Canada Nickel (CNC) - NEW Glencore Agreement Further Improves Margins

Canada Nickel is advancing the new 100% owned Crawford Nickel-Cobalt sulphide discovery with large scale potential located in the established Timmins mining camp adjacent to major infrastructure.

We caught up with Mark Selby, CEO of Canada Nickel regarding the very recent news that Canada Nickel have signed an MOU with Glencore in order to examine the potential use of Glencore's Kidd concentrator and metallurgical site (Met site) in Timmins, Ontario for the treatment and processing of material mined from Canada Nickel's 100% owned Crawford Nickel-Cobalt Sulphide project (Crawford).

Glencore's Kidd concentrator and Metallurgical site

The Met site is 40km to the south of the Crawford mine and gives Canada Nickel the potential to develop the mine more quickly, and importantly to get started at a much lower capital cost. Canada Nickel is working with Ausenco, the engineering firm, to look at how they can retrofit the mill to take advantage of a mill facility which is only half-utilised at the moment. They would be looking to start with something in the range of 4,000t-10,000t a day which would dramatically reduce their initial capital cost.

Blending the tailings

From the Glencore side, after 50-years of mining at Kidd Creek, there is a large tailings facility and those tailings contain acid. This acid needs to be managed on a long-term basis and the tailings produced by Canada Nickel are more basic than the Glencore tailings. The plan is to put the Canada Nickel tailings on top of the Glencore acid-generating tailings which will blend together and so mitigate and remediate the tailings liability that they have. 

Reduced Capex

The Met site has a large industrial footprint because there used to be a Copper smelter, a Copper refinery, and a Zinc refinery there. Canada Nickel will be looking to utilise the site to build their processing plants at a much lower capex than they would have to be at a new site. The existing Glencore mill facility has 4 separate lines,  2 of which are being utilised now and 2 of them are sitting empty which Canada Nickel aims to re-purpose to process their material. This agreement to use the existing mill footprint and existing tailings facility will allow Canada Nickel to get going at a fraction of the capital cost, to be able to advance the project forwards and possibly take a year out of the schedule. 

One of the reasons to announce it now is to be able to discuss with various stakeholders, governments, at certain levels in terms of how they're going to view the project going forward. The agreement will give certainty for the timing of a processing solution for the mine and allow Canada Nickel to calculate the cost-saving by the end of Q1/21. This will give investors a sense of the economics and enable them to see the advanced potential with the revenue stream and the cost saving. 

Detailed calculations and negotiation

Canada Nickel will do the detailed work over this first quarter to calculate the precise cost benefits and then negotiate the terms from there. In this agreement, there is something to benefit both Canada Nickel and Glencore so they are confident they can come to an arrangement that makes sense for both companies going forward.

We were pleased to be able to discuss this significant and exciting news with Canada Nickel and we will be interested to see if the agreement goes ahead into production. Glencore must value the Canada Nickel project going forward to be having the conversations regarding the Met site in the first place. And this is yet another piece of the jigsaw which shows investors that Canada Nickel Corp is serious when its states that they will deliver in an accelerated time frame into this nickel supercycle. As their share price suggests, the nickel is now on investors radars and they have the scale, grade, metallurgy, location and infrastructure to take advantage of the timing. 

To find out more, got to Canada Nickel's Website.