Power Nickel Looks to Strategic Partners as It Advances High-Grade Nickel Project

• Power Nickel is developing the Nisk Nickel Sulphide Project in Quebec, Canada.
• Industry interest is growing, with notable presence from the U.S. and government support, such as loans and tax credits for Canadian projects.
• Nickel demand is surging, with companies like BHP stating a need for four times their current nickel by 2030.
• Power Nickel's project has shown promising results, including an impressive step-out hole discovery five kilometers away.
• The company aims for external validation and is in advanced discussions for strategic partnerships. They anticipate moving towards a feasibility study quickly.

Power Nickel Inc. (TSX-V: PNPN) is a Canadian junior mining company focused on developing its 100% owned NISK nickel-copper-PGE sulfide project in James Bay, Quebec. With high-grade drill results over a large and expanding area, Power Nickel believes NISK could become an important new nickel supply source to meet surging demand, especially from the electric vehicle market.

Market Outlook for Nickel

In a recent conversation at a mining conference, Power Nickel CEO Terry Lynch provided an update on the NISK project and the company’s plans to advance it rapidly with the help of new strategic partners.

With nickel prices depressed but expected to strengthen over the next few years, Lynch noted the need for mines like NISK to come online. “BHP's announcement last week saying by 2030 they need four times as much nickel.” He added, “everyone's saying that the demand is requesting a lot more nickel than what exists in production today." There is uncertainty in where it is going to come from so companies need the ability to finance projects.

The market has yet to appreciate the upside for nickel, but Lynch believes that will change. As he puts it, “the ground is gurgling - it hasn't come through to the market yet but it will at some point. The industry's certainly active.” Recent U.S. policy moves like the Inflation Reduction Act highlight the growing importance of critical minerals.

NISK Project Exploration Success

Lynch credits his technical team for the remarkable exploration success at NISK over the past year, including a highlight intercept of 8 meters grading 1.04% Ni and 1.1 g/t PGM from 305 meters downhole. Step-out drilling has now traced mineralization over 5 kilometers of strike length and an airborne electromagnetic survey lit up additional targets. The company will soon deploy an innovative geophysical technique to further demonstrate the scale of the deposit.

An initial 43-101 resource estimate is slated for late 2023 with scoping studies to follow. The goal is to accelerate NISK through feasibility and permitting over the next couple years. “I think that's what the major wants to do,” Lynch noted, hinting at plans for new strategic partners.

Financing and Strategic Partners

To fund continued exploration and development in a challenging market, Power Nickel recently closed an oversubscribed private placement, raising $4.8 million. However, with a project as large and rapidly advancing as NISK, the company recognizes the need for additional financial and technical support.

A strategic investment by a major mining company would provide third-party validation and give Power Nickel the expertise and balance sheet strength needed to take NISK through studies and permitting.

Advanced discussions are underway and Lynch expects a deal “would be helpful for us to move it towards doing a feasibility study.” While the market may doubt the potential today, the 43-101 and geophysics results expected over the coming months can change that perception.

Risks & Opportunities

Risks

• Nickel prices remaining depressed in the near-term, delaying project economics
• Further equity dilution if additional financings needed to advance the project
• Technical risks around converting exploration success into a feasible mining operation
• Execution or operational risks if put into production

Opportunities

• Significant upside to nickel prices as demand surges, especially from electric vehicles
• Additional exploration success could expand size and scale of deposit
• Strategic partners provide capital, expertise and validation
• Location in mining-friendly Quebec with government support
• Scarcity value as an emerging North American nickel project with high grades
• Small market cap offers leverage to success for early investors

5 Key Takeaways for Investors

1. High-grade nickel intercepts at NISK project point to significant resource potential.
2. Exploration success being validated through airborne geophysics and upcoming 43-101 report.
3. Strategic partners sought to provide capital, expertise and confidence to fast-track development.
4. Location in mining-friendly Quebec positions project for success.
5. Disconnect between strong technical merits and modest valuation provides opportunity for investors.

Investment Thesis

For investors, the opportunity with Power Nickel lies in the disconnect between the company's strong exploration results and current modest valuation. The NISK project clearly has scale, grade, and strategic interest - a powerful combination. As Lynch summarized, “the value proposition is pretty evident and you're buying at the very bottom of the risk cycle.”

With nickel demand surging but new supply challenged, the market needs NISK to advance rapidly. Strategic partners can provide the boost for Power Nickel to feasibly develop this emerging district-scale nickel project in Quebec. As Lynch stated, “if you don't think things this thing can go up 10 times you should move along.” The time to get positioned is now.