Mining Project Could Be Carbon Net Zero

Source: Adam Schatzker  (1/5/23)

Such a scenario is possible for this nickel-cobalt asset thanks to its owner’s carbon sequestering process, noted a Research Capital Corp. report.

“If the testing by Canada Nickel is proven,” Schatzker wrote, “the Crawford project could become a major critical minerals producer while being net zero carbon or perhaps sequestering far more carbon than the project produces.”

Testing of the IPT process revealed two significant findings, noted Schatzker. One, the methodology can be applied to the Toronto-based company’s existing process stream to capture and store carbon dioxide (CO2) at an accelerated rate.

“In the near term, we think Canada Nickel will likely announce some form of financing (likely strategic) that will allow the company to eliminate the debt on its balance sheet,” wrote Schatzker.

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Two, in the lab, the IPT process can capture a maximum of 37 tons of CO2 per ton of nickel produced. The amount to be captured routinely, however, is likely to be lower, and the nadir is not yet known, Schatzker wrote.

Regardless, extrapolating this result to the much larger scale of the Crawford project suggests the process would sequester a “very significant amount of CO2,” noted Schatzker, more than enough for Crawford to achieve carbon net-zero status, noted Schatzker. The feasibility study of Crawford is now expected in Q2/23.

Ways To Improve the Project

Schatzker pointed out that by integrating the IPT process into Crawford, Canadian Nickel might qualify for and benefit from some type of governmental incentive. One possibility is Canada’s existing refundable investment tax credits that range from 37.5–60% between 2022 and 2030 and from 18.75–30% between 2031 and 2040. These specific credits, Schatzker noted, would greatly improve Crawford’s economics.

“In the near term, we think Canada Nickel will likely announce some form of financing (likely strategic) that will allow the company to eliminate the debt on its balance sheet,” wrote Schatzker.

Also, the analyst purported the IPT process would work best with “a point source of concentrated CO2,” generated through a vehicle such as a natural gas generating plant or a blue hydrogen project.

“This approach,” he added, “while broadening the scope of the overall project, may make it more attractive from a carbon/environmental, social, and governance perspective.”

Research Capital has a Speculative Buy rating and a CA$2.70 per share price target on Canada Nickel, the current share price of which is about CA$1.76.

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Disclosures For Research Capital Corp., Canada Nickel Company Inc.,  January 4, 2023

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