SPC Nickel Corp (TSX-V:SPC, OTC:SPCNF) is a 'Buy' for analysts at Couloir Capital following its agreement with Vale Canada Limited to consolidate ownership of the West Graham and Crean Hill 3 deposits.
The firm reiterated a 'Buy' rating but lowered its fair value per share estimate to $0.31 per share from $0.48 per share, in a note published Wednesday.
“The agreement with Vale allows SPC to earn 100% interest in Crean Hill 3 and provides a clear path to develop a large tonnage (>20Mt) resource in the prolific Sudbury mining camp,” analysts wrote. “The acquisition is non-dilutive for SPC as it is not funded with equity.”
READ: SPC Nickel enters deal with Vale to consolidate ownership of West Graham and Crean Hill 3 deposits
“The abundance of minerals and mining infrastructure at Sudbury should benefit the combined West Graham-Crean Hill 3 properties if developed to the point of commercial operations,” they added.
Several targets have been identified for exploration in 2023, including the potential to expand the West Graham deposit an additional 600 meters to the west through the recently-acquired Crean Hill 3 property and a 400-meter gap zone between West Graham and the high-grade Lockerby East deposit.
Notably, SPC expects to complete the diamond drilling on both properties by the first half of 2023 and complete a combined resource update in 2023.
“We think a resource update could provide a near-term valuation catalyst,” analysts said.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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