Wednesday, August 27, 2025

Canada Nickel Company: Strong Nickel Demand Underscores The Value Of Its Properties

On February 25, Tesla’s CEO, Elon Musk, reiterated his concerns about whether Tesla can procure enough nickel to satisfy the expected explosive demand for the silvery-white metal in electric vehicle (EV) batteries. The world’s second richest man tweeted that, “nickel is our biggest concern for scaling lithium-ion cell production.” This follows his July 2020 quote: “Tesla will give you a giant contract for a long period of time for you to mine nickel effectively and in an environmentally sensitive way.

Canada Nickel Company (TSXV: CNC), a pre-revenue junior nickel miner, could in time satisfy a significant portion of the EV industry’s nickel demand if it can develop its flagship Crawford Nickel Cobalt Sulfide Project, as well as the promising MacDiarmid property, both located in an Ontario mining camp.

Indeed, in mid-February 2021, Canada Nickel reported that the MacDiarmid nickel target — 1.8 kilometers long and an average of 400 meters wide — is 15% larger than the original Crawford Main Zone discovery. The company believes that a recently completed geophysics study, along with a review of historical drilling results on the MacDiarmid property, supports this view. Canada Nickel has applied for exploration permits and plans to begin drilling on the property in March.

Map of Crawford and MacDiarmid properties with magnetic field intensity overlay

Flagship Crawford Property

Crawford is considered one of the ten largest nickel sulfide resources in the world. It contains an estimated 2.9 million tonnes of nickel, including measured, indicated and inferred resources. To put the size of this resource in perspective, and to quantify potential future nickel demand, the analysis firm CRU estimates that by 2025, worldwide annual nickel demand may be 0.9 million tonnes higher than 2018 levels.

Crawford Main Zone

Canada Nickel is expected to release a Preliminary Economic Assessment (PEA) on Crawford in April of 2021, as well as a Feasibility Study by year-end 2021. The timeline for the PEA has now been delayed twice as a result of continuous developments at the property that positively impact the economic study.

Cash Requirements Build

Canada Nickel’s operating cash flow shortfall widened considerably in the quarter ended October 31, 2020. As the company continues to develop its properties, that deficit will likely expand further. Canada Nickel had $11.2 million of cash and no debt as of October 31, 2020. It will probably be required to sell equity in fiscal 2021 to fund exploration and drilling programs at the Crawford and MacDiarmid properties.

(in thousands of Canadian $, except for shares outstanding)4Q FY203Q FY202Q FY201Q FY20
Operating Income($2,526)($942)($769)($429)
Operating Cash Flow($3,263)($1,599)($126)$707
Cash – Period End$11,167$71$237$178
Debt – Period End$0$0$0$0
Shares Outstanding (Millions)79.968.057.328.4
Fiscal year 2020 ended October 31, 2020.

If EV adoption were to prove slower than generally expected, or if Canada Nickel’s future drilling programs were to prove unsuccessful, the company’s stock would also be negatively affected. Furthermore, the company is not expected to begin generating cash flow for some time.

Canada Nickel’s properties contain substantial quantities of high-grade nickel resources. Since that material will likely be in great demand by EV battery manufacturers, which itself could force nickel prices even higher, the company could generate strong cash flows when commercial production begins at its Crawford and MacDiarmid properties.

A micro-cap copper exploration company, Spruce Ridge Resources (TSXV: SHL) owns 8.1 million shares of Canada Nickel. Spruce Ridge acquired these shares when it sold the Crawford Nickel Cobalt Project to Canada Nickel in February 2020. The 8.1 million shares are worth $28.4 million, equivalent to 101% of Spruce Ridge’s stock market value. As a result, any significant appreciation in Canada Nickel’s share price would likely positively affect Spruce Ridge’s shares as well.

Canada Nickel Company and Spruce Ridge Resources are trading at $3.32 and $0.175, respectively, on the TSX Venture Exchange.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Goliath Resources Hits 10.60 g/t Gold Over 22.82 Metres, Highest Grade Results In Third Distinct Rock Package At Surebet Discovery

Four Countries Control the Fertilizer That Feeds the World | Sage Potash

$10,000 Gold Is Just A Question of Time | Florian Grummes

Recommended

Nord Precious Metals Identifies 29 Veins At Castle East Following 3D Modeling

Emerita Resources Expands El Cura Drill Program By 10,000 Metres As Deposit Remains Open For Expansion

Related News

Canada Nickel Gains Massive Financial Boost for Nickel Sulphide Project

Canada Nickel Company (TSXV: CNC) has made a significant leap toward the development of its...

Thursday, September 12, 2024, 03:32:00 PM

Canada Nickel Intersects 687 Metres Of 0.27% Nickel At Reid Property

Canada Nickel (TSXV: CNC) has seen continued positive resulting from drilling at its Reid property,...

Monday, May 6, 2024, 08:23:36 AM

Canada Nickel Hits 0.28% Nickel Over 343 Metres At Midlothian

Canada Nickel (TSXV: CNC) this morning published drill results from three separate properties it operates...

Wednesday, May 24, 2023, 08:41:02 AM

Mansa Exploration Set To Acquire Wheeler Resources

Mansa Exploration (CSE: MANS) this morning announced that it has entered into an arrangement with...

Tuesday, June 1, 2021, 10:43:36 AM

Garibaldi Assays 0.56% Nickel, 0.61% Copper Over 151.6 Meters At Nickel Mountain

Garibaldi Resources (TSXV: GGI) this morning released its latest drill results from its 2020 exploration...

Friday, September 11, 2020, 08:24:56 AM