TMC - Nickel Miners News For The Month Of December 2023

2023-12-31 04:21:26 ET

Summary

• Nickel spot prices were flat for the last month. Low nickel prices leads to BHP issuing dire warning on nickel mines.
• 2024 nickel supply is set to outpace growth, which will suppress prices and exert pressure on producers' margins.
• In nickel company news - Panoramic Resources collapses into Voluntary Administration. Premium Nickel Resources drills 10.45 metres of 1.45% NiEq.
• Horizonte Minerals signs interim US$20 million funding package. Power Nickel reports a Resource of 5.4 Million Indicated Tonnes grading 1.05% NiEq and 1.8 Million Inferred tonnes grading 1.35 % NiEq. at NISK.

Welcome to the nickel miners news for December.

The past month saw continued low nickel prices resulting in the collapse of a small nickel producer. 2023 has been a tough year for the base and EV metals as China slowed.

Nickel price news

As of December 30, the nickel spot price was USD 7.44/lb , flat from USD 7.46/lb last month. LME shows the price at USD 16,250/tonne . Nickel inventory at the London Metals Exchange [LME] was significantly higher the past month at 64,056 tonnes (45,468 tonnes last month).

Nickel spot price 5 year chart - Current price = USD 7.44/lb

Nickel demand v supply chart

Nickel Business Environment: Supply-Demand Balance (as of May 2023) ( source )

Benchmark Mineral Intelligence forecasts deficits for lithium, nickel & cobalt to increase from 2027 onwards ( source )

Trend Investing v IEA demand forecast for EV metals ( Trend Investing ) ( IEA )

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 )

2022 - IEA forecasts 60 new nickel mines needed by 2030

BMI forecasts we need 330+ new EV metal mines from 2022 to 2035 to meet surging demand - 72 new 45,500tpa nickel mines needed by 2035

Lithium & Nickel are the two 'high importance to energy' critical materials in the medium term (2025-2035) ( source - page 29)

Nickel Market News

On December 1 Energy.gov announced : "Department of Energy releases proposed interpretive guidance on Foreign Entity of Concern for public comment."

On December 5 Fastmarkets reported :

FEOC definition leaves most Indonesian nickel outside IRA tax credits. A Foreign Entity of Concern (FEOC) includes any foreign entity that is "owned by, controlled by or subject to the jurisdiction or direction of a government of a covered nation". Those countries that currently fall into this "covered nation" category are China, Russia, North Korea and Iran...Starting from next year, with a period of transition, companies that have a more than 25% ownership or control by a FEOC - including board seats, voting rights or equity - will not be eligible for tax credits available under the Inflation Reduction Act (IRA). "To strengthen the security of America's supply chains, beginning in 2024, an eligible clean vehicle may not contain any battery components that are manufactured or assembled by a FEOC, and, beginning in 2025, an eligible clean vehicle may not contain any critical minerals that were extracted, processed or recycled by a FEOC," the Department stated...

On December 5 Business today reported :

Ford acquires stake in Indonesia nickel project. Ford Motor Co will take a direct stake in a battery-nickel plant under construction in Indonesia... The US automaker joins PT Vale Indonesia and China's Zhejiang Huayou Cobalt Co as investors in a project to make an annual 120,000 tonnes of nickel chemicals for EV batteries, according to a joint statement from the companies. The Pomalaa plant is expected to start commercial production in 2026, with total investment at 67.5 trillion rupiah (RM20.2 billion). The statement did not disclose each company's share of the investment...

On December 28 Argus Media reported :

Viewpoint: Weak Ni fundamentals to weigh on EV market. The start of a restocking cycle in 2024 across the Chinese electric vehicle ( EV ) battery value chain, along with easing inflationary pressures in major growth area Europe, will boost demand for nickel-based battery cathodes, ingredient nickel sulphate and input feedstocks after a slowdown this year. But supply is set to outpace this growth, with a ramp up in mixed hydroxide precipitate (MHP) and nickel matte production, together with a Class 1 and battery chemicals surplus, set to suppress prices and exert pressure on producers' margins... Dutch investment bank ING expects benchmark nickel prices to be little changed and average $16,600/t in the first quarter of next year, with a full-year average of $16,813/t. And the International Nickel Study Group expects the global nickel surplus to widen to a record 239,000t in 2024, from 223,000t in 2023...

On December 30 Bloomberg reported :

Nickel is year's biggest metals loser, copper manages small gain. Nickel slumps 45% this year as supply continues to grow... In a mostly lackluster year for metals trading, nickel emerged as the worst performer and might not see a reprieve anytime soon. The metal used in stainless steel and electric vehicle batteries posted an annual drop of 45% on the London Metal Exchange, the biggest decline since 2008. That's by far the worst outcome among industrial metals, and contrasts with a 2.2% gain for copper or with iron ore's advance of about 20% in Singapore. Metals have been pressured this year by global economic headwinds and uncertainty over China's growth outlook.

Nickel Company News

Producers

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

On December 14, MMC Norilsk Nickel announced : "Nornickel publishes first-ever climate change report..."

Vale SA (NYSE: VALE )

Vale Voisey's Bay Mine is a key Canadian and global source of nickel. Vale plans a refinery at Bécancour in Québec to supply GM with battery grade nickel sulfate with deliveries targeted to commence in H2 2026.

No nickel related news for the month. See 'market news' story - "Ford acquires stake in Indonesia nickel project." Ford JV with PT Vale Indonesia & Huayou Cobalt.

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

On December 12 Mining Weekly reported :

Nickel Industries enters sales contract with Glencore. ASX-listed Nickel Industries has announced a maiden nickel matte sales contract with Glencore. The contract, starting in January and running for an initial six-month term, will see nickel matte from the company's Hengjaya Nickel project ( HNI ), in Indonesia, sold to Glencore, representing NCI's first sales to western customers.

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 December 15, Australian Financial Review reported :

BHP issues dire warning on nickel mines. The overhaul of the Albanese government's critical minerals strategy offers no relief to the besieged nickel industry, which faces further job losses at BHP-owned mines. BHP said its Nickel West business was not immune to the challenges suffocating the sector where some mines have shut down, and fellow producer Panoramic Resources was tipped into administration this week.

BHP's Nickel West operations

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

On December 8, Anglo American announced : "Anglo American unlocks value through operational, cost and capital discipline." Highlights include:

Guidance outlook:

...2024

• "Production expected to decrease by c.4%(2): production rescheduled to enhance value and reduce unit costs.
• Unit costs expected to decrease by c.2%(3): cost discipline more than offsetting inflation.
• Capex of c.$5.7 billion (a reduction of c.$0.8 billion) and includes Woodsmith..."

Eramet [FRA:ERA] ( OTCPK:ERMAY )

No nickel related news for the month.

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

No news for the month.

IGO Limited [ASX:IGO] ( OTC:IIDDY )

On December 11, IGO Limited announced : "Ivan Vella commences as CEO and Managing Director."

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 December 14, Panoramic Resources announced :

Appointment of Voluntary Administrators to Panoramic Resources Limited... As previously announced to the ASX and investors on November 16, 2023, being impacted by a falling nickel price, Panoramic initiated a strategic review... Panoramic retains sufficient cash to enable the Administrators to conduct this on a 'trade-on' basis, so that the mine will continue to operate, at least in the short-term, while the Administrators undertake this process.

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

On December 19, Nickel 28 Capital Corp. announced : "Nickel 28 files fiscal Q3 financial statements." Highlights include:

• "Cash distribution from Ramu for H1 2023 operating surpluses of $4.8 million and repayment of $8.9 million of construction debt during the quarter for a total distribution of $13.7 million.
• Strong quarter end cash balance of $9.8 million.
• Total non-recourse construction debt of $49 million as at October 31, 2023.
• Production of 8,979 tonnes of contained nickel and 851 tonnes of contained cobalt in mixed hydroxide precipitate ("MHP") during the third calendar quarter, placing Ramu as one of the top producers of MHP globally.
• Sales of 8,832 tonnes of contained nickel and 836 tonnes of contained cobalt in MHP during the third calendar quarter.
• Actual cash costs for the third calendar quarter, net of by-product sales, of $2.77/lb. of contained nickel, a 29% decrease compared to Q2, largely as a result of reduced input commodity prices.
• Share of operating profit from Ramu of $3.7 million during the third calendar quarter.
• Total net and comprehensive income of $1.1 million ($0.01/share) for the three months ended October 31, 2023, largely as a result of the Company's share of operating profit from Ramu."

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

On December 11, Nickel 28 announced :

Nickel Industries trialing EV trucks in operations. Nickel Industries Limited (Nickel Industries or the Company) is pleased to advise it is trialing Electric Vehicles (EVs) within its operating fleet as part of its strategy to achieve a 50% reduction in carbon intensity by 2035 and net zero emissions by 2050. As the Company continues to take a leadership role in advancing the sustainability of Indonesia's nickel industry, the Company is now trialing the use of EVs across both its IMIP and Hengjaya Mine operations with each EV expected to deliver significant emission savings compared with traditional vehicles.

On December 12, Nickel 28 announced :

Nickel matte sales contract with Glencore. Nickel Industries Limited (Nickel Industries or the Company) is pleased to advise it has entered into a maiden nickel matte sales contract with Glencore AG (Glencore). The contract, commencing January 2024 and running for an initial 6-month term, will see nickel matte from the Company's Hengjaya Nickel Project [HNI] sold to Glencore and represents the Company's first direct sales to western customers...

Other nickel producers

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

Nickel juniors

Horizonte Minerals Plc [TSX:HZM] [AIM:HZM]

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

On December 19, Horizonte Minerals Plc announced : "Araguaia Project update." Highlights include:

• "Demobilization well advanced with two critical construction activities continuing to progress.
• Consolidated cash position of US$42m as of December 15th 2023 which is expected to last until the end of January 2024.
• Positive discussions remain ongoing between lenders and cornerstone shareholders with regard to commercial terms for an interim financing solution to extend this period.
• The Company and independent consultants continue to review the outstanding Project capital expenditure and schedule re-estimate, necessary to implement a full funding solution."

On December 27, Horizonte Minerals Plc announced :

Horizonte signs interim US$20 million funding package... provided by Orion, Glencore and La Mancha... The funding package is expected to provide liquidity while a full funding solution is progressed. Agreement with existing Senior Lenders to defer interest payments due 31 December 2023...

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

On December 18, Poseidon Nickel announced : "Exploration & gold tailings update." Highlights include:

Maggie Hays West prospect returns positive assay results

• "Latest drill assay results confirm a strong, 1km coherent Ni-Cu-PGE regolith anomaly at Maggie Hays West. Drill results include: PLJA176: 36m @ 0.99% Ni, 286ppm Cu, 141ppb PGE... PLJA177: 21m @ 1.13% Ni, 374ppm Cu, 136ppb PGE...
• Maggie Hays West is confirmed as a compelling and exciting regional nickel sulphide target and further drilling to progress this exciting target is warranted."

Regional nickel targets along the Western Ultramafic Unit

• "Final assays from the recent program testing other prospective regional targets remain outstanding, including some PGE results from Maggie Hays West."

Windarra

• "External consultant engaged to undertake further exploration targeting.
• Ongoing engagement with multiple parties showing renewed interest in the Windarra and Lancefield gold tailings projects as well as the South Windarra water resource."

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

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

No significant news for the month.

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

No news for the month.

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 December 27 St George Mining reported :

EXPLORATION UPDATE. Strong Foundations for Growth of Lithium and Battery Metals Projects in Western Australia...

Note: Mostly focused on lithium.

Queensland Pacific Metals [ASX:QPM]

On December 8, Queensland Pacific Metals announced :

Successful HPA Demonstration Plant Campaign... 6 x ~10 kg 4N HPA blends have been transported to the United States to provide to potential offtakers. Initial target offtakers are from the LED market...

Premium Nickel Resources Corporation [TSXV:PNRL]( OTCQX:PNRLF )

On December 14, Premium Nickel Resources Corporation announced :

Premium Nickel Resources Ltd. announces closing of previously announced equity and debt financing package of $21.6 million...

On December 19, Premium Nickel Resources Corporation announced :

Premium Nickel reports assays and extension of historic resource at Selebi North Underground. 10.45 metres of 1.45% NiEq (0.48% Ni; 1.82% Cu; 0.02% Co)... CEO, Keith Morrison said, "Most recently, drillhole SNUG-23-017, while being extended to be used as an underground BHEM platform, intersected N2 Limb mineralization 180 metres down-plunge of the wire frame of the historic resource. This intersection confirms that mineralization continues to depth beyond the bottom of the legacy resource."

Canada Nickel Company [TSXV:CNC]( OTCQX:CNIKF )

On December 18, Canada Nickel Company announced :

Canada Nickel provides financing update. Canada Nickel Company Inc. ("Canada Nickel" or the "Company") (TSXV: CNC) (OTCQX: CNIKF) today announced that it has extended the repayment date of the US$12 million loan facility announced September 18, 2023 with Auramet International, Inc. ("Auramet") to January 18, 2024 by agreeing to issue 350,000 one year common share purchase warrants with a strike price of $1.19 per share and pay an extension fee of 1.5% of the repayment amount of US$185,519. The loan will carry an interest rate of 1.25% per month for the extension period. The warrants and the underlying shares will be subject to a four month hold period under applicable Canadian securities laws. The extension is also subject to TSX-V approval.

Ardea Resources [ASX:ARL] ( OTCPK:ARRRF )

In total, Ardea has 6.1Mt of contained nickel and 386,000t of contained cobalt at their KNP Project near Kalgoorlie in Western Australia. Ardea is also exploring for gold and nickel sulphide on their >5,100 km2 of 100% controlled tenements in the Eastern Goldfields region of Western Australia.

On December 15, Ardea Resources announced :

Nickel sulphide prospectivity confirmed and Lithium-Caesium-Rubidium bearing intrusives in Highway EIS drillhole... Petrological studies confirm the key nickel sulphide mineral pentlandite is present in AHID0024. The Walter Williams Formation (WWF) komatiite ultramafic within the Goongarrie Hub is demonstrated to be fertile for nickel sulphide mineralisation...

On December 21, Ardea Resources announced : "Ardea and Japanese Consortium: Update on progress on KNP - Goongarrie Hub." Highlights include:

• "Ardea continues to make substantial progress on the Kalgoorlie Nickel Project - Goongarrie Hub Definitive Feasibility Study [DFS] scope with a consortium (Consortium) consisting of Sumitomo Metal Mining ( SMM ) and Mitsubishi Corporation ( MC ).
• Following multiple site visits and technical meetings in Perth, the Consortium has made significant progress towards completion of its technical due diligence and Ardea continues to advance time critical workstreams ahead of Final Agreements.
• SMM and MC have reaffirmed their commitment to continue negotiations under the MOU and continuing discussions with Ardea. Mitsui & Co., Ltd (Mitsui) has elected to withdraw from the Consortium.
• Ardea and the Consortium have agreed to extend the timing to agree the DFS scope and the completion of the Consortium's due diligence by the end of February 2024 and have reaffirmed their commitment to continue to negotiate binding Final Agreements, that are expected to be executed by the end of Quarter 1 (Q1), 2024.
• Future work is aimed at completing the DFS, making a Final Investment Decision [FID] and securing project development funding for the Goongarrie Hub to become a globally significant producer of nickel-cobalt for the Lithium-Ion Battery sector, with Final Agreements expected in Q1, 2024."

For further details see:

Nickel Miners News For The Month Of December 2023