$NICO Ben Cooper, Class 1 Nickel & Technologies; AMVEST SPEECH 2020-08-27, by @Newton
Class 1 Nickel & Technologies $NICO Ben Cooper, AMVEST SPEECH 2020-08-27
Class 1 Trades on the CSE as NICO. This call is for informational purposes, see important disclaimers please and thank you. Presenting today is Ben Cooper is the President of Class 1 Nickel & Technologies. Ben has over 22 years of experience on the frontlines of capital markets and has raised over $200 million for public companies. He is responsible for financing, administration, marketing, and management of public companies for resource development and exploration operations in nickel, cobalt copper, iron ore, and iron ore assets. Deep-dive on one of Canada’s newest companies. Welcome, Ben.
Thanks for having me. Thank you. Lots of talk in the market about TESLA and batteries and I think it’s game on. We called our company Class 1 Nickel and Technologies. It was 2-2.5 years ago that we went searching for nickel sulphide capable o producing class one products. Coming from Australia and having a background in various companies, I realized how hard it was to find something advanced in the nickel sulphide space.
These deposits have demonstrated low risk, near term, small-scale production success. The opportunity exists to re-start production rapidly under the terms of the existing permits. The permitting baseline work already completed would significantly expedite plans to expand the scope of production plans for larger Mineral Resources.
There are similar deposits in Siberia and Canada. We were fortunate enough to come to Canada and go to the right location, which happened to be the City of Timmins.
We call ourselves Class 1 Nickel because we have high-grade nickel sulphide, capable of producing class one products. The nickel sulphate is used in cathodes for electric vehicles, for one thing. We’re on a fast track back to production. We are that high-grade nickel sulphide.
We can go in and look at the permitting that’s already in place. Within a very short time, and I’m going to use the two years as a number, we could take the permits from the current “suspended” bonding status so we could go back into production.
What does it mean to go into production fast? We’re not a greenfields exploration company. We’ve got brownfield assets. We’ve already got the deposits. We’ve got the permitting status because there were direct shipping operations in 2011.
We’re not looking at a 5 to 7 year-long lead time.
We’re not looking at these low grade, large cap-ex, long loss spreadsheets. These are going to come to the market, but that’s not what we’re doing. We want close to the surface, direct shipping focus. We are so close to the town of Timmins, for instance, where we’ve got 2 or 3 or 4 options for mills? I’m not gonna go to the market and look for a billion dollars cap-ex. Not half a billion dollars cap-ex. No, we are happy with a smaller deposit that’s higher grade, close to the surface, and that we can literally direct-ship concentrate. If we’ve got high-grade nickel sulphide and cobalt sulphide, and there are some there other bits and pieces in our mineralization then it’s a low op-ex operation. We say that it has an enviable location, logistics, and infrastructure.
For that reason, I think that if you are looking to invest in nickel sulphide that is capable of the EV use and you wanted to find something that had an upside, but that is capable of going into production sooner then that’s us.
This company has a strategic land package, geologically. All of our projects are located on a lava flow at ultramafic sills. Everything in our boundary that we have ring-fenced is on those ultramafic sills. These are the rocks that host the nickel sulphide high-grade. Geologically, we’re in the right place. Geographically, it’s great because we are close to infrastructure. And the fact that the projects have only just had the cream and cherries scraped off the top — it’s wide open.
We see 2-4% material there for direct shipping. And it’s not deep. We’ve got the existing ore body that remains, which is lower grade than that. You’ll see that in the classification. But we’ve got these strikes that continue and have more of that high-grade stuff to the east. We’ve got existing nickel mineral resources with some high-grade and we think we can find more.
We have around 0.7-0.8% nickel, up to 1.2% nickel at Alexo-Kelex Mineral Resource as a 43-101 resource.
800 meters south of that, we’ve got a non compliant resource ( Historic Falconbridge ). We’ve got 750,000 ton at 1.5% nickel, with grade as high as 3%. There are many open zones down there, too.
When I say that we’ve got a direct shipping operation, understand that we’ve got to focus on close-to-surface mineralization. When we are talking about these projects with low op-ex, understand that we’re looking at estimations of around $5 to $7 million towards direct shipping without building a huge infrastructure on our ground.
Due to the quality of the projects which have remained unworked for a considerable time, the company has been able to attract highly regarded and credentialled career nickel experts who possess vast nickel exploration development and mining experience.
My job’s an easy one. I take advice from people that have done it before in this area. When you’re talking about Tony Donaghy, who’s the expert there from CSA Global — he’s an Australian nickel expert who cut his teeth in this territory, ex-Falconbridge. These projects originally emanate from Falconbridge. Tony introduced me to a skilled Geologist by the name of Dean Maceachern who was exploration manager for Falconbridge for 22 years. Tony and Dean worked together at Falconbridge and these guys know these projects and they know how to explore and build kambalda style magmatic nickel sulfide resources. These guys know the nickel sulphide market and they know this area geologically . They know these projects and have been involved in the exploration and production here at Alexo in its previous life.
Danielle Giovenazzo is not only a lovely lady, but she’s very, very smart. She’s a Ph.D. She was involved in Raglin. She’s highly regarded in Quebec and was ex-Falconbridge, too. Again, she knows these projects.
Martin Tuchscherer has just come off five years with Canadian Royalties. His recent work with Azimut is important. He has a Ph.D. and is working on projects for us as a Specialist Geological Technical Advisor.
I’ve got a very good board. We’re all great friends. David Fitch is a business partner. He is a big supporter. The board takes the same view — we’ve put this company together to move quickly.
I’ve got the backing from the Australians financially to get it all the way. We’ve got the right consultants here in Canada on the technical side. And we’ve got a tight share structure.
We’re very happy that we took that view.
We went here early before all of this news of TESLA in front of you today. We were here 2-2.5 years ago when no-one was talking about nickel. Everybody was talking about lithium-cobalt. We went in when things were weak and we took a 2-3 year view. Now, we understand things will turn for several different reasons.
Everybody knows the thematic story around the auto and tech market requiring class one nickel.
We’ve ended up having this amalgamation of many facets together, which we now call Alexo-Dundonald Nickel-Copper-Cobalt & PGE Projects.
You can see this aerial photograph of Alexa. That’s the old mine that was in production in 2011, which is the foundation I said that we will develop first. That’s where we have the 43-101 resource, which we’re going to extend & expand the tonnage and increase the grade by drilling to the east.ly
See 800 meters to the south of those two pits is Dundonald South deposit. We got all these projects from various vendors and they’re now in one big package. Alexo, Kelex, Dundonald North, and Dundonald South deposits.
You’ve got that long zone down at Dundonald South deposits with many different lenses, or smaller deposits. See the drilling at Dundonald South deposits in the ultramafic unit. It looks like there’s more at Dundonald South. This area is important.
Drilling has outlined eight east-west nickel-bearing sulphide zones, (A to H), defined at shallow levels (<200 metres depth). Most of the lenses are open at depth and along strike. Historical Mineral Resources of 750,000 tonnes @ 1.50% Nickel Sulphide reported by Falconbridge have been estimated in the past, with future plans to confirm and extend the zones to a NI 43-101 compliant Mineral Resource Estimate. Fresh, high grade Ni-Cu-PGE sulphide mineralization has been trenched at surface by Hucamp Mines. A selected Hucamp Mines sample of the mineralization returned 34.82% Ni, 0.30% Co, 3.7 g/t Pt, 5.8g/t Pd, 0.90 g/t Au, 0.44 g/t Os, 0.47 g/t Ir, 0.84 g/t Rh and 2.4 g/t Ru.
Alexo and Kelex, as in the presentation, have demonstrated low risk, near term, small-scale production success. The opportunity exists to re-start production rapidly under the terms of the existing permits. The permitting baseline work already completed would significantly expedite plans to expand the scope of production plans for larger Mineral Resources.
The Alexo deposit sits on the northeast arm of a large “Z”-shaped komatiite fold, while the Dundonald deposit sits on the southwest arm of the fold. A past production operation ( with historical 2.0-4.0% nickel head grade) nickel sulphide resources remain open at depth and along strike (Nickel-Copper-Cobalt- PGE’s). The Alexo-Kelex Deposits contain NI 43-101 compliant Mineral Resources.
You can see in the slides where the historic production is located. You’ll see the highlighted area. These deposits have demonstrated low-risk, near-time, small-scale production success. Again, the opportunity to restart production rapidly under the terms of the existing permits. Permitting baseline work already completed is helpful. We will do more. I specialize in that and I’ve got a specialized group who have done significant report writing. They’re going to upgrade Dundonald South from a historic one to 43-101 rules. We’ll get some of that higher grade stuff there. When we merge Dundonald South with Alexa, you’ll have a global resource rationalization of several different deposits. That will be Dundonald South and Alexo to start. When we drill, it will continue to grow larger at that Alexa open pit section.
We’ll add the Dundonald South and that will all change nicely. We’ve got a full 3D model on everything now. We’ve put everything into Leapfrog with Martin and his wife Rebecca. They’re both geophysicists, as well. They’ve given us a great indication of the 3D model. It’s open at depth and along strike. We can build the tonnage and the grade, reasonably well.
The Z-shaped fault is important. At the top, you go to Alexo-Kelex area. Then, along the left-hand side of the Z-shape band, you’ve got what we call Dundonald West. Lots of apparent mineralization there for nickel and base metals.
We’ve got all these zones at Dundonald South: A, B, C, D, E, F, G, H. There is about 10 or 11 different, smaller deposits. We can drill all that, but how much is there?
All these results are extremely high-grade. Look.
A Zone: The A zone is a fracture system with brassy pentlandite/pyrrhotite mineralization consisting of thin fracture fillings, patches, and semi-massive to massive zones. The main portion of the A zone is a very steep west plunging to vertical high-grade nickel lens below a vertical depth of 150 m. This lens is 20–25 m wide and is open to depth, below a vertical depth of 260 m. The A zone PGE historical values are typically 1.5 g/t to 2.8 g/t, except for hole FND04-16 that returned 11.84% Ni and 17.55 g/t PGEs over 1.7 m.
B Zone: The B zone is located 10-20 m above and south of the A zone and is historical lower grade (1-3.8% Ni over 1-1.5 m) than the A zone and has low PGE values (<1 g/t.). The more significant B Zone historical drill intersections occur as a shoot in the keel area of the peridotite flow, including 3.77% Ni over 1.5 m (FND04-14) and 3.26% Ni over 7.65 m (HUF09-01). The shoot (10 m wide) is open to the west along with a shallow plunge of 15 degrees.
C Zone : The C zone is situated about 10–20 m stratigraphically above the B zone. Sulphide mineralization consists of fine-grained pyrrhotite/pentlandite disseminations and blebs. The zone is sporadic and discontinuous. A possible nickel mineralized shoot plunges 10° westerly and is open to the west. The zone was known from two historical Falconbridge intersections of 3.73% Ni over 1.52 m and 4.17% Ni over 1.22 m. and 1.66% over 3 m in FND04-21.
D Zone: The D zone occurs at the top of the E zone komatiite flow. The zone is sporadic and discontinuous. Sulphide mineralization consists of fine-grained pyrrhotite/pentlandite disseminations and blebs in peridotite flow rocks. The D zone historical nickel grades range from 1% to 3% Ni over narrow intersections 0.5 m to 2.6 m. Hole FND04-16 had the best intercept (2.24% Ni over 2.6 m) recovered to date. The up-plunge trend of the D zone contains Falconbridge DDH 64-10 that returned a historical grade 2.57% Ni over 3.5 m.
E Zone : The E zone is situated within a trough at the base of the Central komatiitic peridotite flow sequence at about 200 m below surface. To the west it may be correlated with the C zone. The E zone is comprised of at least two stacked nickel mineralized horizons (E and E2) that dip very shallowly 15° to 20° to the south. The E and E2 horizons have been traced by limited drilling for 130 m. They are cut off to the east at 511755E and are open down plunge to the west. Sulphide mineralization consists of 3–10% very finely disseminated fine-grained brassy pentlandite and lesser brown pyrrhotite. The higher sulphide content sections of 5–10% and locally 20% contain blebs and fine stringers to microfractures of pentlandite/pyrrhotite. The best historical drill intersections of the E horizon were 4.67% Ni over 1.3 m and 1.6% Ni over 14.05 m.While the E2 horizon’s best historical drill intercepts were 4.63% Ni over 1 m and 2.58%Ni over 2 m.
F Zone: The F zone occurs between 100 m and 200 m below surface. It has a shallow variable dip 40–70° to the south. It is continuous over 180m strike and disappears to the west, but is possibly open to the east. The zone is principally located stratigraphically 20–70 m below the G zone in two shoots both plunging west. F zone mineralization is comprised of blebs, fine stringers, semi-massive and massive brassy fine-grained pentlandite/pyrrhotite. The F zone PGE values lie in the range of 1–2 g/t and are generally lower than the G zone values. Significant historical drill intercepts from the upper shoot are 6.03% Ni over 1.5 m and 2.37% Ni over 4.0m. This upper shoot is open up and down plunge. High-grade historical nickel intersections from the lower shoot include 8.46% Ni over 1.6 m, 5.22% Ni over 2.1 m and 3.67% Ni over 2.1 m.
There are some companies in Australia having these nice intersections of high-grade nickel, 1% high-grade today. See some of the historic intersections at Dundonald South.
We’re talking about 15 meters at 5%. These are huge numbers. That should be appealing for exploration. It should add the tonnage of our global resources.
Of particular note at this property is that J zone, which we are excited about. It can be very similar to some of the other successful nickel sulphide deposits around the world.
To date, there the samples of either fresh rock chips or core. You can see a little piece of the core by hand there. Those higher numbers are exciting us to start work.
What will this work involve? Well, we are going to start with the merging of the resources and the building of the 43-101 that I just mentioned to you. Then, we’re going to get industry experts to analyze it with a VTEM survey. That’ll be a couple of weeks. It will give us a grasp of what’s on our ground. It’s never been subject to modern geophysics, so who knows what else we’re going to find. It’ll certainly help us see what’s in and around the area that’s already been mapped. Then, we’ll do groundwork. Ground geophysics will penetrate a lot deeper. And we’ll see how much further there is to go. That’s the obvious approach. Then, we’ll do drilling campaigns on Alexa, Dundonald South, and others. That will continue and over the next 12 months, we’ll end up having that target resource of high-grade, close-to-the-surface, close-to-infrastructure nickel. People will be able to make a comparison of stocks that you see in front of you.
Then you will be able to make a sensible comparison with us to others.
It’s early days for us. We’ve just launched onto the market. We’ll look to spend $6-7 million doing what I just said, building that resource up to the point where we can do a PEA. That will be based on the theory that I said of the low op-ex direct-shipping model. To be conservative, consider a two-year timeframe. Within that two year timeframe, we’ll tidy up the permitting. We’ll do the met work necessary. We’ll do a deal with one of the mills. That would be our eventual goal. So far, all those relationships have worked well. I’ve been in Canada and everything is working fine.
Will we find anything else? What we might find? We might very well find that it’s a lot deeper and a lot more. Or not.
We’ve also got an option over another project. The other project is in Quebec. It’s an important nickel sulphide deposit. Again, it is shallow and hasn’t been drilled-out. There’s a lot of upside to this company, but I want to do it methodically. I want to do it right. I want to get Alexa over the production. We want our cash flow from that lower grade material around about 1%, but we want to start with that higher grade extension.
We want to do Dundonald South and see how big that is and then we will move on through the others. We’d like to do it sequentially.
This is the nickel market. We ran. Everybody’s talking about EV batteries and we think that it’s something that an EV company would look at directly. That’s why we are called CLASS 1 NICKEL. We expect to be selling a product to the market. I’m going to stick to that focus. We’ve already got the deposits — it’s not greenfields. We don’t face the same risks. We have a tight capital structure. We’ve got the right projects in the right part of the world at the right time. And there’s a lot of compelling things that have come together in this company to make it appealing to investors.
We’re also fortunate enough to be in a situation where we haven’t done a capital raising with the market yet, so the stock is illiquid. When we have an opportunity to do that, people will be coming in at a foundation level.
I’ve shown you the runway, which we’re able to do on really a small budget compared to that advanced stage. In summary, my comments would be, that if you’re wanting to go long, an EV great battery, metal production story and you really want to be long nickel sulphide, then you need to have an asset that has the right geology. If you can get one that’s got the right geology, then that is it!
Our Alexo-Kelex project has had money spent on it. It’s in a good geological setting. It’s got infrastructure advantages added to cheap price and if all these things coming together to make a compelling investment case. That is where we sit now.
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