AGORACOM Small-cap Investor Relations Blog

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

Nickel prices hit 2-week high

• Nickel prices hit their highest in nearly two weeks on Thursday, as investors who bet on falling prices had to buy in at a strong support level.

By Mai Nguyen

SINGAPORE, Dec 12 (Reuters) – Nickel prices hit their highest in nearly two weeks on Thursday, as investors who bet on falling prices had to buy in at a strong support level.

Nickel prices have fallen in the past weeks to touch a five-month low of $12,900 a tonne on the London Metal Exchange (LME) on Tuesday, as the market viewed prices more expensive than supply and demand fundamentals indicated.

“$13,000 was a critical number to defend,” said a trader.

Three-month nickel on the LME on Thursday climbed as much as 0.9% to $13,980 a tonne, its highest since Nov. 29.

The most-traded nickel contract on the Shanghai Futures Exchange (ShFE) jumped as high as 3.5% to 110,570 yuan ($15,708.42) a tonne, nearing a two-week high, before ending at 110,190 yuan a tonne, up 3.1% from the previous close.

Other nickel industry players said that a royalty hike in top nickel ore producer Indonesia contributed to a bullish view on prices, but they expressed uncertainty over how long the upward trend could last.

FUNDAMENTALS

* SPREAD: The LME cash nickel contract was last at a $65 a tonne discount to the three-month contract, suggesting sufficient nearby supplies.

* NICKEL STOCKS: LME on-warrant nickel inventories, or those available to the market, rose to a 2-1/2-month high at 67,248 tonnes. MNISTX-TOTAL

* ALUMINIUM STOCKS & SPREAD: LME headline aluminium stocks MALSTX-TOTAL jumped to their highest since April 2018 at 1.33 million tonnes, and the spread between the cash and three-month contract flipped to a discount of $8.75 a tonne after mostly holding in the premium zone for around a month. CMAL0-3

* OTHER PRICES: LME zinc advanced 1.3% to $2,250 a tonne at 0712 GMT, while copper fell 0.3% to $6,139 a tonne and aluminium rose 0.3% to $1,766 a tonne. ShFE copper rallied 0.5% to 49,030 yuan a tonne and zinc jumped 1.1% while aluminium fell 0.3%.

Source: https://www.reuters.com/article/global-metals/metals-nickel-prices-hit-2-week-highs-as-investors-cover-short-positions-idUSL4N28M1AN

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

Nickel Is Hot Right Now – The Nickel Boom May Have Just Begun

• Indonesia announced they will ban nickel ore exports beginning 2020.
• Indonesia currently accounts for about 27-28% of global nickel ore supply.
• Other sources of nickel supply appear somewhat constrained, while demand for nickel looks strong, especially boosted by EVs.

Nov. 5, 2019

By: Matt Bohlsen

Indonesia has declared that they will ban nickel ore exports as of January 1st, 2020 (previously scheduled for 2022). However, on Monday, September 2, 2019, Indonesia’s Energy and Mineral Resources Ministry confirmed plans to move the ban up and place it ahead of schedule. Indonesia currently accounts for about 27-28% of global nickel ore supply. Nickel prices surged higher on the news.

Source: InfoMine

The 2007/08 nickel spike coincided with record low LME nickel inventory levels (see chart below) and a China construction boom. Today, LME nickel inventory is at 153,000 tonnes and has been falling steadily for some time now. The Indonesia export ban could easily send nickel inventories back below 50,000 tonnes in 2020 and cause another huge nickel price spike.

Nickel 30-year price chart

Source: InfoMine

LME nickel inventory levels are heading to lows not seen in a decade

Source: InfoMine

Indonesia’s Coal and Minerals Director General Bambang Gatot Ariyono stated: “The government decided, after weighing all the pros and cons, that we want to expedite smelter building. So we took the initiative to stop exports of nickel ores of all quality.”

Indonesia will soon have 36 smelters, and if exports were to continue, there would have been only enough reserves for seven to eight years. These smelters can process low-grade nickel ores and they can be used for batteries to help Indonesia meet its electric-vehicle goals. Bambang continued: “We already exported 38 million tons up until July this year. At this rate, we would need to think about our reserves especially if we keep issuing exports permits.”

Put simply, Indonesia has long wanted to encourage investments within Indonesia that can value-add to their nickel ore. The end game would be for Indonesia to be able to produce their own finished nickel, stainless steel, and lithium-ion batteries (NMC batteries require plenty of nickel).

Last month Reuters reported:

“Indonesia currently has 13 operating nickel smelters with input capacity of 24.52 million tonnes. Government data showed that 22 more nickel miners are currently under development with additional capacity of 46.33 million tonnes. Lengkey said the installed capacity will not be enough to process the country’s ore output.”

Nickel supply by country

Source: Own chart with data sourced from Investing News

Other sources of nickel supply

The Philippines is the number two global nickel supplier. No doubt Philippine nickel miners will try to boost ore production next year when the Indonesia export ban kicks in. The Philippines has 29 nickel mines and two nickel processing plants. However, strict environmental law changes in the Philippines in recent years have reduced their nickel supply. Also, it is said that many Chinese buyers prefer higher-grade ores from Indonesia. Current Philippine nickel ore production has dropped to about 340,000 tonnes in 2018 due to the closure of 23 mines as the government seeks to curb environmental damage from mines in the Philippines.

Perhaps the boost will come from New Caledonia, Russia, Australia, Canada, China and some contributions from the new Indonesian smelters. But will this be enough?

Overall, it appears for now that very large new sources of nickel supply appear somewhat constrained, especially given the Philippines recent focus on environmental protection and nickel mine closures.

Nickel demand looks set to increase boosted by electric vehicles

All experts agree that demand for nickel sulphate is set to go through the roof as electric vehicles [EVs] take off. Fastmarkets stated last year:

“Demand for nickel in the EV space is expected to total 36,000 tonnes in 2018… That figure is expected to surge to 350,000-500,000 tonnes by 2025.”

That’s more than a tenfold increase, in just 7 years. Wow!

The best source of nickel sulphate will come from the nickel sulphide miners.

No doubt new sources of nickel will start to fill the supply gap that Indonesia will leave, but this takes time. Indonesia will also step up their processing of ores, but this will take several years to raise capital and then build out the processing plants. Many companies that halted nickel sales due to the recent bear market years for base metals will start to come back online, as will new nickel projects assuming the nickel price stays strong. Will we see nickel over USD 10/lb in 2020? Yes, I would say this is very possible, as with most severe supply disruptions, the industry usually takes a couple of years to catch up.

The chart below shows nickel is forecast to be in deficit after ~2020-2022 (and this was before factoring in the Indonesia ban).

Source: Wood Mackenzie

Nickel Companies to consider

The top global nickel producers by nickel production volume are Vale [BZ: VALE3](NYSE:VALE), Norilsk Nickel [LSX: MNOD] (OTCPK:NILSY), Jinchuan International Group Resources [HK:2362], Glencore (OTCPK:GLCNF)[LSX:GLEN], and BHP Group [ASX:BHP] (NYSE:BHP). Good smaller producers include Independence Group [ASX:IGO] (OTC:IIDDY) and Western Areas [ASX:WSA](OTCPK:WNARF). Some top nickel developers with very large resources include RNC Minerals [TSX:RNX] (OTCQX:RNKLF), Ardea Resources [ASX:ARL] (OTCPK:ARRRF), and Australian Mines [ASX:AUZ].

Rather than repeat information from my other recent nickel articles here, I refer to the further reading section below that gives plenty of company information.

Forecast leading companies based on finished nickel production worldwide in 2020 (in 1,000 metric tons)

Source: Statista

Note: Glencore took over Xstrata’s nickel assets.

Risks

• A China or global slowdown could reduce demand for nickel. China and the stainless steel industry are by far the largest consumers of nickel.
• Nickel prices falling. Indonesia may reverse their decision, or other countries may bring on excess new supply. Also, the new Indonesian smelters once running will be a new source of nickel supply from Indonesian nickel ore. Noting Indonesia already has 13 operating smelters.

Further Reading

• Nickel Monthly News For The Month Of August 2019
• Top 5 Nickel Producers And Other Smaller Producers To Consider
• Top 5 Nickel Sulphide Miners To Consider

Conclusion

This article is for the purpose of alerting Trend Investing members that the nickel boom may have just begun. Certainly all the signs are there.

The further reading section above gives plenty of good information on the better nickel plays. My standout nickel miner continues to be Norilsk Nickel due to their massive (sulphide) resources, very low cost of production when taking into account by-products (palladium, copper), low valuation (2020 PE of 8.3), and high dividend yield (2020 estimate 10.9%). Vale offers some attraction right now after recent price falls, but is mostly an iron ore miner. My top nickel developers are RNC Minerals, Ardea Resources, and Australian Mines.

Source: https://seekingalpha.com/article/4302579-nickel-hot-right-now-nickel-boom-may-just-begun

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

A nickel for your thoughts – The price of nickel has run up to a five-year high of late

By Gwen Preston

The price of nickel has run up to a five-year high of late, defying softness in the rest of the base metal complex.

The reasons are both simple and complicated. The price of nickel doubled in two years, from US$4 per lb. in August 2017 to US$8 per lb. a few weeks ago. The reasons:

· Robust demand. Nickel is primarily used to make stainless steel. And despite slowing growth, stainless steel demand keeps marching up.

In the first half of 2019, for instance, Chinese stainless steel production was up 8.5% yearover-year. (As the chart suggests, forecasts predict softening of demand in the current quarter.)

· China makes most of the world’s stainless steel. And China gets the nickel for that steel from its own mines as well as mines in Indonesia and the Philippines, many of which produce a lowgrade, high-impurity ore called nickel pig iron (NPI). NPI production has ballooned over the last decade, enough that as of 2020 the world will get more of its nickel from NPI than from conventional nickel ores. However, this reliance on NPI brings with it a few problems.

· Indonesia will implement a ban on nickel ore exports at the start of 2020. This has been in the works for some time but until a few months ago the ban was not scheduled to take effect until 2022. Indonesia produces roughly ~12% of global supply, so this ban is significant. The idea is to push the development of domestic smelters, which would keep more of the resource upside in country versus exporting raw ore. This is in the works – the country already has 11 nickel smelters and 25 more are planned or under construction – so Indonesian nickel supplies should slide in the near term but recover within about three years. However, the smelters in China that relied on Indonesia’s nickel pig iron (NPI) ore will have to find feed elsewhere; the main candidate is the Philippines, where ore is generally lower grade. The only other option is to upgrade to processing Class I ores. Either move would increase costs overall, which supports a higher nickel price.

· Batteries. Eighty percent of the world’s nickel goes into stainless steel, so steel certainly drives the market. But many of the batteries that power laptops, electric vehicles, phones, and even power grids require nickel. This has transformed nickel from a one trick pony to a two trick market – and if electric cars take off then nickel’s battery market will take off right alongside. Right now batteries consume 5% of global nickel but demand is rising rapidly and is expected to reach 8% by 2020. Vice President of market analysis and economics for BHP, Dr Huw McKay, says he sees a future where batteries and stainless steel become “equally important” nickel consumers. Global nickel demand currently sits around 2 million tonnes per annum; it is expected to grow to 6 million tonnes per annum by 2035 with batteries accounting for almost half of demand growth.

· In addition, batteries cannot use nickel from NPI, as impurities are too high, so the battery factor has divided the nickel market into two parts – high purity Class I nickel and lower purity Class II. All of this has two important effects: it is bringing energy metal investors into the nickel space and it is underlining that NPI, which has been the dominant source of nickel growth for the last 10-plus years, will not solve the nickel supply gap going forward.

· To address that second point and boost production of Class I nickel, China is developing several mines tapping into nickel laterite deposits. Nickel laterite is easy to mine but very difficult to process, requiring high pressure acid leaching (HPAL). Most analysts are highly skeptical that China’s planned HPAL facilities will come online anywhere near their projected timelines or budgets, as these facilities are notoriously difficult and expensive.

· Because NPI has ballooned so in the last decade, explorers and developers have not looked for conventional nickel deposits. There is a true lack of development-stage nickel projects with conventional sulphide deposits that could be built to fill supply gaps.

· Current mine-specific supply issues. The biggest producer of NPI in the Philippines just ran out of ore. The Ramu project in Papua New Guinea is temporarily suspended, which removes 35,000 tonnes of annual nickel supply.

· Stockpiles are falling – and fast. Nickel stockpiles have been declining for five years.

This is what happens when a market is persistently undersupplied. But as you can see, the decline accelerated in the last two years…and stockpiles dropped off a cliff a few weeks ago.

The cliff is likely the result of panic buying and/or stockpiling ahead of the Indonesian ban.

I told you it was complicated!

Complicated is normal for nickel, which has a long track record of extreme price moves. In 2008 a supply shortage drove the price as high as US$22 per lb. before steel mills found substitutes, 7 including manganese, and within 18 months the price was back at US$4.50 per lb. (The Great Financial Crisis likely exacerbated the price decline.)

The Bear Case

The key question on this side is: to what extent is speculation driving nickel?

If speculators are pushing the price up, entering the space now is risky because (1) speculative tides turn fast and (2) that turn would likely transpire in the next 6 to 9 months. Indonesia’s ban comes into effect in January 1 so over the next six months the impacts start to play out.

It’s clear that stockpile drawdowns are at least in part because smelters and speculators have been stockpiling metal privately. That metal will be used or sold to ease any nickel price jumps.

If increased physical metal availability coincides with the absence of speculative upside pressure…nickel could turn down fast.

On top of all that, there are reasons to believe (1) stainless steel demand will weaken to end this year, (2) EV demand is taking longer to ramp than expected, (3) scrap usage is increasing, and (4) rising backwardation alongside falling physical premiums is a sign that actual demand is lower than perceived.

The fourth point above needs some explaining. In a tight market, limited stockpiles lead to backwardation – people paying more for metal today than in the future. Backwardation should only happen when the current physical market is very tight. If that’s the case, there should also be high physical premiums, which are extra amounts paid for actual metal now (rather than paper metal).

What weird about nickel is that premiums are down sharply, from $200 per tonne a few months ago to negative $50 per tonne today. It’s the first-time premiums have ever gone negative in China and something that is very rare across the metals complex. European nickel briquette premiums are also down 80% in recent months.

The dark blue line below shows physical premiums. The light blue line shows the difference between current and three-month nickel prices; a positive Cash-3M is backwardation.

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This suggests:

· The physical market is not that tight

· Speculation in the paper market is driving the price

· Speculation is not simply investors; nickel users and producers are also playing games (stockpiling) to boost the price. When they stop, the price will lose ground rapidly.

The Bottom Line

Nickel may or may not continue its bull run from here. The fact the physical premiums are so low when prices have gained so much and the paper market is in backwardation is definitely concerning, enough that I am not ready to enter the space right now. The fact that nickel spot price recently stepped back almost 10% reinforces my outlook.

However, in the medium and long term this is a market that has good opportunity. Stainless steel demand growth is reliable. The battery space will need more and more Class I nickel with each year. The pipeline of new projects is very limited, especially if you (like me) see China struggling with its nickel laterite output mines and HPAL facilities.

I might be wrong and my hesitation on entering now may mean missing out on near term upside, but such decisions are common in this sector!

Source: https://www.kitco.com/commentaries/2019-10-28/A-nickel-for-your-thoughts.html

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

Nickel and palladium surge on the back of supply constraints

• Nickel price has recently surged reaching US$18,000/t
• This is mostly due to the Indonesian nickel ore export ban to commence January 2020, as well as the Philippines indefinitely suspending nickel mining in southern Philippines (27% of overall Philippine nickel ore exports are from this area).

Matthew Bohlsen

The past few years have generally been tough for the miners, especially for investors that joined the electric vehicle (EV) metal miners boom at its first peak (January 2018). However, all is not lost. For nimble investors, there are some great gains to be made when metal prices spike, but you need to be not too late to the party. Right now two metals are rising fast on supply constraints and strong demand. Furthermore, they should continue to do well for some time. In many cases, the associated miners have been slow to reflect the gains as investor sentiment has been weighed down by the trade war. This leaves some incredible buys for those willing to invest.

Those two metals are nickel and palladium.

Nickel

As we can see below the nickel price has recently surged reaching US$18,000/t. This is mostly due to the Indonesian nickel ore export ban to commence January 2020, as well as the Philippines indefinitely suspending nickel mining in southern Philippines (27% of overall Philippine nickel ore exports are from this area).

Nickel supply reductions from the two largest nickel producing countries (Indonesia and Philippines represent 45% of global nickel supply) and an EV led demand surge are combining to cause nickel deficits and a nickel price spike, as shown below.

Add in resilient nickel demand and soon a surge in EV related demand and you have the recipe for a nickel boom.

Nickel 5 year price chart

EV related demand for class 1 nickel is set to surge more than tenfold from end 2018 to 2025, or increase from 36,000 tonnes in 2018 to 350,000-500,000 tonnes by 2025. In a 2 million tonne total nickel market, a 500,000 tonne increase represents a 25% increase just from the EV boom.

LME nickel inventory levels fell last week the most in 40 years

Just last week LME inventory levels fell the most in 40 years, as China’s Tsingshan Holding Group Co. bought 25,000 tonnes of LME nickel. Apparently a further 75,000 tons of metal are scheduled to be delivered out soon. That could send LME nickel below 50,000 tonnes and panic the market causing nickel prices to surge even higher.

Palladium

Palladium metal prices have doubled the past year and a half on the back of strong demand for palladium used in catalytic converters. The price is now over US$1,700/oz, significantly higher than gold at US$1,492/oz.

Palladium 5 year price chart

Europe is reducing emissions targets in 2020, 2025, and 2030 and other countries will follow. This means more palladium will be needed in catalytic converters. As reported by Reuters, Morgan Stanley recently stated that starting 2020 in China each vehicle will need to contain around 30% more palladium, platinum and rhodium. Some analysts are already forecasting US$2,000/oz palladium.

The only caveat here is if we see very rapid electric vehicle take up and hence less internal combustion engine (ICE) vehicles then demand could stall or even reverse. However, this should still be several years away given the electric car market share globally is still only at 2.3%. Hybrid EVs use both palladium and nickel. Note also that platinum can be used to substitute for palladium but it is not so easy and the cycle to replace can be costly and take ~2 years.

Source: https://investorintel.com/sectors/gold-silver-base-metals/gold-precious-metals-intel/nickel-palladium-surge-back-supply-constraints/

• Company has engaged Aster Funds Ltd, Toronto, Ontario, to conduct a satellite-based long wave infrared thermal mineral scan and a synthetic aperture radar survey of the Sill Lake Pb-Ag property, Vankoughnet Twp. Ontario.
• Aster Funds Ltd provides spectral analysis surveys and synthetic aperture radar surveys to exploration companies

TORONTO, ON / October 9, 2019 / Tartisan Nickel Corp. (CSE:TN)(OTCPINK:TTSRF)(FSE:A2D) (“Tartisan”, or the “Company”) is pleased to announce that the Company has engaged Aster Funds Ltd, Toronto, Ontario, to conduct a satellite-based long wave infrared thermal mineral scan and a synthetic aperture radar survey of the Sill Lake Pb-Ag property, Vankoughnet Twp. Ontario.

Aster Funds Ltd provides spectral analysis surveys and synthetic aperture radar surveys to exploration companies principally active in Canada, Latin America, and Australia. The spectral analysis survey provides a property-wide distribution of up to 16 mineral and rock species consistent with the Sill Lake deposit model, while the synthetic aperture radar survey provides a distribution of surface and shallow buried conductors similar to what an airborne electromagnetic survey would generate.

Tartisan Nickel CEO Mr. Mark Appleby said, “we are going to test Sill Lake with the Aster Funds Ltd technology, which should give us some very good insights into the extent of mineralization on the property. This would focus detailed exploration on targets that would deliver shareholder value in a discovery or definition context.”

Tartisan Nickel Corp. common shares are listed on the Canadian Securities Exchange (CSE:TN, US-OTC-TTSRF, FSE A2D). Currently, there are 100,403,550 shares outstanding (103,103,550 fully diluted).

For further information, please contact Mr. D. Mark Appleby, President & CEO and a Director of the Company, at 416-804-0280 ([email protected]). Additional information about Tartisan can be found at the Company’s website at www.tartisannickel.com or on SEDAR at www.sedar.com.

Jim Steel MBA P.Geo. is the Qualified Person under NI 43-101 and has read and approved the technical content of this News Release.

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

The Canadian Securities Exchange (operated by CNSX Markets Inc.) has neither approved nor disapproved of the contents of this press release.