Toll Milling Fast-Tracks SPC Nickel Revenue & Growth Ahead of Eventual Nickel Boom

• SPC Nickel has a maiden resource of 22-23 million tons at 0.55-0.6% nickel and copper at its West Graham project
• Plan is to do toll milling at nearby Glencore and Vale mills to generate near-term cash flow with low capex
• Initial "starter pit" phase expected to produce 1-1.5 million tons over 12-18 months
• Additional resources outside current pit model could support expansion to 10 million tons and ultimately 20+ million tons
• Also own the Muskox project with district-scale potential that they hope to joint venture

About SPC Nickel

With nickel prices bouncing along recent lows, junior explorer SPC Nickel offers investors potential leverage to an eventual cyclical recovery. SPC Nickel aims to transition their flagship West Graham project from resource to revenue generation rapidly, taking advantage of nearby infrastructure to deliver toll feed to major producers' mills. Their phased approach could bootstrap the company into production without substantial shareholder dilution or project financing needs.

West Graham Resource Base & Production Potential

In January 2024, SPC Nickel announced a maiden resource on their wholly-owned West Graham Deposit which sits at their West Lockerby Property in the prolific Sudbury Nickel district. The current open pit model contains 22-23 million tons with grades averaging 0.55-0.6% nickel and copper at a 2:1 ratio. Mineralization starts at the surface, allowing for a zero strip ratio during early production phases.

SPC CEO Grant Mourre explained that they envision developing West Graham in multiple stages, starting small to generate cash flow that can fund sequential expansions:

"The concept would be we look at this pit that we have and say that there's kind of three stages to this...The first stage would be a small starter pit which would have probably in that, one to one and a half million ton range."

This initial phase would require minimal capex spending below $10 million, facilitated by the project's proximity to existing roads, power, mills and smelters owned by major producers Vale and Glencore. Rather than build their own infrastructure, SPC plans to negotiate toll milling contracts, and trucking of raw ore to nearby facilities for processing and revenue generation.

The starter pit could be operational on a 12-18 month timeframe, providing SPC Nickel near-term cash flow to support a stage two expansion towards a 10 million ton pit model. Additional in-fill drilling and permitting adjustments would pave the way for this interim growth phase.

Finally, at higher nickel prices closer to $15,000/ton, SPC Nickel believes West Graham could support a 20+ million ton life-of-mine operation. The company's phased approach aims to organically fund each expansion stage without substantial dilution or project financing.

Interview with Chief Executive Officer, Grant Mourre

Toll Milling Upside

SPC's planned toll milling approach leans heavily on excess capacity at Vale and Glencore's regional mills and smelters. Mourre highlighted the potential for SPC to fill a valuable niche, stating:

"There is a bit of a crunch for additional feed in Sudbury. If you can deliver that in a timely fashion... we're hopeful that that will result in some more favorable terms for us."

By delivering quickly at a time when majors face input shortages, SPC hopes to negotiate cost-effective tolling contracts. These agreements would allow the company to sidestep substantial capex spending while leveraging existing regional infrastructure.

Rather than 5 years, SPC Nickel believes they could begin generating toll milling revenue from West Graham within 18 months. Avoiding project financing needs and shareholder dilution at the early stages offers significant upside for investors betting on a recovery in nickel prices.

Team Track Record

SPC Nickel CEO Grant Mourre brings over 25 years of nickel exploration experience to the company, including an extensive background in the Sudbury region. Mourre originally came to Sudbury to collaborate with Inco and has focused extensively on nickel assets across North America since.

Mourre has assembled a veteran team of geologists and engineers who have contributed substantially to past discoveries and mine-building in Sudbury and other nickel districts:

"Where team's been responsible for some of the larger discoveries in Sudbury and also some other key nickel discoveries in Canada and but also on the mine building side."

With insight into regional geology and relationships with incumbent producers, SPC's impressive human capital could confer advantages as they advance West Graham.

Muskox Exploration Project

Beyond their flagship, SPC controls the district-scale Muskox exploration project prospective for nickel, copper and platinum group metals. In the early stage, Muskox offers a substantial blue sky upside for investors.

Muskox lies in the Nunavut territory, where evolving government policy aims to give traditional indigenous groups more control over mineral rights and projects. SPC Nickel believes this shift will incentivize and streamline Muskox's development.

However, SPC's immediate priority remains advancing West Graham into production. They hope to joint venture Muskox to a major partner with the balance sheet to fund extensive exploration campaigns. Several companies have expressed interest during periods of higher nickel prices.

Investment Thesis Bullet Points

• Rapid path to toll milling revenue and cash flow projected within 12 months could achieve first production without equity dilution
• Phased expansion approach sidesteps extensive project financing or capex at early stages
• Leverages existing regional infrastructure from majors (Vale, Glencore); no need to build stand-alone mills/smelters
• A seasoned technical team with extensive Sudbury experience should help with operations
• Strategic partnerships could unlock world-class exploration potential at the Muskox project

With substantial existing resources amenable to low-cost open-pit mining and toll milling, SPC Nickel offers investors an intriguing value proposition. Their expert team aims to transition West Graham into SPC's first revenue and cash flow generator capitalizing on nearby infrastructure. Additionally, strategic partnerships could eventually provide upside from early-stage exploration at Muskox. In a weak nickel price environment, SPC's model warrants investor attention.

Nickel markets face substantial supply deficits over the next decade as demand surges from stainless steel producers and battery manufacturers. With few advanced-stage development projects in the global pipeline, analysts expect significant shortfalls absent substantial new mine investment. SPC CEO Grant Mourre summarizes the opportunity:

"When you start to see closures of nickel mines around the world in Australia and New Caledonia perhaps that's signaling that we are bouncing along the bottom and that we will see an increase in price over the coming years."

Heightened government scrutiny of carbon emissions in China and Europe will constrain supply among top producers in Indonesia, the Philippines and Russia. Additionally, looming ore export bans in Indonesia will impact availability. This supply/demand imbalance should catalyze higher prices and fresh incentives for nickel investment.