Blackstone takes C$3m piece of massive Canadian nickel play

Blackstone Minerals has secured a strategic investment in Flying Nickel Mining Corporation’s massive Minago nickel sulphide project southwest of Thompson in Manitoba, Canada. Blackstone has pumped C$2.98m into Flying Nickel in return for a 6.85 per cent interest in the company and has further agreed with Flying Nickel that it will have a right of refusal to maintain its 6.85 per cent interest in future capital raises.

A Memorandum Of Understanding has also been signed with Flying Nickel to collaborate on upstream and downstream processing and opportunities around offtakes when its Minago project gets into production.

Minago currently boasts a serious 44.23m tonne resource going 0.74 per cent nickel– and that’s just the measured an indicated category within the resource that also shows a further 19.55m tonnes grading 0.74 per cent nickel at an inferred level.

Blackstone says its investment into Flying Nickel, a subsidiary of Vancouver based Silver Elephant Mining Corporation, is a strategic one and will help it build a pipeline of sizeable nickel resources as it seeks to get ahead of the pack whilst the electric vehicle juggernaut rolls on.

Flying Nickel will be spun out of the Silver Elephant Mining Corporation and listed on the TSX-V in early 2022.

Blackstone says the Minago nickel sulphide project is at an advanced stage of development with district scale exploration potential and nearby access to many valuable assets including a renewable hydropower plant.

In addition to Blackstone receiving 6.85 per cent of Flying Nickel, it will also be issued with 2.12 million warrants converting into equity at a price of C$1.00 per warrant

If Blackstone elects to convert its warrants the Perth based company will end up holding approximately 9.5 per cent of Flying Nickel on a fully diluted basis.

The initial C$2.98m equity investment will be held in escrow for 120 days. If Flying Nickel shares fail to list on the TSX-V exchange within the 120-day period, funds held in escrow will be returned to Blackstone.

The company said its primary focus continues to be the building of a nickel mine and downstream refinery in Vietnam that will mine and refine ore from its 90 per cent owned Ta Khoa nickel project.

It is only planning however to supply around 50 per cent of the product to the refinery from Ta Khoa and the company has previously stated the balance will come from third party nickel miners and no doubt Minago will now feature heavily in those third-party plans.

Blackstone Minerals Managing Director, Scott Williamson said:

“The known mineral endowment of the Minago asset in combination with the potential of the Ta Khoa district represents enviable scale, being highly sought after by OEMs, battery and cathode manufacturers. Large, disseminated nickel sulfide deposits of the size and grade of the Minago asset are difficult to find.”

“The ongoing structural evolution of nickel supply chains and increasing demand for downstream nickel chemical products for the lithium-ion battery industry, is driving a unanimous view by analysts and the broader investment community that higher nickel prices are here to stay for longer. This means that large undeveloped opportunities such as Minago are primed to overcome previous barriers, including access to capital”

Blackstone has its sights set on being a regional electric vehicle battery hub in Vietnam and its latest deal with Flying Nickel adds another concentrate source to make that plan a reality. Interestingly there is more nickel in a lithium-ion battery than lithium and with the lithium bulls currently running, there may be a small window of opportunity for companies like Blackstone to stockpile nickel deposits ahead of the bulls switching focus from overpriced lithium to nickel.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au