VALE - Nickel Miners News For The Month Of August 2022

Summary

• Nickel spot prices were generally flat the last month and the LME inventory was lower.
• Nickel market news - IEA:60 new nickel mines needed to meet demand by 2030. US Inflation Reduction Act EV tax credits supports nickel from North America and free trade allies.
• Nickel company news - Glencore announces special distribution and a new $3.0b buyback program. OZ Minerals rejects BHP takeover offer.
• Horizonte Minerals reports closing of US$633 million funding package for construction of the Araguaia Nickel Project. Amur Minerals Corp. proposed disposal of Kun-Manie Project for US$35m.
• Premium Nickel Resources Corporation completes reverse takeover of North American Nickel. Giga Metals and Mitsubishi Corporation agree to establish Joint Venture to develop Turnagain Nickel Project.

Welcome to the nickel miners news for August.

The past month saw a renewed focus by the USA (Inflation Reduction Act, US$369b for green policies) to build and support North American EV and battery production and supply chains (included is supply from countries with a free trade agreement with the U.S.). Meanwhile Canada continues to make significant efforts to build an EV supply chain to support the 13+ new USA battery factories coming ~2023-26 (plus add in Panasonic ).

Nickel price news

As of August 30, the nickel spot price was USD 9.76 , similar to USD 9.66 last month. LME shows the price at USD 21,633/tonne . Nickel inventory at the London Metals Exchange [LME] was lower the past month at 54,846 tonnes (57,990 tonnes last month).

Nickel spot price chart - Current price = USD 9.66/lb

Nickel demand v supply charts

Norilsk Nickel - Forecasts a mild nickel surplus in 2022

Source : Nornickel announces consolidated production results for 1H 2022 p28

'Battery' nickel demand set to surge over ten fold this decade as the EV boom takes off (2020 chart)

UBS forecasts Year battery metals go into deficit (2021 chart)

2021 IEA forecast growth in demand for selected minerals from clean energy technologies by scenario, 2040 relative to 2020 - Increases Of Lithium 13x to 42x, Graphite 8x to 25x, Cobalt 6x to 21x, Nickel 7x to 19x, Manganese 3x to 8x, Rare Earths 3x to 7x, and Copper 2x to 3x

Source : International Energy Agency 2021 report

Nickel Market News

In August the IEA released :

Global supply chains of EV batteries... Battery and minerals supply chains will have to expand ten-fold to meet government EV ambition... Demand for EV batteries will increase from around 340 GWh today, to over 3500 GWh by 2030...

Note: 60 new nickel mines needed by 2030, lithium 50 and cobalt 17.

Number of mines to produce required levels of metals, anode/cathode production plants, battery gigafactories and EV plants required to meet projected demand in 2030 relative to 2021

Source : Global supply chains of EV batteries page 48

On August 8 Reuters reported :

Indonesia says Tesla strikes $5 billion deal to buy nickel products. U.S. carmaker Tesla has signed contracts worth about $5 billion to buy materials for their batteries from nickel processing companies in Indonesia, a senior cabinet minister told CNBC Indonesia... He said Tesla signed a five-year contract with nickel processing companies operating out of Morowali in Sulawesi island.

On August 9 GreenCarCongress reported :

Inflation Reduction Act mandates escalating battery critical mineral requirements to qualify for EV tax credit... There are 72 EV models currently available for purchase in the United States including battery, plug-in hybrid and fuel cell electric vehicles. Seventy percent of those EVs would immediately become ineligible when the bill passes and none would qualify for the full credit when additional sourcing requirements go into effect. Zero.

On August 23 Reuters reported :

VW aims to take stakes in Canadian mines, mine operators - Handelsblatt... "We are not opening any mines of our own, but we want to acquire stakes in Canadian mines and mine operators," Thomas Schmall told the daily on Tuesday.

On August 26 Global news reported :

Canadian critical minerals will be 'key' amid pivot away from China, Russia: minister... Canada's draft critical minerals strategy, which is being worked on by Wilkinson's department, focuses on six minerals and metals Ottawa has decided have the greatest potential for economic growth and employment opportunities: lithium, graphite, nickel, cobalt, copper and rare-earth elements.

Nickel Company News

Producers

Vale SA (NYSE: VALE )

Vale plans a US$1.7B Voisey's Bay expansion plan to boost their nickel production. Construction began in 2018 and is expected to be complete by 2022. You can read more here .

On July 28, Vale SA announced :

Vale's performance in 2Q22. In 2Q22, Vale reported a proforma adjusted EBITDA from continued operations of US$ 5.534 billion, US$ 840 million lower than 1Q22, reflecting the decline in iron ore and copper prices at the end of the quarter, but partially compensated by higher iron ore sales... Nickel realized price in 2Q22 increased 18% q/q largely due to 10% higher LME average price and better average aggregate premium...

Note: Q2 net income was US$4,093, down from US$4,456 in Q1,2022.

Norilsk Nickel [LSX: MNOD] ( OTCPK:NILSY )

On July 28, MMC Norilsk Nickel announced :

Norilsk Nickel announces consolidated production results for 1H 2022... In 2Q22, consolidated nickel output decreased 6% quarter-on-quarter (q-o-q) to 48kt, all of which was produced from the Company's own Russian feed.

On August 2, MMC Norilsk Nickel announced : "Nornickel reports first half 2022 interim consolidated IFRS financial results." Highlights include:

• "Consolidated revenue was flat year-on-year amounting to USD 9 billion. Higher base metal prices and recovery of production volumes after temporary suspension of operations caused by the incidents at Oktyabrsky and Taimyrsky mines and Norilsk concentrator in 1H2021, were negatively offset by lower realized palladium price and lower overall metal sales volume owing to logistical disruptions as well as a higher base effect due to the sale of metal from previously accumulated stock in 1H2021.
• EBITDA decreased 16% y-o-y to USD 4.8 billion... EBITDA margin amounted to 53%.
• Net income increased 18% y-o-y to USD 5.1 billion...
• CAPEX increased 83% y-o-y to USD 1.8 billion...
• Net working capital amounted to USD 3.8 billion...
• Free cash flow decreased 25% y-o-y to USD 1.1 billion...
• Net debt doubled to USD 10.2 billion as a result of the decrease of free cash flow and payment of dividends for 2021 totaling USD 6.2 billion...
• Various economic restrictions imposed on Russia by a number of countries have created risks for operating, commercial and investment activities of the Company. To mitigate these risks Nornickel has developed a set of responses and has launched a new procurement strategy aiming at the substitution of some imported goods and services with alternative suppliers..."

On August 10, MMC Norilsk Nickel announced : "Noteholders' consent solicitation launch."

BHP Group [ASX:BHP] (NYSE: BHP )

BHP's Nickel West (includes the Mt Keith nickel mine in Australia) has a Measured and Indicated Resource of 4.1Mt contained nickel with a Total Resource contained nickel of 6.3Mt , with an average grade of 0.58% Ni in sulphide ore. Nickel West produced 80 kt of nickel in FY 2020. Stage 1 production of the Kwinana Nickel Refinery is aimed to be 100ktpa nickel sulphate.

On August 7, BHP Group announced : "BHP announces non-binding indicative proposal to acquire OZ Minerals Limited."

On August 8, The Market Herald reported :

OZ Minerals (ASX:OZL) rejects BHP takeover offer. OZ Minerals rejects an $8.37 billion takeover offer from BHP, claiming the offer "significantly undervalues" its copper and nickel assets...

On August 16, BHP Group announced :

BHP results for the year ended 30 June 2022. BHP Chief Executive Officer, Mike Henry: "BHP delivered strong operational performance and disciplined cost control to realise record underlying earnings of US$40.6 billion and record free cash flow of US$24.3 billion. We have reduced debt and announced a final dividend of US$1.75 per share, bringing total cash dividends announced for the full year to a record US$3.25 per share...

BHP's Nickel West operations

Source: BHP Group/ Nickel West

Glencore [HK:805] [LSE:GLEN] ( OTCPK:GLCNF )

On July 29, Glencore announced :

Half-year production report 2022. Own sourced nickel production of 57,800 tonnes was 10,100 tonnes (21%) higher than H1 2021 reflecting Koniambo operating both production lines in 2022 and Murrin stable operations compared to maintenance in base period.

On August 4, Glencore announced :

2022 half-year report. Glencore's Chief Executive Officer, Gary Nagle, commented: "...underpinning a $10.3 billion increase (119%) in Group Adjusted EBITDA to $18.9 billion. Marketing Adjusted EBIT more than doubled to $3.7 billion, with energy products the standout, while Industrial Adjusted EBITDA increased $8.4 billion to $15.0 billion period-on-period. "Allied to the record EBITDA, our net working capital significantly increased during the period, with some $5 billion invested into Marketing, primarily Energy, in line with the materially higher oil, gas and coal prices, and their elevated volatilities. Despite this build, significant cash was generated, which reduced Net debt to $2.3 billion, allowing for today's announcement of $4.5 billion of "top-up" shareholder returns, comprising a $1.45 billion special distribution ($0.11 per share) alongside a new $3.0 billion buyback program (c.$0.23 per share). Today's additional returns lift total 2022 shareholder returns to c.$8.5 billion...

On August 4, Glencore announced :

Share buy-back programme. Glencore plc (the "Company") announces the commencement of a programme to make market purchases of its ordinary shares (the "Shares") of an aggregate value of USD3 billion (the "Programme"), subject to market conditions, which may continue until the 2022 full year results are announced in February 2023.

Jinchuan Group [HK:2362]

On August 19, Jinchuan Group International Resources announced :

Jinchuan International announces 2022 interim results revenue surges 50% to US$539.4 million. Development projects make breakthroughs...

Sumitomo Metal Mining Co. ( OTCPK:SMMYY )

On August 8, Sumitomo Metal Mining Co. announced : "Consolidated financial results for the first quarter ended June 30, 2022 [IFRS]..."

Anglo American [LSX:AAL] ( OTCPK:AAUKF )

No nickel related news for the month.

Eramet ( OTCPK:ERMAY )

No news for the month.

Sherritt International ( OTCPK:SHERF )[TSX:S]

No news for the month.

IGO Limited [ASX:IGO] ( OTC:IIDDY ) (formerly Independence Group)

On August 22, IGO Limited announced : "Buxton and IGO enter into 3 interdependent transactions." Highlights include:

• "BUX and IGO to amend the existing Merlin Project Joint Venture in the West Kimberley (currently IGO 51% and BUX 49%) by IGO acquiring a further 29% for $1,000,000 to take it to 80%.
• BUX and IGO to enter into a subscription agreement and option over the Narryer Project (WA). IGO to subscribe for BUX shares to take its voting power from its current 15.08% to 19.9%. The total subscription price will be $1,005,200. IGO will have an option to enter into an earn-in and joint venture agreement over the Narryer Project currently held as to 100% by BUX..."

On August 25, IGO Limited announced : "Commencement of drilling at Sentinel Project, West Kimberley."

Panoramic Resources [ASX:PAN] ( OTCPK:PANRF )

Panoramic's Savannah mine and mill has a forecast life of mine average annual production rate of 10,800t of nickel, 6,100t of copper and 800t of cobalt metal contained in concentrate.

On August 1, Panoramic Resources announced : "Savannah underground drilling continues to deliver." Highlights include:

• "Second underground drill fan to in fill the Savannah ore body immediately above the 900 Fault has been completed.
• Mineralisation thicknesses continue to be significantly better than predicted: 28.9m @ 1.16% Ni; 0.74% Cu and 0.06% Co from 97.2m in KUD1931... 17.4m @ 1.02% Ni; 1.38% Cu and 0.05% Co from 117.4m in KUD1938... 9.0m @ 2.95% Ni; 0.06% Cu and 0.15% Co from 162.0m in KUD1943...
• Drilling ongoing and to be followed immediately by a program to test the Savannah orebody below the 900 Fault."

On August 25, Panoramic Resources announced : "More strong results from Savannah underground drilling."

Nickel Industries Limited [ASX:NIC] ( OTCPK:NICMF )

On August 17, Nickel Industries Limited announced :

Binding Term Sheet - 200MWp plus 20MWh Battery Solar Project... within the Indonesia Morowali Industrial Park ('IMIP'), which will supply power to the Company's Hengjaya Nickel, Ranger Nickel and Oracle Nickel processing operations.

On August 24, Nickel Industries Limited announced :

Completion of US$225M Offering of Senior Secured Notes. Nickel Industries Limited (the "Company") is pleased to announce the completion of the issuance of US$225 million of senior secured notes (the "Notes") at an interest rate of 10.0%, maturing 23 August 2025. Proceeds from the Notes will, along with the Company's cash reserves and future earnings from existing operations, be applied towards the remaining payment obligations for the Oracle Nickel Project ("Oracle Nickel").

Nickel 28 Capital Corp. [TSXV:NKL] [GR:3JC] (CONXF)

On August 4, Nickel 28 announced : "Nickel 28 releases Ramu Q2 2022 operating performance." Highlights include:

• "Ramu Q2 2022 production of 8,128 tonnes of contained nickel in MHP.
• Ramu Q2 2022 nickel sales of 6,624 tonnes of contained nickel.
• LME average nickel price of US$13.13/lb in Q2 2022, a 67% increase from the same period last year. 2022 H1 LME nickel price is $12.50/lb compared to nickel price of $7.92/lb for H1 2021.
• Actual cash cost, net of by-product credits of $3.03/lb of nickel produced as MHP, a 7% increase from the same period last year. H1 2022 cash cost, net of by-product credits of $2.22/lb. of nickel which is unchanged from the same period in the prior year."

On August 15, Nickel 28 announced : "Nickel 28 releases update on Giga Royalty: Secures Mitsubishi as development partner."

Mincor Resources [ASX:MCR] ( OTCPK:MCRZF )

Owns the Kambalda Nickel Operations (includes the Cassini nickel sulphide mine), just south of Kambalda in Western Australia. First nickel concentrate production began in Q2 2022.

No significant news for the month.

Other nickel producers

First Quantum Minerals [TSX:FM] ( OTCPK:FQVLF ), Franco/Nevada [TSX:FNV] (FNV), MMG [HK:1208], South32 [ASX:S32], Lundin Mining [TSX:LUN] (LUNMF), Nickel Asia Corporation [PSE:NIKL] ( OTC:NIKAY ), Platinum Group Metals' [TSX:PTM] ( PLG ).

Nickel juniors

Horizonte Minerals Plc [TSX:HZM] [AIM:HZM] (HZMMF)

Horizonte is developing its 100% owned Araguaia Nickel Project (Araguaia) as Brazil's next major ferronickel mine.

On August 15, Horizonte Minerals Plc announced : "Interim financial results for the six months ended 30 June 2022." Highlights include:

• "Closing of US$633 million funding package for construction of the Araguaia nickel project ("Araguaia" or the "Project").
• A number of key construction contracts including furnace, EPCM, and earthworks awarded for Araguaia.
• Approved start of construction at Araguaia in late January 2022 with earthworks contractor mobilised to site in May to maximise productivity during the dry season.
• Commenced construction and broken ground at Araguaia in May 2022;
• Appointment of two industry leaders to the board: Gillian Davidson (independent non-executive director), Vincent Benoit (non-executive director).
• Philipa Varris appointed as Head of Sustainability;
• 2021 Sustainability Report published which is Horizonte's third such disclosure.
• Maintained a strong cash position of US$199 million at 30 June 2022, prior to any debt draw down."

Post period highlights

• "Contracts totalling US$293 million awarded to-date at Araguaia, including civil works and all major and long-lead time process plant equipment contracts.
• Agreement signed with Serviço Nacional de Aprendizagem Industrial for host community skills training.
• Araguaia construction running in line with project execution schedule."

Poseidon Nickel [ASX:POS] ( OTC:PSDNF )

On July 29, Poseidon Nickel announced : "Quarterly report 30 June 2022." Highlights include:

Black Swan Disseminated Mineral Resource Update

• "Updated Black Swan Mineral Resource Estimate of 28.9Mt at 0.63% nickel containing 181kt nickel.
• Measured and Indicated Resources now have 35% more contained nickel compared to the 2014 Resource."

Silver Swan Mineral Resource Update

• "Total Indicated and Inferred Resource at Silver Swan now 130kt @ 9.6% Ni for 12.4kt Ni at a 4.5% Ni cut off.
• High-grade Indicated Mineral Resources from both Golden Swan and Silver Swan now total 250kt @ 7.10% Ni for 17.6kt Ni, a 75% increase of nickel metal reported in 2019."

Black Swan Bankable Feasibility Study

• "Solid progress made on the Black Swan Feasibility Study.
• Preliminary metallurgical testwork demonstrates amenability of concentrates from both serpentinite and talc carbonate ore types to pressure oxidation, producing mixed hydroxide precipitate.
• Internal preliminary economic assessment supports various restart options including a 2.2 Mtpa processing plant throughput case."

Corporate

• "Discussions progressing with Pure Battery Technologies on providing concentrate feed to their proposed Kalgoorlie pCAM refinery.
• Cash and investments - $11.1 million at the 30 June 2022."

Amur Minerals Corp. [LSE:AMC] [GR:A7L] ( OTCPK:AMMCF )

On August 5, Amur Minerals Corp. announced : "Proposed disposal of the Kun-Manie Project for US$ 35 million." Highlights include:

• "...If the Transaction receives approval at the General Meeting and all other consents and approvals, following receipt of the consideration of US$ 35 million, the Company intends to pay a special dividend of 1.8 pence per share to Shareholders within 90 days of Completion."

Talon Metals [TSX:TLO] ( OTCPK:TLOFF ) Tamarack - (JV with Rio Tinto)

Tamarack is a high grade nickel-copper-cobalt project located in Minnesota, USA, with considerable exploration upside. Talon Metals owns a 51% project share, with potential to further earn-in to a 60% share by 2026.

On August 10, Talon Metals announced :

US EV battery supply chain: Talon Metals acquires exploration rights from Sweetwater Royalties to explore historic Henry Ford land package in Michigan.

On August 15, Talon Metals announced : "Talon Metals reports results for the quarter ended June 30, 2022."

Garibaldi Resources [TSXV:GGI] [GR:RQM] [LN:OUX6] ( OTCPK:GGIFF )

On July 28, Garibaldi Resources announced : "Garibaldi's Nickel Mountain drill program underway."

OZ Minerals [ASX:OZL] ( OTCPK:OZMLF )

Owns the West Musgrave nickel-copper project in Western Australia as well as several other mines.

On July 25, OZ Minerals announced : "Second quarter report 2022 for the three months ending 30 June 2022." Highlights include:

Growth projects advancing

• "2022 Group production and cost guidance updated in June 1 to reflect: Softer start to the year due to weather and COVID absenteeism which continued into Q2. Carrapateena material handling system belt damage in Q2. Group unit costs guidance increased due to lower volumes, labour pressures, and inflation on other inputs.
• Pedra Branca mining ramp up completed ahead of schedule.
• Growth projects: West Musgrave scheduled for investment decision in H2 2022. Terms Sheet entered into in relation to an option to acquire the Kalkaroo copper project in South Australia.
• Working capital liquidity strengthened with corporate debt facility increased from $480m to $700m.
• H1 net revenue of $909 million enabling net cash position of $82 million after reinvesting $210 million in growth projects."

On August 8, OZ Minerals announced :

OZ Minerals rejects Indicative Proposal from BHP... OZ Minerals Managing Director and Chief Executive Officer, Andrew Cole said: "We have a unique set of copper and nickel assets, all with strong long-term growth potential in quality locations. We are mining minerals that are in strong demand particularly for the global electrification and decarbonisation thematic and we have a long-life Resource and Reserve base. We do not consider the proposal from BHP sufficiently recognises these attributes".

On August 15, OZ Minerals announced : All regulatory approvals now in place for West Musgrave project."

On August 26, OZ Minerals announced : "Momentum rebuilding after soft first half."

On August 26, OZ Minerals announced : "OZ Minerals set to ride electrification growth wave." Highlights include:

• "Global demand for copper and nickel set to reach unprecedented highs during this decade and beyond.
• OZ Minerals uniquely positioned for the oncoming electrification and decarbonisation era.
• Quality low operating cost, long-life assets in low-risk jurisdictions with: Brownfields expansions underway at Carrapateena and Prominent Hill. Greenfield projects well advanced, including West Musgrave.
• A unique copper and nickel growth pipeline with a clear pathway to more than double production.
• Refreshed strategy from copper focus to modern minerals to align strategy, portfolio and future opportunities."

St George Mining Ltd. [ASX:SGQ] [GR:SOG]

The Cathedrals, Stricklands and Investigators nickel-copper discoveries (at Mt Alexander) are located on E29/638, which is held in joint venture by Western Areas Limited (25%) and St George (75%). St George is the Manager of the Project with Western Areas retaining a 25% non-contributing interest in the Project (in regard to E29/638 only) until there is a decision to mine.

On July 29, St George Mining Ltd. announced : "Quarterly activities report for the period ended 30 June 2022." Highlights include:

Mt Alexander Project

• "Seismic survey of 13-line kilometres completed with results pending.
• Moving loop electromagnetic (MLEM) survey using an ARMIT sensor is in progress.
• Both geophysical surveys will assist in targeting the potential for additional massive Ni-Cu-PGE deposits with drilling of new targets planned for Q3 2022.
• IGO (ASX: IGO) becomes St George's JV partner for tenement E29/638 following its takeover of Western Areas..."

On August 23, St George Mining Ltd. announced :

Exploration update. Paterson drilling wraps up with assays pending; focus returns to Mt Alexander Ni-Cu-PGE and lithium field work as well as target generation at Ajana.

Sama Resources [TSXV: SME] [GR;8RS] ( OTCPK:SAMMF )

No news for the month.

Premium Nickel Resources Ltd. [TSXV:PNRL] (WSCRD)

On August 3, Premium Nickel Resources Ltd. announced :

Premium Nickel Resources completes "Go Public" transaction; closes reverse takeover transaction. Premium Nickel Resources Ltd. (formerly, North American Nickel Inc.) (TSXV:PNRL) ("Premium Nickel" or the "Corporation") is pleased to announce the closing of its previously-announced "reverse takeover" transaction (the "RTO Transaction"). Following the closing of the RTO Transaction, the common shares of Premium Nickel are expected to be listed for trading as soon as next week on the TSX Venture Exchange (the "Exchange") under the symbol "PNRL".

On August 15, Premium Nickel Resources Ltd. announced : "Premium Nickel Resources Ltd. announces expected commencement of trading date & company overview."

For further details see:

Nickel Miners News For The Month Of August 2022