Canada Nickel’s Crawford feasibility pegs capex at US$3.5B, mine life at 41 years

Canada Nickel Company (TSXV: CNC; US- OTC: CNIKF) has released the results of a feasibility study for its Crawford nickel sulphide project, outlining an operation with capital costs of US$3.5 billion for its first and second stages, and an after-tax net present value (at an 8% discount) of US$2.6 billion. 

The study confirms improved economics compared to the preliminary economic assessment (PEA) of 2021, which did not include carbon capture and storage, though the feasibility study puts the after-tax internal rate of return at 18.3%, with carbon capture. The PEA pegged the after-tax net present value at US$2.5 billion and internal rate of return at 17.1%. Sustaining capital costs total US$1.62 million and capital costs don’t include escalation or interest.

The project has an initial life of 41 years, during which time it will produce 3.5 billion lb. of nickel, around 53 million lb. of cobalt, 490,000 oz. of palladium and platinum, 58 million tonnes of iron, and 6.2 million lb. of chromium. Annual earnings before interest, taxes, depreciation and amortization (EBITDA) will be US$811 million, and the free cash flow will be US$546 million.

Uniquely, Crawford will be a net negative contributor to global carbon dioxide (CO₂) emissions, thanks to its ability to capture and store 1.5 million tonnes per year of carbon. There will also be room to capture and store 30 million tonnes of carbon from third parties.

“This bankable feasibility study is a significant milestone for Crawford and a major step forward in demonstrating the value of our Timmins Nickel District and its potential to anchor a Zero Carbon Industrial Cluster in the Timmins-Cochrane region,” said Canada Nickel CEO Mark Selby. “Crawford is poised to be a leader in the energy transition through the large-scale production of critical minerals, including nickel and cobalt, and is expected to become the sole North American producer of chromium, while also supporting Canada’s climate objectives through industrial-scale carbon capture and storage.”

According to Canada Nickel’s numbers, the Crawford deposit has the world’s second-largest nickel reserves: 8.35 billion lb. of nickel. The proven and probable reserves total 1.72 billion tonnes grading 0.22% nickel, plus copper, palladium, and platinum.

Crawford also has the world’s second largest nickel resources. Inclusive of reserves the measured and indicated resources are 2.4 billion tonnes at 0.24% nickel, containing 13.3 billion lb. of nickel. There is also an inferred resource of about 1.7 billion tonnes grading 0.22% nickel, for 8.2 billion lb. of nickel.

The company’s in-process tailings (IPT) method of carbonization will be used. It involves injecting a concentrated source of CO₂ into tailings in the mill. The carbon is geologically sequestered in the tails while they’re in the processing circuit, rather than after.

The concentrator will include a conventional milling circuit, including crushing, semi-autogenous and ball milling, desliming, nickel flotation, magnetic separation of the tails, and IPT carbonation.

The flowsheet has been optimized from what was anticipated in the PEA. It is expected to deliver improved recoveries of all base metals, improved concentrate grades, and carbon storage. Both a nickel concentrate (34% nickel, 0.79% cobalt, and 4.1 grams per tonne palladium and platinum) and an iron ore concentrate (55% iron, 0.3% nickel, and 2.6% chromium) will be produced.

Crawford will consist of two separate open pits of about equal tonnages of ore. When the first pit is exhausted in year 17, it will become tailings storage; this strategy reduces the project’s surficial and environmental footprint while reducing the cost of tailings management. The production fleet – drills, shovels, and trucks – will be electrically powered.

Canada Nickel shares were down 3.1% to $1.22 in Toronto at mid-day on Thursday, valuing the company at $172.9 million. Its shares traded in a 52-week range of $1.09 and $2.20.