Crawford BFS Economics Set to Establish Canada as a Global Nickel Powerhouse

• Canada Nickel has completed a feasibility study for its Crawford nickel project, with a 41 year mine life and strong economics.
• The project has a NPV8 of $2.5 billion and IRR of 17.7%, making it globally significant.
• This increases to 18.3%IRR and $2.6 billion when carbon capture and storage tax credit are included
• It will be the world's 2nd largest nickel sulfide operation, producing 48,000 tonnes of nickel per year.
• Crawford will also produce cobalt, chromium and iron as byproducts.
• The company is now focused on permitting, financing and ultimately building the mine by 2027.

Canada Nickel Advances Crawford into Top Tier of Global Nickel Projects

Canada Nickel Company has hit a major milestone on the path to building its flagship Crawford nickel-cobalt-palladium-platinum-chrome sulfide project in Ontario, Canada. The company recently announced the results of a Bankable Feasibility Study that demonstrates Crawford is to become one of the world’s largest, lowest-cost nickel sulfide mines.

With nickel demand growth exploding thanks to electric vehicle adoption, Crawford appears well-positioned to start production in 2027, right when supply will be desperately needed. Canada Nickel now embarks on finishing permitting and financing, with ample interest from potential off-take partners. The feasibility results cement Crawford as a top global nickel project that large miners may wish to acquire.

World Class Scale and Economics

The Bankable Feasibility Study outlines a large, long-life and highly economic mining operation at Crawford. The project would produce an average of 48,000 tonnes of nickel annually over a 41-year mine life, from a reserve of 1.7 billion tonnes and a resource of nearly 4 billion tonnes. As CEO Mark Selby said:

"Bottom line, $2.5 billion dollar after-tax NPV, IRR of 17.7%...We’re now the world's largest second largest nickel reserve."

A post-tax net present value of $2.5 billion and an internal rate of return of 17.7% are impressive figures for a project of this scale. Crawford now ranks as the world's 2nd largest nickel sulfide resource and reserve. Capital costs are estimated at a reasonable $1.9 billion. With all-in-sustaining costs projected at just $2.60 per pound of nickel, Crawford would be in the lowest quartile of the global nickel cost curve.

The Right Partner for Feasibility

Canada Nickel wisely chose Ausenco Engineering Canada to complete the feasibility study for Crawford. Ausenco is a global leader in designing and optimizing mineral processing facilities and mining operations. Unlike many engineering firms that only provide studies, Ausenco also has extensive "build own operate" experience from delivering projects around the world. This means they understand firsthand what it takes to construct and ramp up a mining operation efficiently.

Ausenco has direct expertise with nickel sulfide projects from working on other developments like Nova-Bollinger in Australia and Dumont in Canada. This real-world knowledge gave Canada Nickel confidence in the rigor of the feasibility study, especially the capital and operating cost estimates.

As CEO Mark Selby explained, Ausenco delivers studies for projects they know can be built on time and on budget, reducing execution risk:

"We work with someone who actually builds mines and doesn't just do studies."

Given the feasibility study will be the foundation for financing Crawford, having certainty in the project parameters was critical. Canada Nickel made a prudent choice by selecting Ausenco to leverage their hands-on experience building similar nickel operations.

Despite relatively low nickel grades of 0.22% and recovery rates of 41-50%, CEO Mark Selby maintains these are strong results for an ultramafic nickel deposit like Crawford. He explains that grades between 0.15-0.25% nickel with 40-50% recoveries are the geological reality for these large-scale, bulk mineable nickel sulfide deposits. While grades are lower than the high-grade nickel sulfides found in smaller mines, the immense size potential more than compensates. Furthermore, Selby emphasizes that nickel recovery is just one variable in the overall economic equation.

What matters most are total revenues, operating costs per tonne, and capital intensity. With Crawford's large production scale, low costs and attractive economics, the nickel grades and recovery are perfectly adequate to deliver substantial value. As the CEO states, "as long as the overall equation works, you should just view recovery as a number."

Leveraging Multiple Funding Sources to Advance Crawford

CEO Mark Selby has outlined a multi-faceted financing strategy for the $1.9 billion capital costs of the Crawford nickel project. He estimates that various Canadian federal and provincial government tax credits, infrastructure funding programs, and strategic innovation funds could cover up to half of the required capital expenditure. These government initiatives include tax credits specifically for critical minerals projects and carbon capture utilization, both of which apply to Crawford.

Selby is also engaged in discussions for potential nickel offtake agreements, where customers commit to buying a portion of future production in exchange for upfront pre-payment financing. Even one offtake agreement could provide a meaningful component of the funding needed. Streaming deals on the cobalt, platinum and palladium by-products is another non-dilutive financing option. Precious metals streamers pay an upfront deposit to secure metal production at a fixed price.

This diversity of funding sources could allow Canada Nickel to fully finance Crawford with minimal or no equity dilution to current shareholders. As Selby stated, "We can construct a scenario where it's very unlikely that we'll actually have to come to the market for any equity to get this project built." The company appears to have a clear path to funding its flagship nickel project.

Diversified Production

In addition to nickel, Crawford would produce over 75,000 tonnes of chromium annually plus cobalt, platinum and iron. This diversified production results in byproduct credits that lower operating costs and boost mine economics. Chromium and iron are designated as critical minerals in North America, so Crawford will provide security of domestic supply. As Selby explained:

"In addition to the nickel we produce byproduct cobalt, byproduct PGMs and that byproduct iron and chrome product."

The economic merits of Crawford are further enhanced by the abatement of carbon emissions. Using waste rock from mining, the project is estimated to permanently sequester 1.5 million tonnes of CO2 annually. This will make Crawford one of the largest carbon capture and storage facilities in Canada.

Ideal Location

Crawford sits in the heart of a newly emerging nickel district in Ontario, near existing infrastructure. The Timmins region is a world-class mining jurisdiction with skilled labour, suppliers and political support for resource development. Permitting is well underway, with federal approval targeted for mid-2025. Canada Nickel will leverage its Timmins expertise to explore additional discoveries across its district-scale land package. The company sees excellent potential to develop a pipeline of Crawford-like projects to feed nickel-hungry markets. As CEO Selby commented:

“We’re unlocking an entire nickel district. We have better assets in the portfolio to come.”

Clear Path to Production

With feasibility complete, Canada Nickel has a straightforward path to finance, permit and construct Crawford on a timeline to start producing in 2027. The company has already appointed financial advisors and plans to secure one or more off-take agreements in the next year, which will underpin debt financing.

Crawford benefits from various Canadian government initiatives and tax credits that will cover an estimated half the project's capital costs. The asset's green attributes also make it a strong contender for ESG-linked capital. Canada Nickel says its balance sheet is funded into early 2024, while it advances Crawford on the development timeline:

“We’re well funded now into early next year. The key piece is these off-take agreements.”

The next steps are completing project permitting by mid-2025, and then finalizing construction financing to allow a 2027 production start. The company feels its stock price and progress on off-takes are the best defense against any takeover offers.

Ideal Timing

With most projections forecasting a growing nickel supply deficit by the mid-2020s, the timing for Crawford's development appears fortuitous. Nickel demand is expected to rise from 2.5 million tonnes in 2021 to up to 6 million tonnes by 2030, driven by electric vehicle battery manufacturing.

Crawford will be among only a handful of new nickel projects globally that can realistically deliver the first production before 2030. With development timelines of 5 to 7 years, most other sizable nickel projects will struggle to fill the looming supply gap. As Canada Nickel's CEO emphasized:

“We’ll be the only large-scale source of nickel outside Indonesia that can get to market before the end of this decade.”

Crawford's green profile and North American location give it a further advantage over competitors in geopolitically risky jurisdictions like Indonesia or Russia. Battery makers and automakers will increasingly favor reliable and responsible nickel sources.

Major Potential Still to Unlock

While Crawford already boasts a world-class scale based on results to date, Canada Nickel has hinted the project could grow significantly larger. Exploration drilling has barely scratched the surface of the company's district-wide land holdings that span several promising geologic trends.

Given commodity cycles often last a decade into the future, the current nickel boom may only be in its infancy. Crawford has expansion potential and Canada Nickel's pipeline optionality to deliver further resource growth when needed. Now that the flagship asset's fundamental merits are proven, Canada Nickel offers substantial upside exposure to the nickel supercycle, underpinned by Crawford's billion-dollar economics. The feasibility study results reflect a crucial de-risking milestone that propels the company into the top tier of nickel developer stocks.

The Investment Thesis for Canada Nickel

• World's 2nd largest nickel sulfide project provides exposure to exploding nickel demand from electric vehicle adoption.
• Recently completed feasibility study demonstrates robust economics of 41-year mine life with $2.5 billion NPV.
• Diversified production of nickel, cobalt, chromium and iron provides credits that lower costs.
• Ideal location in mining-friendly Ontario, already in the permitting process with a clear path to production by 2027.
• Crawford's green attributes including carbon sequestration make it attractive for ESG-focused capital.
• One of only very few potential large-scale nickel projects that can realistically start-up by the end of the decade to meet the forecast supply deficit.
• Massive exploration upside potential on Canada Nickel's district-scale land package surrounding Crawford.
• Currently undervalued compared to nickel developer peer group, offering substantial leverage to nickel price upside.
• De-risked project with a billion-dollar NPV provides a solid foundation, while optionality for a much larger resource size still remains.
• Potential for Crawford to be acquired by a major mining company seeking to add nickel exposure.