Canada Nickel secures $10 million loan
Canada Nickel Company Inc. [CNC-TSXV] has secured a $10 million loan facility from Auramet International Inc. and will use the proceeds to execute post feasibility work on permitting and detailed engineering at its flagship Crawford Nickel Sulphide Project near Timmins, Ont.
The company said it is advantageous to complete this work during the coming winter months.
The loan will be due on January, 2023, and will carry an interest rate of 1.00% per month and will be subject to a 2.0% arrangement fee. At closing, Auramet will also receive 325,000 one-year warrants with a strike price of $1.52 per share. Auramet is a private company, ranking as one of the largest precious metals merchants in the world, with over $20 billion in annual revenue. It is engaged in physical metals trading, metals merchant banking and advisory.
The announcement that the loan has closed came after the close of trading on October 18, 2022, when Canada Nickel shares closed at $1.43. The shares are currently trading in a 52-week range of $4.01 and $1.18.
Canada Nickel recently said it remains on track to deliver a feasibility study for its 100%-owned Crawford project by the end of this year.
The company has said a preliminary economic assessment (PEA) has confirmed robust economics for the project, which is located 40 kilometres from Glencore Canada Corp.’s Kidd concentrator and metallurgical site in Timmins.
The PEA demonstrates the potential to develop a phased conventional nickel sulphide concentrate, producing nickel concentrates and magnetite concentrates. The operation is designed to have an open pit mine with a plant potential of 120,000 tonnes per day.
In a press release in October, 2020, Canada Nickel said the measured and indicated resource at Crawford had increased by 9.0% from an earlier estimate to 657 million tonnes at 0.26% nickel (1.7 million tonnes of nickel). It said the total inferred resource had increased by 121% from a previous estimate to 646 million tonnes at 0.24% nickel (1.6 million tonnes of nickel).
“The PEA, utilizing just a fraction of our resource potential, demonstrates that we expect to be one of the largest nickel sulphide operations globally, producing 1.9 billion pounds of nickel over a 25-year period with net cash costs of just over $1 per pound,’’ said Canada Nickel Chairman Mark Selby.
The Crawford PEA forsees average nickel production of 75 million pounds (34,000 tonnes) with peak period annual average of 93 million pounds (42,000 tonnes). It also envisages significant iron and chrome by-products of 860,000 tonnes per annum and 59,000 tonnes per annum respectively.
Life-of-mine production is forecast to be 25 years with 842,000 tonnes of nickel, 21 million tonnes of iron and 1.5 million tonnes of chrome valued at $24 billion using long-term price assumptions.
Nickel mineralization in Crawford Township was originally discovered by Inco during a 1960s exploration program that covered several townships north of the Kidd Creek Mine.