#MarkSelby #CanadaNickel #NewtonInterviews https://youtu.be/K4B3-kE01gU
Peter Bell: Hello, I'm Peter Bell and I'm here with Mr. Mark Selby, CEO of Canadian Nickel. Hello, Mark!
Mark Selby: Hey Peter, how are you.
Peter Bell: Tell me again -- what's the name of the company?
Mark Selby: Canada Nickel Company with the ticker CNC. We've just started trading this week on the venture exchange.
Peter Bell: Thank you very much it's February 28th and the stock started trading on February 27th. Since then it's traded up there's been fairly little on the offer. It's had a halt. Now, there's been a major news release here on Friday afternoon announcing a maiden resource and drilling highlights. What a debut!
Mark Selby: Thanks. We've been working towards getting this initial resource out for a while. Even when we hadn't started trading publicly, we were been busy drilling this off. Since September, in fact. We had a couple of discovery drill holes in September 2018.
Mark Selby: I'm very proud of our team. To take it from those first few initial drill holes to a maiden resource with the 11th largest nickel sulphide resource in the world today is exceptional. And two-thirds of it is in a measured and indicated category, 900 million tonnes.
Mark Selby: Most importantly, the thing that I'm most excited about is that there's a very contiguous set of higher grade core through the ore body. If you look at the release we just put out, then you can see a grade shell at 0.3% cutoff where we've got 98 million tonnes at 0.34% percent nickel.
Mark Selby: My previous life was with RNC MINERALS, advancing DUMONT two months a point to seven percent of our body. The economics for that were documented in their feasibility study. The fact that we've got a large, continuous chunk of ore hopefully will be the first few years of a mining plan. It will really help the economics for the project, going forward. Most importantly, it's open in pretty much every direction.
Mark Selby: We have the 11th largest nickel sulphide resource on just less than 20% of the overall structure. There's lots of results pointing to a bunch of other great targets to start drilling, which we'll be able to start to now that we've got this initial resource going.
Peter Bell: Amazing to think about your history, the project history, and all the different things going on here. Again, to compare it to DUMONT is interesting -- the timelines that went into the exploration work and the resource estimates for that project in that public company in contrast to that with a new entity here. A new pubco that's just screaming out the gate with some firm numbers here in the first days of trading. Amazing. Maybe I'd ask about NOBLE MINERALS and WINDFALL GEOTEK as well? Lots there.
Mark Selby: Sure is. The deposit was initially a joint venture between several groups. They saw the benefit of this asset and put it into a wholly-owned, standalone company. We work with the team there for this transaction. The thing with NOBLE is that the PROJECT 81 has a huge land package. It was owned for a quite a period of time by a forestry company that were going in and out of bankruptcy. They did not spend a lot of time on this property.
Mark Selby: Vance and the team at NOBLE realized that theirs is one of the largest, most under-explored pieces of land in Ontario close to infrastructure. I look forward to many discoveries on this property. There is the nickel potential. The VMS potential and the gold potential, too.
Peter Bell: Credit to Canadian mining, all around. You mentioned 20% having been explored by Canada nickel -- is that 20% of this target area or the project area?
Mark Selby: That's the target area. Going through this at DUMONT over seven years, I learned a lot of things. For one, the geophysics is really useful. Not always, but in this kind of deposit it's very helpful on multiple fronts. Based on the geophysical signature, we think it is going to be mineralized ultramafic over eight kilometers or so in strike length. We've drilled-off just over one and a half kilometers of that so far. The same geophysical signature that we've seen in the best part of what we've drilled today at CRAWFORD it shows up in multiple places in the structure. Fingers crossed. As we start to step-out in some of the drilling now, we're gonna find more high-grade material.
Peter Bell: I was flipping through the company presentation and I noticed on one of the last slides mention accelerating the timeline for met testing. Any comments on that?
Mark Selby: Sure. I think that is one of the things that investors look at. Not just with CRAWFORD, but generally. Look at the copper space -- most of the large great copper projects are now between 0.3-0.5% copper.
Mark Selby: The reality in the nickel space is similar. Outside of Indonesia, it's going to be large, lower grade nickel deposits that are going to provide the bulk of the resource going forward. What's key with these lower grade deposits is metallurgy. Is the nickel minerals that you can recover easily. The drilling that we've done has been very important, but I've already got multiple labs working on the mineralogical samples to make sure that the nickel is in minerals that we can recover into concentrate. Over the next few weeks, we're going to start releasing some of that information. Given what I've seen so far, I'm confident that the mineralogy is going to come out okay. Two things. For one, there are parts of the ore body that have lots of sulphur. and nickel sticks to sulphur preferentially to iron. In these types of ore bodies, if there's sulphur then there's a good chance there's an atom of nickel stuck to it. Secondly, the process that converts the nickel into a mineral that's recoverable also releases magnetite. You can use how intensely magnetic something is as a guide of how far that process went-- how far it may have gone down the path to create recoverable nickel minerals. We're in great shape, I think. We can't wait to see what the test results come. That'll be coming over the next six weeks here.
Peter Bell: Wonderful. Nice to hear about the exploration playbook and the plan of attack. I haven't heard you say the word development, but it's clearly in the offing there.
Mark Selby: This initial scale of the resource right now can support a multi-decade operation, as is. Again, just on less than 20%. We're gonna continue to explore and find other, higher grade targets. We're not going to sit here and just take shareholders money to go drill forever, ever, and ever. With what we have right now, we're going to move right into doing a PEA on that piece of it. Again, we're going to focus on picking some other stuff up over the next couple months. Again, there are similarities geologically, mineralogically, terrain-wise, and infrastructure-wise between them. All the engineering work and the team that we used at DUMONT -- we can leverage that experience to quickly advance this project. Our target is to have a PEA done by next fall, then be able to roll right into a feasibility study with a target of having that done by the end of 2021. Hopefully, in time for catching a wave of what I think will be a nickel super cycle. That tends to happen every 15 to 20 years.
Peter Bell: Appreciate you talking about super cycles, as well. Maybe an esoteric or controversial term for some people in markets, but the CRUX INTERVIEW that you did earlier last year in 2019 was full of valuable insights about nickel markets and the cycles that we get in commodity markets. The under-investment in supply that creates these tightness, then price spikes and the windfall opportunities open up for those who can position yourself to exploit the opportunity. Wonderful.
Mark Selby: When I joined RNC in 2010, I did that because the team there believed that project cupboard got cleaned-out in the mid-2000s with the big price spike at that time. There's very few projects outside of Indonesia that are ready to be developed. Nickel has always been a high-growth metal and it continues to be a high-growth metal. The EV story just provides a whole new other source of demand, going forward. We knew we had to get through that nickel pig iron for four or five years --- going to go through some pain. It was a little. More painful than we thought.
Mark Selby: The contrast now is that I spent seven years promoting and advancing a nickel project in a market where not many major mining companies or investors were interested in nickel. We got it done. Just last week, you had the BHP CEO Mike Henry saying we need more future-facing metals. We need more nickel. We need more copper. We're here at the RED CLOUD event and ROBERT FRIEDLAND was talking at lunch today. See him talking about how essential nickel is -- it's the gasoline and in the EV revolution. Already, we've seen some interest from some very large mining companies an. Going forward, as we demonstrate the scale potential of this asset and the economics around this asset -- I think it's going to be a very exciting. Very fun couple years.
Peter Bell: Again thinking about how far you went with the wind in your face and now to think about the wind at your back, amazing. Wonderful. Congratulations. All this success so far, but really the work is just beginning in a lot of ways. We've talked about some of the important stuff ahead, let's talk about a few the diagrams in news released today. There's one that has a fairly vertical hole testing one of these mag-highs at depth.
Mark Selby: The thing with these deposits is we believe they're emplaced horizontally and get tipped up. This looks really interesting is with the 3d magnetics. We saw this mag anomaly that went down a kilometer and we could see from the first few drill holes that there was some higher grade around that mag high. Again, there's been more than a few mining companies spend a lot of time drilling around one piece before finding out the best part was over there instead. To just make sure that we weren't missing out on the absolute best part of it, we drilled a drill hole right through the heart of it. We didn't find anything that was much higher grade than what we're drilling, but we hit 900 nine hundred meters of 0.31% nickel. There was only one assay in the entire 900 nine hundred meters that was not mineralized. There are no dykes. There are no other sort of disruption in the mineralization. The scale of what we have here is really amazing. We basically went another couple hundred meters below where the resource estimate is sitting today. The other part that's interesting is the shape of the ultramafics, as seen in the shape of the mag. The ultramafic rocks actually bow-out as you go deeper, which will be very helpful from a strip ratio perspective. That was a pretty exciting hole that we drilled. We've been waiting to go public to be able to release it.
Peter Bell: I recall studying the presentation deck, looking at some of these cross-sections that show a high grade hit here and then high grade hit in another hole. They seemed to be vertically aligned. I'd posted about that online -- what's going on? What is the orientation of the high grade here? To hear you say that you drilled vertically, down the throat of it, I am pleased. Well done! Thank you for doing that. Some geologists might resist that, saying all the holes should be perpendicular. OK, great, fine, thank you, but at this point it's a promotional story -- you really have to get the market excited about what you have here and that kind of work shows that you understand how to do that in terms of really understanding the dimensions of your ore body.
Mark Selby: We want to see what's there! That center axis is important, as it's going to be the center of the pit! We know that pit bottom can drop quite a bit, so let's figure out what's in the pit before we spend much time know drilling elsewhere.
Peter Bell: Exceptional. I've seen cases before where people have waited until hole 150 or 180 to drill those vertical holes down the throat. And then they find some really nice high-grade, but by that point nobody really cares anymore. What a tragedy.
Mark Selby: That's the key part here -- the thing I'm most proud of is what we've done as a team. Steve as our VP-Exploration. Bill and John in Timmins. We've drilled off the 11th largest nickel sulphide reserve on basically a few million dollars worth of drilling. It's basically a discovery cost of about $1 per tonne. There are a lot of sulphide projects and some publicly traded ones, which I won't name publicly, have spent thousands of dollars per tonne for much less resource than we have today. To me, I think that speaks to the team and is very exciting for what next. A massive chunk of my net worth is invested in this company. I want to make sure we use that capital most effectively, going forward.
Peter Bell: And the amount of money, post-IPO? How much will still be in Treasury?
Mark Selby: Of the six point eight million dollars that we raised, two million went out the door to get the transaction done. Right now, we're have about a million and a half dollars. We will be coming back to market towards the end of March to be able to fund the PEA, do that next phase of exploration, and get that PEA done by next fall.
Peter Bell: Hammer down! This is the nature of junior mining, isn't it? Maybe to ask, as well, these other 11 nickel sulphide projects in the word -- develop-ability? Or mine-ability? It's pretty hard to go line by line and compare them in depth, but it seems like where you are in Ontario is a world-class mining location. Kidd Creek!
Mark Selby: I think too many people get caught up in grade. I've run a mine in Australia. When you're spending one hundred dollars per tonne on mining costs, you need like 2% nickel. You need several grams per tonne gold just to basically meet the mining costs, before you start making any contribution toward the milling and a profit. Being in a location in Timmins, we are close to all that infrastructure. We've got a supportive community that likes mining. Excellent First Nations group you that's very commercial and realized the cost-benefit of resource development in the area. We've got a good relationship already with the First Nation that's there. I would encourage people to spend more time looking at those aspects of a project because, again, if you've got 10% nickel or 4% copper but it's in a 2 metre vein on the top of a mountain then watch out. Yes, it's sexy. The core looks great, but in terms of whether you can develop it or not -- that's what's key. I carried around a box of rocks that were 28% gold from from BETA HUNT. At the end of the day, would I rather carry around a piece of core at 0.3% nickel from that 900 meter hole or that gold-bearing rock? In terms of actually creating value for shareholders, that nickel core has gotta be very, very valuable going forward.
Peter Bell: Thinking about the exploration question again with WINDFALL GEOTEK and CARDS -- the fact that you've tested one of their target areas. Does that help them refine their targeting for the next round?
Mark Selby: Big time. The AI is an important approach of taking the data you have and making your best interpretation based on that data. The more data you feed the model, the better answers you're going to get and the more targets you're going to generate. As we go forward, we've got an opportunity now that we've proved out the scale the resource on one small piece of it -- we've got an opportunity to start to step-out and look at some of the other opportunities in the area using the best best targeting that's out there. CARDS was a critical piece of helping to know unlock this so far, which is now turning into a massive nickel deposit.
Peter Bell: And how about holes that you might have drilled that missed? Areas where you found the edge or the ore body? You mentioned that it was open in all directions.
Mark Selby: We have one hole that goes deep and it was still in mineralization when it stopped. In this release, go to hole 22 -- that's the westernmost hole. It's in an area that's a relative mag low. What was surprising to us was that there was a nice high-grade, high nickel, high sulphur section in there. I thought that, given the mag was lower, it might not be that well mineralized but it continued that way. We see this great big opening that's not mineralized in the middle of the two mag highs. Who knows what we'll find as we step-out with drilling there. CRAWFORD is the gift that keeps on giving.
Peter Bell: The best projects get better the more you work them! That hole 19 pointing off to the southwest -- it seems like the nearby hole 16 has a similar high-grade intercept in a similar area. We're looking at a plan view at this point and we talked about the vertical orientation of the higher grade sections. I wonder the horizontal continuity at a strike at surface?
Mark Selby: The high-grade is there at surface in the easternmost edge, then plunges slowly as you move westward. Again, I've been blown away as we go west. There are several kilometers to go west. On the east side, there's an important fault. In the graphics, you'll see a large horizontal anomaly that we think is the faulted-off extension of that main anomaly. With the geophysics, it looks like what we have in the main ore body continues out there. We'll tell when we drill it. We're partway into something that is potentially very, very large.
Peter Bell: And the street has some interest in it! Any comments on some of the bigger entities out there in the world of nickel either?
Mark Selby: One thing that was encouraging to me was in the very early days when I was in London for One On One meetings. I got an email that meeting planner was open and, literally, the first two emails that came up for meetings were Rio Tinto and China Moly. Those were initial meetings at the early days, but it showed me the level of interest from the majors for nickel. I can tell from experience that did not exist three four or five years ago. If the BHP CEO said we need more nickel, I can assure you that the Anglo CEO the Rio CEO -- all the large mining CEOs are thinking about it and saying we need to find a way to get exposure to nickel. Hopefully, CRAWFORD will be that for one of them.
Peter Bell: Canada Nickel Company, CNC on the TSX Venture. Mr. mark Selby is President and CEO. Thank you very much!
Mark Selby: Thank you, Peter. Have a good day.
Peter Bell: Goodbye.
