Investment Tips 05-11-2023 03:08 15 Views

FPX Nickel

Overview

FPX Nickel (TSXV:FPX, OTXQB:FPOCF) is an exploration and development company focused on its advanced-development-stage Tier 1 Baptiste project in the Decar Nickel District in central British Columbia. The project has the potential to supply high-concentration nickel and cobalt sulfates suitable for the growing electric vehicle battery industry, as well as more traditional markets for nickel, such as stainless steel.

Nickel plays a vital role in electric vehicle (EV) and battery manufacturing, a sector that sees rapid expansion year after year. Market research projects a growing nickel demand to reach 1.3 million metric tonnes per annum by 2030, as nickel content in electric vehicles increases to over 40 kilograms per car battery.

Despite its significant role in powering a global shift to greener energies, analysts also project an undersupply of nickel for the next several years due to decreasing production and a lack of new active mines. Mining companies operating high-grade nickel projects offer investors exposure to a market with great economic growth and success potential.

FPX Nickel’s Baptiste project leverages an existing 2020 PEA and an updated mineral resource estimate that includes total nickel and potential by-product elements, cobalt and iron. It reports a 6-percent Davis Tube Recoverable (DTR) nickel grade increase in the indicated category and a 15-percent increase in the inferred category. Together, these NI 43-101 compliant reports show the Baptiste project has the potential to become one of the world’s largest-scale, lowest-cost nickel producers.

A preliminary feasibility study for Baptiste indicated an after-tax NPV of $2.01 billion and IRR of 18.6 percent at $8.75-pound nickel for a 29-year mine life producing an average of 59,100 tonnes per year.

The positive geological interpretation of the Van target at the Decar Nickel District offers further blue-sky potential for the Baptiste project, potentially mimicking the successes of its geographic neighbors, such as New Gold’s (TSX:NGD, NYSEMKT:NGD) C$1.8 billion Blackwater Gold open-pit project.

The Baptiste project presents FPX Nickel with the potential to produce refined nickel at a significantly lower carbon footprint than other sources of production in the global nickel industry. Recent leach testing of awaruite nickel concentrates produced from Baptiste achieved nickel recoveries of 98.8 percent to 99.5 percent in producing a high-purity chemical solution containing 69.4 to 70.1 g/L nickel.

In keeping with FPX Nickel’s aim to build a carbon-neutral mining operation at the Baptiste project, the company co-founded a multi-university research program to study carbon capture and storage at mining sites. The program is in collaboration with Anglo-American majority-owned (LSE:AAL,OTCQX:AAUKF) DeBeers, and the Government of Canada. .

Hydrometallurgical testing conducted by FPX Nickel for the production of battery-grade nickel sulphate has produced sufficient high-grade (> 65 percent nickel) awaruite concentrate. This large-scale pilot test work validates the processing strategy for Baptiste, leveraging awaruite’s ferromagnetism, high density, active surface properties, and very high nickel content.

Baptiste’s awaruite mineralization promotes a simple three-stage process. It has the potential to be more efficient than the typical five-stage process required to convert sulphide and laterite ores into nickel sulphate. Rapid nickel extraction of more than 98 percent in 60 minutes is achieved under mild pressure leaching conditions with significantly lower equipment size/risk, power consumption, pressure and temperature requirements than typical high-pressure acid leach (HPAL) operations.

FPX Nickel’s management team consists of highly experienced capital markets and mining professionals, including Canadian Mining Hall of Fame member Dr. Peter Bradshaw, and veteran geologist Rob Pease.

Company Highlights

FPX Nickel is a Canadian resource company focused on exploring and developing its wholly-owned advanced-development-stage Baptiste nickel project in the Decar Nickel District, central British Columbia.The company favorably leverages low-cost operation and mining best practices. It operates one of the few major nickel deposits in the mining-friendly jurisdiction of British Columbia.The Baptiste property hosts high-grade nickel mineralization with low impurities and little to no sulfides. This production-quality asset has potential applications for direct feed to the stainless steel or the electric vehicle battery market, with recoveries coming in at 98.8 percent to 99.5 percent.FPX Nickel operates a tight share structure consisting largely of management and other strategic high net-worth and institutional shareholders at approximately 18.5 percent and 35 percent holding, respectively.Baptiste offers a tremendous opportunity for lowering the carbon footprint of nickel

Key Project

Decar Nickel District – Baptiste Project

The Decar Nickel District covers 245 square kilometers and is 80 kilometers west of the Mt. Milligan mine, central British Columbia. The property hosts the highly prospective Baptiste nickel project, which has the potential to become the world’s best development-stage nickel project. The asset is accessible via logging and paved road, with railway and hydropower nearby.

Baptiste hosts nickel-iron alloy mineralization, bulk-tonnage potential and open-pit nickel mining possibilities across its four primary targets. Exploration has also indicated resources at an average grade of 0.123 percent DTR nickel for 2.3 million tonnes and 391 million tonnes of inferred resources with an average grade of 0.115 percent DTR nickel.

FPX Nickel released an updated mineral resource estimate (MRE) for the Baptiste Nickel Project incorporating results from 2021’s in-fill drilling program. The MRE is based on a new geological modeling approach and a newly improved dike model contributing to a significantly improved Davis Tube Recoverable (DTR) nickel grades with a 6 percent DTR nickel grade increase in the indicated category and a 15 percent increase in the inferred category.

In September 2022, the company completed a 2,504-meter step-out drilling program at its Van target in the Decar Nickel District. The completed holes stepped out aggressively from the initial discovery area, testing the potential for nickel mineralization up to 1 kilometer west of the holes drilled in 2021. Results from this drilling program were incorporated in the updated mineral resource estimate for the Baptiste Nickel project with total nickel and potential by-product elements, cobalt and iron.

Baptiste Project 2023 PFS

In 2023, the company released the preliminary feasibility study results for the Baptiste Nickel Project indicating an average production of 59,100 tonnes of nickel per year in concentrate over a 29-year mine life. The project will be developed in a phased approach, with an initial mill throughput rate of 108,000 tonnes per day (Phase 1), followed by an expansion to 162,000 tonnes per day (Phase 2).

FPX Nickel signed a non-binding memorandum of understanding with Japan Organization for Metals and Energy Security (JOGMEC) and the Prime Planet Energy & Solutions (PPES) joint venture between Toyota Motor Company and Panasonic, setting out a framework for FPX and PPES to explore collaborative opportunities for the vertical integration of nickel production at the Baptiste Nickel Project and the production of nickel sulphate and cathode active materials for the PPES supply chain.

Management Team

Martin Turenne – President, CEO and Director

Martin Turenne is a senior executive with over 15 years of experience in the commodities industry, including over five years in the mining industry. He has extensive leadership experience in strategic management, fundraising, economic analysis, financial reporting, regulatory compliance and corporate tax. Turenne formerly served as CFO of First Point Minerals Corp. from 2012 to 2015 and in positions at KPMG LLP and Methanex Corporation. He is a member of the Canadian Institute of Chartered Accountants.

Andrew Osterloh – Vice-president, Projects

With more than 20 years in the industry, Andrew Osterloh is experienced in process engineering, plant metallurgy and project management. He was formerly the project director and head of studies for Fluor Canada, leading feasibility study work for large base metal assets. He was formerly project director and manager of studies for Fluor Canada, where he led feasibility studies for several large base metal assets in the Americas for Glencore, Freeport-McMoRan, Teck and Newmont. Osterloh is a member of the Association of Professional Engineers of British Columbia and holds a Bachelor of Applied Science in mineral process engineering from the University of British Columbia.

Felicia de la Paz – Chief Financial Officer and Corporate Secretary

Felicia de la started her professional career with KPMG LLP’s audit practice in Vancouver, culminating with her role as a senior manager leading large teams in the execution of audit engagements for a variety of large and complex organizations across multiple industries. After joining Equinox Gold as the corporate controller in 2017, she was part of a core financial leadership team overseeing corporate accounting, financial reporting and system development, managing the successful integration of several new acquisitions across multiple jurisdictions, including both operating mines and large-scale development projects. She acted as the vice-president of finance for Vida Carbon, a carbon royalty and streaming company, and has more recently been providing financial and systems advisory services to public companies in the mining sector. She is a chartered professional accountant and holds a Bachelor of Commerce (Honours) from the University of British Columbia.

J. Christopher Mitchell – Advisor

J. Christopher Mitchell is a business consultant with more than 40 years of experience in the mineral industry. He previously served as senior vice-president of Viceroy Resource, and executive vice-president and CFO of Orvana Minerals Corp. Mitchell holds an MBA and M.Sc. from the University of British Columbia and is a member of the Association of Professional Engineers of British Columbia. He is also a director of Endurance Gold.

Dr. Peter M. D. Bradshaw – Chairman

Dr. Peter Bradshaw is a geologist with more than 45 years of international mineral exploration experience in over 30 countries with Barringer Research, Placer Dome, and Orvana Minerals. He is a member of the Canadian Mining Hall of Fame. Bradshaw’s key discoveries and project involvement include Porgera Gold Mine, Papua New Guinea; Kidston Gold Mine, Queensland, Australia; Misima Gold Mine, Papua New Guinea; Big Bell Gold Mine, Western Australia; Omai Gold Mine, Guyana; Decar Nickel Project, British Columbia, Canada; director of Aquila Resources; co-founder and first chairman of the Mineral Deposit Research Unit, University of British Columbia.

Rob Pease – Director

Rob Pease is a geologist with more than 30 years of experience in exploration, mine development and construction. He is the former CEO of Terrane Metals, acquired by Thompson Creek for C$650 million. Pease was also the former director of Richfield Ventures, acquired by New Gold for C$500 million. He is a director of Pure Gold Mining Inc. and Liberty Gold Corp.

William H. Myckatyn – Director

William Myckatyn is a mining engineer with more than 34 years of experience in the mining industry. Myckatyn is the founder and CEO of Quadra Mining Ltd. He served as chairman and subsequently co-chairman of Quadra FNX Mining until its takeover in 2012. Prior to this, Myckatyn was chairman, president and CEO of Dayton Mining Corp., where he led the restructuring and merger with Pacific Rim Mining Corp. He was the former president and CEO of Princeton Mining and Gibraltar Mines Ltd. For over 17 years, he worked for various operations controlled by Placer Dome Inc. and its associated predecessor companies, including four separate mines in Australia and the Philippines. He is a director of San Marco Resources and OceanaGold.

Peter Marshall – Director

Peter Marshall is a mining engineer with 30 years of experience in mine development and construction. Marshall was formerly VP of project development at New Gold and SVP project development at Terrane Metals. He has extensive mine development experience in central British Columbia, including completing the Blackwater gold project feasibility study and development, and early construction of Mt. Milligan copper-gold mine, acquired by Thompson Creek for C$650 million in 2010.

James S. Gilbert, – Director

James Gilbert has more than 30 years of investment and transaction execution experience, with more than 20 years focused on the international mining and metals industry. Gilbert held senior management positions with Rothschild, Gerald Metals Inc. and Minera S.A., a private mining investment company. His experience covers mergers and acquisitions, debt and equity financing, off-take and specialty refining agreements, joint venture negotiations and strategic marketing. He was formerly director of AQM Copper Inc., acquired by Teck Resources in 2016.

Anne Currie – Director

Anne Currie is a recognized leader in the permitting of major Canadian mining projects, with over 30 years of experience in the private and public sector, including as a former senior partner with leading global consultancy Environmental Resources Management. She was British Columbia’s chief gold commissioner, the chief regulatory authority for the Mineral Tenure Act., and has an exceptional track record in steering the environmental assessment and permitting processes for major mining projects in British Columbia, including for the KSM, Brucejack, Kemess Underground and Blackwater projects.

Dan Apai – Engineering Manager

Dan Apai has over twenty years of mining industry experience in civil engineering and engineering management over a diverse range of projects. In his previous role as a principal civil engineer for Fluor Canada, he led the study and detailed engineering works for numerous large-scale mining projects for clients including Teck, Newmont, BHP, First Quantum, Glencore, Josemaria Resources and Newcrest. Apai’s technical expertise includes site layout, earthworks, water management, linear facilities (i.e., roads, powerlines, pipelines), and water supply systems – all elements that strongly influence the capital intensity, permitability, and operability of mining projects. Apai is a member of the Association of Professional Engineers of British Columbia and holds a Bachelor of Engineering from the University of Western Australia.

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