Recording date: 17th October 2023

Has been 2 weeks since we last talked about the nickel market, and as expected market is trading down in the $18-$19,000 range and a few more thousand tonnes come on LME. Expect a further move over the next 6-8 weeks down to the $17,500 level before year-end as another 10,000 - 20,000 tonnes of nickel hits LME, and then rebound into year-end as EV demand re-accelerates and stainless production continues to build on recent strengths.

“Great convergence” well-underway – sulphate now back to par with briquettes, NPI discounts continue to narrow.

Rho Motion EV Sales - September 2023 Global EV sales reached a monthly record in September 2023 with over 1.3 million units, growing by 23% compared to the same period last year and 7% month-on-month, bringing YTD PC & LDV EV sales to 9.5 million. Sales in China have grown by 33% YTD, in EU & EFTA & UK by 27%, and in the US & Canada by 60%.

Was in London last week for LME week – always like it because you get to see producers, traders, and consumers in one time period to help understand the market. And then went to the US for a Stainless Steel conference.

Key LME week takeaways:
- Per the last session, nickel is in surplus but not as large as many are projecting as missing the in-process inventories.
- Cobalt market going to come under pressure from HPAL and new Chinese Congo projects
- Opportunity for meltshop growth in the United States

Nickel Industries buying 55% of Excelsior Nickel project which is an HPAL project – going to target low carbon footprint with power coming from sulphur burning for acid production and a 200 MW solar project. Projects built and operated by Tsingshan.

ENC is expected to produce 72,000 metric tons per annum of contained nickel equivalent across the three major class 1 nickel products being mixed hydroxide precipitate (MHP), nickel sulphate and nickel cathode. ENC will be the first HPAL globally with the capacity to produce the three major class 1 nickel products, Nickel Industries give only real public company view into Indonesian operations – use for ore grades, operating costs – will be good to have HPAL view of things.

SPC Nickel completed its infill drilling at West Graham – some very good intervals in the program and Phase 2 comprised 8,842 metres in forty holes. Will be interesting to see how resource update comes together – a few open pittable deposits in place that can ship to the mill.

Aston Minerals, our neighbour in Timmins, reported after we last talked about multiple drill holes that are seeing Crawford-like grades and extended nickel-cobalt sulphide mineralisation across multiple drilling intercepts at the B2 Prospect, strike continuity has extended by 500m. Company insiders have been buying stock as the price has come off.

Crawford feasibility study released last week:
- $2.5 billion after-tax NPV8% and IRR of 17.1%; increasing to $2.6 billion after-tax NPV8% and IRR of 18.3% with projected Carbon Capture & Storage tax credits
- Crawford is world’s 2nd largest nickel reserve and 2nd largest resource. Initial mineral reserve of 1.7 billion tonnes of ore grading 0.22% nickel
- Production of 1.6 million tonnes nickel, 24 kt cobalt, 490 koz palladium & platinum, 58 million tonnes iron and 2.8 million tonnes chromium over 41-year project life
- Annual EBITDA of $811 million, free cash flow (FCF) of $546 million, and 48ktpa of nickel production during peak 27-year period
- One of Canada’s largest carbon storage facilities with 1.5 Mtpa carbon captured and stored during peak 27-year period
- Crawford is a net negative contributor to the global CO2 footprint – with 30 tonnes of carbon capture and storage capacity per tonne of nickel remaining after accounting for the project footprint

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