TLOFF - 3 Lesser-Known Nickel Mining Stocks to Add to Your Watchlist

Nickel plays a vital role in energy transition due to the growing market for nickel-cobalt-aluminum batteries used in electric vehicles (EV). Nickel mining companies are ramping up investments in new production capacity to cash in on the increasing demand. According to the International Nickel Study Group (INSG), primary nickel production worldwide is expected to reach 3.12 million mt this year, a rise of around 10% from 2021, while demand is likely to be at 3.044 million mt, an increase of some 18% from 2021.

Nickel prices are rising amid the fears of supply shocks due to Russia’s invasion of Ukraine because the metal is a key Russian export. The metal traded at an almost 15-year high earlier this month, and prices could continue their upward momentum if Russia’s production does not make it to market.

The rising prices and the heightened demand for nickel bodes well for lesser-known nickel mining stocks Talon Metals Corp. (TLOFF), PolyMet Mining Corp. (PLM), Canada Nickel Company Inc. (CNIKF). Thus, we think these stocks could be ideal additions to one’s watchlist.

Talon Metals Corp. (TLOFF)

TLOFF is a British Virgin Islands-based mineral exploration company. It holds a significant interest in the Tamarack nickel-copper-cobalt project located in Minnesota, in the United States.

Last month, TLOFF reported an additional 31 new drill holes outside the Tamarack Nickel Project’s resource area. These new drill holes are expected to have massive nickel-copper mineralization, which could help boost mining capacity and support the company’s growth trajectory.

In January, TLOFF, through its subsidiary Talon Nickel (USA) LLC, agreed with Tesla Inc. (TSLA) to supply and purchase nickel concentrate from Tamarack Nickel Project for Tesla’s EV batteries. This collaboration with the EV giant should prove beneficial for the company.

TLOFF’s comprehensive income increased 143.9% from the prior-year quarter to CAD728,478 ($572,349) in its fiscal third quarter, ended Sept. 30, 2021. Its net cash flows provided by financing activities increased 310.4% year-over-year to CAD34.92 million ($27.44 million) in the nine months ended Sept. 30, 2021, while its cash and cash equivalents balance stood at CAD32.65 million ($25.65 million), up 357% year-over-year.

The stock has gained 19.9% in price year to date. And over the past six months, TLOFF shares have gained 22% to close the last trading session at $0.57.

PolyMet Mining Corp. (PLM)

PLM in Toronto, Canada, explores for and develops natural resource properties. The company’s primary focus is the commercial development of its NorthMet Project, which hosts copper, nickel, cobalt, gold, silver, and platinum group metals mineralization.

On Dec.21, 2021, the Minnesota Pollution Control Agency activated PLM’s air permit to build and operate the first copper-nickel-precious metals mine in northeast Minnesota. The permit marks a significant step toward constructing NorthMet, which will boost supply to meet the growing global demand for copper, nickel, cobalt, and other metals. Also, in January, the Minnesota Court of Appeals affirmed nearly all aspects of the water discharge permit for the NorthMet Project, overruling six of the seven challenges to the permit made by mining opponents.

PLM’s net cash provided by financing activities increased 10.2% year-over-year to $9.92 million in its fiscal third quarter, ended Sept. 30, 2021. Also, its cash balance stood at $7.49 million.

The company’s EPS is expected to increase 20% per annum over the next five years.

PLM’s shares have gained 32% in price year-to-date and 25.5% over the past month to close yesterday’s trading session at $3.30.

Canada Nickel Company Inc. (CNIKF)

Based in Toronto, Canada, CNIKF explores for nickel sulfide to supply to the green energy, electric vehicle, and stainless-steel markets. Its flagship property is the Crawford Nickel-Cobalt Sulfide Project, located in Ontario.

On Feb. 15, 2022, CNIKF announced a substantial improvement in its metallurgical performance at the Crawford Nickel Sulfide Project. The company believes the metallurgical results delivered are the highest nickel sulfide concentrate grade from a locked cycle test. In addition, it has continued to make  additions to its land holdings in the Timmins district.

In late January, CNIKF announced the successful drill results from its recently acquired Deloro target. The company plans to move beyond its flagship Crawford property and start exploring its 13 newly acquired regional properties. These expansions should improve its operating capability and should add significantly to the company’s revenues once it is fully operational.

For the fiscal year ended Oct. 31, 2021, the company’s cash and cash equivalents balance came in at CAD3.33 million ($2.62 million).

CNIKF has gained 8.3% over the past six months to close the last trading session at $2.23.

TLOFF shares were trading at $0.57 per share on Thursday afternoon, down $0.00 (+0.03%). Year-to-date, TLOFF has gained 19.25%, versus a -8.14% rise in the benchmark S&P 500 index during the same period.

About the Author: Subhasree Kar

Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.

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