plant design and nickel plant design.

Premium Nickel more assays from Selebi deposit – some good nickel (not ni-eq) grades and some step-outs from it's existing resource. Highlights include:

SNUG-23-070 (South Limb, within historic resource): 15.95 metres of 2.05% NiEq (1.32% Ni, 1.20% Cu, 0.07% Co)incl. 8.80 metres of 3.03% NiEq (2.07% Ni, 1.53% Cu, 0.11% Co)

SNUG-24-077 (South Limb, 26 metres down plunge of historic resource): 6.70 metres of 3.74 % NiEq (2.43% Ni, 2.19% Cu, 0.12% Co)

SNUG-24-086a (South Limb/N2, 245 meters down plunge of N2 historic resource): 9.50 metres of 1.40% NiEq (1.15% Ni, 0.29% Cu, 0.06% Co)7.05 metres of 1.73% NiEq (1.45% Ni, 0.33% Cu, 0.07% Co)

Denarius Metals – first time talking about it. The multi-asset developer announced a PFS on the restart of the Aguablanca mine previously run by Lundin. Over its 6-year life in the PFS, a total of 4.8 million tonnes will be processed from the Aguablanca underground mine, resulting in a projected life-of-mine net revenue of $480.3 million and LOM after-tax Project cash flow of $105.7 million. The PFS delivers a robust NPV5 of $83.1 million with an after-tax IRR of 213% and a payback period of 1.2 years. Potential to leverage the 5,000 tpd processing plant to recover a variety of metals, and the exploration potential, not only from the Aguablanca Project but also our nearby Lomero Project.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 14)

Copper and gold prices jump again, heralding a junior resources market resurgence. But look! Micro-cap equities have barely moved in the last week, whereas the plus $300 million market cap companies have all posted significant gains. As liquidity returns to the sector it is the bigger companies that benefit the most in the early stages.

Merlin also looks at the build history of the twenty largest copper mines. A golden period of construction 1990-2009 emerges. The heyday of modern western capitalism. Since the Global Financial Crisis, even with ultra-low cost of capital, China has led the way in construction. The implication is that deep, lower-grade ore-bodies need much higher incentive prices to stimulate build decisions. US$15,000-20,000 is likely (that’s $6.82-9.09/lb in old money). Current prices are $9342/t or $4.25/lb. 

A rattle through four weeks of exploration results follows. Merlin reviews news releases from Entrée Resources, McEwen Mining, Metals Acquisition, Gladiator Metals, Pampa Metals and Abitibi Metals - all appearing for the first time. He also talks through follow-up drilling results from T2 Metals and Emerita Resources. 

Go Copper, Go Explorers!

—

Learn more: https://cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Recording date: 8th April 2024

Nickel is up more than $1,000 since we last spoke – now at $17,800 or over $8/lb. Chinese PMIs better than expected drove the entire base metal complex higher – all up nearly 2% on a single day, copper now $9,200 per tonne up over $4/lb. The move will need to see more concrete signs of improved markets/tightness to make an even higher move from here.

In China, sulphate prices came off a little last week so a large premium which emerged came back to earth. On the stainless side, we saw stainless and NPI prices start to level and finally saw stainless steel stocks decline after several weeks of increases. Indonesia are still importing ore from the Philippines and while ore prices in China were flat, Indonesia ore prices went up $3/tonne or more than 6%.

Company News

Karora Resources (KRR) merger with Westgold.

Magna Metals hit some great holes from 109 footwall zone (fluid around a bunch of gravel)

MCR-24-068: 0.7% Ni, 2.4 % Cu, 9.7 g/t Pt + Pd + Au over 26.3 metres Including 3.2% Ni, 11.3 % Cu, 10.6 g/t Pt + Pd + Au over 4.4 metres

MCR-24-069: 0.3% Ni, 0.3 % Cu, 10.7 g/t Pt + Pd + Au over 28.5 metres Including 0.9% Ni, 0.3 % Cu, 25.3 g/t Pt + Pd + Au over 7.8 metres

MCR-24-070: 1.6% Ni, 5.2 % Cu, 10.0 g/t Pt + Pd + Au over 17.1 metres Including 2.5% Ni, 9.6 % Cu, 17.4 g/t Pt + Pd + Au over 6.8 metres

A couple of big exploration plays outlined their plans:

Talon Metals outlined in some detail their targets both around current resource and in some district targets in a detailed release – a must read if curious about investing in the story.  They are very well-funded as received substantial government money to explore their land packages.

Premium Nickel Resources hosted webcast walking through the exploration potential and targets for their Selebi properties – they do a good job outlining potential scale – will need to see if they can delineate a sizeable enough higher grade resource at the depth where the target occurs.

Released on the day of our last discussion, results from a number of holes – some good infill holes in existing resource but also some good extensions – these are the ones that will be most helpful to expand the resource and also some higher tenor nickel grades (narrow interval of 4% but shows potential)

SNUG-23-017 (South Limb, 180 metres down plunge of historic resource) 18.15 metres of 2.21% NiEq (1.27% Ni; 1.65% Cu; 0.06% Co) incl. 6.25 metres of 3.23% NiEq (2.34% Ni; 1.40% Cu; 0.11% Co)  and 3.50 metres of 3.22% NiEq (1.06% Ni; 4.08% Cu; 0.05% Co)

SNUG-23-069: (between N2 and N3 fold noses, outside historic resources): 5.85 metres of 1.63% NiEq (1.17% Ni, 0.70% Cu, 0.06% Co) incl. 2.25 metres of 2.50% NiEq (1.52% Ni, 1.64% Cu, 0.09% Co) incl. 0.45 metres of 5.86% NiEq (4.53% Ni, 2.10% Cu, 0.16% Co)

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

Recording date: 4th April 2024

The green energy transition is driving strong demand growth for critical battery metals like copper and lithium. Electric vehicles require significantly more copper than traditional internal combustion engines, while lithium-ion batteries are essential for both EVs and renewable energy storage. Despite near-term volatility, the long-term outlook for these metals is highly favorable.

On the supply side, copper and lithium production is struggling to keep pace with the projected demand surge. Bringing new mines online is a capital-intensive and time-consuming process. Much higher commodity prices will be needed to incentivize the necessary investments. This creates an attractive opportunity for investors in well-positioned copper and lithium developers.

Arizona Sonoran Copper Company is advancing the Cactus Mine in Arizona, which boasts 7.4 billion lbs of copper resources - the 6th largest unmined deposit in the U.S. The company expects to produce 55,000 tons of cathode annually over an initial 21-year mine life, with significant expansion potential. The project benefits from existing infrastructure, including roads, power, and water. Management is targeting very low carbon emissions, which could command a "green copper" premium. With a low capital intensity of $10,300 per annual ton of production capacity, Arizona Sonoran is well-placed to deliver strong returns in a rising copper price environment.

American Lithium offers exposure to both lithium and uranium through its projects in Nevada and Peru. The company's two key lithium assets, TLC and Falchani, are both at surface and amenable to low-cost open-pit mining. American Lithium's straightforward processing approach yields a high-purity lithium chemical on-site, reducing dependence on Chinese refiners. The company's projects have a combined NPV of $8.5B based on recent studies, far exceeding its current $200M market capitalization. American Lithium is also working to unlock value from its uranium asset, providing an additional avenue for growth.

While the EV revolution is global in nature, increasing emphasis on supply chain security is driving efforts to boost domestic production of these critical metals, particularly in the United States. Government incentives and a streamlined permitting process could provide a tailwind for U.S. copper and lithium projects in the coming years. By investing in companies like Arizona Sonoran Copper and American Lithium, investors can gain leveraged exposure to rising metals prices, while also participating in the re-rating potential as these projects move towards production.

—

Learn more: https://cruxinvestor.com/companies/arizona-sonoran

https://www.cruxinvestor.com/companies/american-lithium

Sign up for Crux Investor: https://cruxinvestor.com

Nickel continues to retrace gains – down to $16,600 – more than $1,000 bottom, but has given up about 2/3 of its move from the recent peak. Expect a range of $16,500-$17,500 for the next while.

A Tale of Two Markets in China

Nickel sulphate continued to climb – up another 3% this week. The “great conversion” that I discussed is continuing – discount coefficients of MHP and high nickel matte remained at high levels of 80-81% and 84-85% respectively and with nickel prices dropping this week will be interesting to see if these coefficients continue to climb higher (expect by end of the year for both to getting towards 90%).

Stainless on the other hand remains sloppy with inventories continuing to build and prices continuing to lower. Indonesia is working through a backlog of ore approvals which is causing some immediate market concerns about the supply squeeze of ore. 153 million tonnes of quota have been approved versus total production in 2023 of 194 million tonnes. Will need to see that number get up to 210 million tonnes this year.

NPI discounts contracted a little bit – will see what happens with discounts this week. Once matte gets back up towards 90% range, should see NPI discounts contract and complete “great convergence”. As said last week, will need to see both markets improve before seeing the next leg higher and will see nickel consolidate in this range.

Company News

Last week, Talon Metals put out a nice hole of 12.72 meters (41.7 feet) of high-grade massive nickel and copper mineralization assaying 6.04% Ni and 2.68% Cu (7.5% NiEq) located 10 meters outside of the Tamarack Resource Area at a depth of 380.7 meters. An additional 25.26 meters (82.87 feet) of disseminated sulphides assaying at 0.695% Ni and 0.493% Cu (1.13% NiEq) starting at a depth of 435.6 meters. They said they had 4 rigs going so we should see more results over the coming weeks.

BHP cut 25% of the contractor workforce at the West Musgrave project as it slows spending in nickel space. This is the project they sold for $250K cash in 2014 + 2% royalty + $10 million production payment and bought back for ~$2 billion.
 
— 

Learn more: https://cruxinvestor.com/categories/commodities/nickel 

Sign up for Crux Investor: https://cruxinvestor.com

Nickel is in the $17,500 range (just under $8/lb) off about $1,000/tonne since last week’s recent high and retracing some of the gains. Still up 10% from the bottom – remember don’t go up or down in a straight line so this kind of pullback is expected.

In China, we are still seeing expected battery restocking with sulphate prices up another 2% this week, however, stainless markets looking a little sluggish with inventories ticking higher and prices coming off.

To be able to take nickel prices another leg higher, will likely need to see both batteries and stainless moving higher so expect we’ll settle into this nickel price range for a bit.

Company News

Canada Nickel’s best hole yet at Reid – one of the top targets - best interval to date at the first hole at Reid - 675 metres of 0.25% nickel including 142 metres of 0.32% nickel and 24 metres of 0.40% nickel in REI24-17. The first section delineating over 800-metre width of the target ultramafic sequence - nearly 2 times thicker than Crawford and a new discovery at Newmarket.

The first 2 holes at Newmarket hit, including 373 metres of 0.24% nickel in NEW24-01 The initial Newmarket results are also very encouraging, despite the fact CNC were only able to drill at the least attractive geophysical target due to seasonal logistical constraints. This initial drilling occurred on the edge of the eastern end of the 7-km long Newmarket target, which is contiguous with the Mann Southeast target and is part of an overall geophysical target more than 3 times larger than Crawford.

Spruce Ridge, which acquired an advanced nickel laterite in Oregon a couple of months ago, has now picked up another laterite and sulphide property. The US is always challenging from a permitting perspective, but this is one of only a handful of places to find nickel in the US and was the only producing region for a long time in the US.

Poseidon Nickel sold its Lake Johnson mill and Emily Ann/Maggie Hays properties (operated in the 2000s) to Min Res who is going to convert it to a lithium processing mill. Change of CEO as they are going from operator to exploration of their Windarra and other properties.

Missed this last week, FPX Nickel announced prioritising critical path activities in preparation for entry into the Provincial and Federal environmental assessment (“EA”) in the first quarter of 2025.

Nickel broke through $18,000 level surging up to $18,500 – 16% off the lows from a month ago when nickel was “going to be bad forever…”. It has given up some of those gains but it's still trading at $18,100 or $8.20 per pound. When you have a big short or big long position, when people covering can see a sharp price move (gone from 24,000 lots net short to 8,000 net short in just over a month).

We’ve seen, as expected, follow-through battery restocking in the market – Chinese nickel sulphate prices up 3% in one week. Chinese stainless prices have come off a little bit and are showing some weakness (got a bit ahead of itself), but stainless markets in Europe have seen prices improve and scrap discounts have narrowed meaningfully in both the US and Europe after troughing last summer.

EV sales globally were also “going to be bad forever” – no wait a minute, up 32 % YTD February according to Rho Motion

+32% globally (1.5M – 1.9M)
+34% in China
+33% in the US & Canada
+21% in the EU & EFTA & UK

Indonesia

In addition to restocking in the battery sector, a big driver of price support is limits on Indonesian ore supply – reports say that the Indonesian government are limiting the amount of ore supply for this year. An editorial in Jakarta Post – the main English language paper in Indonesia, suggested the following:

‘The idea to establish an OPEC-style organization for nickel was once introduced by President Joko “Jokowi” Widodo and Investment Minister Bahlil Lahadalia. Such an organization could help producing countries better coordinate supply and prices. Perhaps it is a good time to carry on with the plan.’

Why would you want to be in a metal where the supply will be dominated by larger players to keep supply in line? An Indonesian minister was quoted saying that they want to keep prices at $18,000 level (I'm sure they would be quite happy if prices sat 10-15% higher in $20-$21K level). I don’t think they’ll be able to keep pace with demand growth later this decade. 

BHP issue (picking on them again) is that they own a bunch of 3rd/4th quartile cost curve assets that are very old and the only new supply they have is in probably the most expensive jurisdiction (Western Australia) in the world ….

Back to some company news:

Widgie Nickel released scoping study to produce 10ktpa of nickel for 6 years with extension potential.  Capex of $269 million, 22% IRR, $400 million NPV at $24,000 nickel price.   Cash cost of $5.36 per pound.

Premium Nickel (PNRL) released 5 additional holes Highlights include:

SNUG-23-017 (drilled 180 metres down plunge and outside of the South Limb historic resource): 18.15 metres of 2.25% NiEq (1.27% Ni; 1.65% Cu; 0.06% Co) incl. 6.25 metres of 3.28% NiEq (2.34% Ni; 1.40% Cu; 0.11% Co) and 3.50 metres of 3.31% NiEq (1.06% Ni; 4.08% Cu; 0.05% Co)

SNUG-24-089: Drilled 403 metres down-plunge and outside of the South Limb historic resource intersected massive sulphide mineralization (assays pending).

Queensland Pacific Metals - Korean news reported QPM announced a 3-year delay to supply nickel to POSCO/LGES to end 2026 at the earliest.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

Imagine a world powered by clean, renewable energy. Electric vehicles glide quietly down city streets. Solar panels glisten on rooftops. Wind turbines spin gracefully on the horizon. This is the electric future we are striving for - one that copper will play an indispensable role in building.

As the world charges towards electrification, one metal above all will serve as the irreplaceable conduit: copper. The red metal is truly the lifeblood of the energy transition. Copper's unmatched thermal and electrical conductivity makes it a critical component in EVs, charging infrastructure, renewable power systems, and the grid. It's no exaggeration to say an electric future simply isn't possible without copper.

Just how much copper will the energy transition require? Estimates suggest demand could surge 20-30% by 2030 as electrification accelerates - amounting to 5-6 million metric tons of new copper demand per year. This is a staggering figure, equivalent to building over thirty Eiffel Towers out of pure copper annually! EVs alone will be a major driver, using 3-4x more copper than conventional cars. A single EV can contain upwards of 180 pounds of copper. Charging stations and associated infrastructure will further amplify copper needs.

The greening of the power sector will also translate to a copper boom. Solar and wind power are extremely copper intensive, using 5-10x more copper per megawatt than traditional fossil fuel plants. Massive transmission line build-outs to support renewables will create additional copper demand. The EU alone will require up to 4.5Mt of copper for power grids by 2030.

However, the surging demand won't be met without challenges. Copper producers are already grappling with dwindling ore grades, permitting obstacles, and geopolitical risks that could constrain new mine development. Average Chilean copper grades have slipped below 1%, while acquiring permits for a new U.S. mine can take decades. Much of the world's untapped copper lies in high-risk jurisdictions like the DRC. Competing land uses and ESG concerns create further hurdles.

To overcome these headwinds and seize the electrification opportunity, copper miners will need to employ innovative new approaches. Advanced leaching technologies could help unlock production from low-grade ore stockpiles and waste rock. Increased recycling and the processing of scrap like old wiring and e-waste will be key to supplementing mine production. Improving the efficiency of mineral processing and smelting could also boost output.

On the policy front, governments are increasingly recognizing copper's role as a strategic metal. In the U.S., the Biden administration has underscored securing critical minerals supply chains as an economic imperative. Bipartisan momentum is building for permitting reform to support domestic mining projects. Internationally, efforts to "friend-shore" supply chains could direct investment to U.S. copper mining allies like Chile, Peru, and Australia.

Higher sustained copper prices will also be essential to incentivize new production. Fortunately, the compelling demand outlook is likely to support elevated copper prices for years to come. For investors, this creates a tantalizing opportunity. Companies with quality copper assets, experienced management teams, and strong ESG track records could generate impressive returns. The key is identifying miners positioned to capitalize on surging demand while deftly navigating supply headwinds.

The long-term investment thesis for copper is a powerful one. We are on the cusp of a global energy transformation that will require an unprecedented amount of the red metal. The question is not if copper demand will boom, but rather which projects and companies will emerge as the winners to supply an electric future. For investors who believe in the electrification megatrend, gaining exposure to copper is a simple yet potentially lucrative way to plug into the biggest energy shift in a century. The renewables revolution will be built on a copper foundation.
—

Learn more: https://cruxinvestor.com

Sign up for Crux Investor: https://cruxinvestor.com

Our previous interview: https://www.cruxinvestor.com/posts/nickel-price-rebound-supply-cuts-rising-ev-demand-4874

Recording date: 3rd March 2024

Less than 2 weeks ago, BHP in a half-year report commodity outlook:
*“While the supply glut was still contained mainly in the Class-II segment of the industry, operating conditions for integrated sulphide businesses, globally, remained solid. However, since the LME began to take delivery of Sino-Indonesian nickel cathode to its warehouses, thus catalysing price convergence between product classes*, loss-making has become widespread. If the LME nickel price is set to $16,000/t, close to the spot price in mid-February, as much as one-half of global production could be loss-making on a cash plus sustaining capex basis.  Producers adopting more sustainable practices could be disadvantaged in this environment, with their efforts not yet recognised with a commercial premium that could help buffer profitability when the base price declines to cyclical lows. Due to the deterioration in the short-term and medium-term outlook for nickel, we have lowered our nickel price assumptions

We, we note that Wood Mackenzie’s long-term Indonesian nickel production forecast has increased by more than +200% between late–2019 and late–2023. Wood Mackenzie utilises a methodological framework for project assessment based on the kind of hurdle rates of return that a listed Western producer would be familiar with. Consequently, they have been continually surprised when Indonesian projects kept coming forward. These projects were also being delivered at significantly lower costs (and ramping up to nameplate more smoothly) than was thought likely just a few short years ago. Clearly, capital has been committed in the Sino–Indonesian nickel complex based on very different return parameters to those that underpin shareholder expectations of capital allocation processes in the West.

Jim Lennon at Macquarie, one of the only banks that invests time in some fundamental commodity research said that after travelling through China said that demand had been understated by more than 100ktpa and that 40-50 kt of supply had been not properly counted and has revised surplus for 2023 from more than 250kt to 150kt and acknowledgement that some of this is in-process inventory build rather than inventory for sale.  More importantly said that the forecast for 2024 now 40kt – that is just 1% of supply – and acknowledged that if Indo supply fails to grow by 13% of forecast than could potentially move into deficit. 

You see forecasts from 20-30 banks, but in reality, they all come from a combination of 4 sources:  Wood Mackenzie, CRU, Shanghai Metals Market, and in the case of nickel and a few other commodities, the study groups like International Nickel Study Group. (other is copper,lead/zinc)
The banks take one or more of these forecasts, depending on how much focus commodities are at that bank, they then tweak the demand and supply numbers and it becomes “their” forecast so these groups Woodmac/CRU/SMM/INSG basically drive most of bank commodity and even consulting firm analysis. 

International Nickel Study Group generally does a good job but depends on countries to provide forecasts and can do some work but doesn’t have a budget to do lots of fundamental analysis 
Am going to focus on the most guilty – WoodMac’s demand forecasts for nickel have been ludicrous.  They understate trend stainless and nickel demand growth, they overstate the rate at which scrap will grow and then (as BHP noted) do not get Indonesian supply right (that is a tough
In their Q4-2019 demand forecast, they had demand getting to 3.2 Million tonnes by 2030, and 4 million tonnes by 2040 (CNC forecast since 2019 is for 5 million tonnes by 2030, our current thinking is close to 6 million tonnes).  WE ACHIEVED 3.2 MILLION TONNES IN 2023. 

As a concrete example of the “cancer” that creeps in – WoodMac had the most ludicrous example that somehow demands for stainless was going to slow to less than half historical trend growth and that nickel scrap growth was going to increase so primary nickel demand for stainless was going to DROP by 2030 !

This completely crazy forecast has then showed up in reports by McKinsey and BCG who each assured me that the “do their own analysis” but had forecasts that were eerily similar to that flawed *WoodMac* forecast.

*CRU* not as bad, but nowhere close their 2023 forecast in 2019 was 2.75 Mt – again actuals will be close to 3.25 Mt when done – so missed by 500kt …..  That  2019 forecast for 2030 was 3.7 million tonnes, more than a million tonnes lower  than CNC forecast (and where we will likely end up in 2025-2026)

Nickel has grown at 4-5% over long periods of time.  EVs wil drive that higher for next decade so why did they have effectively just trend demand growth until 2030.

Major Supply Squeeze Coming in Copper

Fundamentally, copper markets look poised to face substantial global supply deficits in the coming years. As emerging explorers and developers race to provide new sources of production, substantial upside exists in copper mining stocks today before this pending supply squeeze fully materializes.

Many existing copper mines are aging, with ore grades declining over decades of exploitation. Yet copper demand keeps rising steadily thanks to decarbonization policies and rising electrification hitting energy infrastructure and consumer products worldwide. This demand picture conflicts harshly with the supreme lack of new large-scale copper projects in the development pipeline. The supply lag sets up for recurrent periods of spiking copper prices in the future as demand grows faster than additional mine capacity.

Several mining juniors profiled are advancing projects rapidly or finding high early grades that provide leverage to the pending copper bull run. Hot Chili for example continues expanding their major Coastal Copper resource in Chile, now over 1 billion tons. Meanwhile in Canada, both T2 Metals and Tribeca Resources are uncovering impressive grades that could augment resources substantially with tighter drilling.

Even copper majors like NGEx Minerals offer some protection but with muted upside, as their vast deposits expand potentially for years to come through multi-phase exploration like at the Los Helados project. Investors should evaluate their copper exposure based on risk tolerance, timeline expectations, and desired leverage to cyclical peaks. Fundamentally though, the winds are clearly at the back of copper exposure for those with some patience to ride out the likely turbulence ahead.

Hot Chili
Rapidly advancing major 1+ billion ton copper-gold project at Coastal Copper in Chile with over 300 million tons already at higher grades. Exploration and engineering moving project towards production.

Tribeca Resources
Early-stage explorer finding strong initial grades under shallow cover at Copper Gold project in Chile, recently extended strike length 40% through drilling.

Filo Mining
Majors advancing flagship Filo Del Sol deposit which contains high-grade feeds and continues to expand through extensive exploration like 5400m drilled in January. Massive scale bodes well for production lifespan.
—

Learn more: https://cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

As Chinese New Year comes to an end, nickel prices have moved up to the upper end of the recent range over $17,000 per tonne trading at 3 month high of $17,200. Will wait to see commentary by Monday on current market conditions in China. We will need to see whether it can be sustained but a good start to Year of the Dragon.

Some more capitulation moments – BHP taking multi-billion dollar write-downs on nickel business, threatening to put entire Nickel West operation on care & maintenance as a business lost $200 million in the most recent period. 

Glencore also announced it's not funding Koniambo any further and looking to sell its 49% interest.  The Australian government has now put a nickel on the critical minerals list allowing some (not sure why wasn’t on in the first place) and has announced a royalty cut to help provide further financial support to the sector. 

France offering to provide $150 million in funding for Prony Resources (Goro project) to keep it afloat.  

Canada Nickel announced results at Bannockburn and a new discovery at Mann Central. Holding a conference call on Friday to talk through the exploration plan.

Updated Horizonte estimate came through: $454 million and 18 more months to completion.  Looking to put finance in place by Q2-2024 and complete by Q1 2026. The updated capital cost is now US$1,004 million, approximately 87% higher than the previously disclosed capex budget of US$537 million.

Magna Metals released some good footwall orebody drilling results at their 109FW zone. MCR-234-061: 0.6% Ni, 1.0 % Cu, 9.5 g/t Pt + Pd + Au over 14.7 metres, MCR-24-065: 0.2% Ni, 1.1 % Cu, 11.4 g/t Pt + Pd + Au over 10.2 metres with some higher grade intervals as well

Power Nickel announced results of 6 holes – 4 holes intersecting mineralization - hole PN-23-40 and PN-23-42 carrying some attractive high-grade zones of 12.77 m @ 0.62% Ni, 0.63% Cu, 0.04% Co, 0.78 g/t Pd and 0.22 g/t Pt and 7.77 m @ 0.71% Ni, 0.12% Cu, 0.04% Co, 0.42 g/t Pd and 0.03 g/t Pt respectively.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 13)

Copper prices continue to absorb pressure in early 2024 from a strong US dollar and weak economic data from China. Prices have dipped to US$3.70 / lb and end the week at US$3.80 / lb. Meanwhile it is still hard to define simple metallurgy, good grade, easy geometry, shallow resources. Right on cue American West Metals delivers a maiden mineral resource for Storm which ticks all of those boxes, although investors will need to assess the impact of extreme weather conditions and the indium asset. Elsewhere, the explorers have their drill rigs turning. Merlin discusses two weeks’ worth of results, some excellent, some less good, from the following companies Filo Corp, Surge Copper, Hercules Silver, Copper Fox, Koryx Copper, Trigon Metals, Arizona Sonoran, Amaroq, T2 Metals, Callinex; Xanadu, Benton, Barksdale and Emerita.

—

Learn more: https://cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Nickel prices continue to trade in the $16,000-$17,000 range we’ve been in since mid-December, trading down towards the bottom end of the range after moving towards the upper-end last week.  Expected inventory build emerging with LME inventories continue to move up to 70,000 tonnes level. Have seen a few bumps below $16,000 and may see a bump down to the $15,400 level again before we’re done but moves last day and comments on seeing restocking by the EV chain through Chinese New Year. Optimism that should see restocking after Chinese New Year at end of Feb/into March (Chinese New Year keeps China quiet for about 2 weeks)

Have talked about the impact of destocking in batteries – 4% demand versus underlying consumption growth of closer to 40%. On the stainless front, shook off impact of Chinese economic slowdowns  - China’s CSSC, the stainless steel industry body in the country, has released the full year 2023 stainless output volumes. This shows a 12.6% y/y gain to 36.7Mt, cementing China’s place as the dominant producer of stainless in the world. Within this, nickel-rich 300-series stainless steel grew 11% y/y to 18.5Mt, while 400-series rose 15.7% to 6.5Mt. With imports falling, apparent consumption rose 10.6% y/y.

On company news front over last few weeks:

Canada Nickel announced plans to develop North America’s largest nickel downstream processing plant and largest stainless and alloy plant in Canada at a press conference with the Provincial mines minister, Timmins mayor, and one of the First Nations chiefs.

The Canadian government made a $5-million investment to support the construction of North America’s first cobalt sulphate refinery, dual-listed Electra Battery Materials reported on Friday.

Buxton Resources had another high-grade interval at Dogleg prospect from JV with IGO. 2.6 metres (true width) of over 4% nickel. Starting with this one because I want to highlight how to show intervals to indicate what the interval means (size/orientation of geophysical target, how drill holes relate to previously reported holes)  - if someone has something good (not just promotional), they will do a good job showing the scale of the target and what the data means.

NiCan released a drill hole at the Wine project – shallow, good Ni-Cu grade over good width but again is 15-metre stepout based on scale shown - not sure how relates to prior historic drilling as well.

Some decent results as well from LifeZone Metals – several holes over nearly one kilometres successfully connected one resource to the zone previously drilled (graphic and results highlight new holes plus ones in 2007 and follow-up holes in 2021/2022). Some good grades similar to Kabanga resource, but they were narrower in a few places and some missed along strike so overall scale will be interesting

PNRL had a couple of good sets of results - released some good grade results (had previously shown visual core) and show verify - good to get some real description of dimensions:

SNUG-23-056 (South Limb): 30.45 metres of 2.88% NiEq (1.78% Ni; 1.81% Cu; 0.09% Co) including 15.80 metres of 3.00% NiEq (1.73% Ni; 2.15% Cu; 0.09% Co) and 12.10 metres of 3.14% NiEq (2.06% Ni; 1.73% Cu; 0.11% Co).  

Is beyond old workings and the existing resource – it would be good to get some sense of the true width of these intersections to understand scale.

SNUG-23-060 (South Limb-north): 36.35 metres of 1.64% NiEq (1.01% Ni; 1.00% Cu; 0.05% Co) including 15.40 metres of 2.00% NiEq (1.14% Ni; 1.42% Cu; 0.06% Co) and 4.10 metres of 2.11% NiEq (1.44% Ni; 1.00% Cu; 0.08% Co) and 5.60 metres of 2.76% NiEq (1.84% Ni; 1.41% Cu; 0.10% Co)

SNUG-23-060 (South Limb-south/N2): 38.20 metres of 1.67% NiEq (1.06% Ni; 0.97% Cu; 0.06% Co) including 25.05 metres of 2.03% NiEq (1.27% Ni; 1.20% Cu; 0.07% Co) including 8.30 metres of 3.07% NiEq (1.98% Ni; 1.72% Cu; 0.10% Co)

SNUG-23-062 (N2 Limb): 20.85 metres of 1.64% NiEq (0.85% Ni; 1.35% Cu; 0.04% Co) including 10.85 metres of 2.10% NiEq (1.06% Ni; 1.79% Cu; 0.05% Co)

SNUG-23-064 (South Limb/N2): 102.80 metres of 2.23% NiEq (1.41% Ni; 1.30% Cu; 0.08% Co) including 86.75 metres of 2.64% NiEq (1.66% Ni; 1.55% Cu; 0.09% Co) including 12.95 metres of 2.89% NiEq (1.92% Ni; 1.49% Cu; 0.10% Co) and 14.70 metres of 3.26% NiEq (1.91% Ni; 2.23% Cu; 0.10% Co) and 19.70 metres of 2.93% NiEq (1.99% Ni; 1.43% Cu; 0.11% Co) and 12.25 metres of 2.71% NiEq (1.69% Ni; 1.62% Cu; 0.09% Co).

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 12)

Betting on Copper’s Supply Crunch

Copper prices have pulled back recently amidst a stronger dollar and concerns over a cooling Chinese economy. However, a compelling opportunity is emerging for investors willing to look past short-term volatility – the coming copper supply crunch. New discoveries and mine capacity expansions are not keeping pace with global demand growth and existing operation grade declines. As major producer Chile highlights, copper output could fail to surpass 2% annual growth this decade versus estimates near a 3% historical rate. Yet copper’s essential applications from electric vehicles to power infrastructure leave consumption marching steadily higher. This backdrop points to material pricing power shifts toward copper miners as buyers compete for inadequate future supply.

Astute investors can position early with select copper developers and explorers ahead of the crowd. These companies offer substantial upside potential before positive supply-demand fundamentals grab wider attention across the copper sector. For example, QC Copper & Gold already holds 12 billion pounds of copper resources amenable to open pit mining in Quebec, but trades around a paltry $25 million valuation. As permitting and feasibility studies progress, QC’s fundamentals plainly outweigh its current market capitalization. Targeted explorers like American Eagle Gold also offer huge lift potential from new discoveries before enough drill success gets priced into share values. American Eagle recently hit an impressive 302 meters at over 1% copper equivalent on its British Columbia project.: 

The copper market outlook offers perhaps the most bullish set-up among commodities this decade. Yet it remains overlooked relative to historic copper bull runs. Value-focused investors can capitalize early on coming pricing strength by identifying assets and equities substantially disconnected from copper’s positive underlying supply and demand drivers.

—

Learn more: https://cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

We have seen the 5% move – to the downside - from our last discussions when nickel prices were bumping up against the top end of their recent range in the $16,800-$17,000 and we’ve tested $16,000 level multiple times with a few minor breaks below.
 
This is creating the capitulation which heralds a bottom – I had been calling for a turn to happen in the New Year (either post the calendar or Chinese New Year – the latter most likely) – recent events make that even more likely and seeing some green shoots of the positive turn already
 
The Capitulation

Wyloo putting its Mincor operation on care & maintenance which it just bought a year ago. Cassini 1.2 Million tonnes at 3.3% nickel.

BHP in turn is putting its Kambalda concentrator (fed by Mincor) on C&M which effectively cuts out a number of operations paths to market.  It also impacts the amount of Mt.  Keith concentrate which can be processed because the flash furnace needs to blend feeds.

BHP looking at a write-down on their nickel business (based on reported data, their sulphate plant not producing or selling much, cost pressures across rest of the business) and including their Oz Minerals acquisition and ni.

First Quantum suspending mining at Ravensthorpe (will feed plant from stockpiles to save cash).

South 32 reviewing their Cerro Matoso FeNi operation – this is a 40-year-old laterite mine – remember laterites are relatively easy to high-grade.

Majors tend to be behind the curve and the production cuts they announce end up helping create the bottom.

The Green Shoots

Seen a small increase in stainless steel and NPI prices in China (despite the negative mood).

Beginning of restocking in EV and supply chain:

Thesis for this year – restocking to kick in to drive double-digit demand growth and push prices back up to $20K by year-end!

US 2023 year-end sales 1.4 million – up 50% for the year and still exiting with December up 42% - hardly collapsing…..Global plug-in sales up November up 31% (total YTD up 38%)

Company News

SPC Nickel published solid initial resource at West Graham – 19 Mt at 0.42% (0.57% Ni-eq), is an open pit.

Brazilian mining ministry endorsement of the Plan of Economic Assessment (PAE) confirms that Centaurus Metals has met all technical requirements for the mining lease and can implement the project – one step closer to the final permit.

Talon Metals had splashy results 5.93-meter  intercept of high-grade massive nickel and copper mineralization assaying 2.92% Ni and 1.73% Cu (4.09% NiEq), which includes a 2.2-meter (7.2 feet) intercept of high-grade massive nickel and copper mineralization assaying at 6.84% Ni and 3.80% Cu (9.31% NiEq). The other 2 holes released were not too spectacular.

Visionary Metals next set of assays from its Wyoming project – very greenfield project – targets were a little narrow, but still early days.

Archer Exploration – exploring Grasset deposit originally discovered about a decade ago by Balmoral resource.  Some OK grade but narrow and deeper.

Premium Nickel couple of interesting results and decent grades with some width (but no true widths) – but please compare it to Mincor resources which is now going to be closed.
 
—

Learn more: https://www.cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

Previous recording: https://youtu.be/2eEQhElc4Tw

Recording date: 19th January, 2024

Nickel Market Poised for Deficit by 2024 as Demand Booms

Nickel prices failed to plunge as low as expected in early 2023 due to destocking along the EV supply chain, but underlying demand growth remained resilient at 9% annually from 2020-2022. While temporary factors kept consumption subdued last year, the electric vehicle revolution continues to drive rapid nickel demand expansion.

With supply growth still reliant on Indonesia in the face of several other operations closing, the stage is set for a potential nickel market deficit by 2024. Export quota changes could see Indonesia constrain supply, just as soaring EV uptake spurs further inventory restocking and double-digit nickel demand growth globally.

Surging nickel consumption in North America as EV penetration accelerates will make the region a major demand driver. Relentless demand against capped supply will require price signals to incentive substantial new mine investment. But after a turbulent 2023, nickel appears gearing up to fulfill its potential as an indispensable metal in a rapidly electrifying world.

The supply challenges emerging just as demand hits its stride likely create a promising risk-reward investment profile for nickel exposure moving forward. As the decade unfolds, the metal could emerge as one of the primary beneficiaries of the unstoppable momentum behind EVs.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 11)

Copper prices have been falling in real-money terms for 20 years and this has to change in the face of sustained demand growth. The incentive price for new copper production is likely to rise as supply falters due to i) depth of resources ii) grade of resources iii) discovery rate of resources iv) higher interest rates and v) inflation.  

Quality shallow exploration projects with good grades, simple metallurgy and infrastructure advantages will trade a premium. Go Explorers! 

Merlin discusses results from Benton Resources, Hercules Silver, and Cascadia Minerals. Hercules Silver produces an almost perfect news release and decent results. Benton Resources remains at unchallenging valuations.

—

Learn more: https://cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 10)

Copper prices were range-bound over the year. Unexpectedly strong demand and unexpectedly weak supply kept copper prices close to the US$4/lb level. In real terms copper prices have actually fallen since 2006. Supply looks tight and demand looks strong for the foreseeable future. Mind the Gap, Go Explorers! Talking of which, there are results out from: 

Brixton Metals, Tribeca Resources, Benton Resources, Gladiator Metals, MTB Metals, Barksdale Resources, Serabi Gold, and Nicola Mining. Benton Resources - once again - is the pick of the bunch, although Gladiator Metals catches the eye as well. 

—

Learn more: https://www.cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Nickel popped up over $17,000 per tonne after the big moves of the other week and is now around $16,800. Will be interesting to see what happens through year-end. We could see some more 5% moves that we had seen a month ago in the next few weeks. Lower trading volumes during the Christmas period have historically led to commodity funds trying to “shove” the market in a new direction.

Global EV sales (BEV and hybrid) in October were up 37% and US sales are up 38% y-o-y.

A few pieces of news, drill results & resources before year-end:

Canada Nickel extended their bridge loan from Auramet by just 30 days (had the opportunity to do 90 days) – and made the comment that they expect to complete various financing and off-take discussions during that period.

Western Mines Mulga Tank – we talked about last call - Got some additional drill holes with similar wide intervals of Crawford-like grades and got a metre interval at 1.8% nickel and 4.8% copper. Again, keep an eye on this one!

Lifezone’s Kabanga project announced a new resource – the best undeveloped high-grade resource (initially discovered in 1980s), as it is in a challenging location – just over 1 million tonnes contained nickel across all categories Attributable Measured and Indicated Resources total 43.6 million tonnes grading 2.02% nickel, 0.28% copper and 0.16% cobalt (2.57% nickel-equivalent). Plus, attributable Inferred Resources totaling 17.5 million tonnes grading 2.23% nickel, 0.31% copper and 0.16% cobalt (2.79% nickel-equivalent). Measured and Indicated Mineral Resource tonnages have increased by 69% relative to the February 2023 Mineral Resource Estimate. The nickel-equivalent metal contained in Measured & Indicated Resources has increased by 30%. Inferred Resources have also increased in tonnage by 20%, with contained nickel-equivalent metal increasing by 4%.

Widgie Nickel – Armstrong deposit (one of a bunch of deposits). Total Resource of 959Kt @ 1.4% Ni for 13,820 nickel tonnes. 19% increase in Indicated resources to 13,720 nickel tonnes. Scoping study pushed into 2024.

Lunnon Metals at Foster South project delivered metallurgy results - an average of 91.4% recovery for nickel, concentrate grades of 17.3% nickel and 12.9% nickel. Premium Fe:MgO ratios of 19:1 and 17:1; negligible arsenic levels. Lunnon also added a small resource near its Baker project and Lunnon Metals’ global MRE across the KNP increased to 3.8 million tonnes @ 2.7% nickel for 104,400 contained nickel tonnes, a threefold increase in tonnes and more than 2½ times more nickel metal in MRE than at the time of the Company’s Initial Public Offering in June 2021.

Some big negative news:

Panoramic Resources filed for bankruptcy – talked about it on our last call. Almost 2% Ni-equivalent grade, deposit next to past producing mine, has its own mill already. As said last time should be a warning about automatically assuming grade equals profit – is just one variable!! One of the other companies that stumbled had a big Board change this week.

Horizonte saw former Board members “retired” and the LaMancha group, one of the key shareholders, installed one of their own as CEO and changed out multiple Board members. A very good sign is that Maryse Belanger is taking over as COO – she’s a rock star, and did a great job turning around Santa Rita for Mirabela – unfortunately, the collapse in nickel from $8.00/lb to $4.00/lb fell faster than they could cut costs. The work that she and her team did set it up for the restart of the asset by Appian a few years later.

IGO announced a review of the Cosmos project it picked up with the Western Areas acquisition. While the Review has not yet concluded, and while we continue to assess life-of-mine scenarios for the Project, IGO will transition to an ore trucking operation in the interim, rather than utilise a mechanised materials handling system as previously planned. As a result, construction on this part of the Project has been halted. Regretfully, there will be an impact on some roles, however, IGO is working on redeployments within the IGO business and is providing all the necessary support to our people through this process. IGO expects to provide the market with a further update on the outcomes of the Review in the December Quarterly Activities Report which is scheduled for release on 31 January 2024. IGO advises that it is likely to record a further impairment against the Cosmos assets in the Company’s First Half FY24 Results.

—

Learn more: https://cruxinvestor.com/categories/commodities/nickel 

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 9)

Merlin is still catching up from travel and jury duty, but he is not alone - Bloomberg appears to be six weeks behind Copper Bottomed in calling out a tight copper market for 2024. Meanwhile, Friedland promotes with energy and soon after, Ivanhoe Mines taps the market for C$500M. Dr J.M.Wise reminds us that copper mines take (on average) 16 years from ‘discovery’ to production - which means that resources defined in 2024 will likely only start production in 2040. Mind the Gap, Go Explorers! Talking of which, there are results out from: Pampa Metals, Kodiak Copper, Pacific Ridge Exploration, Benton Resources, Vizsla Copper, MacDonald Mines, Sterling Metals, and Mirasol Resources. Benton Resources - once again - is the pick of the bunch. Copper Equivalents continue to rear their ugly heads in news releases, undermining the integrity of the reporting company.

—

Learn more: https://www.cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 8)

Travel has delayed this weeks’ Copper Bottomed a few days… but hang in there, it’s a corker. 
The Market section discusses some of the aspects of the Panamanian decision to close Cobre Panama, and the wrong-think and politics behind the decision. Thousands have lost their jobs, the mine produced 5% of GDP and 75% of exports, and the government will almost certainly lose in international arbitrage. A terrible outcome for everyone, and it will take years to unpick. 

In other news, Goehring and Rozencwajg published excellent research, but Merlin uses an ICSG from 2019 report to challenge their assumptions on the success (or lack thereof) of hydrometallugical processes on copper concentrates. Meanwhile, the drill bits have been active and results have been published by Filo Corp, C3 Metals, Ivanhoe Mines, Copper Road Resources, Northisle Copper & Gold, Avrupa Minerals. 

The art of writing cogent and succinct news releases seems to be dying. The use of copper equivalents continues, doing no favors to any company, least of all Filo Corp as all it highlights is metallurgical uncertainty.

—

Learn more: https://www.cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Nickel prices did a 5% up and down round trip during the period - touched $15,500 level, then with a few days a nice little squeeze back up to $16,750 driven by Indo news I flagged was coming at the end of this month, and is now settling in either side of $16,500. 

Inventories continue to grind slowly highly – am surprised we haven’t seen some chunky LME deliveries during this period - may still see some going into year-end before we start moving higher early in the new year.

Good signs from both the copper market and iron ore prices in China so still convinced should see good stuff coming in the first quarter.

Indonesian government announcing pricing deals at a conference at the end of the month. With nickel prices coming off, seeing further convergence – sulphate was trading and NPI discounts continuing to narrow.

When bouncing off a bottom as we are doing now. A good rule of thumb for prices - is long-term price typically is 90% of the cost curve and 70% of the cost curve for short-term.

Big news this week “Entities of Foreign Concern” – qualifying for credits can’t have 25% or better interest from a Chinese company (or other unfavouable country/region). Benchmark highlighted that 82% of supply in Indonesia is MAJORITY Chinese controlled (is one of the key reasons why the US not rushing into an FT deal with Indonesia).

LME also dodged a bullet with a lawsuit. They have some pretty broad language in their regulations that allows them to do pretty much whatever they want to “maintain an orderly market”. Despite cancelling trades being highly problematic on multiple fronts, it falls within their purview.

Company News: 

Blackstone Minerals picking up another Manitoba nickel project (is a great jurisdiction!). Wabowden and Bucko Lake deposits – series of payments for $70 million through to production. Bucko was mined in mid-2000s by CaNickel but the mine collapsed and didn’t reopen. They’re looking at open-pitting some of these deposits – not hugely wide but good grade (for open pit). Keep an eye on this one.

Some spectacular infill results from Widgie Nickel (heading to resource in early 2024) from Mt. Armstrong deposits (this one was previously mined in 2 separate occasions).

Fathom Nickel got some narrow higher grade intervals (1-3% nickel) within broader disseminated intervals from their Gochager Lake project – a small high-grade past producer. No big fire yet, but lots of smoke.

Centaurus Metals got some deeper 1% intervals which shows that the mineralization extends more than 300 metres below the current resource. Aiming to get contained nickel +1 million tonnes.

SPC Nickel got some good final resource drilling results.

Western Mines Group – Mulga Tank – disseminated Crawford-like orebody – some good higher grades in the central core of structure – multi-hundred metres 0.3% nickel and good nickel:sulphur ratios. Economics in Western Australia is more challenging than in Ontario but good to see big potential resource – is one to keep an eye on and the market cap is pretty modest.

Alaska Energy Metals released initial inferred resource 320 million tonnes @0.22% nickel+CU+PGMs

Premium Nickel release another set of drill holes – more holes with consistent grades. Hinted at some longer intervals of mineralization – will see what assays come through for those.

On the carbon front, BHP hired ARCA (UBC spinout) to look at CO2 capture using Mt Keith tailings. Good to see more people recognizing the potential of mineral sequestration.

Panoramic Resources looking for a buyer for Savannah mine. Past producer restart which has not gone well – don’t want to be broken record, but this is a resource at brownfield site 13.45Mt @ 1.56% Ni, 0.70% Cu and 0.10% Co for 209.8Kt Ni, 94.2Kt Cu and 13.7Kt Co contained metal (about 2% Ni-Eq) and couldn’t make work!

Something you don’t see very often, Norilsk PAID someone to sell their share in the Nkomati asset in Southern Africa. Old low-grade disseminated open pit which produces a very low-grade concentrate.

Financings:

Perseverance Metals (private company) – a bunch of old FNX crew raised $2.8 million in Targeting higher grade nickel sulphides in Michigan, remote Quebec, and NW Ontario. Some good historical holes at some of the properties. Michigan was owned by Bitterroot Resources – good to see targeting new discoveries. Potential for good promo holes. Let’s hope they find some good nickel – we need it all.

Fathom Nickel raising $4.5 million.

Premium Nickel raised a total of $22 million – $17 million in equity and expanded the existing debt facility by another $5 million. In exploration-stage companies without a clear path to major milestones, debt is dangerous. We stated a warning on this one last time. Hope it doesn’t come true – but this is one that has massive downside risk from the current valuation. 

— 

Learn more: https://cruxinvestor.com/commodities/nickel 

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 7)

A double-header this week as Merlin was on Jury Duty for the past fortnight. Key market news includes Supreme Court of Panama ruling that the Cobre Panama contract was unconstitutional. The mine produces about 25,000 tonnes of copper per month and has closed down, temporarily one would think. 

Also in the news is the purchase of the 1.9 Mt contained copper Khoemencau project by China’s MMG for US$1.9 billion. Another major that finds it easier to buy than to discover. 

Merlin then runs through two weeks’ of exploration results from: DLP Resources, American Pacific Mining, Atico Mining, Cascadia Minerals, Lara Exploration, Halcones Precious Metals, Northstar Gold, O3 Mining, Benton Resources, Minsud Resources, Arizona Sonoran Copper and Pacific Ridge Exploration. 

Poor drafting abounds, and several companies continue to ignore TSX reporting guidelines. Repeat offenders are losing airtime. Benton Resources is producing some cracking results. 

—

Learn more: https://cruxinvestor.com/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 5)

Copper has long been considered a bellwether for the global economy, yet prices have held up remarkably well lately despite economic headwinds. This resilience is signaling strengthening fundamentals poised to drive copper higher. Supply constraints are mounting while demand continues to expand, tightening the market more rapidly than expected.

Most impactful was Ivanhoe Mines’ mega discovery in the Democratic Republic of Congo of over 16 million tons of 3.55% copper along with 154 million tons at 1.89% copper. This remarkable grade is nearly 7 times the global average, with over 3 million tons of contained copper. Once infrastructure is established, this could be a generational low-cost, high-margin mine.

Alarm bells are ringing on the supply side as smelters struggle to source enough copper concentrate. Trafigura is now having to help Chinese smelters obtain sufficient imports to meet blistering demand. With mines already operating full tilt, this sets the stage for the type of demand-driven copper bull markets of the past.

Meanwhile, Cobre Panama, one of the world’s largest new copper mines, is experiencing severe production issues. Output is being throttled back as protests block port shipments. Many experts believe its mining license will be revoked, potentially removing 300,000 tons of supply next year. This would substantially reduce the forecast 460,000 tonne market surplus in 2023.

The demand backdrop remains positive for copper as well. Commitments were renewed at COP27 to triple renewable energy capacity by 2030. This will necessitate a tremendous amount of copper, as renewable systems require 4-5 times more copper per megawatt than conventional energy.

While inflation is easing a bit, governments are still spending heavily on infrastructure and stimulus programs. Manufacturing and construction activity in top consumer China have also picked up. With the electrification of transport gathering pace, copper demand looks resilient despite economic hurdles.

The takeaway is clear - new supply is not coming online fast enough while demand continues expanding. Copper prices need to rise considerably to incentivize the huge investments required for new mines. Juniors offer upside potential, but extensive due diligence is mandatory given the risks.

With global decarbonization accelerating, copper will become increasingly scarce. Its essential role in renewable energy makes it poised to be one of the best performing commodities of the coming decade. Investors seeking commodities exposure should have copper at the top of their list. The warning signs of a major supply shortfall are already flashing bright red.

Learn more: https://cruxinvestor.com/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Nickel, trading down again around $17,000/tonne level (think may briefly touch $16,500), but expect to trade in its recent range between $17,000-$17,500 before we start moving higher at year-end. LME inventories in the same range. Ore and NPI prices both came off their recent highs as was reported that Indonesia granted some temporary ore quotas to reduce the need to import ore.

Before getting to company news, and a follow-up from last week, global EV sales were up 23% in September and YTD up 39% - hardly a death spiral that you might think given some of the recent headlines…Remember some key markets saw the removal of some subsidies which obscure overall trend.

Is anything wrong with CNC?

Spruce Ridge just acquired 80% interest in Homeland Nickel with the project in Oregon which was home to US’s only nickel mine for quite a while. Steve Balch, interim President and CEO, stated, “Spruce is poised to enter the U.S. critical minerals market with two important properties containing significant resources of nickel with further expansion potential. We have now signed the definitive agreement to complete the acquisition. Together, Cleopatra and Red Flat have resources equivalent to over 1 billion pounds of nickel.” Cleopatra and Red Flat are nickel laterites with resources identified in soil and rock. The most recent work included unpublished NI 43-101 reports (“Evaluation of the Cleopatra Ni/Co Property Mining Potential, Curry County, Oregon, U.S.A.”, A.J. Rancourt, 2009 and “Evaluation of the Red Flat Ni/Co Property Mining Potential, Curry Country, Oregon, U.S.A”, A.J. Rancourt, 2009) which identified total inferred resources at Cleopatra of 39.5 Mt grading 0.93% Ni and at Red Flat of 18.8 Mt grading 0.84% Ni both using a 0.7% Ni cut-off.

Horizonte Minerals, from bad to worse, and not sure what’s worse than worse. Provided project updates, ”to manage resources and funds whilst undertaking discussions with the Company’s cornerstone shareholders and lenders, the Company intends to reduce construction activities at Araguaia, advancing only critical work streams” to preserve remaining cash into the new year. Not expecting the funding solution to close until the end Q1/24. On earlier shows, we were suspicious of capex estimates (given Barro Alto and Onca Puma costs), but after multiple investors came in, thought maybe we were being too hard…

Centaurus announced a further delay in completing FS – now coming in Q1/2024 because engineer Ausenco needed more time to complete opex and capex estimates as suppliers are slow in responding

TLO released 14 holes – some good grades – 14 out of 20 outside the current resource.

IGO-Buxton Resources JV – had one of the best holes and new greenfield discovery in the Kimberly region in the north.  Good picture of “pentlandite eyes” in the core and a well-laid-out release which lets you see the size of the target (currently not massive)
Table 1: Dogleg Prospect Significant Drill Intersections: 23WKDD003 177.34 13.24metres of 4.35Ni,  0.34Cu,  0.15Co includes 5.60metres of 7.47Ni, 0.31Cu, 0.25Co

IGO - Cosmos - have spent more than $A500 million developing so far, suspended guidance for the year. Was part of the acquisition of Western Areas they wrote off nearly $A1 billion shortly after the acquisition. Figuring out how to ramp up. Talk about grade so often – this is a past-producing mine targeting new deposits with 10 million tonnes at 2% nickel and they’re struggling. 

Premium Nickel (PRNL) also released drill results – consistent with what’s there but grade x widths at the depths they’re talking about are tough to see how economic it is.

SNUG-23-025 (South Limb): 9.25 metres of 1.78% NiEq (1.35% Ni; 0.67% Cu; 0.07 % Co)

SNUG-23-018 (N2 Limb): 9.85 metres of 1.28% NiEq (0.77% Ni; 0.95% Cu; 0.04% Co)

including 5.6 metres of 1.06% NiEq (0.50% Ni; 1.13% Cu; 0.03% Co) and 2.45m of 2.24% NiEq (1.75% Ni; 0.72% Cu; 0.09% Co)

After Horizonte Minerals and Chalice Mining,  need to highlight this company valuation (and kudos to them for getting it to this level) relative to other projects in the nickel space.  It’s more than a number of other nickel projects with larger and/or higher grade resources, much more advanced, is ¾ of Centaurus which is going to have FS out shortly.

Learn more: https://cruxinvestor.com/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 5)

This week's discussion covers recent exploration results and market news related to copper mining companies. Merlin starts with Arizona Sonoran who announced drill results from its Parks/Salyer and Cactus Mine projects in Arizona, USA. The company completed infill drilling at 38-meter spacings at both deposits, highlighting continued mineralization. The best results were 1.97% total copper over 165 meters at Parks/Salyer and 83 meters at 2.5% soluble copper at Cactus East.

Valhalla Metals, a small exploration company with an $8 million market cap, reported results from its maiden 4-hole, 1100-meter drill program at the Sun project in Alaska, USA. Highlights included 21 meters at 6.8% copper equivalent. However, only 1.3% was actual copper, with the rest being zinc. The company used questionable assumptions for the copper equivalent calculation. Overall, the project relies on nearby infrastructure being built by Trilogy Metals.

Benton Resources, market cap of $24 million, announced partial assays from its first drill program at the Great Burnt copper-gold project in Newfoundland, Canada. Early highlights included 4% copper over 3 meters and 8% copper over 4 meters. Due to early success, the initial 2000-meter program has been expanded to 4000 meters. However, the news release included confusing technical jargon and lacked cross-sections. Previous drilling delineated a 670,000-tonne resource at 3% copper.

Imperial Metals, market cap of $312 million, drilled 165 meters at 3% copper at its Whitting Creek target, located 8.5km from its past-producing Huckleberry mine in British Columbia, Canada. The intersection is at the reserve grade of the former mine, which closed in 2016. More exploration work is underway to potentially expand resources and restart the Huckleberry Mine.

Mine supply is expected to peak in 2026 while the project pipeline is low, pointing to supply shortages. $120 billion of investment is estimated to be needed over the next decade to fill supply gaps. Demand continues to grow, especially related to electrification and grid infrastructure. Overall, higher copper prices will be needed to incentivize new mine development.

Learn more: https://cruxinvestor.com/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Nickel prices trading this AM at $17,600 ($8.00) after trading back up to $18,000 at start of the week. Got a little boost as a few thousand tonnes came off LME inventories taking them back to where we were at the start of October. Expect nickel prices to bounce off the bottom here for the next little while until we underlying growth in both EV and stainless comes through and we get past battery chain destocking from lower lithium prices (will get into some of the details later in the discussion today).

“Great convergence” still underway – sulphate prices trading flat to nickel prices, NPI discounts continue to contract by another several per cent, and MHP now trading at 78-80% of LME price (about halfway back to the low 90s% level 18 months ago). One analyst reported seeing more contracts now incorporating processing fees (25,000 RMB / $3,400 per tonne) rather than %.
Bulls emboldened to push back as more stories about ore quotas and ore imports from the Philippines. Indonesia set to unveil new pricing mechanisms at the end of the month – stay tuned. Indonesia has more control over the nickel market than OPEC did at its peak – no 4X increase in price, but will do what it takes to maximize value from a finite resource base.

China’s Stainless Steel Council has released the country’s output figures for the first nine months of this year. Crude stainless steel output over this period was 26.6Mt, up 11.8% on a y/y basis, while that of nickel-intensive 300-series was up 14% y/y at 13.6Mt. Combining production and trade, China’s stainless steel apparent consumption rose 9.2% y/y to 22.3Mt during the first nine months. Will see production rates drop off a little bit during the last few months as Chinese seasonal demand is not as strong as anticipated – but strong demand given all of the economic headwinds we’ve had over the last 12 months.

EV sales – will have more next week for September – but China is up 22% y-o-y.  People seeing a few models not selling well and extrapolating across the market – will be interesting to see what totals look like for the US. Will have more on this next week.

Rumours of possible limited FT agreement with Indonesia. Letter from bipartisan.

Not a concern – we need some amount of Indo nickel into US/Europe – no real new Western supply- effectively zero in next 2-3 years. Western car companies (particularly the higher end of the market, not going to depend on high carbon, environmentally damaging nickel from Indonesia. 

Canada Nickel Crawford project is the only large sulphide project that can come online by the end of 2027. We need more than half a million tonnes for US/Europe. We need EVERY big project in Canada to come to market – current across-board weakness is not reflected in physical discussions. The urgency of automakers and battery supply chain has taken a massive step change in the past 6 months – we are formally starting our process for Crawford in early December once FS report is filed end of month and expect it is going to be a very fun, profitable process for our shareholders. 

Glencore announced that Nickel Rim South (core mine in Sudbury) going on care & maintenance next April. Will be replaced by Onaping Deep mine which is ramping up in Sudbury. Keeping on C&M to be able to access Vale’s Victor deposit (which is larger than the original Nickel Rim Deposit) – is a shame for Sudbury & Canada that this hasn’t happened yet (was a key part of synergies in the 2005 Inco-Falco merger).

Magna Mining released more drill results from 4 holes from its Crean Hill project – the best intercept (into crown pillar) was 96m of 0.75% Nickel, 1.29% Copper, and 2 g/t PM.

Learn more: https://cruxinvestor.com/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

The Battery Show (Copper Bottomed, Episode 4)

Copper prices hit $3.67/lb this week, up from $3.57/lb last week, partly driven by protests in Panama that threatened production at First Quantum's Cobre Panama mine. The mine contributes nearly 5% of Panama's GDP but protests erupted after the government rapidly passed a law extending First Quantum's mining concession by 20-40 years. The protests highlight political and social risks for mining projects, even major contributors to local economies. The resolution of the protests remains uncertain but Panama relies heavily on Cobre Panama so an extended shutdown seems unlikely.

The copper market faces a 460,000 tonne surplus in 2024 per the International Copper Study Group. However, Anglo and Teck recently cut guidance so the market could balance or even tighten if more mines miss targets. Tightness underscores the asymmetry in copper due to the lack of new mega projects coming online in the next decade.

Filo Mining discovered a new high-grade copper/gold zone outside its main Aurora resource area in Argentina, highlighting expansion potential. However, with a $2.3 billion market cap, significant new discoveries are needed to double Filo's valuation. The resource used relatively high metal price assumptions while the latest results used more conservative prices. More metallurgical work is also needed. Filo is a quality asset but substantial upside is challenging from the current share price.

Lion Copper & Gold hit high-grade copper intercepts but they were 700-900 metres deep, likely requiring underground mining. The results are encouraging but Lion needs to better demonstrate potential to delineate high-grade zones for a lower cost open pit before getting investors excited. More complete drill hole depth disclosure and metric unit reporting would also help.

Meridian Mining discovered a 3+ km long copper/zinc zone near its flagship project which could provide additional mill feed. However, reporting excavation results as copper equivalents based on existing resources is questionable. The potential value from the new zone is also unclear until more detailed economic studies are done. Meridian has upside but still carries risks typical of single-asset junior miners.

The copper market shows signs of emerging tightness but juniors with new discoveries still need to de-risk projects substantially before onboarding large institutional investors. Retail investors with higher risk tolerance may find upside in selecting exploration stories like Filo, Meridian and Lion but expect volatility and invest small amounts as part of a diversified portfolio.
—

Learn more: https://cruxinvestor.com/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Nickel prices bounced off the $17,500-$18,000 range as expected, with inventories continuing to gradually increase. The "great convergence" continues as the premium between nickel sulphate and NPI has narrowed.

Fastmarkets launched new price indexes for nickel pig iron (NPI) and mixed hydroxide precipitate (MHP) exports from Indonesia to bring more transparency to battery raw material markets.

Indonesia is re-confirming the ban on new class II nickel smelters to maintain balance between nickel ore supply and demand. Mining quotas will likely be used to manage supply.

Company News:
Canada Nickel released a feasibility study for its project. Alaska Energy released more drill results for its bulk tonnage nickel project and plans to release an inferred resource in 2023.

Rio Tinto signed an agreement to earn up to 80% of a nickel project from Sultan Resources by spending $2m on exploration.

Alliance Nickel delayed its feasibility study for its nickel leach project in Australia to mid-2024 due to higher than expected costs. Australian nickel leach projects have historically struggled, so new projects will need cautious evaluation.

Learn more: https://cruxinvestor.com/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

Copper Bottomed, Episode 3.

This week's copper exploration news highlights both positive results and poor reporting practices. Doubleview Gold reported strong copper and scandium grades but misleadingly used copper equivalents, violating disclosure rules. American Eagle Gold also reported copper equivalents despite promising 900m of 0.5% copper. Kodiak Copper reported more copper at its MPD project but persists with questionable copper equivalents.

On the positive side, Galantas Gold properly reported 1.87 g/t gold, 1.17% copper and 1.2% zinc over 34m at its Omagh project without resorting to equivalents. However, slow progress with just 5 holes drilled in 10 months explains the stagnant share price. Excelsior Mining is being funded by BHP's Newmont to explore the Johnson Camp copper project, with good grades like 7% copper over 130m. This offers non-dilutive funding while Gunnison remains problematic.

American Pacific Mining reported an excellent 1.78% copper and 13.73% zinc over 23.4m but the share price has languished despite multiple project acquisitions. Ownership structure and plans for the Palmer project are unclear. Finally, Decade Resources reported promising copper hits and increased volume and share price traction, with mineralization outlining over 200m. However, reporting copper equivalents was unhelpful and cross-sections would aid understanding.

Overall, some promising results but poor reporting practices persist, confusing investors. Juniors need to focus on transparency, accelerating work programs, and clarifying ownership structures and financing plans to build market confidence. Adhering to disclosure rules and reporting standalone grades without questionable equivalents would also help. Promising projects need time and careful execution to prove themselves.
—

Learn more: https://cruxinvestor.com/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Copper Bottomed, Episode 2. Our latest addition to the Crux Investor Batteries thematic. 

The copper price has shown resilience in recent weeks, trading around $3.60/lb, despite bearish predictions of a 467,000 tonne global surplus in 2024 from the International Copper Study Group (ICSG). Major new mines are slated to ramp up production, potentially outpacing demand growth. However, early drilling results from junior explorers around the world offer a glimmer of hope that new discoveries could help fill future supply gaps. While not without challenges, leading juniors have reported impressive early-stage intercepts, contingent on further delineation.

Double View Gold generated substantial investor enthusiasm with reported copper-equivalent grades up to 1.09% over 552 meters at its British Columbia project. However, with the actual copper grades quite modest, the company likely erred in publishing the misleading equivalents without an initial resource estimate as required by regulators. While gold, silver and scandium offer additional upside, metallurgical recoveries are still unknown. Double View also likely faces delays in its planned Q1 2024 maiden resource. More transparency around timelines and contributory metals would serve investors better than flashy copper equivalents.

Peru-focused DLP Resources fell into the same trap, touting 0.81% copper-equivalent grades that proved unsupported once underlying assays showed just 0.7% copper. By factoring in minimal credits from silver and molybdenum too early, DLP inflated perceptions of the potential copper resource. Investors should remain focused on actual metal grades rather than homogenized equivalents when reviewing early-stage exploration results.

In contrast, Hercules Silver executed an exemplary drill result release after intersecting 185m of high-grade copper at its Idaho project. Rather than wrap the results in a copper-equivalent bow, Hercules simply reported the outstanding 1.9% copper intercept transparently alongside modest silver and gold byproduct credits. Combined with releasing exceptional visual core photos, Hercules gave investors an accurate and exciting view of the discovery's world-class potential, powering a doubling of its share price.

C3 Metals also impressed by transparently outlining both significant upside and technical challenges from early drilling at its Jamaica project. Highlighting issues reaching target depth shows leadership and provides a balanced perspective. While grades currently seem modest, C3 systematically outlined an impressive scale copper-gold porphyry system with ample room for growth through further delineation.

Conversely, Aston Bay Holdings faces extreme challenges advancing a very high-grade copper-zinc discovery in remote Nunavut, Canada. The region's lack of infrastructure means only massive, exceptional deposits have hope of feasible development. Thus, impressive initial assays are currently insufficient to attract investor attention absent a dramatic increase in delineated tonnage.

Similarly, Turmalina Resources requires further drilling to prove continuity before its narrow but exceptionally high-grade Argentine copper-gold intercepts can be considered a valid development target. Promising results must evolve into contiguous, mineable mineralization to upgrade speculative appeal.

In summary, disciplined explorers with a track record of transparent reporting and communication stand the best odds of attracting investor capital amid sector volatility. While analysts call for copper market surpluses, exciting junior exploration results provide optimism that the next generation of deposits can offset the impending supply growth challenge.

Learn more: https://cruxinvestor.com/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Nickel prices bouncing off $18,000 ($8.20) again for the balance of the week. Still expect further move lower down to $17,500 level – have seen a steady increase in LME inventories (still at a low level of 45,000) up about 1-2,000 per week

“Great convergence” – sulphate premium to briquette hanging in, NPI prices hanging it similar levels even with ore prices edging down slightly. Heading into a period where the Philippine's rainy season disrupts shipments and according to sources still seeing ore heading to Indonesia so interesting to see what will happen over the next few months as people stock up in advance

Big News out of China:

Big news overnight was Chinese stimulus which appears multiple measures to halt a slowdown in the economy.  Policy support has returned to the Chinese economy, with a plan approved to raise the fiscal deficit to 3.8% of GDP, well above the 3% target set earlier in the year. Furthermore, over and above this deficit the NPC has approved issuance of RMB1trn in long-term construction bonds, with half the funds to be spent in Q4 and half in 2024. PRC Macro note that proceeds from this issuance will be only used for infrastructure investment, mostly for hydropower and flood prevention. These funds cannot be used for building new production capacity. Meanwhile, the National Finance Conference has been confirmed to take place early next week (following President Xi’s first direct visit to the PBoC in his tenure), which will focus on containing financial risks and potentially the establishment of a permanent state equity stabilisation fund, suggesting supporting asset prices has become a policy mandate for the PBoC

Adamas Intelligence:

They look at MW of batteries installed. Remember LFP share by car is increasing but is smaller batteries on average.  High nickel batteries tend to be in bigger batteries.  In July 2023, Adamas Intelligence data shows that LFP share by MW was only up 1% to 31% and that the average passenger battery electric vehicle (BEV) sold globally contained 25.3 kilograms of nickel, up 8% year-over-year, while the average PHEV contained 6.5 kilograms, up 11% year-over-year. Multiply that by times increase in the number of cars sold.

Sharp LME price move lower driven by funds have amassed $4.6 billion in short positions against London Metal Exchange nickel contracts, helping to create a net short position valued at $2 billion, according to data from the bourse. Measured by value, that’s a record in data going back to 2018, while in tonnage terms the mismatch is near an all-time high seen in 2019.   We’ll see a move lower and also set the stage for a rebound at the end of the year (as will need to cover those shorts at some point) – given scale of the shorts is surprising nickel price not already lower !!

Company News:

Talon Metals raised $22 million to continue exploring Tamrack – a very tough market out there and good to see $ being raised.

SPC Nickel (talked about last week) – additional results from shallow infill holes WG-23-063: 1.01% Ni, 0.53% Cu over 17.00 metres (12.00 to 29.00 metres) within a wider zone grading 0.71% Ni, 0.38% Cu over 59.00 metres (2.00-59.00 metres).

Alaska Energy – first time talking about - prospect explored in 1990s by Inco.  First drilling is tapping similar historic grades over wide widths; highlights include:

• 341.6 meters averaging 0.23% nickel, 0.08% copper, 0.02% cobalt, 0.107 g/t palladium, 0.051 g/t platinum, and 0.011 g/t gold in hole EZ-23-001.

• 296.6 meters averaging 0.23% nickel, 0.09% copper, 0.02% cobalt, 0.115 g/t palladium, 0.052 g/t platinum, and 0.013 g/t gold in hole EZ-23-002.

Alaska is one of only a handful of locations where one can find nickel in the USA.

—

Learn more: https://cruxinvestor.com/commodities/nickel

Sign up for Crux Investor: https://cruxinvestor.com

Copper Bottomed, Episode 1 - The inaugural show all about Copper. 

A new addition to the Crux Investor Batteries thematic. Merlin Marr-Johnson provides a succinct weekly round-up of the copper market, covering the main stories and exploration results. In this first episode, as well as quotes from BHP, Rio Tinto, and Ivanhoe Mining luminaries outlining the need for more copper projects, Merlin reviews news releases from the following companies: Faraday Copper, Aldebaran Resources, Xanadu Mines, Surge Copper, Foran Mining, C3 Metals, and Lara Exploration.  What do the results tell us about the projects? What do the new releases tell us about the companies? How does the news affect the investment case, if at all?

—

Learn more: https://www.cruxinvestor.com/categories/commodities/copper

Sign up for Crux Investor: https://cruxinvestor.com

Has been 2 weeks since we last talked about the nickel market, and as expected market is trading down in the $18-$19,000 range and a few more thousand tonnes come on LME. Expect a further move over the next 6-8 weeks down to the $17,500 level before year-end as another 10,000 - 20,000 tonnes of nickel hits LME, and then rebound into year-end as EV demand re-accelerates and stainless production continues to build on recent strengths.

“Great convergence” well-underway – sulphate now back to par with briquettes, NPI discounts continue to narrow.

Rho Motion EV Sales - September 2023 Global EV sales reached a monthly record in September 2023 with over 1.3 million units, growing by 23% compared to the same period last year and 7% month-on-month, bringing YTD PC & LDV EV sales to 9.5 million. Sales in China have grown by 33% YTD, in EU & EFTA & UK by 27%, and in the US & Canada by 60%.

Was in London last week for LME week – always like it because you get to see producers, traders, and consumers in one time period to help understand the market. And then went to the US for a Stainless Steel conference.

Key LME week takeaways:
- Per the last session, nickel is in surplus but not as large as many are projecting as missing the in-process inventories.
- Cobalt market going to come under pressure from HPAL and new Chinese Congo projects
- Opportunity for meltshop growth in the United States

Nickel Industries buying 55% of Excelsior Nickel project which is an HPAL project – going to target low carbon footprint with power coming from sulphur burning for acid production and a 200 MW solar project. Projects built and operated by Tsingshan. 

ENC is expected to produce 72,000 metric tons per annum of contained nickel equivalent across the three major class 1 nickel products being mixed hydroxide precipitate (MHP), nickel sulphate and nickel cathode. ENC will be the first HPAL globally with the capacity to produce the three major class 1 nickel products,  Nickel Industries give only real public company view into Indonesian operations – use for ore grades, operating costs – will be good to have HPAL view of things.

SPC Nickel completed its infill drilling at West Graham – some very good intervals in the program and Phase 2 comprised 8,842 metres in forty holes. Will be interesting to see how resource update comes together – a few open pittable deposits in place that can ship to the mill.

Aston Minerals, our neighbour in Timmins, reported after we last talked about multiple drill holes that are seeing Crawford-like grades and extended nickel-cobalt sulphide mineralisation across multiple drilling intercepts at the B2 Prospect, strike continuity has extended by 500m. Company insiders have been buying stock as the price has come off. 

Crawford feasibility study released last week:
- $2.5 billion after-tax NPV8% and IRR of 17.1%; increasing to $2.6 billion after-tax NPV8% and IRR of 18.3% with projected Carbon Capture & Storage tax credits 
- Crawford is world’s 2nd largest nickel reserve and 2nd largest resource. Initial mineral reserve of 1.7 billion tonnes of ore grading 0.22% nickel 
- Production of 1.6 million tonnes nickel, 24 kt cobalt, 490 koz palladium & platinum, 58 million tonnes iron and 2.8 million tonnes chromium over 41-year project life 
- Annual EBITDA of $811 million, free cash flow (FCF) of $546 million, and 48ktpa of nickel production during peak 27-year period
- One of Canada’s largest carbon storage facilities with 1.5 Mtpa carbon captured and stored during peak 27-year period
- Crawford is a net negative contributor to the global CO2 footprint – with 30 tonnes of carbon capture and storage capacity per tonne of nickel remaining after accounting for the project footprint

Learn more: https://cruxinvestor.com/companies/canada-nickel

As expected when seeing a clear break of a very long support line, the nickel price move lower was pretty aggressive down nearly $1,500 to the mid-$18K range where we were in mid-2021. I believe we’ll see a further move lower down to the $17,500 level before we begin to move higher once again into year-end.

“Great Convergence” continued on as sulphate prices ticked up while nickel prices moved lower – sulphate and NPI discounts continued to be reduced. China is generally quiet heading into the week-long October holiday – will see what happens when get back afterwards – but not expecting anything too exciting.

Canada Nickel - FS call on 12th October 2023.

Horizonte Minerals - unfortunately, took a stumble 2 quarters before the goal line started pushing out the start date to quarters and increasing total capex by a further 35%. They hired an ops director 2 months ago and wonder if he is driving it – I DON’T KNOW the exact reasons but based on some words in the release I wonder if is water management - something investors don’t pay much attention to, but critical from a reliable operability perspective which required some re-work of site civils. Where it lands will depend on how greedy their partners – Orion and Glencore will be in providing additional funding. Think it looks cheap at these levels, but may want to wait to see what the re-financing package looks like before jumping in.

Glencore will halt funding the Koniambo project in New Caledonia – the total $$ destroyed on the island between Goro and Koniambo must be approaching $20 billion. Neither plant ever reached design capacity and had some technical flaws (both were new processes) in conjunction with trying to operate in a highly difficult jurisdiction. Will be interesting to see what happens – a Chinese company puts in RKEF or just exports ore. Another example of grade not being the most important thing – Koniambo was the highest grade undeveloped laterite deposit in the world!

Atlas Materials raised privately $27 million on a $115 post-money valuation for the saprolite hydro-met process. It’s going to solve 2 major problems!!

Both of its founding premises are false:
“Increasing the amount of nickel ore available to make batteries by 50% Before the Atlas Process, saprolite ore, which accounts for approximately one-third of the world’s current nickel resources, was not economically viable for battery grade applications”. Matte from saprolite works!

Hydro-met guys say, “Producing battery nickel with almost zero CO2, no waste or other emissions. All existing processes to refine nickel are costly and harmful to the environment due to their process emissions and waste dumps.” However, it can be done with the right pollution control and limited environmental equipment.

Attended INSG meetings – big surpluses, but no one can say where the surpluses are sitting!

—

Learn more: https://cruxinvestor.com/companies/canada-nickel

Sign up for Crux Investor: https://cruxinvestor.com

Have seen continued improvements in ore and NPI prices driven by combination of a couple of factors:

• Chinese stainless production continues strong y-o-y growth – 17-20% in August and September
• Nickel has had a “shipping coal to Newcatle” moment recently as the Indonesian government investigated and dealt with illegal nickel ores and stopped the approval of new quota applications which has resulted in ore coming from the Philippines

Korea trip again interesting. Key piece is how much nickel they will need – just
one of the players at one stage - and there are multiple players at each step (precursor-cathode-battery) will need more nickel.

Indonesia talking about a free trade agreement with the US (make it IRA-eligible) – may see something limited, but Chinese control of most assets would defeat the whole purpose of the IRA to get China out of critical material supply chains.

Nickel Institute published clarification around CBAM in Europe (Carbon Border Adjustment Mechanism) – this is a mechanism which will eventually create a premium for lower carbon products (like Canada Nickel will be producing from Crawford).

From 1st October 2023, FeNi and NPI producers will have to measure the carbon footprint of their products according to the requirements defined in the Annexes of the CBAM Implementation Regulation.

From end of January 2024 onwards, data on the carbon footprint must be reported via a template submitted to the CBAM Portal.

From 2026 onwards, companies importing FeNi and/or NPI will have to purchase CBAM certificates to compensate for the carbon footprint of the imported goods. The amount of certificates that FeNi and NPI importers have to purchase will be gradually increased. In 2026, certificates for only 2.5% of the total carbon footprint of a product have to be surrendered. This will gradually be increased until 2034, when 100% of the carbon footprint has to be covered.

FPX announced solid PFS results – key drivers are low strip ratio below 1, simple process plant driven by magnetic separation, ability to sell awaruite directly to market -

• After-tax NPV8% of $2.01 Billion and IRR of 18.6% at $8.75 /lb Ni
• 29-year mine life producing an average 59,100 tonnes per year of nickel
• Phased development approach, with expansion following the 3.7-year after-tax payback period
• Life-of-mine average C1 operating cost of $3.70/lb Ni ($8,150/t), assuming no byproduct credits
• LOM average annual pre-tax free cash flow of $578 million during operating years
• Strategic product flexibility, with a Base Case high-grade nickel concentrate (60% nickel) for direct feed to the stainless steel industry, plus a Refinery Option to produce battery-grade nickel sulphate

At Canada Nickel, very keen to see this PFS – our Midlothian deposit looks like maybe a primary
awaruite deposit.

Dreadnought – the interesting early stage where First Quantum earning into 51%. Mineralization (no assays) from 14-27 metres wide relatively shallow.

Same comment as our last call - Nickel continues to bounce along the bottom of $20,000-$22,000 ($9-$10/lb) range where it's been since early June and has only briefly broken $9/lb.  LME inventories remain near multi-year lows.

China is still split on 2 key markets – sulphate for battery continues to tread water, while stainless continues to edge higher, again despite lots of noise on Chinese weakness with both stainless prices and NPI prices moving higher once again. 

Things are quiet here in summer, however

SPC Nickel, who consolidated property in Sudbury from Vale, hit some interesting intervals.  Talked in the past about a good exploration team that is in the same neighbourhood as Magna Mining Sudbury property.

Hole WG-23-047, intersected a high-grade section that returned 1.27% Ni, 0.47% Cu over 18.00 metres from 245m to 263m within a thick zone of nickel and copper mineralization grading 0.70% Ni, 0.32% Cu over 50m from 221m to 271m.

Canada Nickel made Mann Northwest announcement - is another major discovery 

One of 11 targets larger than Crawford – target geophysical footprint of 6km2 is more than triple the size of Crawford footprint.
The first 8 holes drilled at Mann Northwest intersected well-mineralized, multi-hundred-metre intervals of mineralized peridotite and minor dunite across a combined strike length of 2.7 kilometres  - all holes were largely mineralized across the entire core length.  Initial mineralogy samples showed well-serpentinized material with heazlewoodite and pentlandite dominant nickel minerals.
Target remains open in all directions.
The big thing to talk about this week is Chalice Mining PEA – market cap has fallen by +30%.  They are the big boy with a pre-announcement market cap of $1.8 billion (which was already higher), so we need to say it like it is – particularly as PEA had some “offensive/aggressive” assumptions. Headline numbers all look great – but the market quickly realized some very aggressive assumptions.

Chalice Mining just published a PEA, a month earlier than Canada Nickel will be publishing their Feasibility Study (FS) on Crawford – their deadline for FS is 2.5-years from now.

Their biggest issue is the price deck:

Palladium price (over ½ revenue) was $2,000 – today’s price is $1,200. Remember palladium's main use is now being phased out as EV market reduces the need for catalytic converter
Nickel price was $24,000 –($11/lb) – we’ll probably be looking at the $20-$21,000 range. 
Copper price was $11,000 ($5/lb) – copper prices have NEVER been this high
When looking at the value at today’s price deck – you get to a value somewhere between negative and $500 million – Remember their market cap is still $1.3 billion!!

Chalice and  Canada Nickel are interesting comparisons.  Gonneville was discovered about the same time as Crawford so a good yardstick – the focus was nickel initially, but it turned out to be mostly PGE deposit with a scale about 1/3 less than Crawford and half the mine life.

Another thing that is interesting is capex – we’ve indicated our capex will likely be in $US1.8-1.9 billion range, Chalice is getting 1/3 bigger mine/mill operation, a leach plant, a hydromet plant for 10% LESS cost than Canada Nickel in a higher cost jurisdiction.

When the price deck is crazy aggressive, raises questions around what of the other 300-400 assumptions in there are also very aggressive! Will need a reset of expectations, and more than likely, a new owner who can take advantage of this fall from grace.

I’ll State it Again

We have talked about it in the past, but want to make sure watchers are very clear on this point.

A PEA IS ONLY AS GOOD AS THE ENGINEERING FIRM WRITING THE REPORT.  REMEMBER THERE ARE ENGINEERING COMPANIES THAT ALMOST NEVER BUILD PROJECTS, SO WRITING REPORTS IS THEIR BUSINESS AND IF THEY DON’T GIVE MINING COMPANIES THE ANSWERS THEY WANT, THEY DON’T GET THE BUSINESS.

MOST FRUSTRATING FOR ME, WHEN INVESTORS SAY WHY NOT PROJECT HAVE MID-20% IRR?  REALITY IS THAT WITH VERY FEW EXCEPTIONS – ONLY GET THOSE RESULTS FOR SMALLER, HIGH-GRADE DEPOSITS IN TOUGH JURISDICTIONS, GENERALLY WITH A COMPARATIVELY SHORT LIFE OF MINE.  IF BUILDING A MINE IN PLACE THAT GOVERNMENT WON’T TAKE IT AND A SCALE MAJORS WANT, BASE METALS PROJECTS ARE EITHER SIDE OF MID-TEENS IRR.

Stainless prices are now moving higher in multiple markets which is generally a good signal for overall market conditions.  Over the last few weeks, have seen ore prices/NPI prices move higher, now joined by stainless prices in China and now in Europe as the market seems intent on restocking after spending most of the year destocking. Despite Chinese market weakness,  Chinese stainless steel production was up more than 11% in the first half 2023. Remember that stainless still more than 2/3  of global nickel demand so good sign that should see the expected demand improve through the balance of the year.

Quiet week news-wise

Talon Metals had good infill intercept using to look at the area of higher PGE content -  101.71 meters of high-grade nickel-copper mineralization grading 1.94% Ni,1.84% Cu, 0.35 g/t Pd, 0.64 g/t Pt and 0.62 g/t Au (1.61 g/t PGEt + Au) (3.04% NiEq) (see Table 1).

Everyone is entitled to their opinion, but commentator DrJimJones materially misstated a couple of facts in a recent piece on Canada Nickel Corp.

1. DrJimJones was quoting from PEA in May 2021 as to what needed to be spent for CNC to go to the next level, and then compared that amount to the June 2023 cash balance. Clearly just a mistake or conflation of data on his part. He may not have noted that since May 2021, CNC has raised nearly £$100 million in the interim to do what is needed, leaving their cash balance in a healthy position to finish their FS. I’m sure he would be willing to check and validate this, and shortly republish his thoughts using the correct assumptions.

2. It is also worth noting that Crawford produces a FeCr concentrate which has some nickel in it.  This product would make CNC the sole chrome producer in North America, and provide a low-carbon feed for the stainless market in North America (stainless steel is a mixture of nickel, iron, and chrome).  The stainless market in the United States has significant premiums -more than $800-$1,000 price premiums versus Asia, and conversion margins of $1,000 per tonne (or ~$6/lb premium per pound of contained nickel) so good to get units into this market.

3. In any technical report, always good to look at the assumptions.  Assumptions are only as good as a company that signs off on technical reports.  Lots of bad technical report companies out there.  CNC however uses Ausenco, who not only do studies but actually bid on & build these projects. Ausenco signed off on the overall report.  CNC’s work on the pricing for this material was done by CRU, a leading metal price consultancy, and SMR – the leading stainless and alloy market consultant.

4. Interestingly, iron price is not iron ore price – it is Fe scrap price in North America (which is how stainless feed material is priced) - it averaged $US407 per tonne in February 2023 according to USGS versus the $290/tonne number used in 2021 PEA. So DrJimJones talk of iron ore pricing and decline in iron ore pricing is again perhaps conflating data. Again I’m sure given the chance DrJimJones will choose to restate their thoughts and the impact of their conclusions for CNC.

5. And in addition, the current US ferrochrome price which was the basis for chromium pricing was assumed to be $1.04 per pound in the CNC 2021 PEA, whereas it averaged $3.08 in 2022, and was $2.55 per pound in June 2023.

6. Please also remember that Anglo American, one of the world’s largest mining companies, made a 9.9% investment in Canada Nickel so they must have been comfortable with the CNC project assumptions and their own year-long diligence process.

According to statistics from the Stainless Steel Branch of China Iron and Steel Association, China’s crude stainless steel production amounted to around 17.59 million tons in the first half of this year, up by 8.2% compared to the same period a year ago.  Among them, the output of Cr-Ni stainless steel (300 series) accounted for the largest proportion at 50.33%, totalling around 8.85 million tons, a year-on-year hike of 11.1%.  (we thought China was slowing down) - seeing cuts in the first half in ROW production after a big surge in 2021/22, but now seeing a turn in the West as well.  Analysts always underestimate stainless growth. 

Still not seeing any further momentum in nickel sulphate in China, but seeing more nickel directly utilized (in the form of MHP/matte) and more high nickel cathode material produced in Korea.

FPX Nickel saw a big drop this week – down by 33% on news that one of the First Nations (FN) groups has made public communications from Tl’azt’en Nation with respect to the 2012 Memorandum of Understanding (“MoU”) between Tl’azt’en Nation, family Keyoh Holders, and FPX, and concerns expressed related to resource development.

The team at FPX have done a very good job responsibly advancing the project, but sometimes best efforts can’t change the view of the local community.  The original 2012 group split into several groups – which may have different views on resource development. Elections in FN communities typically every 2-3 years so can have multiple leadership groups to deal with during the lifespan of the project (think with my old Dumont project, we had 5 different chiefs over 10 years).  The new chief came in a year ago and may be a catalyst for change, maybe another change in the future.

Permitting/First Nations risk is real – even the best management team/approach can do everything 100% right, but the community may not want resource development. Encourage every investor to look at First Nations/permitting risk – not just to country, province, but the specific region – look at whether any mines operating in the area, have any operated before, and search for public comments on mining activity in the area. Can always be the first new mine in an area, but comes with lots of risks and need to manage accordingly.

This is always been a key concern – 4 major assets that I’ve been involved with have been in established mining areas - Abitibi Quebec (Dumont), Abitibi area of Ontario (Crawford), Kalgoorlie (Beta Hunt), Manitoba/Snow Lake (Reed).  

The Metals Company (TMC) stock has moved significantly higher over the last 2 months and just completed $27 million financing (think highlighted back in June that smaller scale start-up using existing Japanese processing capacity provides a lower capex path to production).  The Metals Company aims to apply next year for a licence to start mining in the Pacific Ocean, with production expected to start as early as the fourth quarter of 2025, it said in a statement.

Magna Mining put out some nice drill holes this AM and has been busy retracing about 50% of what it gave up after the PEA announcement.
101 FW Zone

MCR-23-041: 3.0% Ni, 0.7% Cu, 1.2 g/t Pt + Pd + Au over 31.6 metres

MCR-23-042: 4.2% Ni, 1.4% Cu, 1.0 g/t Pt + Pd + Au over 27.6 metres

Good results but would asterisk them a little bit – when historic drilling – look for step out versus infill, unless filling in some pretty wide gaps.  These holes look like in between 22-003 and 22-005 drilled earlier this year which in turn were between 1003080 and 1003090 and 1163050
At the other end of step out level, our neighbour in Timmins, Aston Minerals, has started off their 2023 drilling season with some 500 metre step-outs in their B2 zone which in turn is more than 2 kilometres away from their initial Boomerang resource of 2.5 million tonnes of nickel.

On the lithium-nickel front, Widgie Nickel got approval to mine its Faraday lithium deposit – will ship ore to one of the local lithium mines to be processed.

Azure Minerals (nickel developer turned lithium developer) turned down $600 million offer from SQM.

The big news of the week:

Saudi Arabia is investing $US3.4 billion for a 10% stake in Brazil’s Vale base metals business – good to see the Middle East $$ in the sector.

Australia going to include nickel in the critical minerals list.

Potential for Russian nickel to be subject to sanctions in UK/Europe in the upcoming year – think a lot of people choosing not to use it, but if implemented, a little more challenging given that nearly ½ of Russian nickel used to end up in Europe.

Magna Metals PEA on Crean Hill/Denison project picked up earlier in the year from Sibanye – unfortunately share price was off by about 15% (but had popped up 10% in the week before). 
Metrics on IRR and NPV are both good at $C200 million and 22% IRR with a 15-year mine life mining 1.5-2 Mtpa of ore for a few years with an open pit and then 1.25 Mtpa underground operation with roughly 10ktpa of nickel production.  However, the market reacted negatively for a couple of reasons with capital cost being the primary one:

- Total of CAD$129 million including $48 million of “advanced exploration” costs, $24 million in open pit costs, and $57 million in underground capital. Think the market was expecting was going to be open pit restart and then underground so was a little surprised at the total amount.
- They had some pretty splashy high-grade intervals but the life of mine grades are 0.6% nickel, 0.6% copper and over 1g/t PGMs so some investors were probably expecting some more grades to pop out.
- The third reason was valuation – at $0.75/share has a market cap of $120 million versus the value for the project at $C200 million (and they also have Shakespeare) – which is a pretty healthy P/NAV in the industry sector that is struggling.

A good example of challenges with high grade – can be narrower, less continuous = more drilling capital, particularly if has to be done underground.

Widgie Nickel had nice step-out results and infill drilling
100-metre step out Eastern Limb MEDD069 29.0m @ 1.66% Ni from 79m Incl. 5.0m @ 3.23% Ni from 88m.  Widgie Townsite MEDD061 30.85m @ 1.59% Ni from 435m Incl. 13.43m @ 2.74% Ni from 449.7m And 3.36m @ 3.27% Ni from 471.3m.

Our Timmins neighbour had updated resources from their W4 higher grade deposit:

Measured + Indicated Resources of 31.3M pounds at 0.98% Ni (2.1x the 2010 historical estimate) and Inferred Resources of 12.1M pounds at 0.98% Ni (3.6x the 2010 historical estimate) – about 40% of that in open pit and balance underground resource.

Nickel continues rangebound in $20,500-$21,500 range with LME inventories remaining low at 37-38,000 tonnes

After nickel price move off the $20,000 range about 10 days ago, sulphate prices actually softened a little as the big surge in June ores for NMC cathodes in China hasn’t continued through yet for July /August  - so sulphate discounts retraced some of the narrowing we’ve seen in last few weeks. On NPI front, NPI prices surprisingly actually ticked up about 2%.  Thought we would see sulphate discounts narrow pretty fully before NPI started moving higher but good to see  

Not lots of news, but couple of key pieces of news

Nickel refining capacity - The London Metal Exchange has approved nickel produced by China’s Zhejiang Huayou Cobalt Co. for delivery under its new fast track registration system for its new refinery in China.  Huayou, GEM, CNGR all building refineries in Indo/China and will follow down a similar path.

This is key piece in “great convergence” which will allow market clearing mechanism to move from NPI/matte discounts back to LME price.   Should see ~200ktpa of capacity come online by end 2024 and nearly 100ktpa of LME deliverable nickel produced in 2023.

This scale of numbers given that given current annualized surplus is estimated by INSG in 100-200kt range which in  May fell by 1/4 to 144kt annualized form ~200ktpa annualized.  I still believe that these figures are overstated as don’t see large inventories in market and wouldn’t see discounts reducing if these inventories available to market.

Poseidon Nickel – comment from subscriber online that wanted thoughts on this announcement.  Last week mentioned their exploration at success at other past producing mine – Emily Ann/Maggie Hays

Poseidon was restarting Black Swan/Silver Swan operations – one of few nickel mills in Western Australia and mine operated for short period of time in 2008-2009 – now announced last week deferring restart until 2024 for following reasons: 

Western Power has advised grid power will be available from late 2024 · Additional metallurgical testwork will be conducted to confirm recovery assumptions for the disseminated serpentinite ore · Decision made to defer the restart of Black Swan due to project related factors and external market conditions

From release quote: “These project related factors together with the continuing tightness in the WA labour market, the lack of the availability of Kalgoorlie FIFO accommodation ….”

Highlights 4 key issues:

Availability of infrastructure– no grid power until end 2024, (could use generators, but much more expensive

Availability of people and ability to support them – talks about fly in fly out – most of Western Australia with a few exceptions is massive fly in, fly out operation.  Is expensive, and highly competitive 

Importance of nickel concentrate grades - Release talks about certain ore feed producing only 5-6% nickel concentrate with high mgO content – big plus of deposits like Crawford is ability to produce much higher grade nickel concentrate.  Most nickel concentrates are only 10-15% nickel 

Parallel project design – need to integrate resource/mine design/mineralogy/metallurgical testing so always understand how feed will perform. Is good they found out now rather than in operation, but would have been better if found before putting FS out last year.

Nickel prices hanging in similar $20,500 - $21,000 range.  LME Inventories after bump up showing decline again at very low levels - 40,000 tonnes

Indonesia Investment Minister Bahlil Lahadalia on Friday gave the latest updates on Indonesia’s proposal for a global nickel cartel, saying that it has had intense talks with some unnamed countries. Resource-rich Indonesia has been proposing a group of nickel-producing countries that operates in a similar manner to the Organization of the Petroleum Exporting Countries (Opec). The Opec says it aims to coordinate the petroleum policies of its member states and keep the oil markets stable. And Indonesia wants to see a similar group for nickel, which is a key ingredient for electric vehicle (EV) batteries. "There are three countries whom we already have been intensely communicating with," Bahlil told reporters in Jakarta on Friday, commenting on the progress of the Opec-style nickel group. The minister, however, refused to disclose the name of the said countries. When asked about their initial response to the plan, Bahlil said: "[they thought] it was a great idea, but we still need to work on the details of the proposal." The Corruption Eradication Commission (KPK) recently revealed that about 5.3 million tonnes of nickel ore from Indonesia were sent illegally to China from January 2020 to June 2022.

Big couple of weeks for Ardea Resources

Non-binding MOU signed with a Japanese Consortium consisting of Sumitomo Metal Mining, Mitsubishi Corporation and Mitsui & Co. to develop the Kalgoorlie Nickel Project - Goongarrie Hub.  SMM strength is HPAL processing so logical partner for this project and best positioned for success outside of Indonesia

Ardea Resources Kalgoorlie Nickel Project global Mineral Resource Estimate (using a 0.5% Ni cut-off grade) now stands at 854Mt at 0.71% Ni and 0.045% Co for 6.1Mt of contained nickel and 386kt of contained cobalt.  Total resource contains over 6 million tonnes of nickel. This is Australian laterite different than what you see in tropical areas like Indonesia.

Mining optimisation studies have projected production of approximately 30,000t of nickel and 2,000t of cobalt per year for more than 40 years.  Capital cost is A$3.1 billion.  The project generates Post-tax NPV7 of A$4,980M and IRR of 23%,  Average Annual EBITA of A$800M, Project pay back within 3.1 years Direct cash cost after Co by products of US$5,763/t Ni in MHP over life of mine. Metal Prices were $US25,000 for nickel, $60,000 for cobalt. Nice to see but a little on high side – cobalt will be challenged by all of the HPAL capacity coming online before nickel as ratio of production (roughly 10:1 is less than half total supply of  c.20:1

A well-known former Sudbury mining executive is back in the news and is taking on a new role as chair of the newly formed Energy Transition Metals Board with Vale Base Metals, which calls itself one of the world's largest producers of responsibly-sourced nickel, copper, cobalt and platinum group metals. Mark Cutifani was previously chief operating officer (COO) at CVRD Inco, but he left Sudbury in 2007 to become chief executive officer (CEO) of AngloGold Ashanti, and then became CEO of mining giant Anglo American, one of the largest mining companies on the planet.  
Poseidon Nickel – focus has been at Silver Swan / Black Swan – now on its way.  They also had past producing mines at another location Emily Ann / Maggie Hays.  

New target At Maggie Hays West, Nickel has been intersected at the base of the WUU. 

Best results include:
PLJA075 28m @ 0.66% Ni, 187 ppm Cu from 20m including 4m @ 1.32% Ni, 134ppm Cu from 40m
PLJA076 8m @ 1.18% Ni, 143 ppm Cu from 40m
PLJA078 24m @ 0.88% Ni, 220 ppm Cu from 12m including 12m @ 1.16% Ni, 256ppm Cu from 20m
PLJA080 4m @ 0.52% Ni, 744 ppm Cu from 36m
PLJA081 7m @ 0.70% Ni, 588 ppm Cu from 40m (EOH).

Debt deal helped put bounce back in copper and floor under nickel prices.  Given global slowdown, still think test of $20,000 possible before we trend higher by year-end. 

Battery restocking – lithium prices up 13% week-over-week as seeing restock well underway.  As I’ve said before, collapse in lithium caused destocking and drop in battery demand through first half and that we’ll see an aggressive restocking which looks like is now well underway.

“Great convergence” continues – discounts narrowed again with nickel prices lower and sulphate prices higher – sulphate discounts now less than half of what they were 6 weeks ago.  NPI discounts also narrowed slightly.

Indonesia – part of conference and series of site visits

Key takeaways:

Nickel price index – government not going to put export tax on NPI, but establish Indonesia reference price – think this is the way government will extract additional value for Indonesia. Important as no floor price for limonite (HPAL) unlike saprolite (NPI) – part of reason building MHP capacity. There will be ONEC – way for Indonesia capture

Focus on growing battery supply chain volumes starting with HPAL/MHP, matte.  No further talk of more stainlesss capacity – good for US/European stainless producers who have healthy price premiums. Taking advantage of limonite being mined to get to saprolite

Lots of capacity coming – 4 million tonnes approved through 2030 (we’ll need all of it as no western supply growth coming yet).  But will need 500 million tonnes – presenter from Indonesia government bureau doubtful that can supply that much. 

Ore grades definitely the risk – some of plants we went already using 1.5%, most using 1.6-1.65%.  Was 1.8% 2 years ago – don’t think people factoring in derating of plant.  33 MW furnace used to 8ktpa, at 1.6% is 7ktpa

Lots of open property – don’t seem to be rushing to reclaim – not good for runoff

Brimob – Indonesia special forces at each facility