CEO Blog

The Underlying Value of Nickel Deposits

It is difficult to find meaningful comparisons between undeveloped mineral deposits.  They vary by size, grade, infrastructure, metallurgical complexity, stage of development, permitting and country risk and other factors.

Nickel deposits are further complicated because they ultimately produce two completely different finished products.  Class II nickel, or ferro-nickel (including nickel pig iron) is only suitable for the stainless-steel market due to the mixed nickel and iron content and impurities; Class I nickel is nickel that can be economically refined to greater than 99% purity, which is suitable for all other applications, including batteries.

Class I nickel can be produced from nickel/cobalt sulphide deposits such as our Turnagain project, and from High Pressure, High Temperature Acid Leach (HPAL) projects used to process limonite deposits.

The graphs above show enterprise value 1) per pound of contained cobalt and 2) per pound of contained nickel equivalent in several different large, undeveloped deposits capable of producing Class I nickel.  They are a mix of HPAL and sulphide projects and their stage of development varies from Preliminary Economic Assessment (Giga’s Turnagain Project) to Definitive Feasibility Studies.  Only Measured and Indicated Resources are included. 

Bearing in mind the inherent difficulty of comparing unique deposits, some interesting observations can be made.  One is that the market capitalization of Giga implies a value of less than 1 cent per pound of contained nickel equivalent, making our Turnagain project the lowest valued major undeveloped nickel deposit in its peer group!  Another is a trend towards higher enterprise value per pound of contained nickel equivalent as the engineering advances from PEA through PFS to Feasibility Studies.

Our goal is to have a Pre-Feasibility Study completed by the end of 2019 and a Feasibility Study completed in 2021.  We also aim to have permits in place, which would make the project shovel-ready, by 2021.  We are hopeful that with these milestones, the Company’s shares will be re-rated by investors and trade more in line with its peer group.

Mark Jarvis,
Giga Metals Corp.

Scientific and technical information disclosed in this document has been reviewed and approved by Greg Ross, P. Geo., a Qualified Person consistent with NI 43-101.

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