Giga Metals Remains Optimistic Despite Challenging Nickel Market

• The PFS projects pre-tax IRR of 11.1% and post-tax IRR of 11.4% at base case nickel price of $9.75/lb, with post-tax NPV of $574 million.
• Sensitivity analysis shows post-tax NPV rising to $1.12 billion at nickel prices near 20-year average, indicating upside potential.
• Metallurgy and geomatology studies have significantly de-risked the project for potential strategic partners.
• The company needs $50 million to get to a final investment decision, which it intends to raise from strategics, not by diluting current shareholders.
• Successful fundraising from strategics at project valuations above the current market cap could catalyze a re-rating of the stock.

About Giga Metals

Giga Metals is a mineral exploration company focused on nickel and cobalt. The company’s primary asset is the Turnagain project located in northern British Columbia, which contains one of the largest undeveloped nickel-cobalt sulphide deposits in the world. Giga Metals acquired the Turnagain project in 2011 and has been advancing it through exploration and engineering studies. The company aims to develop Turnagain into a major nickel-cobalt mine to supply the growing electric vehicle market.

Giga Metals is led by President and CEO Mark Jarvis, a mining engineer with decades of experience developing mineral projects. The company's largest shareholder is Mitsubishi Corporation, which currently owns a 15% interest in the Turnagain project. Giga Metals trades on the TSX Venture Exchange under the ticker GIGA.

Interview with Mark Jarvis, CEO & Chairman of the Board of Giga Metals Corp.

Optimism Despite Challenging Nickel Prices

During the discussion, Jarvis expressed optimism about Giga Metals' future despite low nickel prices weighing on the project's economics. The recent preliminary feasibility study (PFS) for Turnagain used a long-term nickel price of $9.75 per pound, which is approximately 20% below the 20-year inflation-adjusted average. At this conservative price, the after-tax NPV is $574 million with an IRR of 11.4%.

Jarvis believes the current low nickel price is a temporary issue driven by economic conditions in China. He thinks nickel will enter deficit in the coming years as demand for electric vehicle batteries climbs. During periods of nickel shortage, prices have historically spiked dramatically for short periods. Jarvis believes Turnagain could generate substantial returns for investors if it's built before the next spike occurs.

Non-Dilutive Financing Critical for Shareholders

An important theme was Jarvis' intent to finance the next stages of Turnagain's development through strategic partnerships rather than issuing additional shares. The company estimates it needs approximately $50 million to complete feasibility studies and permitting required to make a final investment decision. At Giga Metals' current valuation, raising this capital through share dilution would essentially triple the shares outstanding.

Instead, Jarvis plans to engage in discussions with potential strategic partners, saying "I have zero intention of financing this company by selling stock in the mothership here.” Jarvis believes auto companies and mining majors focused on long-term nickel demand will value Turnagain based on its resource potential rather than Giga Metals’ current market capitalization. Bringing in strategic partners to finance development in return for a project interest would limit share dilution and potentially re-rate the stock higher.

Next Steps on the Path to Production

Over the next year, Giga Metals plans to spend its existing capital completing additional geological and metallurgical studies required to support a full feasibility study. Concurrently, management will engage with potential strategic partners capable of providing the roughly $50 million required to advance the project through permitting.

Though subject to negotiation, management believes this level of strategic investment could imply a valuation of $2.00-$2.50 per share compared to the current $0.25 share price. While timing is uncertain, Jarvis says a strategic partnership "could be done by the end of the year or not, but it’s not impossible that things could move that quickly."

Conclusion

Giga Metals offers leveraged exposure to any improvement in the nickel market, with strong re-rating potential if management can execute on non-dilutive strategic financing. However, the low nickel price may discourage near-term strategic interest, and shareholder dilution remains a risk if funding cannot be secured. Risk-tolerant investors with a multi-year time horizon may be rewarded, but others may prefer to await clearer signs of progress.