What progress has been made at the Crawford nickel-cobalt project since CNC’s IPO in February 2020, and what are the next steps for its development?
Since the initial resource, we raised another C$4.5 million during the depths of Covid in April 2020, which allowed us to continue the drilling program, leading to an updated resource released in October 2020 where we more than doubled the size of the higher-grade core part of the deposit. The overall resource increased by 50%. We are heading towards delivering a Preliminary Economic Assessment (PEA) by the end of 2020 and then completing a feasibility study by the end of 2021.
The PEA is considering a production rate of approximately 30-40,000 tonnes per day (mt/d), with multiple expansion options that could subsequently be added to take it north of 100,000 mt/d, which would make Crawford one of the largest nickel-sulphide mines globally. The Timmins region of Northern Ontario is an established mining hub, which means large-scale mining operations can be permitted and built in a relatively timely manner, so we are confident that coming out of the completed PEA and Feasibility Studies we would be ready to advance Crawford’s development in a rapid manner to deliver nickel sulphide to the market by the middle part of this decade.
What led to Elon Musk responding to CNC on Twitter regarding sustainably-produced nickel?
On the Tesla quarterly results investor conference call in July 2020, Elon Musk publicly stated that he wanted mining companies to mine more nickel, and do so in an environmentally-friendly and sustainable way. More than 100% of the recent supply growth for nickel in the last five years has come from nickel pig-iron mined out of Indonesia, which needs a lot of electricity to be processed, and that electricity is generated from coal. In this context, you need to burn at least 25 tons of coal to produce one ton of nickel, which generates almost 90 tons of CO2 per ton of nickel.
Around the same time as when Elon made these comments, Canada Nickel had just established a wholly-owned subsidiary, NetZero Metals Inc., and was making plans to look into how to produce nickel, cobalt and iron with zero-carbon emissions. Our announcement came out at the same time as Elon’s comments and via Tweeting it on social media Elon responded on Twitter saying it sounded like a good idea. CNC’s stock price tripled in a very short period of time and has come about half way back. The demise (or shrinking) of active fund management in the mining business means you have to find a way to reach out to retail investors, and social media really helps with this. In terms of managing shareholder expectations, we have been deliberate in setting milestones and sticking to them.
Can you elaborate on how CNC plans to develop zero-carbon production of nickel, cobalt and iron through the launch of NetZero Metals Inc.?
When the rock that makes up 90% of what we are mining is exposed to air, it spontaneously absorbs CO2. In a world that is looking to eliminate CO2 from the planet, that is very valuable. Additionally, all of the electricity in the region around Timmins is all hydroelectric-based, which is also zero carbon. Because Timmins is also supportive of downstream processing, we would look to have JV partners build downstream plants that we would effectively take out tailings and use those to scrub off CO2 from the off-gases that are generated by those projects.
What would you say are the main catalysts currently impacting the nickel market?
When China turns the reflation pumps on, they do a very good job of pushing it as hard and fast as they can until they see broader inflation emerge. In terms of the benefits for nickel, we have seen a huge growth in demand for stainless steel, with production rates up almost 30% year-over-year (YOY). Over the next four or five months (from October) we are heading into the rainy season in the Philippines, which is the primary ore supplier for nickel pig-iron production in China. When Indonesia comes back into the equation in 2021 the market should see more balance. It won’t be until later in 2022 or beyond before the EV market starts significantly impacting growth. However, nickel has always been a high-growth metal (4 to 5% per year), and by the middle part of this decade when the EV market takes off it will make things very exciting.