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Could Timmins become Northern Ontario's new nickel capital?

A nickel supercycle is set to begin, thanks to Elon Musk, and Canada Nickel wants to be first to production
Mark Selby 2 Canada Nickel
Canada Nickel Company Chair-CEO Mark Selby (Company photo)

An upstart mine developer wouldn't mind having Timmins knock off Sudbury among the world's leading nickel mining camps.

Canada Nickel Company Chair and CEO Mark Selby thinks his Crawford nickel sulphide deposit is a "global-scale" discovery with multi-million-tonne potential that could be a robust producer for generations.

Selby explained in a Feb. 9 web presentation to a Greater Sudbury Chamber of Commerce audience of the sudden emergence of the Crawford Project in the historic Timmins gold and base metal mining camp.

The potential series of large open-pit mines, north of the city, could be poised to gradually enter commercial production at a time when there's a relative paucity of nickel projects in the world-wide development pipeline.

It will be hugely beneficial not only for Timmins and northeastern Ontario, but for Canada, Selby said.

Selby, also known as a respected nickel analyst for 20 years, believes this time is a "key takeoff" point in the "rapid adoption curve" of the electric vehicle revolution.

The nickel mining sector is on the eve of another supercycle, which comes around once every 15 to 20 years, he said.

But this one has the legs to last a long time, driven by strong demand in the stainless steel market and the electric vehicle (EV) sector, where nickel is a key ingredient in the manufacturing process.

In this cycle, the founder of Tesla is setting the pace.

"We're not moving in mining time here, we're moving in Elon Musk time here," said Selby. "These things are going to move very quickly and much faster than people anticipate."

Tesla recently set a target of putting 20 million electric vehicles on the road by 2030. That will require 1 million to 1.5 million tonnes of annual global nickel production, just for that car company alone.

That equates to two to three years worth of Voisey's Bay production or 15 to 20 times of what Vale and Glencore collectively produce in the Sudbury basin every year, said Selby.

"That's the scale of the amount of nickel that we're gonna need by the end of this decade."

Unfortunately, Selby said there's been precious little nickel exploration and mine development since the last supercycle in 2005 to 2007.

Outside of Indonesia, the mine project pipeline is largely empty, despite the looming global demand for nickel, expected to last for decades, according to the projections of mining giants like Vale and Glencore.

"We really aren't finding nearly enough nickel to be able to meet future demand growth," said Selby.

Now along comes Crawford as a potential low-grade but big-tonnage operation, which Selby proclaims is the world's largest nickel sulphide discovery since the 1970s.

The 4,900-hectare project sits astride and beneath Highway 655, about a half hour's drive north of Timmins, just past Glencore's Kidd Mine.

Surrounded by plenty of mining infrastructure and a local population with a keen understanding of metal processing, "You can't ask for a better location to build and permit a large-scale mining operation," said Selby.

The total capital expenditure will be close to US$1 billion when Canada Nickel's own large-scale processing plant is factored in, "which will be much larger than the Timmins area itself can provide," he said.

On the employment side, Selby said the eventual size and scale of the entire mine and milling operation will create "multi-hundred jobs."

Amazingly, for decades, there had been very little exploration at Crawford, relative to the activity in the surrounding area.

Inco punched some holes in the 1960s before moving on. Owned by a forestry company, the ground sat largely unexplored until exploration activity resumed in 2010.

After the initial discovery in late 2018, Canada Nickel acquired the project in mid-2019 and has been aggressively drilling it to the point where it's considered one of the ten largest nickel sulphide resources in the world.

Crawford's total measured and indicated resources stand at 657 million tonnes, grading 0.26 per cent nickel. The inferred resources are 646 million tonnes, grading 0.24 per cent nickel.

But Selby said they've only explored a fraction of Crawford, along with five other nearby properties under option agreements.

He figures once the property is completely drilled off, there could be "two or three more Crawfords" in their land package.

"We believe it can be one of the largest nickel sulphide deposits ever," he said. "Hopefully by the time we're done there we're going to turn Timmins into the new nickel capital."

The company expects to release a mine feasibility study of Crawford by year's end, followed by two years of government permitting.

The start of mine construction would take place by late 2023 with the full ramp-up to a commercial operation by the end of 2025.

They expect to sign a processing agreement with Glencore at the end of March to use the excess refining capacity at the Kidd Metallurgical Site, outside of Timmins. It allows them to get off to a quick start with an initial small open-pit mining operation in 2023, while financing the ramp-up to a larger processing plant of their own.

With the world turning toward a low carbon future, Canada Nickel is aligning its values and processes to become a net-zero producer.

In his presentation, Selby frequently pushed the 'green' metal and climate change angle in showcasing Crawford's would-be low carbon footprint.

Based on Musk's call for responsibly-sourced nickel, Selby said there's a "dirty nickel" image for the industry to overcome.

The nickel pig iron produced in Indonesia requires huge amounts of coal-fired electricity in the melting process, with roughly 25 to 30 tonnes of of coal used to produce one tonne of nickel, pumping out 88 to 90 tonnes of carbon dioxide in the process.

It's inspired Canada Nickel to spin off its NetZero Metals subsidiary, with the goal of developing a Timmins-area processing facility that would produce zero-carbon nickel, cobalt and iron products.

Selby pointed out that the rocks in these ultramafic-hosted nickel deposits actually soak up carbon dioxide when exposed to air, making them valuable in the coming low-carbon regulatory environments in Canada and the European Union.

Their open-pit mining operations would favour electric rope shovels and trolley trucks over diesel equipment. Their own large-scale milling plant would be powered by hydroelectricity to minimize carbon emissions.

But the real benefits could come in adding value to its nickel product.

Based on his discussions with those in the battery supply chain, Selby said the current flow sheet of converting the nickel to sulphate and into the final customer product, while passing it from country to country, is "not optimal" from the value chain perspective.

Selby said there's a "very real opportunity" to see a battery conversion facility, possibly close to Timmins, to deliver a processed solution straight to the auto plants.

On the social-licence-to-operate side, Canada Nickel is working toward reaching impact benefit agreements with Matachewan and Mattagami First Nations and Taykwa Tagamou Nation (TTN).

In TTN's case, the community is looking for more direct business involvement. The community is using its own capital to finance and build a power line into the Crawford site and lease it back to the mining company, plus get involved in the project through other business ventures.