As the world turns increasingly to electric vehicles (EVs) to get around, demand for the high purity nickel needed to make their rechargeable batteries is only likely to grow.
This type of nickel, known as Class 1, should become much sought after by suppliers and original equipment makers (OEMs) for the EV industry and so too will be the deposits where it is found - namely nickel sulfide deposits.
Two things to know about nickel - there are nickel sulfide deposits and there are laterite deposits. From the former comes the over 99.8% purity nickel, used in batteries, plating and super-alloys, while the latter host the lower grade, higher iron content material (Class 2 nickel), which is generally used in stainless steel.
New company Zeb Nickel (TSX-V:ZBNI) Corp, which went public in August 2021 wants to supply the ballooning EV industry with raw material to make battery cathodes. Handily, it is sitting on a high-grade nickel sulfide deposit (Zebediela Nickel Project) in mining-friendly South Africa, which also happens to be the eighth largest known nickel sulphide deposit in the world in terms of its resource.
Right neighborhood
The project is in the right neighborhood too. Zeb's 7 kilometre (km) by 6 km land package is in the Bushveld complex - a region synonymous with world-renowned platinum group metals and nickel producers.
It is also surrounded by great infrastructure and sits next to Ivanhoe Mines’ huge US$1.5 billion Platreef project, which churns out platinum group metals (PGMS), copper, gold and nickel. It is also just 15km from Anglo American Platinum’s Mogalakwena mine - the largest nickel sulfide deposit in the world.
Together, those two deposits alone contain more than 27% of the top ten known global nickel sulfide resources.
"It's a great exploration story. It really is the needle in the haystack here," said Zeb Nickel (TSX-V:ZBNI) CEO Wayne Isaacs on his company's flagship Zebediela (Zeb) asset.
"It's got huge tonnage. It's got a lot of potential. The project itself boasts approximately 1.5 billion tonnes of nickel at about 0.25% grade and there are numerous viable targets for us to increase tonnage and grade and position it as a world-class opportunity," Issacs added.
On the radar
For those in the know, the project has been on the radar for a number of years and boasts a large database of prior work for Zeb to draw on. Depressed nickel prices and market uncertainty meant it was shelved for a few years from 2012.
But in 2017, the project was transferred to URU Metals (now a majority shareholder in Zeb with nearly a 75% stake), which revived the story and carried out extensive exploration. Zeb was born as a result of the desire to publicly list the project and raise capital to advance it. URU sold it to shell company Blue Rhino Capital Corp, which Zeb reversed into. Concurrently, around $3 million was raised to start drilling.
And Zeb has already completed around 2,500 metres (m) of a 3,600m first phase drill program, which kicked off in September 2021, targeting higher grade nickel, included in the footwall and part of a historic resource estimate.
Isaacs said the drilling is progressing very well and the company is already seeing good visible results. The campaign is expected to be completed by the end of the year, after which the company will await lab assays, ahead of a potential second phase of work, where deeper, higher grades will be targeted.
"We believe that we have identified some very viable high-grade zones that we have not even touched yet and I think once we get into some of that drilling in our Phase 2, we're going to start seeing some spectacular results," said Isaacs.
And the company already has a good foundation on which to build. An NI 43-101 resource from 2012 for the Zeb property puts it in the top ten global Class 1 resources, with 485.4 million tonnes in the higher confidence indicated category and a huge 1.1 billion in the inferred category.
Today, the nickel price is more like US$10.50 per pound, or US$20,805 per tonne, and at three-month highs. The metal is on a bullish run, up nearly 30% in the last 12 months, as the market responds to the shortfall in supply in the medium and long-term, due to things like the EV boom.
Last year, EV sales reached 3.2 million and the figure is expected to reach 21 million per year by 2030, while major automakers are literally ploughing billions into the emerging technology.
According to Zeb, 825,000 tonnes of new nickel supply will be needed by 2030 to meet demand, rising to 2 million tonnes of new supply by 2040.
So the company and its project seem to have re-emerged just at the right time. With plenty of news flow ahead, an undervalued asset, a skilled management and technical team and the backdrop of a green energy revolution, Zeb Nickel could certainly be an interesting company to follow.
Contact the writer at giles@proactiveinvestors.com