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To pay $6.2M to gain a foothold in Giga Metals' Turnagain Metal Tech News - August 15, 2022
Boxes of core from the drilling that has outlined roughly 10.7 billion pounds of nickel and 640 million lb of cobalt at Giga Metals' Turnagain project in Northern British Columbia.
Japanese industrial giant Mitsubishi Corp. has entered into a deal to gain a foothold in a potential nickel-cobalt mine at Giga Metals Corp.'s Turnagain project in Northern British Columbia, Canada.
Best known for manufacturing automobiles, Mitsubishi is involved with a broad spectrum of businesses including industrial materials and mineral resources.
The Turnagain project offers this diversified company a potential carbon-neutral source of the nickel and cobalt that are in high demand due to the enormous quantities required for the lithium-ion batteries powering electric vehicles.
A preliminary economic assessment completed for Giga in 2020 outlines plans for a mine at Turnagain that would produce an average of 33,215 metric tons of nickel and 1,962 metric tons of cobalt annually for 37 years.
This PEA is based on 1.07 billion metric tons of measured and indicated resource averaging 0.22% (5.21 billion pounds) nickel and 0.13% (312.4 million lb) cobalt; plus 1.14 billion metric tons of inferred resource averaging 0.217% (5.47 billion lb) nickel and 0.013% (327.3 million lb) cobalt.
Mitsubishi and Giga have agreed to form a joint venture company, Hard Creek Nickel Corp., to advance the Turnagain project toward development.
Mitsubishi will pay Giga roughly US$6.2 million (C$8 million) to acquire a 15% interest in Hard Creek. Giga will hold an 85% interest in the JV in exchange for contributing all related assets for the Turnagain project.
"We are very pleased to welcome Mitsubishi Corporation, a global trading and investment company, as a strategic partner for the development of Turnagain project," said Giga Metals President Martin Vydra.
CO2-neutral nickel potential
Carrying forward the work completed by Giga, the Nickel Creek JV intends to develop the Turnagain project as one of the greenest and most environmentally friendly nickel projects globally. This includes continuing to explore the potential of absorbing and storing atmospheric carbon dioxide in the tailings left over from mining the nickel and cobalt.
Professor Greg Dipple, and his team at the University of British Columbia, have found that ultramafic rocks – igneous rock with a high magnesium and iron content – are among the largest CO2 storing reservoirs on Earth. The carbon-absorbing potential of these rocks, however, is limited when they are buried away from the atmosphere.
It so happens that the nickel and cobalt at Turnagain are hosted in ultramafic rocks enriched with brucite, a mineral that is particularly good at absorbing CO2. The mining and grinding of these rocks to a sand-like consistency to recover the lithium-ion battery metals maximizes the carbon sequestering potential of the rocks.
Tests recently carried out by Dipple and his team at UBC indicate that the tailings left over from mining at Turnagain could absorb nearly as much CO2 from the atmosphere as is expected to be emitted per metric ton of nickel if an electric mining fleet charged with BC hydropower was used to do the digging and hauling.
Dipple's testing indicates that these CO2 absorption rates would be higher under actual mining scenarios.
"We recognize the growing importance of strong ESG performance from commodity producers," Vydra said upon the mid-2021 results from testing by Dipple and his team. "We are proud that our project is at the forefront of being able to contribute to a carbon-free industry. We are also looking forward to continuing work with Dr. Dipple as we see a potential for Turnagain to actually generate carbon credits under the right scenario, however there is still significant work ahead before we can address this potential."
Further details from the CO2 absorbing potential of Turnagain mine tailings can be read at Potential CO2 neutral nickel mine in BC in the June 2, 2021 edition of Metal Tech News.
Advancing Turnagain prefeasibility
The significant work mentioned by Vydra includes improving the economics of developing and operating a mine at Turnagain.
At a US$7.50/lb nickel price, the Turnagain mine outlined in the 2020 PEA was calculated to have a pre-tax net present value (8% discount) deficit of US$269 million and internal rate of return of 6.3%. At US$8.50/lb, the project is expected to have a pre-tax NPV (8% discount) of US$242 million and an IRR of 9.4%.
Nickel is currently selling for around US$9.75/lb.
Engineering firm Tetra Tech is already carrying out optimization studies ahead of a prefeasibility study slated for completion in the first half of 2023 that will provide an updated mining scenario similar to the operation outlined in the PEA.
A separate PFS-level study will include the addition of a pressure oxidation circuit to convert the concentrate produced at Turnagain into a mixed hydroxide precipitate, which is the chemical form of nickel and cobalt currently in highest demand by lithium-ion battery manufacturers.
"The potential addition of a pressure oxidation circuit to the flow sheet will provide flexibility in terms of the form of nickel and cobalt the project produces," said Vydra. "We know from discussions with battery manufacturers and automobile OEMs (original equipment manufacturers) that this flexibility is important to the end users. Our project should be well positioned to provide whatever the customers want."
Whichever scenario proves to be the most viable, Giga says the newly formed JV intends to develop the Turnagain project as one of the greenest and most environmentally friendly nickel projects globally.
Also, Hard Creek will work closely with local communities and First Nations to develop Turnagain in a way that will be beneficial for all stakeholders in British Columbia, a jurisdiction that has adopted the United Nations Declaration on the Rights of Indigenous Peoples.
"We are excited about partnering with MC due to their excellent reputation, expertise in mining, extensive financing capabilities, experience in marketing, and the values that they share with Giga regarding environmental, social and governance issues," the Giga Metals president said.
Completion of the proposed Hard Creek Nickel JV is subject to approval of the TSX Venture Exchange and receipt of all regulatory and third-party approvals.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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