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Welcome to the nickel miners information for December. Trade struggle and international development slowdown considerations proceed to weigh on the nickel worth, regardless of rapidly-falling LME nickel inventories.
Nickel worth information
As of Dec. 24, the nickel spot worth was US$4.90/lb, about the identical as US$4.86 final month. The London Metals Exchange (LME) stock fell but once more for the month (see LME graph under).
Nickel spot costs – five-year chart – USD 4.90/lb
Source: InfoMine.com
LME nickel 5 12 months stock
The chart under reveals nickel stock ranges have declined and at the moment are again to 2013 ranges when the nickel worth was ~USD 6-8/lb.
Source: InfoMine.com
Nickel demand v provide
On Dec. 23 Investing News reported:
Nickel outlook 2019: No growth, however batteries loom. Nickel was as arduous hit as different base metals in 2018 as investor sentiment bled the markets, resulting in decrease costs at the same time as demand elevated. Analysts predict that nickel costs will keep low via to 2019, barring any vital enhancements within the seemingly deteriorating US-China commerce rhetoric. In their final commodities forecast report for 2018, analysts at Focus Economics notice that elevated output from Indonesia and the Philippines has been pushing costs down, and plans to construct a brand new Class 1 nickel-cobalt refinery in Indonesia are making certain any bullish attitudes to the metallic are tempered. China’s Tsingshan (the world’s largest stainless-steel maker), introduced that the refinery shall be producing battery-grade nickel (50ktpa) and cobalt. Stefan Ioannou of Cormark Securities stated…. “I think the reality in the case of the battery narrative is that yes, I think nickel at some point will have a place to play there, but it’s a few years out yet in terms of actual consumption of the metal in that space. So I think it may have been a bit premature, and I think the market has recognized that as well. Drawing down on the above thoughts on supply and demand, each analyst predicted either a stable or higher nickel price in 2019 — with the trade war weighing down on prices even if supply and demand push them up. “Should the trade dispute be resolved sooner rather than later and/or China provides a new stimulus package for internal growth, then that would be positive for the price outlook…. Panelists see nickel prices recovering considerably over the next 12 months amid a tight market.”
Back in 2017 I wrote in my Norilsk Nickel article on Trend Investing:
The nickel growth possibly simply beginning now, or extra doubtless will probably be within the interval from 2018-2020, principally relying upon demand from the stainless-steel and building business (led by China, and shortly India). Increasing adoption of EVs with an rising nickel share within the Li-ion battery will even assist drive demand, once more extra doubtless in the direction of 2020 when EV volumes are extra vital.
The chart under reveals nickel is forecast to be in deficit after ~2022 (or no less than require new provide to return on-line).
Source: Wood Mackenzie
Note: Some others similar to BMI have been forecasting a nickel surplus by 2020 on account of elevated Indonesian manufacturing and diminished Asian demand.
Source: Sherritt presentation May 2018
Nickel Market News
A latest interview from The Assay from power metals skilled Chris Berry offers his views on nickel:
It is a stretch to consider that demand from the electrification theme would be the sole driver of upper nickel costs. Nornickel sees batteries at 15% of nickel demand in 2025, up from 4% in 2017, and clearly battery finish makes use of will compete with the stainless-steel market for nickel items going ahead. Forecasts for nickel demand from the EV sector are fairly broad with a spread of between 370,000t to 525,000t by 2025, up from 34,000t at this time. This is a big soar, however nonetheless solely a comparatively small a part of a a lot bigger nickel market…..To be clear, ought to the forecasts round extra nickel-heavy cathodes be correct (and I consider they’re), we’re going to want extra nickel to return to market, however the situation for structurally greater nickel costs is a longer-term phenomenon.
Nickel Company News
Producers
Vale SA (NYSE:VALE)
Vale plans a US$1.7B Voisey’s Bay enlargement plan to spice up their nickel manufacturing.
No nickel associated information, nevertheless there was some helpful data of their Vale Day 2018 December investors presentation.
Norilsk Nickel (LSX: MNOD) (OTCPK:NILSY)
On Nov. 30 Norilsk Nickel announced: “Nornickel modernizes its data centers.”
On December 25 Norilsk Nickel announced:
Nornickel terminates cope with BCL and continues to hunt damages from Botswana for breach of contract. Nornickel has terminated its settlement to promote African property to BCL Group, together with a 50 p.c stake within the Nkomati three way partnership. The discover of termination was submitted to BCL on 20 December 2018. The termination outcomes from BCL Group’s severe breaches of contract. Nornickel’s termination of the settlement means that it’ll now not be requiring the BCL Group to buy Nornickel’s curiosity within the Nkomati three way partnership. Instead, Nornickel will proceed to hunt damages from BCL for the numerous loss it has suffered on account of BCL’s failure to honour its obligations. The termination of the settlement will even allow Nornickel to pursue its personal technique for the African property.
Investors can learn my very latest article “An Update On Norilsk Nickel.”
BHP Group [ASX:BHP] (NYSE:BHP)
In 2017 BHP introduced a US$43.3m funding in its Nickel West mission to allow conversion to nickel sulphate.
On December 16 4-traders reported: “BHP purchases 5% of stock in US$5.2 billion buyback funded by the sale of its U.S. shale unit.”
Jinchuan Group [HK:2362]
No vital information for the month.
Glencore (OTCPK:GLCNF) [LSX:GLEN]
No nickel associated information for the month. I did come throughout a quick abstract of Glencore’s 2017 nickel manufacturing numbers and so on as proven under.
Sumitomo Metal Mining Co [JP:5713] (OTCPK:SMMYY)
On December 5 Sumitomo Metal Mining Co. announced: “Acquisition of interest in Quebrada Blanca Copper Mine.”
On December 19 Sumitomo Metal Mining Co. announced: “Acceptance of the Philippine Presidential Mineral Industry Environmental Award by Coral Bay Nickel Corporation.”
On December 19 Sumitomo Metal Mining Co. announced: “Acceptance of Hall of Fame Award for being the top export performer by Taganito HPAL Nickel Corporation.”
Anglo American [LSX:AAL] (OTCPK:AAUKF)
No nickel associated information.
Eramet (OTCPK:ERMAY)
On December 5 Eramet announced:
Léod-Paul Batolo appointed as CEO of Comilog. On 5 December, on the proposal of Eramet group, Comilog’s Board of Directors accepted the appointment of Léod-Paul Batolo as Chief Executive Officer. Mr. Batolo will exchange Hervé Montegu, who will take up a brand new place at Eramet. This appointment will take impact as of 1 January 2019.
On December 8 Eramet announced: “Eramet takes corrective actions as part of a quality process review within its Alloys division.”
Sherritt International (OTCPK:SHERF)[TSX:S]
No nickel associated information for the month.
Independence Group [ASX:IGO] (OTC:IIDDY)
On December 20 Independence Group announced:
Pre-feasibility research confirms potential for underground mine at Tropicana. Independence Group NL is happy to announce {that a} pre-feasibility research into the event of an underground mine beneath the Boston Shaker pits at Tropicana (the Pre-Feasibility Study or PFS) has confirmed that underground mining is technically and financially viable. The Tropicana three way partnership companions, AngloGold Ashanti Australia Ltd and IGO (AGAA 70% and supervisor, IGO 30%) at the moment are progressing a Feasibility Study [FS]. The completion of this FS and a monetary dedication to the Boston Shaker underground growth is predicted within the second half of FY19.
Western Areas Ltd. [ASX:WSA](OTCPK:WNARF)
On November 30 Western Areas reported: “SGQ: Assays confirm best ever thick high-grade nickel-copper sulphide intercepts at Mt Alexander.” One instance was “7.86m at 5.70% Ni, 2.11%Cu and 0.18% Co from 184m.”
On December 12 Western Areas announced: “SGQ: Strong results continue at Mt Alexander.”
First Quantum Minerals (OTCPK:FQVLF)
On December 3 4-traders announced: “First Quantum Minerals: warns that it will cut production at Sentinel once sales tax kicks in.” Sentinel is in Namibia with a give attention to copper manufacturing.
On December 21 4-traders announced: “First Quantum Minerals: plans 2,500 layoffs in Zambia over tax hikes….. Zambia’s native mining physique stated on Thursday that Zambia was pricing itself out of the worldwide mining market with the proposed tax hikes, that are geared toward bringing down mounting public debt.“
Nickel Asia Corporation [PSE:NIKL] (OTC:NIKAY)
No nickel information for the month.
Highlands Pacific [ASX:HIG] (OTC:HLPCF)
On December 10 Highlands Pacific announced: “Frieda River Project feasibility study.” Highlands Pacific has a 20% share in Frieda. Highlights are proven under and embrace a post-tax NPV8% of US$1.8b, post-tax IRR of 11%, and a capex of US$6b.
On December 13 Highlands Pacific announced: “Frieda River permitting update. Highlands Pacific Limited’s joint venture partner and project manager PanAust Limited, a wholly-owned subsidiary of Guangdong Rising Assets Management Co Ltd, has lodged with the Mineral Resources Authority (MRA) of Papua New Guinea an amended Proposal for Development in relation to the Frieda River Project’s Special Mining Lease (SML) application.”
Other nickel producers
Franco/Nevada [TSX:FNV], Mincor Resources, MMG [HK:1208], South32 [ASX:S32], Lundin Mining [TSX:LUN].
Developers
Axiom Mining [ASX:AVQ] (OTC:AXNNF)
On December 20 Axiom Mining announced:
Isabel Nickel Project – Licencing replace. Axiom Mining Limited advises the next as to its prospecting licence purposes for nickel in Solomon Islands: Kolosori; The Company has acquired discover from the Solomon Islands Ministry of Mines, Energy and Rural Electrification (‘MMERE’) that its utility for a Prospecting License was unsuccessful. Axiom has re-applied for a Prospecting License, has requested a evaluate of this determination, and may search judicial evaluate for the rationale for its unsuccessful utility because the determinations therein might not be primarily based in regulation. Tenement D; The MMERE has requested additional data and documentation for the Prospecting Licence Application and this has been equipped. It is predicted the appliance will accordingly be accepted.
On December 20 Axiom Mining announced: “San Jorge mining and financing update.” Highlights embrace:
San Jorge mining operations
- First stock/stock yard established in preparation for the graduation of mining.
- More haul roads established to new goal mining areas.
- Mine building on schedule with the primary cargo of ore due in Q1, 2019.
Off-take and financing
- “Off-take and advertising settlement[s] and debt mission financing for San Jorge in superior levels of negotiation.
- Anticipated mission financing bundle is to cowl the full value of mine building.”
Axiom’s largest shareholder to extend stake; supporting licencing course of and San Jorge growth
- “Axiom director, Mr Jeffrey Markoff who can also be the corporate’s largest shareholder has supplied a binding monetary dedication of $2m in a Private Placement of shares.
- An Entitlements Offer for as much as roughly $4m shall be supplied to shareholders on the identical or related phrases to the proposed Private Placement.”
RNC Minerals [TSX:RNX] (OTCQX:RNKLF)
On December 17 RNC Minerals announced: “RNC Minerals announces $9 million bought deal and concurrent private placement financing.”
Panoramic Resources [ASX:PAN] (OTCPK:PANRF)
On December 6 Panoramic Resources announced: “Lanfranchi sale completed. Settlement completed on the sale of the Lanfranchi Nickel Project to Black Mountain Metals LLC.”
On December 14 Panoramic Resources announced: “Management agreement extended. Management Agreement with Panoramic Resources Limited extended for a further six months.”
Poseidon Nickel [ASX:POS] (OTC:PSDNF)
No information for the month.
Garibaldi Resources [TSXV:GGI] [GR:RQM] [LN:OUX6] (OTC:GGIFF)
On December 6 Garibaldi Resources announced:
Garibaldi broadens nickel mountain system. Garibaldi Resources Corp. is happy to announce the profitable completion of the primary full season of drilling on the firm’s 100%-owned Nickel Mountain Project within the coronary heart of the Eskay Camp, the Golden Triangle’s first nickel-copper-cobalt-platinum-palladium-gold-silver magmatic large sulphide system. Steve Regoci, president and CEO, commented: “Not only have we made important progress in expanding the footprint of this nickel-copper-rich mineralization, but our geological understanding of this unique Eskay Camp system – from the configuration of the intrusion to the controls on mineralization – has advanced dramatically over last year. We’ll enter 2019 with working capital of approximately $15 million which puts us in a highly favorable position to take Nickel Mountain to the next level and fully leverage this asset for shareholders.”
Sama Resources [TSXV: SME] (OTC:LNZCF)
On December 12 Sama Resources announced:
Sama intersects semi-massive nickel and copper sulphides in first drill gap focusing on storm electromagnetic targets at Yepleu…..The drill gap is continuous and is now at 776m from floor. “We are very pleased with the results from this first deep drill hole as it confirms the exceptional potential for nickel and copper mineralisation at depth in the large Yacouba layered complex. Additionally, we are very impressed by the accuracy of the Typhoon conductivity inversion. The hole hit the upper edge of the target leaving the remaining bottom two thirds and the center untested.” stated Dr. Marc-Antoine Audet, P.Geo, President and Chief Executive Officer of Sama Resources.
S2 Resources (ASX:S2R)
No vital information for the month.
Cassini Resources [ASX:CZI]
No vital information for the month.
North American Nickel [TSXV:NAN]
No information for the month
Other juniors
Ardea Resources [ASX:ARL], Artemis Resources [ASV:ARV], Australian Mines [ASX:AUZ], CleanTeQ [ASX:CLQ], Giga Metals [TSXV:GIGA], Mustang Minerals [TSXV:MUM], New Age Metals [TXV:NAM], Polymet Mining [TSX:POM], St George Mining Ltd [ASX:SGO] [GR:SOG], Transition Metals [TSXV:XTM], and Wall Bridge Mining [TSX:WM].
Note: Some of the above corporations are lined within the Cobalt month-to-month information.
Conclusion
Nickel spot costs have been flat in December and LME inventories fell but once more in December. December was yet one more reminder for buyers about sovereign threat.
Highlights for the month have been:
- Nickel spot costs have been flat in December, nonetheless depressed on account of commerce struggle/China slowdown fears, and a few oversupply considerations.
- Investing News – “Panelists see nickel prices recovering considerably over the next 12 months amid a tight market.” Note some others similar to BMI have been forecasting a nickel surplus by 2020 on account of elevated Indonesian manufacturing and diminished Asian demand.
- BHP purchases 5% of stock in US$5.2 billion buyback funded by the sale of its U.S. shale unit.
- Independence Group – Pre-feasibility research confirms potential for underground mine at Tropicana.
- Western Areas – Assays verify finest ever thick high-grade nickel-copper sulphide intercepts at Mt Alexander.
- First Quantum Minerals: warns that it’ll lower manufacturing at Sentinel as soon as gross sales tax kicks in. Sentinel is in Namibia.
- Highlands Pacific delivers Frieda River Project feasibility research with a post-tax NPV8% of US$1.8b, post-tax IRR of 11%, and a CapEx of US$6b.
- Axiom Mining pronounces that their utility for a Prospecting Licence was unsuccessful. Their Isabel Project is within the Solomon Islands.
As common, all feedback are welcome.
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Disclosure: I’m/we’re lengthy 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]. I wrote this text myself, and it expresses my very own opinions. I’m not receiving compensation for it (apart from from Seeking Alpha). I’ve no enterprise relationship with any firm whose stock is talked about on this article.
Additional disclosure: The data on this article is normal in nature and shouldn’t be relied upon as private monetary recommendation.
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