Earlier this year, we highlighted Power Nickel Inc. (TSXV: PNPN) (OTCQB: PNPNF) (Frankfurt: IVVI) as a multi-faceted growth story with several major potential catalysts.
A core pillar of our bullish view on Power Nickel is related to the number of its near-term catalysts. Since September, the company has been drilling on the Nisk property, which is the most attractive asset of the business, and we believe the market underappreciates the amount of value that can be generated from it.
In order to execute on previously announced growth initiatives, Power Nickel needs additional resources and we believe the business is about to reach an inflection point. Although the company has been strategic when it comes to efficiently advancing the Nisk project, additional capital would greatly accelerate the growth of the business.
Raising Capital to Advance the Nisk Project
Last month, Power Nickel announced that it has received commitments to oversubscribe the previously announced $5 million private placement. We find this development to be especially significant due to challenging market conditions and believe the oversubscribed nature of the financing is a testament to the strength of the business.
We believe the data points that have been released on the Nisk project by Power Nickel have been very positive and consider the project to be the most attractive aspect of the story. Due to the level of interest in the private placement, we think the market agrees with our opinion and want our readers to be aware of the Nisk project when it comes to Power Nickel.
By owning a property that is located in Quebec, Power Nickel can take advantage of many Provincial and Federal Tax Credits and deductions. In the case of the financing, these structures allow the company to raise capital at $0.50 per unit (each unit is comprised of one common share and a half warrant). Recently, the stock has been trading in the $0.23-$0.27 CAD range so these tax benefits substantially reduce dilution and improve access to capital.
In the future, we expect Province of Quebec and The Government of Canada to provide tax credits that are in the range of 40% to 55% for nickel projects that are similar towhat Power Nickel is focused on. The tax credits are equivalent to a similar subsidy to build a mine. In Power Nickel’s case to develop a mine that is capable of selling nickel is expected to cost approx. $400 million USD.
This would be advanced Nickel mine capable of not only producing Nickel Sulfate but higher value Nickel wire, powders and anodes for batteries. Given the government subsidy, the company could receive approx. $200 million USD of tax credits. The company currently trades around $25 million USD and we do not believe the market has yet to assimilate this information which we believe will be a positive for Power Nickel.
What You Need to Know About the Nisk Project
A few weeks ago, Power Nickel reported positive data from its Nisk project. According to Power Nickel CEO Terry Lynch the latest results have confirmed the presence of high-grade nickel, copper, and cobalt in the main zone. The company noted that mineralization extends by an additional 150 meters at depth and we find this to be significant.
Based on data that has been received, we believe the project provides substantial upside potential. In the coming months, Power Nickel hopes to publish a 43-101 technical report and we are favorable on how the management team is executing.
Over the next quarter, Power Nickel expects to receive several updates on existing drilling programs and we believe the market is not assigning much value to this aspect of the story. Since Power Nickel expanded the size of its drilling program ,though, we believe the initial data has been positive and consider this to be an underappreciated aspect of the story.
The Nisk project has high-grade nickel sulfide deposits that have the potential to be among the most low-cost and environmentally-friendly sources of high-grade nickel in the world. This is due to the following factors: the mine’s proximity to a hydropower facility, its established infrastructure, and its shallow mineral depth.
Earlier this year, Power Nickel formed a partnership with Australian-based Fleet Space Technologies, a developer and operator of a constellation of microsatellites that delivers universal connectivity across the globe, including the exploration of nickel ore deposits at its Nisk project. Through the relationship, Power Nickel will use innovative sound mapping technology from Fleet Space to locate additional high-grade nickel sulfide deposits with a greater level of accuracy.
By using this advanced seismic tomography approach in combination with Power Nickel’s in-house methods, the management team hopes to increase its chances of finding more nickel ore pods at a faster rate. The two main advantages this technology offers are that it can now explore its 45-square-kilometer land package in a fraction of the time that it would take using traditional ground-based methods. The second advantage is that with this data, the company can drill fewer meters but with increased impact.
A Growth Story To Be Aware Of
A few days before the partnership was announced, Power Nickel reported to have retained Karbon-X Corp (OTCQB:KARX) to retire 159 high quality Verra VCU carbon offsets. We find the development to be significant because it supports Power Nickel’s commitment to offsetting their drilling program in the years to come.
One carbon offset represents the reduction, removal, or avoidance of one metric ton of greenhouse gas (GHG) emissions from a certified project. The development symbolizes Power Nickel’s goal of creating the world’s first carbon neutral nickel mine at its NISK Project in Nemaska, Quebec.
Over the next few months, we expect Power Nickel to announce several major developments and believe the story is flying under the radar. We categorize Power Nickel as a company which has major potential catalysts for growth and want our readers to be aware of the opportunity.
If you are interested in learning more about Power Nickel, please send an email to support@onthebids.comwith the subject “Power Nickel” to be added to our distribution list.
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This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws
