Nickel’s Bumpy Ride in 2023 Followed by Significant Rebound in 2024 By Yolowire

Nickel prices experienced a significant decline in 2023 due to a global economic slowdown. However, a resurgence is underway in 2024, which could attract investor interest in this vital metal. As noted earlier in the year, nickel has risen by 16.5% so far, although it is still down about 20% from last year, indicating considerable upward potential.

The demand for nickel is expected to stay strong, primarily driven by its applications in stainless steel and, increasingly, in rechargeable batteries that power electric vehicles (EVs). While stainless steel currently represents the largest share of nickel consumption, battery demand is forecasted to soar in the decades to come, potentially accounting for 41% of all nickel usage by 2040. The International Energy Agency has even projected a feasible net-zero emissions scenario by 2050, further underscoring the need for nickel.

This escalating demand translates to a pressing question: How many electric vehicles need to be sold? Research from Chris Hoehne, a climate and transportation expert at the National Renewable Energy Laboratory, suggests that in order to meet 2050 climate targets, 80% of all vehicles sold over the next ten years must be zero emissions. Therefore, immediate actions are essential.

The current nickel supply may struggle to meet this rising demand, making exploration efforts, especially in North America, increasingly crucial. Canada, in particular, is rich in nickel reserves and is witnessing a resurgence after years of declining production. Between 2014 and 2016, Canada’s nickel production was stable at around 235,000 metric tons annually. However, production dropped to a low of 176,000 metric tons in 2018 and fell further to just 134,000 metric tons in 2021. A rebound is projected, with estimates of around 180,000 metric tons for 2023, indicating significant potential for production growth in this nickel-rich nation.

Fathom Nickel: A Force in the Trans-Hudson Corridor

Fathom Nickel Inc. is a Canadian exploration company focusing on discovering magmatic nickel sulfide deposits within Saskatchewan’s renowned Trans-Hudson Corridor. This corridor is notable for a variety of critical and precious metals, including nickel and cobalt, and is home to several well-known mines. Despite its potential, the Trans-Hudson area remains significantly underexplored.

Canada has a rich history of gold discoveries in regions like the Abitibi, the Red Lake District, and the Golden Triangle. The extensive scale of the Trans-Hudson Corridor, spanning from South Dakota to James Bay, combined with its known resources, suggests significant untapped potential for Canada’s next major high-grade metal district.

Fathom is currently advancing two promising exploration projects in the heart of the Trans-Hudson Corridor: Albert Lake (over 90,000 hectares) and Gochager Lake (22,000 hectares). Both locations are near Foran Mining’s McIlvenna Bay deposit, recognized as the largest undeveloped volcanic-hosted massive sulfide (VHMS) deposit along the Flin Flon Greenstone Belt, which connects to the Trans-Hudson Corridor.

Magmatic nickel sulfide and VHMS deposits are known for their rich content of valuable metals and arise from distinct geological processes. MNS deposits, for example, often also contain copper, cobalt, and platinum group elements such as palladium and platinum alongside nickel.

Recent drilling activities at both Albert Lake and Gochager Lake have shown promising results, revealing high-grade nickel mineralization indicative of MNS deposits. Comprehensive geophysical surveys conducted at these sites have further highlighted areas with strong exploration potential for the upcoming months.

Insights into Gochager Lake

Gochager Lake has shown compelling assays confirming nickel-copper-cobalt mineralization. Historically, cobalt was undervalued compared to its current significance as a critical element for electric vehicle batteries, where a reliable and ethical supply is crucial.

Data collected thus far aligns with a historical mineral resource estimate for the area, indicating substantial potential for further exploration and development. Historic drilling conducted between 1966 and 1970 identified the Gochager Lake deposit with significant reserves. Fathom is actively expanding this deposit and working to enhance its grade.

Innovative borehole electromagnetic surveys have also indicated numerous unexplored target areas within Gochager Lake. A recent drill program aimed at examining the extent of mineralization beyond the historically defined boundaries of the deposit has provided positive results, confirming significant mineralization at notable depths.

Positive Developments for Fathom

Fathom’s decision to early repay an earn-in agreement for Gochager Lake is a strong indicator of confidence in the project’s future. This move was further supported by the original vendor’s request for additional company shares instead of cash, showcasing optimism about Fathom’s growth potential.

Albert Lake: Building on Historical Production

The extensive Albert Lake project benefits from the historic Rottenstone Mine, which produced notable amounts of nickel and copper in the 1960s. Fathom’s recent drilling operations at Albert Lake have turned up promising results, indicating an expansion of identified mineralization zones and new high-potential areas.

A recent discovery at Albert Lake occurred in February 2024, where a drill hole indicated significant nickel content within a rock formation. Ongoing geological assessments suggest that this mineralization is part of a larger, interconnected system that could be highly beneficial for Fathom.

Having completed a significant number of drill holes since going public, Fathom continues to validate its exploration efforts, confirming that both Albert Lake and Gochager Lake possess considerable potential for high-grade mineralization.

Investment Potential

In summary, Fathom is demonstrating that the potential for high-value nickel deposits at Albert Lake is far from isolated; it is indicative of a larger magmatic nickel sulfide system. The positive exploration results bolster Fathom’s position as demand for nickel in North America grows.

While market conditions may have become momentarily subdued, Fathom’s share price might present an attractive opportunity for investors. The company’s successful exploration initiatives position it advantageously within a landscape eager for critical mineral resources.