Canada Nickel Company (TSXV: CNC) released a much-awaited feasibility study this morning for its Crawford Nickel Sulphide Project, outlining an after-tax net present discount (8%) of $2.5 billion for the project and an internal rate of return of 17.1%.
The Crawford project, found near Timmins, Ontario, is now being referred to as the world’s second largest nickel reserve, and once in production is expected to become one of the largest carbon storage facilities in the country. Once carbon credits are factored in, the after-tax NPV(8%) of the project is said to grow to $2.6 billion.
The project has proven and probable reserves of 3.8 million tonnes of contained nickel at 0.22%. Measured and indicated resources meanwhile have grown to 6.0 million tonnes, while inferred mineral resources amount to 3.7 million tonnes of contained nickel.
The feasibility study outlines average nickel production of 83 million pounds, or 38,000 tonnes, over a 41 year mine life. Peak production is estimated to occur for a 27 year period, which would see the annual production of 48,000 tonnes of nickel per year, along with 13,000 ounces of palladium, 800 tonnes of cobalt, 1.6 million tonnes of iron, and 76,000 tonnes of chrome. Life of mine cash costs are estimated at $0.39 per pound of nickel, while the net AISC is estimated at $1.21 per pound of nickel.
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In terms of dollars, the Crawford project is expected to generate over $48 billion in revenues, or more than $1.0 billion annually, with annual EBTIDA of $667 million and free cash flow of $431 million over the project footprint. Payback is estimated at 5.6 years.
The initial phase of construction, if the company elects to proceed, will cost an estimated $1.9 billion and feature mill throughput of 60,000 tonnes per annum. A phase two expansion, which is expected to take a further two years to complete, would double the mill capacity to 120,000 tonnes per annum at a cost of a further $1.6 billion.
READ: Canada Nickel Reports Success In Carbon Storage Pilot Project, Expects $25 Per Tonne Of Co2 Stored
Moving forward, Canada Nickel is said to now be in the process of obtaining federal and provincial permits and developing a financing package, which is expected to be completed by mid-2025. First production is targeted for the end of 2027.
“This bankable feasibility study is a significant milestone for Crawford and a major step forward in demonstrating the value of our Timmins Nickel District and its potential to anchor a Zero Carbon Industrial Cluster in the Timmins-Cochrane region. [..] We are fully focused on pursuing our next milestones of obtaining permits, developing a financing package, and moving towards a production decision by mid-2025, with a goal of first production by the end of 2027,” commented CEO Mark Selby.
Canada Nickel last traded at $1.26 on the TSX Venture.
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.
