Nickel Markets Energized by Toyota’s Return To Electric Vehicles

Recently, Toyota of North America announced it will unveil a new hybrid model as well as not only one, but two brand-new fully electric models over this year, to be commercialized as early as 2022. The company showed continuous hesitance in committing to the EV market – a decision that’s left it lagging behind its competitors.

Seeing that Toyota hasn’t looked back at fully electric units since the California-exclusive RAV4 EV far back in 2014, this is big news. Not only will they offer two new models but will do so across the entire US instead of only in one state.

While Toyota may be somewhat late to the party, sector projections show that it’s not too late. The EV market is projected to reach close to 27 million units by 2030- at a CAGR of 21.1% over the 2018-2030 period. By comparison, 2019 closed with approximately 2.1 million electric vehicles sold globally.

Promising forecasts require strong backing, and governments are providing it. Favorable policies have propelled electric vehicle production thanks to incentives in the form of subsidies, grants and tax rebates as well as other non-financial advantages such as carpool lane access and easier vehicle registration. The industry has, in turn, improved vehicle autonomy, availability of charging infrastructure and secured proactive participation by automotive OEMs.

Such prospects merit a closer look at the sectors involved – and one that gets the investor spotlight is nickel. Nickel is a critical part of the lithium-ion batteries that power EVs, to the point that the industry alone is demanding around half of the global supply of the mineral.

With such a massive growth forecast and half of the nickel global supply already spoken for, one must begin to wonder where will carmakers source their raw materials from in the upcoming years. Nickel discoveries are few and far in between, after all.

Two Canadian companies are conveniently positioned to fill the upcoming market gap: they are Canada Nickel Company Inc. (TSX: CNC) and Renforth Resources, Ltd. (CSE: RFR).

Exploring for the future

Pickering-based Renforth Resources Inc. (CSE: RFR) holds a very promising district-scale nickel/VMS discovery in Malartic, Québec. Mostly centered around the gold space, Renforth management decided to implement a focus shift to differentiate it from the many other junior explorers in the region.

RFR holds 100% interests in the Surimeau project – the Malartic property in question -, the Parbec project which hosts an open-pit gold resource, and in 3 other gold/silver/copper properties.

Canada Nickel Company Inc. (TSX: CNC) acquires, explores, develops, and produces nickel sulphide assets. Its flagship property is the 100% owned Crawford Nickel-Cobalt Sulphide Project located in northern Ontario, Canada. The company was incorporated in 2019 and is headquartered in Toronto, Canada.

CNC is advancing the next generation of high quality, high potential nickel-cobalt projects to deliver the materials required to power the electric vehicle boon. It employs top-of-the-line nickel expertise and is focused on low-risk, well-established mining jurisdictions.

Long-term plays in burgeoning sector

CNC is developing its new Crawford Nickel-Cobalt Sulphide discovery: a large bulk tonnage opportunity. The project is atop the Crawford Ultramafic Complex – an 8 km-long geophysical anomaly. The operation is in Timmins mining camp and has very easy access to infrastructure (Highway 655, rail, grid power, water, established mining towns).

The Crawford Nickel-Cobalt Sulphide project is one of the top 10 nickel sulphide resources globally, with notable expansion potential. Initial testing has confirmed excellent nickel recovery of 46%, 51% and 52% from the first 3 locked cycle tests using conventional flowsheet design.

Canada Nickel is completing a preliminary economic assessment on the Crawford Project by Q1 2021, and a feasibility study by year-end 2021.

Renforth’s Surimeau is Canada’s newest district-scale nickel/VMS discover on a road-accessible 215 sq. km property. It hosts 50 kilometers of intrusives/geophysical anomalies, with current and historic data indicating mineralization over approximately 5 km. on surface in one area – their current focus point.

The property is placed adjacent to Canadian Malartic Mine (CMM), Canada’s largest gold mine, in Malartic, Quebec.

Their other major property is Parbec, also adjacent to CMM– an open-pit gold mine with a May 2020 resource estimation of 104,000 oz Au at 1.78 g/t indicated and 177,000 oz Au at 1.77 g/t inferred. Renforth plans to complete its ongoing 15,000m drilling program in March 2021 – this time including the twinning of historic drilling excluded from the previous resource estimation.

The Renforth Edge

Renforth’s Parbec and Surimeau both hit the newswires recently.

The company resumed drilling on the Parbec Gold Deposit, and aims to complete the remaining 5,070 of the full program’s 15,000m drilling this quarter. They recently announced assay results for 4 of 24 holes drilled during the final 2020 campaign – highlighting an impressive 5.57 g/t Au over 21.45m, with sub-intervals ranging as high as 6.27g/t Au over 16.7m and 37.3 g/t Au over 1m.

The press release included comments by Renforth President and CEO, Nicole Brewster: “We continue to generate positive, accretive data, at times with notable intervals, and in the instance of PAR-20-112 in today’s release, with notable grade, from our shallow open pit gold deposit on the Cadillac Break, beside Canada’s largest gold mine, road-accessible in an excellent jurisdiction.”

As for Surimeau, RFR received assay results for the Nickel/VMS drill program, highlighting:

- 0.156% Ni over 13m, including 0.483% Ni over 1m

- 0.126% Ni over 20.5m, including 0.209% over 2.4m

- 1.16% Zn and 0.132% Cu over 4.03m from the bedrock surface down to 4.0m, followed by 0.147% Ni over 7.9m

From their press release:“Renforth interprets the Surimeau central anomaly to be a nickel bearing ultramafic body occurring alongside, and intermingled with, a sediment-and volcanic hosted copper/zinc volcanogenic massive sulfide style occurrence. This is considered by Renforth to be an "Outokumpu-like" occurrence, a reference to a district in eastern Finland known for several unconventional sulphide deposits variously hosting economic grades of Cu, Zn, Ni, Co, Ag and Au. Like Surimeau, the Outokumpu district is located in a deformed high grade metamorphosed terrain where volcanic and ultramafic units form intercalated lenses in a sediment dominated environment.”

Projects aside, an interesting edge of Renforth’s over most other junior resource/exploration companies is their asset-rich corporate portfolio, available to draw from to fund exploration and G&A. The cash, securities and assets can be used to cover all operational and exploration costs for the foreseeable future.

Funding secured.

Diversified assets in valuable sectors, a rock-solid project in a surging ecosystem, and a healthy balance sheet with plenty of cash on hand make RFR a nickel play worth exploring.

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