An excellent conductor of heat and electricity, and able to resist corrosion at high temperatures, the main use of nickel is to make alloys like stainless steel. However, its use in lithium-ion batteries for electric vehicles is skyrocketing demand for the commodity.
In the near term, nickel’s use in electric vehicles should support the demand side of the equation, yet the industry is currently swamped by a wave of new production, particularly from Indonesia.
As a result, in the near term, nickel faces a massive glut with supply set to exceed demand by 240,500 tonnes this year and by another 204,000 tonnes in 2025.
Nickel price faces short-term headwinds
In recent years since the pandemic, nickel prices have experienced significant highs and lows.
Over the course of 2023, the LME nickel cash price slumped by 45%. More pain is anticipated this year with a median forecast for the nickel price to slide another 23%.
Yet Macquarie argues that the near-term downside is limited from the current LME nickel price of around $16,300. Many analysts seem to agree, with the lowest forecast for this year being $15,200 per tonne.
With the nickel market predicted to remain in surplus in the short term, a sustained price rally appears unlikely due to the growing weight of the surplus.
Bullish longer-term outlook
Most battery markets are now in surplus, yet longer-term nickel shortages are widely forecast as 2030 edges closer and as the demand for greener technologies continues to rise and countries push towards ambitious climate goals.
A nickel price rebound is widely expected towards the later end of the decade, with the International Energy Agency forecasting that demand will then comfortably surpass supply.
Against that backdrop, we consider the recent quarterly performance of a number of ASX-listed nickel juniors…
Galileo Mining
Galileo Mining Ltd (ASX:GAL, OTC:GLMGF) made considerable strides in its exploration of the Norseman palladium-platinum-gold-copper-nickel-rhodium project in Western Australia during the December quarter.
Galileo managing director Brad Underwood said: “December quarter was a period in which we continued to refine our exploration strategy based on a cyclical pattern of campaign drilling, review and interpretation of results, integration of new information and then follow-up drilling.
“This method of exploration activity, we believe, will provide Galileo with the best opportunity of making future discoveries.
“During the period, we reported a maiden mineral resource for the Callisto discovery where the nature of the mineralisation is analogous to the Platreef deposits in South Africa where several deposits occur over a strike length of tens of kilometres.
“Assay results from exploration drill campaigns throughout the quarter show we are advancing strongly with the aim of unlocking further value at our Norseman project.
"Meanwhile, results from geophysical IP surveying during the quarter over Callisto show a very strong response and significantly boosts our confidence that new discoveries — within the 20 kilometres of prospective strike length around Callisto and the 12 kilometres of prospective strike length at the Mission Sill prospect — are possible.
“With multiple ongoing exploration programs, we are committed to aggressively exploring this newly discovered PGE-nickel province and we have the funds in place to continue undertaking these programs.”
Despite the company’s progress during the quarter, it wasn’t reflected in the company’s share price — a result of the current nickel price and broader market sentiment.
Norseman Project
During the quarter, Galileo reported a maiden mineral resource estimate for Callisto deposit of 17.5 million tonnes at 1.04 g/t 4E (palladium + platinum + rhodium + gold), 0.20% nickel, 0.16% copper (2.3 g/t palladium equivalent or 0.52% nickel equivalent).
The contained metal includes 585,000 ounces 4E, 35,000 tonnes of nickel and 28,000 tonnes of copper (~1.27 million ounces palladium equivalent or ~91,000 tonnes of nickel equivalent). Around 46% of the resource (8 million tonnes) is in the indicated category with a 2.5 g/t palladium equivalent grade or 0.58% nickel equivalent grade.
About 95% of the resource is constrained by pit optimisation, which points to robust economic prospects for its eventual extraction. Galileo says the deposit remains open at depth with potential for additional resource delineation.
Additionally, a new near-surface target zone was identified at the Jimberlana South prospect, while first-pass drilling at North Callisto reveals new prospective trends with wide zones of anomalous palladium and platinum results
Fraser Range nickel project
The company also has a 67% holding in the Fraser Range nickel project in Western Australia, the remainder of which is controlled by Mark Creasy
The priority for Galileo during the quarter was exploration at Norseman, the company continued to progress exploration work at its Fraser Range project.
Regional electromagnetic (EM) surveying has been completed at the northern Fraser Range project area with the aim of defining new undercover nickel targets for drill testing. Conductive responses from the first-pass EM surveying will undergo final modelling prior to planned drill testing later this year, and drill program permitting is also still required.
What’s ahead?
A 1,500 metre RC drilling targeting nickel and palladium at the Callisto, North Callisto and Jimberlana South prospects with assays expected early this year. The company is fully funded to implement all planned exploration programs with around $10.4 million in cash on December 31, 2023.
Corazon Mining
The quarterly report from Corazon Mining Ltd (ASX:CZN, OTC:CRZNF) covered its three projects — the Miriam lithium and nickel sulphide project in Western Australia, the Lynn Lake nickel sulphide project in Canada and the Mt Gilmore project in NSW.
Miriam lithium and nickel sulphide project
Corazon confirmed that drilling of the spodumene (lithium) bearing pegmatite discovery at the Miriam Project remains a major focus for the company.
While securing work program approvals for drilling from the Western Australian Government has been a lengthy process, this is expected to be completed in the current quarter.
The lithium target at Miriam is defined by weathered (depleted) rock samples, returning up to 1.85% lithium oxide, and detailed geochemical soil sampling revealing a main target of around 1.6 kilometres in strike and a second trend of about 600 metres, linking into the main trend.
Lynn Lake nickel sulphide project
Activities at Lynn Lake have focused on the completion of metallurgical test-work and geological and mining studies for the reestablishment of the historical mining centre. This phase of work is expected to be completed in the first quarter of 2024.
While no physical exploration was undertaken at Lynn Lake during the quarter, exploration in 2023 utilising new, groundbreaking geophysical methods defined several high-priority targets that are the key focus for future exploration drilling.
Mt Gilmore project
Preliminary results from mineral vectoring geochemical studies, targeting porphyry copper-gold style deposits at the Mt Gilmore project were received in the December quarter. These results are now being assessed and expected to be published in the current quarter.
Corazon closed the quarter with a cash balance of around $841,000.
Leeuwin Metals
Leeuwin Metals Ltd (ASX:LM1) completed its first exploration campaign at Cross Lake Lithium Project in Manitoba, Canada, during the quarter, delivering high-grade lithium results from surface channel sampling.
The program confirmed a 4.7-kilometre mineralised trend, with results received from more than 20 sampled pegmatites. Multiple spodumene-bearing pegmatites were identified and results included high-grade lithium assays of up to 4.31% lithium oxide.
Exploration also focused on the main trend, where all channel sampling has returned assays confirming the presence of a potentially extremely large-scale LCT pegmatite field.
In the western target area of Spodumene Island — where no historical drilling exists — two drill holes returned significant high-grade lithium values of 7 metres at 1.08% lithium oxide and 6.1 metres at 1.75% lithium oxide.
Leeuwin managing director Christopher Piggott said: “With the results received in the December quarter from our Cross Lake Lithium Project, we are very excited by the immense potential for discovery as we look forward to advancing the project in 2024.
“The project to date has shown promising indications of a large-scale mineralised system, situated in the up-and-coming province of Manitoba, Canada.
“An infrastructure-rich province, the project benefits from its proximity to a nearby provincial highway, hydropower availability and being only 100 kilometres from a rail line, each of which provides a significant advantage to any discovery. We are looking forward to a transformative year for Leeuwin as we strive to create value for shareholders through 2024.”
The company is aiming to complete a maiden drill program at the project in 2024. Its cash position as of December 31, 2023, totalled $2.6 million.
NickelX
The focus of NickelX’s December quarterly report was its upcoming 1,700-metre reverse circulation (RC) drilling program at the Dalwallinu nickel-copper-PGE project in the Western Yilgarn region of Western Australian, which subsequently began in February.
NickelX noted that the project’s priority targets represent some of the highest West Yilgarn PGE assays (73.7ppb platinum and palladium) as well as significant and coincident anomalous values for nickel and copper (up to 466ppm nickel and 843ppm copper).
The high-priority geochemical targets complement the modelled moving loop electromagnetic (MLEM) and fixed loop electromagnetic (FLEM) bedrock conductors at the DEM1 and DEM2 targets, that are prospective for massive sulphides.
Q4 also saw the expiration of the European lithium and nickel project option, with the board receiving a finder’s fee of 1 million shares in private company Eyre Metals, which plans to pursue an ASX listing in 2024.
The company advised that as of December 31, it had a cash position of $1.9 million to support the Dalwallinu drilling program and ongoing project generation.
NickelX said that given the significant retreat in the nickel price, it continued to evaluate a number of potential new project opportunities for shareholders, particularly in the uranium and gold sectors.
“As such, since the quarter end, NickelX has secured “highly prospective” uranium targets — collectively, The Elliot Lake Uranium Project — via low-cost claim staking in Ontario, Canada.
Poseidon Nickel
The Lake Johnston project of Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) saw a heightened level of activity over the quarter with an aircore and reverse circulation (RC) drilling program progressing several highly promising greenfields targets along the Western Ultramafic Unit (WUU) and at Maggie Hays West targets.
The follow-up drilling of the Maggie Hays West prospect returned positive drill results confirming a strong 1-kilometre-wide coherent nickel-copper-PGE regolith anomaly.
A total of 18 aircore holes for 844 metres and seven RC holes for 835 metres with a total of 1,049 samples sent to the lab for analysis.
Further work is being planned to target this area in the search for high-grade massive sulphides.
A soil geochemistry program, completed in the southern part of the Lake Johnston tenement package, defined multiple broad anomalous lithium values over a strike length of 3 kilometres. This discovery will also be followed up this year.
Further to this discovery, the company executed an earn-in agreement with Mantis Resources over tenements adjacent to Poseidon’s, which host outcropping lithium-bearing pegmatites based on historical samples that returned high grades from 2.80% up to 3.85% lithium oxide. These tenements will be incorporated into its 2024 exploration plans.
Black Swan project
At the Black Swan project, study works continued after the non-sulphide nickel content of the assays were shown to be in line with the results used in the November 2022 bankable feasibility study. Poseidon is now finalising additional variability test-work to confirm the concentrate product specifications.
Additionally, the technical study for the Black Swan expansion project (up to 2.2 million tonnes per annum) was completed during the quarter, with the company awaiting indicative nickel payable terms from potential customers.
Poseidon says that given the current economic environment, the pre-feasibility study will not be released until the indicative payability terms are received and the nickel price improves.
Cost reduction measures
A focus on cost reductions across the business — a result of the depressed nickel price — saw the company implement various changes that are forecast to deliver annualised savings of more than $3 million.
Poseidon said that given there was the potential for the nickel price to remain depressed in the short term, its focus would remain on reducing costs, while advancing its exploration targets and maintaining assets.
It is progressing various fund-raising initiatives, including monetising gold tailings, partnering to fund the lithium exploration at Lake Johnston and partnering the Black Swan project including treating third-party feeds.
The company held cash and investments of $3.0 million at the quarter end and received a R&D return of $465,000 from ATO in January 2024.
St George Mining
St George Mining Ltd (ASX:SGQ) is advancing its portfolio of battery metals projects in Western Australia with significant exploration activities completed in the December 2023 quarter.
Mt Alexander project – lithium
At the Mt Alexander Project, soil sampling, pegmatite field mapping and outcrop sampling were completed over a previously untested area, the results of which will allow for prioritisation of the 2024 drill program.
That program will test:
- an 8-kilometre-long zone around the Manta Prospect, where drilling by St George intersected a 121-metre-thick fractionated pegmatite;
- a 4-kilometre-long zone of the Jailbreak Prospect, where drilling intersected multiple lithium-bearing pegmatites with values up to 1.8% lithium oxide and rock-chip samples returned values up to 3.25% lithium oxide; and
- tenements E29/1143 and P29/2680 which together host more than 5 kilometres of the contact with the Copperfield Granite – the same contact that hosts Delta Lithium’s Mt Ida Lithium Project.
A major drill program is scheduled to commence at Mt Alexander in the current quarter.
Destiny Project – high-grade REE discovery
At the Destiny project, thick zones of high-grade total rare earth oxide (TREO), of up to 42 metres thick, were intersected.
The rare earth elements (REE) mineralisation is hosted in a thick, near-surface clay zone over a 7-kilometre-long strike with mineralisation open in all directions and less than 10% of the target area tested.
A maiden drilling program at the project intersected a 'ground-breaking' clay-hosted REE system, with REE mineralisation of up to 5,125 parts per million (ppm) total rare earth oxide (TREO) in a near-surface clay zone.
High-value magnetic rare earth oxides (MREO) – such as neodymium and praseodymium needed for magnets used in electric vehicle motors – comprise a high percentage of TREO.
Follow-up drilling of the REE discovery, as well as a maiden lithium drill program, are scheduled for the current quarter.
Lithium Star – major investment completed
Amperex Technology Ltd, the world’s leading producer of lithium-ion batteries, invested $3 million in St George’s subsidiary Lithium Star Pty Ltd to acquire a 10% equity stake in Lithium Star. St George holds the remaining 90%.
The new funds will be used to accelerate exploration at Lithium Star’s lithium projects in Western Australia, with exploration prioritised for the Split Rocks project, Buningonia and Buningonia North Projects, and the Myuna Rocks Projects.