Rebranded Nickel Creek Platinum aims to take Wellgreen to ‘next level’

VANCOUVER — The new management team at recently renamed Nickel Creek Platinum (TSX: NCP; US-OTC: NCPCF) (formerly Wellgreen Platinum) has spent the past year rebuilding its executive ranks the technical foundations of its historic Wellgreen polymetallic sulphide project, 317 km northwest of Whitehorse in southwestern Yukon.

The Wellgreen project has simultaneously been renamed Nickel Shaw.

The wholly owned, 144 sq. km property lies at the end of a 14 km gravel road accessed from the paved, all-weather Alaska Highway. It has been explored — and briefly developed — by numerous owners since its discovery in the 1950s due to an expansive but low-grade mineral endowment that includes nickel, copper and platinum group metals (PGMs).

A gravel road running through Nickel Creek Platinum’s Nickel Shaw nickel-copper-PGM project in southwestern Yukon. Photo by Matthew Keevil.

The company believes the time has come at Nickel Shaw to make the leap from exploration to more advanced development.

“I did around six months of due diligence on the asset before taking the position, and I was absolutely blown away,” recounts president and CEO Diane Garrett, who joined the company a year and a half ago. “It is a really strategic asset that I felt it was absolutely undervalued. You have something that’s very rare and unique considering the size of the project and the access to infrastructure. It isn’t every day you see an asset with PGMs in the Western Hemisphere. You add the nickel and copper to the equation and the size is quite staggering.”

The corporate overhaul at Nickel Creek has been driven by two major institutional shareholders that amassed equity positions in the company during the recent commodity downturn.

Thomas Kaplan’s Electrum Strategic Opportunities Fund holds a 26% stake, while mining-focused private equity outfit Resource Capital Funds (RCF) has an 11% interest.

Garrett helmed Romarco Minerals, which developed the Haile gold mine in South Carolina before Romarco was bought by Australia’s OceanaGold (TSX: OGC) for US$856 million in mid-2015.

At the top of Nickel Creek Platinum’s Nickel Shaw polymetallic deposit, 317 km due northwest of Whitehorse in southwestern Yukon. Credit: Nickel Creek Platinum.

“I knew coming in that there was work to be done, and we needed to get the right team involved to take it to the next level,” Garrett says of Nickel Creek. “I spoke with Electrum and RCF prior to taking the job, and we were all on the same page. The asset already has a very long mine life in excess of 20 years and it’s been thoroughly drilled out. Frankly, the exploration work that had been done over the past couple of years had me scratching my head. I knew we needed to raise meaningful money to get the project back on track, and metallurgy is a big part of that.”

The property hosts sulphide mineralization within the regional Quill Creek complex — a variably serpentinized, ultramafic-gabbroic body that intrudes Pennsylvanian-Permian sedimentary and volcanic rocks.

Historic exploration defined two zones — named East and West — of gabbro-hosted massive and disseminated sulphide mineralization along nearly 2 km of east-west strike.

Nickel Creek’s new geological model is based on historical data that includes 386 drill holes over 62,800 metres from 1987 to 2016. Leading the renewed geological efforts is chief geologist James Berry, who is another Romarco alum.

The company released an updated resource on Nickel Shaw in June 2017 that models 362 million measured and indicated tonnes grading 0.26% nickel, 0.14% copper, 0.015% cobalt, 0.23 gram platinum per tonne, 0.24 gram palladium per tonne and 0.04 gram gold per tonne. In terms of contained metal, this translates to 2.1 billion lb. nickel, 1.1 billion lb. copper, 121 million lb. cobalt, 2.7 million oz. platinum, 2.8 million oz. palladium and 468,000 oz. gold.

The project’s inferred resources total 119 million tonnes at 0.28% nickel, 0.12% copper, 0.015% cobalt, 0.22 gram platinum, 0.25 gram palladium and 0.03 gram gold.

All resource estimates assume a US$13.90-per-tonne net smelter return royalty cut-off grade.

“We needed to drill across the breadth of the entire orebody to assure we had representative samples for our metallurgical programs,” Garrett says. “The work that had been done previously had been very preliminary, and didn’t include comprehensive laboratory testing needed to understand all the geological domains on the property. We’ve gone to one of the best labs in the world to really put together the highest-quality concentrate possible, and we’re nearing prefeasibility level. It’s been a systematic process that includes geology, mineralogy and metallurgy.”

Nickel Creek is undertaking a trade-off study on the benefits of producing separate nickel and copper concentrates. It completed a 2,000-metre drill program in mid-2017 to gather material for batch testing at a pilot plant in Sudbury, Ontario.

A drill site at Nickel Creek Platinum’s Nickel Shaw polymetallic project, in the Yukon, 300 km northwest of Whitehorse. Credit: Nickel Creek Platinum.

Garrett says the project design “changes dramatically” under a development scenario that includes dual concentrates, where the company could realize “nearly twice” the value for its copper credits.

“You add the nickel and copper to the equation and the size is quite staggering.”
Diane Garrett
President and CEO, 
Nickel Creek Platinum

Nickel Creek finished metallurgical testing in early 2017 that yielded a bulk concentrate at 11.9% nickel-copper grade for the project’s peridotite domain and 14.3% nickel-copper grade for its clinopyroxenite domain.

“We’ve been to a few smelters to get quotes on our concentrate, but then we asked them for bids under the assumption we could separate our nickel and copper because the project simply has so much,” Garrett says. “It turns out that the separation would be extremely beneficial to the project’s bottom line, and it completely changes the mine plan. So that’s something we have to look at before we finalize the flow sheet.”

The average process recoveries for metals in the updated resource include 59% for nickel, 78% for copper, 61% for cobalt, 53% for platinum, 60% for palladium and 78% for gold.

Nickel Creek closed a $9.5-million private placement in September wherein in issued 25.1 million units priced at 26¢ each. Each unit comprised a share and a purchase warrant exercisable at 35¢ for five years. The financing brought in another institutional shareholder: the Tocqueville Gold Fund, which picked up 12.4 million units.

The company’s shares have traded in a 52-week range of 21.5¢ to 44¢ per share, and closed at 33¢ at press time. There are 237 million shares outstanding (337 million fully diluted) for a $78-million market capitalization. Nickel Creek reported $12 million in cash at the end of September.

Drillers at work during Nickel Creek’s recent drill program at the Nickel Shaw nickel-copper-PGM project in the Yukon. Credit: Nickel Creek Platinum.

“The best time to get a lot of this work done is when commodity prices are relatively low, so I wouldn’t necessarily want to see a nickel rally right now,” Garrett says. “You want to position yourself well for when these metals start to turn, however, because we know they turn quickly. And we’re hearing a lot of positive commentary on base metals in terms of electric vehicles and future demand. It’s where a lot of people want to be. We’re seeing funds that were traditionally gold-focused branch out towards metals like copper and nickel.”