Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Two Nickel Explorers

Commodities / Metals & Mining Nov 23, 2009 - 07:36 PM GMT

By: Richard_Mills

Commodities

Best Financial Markets Analysis ArticleAs a general rule, the most successful man in life is the man who has the best information

It wasn't so long ago that the base metals were some of the most rewarding markets to be involved in during this commodities bull market. That of course changed drastically when all the base metals were subjected to very large price drops late in 2008.


It seems like copper, gold and oil have been hogging the commodity spotlight since then. Those sectors are so well covered that market interest has neglected other areas in the commodities markets and in my opinion this neglect has created some potentially lucrative opportunities for astute investors.

The nickel industry has responded to rising nickel inventories, and last year's stock market crash by closing or postponing many mines - you can see a list here: http://www.estainlesssteel.com/nickelmineclosures.shtml

But at almost $8 per pound most nickel producers are making money. In fact, nickel began its run to $25 per pound from under $3, where it had been priced for several years. So $8 is providing a great return for most of the industry.

Demand will pick back up but the new mines - and the development and exploration stage, the brown & greenfield stage projects won't exist, or the number of projects will be down severely. Your pipeline of different stage projects from the ground to the mill to market will have been damaged for quite some time by the cutbacks due to rising inventories and lowered prices.

This means that any junior exploration companies that do make a big nickel discovery should get rewarded. But it has been so long since speculative investors made big money on nickel - the last big one was when Vale bought Canico Resources' Onca Puma deposit in Brazil in 2005 for $20/share - they have forgotten where to look.

Below, I have listed what are arguably two of the top nickel exploration plays in the world right now, and one junior that is active near each. The very low price of these two junior stocks tells me they have likely not been able to finance since the market crash last year, but they are in two of the world's best areas for nickel.

Raglan Mine Area, northern Quebec, Canada

Knight Resources (KNP-TSXv - $0.08)

The high grade (>2% nickel) Raglan Mine in northern Quebec, Canada is the crown jewel of Xstrata's nickel properties. Production began at the Raglan Mine in 1997. The current mine life is estimated at more than 30 years.

It's mostly underground mining and a fly-in, fly-out operation. Geologically the deposits all rest in the Raglan formation, which is the contact point between two geological regions. Xstrata owns a 70 km stretch of the Raglan formation.

One hundred kilometers west, and along strike, another mining major, Anglo American, with its partner Knight Resources (KNP-TSXv; $0.08), jointly owns another 70 km of this same Raglan formation. And they have had great success in outlining several pods of mineralization over the last couple of years.

Junior explorer Knight Resources and Anglo American are joint venture partners. Knight's management comes from Falconbridge, and CEO Harvey Keats was also a key member of the team at Diamond Fields that drilled out the large Voisey Bay nickel deposit in nearby Labrador. VP Exploration, Robin Adair, also worked for Falconbridge as manager of North American nickel exploration and was responsible for exploration at Raglan.

The Anglo-Knight team actually drilled some of their highest grade holes ever in the last program - 28 meters of 3.21% nickel and 1.1% copper, plus platinum and palladium credits. But the news came out in November 2008 as the markets were collapsing, and got ignored.

Shares Issued: 90.6 Million Price - $0.07 Cash: $1.57 million

Kabanga Nickel Belt, Tanzania

Castillian Resources (CT-TSXv: $0.05)

The following comes from Xstrata's website and it's true:

The Kabanga nickel project is among the world's most attractive undeveloped nickel sulphide deposits, with a total estimated Indicated Mineral Resource of 23.23 million tonnes grading 2.64% nickel and a total estimated Inferred Resource of 28.5 million tonnes grading 2.7% nickel. It's a 50-50 joint venture between Xstrata and Barrick Gold.

Kabanga is big. It's definitely what you would consider high grade. And one of juniors working near there is Castillian Resources. Castillian also has Dave Gower as CEO, who was previously the head of global nickel exploration at Falconbridge (now Xstrata).

Castillian has the Kagera Nickel Project, a 960 square kilometer land package along trend and the key claims lie within 10 km of Kabanga. This project has a lot of blue-sky potential; and Gower has said it is drill ready.

Shares Issued: 89.1 Million Price - $0.05 Cash: under $1 million

Conclusion

These two junior companies, Knight & Castillian, are exploring in two of the top nickel camps in the world, therefore increasing the opportunity for their shareholders to participate in a major discovery.

Nickel exploration has completely fallen off investor's radar screens, as the low share prices of these junior companies attest. However, nickel prices remain buoyant; and most producers are still making money. And that means the market should reward any new discovery.

    If you're interested in the junior resource market and would like to learn more please come and visit us at www.aheadoftheherd.com

    By Richard (Rick) Mills

    www.aheadoftheherd.com

    rick@aheadoftheherd.com

    Copyright © 2009 Richard (Rick) Mills - All Rights Reserved

    Legal Notice / Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in