Canada Nickel improves recovery and metallurgical performance at Crawford nickel project

Canada Nickel (TSXV: CNC; US-OTC: CNIKF) has released the results of testing done on samples from its 100%-owned flagship Crawford nickel-cobalt sulphide project in Ontario, about 40 km north of Timmins.

The company says that metallurgical improvements at the project will deliver increased recoveries of nickel, iron and cobalt, as well as enhanced magnetite concentrate quality. These are improvements from the preliminary economic assessment (PEA) for Crawford that was released in May.

The results stem from flowsheet optimization and come from a locked cycle test (LCT) that was conducted in late September. The LCT was the first to be completed since the Crawford PEA was released and was intended to measure the impact of flowsheet improvements made over the last four months. The sample selected for testing was a pentlandite dominant sample with a nickel head grade of 0.35%, an iron head grade of 6% and a sulphur to nickel ratio of 1:1.

Highlights included increasing the nickel recovery at the project, which is now set at 62%, a 19% improvement from the PEA. Iron recovery is 45%, a 5% increase from the PEA, while cobalt recovery is 70%, which is a 75% improvement from the PEA. Magnetite concentrate grades increase 14% to 54% iron.

Canada Nickel’s chairman and CEO, Mark Selby, said the recovery improvements underscore the value of the deposit, and reinforce the company’s view that Crawford has the potential to become a new source of nickel and cobalt for the electric vehicle and stainless steel markets.

“This is a real step change for us,” Selby said in an interview. “We had some glimmers that the recovery would increase, but the LCT [results], coming after we had done open circuit tests, makes a huge difference. I can’t emphasize how key these results are. It just increases our belief that Crawford will become a mine.”

He also pointed out that interest in the project continues to grow, as shown by a recent financing deal. In late July, Canada Nickel completed a $12 million bought deal private placement of flow-through shares, with the funds earmarked for exploration work at Crawford.

“This deal allows us to concentrate on moving toward a feasibility study by this time next year,” Selby said. “It’s cash in the till that lets us run as hard and fast as we can.”

The company has five rigs turning at the site, with two dedicated to geotechnical drilling to support resource and feasibility work.

Crawford is envisioned as a conventional open pit mine and mill. The PEA outlined a mine life of 25 years and life-of-mine production of 842,000 tonnes of nickel, 21 million tonnes of iron and 1.5 million tonnes of chrome.

The LCT was conducted by XPS Expert Process Solutions, which is owned by Glencore (LSE: GLEN). In January, Canada Nickel signed a non-binding memorandum of understanding with Glencore to assess the potential of using Glencore’s Kidd concentrator and metallurgical site in Timmins.

At presstime, Canada Nickel was trading at $2.36 within a 52-week range of $1.70 and $4.54. The company has just over 88 million common shares outstanding for a market cap of $208 million.