Sudbury nickel juniors build on region’s history as a metal powerhouse

Amid an increasing demand for nickel, driven largely by the growing need for electric vehicle batteries, a handful of exploration companies are making their mark in Sudbury’s historic and prolific nickel mining camp.

Magna Mining (TSXV: NICU), SPC Nickel Corp. (TSXV: SPC) and Archer Exploration (CSE: RCHR), which all have properties in the region of northern Ontario, have announced a series of promising drill results and asset acquisitions in recent months.

“Sudbury is due for a resurgence,” said Tom Meyer, president, CEO and director at Archer, in an interview with The Northern Miner. “There are opportunities for companies like Archer, like Magna, SPC and other [companies] active in the Sudbury region to revisit the geology and reinterpret the geophysics using the latest technology to make discoveries.”

Sudbury has long been a nickel powerhouse. From 1905 to 1966, according to the United States Geological Survey, mines in the area produced more than half of the global nickel supply. The region made the names of Canadian nickel heavyweights Falconbridge and Inco, and later FNX Mining, which were all subsequently acquired by Xstrata (now Glencore [LSE: GLEN]), Vale (NYSE: VALE) and Poland’s KGHM, respectively.

While Sudbury’s influence lessened since the 1960s, the region has still continued to make up a major part of Canada’s nickel production. In 2020, Sudbury mines produced about 62,000 tonnes of nickel, or 38.8% of the domestic total; Quebec was just behind, at 55,000 tonnes.

The federal government named nickel as one of its six priority minerals in its critical minerals strategy, released in December 2022, given its uses in healthcare, aerospace, electronics and stainless steel, and in electric vehicle batteries. The government introduced a 30% critical minerals exploration tax credit to encourage companies to hunt for specific minerals, with nickel on that list.

“I’ve been in the nickel space a long time, and we’re probably in a situation where junior companies need to get their assets into production to fill the big gap that’s required for critical metals,” said Grant Mourre, CEO of SPC Nickel, in an interview.

But despite the flurry around the minerals necessary for a low-carbon economy, Paul Fowler, senior vice-president at Magna, said Sudbury hasn’t seen a true nickel exploration rush as much of the area is owned by three multi-nationals.

“I would expect under any normal circumstances you’d see a boom in nickel [exploration] in Sudbury,” he said.

Fowler believes that’s where Magna’s advantage lies. With its Shakespeare nickel-copper-platinum group elements (PGE) project 70 km southwest of Sudbury, where it has permits for the construction of an open pit mine and 4,500-tonne-per-day mill, he said the company is well-positioned to develop a hub-and-spoke production model.

Magna Mining

Magna is advancing its Crean Hill nickel-copper-PGE project in the region with a 15,000-metre drill program for 2023 following its acquisition of Lonmin Canada from Sibanye-Stillwater (NYSE: SBSW; JSE: SSW) last year, and is working on a preliminary economic assessment for the project. Simultaneously, it’s working toward building the mine and mill at Shakespeare.

“With the dominance of the majors in the basin, any typical junior [with] a major discovery, that has to be processed by a third-party mill,” Fowler said. “Any major discoveries at Crean Hill… ultimately will all be processed through Shakespeare.”

At Crean Hill, which is a past-producing site that operated for roughly 80 years under Inco, Magna is pursuing an exploration strategy in 2023 that evokes FNX’s early 2000s success with footwall orebodies, said David King, the company’s senior vice-president of technical services. “A lot of material was left on the property that wasn’t economic at the time, or not the focus of production,” he said.

In early January, Magna reported its first assays from a drill hole on Crean Hill’s 109 footwall zone cut 98.3 metres grading 0.4% nickel, 0.5% copper, and 7.2 grams per tonne of combined platinum, palladium and gold. The interval included a higher-grade 44-metre section grading 0.8% nickel, 0.8% copper, and 12.7 grams of combined platinum, palladium and gold. The company also reported a 31.1-metre interval from the 101 footwall zone of 4% nickel, 0.7 % copper, and 0.7 gram combined platinum, palladium and gold per tonne.

While King noted Lonmin was fairly successful at discovering low-sulphide, high-PGE resources on the property, more than half of the resource Magna released is high sulphide and less than half is PGE.

Shakespeare hosts an indicated resource of 20.3 million tonnes grading 0.33% nickel, 0.36% copper, 0.32 gram platinum per tonne, 0.35 gram palladium and 0.19 gram gold.

At Denison, which includes Crean Hill, the company reported an open pit indicated resource in November of 16.8 million tonnes at 1.08% nickel equivalent (0.53% nickel, 0.49% copper, 0.02% cobalt, 0.48 gram platinum per tonne, 0.37 gram palladium and 0.25 gram gold). Underground indicated resources are 14.5 million tonnes at 2.07% nickel equivalent (0.96% nickel, 0.84% copper, 0.03% cobalt, 0.88 gram platinum per tonne, 1.02 gram palladium and 0.54 gram gold).

SPC signs deal with Vale

January was also a big month for SPC Nickel, which announced it had signed a cooperation agreement with Vale Canada to consolidate the ownership of the Crean Hill 3 and West Graham deposits. Vale owned the Crean Hill 3 deposit, which sits right beside SPC’s Lockerby East property, where the West Graham deposit lies.

The deal gives SPC the right to earn a 100% interest in the Crean Hill 3 property by delivering a feasibility study for the project to Vale by June 30, 2026 and paying $1 million at the time the study is delivered. If SPC earns its interest, it will grant Vale a 1% net smelter royalty on the combined project, a net profits royalty of 37% per quarter, and other rights.

The West Graham and Crean Hill 3 deposits are unusual for Sudbury — the region is filled with high-grade massive sulphide deposits that become deep underground mines, while SPC’s combined deposits are a lower grade but open pit-amenable resource that will require a lower capital cost to develop. Combining the two deposits allows SPC to evaluate its property with an open pit development in mind, said Mourre.

SPC’s Lockerby East has a historic resource from 2009, and Vale’s property had an internal historic resource estimate that dates back to the 1980s, so Mourre said the next step is drilling to bring the combined resource up to modern standards.

Meanwhile, Archer has budgeted $2 million for its Parkin and Trill projects in the Sudbury basin this year, which it acquired — alongside its Grasset project in Quebec — from Wallbridge Mining (TSX: WM) in November 2022, along with Wallbridge’s historic exploration data. Wallbridge is now a 19.9% shareholder in Archer.

The acquisition made Archer the owner of the third-largest land package in the basin, Meyer said. The company is in the early stages of the permitting process to allow it to begin drilling, and is planning approximately 6,000 metres of diamond drilling. Meyer said the company’s initial focus of exploration is likely to be on the Parkin Offset Dyke in Sudbury.

He also noted the Parkin project contains the past-producing Milnet mine. Drilling by Wallbridge between 2008 and 2012 beneath the mine discovered the Milnet 1500 zone, which yielded “significant” high-grade nickel-copper-PGE mineralization.

While Sudbury’s three majors haven’t announced new nickel exploration in the region in recent years, new mines are in the works. KGHM is in the midst of constructing its underground Victoria copper and nickel mine 35 km west of the city, and Glencore is building its $1.3-billion Onaping Depth project 2,500 metres below the past-producing Craig mine, which it expects will be in production by 2025.