Widgie's Ni-Li Provides Key To Unlocking Battery Metals Wealth

Widgie Nickel was listed on the Australian Stock Exchange in 2021 based on its Mount Edwards nickel assets which contain 170,000 tons of nickel. Around 30,000 tons of nickel has been produced from 4 of the 12 nickel deposits at Mount Edwards since mining began in the 1960s. Widgie Nickel has done 110,000 meters of recent drilling to identify byproducts like PGMs in the existing data set, adding significant value.

Widgie Nickel also has lithium potential at Mount Edwards, initially sparked by interest from others. This lithium potential now figures prominently in Widgie Nickel's plans going forward. The company has a strong, experienced team to drive it into nickel and now lithium production. Widgie Nickel originally focused solely on nickel but has revised its strategy based on discovering lithium. Lithium provides near-term revenue potential by the end of 2023, enabling Widgie Nickel to reinvest surplus cash into further nickel and lithium exploration while taking a slower approach to developing the nickel assets.

Location, Location, Location

Widgie Nickel is located in a favourable jurisdiction in Western Australia with good infrastructure like roads, rail, gas and power. Its landholding with 12 separate but proximal nickel deposits allows economies of scale as additional mines come online without duplication of overheads. The Widgie South area contains 3 nickel deposits (Widgie Townsite, Gillett, Widgie 3) totalling 70,000 tons of nickel. Drilling continues to expand resources, with high-grade nickel identified at Widgie Townsite signalling a key target area.

The Widgie Central area 4km north contains 3 more deposits: Manda, Inco, 26 North. 26 North historically produced over 25,000 tons of nickel. Nearby is the Faraday lithium resource amenable to low-cost, low-strip ratio open pit mining in oxide material. Step-out drilling shows growth potential. Further north is the 132 North and Armstrong nickel resources.

In total, the top 6 resources contain around 100,000 tons of nickel. Resource estimates are being updated. A scoping study on the top 6 deposits will guide feasibility studies over the next 3 months. With another 70,000 tons of nickel in other deposits, Widgie sees strong growth potential.

Near-Term Revenue

The lithium DSO (direct shipping ore) opportunity provides near-term cash flow starting end of 2023 based on fast-tracking work completed: rock samples, 3 phases of drilling, maiden resource, mine design and approvals, and advanced off-take discussions. Surplus lithium cash flow allows a slower, more optimized approach to developing the nickel assets.

Rather than toll-milling nickel ore at an existing plant, Widgie plans to take a standalone approach with a bespoke flowsheet. This increases recoveries, minimizes penalties, broadens the buyer base, and lowers costs as an owner-operator. The lithium cash flow allows Widgie to exploit the entire nickel resource rather than just high-grade portions.

The scoping study examines an initial 800,000 tons per year ore production rate from the 3 Widgie South deposits, producing 10,000 tons of nickel in concentrate. Further optimization, exploration, and feasibility work will follow. Widgie sees itself as strongly positioned to succeed in both nickel and lithium. The initial lithium DSO production rate is expected to mine out the entire lithium resource over an initial 6 month period.

Nickel and Lithium Plans

Widgie Nickel is transitioning from its early pure nickel focus to now include lithium based on recent discoveries. The near-term lithium production will generate cash flow to support further resource optimization and exploration work, while allowing a slower-phased ramp-up of the larger nickel assets. Widgie Nickel sees a robust investment case with significant growth potential in both nickel and lithium.

There are several reasons why this could be a good investment opportunity for investors

• Established nickel assets - Widgie Nickel already has substantial nickel resources and deposits in place (170,000 tons nickel). Some of these have historical production (30,000 tons produced already), so the assets are proven
• Exploration upside - Recent drilling has expanded known resources, identified new target areas, and found additional value in PGMs within the nickel deposits. More exploration potential remains, providing upside.
• Favorable jurisdiction - Located in Western Australia, a top global mining jurisdiction with good infrastructure.
• New lithium discovery - The discovery and fast-tracking of lithium production provide near-term cash flow potential within months. This derisks the investment by providing early revenues.
• Optimized development approach - The lithium revenues allow Widgie to take a slower, more optimized approach to developing the larger nickel assets. This should lower costs, improve recoveries, and maximize value.
• Scalability - The asset base offers economies of scale as more deposits are brought online over time. This gives room to grow as a producer.
• Strong leadership - Experienced mining team in place with a track record of success and expertise in nickel.
• Growth pipeline - After the first 6 deposits, Widgie has an inventory of another 70,000 tons of nickel it can bring into production.
• Attractive commodities - Both nickel and lithium are seeing strong demand growth for the EV battery market.

So in summary, Widgie Nickel appears to offer a nice mix of derisked assets with cash flowing, upside potential, room for optimization/growth, and exposure to attractive commodities. For investors interested in battery metals, it checks many of the key boxes.