SREMF - Nickel Miners News For The Month Of July 2023

2023-08-01 06:17:45 ET

Summary

• Nickel spot prices were higher the last month.
• Nickel market news - Wood Mackenzie is expecting a better H2 from both the stainless and battery segments. Nickel set to flood the LME, turning metal squeeze into glut.
• Nickel company news - Vale sells a 13% equity interest in Vale Base Metals Limited (VBM) to a JV between Ma’aden and Saudi Arabia’s Public Investment Fund for US$3.4B.
• Mincor Resources takeover by Wyloo Metals Pty Ltd completed. Horizonte Minerals Plc - Mining approval received for their Araguaia Nickel Project in Brazil.
• Ardea Resources KNP Project FS results in a Post-tax NPV7% of A$4,980M and IRR of 23%. Ardea signs non-binding MOU with Sumitomo Metal Mining, Mitsubishi Corporation, and Mitsui & Co. Alliance Nickel signs binding offtake agreement and share subscription agreement with Stellantis N.V.

Welcome to the nickel miners news for July.

The past month saw some nickel price improvement but also saw renewed calls for an oversupply in 2023, albeit with some forecasting China nickel demand to improve from stainless steel and EVs.

Nickel price news

As of July 31, the nickel spot price was USD 9.71 , higher than USD 9.22 last month. LME shows the price at USD 21,625/tonne . Nickel inventory at the London Metals Exchange [LME] was lower the past month at 37,542 tonnes (39,348 tonnes last month).

Nickel spot price 5 year chart - Current price = USD 9.71/lb

Nickel demand v supply chart

Nickel Business Environment: Supply-Demand Balance (as of May 2023) ( 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 July 10 Australian Resources & Investment reported :

Will nickel prices bounce back?... According to BMI (Research) - a unit of Fitch Solutions - nickel averaged ,450 per tonne up until June 27, but the commodity analyst doesn't expect the base metal to return to such heights, reducing its 2023 average price forecast from ,500 per tonne to ,500 per tonne... BMI said there has been excess Class 2 nickel production entering the market, with Indonesia and China the culprits... Despite the headwinds, BMI said tight LME nickel inventories and a weakening US dollar would prevent the commodity from collapsing to pre-pandemic levels... "We see some upside from a very strong long-term demand outlook for nickel due to its role in EV manufacturing, which will support prices to some degree in the short term," BMI said. "Electric vehicles require 39.9kg of nickel relative to the 0kg needed in conventional cars, presenting significant upside to nickel demand as the green energy transition accelerates." BMI's long-term outlook sees nickel prices averaging ,500 per tonne in 2027.

On July 12 Investing News reported :

Nickel price update: Q2 2023 in Review... The main factors impacting the nickel market in the second quarter were "the poor pickup in the Chinese economy and the increasing excess of nickel supply," the analyst told the Investing News Network... "In light of the Chinese economic and EV sector-specific incentives just released, we are expecting a better H2 from both the stainless and battery segments," Gardner said. Chinese demand is expected to be up by 8 percent for stainless steel and 18 percent for the battery segment in the second half compared to the first half of this year. Looking further ahead, the nickel market will see a shift in demand segments in the coming decade, with the battery space growing its share. Fastmarkets is forecasting its share of demand will jump from 12 percent in 2022 to 41 percent in 2033. "This is going to require substantial additional nickel units, and not the type of units that the industry has geared itself to produce in the recent past..."

On July 21 Bloomberg reported :

(Macquarie Group Ltd) Nickel set to flood the LME, turning metal squeeze into glut (at the LME). New plants could lift LME-deliverable capacity 35% by 2024.

Nickel company news

Producers

Vale SA ( 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.

On July 18 Vale SA announced :

2Q23 sales and production report... Nickel production increased 8% y/y largely attributed to better operational performance in Sudbury and Indonesia. Nickel sales increased 3% y/y driven by improved production, remaining relatively stable q/q due to inventory buildup in Q1...

On July 27 Vale SA announced : "Vale's performance in 2Q23." Highlights include:

Business Results

• "Proforma adjusted EBITDA from continued operations of US$ 4.1 billion in Q2, down US$ 1.4 billion y/y, mainly reflecting lower realized prices of iron ore fines and nickel.
• Free Cash Flow from Operations of US$ 0.8 billion in Q2, representing an EBITDA-to-cash conversion of 19%..."

On July 27 Vale SA announced :

Vale announces strategic partnership with Manara Minerals and Engine No. 1 to accelerate growth of energy transition metals business. Vale today signed a binding agreement with Manara Minerals, a joint venture between Ma'aden and Saudi Arabia's Public Investment Fund, under which Manara Minerals will invest in Vale Base Metals Limited (VBM), the holding entity for Vale's energy transition metals business, at an implied enterprise value of US$ 26 billion... The total consideration to be paid to VBM under both agreements is US$ 3.4 billion, for a 13% equity interest. This strategic partnership will fast-track VBM's expected US$ 25-30 billion capital program over the next decade and help drive a significant potential increase in VBM's production from about 350kt/year to 900kt/year in copper and from roughly 175kt/year to more than 300kt/year in nickel. This program will generate jobs, economic growth, procurement and supplier opportunities as well as socioeconomic benefits in communities across the key critical mineral jurisdictions where VBM operates in Brazil, Canada and Indonesia.

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

On June 30 Norilsk Nickel announced :

Nornickel harnesses new technology to boost efficiency. Nickel Plant shutdown in Norilsk helped the Company not only slash sulphur dioxide emissions within Norilsk's residential area by a third. Nornickel was also able to streamline production flows at its two concentrators. These efforts have translated into higher metal recovery rates and end product output.

On July 6 Norilsk Nickel announced : "Nornickel sells U.S.-based metals distributor in an all-cash transaction."

On July 24 Norilsk Nickel announced :

Nornickel announces consolidated production results for 1h 2023... In 2Q 2023, consolidated nickel output decreased 4% quarter-on-quarter (q-o-q) to 45 kt, practically all of which were produced from the Company's own Russian feed.

BHP Group [ASX:BHP] ( 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 July 11 BHP Group announced : "JX Metals and BHP sign MoU for green enabling partnership..."

On July 20 BHP Group announced : "BHP operational review for the year ended 30 June 2023." Highlights include:

• "Full year production guidance was achieved for copper, iron ore, metallurgical coal and energy coal. Nickel achieved revised guidance and finished in line with the lower end of original guidance..."

Note: 2023 FY nickel production was 80kt up 4% YoY. 2024 FY guidance is 77-87kt nickel.

BHP's Nickel West operations

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

On June 21 Glencore announced : "Half-year production report 2023." Highlights include:

• "Own sourced nickel production of 46,400 tonnes was 11,400 tonnes (20%) lower than H1 2022, primarily reflecting higher INO third party production (versus own sourced), in large part necessitated by the strike at Raglan mine in 2022.

• Full year production guidance remains unchanged from that presented in Glencore's Q1 2023 Production Report and December 2022 investor update."

Jinchuan Group [HK:2362]

On June 28 Jinchuan Group announced :

Jinchuan achieves production and operation goals in Jan-June. In the first half of 2023, Jinchuan Group achieved its production and operation goals, with an expected revenue of 181.4 billion yuan (about $25.15 billion) and total profits and taxes of 9.08 billion yuan.

On July 27 Jinchuan Group announced :

Project construction leads high quality development of Jinchuan Group... Since the beginning of this year, Jinchuan Group has accelerated its project construction, supporting and driving investment, and promoting industrial transformation and upgrading... After the construction of two 35,000 tons of nickel sulfate projects, Jinchuan Group Nickel Salt Company had a production capacity of 105,000 tons of nickel sulfate. However there was still a gap for meeting market demand. On April 18th, Jinchuan Group's 100,000 ton/year nickel sulfate solution project for power batteries successfully produced the first batch of qualified solutions, indicating that the project was ready for operation...

Sumitomo Metal Mining Co. ( OTCPK:SMMYY )

No significant news for the month.

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

On July 20 Anglo American announced :

Anglo American production report Q2 2023... Nickel production decreased by 4% to 9,900 tonnes, reflecting the impact of lower grades, despite operational improvements at Codemin...

On July 27 Anglo American announced : "Anglo American half year financial report 2023. Half year financial report for the six months ended 30 June 2023." Highlights include:

• "Underlying EBITDA* of $5.1 billion, a 41% decrease, largely due to weaker product prices.
• Profit attributable to equity shareholders of $1.3 billion.
• Net debt* of $8.8 billion..."

On July 27 Anglo American announced : "Anglo American Platinum appoints Craig Miller CEO..."

Eramet [FRA:ERA] ( OTCPK:ERMAY )

On July 27 Seeking Alpha reported : "Eramet GAAP EPS of $3.44, revenue of €1.61B (-39.0% Y/Y)..." (mostly due to lower manganese prices and volumes (logistical incidents in Gabon)).

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

On June 27 Sherritt International announced : "Sherritt receives final 2023 cobalt dividend and $64 million cash top-up dividend under its Cobalt Swap Agreement..."

On July 26 Sherritt International announced : "Sherritt reports Q2 results and strong liquidity from Cobalt Swap." Highlights include:

• "Available liquidity in Canada of $125 million largely driven by the successful completion of the first year of the Cobalt Swap.
• Final 802 tonnes of cobalt dividend required to fulfill the 2,082 tonne annual maximum volume received...
• Sherritt's share of finished nickel and cobalt production at the Moa JV was 3,268 tonnes and 331 tonnes, 12% and 16% lower, respectively, than the prior year quarter.
• Net direct cash cost (NDCC)(1) was US$7.22/lb in Q2 2023 compared to US$2.19/lb in Q2 2022 primarily due to 63% lower cobalt and 35% lower fertilizer realized prices..."

Developments Subsequent to Quarter End

• "Sherritt paid $3.4 million cash interest in July on its 10.75% unsecured PIK option notes due 2029 (PIK Notes)..."

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

On July 17 IGO Limited announced :

Non-cash impairment of assets acquired from Western Areas and Cosmos Project update... Having concluded the purchase price allocation process and the life of mine budgets relating to the Forrestania and Cosmos assets, IGO can advise that it expects to record a non-cash, pre-tax impairment expense of between A$880M and A$980M in its financial results for the year ending 30 June 2023. The impairment relates to the reassessment of the accounting value at Cosmos and Forrestania to reflect higher capital and operating costs, challenges to the mine production schedule and delays in development at Cosmos...

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 June 29 Panoramic Resources announced : "Savannah Nickel Project - Operational update." Highlights include:

• "...Underground mining activities have been orientated towards preparation for the rapid ramp-up of ore production to coincide with the process plant returning to full operations, now expected in mid-July 2023."

On July 26 Panoramic Resources announced :

Quarterly activities report for the period ending 30 June 2023... Cash at the end of the quarter of A$14.2 million, down by 57% from the end of the prior quarter. Debt repayments for the quarter total $2.5 million.

On July 26 Panoramic Resources announced : Revolving Credit Facility term extension and Offtake Option." Highlights include:

• "Maturity date of the Revolving Credit Facility with Trafigura extended by 12 months to 31 December 2024.
• Facility limit of US$15 million remains unchanged, subject to reduction by debt repayments.
• Trafigura granted an option to extend its concentrate offtake agreement by two years to February 2030 on the current terms."

On July 26 Panoramic Resources announced : "Fully underwritten A$40 million Placement, non-underwritten SPP & Trafigura Amendments."

On July 27 Panoramic Resources announced : Successful completion of bookbuild for A$40 million Placement."

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

On June 28 Nickel 28 announced : "Nickel 28 files fiscal Q1 financial statements." Highlights include:

• "Production of 9,016 tonnes of contained nickel and 798 tonnes of contained cobalt in MHP during the first calendar quarter, placing Ramu as one of the top producers of mixed hydroxide precipitate ("MHP") globally.
• Sales of 7,914 tonnes of contained nickel and 673 tonnes of contained cobalt in MHP during the first calendar quarter.
• Actual cash costs for the first calendar quarter, net of by-product sales, of US$3.12/lb. of contained nickel, a 32% reduction compared to Q4 2022;
• Strong quarter end cash balance of US$10.6 million.
• Total net and comprehensive income of US$0.5 million (US$0.01/share) for the three months ended April 30, 2023, largely as a result of the Company's share of operating profit from Ramu Nickel Mine.
• Receipt by the Company of a cash distribution of approximately US$9.7M from Ramu for its distributable share of the mine's operating surpluses for the second half of calendar 2022.
• Total non-recourse construction debt of US$56.5 million as at April 30, 2023."

On July 26 Nickel 28 announced : "Nickel 28 releases Ramu Q2 2023 operating performance." Highlights include:

• "Production of 7,784 tonnes of contained nickel and 717 tonnes of contained cobalt in mixed hydroxide precipitate ("MHP") during the second calendar quarter, continuing to place Ramu as one of the top producers of MHP globally..."

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

On July 3 Nickel Industries Limited announced :

FIRB approval received for placement to shanghai decent... the FIRB condition precedent to the US$270 million placement of Company shares to Shanghai Decent has been satisfied.

On July 18 Nickel Industries Limited announced :

Record quarterly RKEF production of 32,558 tonnes as Oracle Nickel continues strong ramp-up... For the June quarter, ONI produced 10,141 tonnes of nickel metal, a 94.8% increase from the March quarter. With the commencement of commissioning of the ONI power plant late in the June quarter, further increases in production volumes are expected in the current September quarter, in addition to material electricity cost savings...

Mincor Resources [ASX:MCR] ( OTCPK:MCRZF ) - Wyloo Metals Pty Ltd completed their takeover

On July 5 Mincor Resources announced :

Wyloo consolidated - close of on-market takeover Offer for Mincor Resources NL... The Offer period ended at the close of trading on the ASX today. At the end of the Offer period, Wyloo Consolidated has an interest and voting power in 92.71% of Mincor. As Wyloo Consolidated has a relevant interest in more than 90% of Mincor shares and has acquired more than 75% of the Mincor shares that it offered to acquire under its Offer, Wyloo Consolidated will be proceeding to compulsory acquisition of the remaining Mincor shares under the compulsory acquisition provisions of the Corporations Act 2001 (Cth). Compulsory acquisition will be on the same terms as those offered by Wyloo Consolidated under the Offer, which means that remaining shareholders will receive $1.40 cash per Mincor share.

On July 13 Mincor Resources announced :

Wyloo Consolidated - compulsory acquisition of remaining shares in Mincor Resources NL...

On July 25 Mincor Resources announced :

Mincor Resources NL (ASX: MCR) - removal from official list. Mincor Resources NL ('MCR') will be removed from the Official List at the close of trading on Tuesday, 25 July 2023 under Listing Rule 17.14, following compulsory acquisition of its remaining securities by Wyloo Consolidated Investments Pty Ltd.

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] ( OTC:NIKAY ), Platinum Group Metals' [TSX:PTM] ( PLG ).

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 June 29 Horizonte Minerals Plc announced :

Horizonte Minerals achieves significant construction milestone at its Araguaia Nickel Project with delivery of rotary kiln...

On July 6 Horizonte Minerals Plc announced :

Mining approval received for Araguaia... Jeremy Martin, CEO of Horizonte Minerals, commented: "I am pleased to announce the approval to begin mining activities at Araguaia, another important milestone for Horizonte. The approval allows ore to be mined and stockpiled with the aim of mitigating a key commissioning risk as part of our mine-to-mill strategy ahead of the plant start-up next year. "The Horizonte team continues to work closely with SEMAS and other local stakeholders, towards delivering long-term sustainable value for all involved in this new tier 1 nickel project."

You can read a recent Trend Investing article here that discusses Horizonte Minerals.

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

On July 3 Poseidon Nickel announced : "Exciting greenfields nickel intersections at Lake Johnston." Highlights include:

• "...At Maggie Hays West, Nickel has been intersected at the base of the WUU. Best results include: PLJA075 28m @ 0.66% Ni, 187 ppm Cu from 20m including 4m @ 1.32% Ni, 134ppm Cu from 40m. PLJA076 8m @ 1.18% Ni, 143 ppm Cu from 40m. PLJA078 24m @ 0.88% Ni, 220 ppm Cu from 12m including 12m @ 1.16% Ni, 256ppm Cu from 20m. PLJA080 4m @ 0.52% Ni, 744 ppm Cu from 36m. PLJA081 7m @ 0.70% Ni, 588 ppm Cu from 40m (EOH).
• These intersections indicate a coherent highly anomalous Ni:Cu regolith trend over 300m.
• The Maggie Hays West Ni:Cu regolith anomaly is located up dip from isolated historic nickel sulphide intersections: LJD0003A 1.70m @ 1.59% Ni, 810ppm Cu*. MHUD0551 2.55m @ 1.92% Ni, 1344ppm Cu*.
• Maggie Hays West could represent a mineralised, open-ended channel, up to 400m wide and is considered a compelling nickel sulphide target.
• Two new prospects identified at Windy Hill and Jaymee Ruth with highly anomalous Ni:Cu values alongside the West Ultramafic Unit. Best results include: Windy Hill: PLJA140 12m @ 0.46% Ni, 329ppm Cu from 8m, and 4m @ 0.48% Ni, 812ppm Cu from 24m (EOH) Jaymee Ruth. PLJA122 5m @ 0.51% Ni, 255ppm Cu from 5m (EOH)..."

On July 17 Poseidon Nickel announced : "Black Swan update & exploration plans... Significant progress made towards the Black Swan restart.

• Offtake and project debt financing well advanced with draft documentation received from shortlisted parties and being negotiated.
• Environmental Works Approval obtained and regulatory approval for the Mining Proposal anticipated late in 2023.
• Western Power has advised grid power will be available from late 2024.
• Additional metallurgical testwork will be conducted to confirm recovery assumptions for the disseminated serpentinite ore.
• Decision made to defer the restart of Black Swan due to project related factors and external market conditions."

Black Swan Expansion Project - 2.2Mtpa throughput

• "Recent Resource update could increase contained nickel in the mining inventory.
• The prefeasibility study is on track to be completed late in 2023.
• Concentrate samples sent to potential customers to confirm suitability as a feed source to their hydrometallurgical processes (existing HPAL circuits and/or proposed new POX circuits)..."

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 July 13 Talon Metals announced :

Talon Metals drilling intersects entirely new area of nickel mineralization. New hole is a 450-meter step-out from the nearest drill hole in the "Raptor Zone"... The new nickel mineralization was encountered at a shallow depth of approximately 296.3 meters in an area between the Raptor's Head Area and the Raptor's Crest Area within the newly named "Raptor Zone" (see Figure 2 below). Both the Raptor's Head and the Raptor's Crest Areas contain high-grade massive nickel mineralization with grades up to 9.33% Ni[1] and 9.95% Ni[2], respectively, however, the 1.5 km distance between these zones has never been drilled.

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

On June 22 Market Screener reported : "Garibaldi Resources Corp. reports earnings results for the first quarter ended April 30, 2023."

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 3 St George Mining Ltd. announced : "Maiden drilling of nickel-copper sulphide targets commences at Ajana Project in Western Australia."

Queensland Pacific Metals [ASX:QPM] ( OTCPK:QPMLF )

On July 17 Queensland Pacific Metals announced : "Strategic partnership with SMT." Highlights include:

• "Queensland Pacific Metals Ltd ("QPM") and Société des Mines de la Tontouta ("SMT") (together, the "Partners") have entered into a non-binding Memorandum of Understanding ("MOU") to form a Strategic Partnership.
• The Partners recognise the importance of long term, secure ore supply for Phase 1 and Phase 2 of the TECH Project for QPM.
• The partners will also consider and collaborate on investment opportunities in QPM to allow SMT to participate in the long term value created in the entire battery material supply chain from mined ore to end product.
• The Partners also recognise the importance of ESG in the Electric Vehicle ("EV") sector and the combination of SMT's world class mining practices and the merits of the TECH Project will be invaluable."

You can read a recent Trend Investing article here that discusses QPM.

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

On June 28 Premium Nickel Resources Corporation announced :

Premium Nickel Resources Ltd. announces closing of financing transactions totaling approximately CAD$34 million...

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

On July 11 Canada Nickel Company announced : "Canada Nickel announces latest drill results at Midlothian Property confirming significant discovery." Highlights include:

• "All drill holes yielded long intervals grading 0.29% nickel and ending in mineralization. All four holes collared in mineralization within 10 metres of surface.
• Mineralization is delineated along 2.0 kilometres strike length and across a width of 250 metres within a target geophysical footprint 12% larger than the Crawford resource footprint.
• Latest mineralogy results show significant brucite content, the mineral utilized by Canada Nickel's carbon storage process, nearly four times higher than Crawford average of 1.9%."

Investors can view a CEO video here , or a CEO interview here on Trend Investing.

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.

For further details see:

Nickel Miners News For The Month Of July 2023