EV Boom Sparks North American Nickel Frenzy: Get Ready for a Supply Shakeup
Nickel, a silvery-white metal known for its strength, corrosion resistance, and unique magnetic properties, plays a crucial role in modern society. Rooted in stainless steel and electric vehicles (EVs), its applications are diverse and growing. While historically reliant on imports, North America is increasingly recognizing the importance of domestic nickel production for its burgeoning clean energy ambitions and economic security. Investors would be wise to watch these domestic developments unfold and for companies like Vale (NYSE: VALE), Fathom Nickel (CSE: FNI) (OTCQB: FNICF), Lundin Mining (TSX: LUN)(OTC: LUNMF), and Glencore (OTC: GLNCY) to outperform.
Why the Nickel Buzz?
Most demand for nickel is primarily driven by stainless steel and EV megatrends. The backbone of numerous industries, from construction to food processing, stainless steel relies heavily on nickel for its durability and hygiene. Global demand for stainless steel is expected to rise, fueled by infrastructure development and urbanization. Nickel is also a key component of cathodes for lithium-ion batteries, the heart of EVs. As the world transitions towards cleaner transportation, the demand for battery metals like nickel is skyrocketing. Experts predict this demand to continue rising exponentially in the coming decades.
While there are many cases to be made for a supply surplus, the majority of the world’s nickel comes from outside the west, with Indonesia, Philippines, and Russia the top three producers in 2023. To that end, prioritizing domestic nickel production offers multiple strategic advantages for North America's economic and environmental security. Building a robust domestic nickel industry can create jobs, attract investments, and reduce reliance on volatile international markets.
North America's Nickel Landscape
Though the lone star of the U.S. nickel industry currently, Lundin Mining's Eagle Mine in Michigan signifies a potential revival for U.S. production. This mine, producing both nickel and copper, commenced operations in 2014 after Lundin acquired the project from Rio Tinto (NYSE: RIO) in 2013 and accelerated development of the project. Fueled by rising demand, particularly in EVs, and spurred by Tesla's (NASDAQ: TSLA) 2022 domestic nickel sourcing deal, the U.S. is witnessing increased exploration activity, aiming to recapture its once-thriving nickel production, with the Eagle Mine potentially serving as a catalyst.
To the north, North America is ripe to build a robust nickel industry that the world can be jealous of. Canada is home to significant reserves and has well established mining expertise. The country is home to Vale’s Sudbury Integrated Operations and Nickel Rim South Mine, and Glencore Raglan Mines, amongst others that comprise part of the country’s 2.2 million tons of nickel reserves. In spite of this, the vast country remains largely underexplored compared to its potential.
Fathom Nickel Loads Coffers
Fathom Nickel was formed to capitalize on this burgeoning North American nickel market. Fathom’s flagship assets are two high-quality exploration projects located in the prolific Trans-Hudson Corridor in Saskatchewan. These are the Albert Lake Project, a 90,000+ hectare project that was host to the historic and past producing Rottenstone deposit (produced high-grade Ni-Cu+PGE, 1965-1969), and the Gochager Lake Project, 22,000+ hectare project host to a historic, NI43-101 non-compliant open pit resource; the Gochager Lake deposit (of 4.3M tons at 0.295% Ni and 0.081% Cu, defined 1967-1970), an analogous drill tested nickel occurrence of drill intersections >1.% Ni (Mal Lake last drilled in 1967), and the Borys Lake Zn-Cu-Pb+Ag occurrence.
The company spent recent years conducting extensive geophysical testing, borehole electromagnetic surveys, and other surveys to analyze the ground at both projects as it related to historic showings. The data did not disappoint, validating and expanding the potential resources while setting the stage for 2024 and watershed moments. The first of two planned winter drill programs commenced February 8 at Albert Lake. High-priority targets will be tested with 5-7 drill holes and approximately 2,000 meters. The drill when then be moved to the Gochager Lake project.
Less than two weeks into the drilling, the company made a significant announcement, saying on Tuesday that it completed the second tranche of a non-brokered offering, providing the capital needed to keep driving forward with development of its projects. The second tranche raised gross proceeds of $1.19 million, which, when combined with the first tranche equaled a total raise of $4.57 million.
Fathom Nickel marks a critical step in its exploration journey with the start of drilling operations at the Albert Lake Project and planning for drilling at Gochager Lake right afterwards. Identifying numerous potential drill targets south of the historic Rottenstone mine showcases their commitment to strategic exploration. This, coupled with promising geological indicators, positions Fathom for significant progress and stakeholder value creation as they unlock both project's mineral potential against a wide-open backdrop of North American quest for new nickel infrastructure.
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Fathom Nickel Inc. (CSE:FNI) (OTCQB: FNICF) Full Corporate Write-Up: Click Here.
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