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 begin a Pre-Feasibility Study in 2019 and immediately continue with a Feasibility Study.  We also aim to have permits in place, which would make the project shovel-ready in the early to mid 2020's.  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,
CEO
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.

 

Forward-Looking Information: Some of the posted entries on the CEO Blog may contain forward-looking statements. Forward-looking statements address future events and conditions which involve inherent risks and uncertainties. Actual results could differ materially from those expressed or implied by them. Examples of forward-looking information and assumptions include future estimates of the worldwide supply and demand for nickel & cobalt and other metals and the effect that these changes could have on the short term and long term price of nickel & cobalt and other metals on the world markets, and statements regarding the future operating or financial performance of Giga Metals. Forward looking statements involve known and unknown risks and uncertainties which may not prove to be accurate. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Among those factors which could cause actual results to differ materially are the following: market conditions and other risk factors listed from time to time in our reports filed with Canadian securities regulators on SEDAR at www.sedar.com.

In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operations and various components thereof affecting the economic performance of Giga Metals. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.

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