Nickel Monthly News For The Month Of September 2018

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Includes: AAUKF, AMC, AMMCF, AMSLF, ARRRF, ARTTF, AXNNF, BHP, CSSQF, CTEQF, ERMAY, FNV, FQVLF, GLCNF, HLPCF, HNCKD, IIDDY, LNZCF, MCRZF, MSMGF, NIKAY, NILSY, NMTLF, PANRF, PLM, PSDNF, RNKLF, SHERF, SMMYY, SOUHY, SRSSF, TNTMF, VALE, WNARF, WSCRF
by: Matt Bohlsen

Summary

Nickel spot prices were slightly down in September; however, nickel LME inventory continues to fall.

Nickel market news: "Nickel's 'electric premium' crushed by trade tensions. Mining.com reported: "Quadruple-positive whammy for nickel demand."

Nickel company news: RNC Minerals strikes a massive high-grade gold deposit at its Beta Hunt gold-nickel mine in Western Australia.

Welcome to the nickel miners news for September. It is hard to go past the biggest news in mining this past month as nickel-gold-cobalt miner RNC Minerals discovered huge gold at their Beta Hunt gold-nickel mine in Western Australia. The largest gold nugget may end up being the biggest one ever discovered. Needless to say, the stock price soared about 10-fold in the past 2 weeks.

(Image Source)

Nickel price news

As of September 25, the nickel spot price was US$5.72/lb, down from US$6.11 last month. The London Metals Exchange (LME) inventory is high; however, it is steadily declining (see LME graph below).

Nickel spot prices - 5-year chart - USD 5.72/lb

5 Year Nickel Prices - Nickel Price Chart

Source: InfoMine.com

LME nickel 5-year inventory

The chart below shows nickel inventory levels are declining from overstocked levels.

5 Year Nickel LME Warehouse Levels - Nickel Levels Chart

Source: InfoMine.com

Nickel demand vs. supply forecasts

The chart below shows nickel is forecast to be in deficit after ~2022 (or at least would require new supply to come on-line).

(Source: Wood Mackenzie)

Vale stated in its Q2 report:

Global stainless-steel production increased 8.6% in 2Q18 relative to 2Q17, while electric vehicles (EVs) sales worldwide grew 69% in 2Q18 relative to 2Q17. Demand for nickel in other applications continues to be positive, particularly in the super-alloy and plating sectors. Supply increased by approximately 6% in 2Q18 relative to 2Q17... The long-term outlook for nickel continues to be positive. Nickel in electric vehicle batteries will become an increasingly important source of demand growth particularly as battery chemistry favors higher nickel content due to lower cost and higher energy density. Capital investment for new projects and replacement volumes have been deferred within the context of challenging economic conditions. Capital is starting to flow back into the industry given the recovery in price. However, the timing of investments means production increase will lag and this will widen future deficits given continued demand growth.

Nickel Market News

On September 12, Mining.com reported:

Nickel price to benefit from short supply, strong steel demand through 2019

Slower production increases in leading supplier Indonesia and continued growth in stainless steel demand are forecast to extend a supply shortage in the global nickel market, supporting price gains through 2019.

Nickel, which recently hit its lowest since December, could climb as high as $16,000 a tonne by the end of 2018 and $18,000 a year later, Macquarie Capital senior commodities consultant Jim Lennon said on the sidelines of the MetalBulletin 6th Asian Nickel Conference in Jakarta on Wednesday.

On September 13, Mining.com reported:

Don’t underestimate lithium-ion battery demand for nickel

Quadruple-positive whammy for nickel demand

...

The four factors that will lead to exponential demand growth in nickel are therefore:
1) EVs themselves are seeing exponential growth.
2) The switch to NMC and NCA batteries mean battery cells now contain nickel, whereas first generation batteries did not.
3) There will be increasing amounts of nickel going into each battery cell.
4) (Larger) EV battery packs.

On September 14, Mining.com reported:

Nickel producers eye Indonesia to plug into EV battery market

Several global metals producers have set their sights on Indonesia's nickel reserves to tap an expected surge in demand for the metal for electric vehicle batteries.

Sumitomo Metal Mining Co Ltd said on Thursday that it and nickel miner PT Vale Indonesia are conducting a feasibility study to build a nickel processing project in Pomalaa, Southeast Sulawesi.

On September 18, Mining.com reported:

Nickel's "electric premium" crushed by trade tensions

Nickel has finally succumbed to the base metals price rout.

It is still the best year-to-date performer among the core six metals traded on the London Metal Exchange (LME).

But at a current $12,400 per tonne, LME three-month metal is, like the rest of the pack, now trading below year-start levels.

Nickel Company News

Producers

Vale SA (NYSE:VALE)

Vale plans a US$1.7 billion Voisey's Bay expansion plan to boost its nickel production.

On September 24, the company announced:

"Vale announces dates for reporting of 3Q18 performance. Vale will release its 3Q18 production and sales report on Monday, October 15, 2018, before the opening of the markets."

Norilsk Nickel (OTCPK:NILSY, LSX: MNOD)

On September 20, Norilsk Nickel announced:

Shareholders of Nornikel approved dividends for the first half of 2018

The EGM approved the interim dividend for the first half of 2018 in the amount of RUB 776.02 per ordinary share (approximately USD 11.37 at the RUB/USD exchange rate of the Russian Central Bank as of August 14, 2018, the date when the Board of Directors made a recommendation on the dividend), totaling RUB 122.8 bn (approximately USD 1,800 mln).

Investors can read my very recent article, "An Update On Norilsk Nickel."

BHP Billiton (NYSE:BHP, ASX:BHP)

BHP recently announced a US$43.3 million investment in its Nickel West project to enable conversion to nickel sulphate.

On September 5, the company announced:

"BHP Foundation appoints Chip Goodyear to Board, and progresses $52M commitment to Global Education Programs

The BHP Foundation today announced that Charles (Chip) Goodyear will join the Board as a Director from September 4, 2018 and take up the role of Chairman from February 1, 2019."

On September 16, it announced:

"BHPs Think Big campaign outlines how company is addressing global challenges

BHP will today launch the second phase of its Think Big advertising campaign."

Jinchuan Group [HK:2362]

On September 7, Jinchuan Group announced:

Further announcement regarding Shanghai Jinchuan Junhe Economic Development Co., Ltd.

Shanghai Jinchuan Junhe was established as a limited liability company under the laws of the PRC on 15 December 2017 and is owned as to 60% by GHL and 40% by the Junhe Holdings. Shanghai Jinchuan Junhe is a non-wholly owned subsidiary of the Company.

Glencore (OTCPK:GLCNF, LSX:GLEN)

On September 7, Glencore announced:

"Stake in Rosneft held by Glencore-QIA Consortium: Completion of Sale

On September 19, the company announced:

"Glencore plc successfully placed a tap issue of non-dilutive zero coupon cash settled guaranteed convertible bonds for USD 125 million to be consolidated with its USD 500 million non-dilutive zero coupon cash settled guaranteed convertible bonds due 2025."

On September 25, it announced:

Increase and extension of Share buy-back programme

Further to our previous announcement and having regard to the approaching completion of the existing USD1 billion Share buy-back programme, Glencore plc (the “Company”) announces an increase in the size of the programme by an additional amount of up to USD1 billion and the extension of the duration of the programme until the close of dealings on 20 February 2019.

Sumitomo Metal Mining Co. Ltd. (OTCPK:SMMYY, JP:5713)

On September 13, 4-traders announced:

"Sumitomo Metal Mining...

Researchers submit patent application, "Positive electrode active material for nonaqueous electrolyte secondary batteries, production method thereof, and nonaqueous electrolyte secondary battery", for approval (USPTO 20180248186)"

Anglo American plc (OTCQX:AAUKF, LSX:AAL)

No nickel-related news for the month.

Eramet (OTCPK:ERMAY)

No nickel related news for the month.

Sherritt International Corp. (OTCPK:SHERF, TSX:S)

No nickel-related news for the month.

Independence Group (OTC:IIDDY, ASX:IGO)

No significant news for the month.

Western Areas Ltd. (OTCPK:WNARF, ASX:WSA)

On September 18, Western Areas announced: "More strong results at Mt Alexander." Highlights include:

  • "Assays for MAD108 at Investigators confirm a wide intercept of high-grade nickel-copper-cobalt-PGEs with: 8.4m @ 2%Ni, 0.96% Cu, 0.0 6% Co, 2.59g/t total PGEs from 199m, including 1.37m @ 6.83% Ni, 2.88% Cu, 0.21% Co, 5.58g/t total PGEs from 206.03m.
  • MAD108 has increased the down plunge of mineralisation on the MAD60 section to 320 metres with further step-out drilling in the down dip direction underway
  • Testing of conductor MAD111:X1 at Investigators continues with nickel-copper sulphides confirmed by initial drilling
  • MAD117 intersects further massive nickel-copper sulphides at Investigators East."

On September 21, Western Areas announced:

"Odysseus Definitive Feasibility Study Update

Western Areas Ltd. wishes to advise that the release of the Odysseus Definitive Feasibility Study (“DFS”) results will occur before the end of October 2018."

First Quantum Minerals (OTCPK:FQVLF)

First Quantum Minerals has the Enterprise project in Zambia.

On September 25, the company announced:

"First Quantum Minerals addresses supreme court ruling in Panama in respect of Law 9 of 1997

First Quantum Minerals Ltd. today addressed the announcement of a Supreme Court ruling in connection to the constitutionality of Law 9 of 1997."

Nickel Asia Corporation (OTC:NIKAY, PSE:NIKL)

No significant news for the month, but you can view some general company news here.

Highlands Pacific (OTC:HLPCF, ASX:HIG)

On September 10, Highlands Pacific announced:

Ramu Mineral Resource and ore reserve update. Highlands Pacific Limited has received updated Mineral Resource and Ore Reserve estimates for the Ramu nickel and cobalt deposit from the project manager Ramu NiCo Management Limited [MCC]. The full Mineral Resource estimate is set out in the following table, at a cut-off grade of 0.5% Nickel.

(Source)

On September 12, the company announced:

Highlands Pacific Half-Year results

A strong operating performance at the Ramu Nickel and Cobalt mine has enabled Highlands Pacific Ltd to report a net profit of US$36.1 million for the six months to June 2018, up from US$1.5 million for the prior corresponding half year.

...

Ramu recorded an excellent operational result, producing 17,370 tonnes of nickel and 1,644 tonnes of cobalt in the half year at the project level (100%), which was well above plant design capacity and slightly up from 16,956 tonnes of nickel and 1,624 tonnes of cobalt in the prior corresponding six months.

Ramu earnings also benefited from higher commodity prices, with nickel rising 35% to an average of US$13,548/t in the half, and cobalt rising 85% to an average of US$88,461. This led to a 57% increase in Highlands share of revenue at Ramu to US$25.7 million.

Other Nickel Producers

Franco-Nevada Corp. (FNV, TSX:FNV), Mincor Resources (OTCPK:MCRZF), MMG (HK:1208), South32 (OTCPK:SOUHY, ASX:S32).

Developers

RNC Minerals (OTCQX:RNKLF, TSX:RNX)

On September 4, RNC Minerals announced:

RNC Minerals Proceeds With Dumont Feasibility Study Update

The updated feasibility study will incorporate the results of the market value-in-use study recently completed by the Joint Venture, updated macro-economic assumptions and several other optimizations and updates, including an updated mine plan, optimization of tailings deposition, and updated capital and operating costs. The results of the updated feasibility study are expected to be announced in the first half of 2019.

On September 20, the company announced: "Father's Day vein yields 24,000 ounces of gold worth $38 million." Not bad for 2 weeks, and potential for a lot more to come.

On September 24, it announced:

High Grade Gold Structures Extended By 200 Meters From Father's Day Vein Discovery

"I am thrilled to provide this update, which extends the sediment structures 200 metres from the Father's Day Vein gold discovery in an area adjacent to existing mine infrastructure. This further validates the model that was developed by the hard work and perseverance of the Beta Hunt team. I believe we have only scratched the surface of the high-grade gold potential from this sediment layer, which is a district-scale feature extending across the entire property. With exploration and development ongoing, we will continue to provide timely updates on this very important gold discovery." said Mark Selby, President and CEO of RNC.

On September 26, RNC Minerals announced:

RNC Minerals Adds An Additional $8.4 Million Cash Through Warrant Exercises

"These exercises delivered a total of $8.4 million in additional cash to RNC. This infusion, in addition to the $38 million in cash to be received from the sale of the previously announced 24,000 ounces of gold recovered from the Father's Day Vein discovery, will allow the company to repay all of its debt and achieve a substantial net cash position. This cash is expected to fully fund all corporate activities for the foreseeable future, including most importantly the upcoming exploration program at Beta Hunt. With exploration and development ongoing, we will continue to provide timely updates on this very important gold discovery." said Mark Selby, President and CEO of RNC.

(Source: RNC Minerals)

Trend Investing subscribers can learn more with my exclusive CEO Mark Selby interview out in the next day or two.

Panoramic Resources (OTCPK:PANRF, ASX:PAN)

On August 30, Panoramic Resources Limited announced:

Panoramic Resources Limited Appendix 4e - Preliminary final report for the financial-year ended 30 June 2018

The Nickel Division did not generate sales revenue as both nickel operations remained on care and maintenance during the financial year.

On September 13, the company announced its "Agreement to sell Lanfranchi to Black Mountain Metals for A$15.1 million." Highlights include:

  • "Lanfranchi Nickel Project to be sold to Black Mountain Metals LLC for a total cash consideration of A$15.1 million
  • Divestment consistent with Panoramic’s strategy to focus on the long-life Savannah Ni-Cu-Co Project.
  • Funds from the sale will strengthen Panoramic’s balance sheet.
  • Transaction expected to close during the December 2018 quarter."

On September 21, it announced:

Restart on track

Savannah Ni-Cu-Co Project targeting 1st concentrate shipment in Q1 2019

Commenting on the progress, Panoramic’s Managing Director Peter Harold said
“with the decision to restart made on 16 July 2018, following the signing of a new four-year Offtake Agreement with Sino Nickel (the Jinchuan/Sino Mining JV) and securing the $40 million Project Financing Facility with Macquarie Bank, activities have increased significantly on site. The process plant refurbishment, which commenced in the March 2018 quarter, is on track and we have now committed to all other site works required for the restart of operations and development of the Savannah North orebody, including the ventilation rise, the tailings storage wall lift and recommissioning of other site infrastructure. We have commenced the recruitment drive and have had overwhelming interest from potential employees."

Poseidon Nickel (OTC:PSDNF, ASX:POS)

On September 17, Poseidon Nickel announced:

"Completion Of Entitlement Issue

Poseidon Nickel Limited advises that its pro-rata renounceable entitlement issue to raise approximately $68,975,319 (Offer), closed at 5:00pm (AEST) on 12 September 2018."

On September 21, the company announced:

"MOUs For Ore Tolling At Black Swan

  • MOUs with 2 local nickel explorers to toll treat ore at Black Swan.
  • Processing to be under ore tolling and concentrate purchase agreements (OTPCAs).
  • OTPCAs will increase utilisation of the Black Swan concentrator."

On September 26, Poseidon Nickel announced:

Drilling Recommenced At Abi Rose Nickel Deposit

  • Significant intersections from previous drilling included;

    -PLJD0001; 0.19m high grade zone of remobilised nickel sulphide grading 10.20% Ni

    -PLJD0002; 10.48m wide zone of nickel mineralisation grading 3.20% Ni, containing 5.72m at 4.66% Ni and 1.29m @ 10.22% Ni

    -PLJD0003; 1.13m zone of massive nickel sulphide mineralisation grading 3.35% Ni, including 0.26m at 8.67% Ni.
  • Lake Johnston was host to the Emily Ann Mine which averaged a resource grade of 4.1% nickel and produced 46,000 tonnes nickel.

Explorers

Amur Minerals Corporation (OTCPK:AMMCF, LSE:AMC)

Amur currently has a potentially large nickel sulphide project in Kun-Manie in Russia.

On September 19, the company announced: "August 2018 drill programme milestones." Highlights include:

  • "A total of 7,969.1 m (29 holes) of drilling was completed during August bringing the season’s total to 143 holes containing a total of 26,235.4 m.
  • The configuration of the mineralisation within IIHG is indicated to cover 0.29 square kilometre area at an indicated 30.9 m thickness averaging 0.91% for nickel and 0.25% for copper representing an expansion of 81%.
  • The newly discovered mineralized zone located between ISK and KUB is well mineralised. Four holes drilled along the strike of the structure indicate an average thickness of 67.3 m at 0.75% nickel and 0.20% copper. Of these four holes, one contains 98.6 m of mineral averaging 0.89% nickel and 0.23% copper making it the best drill hole completed at Kun-Manie.
  • At the west limit of the newly unified orebodies of ISK and KUB, additional mineralisation has also been identified within two holes averaging 44.2 m in thickness with 0.99% nickel and 0.26%.

Axiom Mining (OTC:AXNNF, ASX:AVQ)

On September 20, Axiom Mining announced:

"Mining lease granted for the Isabel Nickel Project (San Jorge).

  • Axiom is now fully permitted to commence mining of the Isabel Nickel Project (San Jorge).
  • The first shipment of ore is expected in Q1 2019."

Sama Resources (OTC:LNZCF, TSXV: SME)

No news for the month.

S2 Resources (OTC:SRSSF, ASX:S2R)

No significant news for the month.

Cassini Resources (OTC:CSSQF, ASX:CZI)

On September 10, Cassini Resources Limited announced:

Further success at Yappsu Prospect

  • Assays confirm an 80m zone of nickel and copper mineralisation in drill hole CZD0079.
  • Complements significant results from CZD0076B.
  • New geological interpretation identifies targets up and down plunge.
  • Preparations for follow-up drilling underway.

Drill Hole CZD0079 Results

  1. A narrow disseminated zone of mineralisation returning 5.75m @ 0.28% Ni, 0.63% Cu, 0.01% Co, 0.30g/t PGE and 0.15g/t Au from 545m.
  2. An underlying broad disseminated zone of disseminated mineralisation of 70.25m @ 0.48% Ni, 0.44% Cu, 0.02% Co, 0.34g/t PGE and 0.08g/t Au from 555.05m.
  3. Including a massive sulphide zone of 0.80m @ 4.39% Ni, 0.11% Cu, 0.13% Co, 1.45g/t PGE and 0.02g/t Au from 555.75m.

On September 18, Cassini Resources Limited announced:

New Near-Mine Discovery at Nebo

  • Resource extension drilling targeting the eastern end of the Nebo deposit has discovered a significant new body of mineralisation, named as the Angie Lode.
  • Better results include 5.6m @ 2.68% Ni, 2.09% Cu, 0.09% Co & 0.33g/t PGE, within a broader zone of 50.35m @ 0.62% Ni, 0.54% Cu, 0.02%Co & 0.15g/t PGE.

North American Nickel (OTCQB:WSCRF, TSXV:NAN)

On September 10, North American Nickel announced:

North American Nickel Inc.: Qeqertassaq Carbonatite Complex Exploration Update

North American Nickel Inc. is pleased to provide an exploration update of work completed on the Qeqertassaq Carbonatite Complex in Southwest Greenland.

A mineral licence over a highly prospective block of ground in the Greenland Norite Belt (GNB) containing the Qeqertassaq Carbonatite Complex was awarded to the Company in 2018 (see news release on July 9, 2018). Compilation and re-interpretation of historic data for the property has helped to identify norite-hosted nickel sulphide targets, and focus exploration on the potential for rare and strategic metals."

On September 19, the company announced:

North American Nickel Provides Exploration Update

North American Nickel Inc. has completed its 2018 exploration and drilling program at the Company's 100% owned Maniitsoq nickel-copper-cobalt-PGM project in Southwest Greenland.

NAN completed 14,287.6 metres of drilling this season, which includes 1,305m at the Qeqertaasaq Carbonatite Complex (see news release dated September 10, 2018). This represents an increase of 5,520.6m from our previous program in 2017. This year's program was achieved over a 15 week period and surpassed the initial planned program of 12,500m.

Other juniors

Ardea Resources (OTCPK:ARRRF, ASX:ARL), Artemis Resources (OTCPK:ARTTF, ASV:ARV), Australian Mines (OTCQB:AMSLF, ASX:AUZ), Clean TeQ (OTCQX:CTEQF, ASX:CLQ), Giga Metals (OTC:HNCKD, TSXV:GIGA), Mustang Minerals (OTCPK:MSMGF, TSXV:MUM), New Age Metals (OTCQB:NMTLF, TXV:NAM), PolyMet Mining Corp. (PLM, TSX:POM), Transition Metals (OTC:TNTMF, TSXV:XTM), and Wall Bridge Mining (TSX:WM).

Conclusion

Nickel spot prices weakened slightly in September after a strong 2017/18 period as the trade war negativity hit.

My highlights for the month were:

  • Mining.com - "Nickel price to benefit from short supply, strong steel demand through 2019."
  • Mining.com - "Quadruple-positive whammy for nickel demand -
    1) EVs themselves are seeing exponential growth.
    2) The switch to NMC and NCA batteries mean battery cells now contain nickel, whereas first generation batteries did not.
    3) There will be increasing amounts of nickel going into each battery cell.
    4) (Larger) EV battery packs."
  • Glencore announces an additional USD 1 billion share buyback programme, on top of its existing US$1 billion buyback.
  • Highlands Pacific announced a strong operating performance at the Ramu Nickel and Cobalt mine, with revenue up 57%.
  • RNC Minerals made a huge high-grade gold discovery at its Beta Hunt gold and nickel mine. "Father's Day vein yields 24,000 ounces of gold worth $38 million." "High grade gold structures extended by 200 meters from Father's Day vein discovery."
  • Axiom Mining announced: "Mining lease granted for the Isabel Nickel Project (San Jorge)."

As usual, all comments are welcome.

Disclosure: I am/we are long NORILISK NICKEL [LSE:MNOD], GLENCORE [LSX:GLEN], RNC MINERALS [TSX:RNX], POSEIDON NICKEL [ASX:POS], SAMA RESOURCES [TSXV: SME], AXIOM MINING (ASX:AVQ), ARDEA RESOURCES [ASX:ARL], AUSTRALIAN MINES [ASX:AUZ] CASSINI RESOURCES [ASX:CZI].

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The information in this article is general in nature and should not be relied upon as personal financial advice.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.