Nickel Creek Platinum (NCP) - PFS Needs to Demonstrate Scale

Matt Gordon recently spoke with Stuart Harshaw, CEO at Nickel Creek Platinum, a Canadian mining and exploration development company with a 100 percent interest in the Nickel Shäw Project. He described his company’s current activities and its plan on how to move the project into development.

Nickel Creek Platinum

Nickel Creek Platinum, formerly known as Wellgreen Platinum Ltd., is headquartered in Toronto, Ontario. Its Nickel Shäw Project (also known as the Wellgreen Deposit), located in Yukon Territory about 3 hours east of Whitehorse, is host to over 1.8 billion pounds of nickel, 1.1 billion pounds of copper, 5.7 million ounces of platinum group metals (PGM), and 107 million pounds of cobalt in the measured and indicated categories. Nickel Creek Platinum is eager to develop this large deposit to help meet the growing demand for these key metals. It hopes to transform the occurrence into a leading North American nickel, copper and PGM producer.

Recent Company History and Management

Although the company has existed under different names since 1972, its current incarnation as Nickel Creek Platinum is a result of its shift in emphasis toward nickel production at the Nickel Shäw Project. Before coming to Nickel Creek Platinum, CEO Harshaw spent 28-years with Inco and Vale both in operating and executive roles, and working in Canada in the Sudbury mines, mills, and smelters. The company also has Cam Bell, a metals geologist, with over 30 years of experience at Inco and Vale, where he ran exploration programs there. Heather White, a mining engineer, built Voisey Bay Mine in Labrador and brings a number of critical skill sets. Joe Romagnolo, CFO, has been with the company for the last five years.

Taking Nickel Shäw to Development 

Harshaw is focused on bringing the Nickel Shäw Project forward at a time when the world needs nickel. Although he remains open to most any development scenario, he is not planning on handing the project over to another company for the development phase. But clearly, the market has gotten quite complex now, especially compared to the scenario in which a traditional junior gets bought out by a senior miner and gets developed. There are a lot more players in the game. For example, there are many automotive companies and battery-makers that are starting to go downstream, and they are looking for resources.

So, the opportunities to develop the project alone have improved dramatically, and the company is not solely reliant on making a deal with a senior. Harshaw believes that he’s got the team to take it into that production side. 

Harshaw was brought into Nickel Creek Platinum because of his expertise in nickel. The company realized that it has a world-class nickel asset, and yes, they can continue to do exploration to find more nickel, but when one has this kind of asset, one needs to actually have a view in terms of the whole of the market. It’s not only knowing the different capital-raising groups, it’s actually knowing all the mining companies. It’s about knowing all of the intermediate companies, the battery manufacturers - it’s about being able to communicate into that space. Harshaw joined because he sees this as an opportunity to take a nickel project into production.

Currently Operating at a Capital-Constrained Level

Harshaw believes that the market hasn’t recognized that Nickel Shäw is a project that’s moving ahead along the curve. Part of the reason is because it is really not a new project. It’s always difficult to renew the interest in an older project. That is where Harshaw has been trying to focus for the past three months, trying to get a deep understanding of the fundamentals this project provides. 

The company has a market capitalization of about $35 M. Yes, he actually needs to raise money to do a pre-feasibility study (PFS), and he needs to raise money each step of the way. In order to do that he needs to convey the underlying value of the project, and that’s really where the current focus has to be.

The Size of the Prize

The Nickel Shäw Project is a very large ore body. When you take a look at that opportunity, it’s got the makings of a great mine. Once developed, it will be a 25-year-plus producer. The CEO believes that he has a district-sized opportunity on his hands. 

According to Harshaw, it contains 323Mt of measured and indicated, which is large. It’s got 850,000t of nickel, 500,000t of copper, and 5.8M troy ounces of PGMs. This is without inferred and there’s opportunity to find more material as development proceeds.

The metallurgical details that the company has obtained are quite impressive. Nickel Creek Platinum took composite samples, went through XPS in Sudbury, had the full sweep done in terms of recoveries. The results indicate the ability to produce a copper concentrate so the company can either do a bulk production or split it into nickel and copper. This further de-risks the project. 

In summary, Harshaw sees the Nickel Shäw Project as a large nickel deposit with copper and PGMs that can feed directly into the EV battery market. It’s in a mining-friendly area and is easily accessible by good infrastructure. 

The PGM Component 

In the past, the company played the asset as a PGM deposit. A lot of the investors that were talked to were in the PGM space. And although 5.8M troy ounces of PGMs are exciting, that’s still only 25 percent of the total contained value. The value driver is still nickel, and Harshaw thinks that was the missing component – the project wasn’t on the global nickel radar, it was more on the PGM radar. He views Nickel Shäw as a nickel story with valuable associated copper and PGM.

Development Scenario

A large open-pit mine coupled with a large milling capacity is envisioned to make this project work. Because of the lower grade, averaging less than 1 percent, a lot of material must be processed to produce an economic amount of nickel. When nickel was priced lower, this wasn't going to get built. Now, with higher prices, the CEO views this as a straight economic issue, one that makes this type of project viable and valuable. 

Scale is going to be a critical driver. The company needs to have enough pounds coming out, because if you look at the nickel equivalent grade, it’s at about 0.5% nickel. The CEO indicated that operating with 0.5% in an open pit is sufficient for an economically viable project.

Company Share Register

Electrum is the biggest shareholder in the company at thirty-one percent. RCF and Drake are also on the registry. All told, institutional support is at about fifty percent.

Pre-Feasibility Study (PFS) Plans

According to the CEO, the next big step on the road to development is the PFS. A lot of work, such as engineering and metallurgy, is already done.  Harshaw believes that getting the PFS done and on the radar will put Nickel Creek Platinum on the same footing as comparable companies with a PFS, and should shift it into the next level. 

Recent drilling has provided some great results, including penetrations with 2- to 4 percent nickel and 1- to 4g/t of platinum and palladium. Harshaw considers that these results are an example of what the company will be able to continue to demonstrate going forward. He doesn’t want to wait to define another resource to put into the PFS. Instead, he wants to push forward with what he has. 

In essence, the PFS is going to highlight a big earth-moving and mill operation in an open-pit scenario. A 45,000t-per-day mill is the order of magnitude that Nickel Creek Platinum envisions. It will be a capital-intensive project involving big machinery. It will not involve new technology; it’s literally just a financial conversation. 

What’s Needed To Put the Development Plan in Place?

Investors will need to see a PFS document in order to have serious financial conversations. Nickel Creek Platinum needs to be in a position to say: ‘These are our numbers, and we can talk about them”. 

Given the state of the nickel market today, Harshaw believes that his company needs to keep pressing forward. In the past Nickel Shäw was promoted as a PGM project. Today, automotive companies are investing in nickel and other key metals. Countries and companies have targets to hit in the electric-vehicle arena. The time to move forward is now for Nickel Creek Platinum. 

Although the company has raised some money already earlier this year, it is clearly still in the money-raising mode. This mode will continue into 2022. There is a bit of geotechnical drilling to do on the pit walls and there’s about 1000 m of infill drilling that needs to occur. Given that, Harshaw expects that the PFS will be finished in a year’s time frame.

Final Thoughts

The path forward for Nickel Creek Platinum revolves around its ability to raise money. This will enable the drill program to move forward. It is all about discovering value through the drill bit and moving toward a PFS.

To find out more, go to the Nickel Creek Platinum Website