Canada Nickel (TSX-V:CNC) continues to deliver strong results from its flagship Crawford Project near Timmins, Ontario. Yesterday, after the market close we learned that CNC intersected a higher grade portion of the East Zone at Crawford; hole CR19-28 intersected 55.5 meters grading .42% nickel within a wider intercept of 321 meters grading .27% nickel, along with smaller amounts of cobalt, palladium, and platinum.

While the higher grade nickel intersected in the East Zone is a major positive, the real story is a 1.5 kilometer step-out in the PGM Zone which intersected high-grade platinum-group metals; hole CR20-32 extended the PGM zone by 1.5 kilometers along strike and intersected 3 separate palladium-platinum zones including the best palladium-platinum intersection to date – 2.6 grams/tonne palladium + platinum over 7.5 meters within 1.8 grams/tonne over 12 meters starting at 123 meters downhole.

Canada Nickel CEO Mark Selby offered the following commentary on these results:

“We are very pleased with both the new nickel and multi-zone palladium-platinum discoveries from our first step-out holes at Crawford. These new holes have also yielded both the best palladium+platinum (2.6 g/t across 7.5 m) intersection and best nickel zone intersections to date (0.42% nickel + 0.2 g/t palladium+platinum across 55 m). With more than 1.5 km extensions to both the PGM Zone and Nickel Zones and assays pending from another 9 holes which have the potential to further extend the mineralization identified to date, we look forward to continued success as we unlock more targets at our original Crawford property.”

The key bit of info contained in this NR is that Canada Nickel now understands that the platinum-group metals are found at the north contact between the peridotite and pyroxenite layer directly to the north of the main nickel structure. The Company will now add a 2nd drill rig in order to target this contact between the peridotite and pyroxenite layer near hole CR20-32 and other high potential targets across 8km of structure.

The Company continues to drill at the East Zone and there are nine holes with assays pending. Canada Nickel is aggressively drilling out this resource and the company is well funded with more than C$4 million in its treasury with no debt.

In its short history as a public company, Canada Nickel has certainly moved quickly and delivered excellent results on a regular basis. Crawford has the makings of a very special project that just keeps getting better as more exploration is conducted on the property.

CNC.V (Daily)

Many people have asked me how much I think Canada Nickel is worth, and frankly this is an impossible question to answer. There are simply too many factors that are not only not fully known, but also impossible to know. The biggest variable is obviously the future path of nickel prices, with the ultimate size and grade of the Crawford Project being another important factor.

The best case scenarios which include significant exploration success and a much bigger and higher grade resource at Crawford along with a nickel bull market could see Canada Nickel eventually reach a billion dollar market cap. However, in the event that nickel prices remain lower for longer and Crawford does not grow nearly as much as hoped then we might be looking at a valuation closer to what we see today (between $75 million and $100 million)

A US$100 million market cap is reasonable for a company that continues to expand the 12th largest nickel-sulphide resource globally. In addition, the discovery of high-grade PGMs at Crawford adds an extremely attractive element to the Project - one which could vault CNC from being a nickel play to being a one-stop shop for all battery metals (cobalt, nickel, palladium, platinum).

Based upon my back of the napkin math Canada Nickel has likely already expanded the Crawford resource by at least 50% with the drill results that have been generated since the maiden resource estimate was released at the end of February. Putting it all together, my current 12-month price target for CNC is C$2.50 per share - this is based upon today's metals futures curve and all information known to date including an updated share count of 76.5 million shares fully-diluted (C$2.50 share price would equate to a C$191 million market cap or roughly US$135 million using today’s USD/CAD exchange rate).

I have purchased Canada Nickel shares on the open market at prices ranging from $.39 to $1.11 and as of this moment CNC represents my largest junior mining holding by dollar amount. 

Disclosure: The author is long CNC.V shares at the time of publishing and may choose to buy or sell at any time without notice. The author has also been compensated for marketing services by Canada Nickel Resources Ltd. 

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