Nickel cobalt juniors are making moves at the right time
Link copied to
Special Report: Nickel and cobalt prices could remain subdued for the next few years, but an increase in demand from battery makers makes the outlook extremely promising two to three years out.
This means junior nickel-cobalt players heading towards production could be bringing their mines online at a time of rapidly rising demand.
Roskill analysts forecast that total, primary use of nickel in batteries will increase 10-fold to 2030.
UBS predicts that by 2025 the amount of nickel going into batteries will be about 700,000 tonnes.
And the cobalt market could enter a supply deficit as soon as 2023 if new mines don’t come online.
Roskill’s 10-year outlook for cobalt consumption is a trebling of the market – to around 360,000 tonnes by 2028.
A recent sales suspension by one of the world’s biggest cobalt miners, Glencore, could challenge the perception that the current cobalt market is oversupplied, experts say.
Glencore’s supply issues in the Democratic Republic of Congo (DRC) have also highlighted, once again, the need for consistent and reliable cobalt supply from stable jurisdictions like Australia.
Australian juniors: in the box seat
There’s a number of Australian-based nickel-cobalt stocks which are strongly leveraged to future cobalt and nickel demand.
Cleanteq (ASX:CLQ) and Australian Mines (ASX:AUZ) — with $305 million and $111 million market caps, respectively — are progressing their advanced nickel cobalt projects towards development decisions.
As is Ardea Resources ((ASX:ARL), with a market cap of about $67.5 million, which is currently looking for partners to develop its Goongarrie project in WA.
Explorer Galileo Mining (ASX:GAL), with a market cap of about $15.5 million, has established a JORC resource of 22,500 tonnes of cobalt and 106,000 tonnes nickel at its Norseman project in WA.
A few hundred kilometres away, battery metals explorer Carnavale (ASX:CAV) – with a market cap of less than $5 million – is close to establishing a JORC resource of its own for the highly prospective Grey Dam project near Kalgoorlie.
Carnavale’s project has an existing JORC 2004 resource of 14.5Mt containing 101,500t of Nickel and 6612t of Cobalt. Explorers are required to convert historic or foreign resources to JORC 2012-compliance by undertaking their own exploration to verify historic data before a project can be classified as having a resource.
The share price of Carnavale jumped 22 per cent in October after it confirmed significant high grade — and very shallow — nickel laterite and cobalt mineralisation at Grey Dam.
A comprehensive drilling program hit strong nickel and cobalt mineralisation from surface up to 44m thick and across a 1.2km by 1km area.
Results included 8m at 1.22 per cent nickel 33m from surface, and 10m at 0.14 per cent cobalt 8m from surface.
A second nickel cobalt target remains untested.
So we can expect Carnavale to confirm this resource and better define the very shallow cobalt rich zone near surface and higher grade nickel zones. Carnavale’s ultimate aim is to then start evaluating the potential for a shallow, low strip ratio open pit at Grey Dam.