Let’s start off with your recent big news – the completion of your joint venture with Mitsubishi Corp. Can you talk us through the catalysts that led to this deal?
Our President, Martin Vydra, introduced us to some traders at Mitsubishi Corporation more than three years ago. They eventually introduced us to the investment arm of the company and the due diligence started in earnest about eight months ago.
We know from other sources that Mitsubishi has been looking at a lot of nickel projects. We stood out to them for a number of reasons.
One is that our project is simple. 99% of the nickel and cobalt are contained in one sulphide mineral, called pentlandite. So, the recovery circuit has to float pentlandite and suppress everything else. Simplicity translates into low technical risk, which is very desirable for a large project.
They like our jurisdiction of British Columbia, Canada. We have high environmental standards and have adopted UNDRIP, so we respect the rights of Indigenous people. Mitsubishi has ESG as one of their core values and they are happy to accept the challenges of high standards because they are serious about delivering on their core values. They were attracted to the project’s low carbon intensity and how the tailings at Turnagain will sequester CO2.
Our deposit is well positioned to supply both Asian and North American supply chains.
Mitsubishi has a lot of respect for our management team because we are straight with them and have not sugar coated the facts. Throughout this transaction we have got to know their team on a personal level, and we really enjoy working with Mitsubishi.
How will the joint venture enhance the development of the Turnagain Nickel Project?
Mitsubishi brings a lot of expertise to the table in both the technical and marketing sense. They have connections, credibility, and sheer scale. On our own, it was very unlikely that our tiny company could build this enormous project. Now we can see a realistic path to getting the mine built.
The partnership also gives us credibility with the government and other stakeholders. They can see that the project is more likely to get built and are more willing to consider infrastructure improvements to support development.
Are you working on any more transactions?
Yes. We would like to sell another minority interest to an automaker or a battery manufacturer because we see that as a good fit.
A year ago, the thought of an automaker investing in a mining project was outlandish. Now, they are realizing that, if they are going to be competitive in the EV business, they will have to be vertically integrated in critical raw materials, particularly nickel and lithium. They are actively looking for projects to invest in.
I don’t think auto or battery makers are going to be interested in being operators of mines, but we are likely to see a model where they invest in a non-operating interest in order to secure access to the minerals.
The problem is, how are automakers going to tell the difference between a good mining project and a bad one? In the rush to lock up supply, I would not be surprised if some bad investments are made.
In our case, we have been through a very thorough due diligence process with a company, Mitsubishi, that is very knowledgeable about the mining business. So again, the credibility that Mitsubishi brings will give us a leg up in talking to other strategic investors.
Talking more about Turnagain, you recently completed the 2022 geotechnical field programme. Please can you give readers some more detail about that?
We now have all the geotechnical data we need to advance the engineering to the Pre-Feasibility level. We did geotechnical drilling and other work around our most likely tailings management area and around our proposed waste dump area.
The company is now fully funded to complete the Prefeasibility Study in H1 2023.
When it comes to supply chain security – and green credentials – where does Turnagain sit in terms of providing a secure supply of nickel to the batteries market?
We are in a jurisdiction with low political risk and high environmental standards, so it is a reliable jurisdiction for ethically sourced raw materials. We will have low carbon intensity and will possibly be a zero carbon mine. Our location is perfect to supply either the North American or Asian markets.
Looking at the wider nickel market, do you foresee a calmer 2023 compared with some of the chaos we saw this year?
Yes. I doubt very much that you will see another short squeeze sufficient to break the nickel market as we saw in March 2022. It is interesting that the price of nickel is hanging in there so well compared to copper in the face of China’s Zero Covid policy.
What’s next on the agenda for Turnagain and your joint venture with Mitsubishi Corp?
Our technical team will prepare the PFS in cooperation with Mitsubishi and our management team will be focused on engaging the next minority interest partner.