IPO Watch: this miner wants to sell nickel sulphides near the first battery factory in Europe
- Nickel explorer Bayrock Resources chases $12m at 20c per share in recent IPO launch
- The main asset has a JORC resource of 460,000 t at 2.2% nickel, 0.7% copper and 0.15% cobalt
- Located just 100 km from Northvolt’s new gigafactory Skelleftea
Europe is experiencing an energy revolution and is becoming one of the biggest markets for electric vehicles in the world. So there are few better places to look for battery metals.
More than 2.2 million electric and plug-in hybrid vehicles were sold in Europe last year, capturing a 19% market share, a figure that is only expected to increase further in the coming years as governments are setting dates for the shutdown of internal combustion generation. engines.
Automakers and European authorities are worried about China’s dominance in the supply chain of lithium-ion batteries and their components like nickel, cobalt, lithium and graphite.
Battery maker Northvolt has taken the lead in changing that dynamic, opening the continent’s first European gigafactory in Skelleftea, northern Sweden, and shipping its first deliveries last month.
Just 100km down the road, an Australian company is set to explore a high-grade deposit of nickel, copper, cobalt and platinum group elements in hopes of joining this nascent supply chain.
BayRock Resources (ASX:BAY) is seeking to raise $12 million in an initial public offering to float on the ASX in August.
The raise led by RFC Ambrian will fund the drilling of the Lainejaur project on the Skelleftea belt near the Swedish border with Finland.
Ready to explore
Bought last year from Carnaby Resources (ASX:CNB), an ASX-listed copper company, Lainejaur is exceptionally advanced for an IPO prospect.
It already has a resource of 460,000 t at 2.2% nickel, 0.7% copper and 0.15% cobalt, and a history of an active mine dating back to World War II.
In addition to this, the resource has substantial credits of 0.68 g/t palladium, 0.2 g/t platinum and 0.65 g/t gold.
While the deposit has been known for a long time and delivered 101,000 t at 2.2% nickel, 0.1% cobalt and 0.9% copper between 1941 and 1945 down to about 100 m in a subsoil shallow, Bayrock managing director Ian Pringle says he remains open for new discoveries.
The JORC resource estimate was compiled from approximately 40 drill holes undertaken on a tiny exploration claim of just 0.4 km².
Bayrock has collected approximately 42 km² of turf around the mine, opening up the possibility of finding repeats of the Lainejaur deposit near the mine and at depth.
“It continues down dip and the reason it hasn’t been followed by previous work is that the drilling was undertaken on a very small exploration permit which was only 0.4 km²,” said Pringles. Stockhead.
“So the drill couldn’t go out to test an area outside of that.
“We think we will be able to get the resource up considerably bigger than it is.
“It has a lower-grade resource of about half a percent nickel-copper, and some of that is obviously going to be economic. We’ll take a closer look at that, but it’s not in the resource.
“So there’s tons and tons of room for upside.”
Class 1 nickel hunting
The International Nickel Study Group forecasts global nickel production to reach around 3.015 Mt in 2022, putting the market in a surplus of 67,000 t.
But those surpluses are expected to give way to prolonged deficits over the next few years as demand for electric vehicles powered by nickel-rich lithium-ion batteries increases.
Class 1 nickel made from nickel sulfide deposits is the primary source of battery-grade nickel.
And while efforts are underway in Indonesia to move lower-grade nickel laterite mines from the stainless steel market to the battery market, there are concerns about the pollution levels and emissions intensity of these operations.
For this reason, companies with high-grade nickel deposits in leading jurisdictions are likely to be favored by customers, who will demand high sustainability credentials from their suppliers.
Pringle says being located in Europe also gives Bayrock an advantage over Australian-based producers.
“The European Union now has carbon taxes on everything coming into the region and of course we are already there. So we will be competing with nickel imported from Australia or elsewhere which is taxed on their consumption. carbon,” he said.
“It’s something that’s really appealing and something that not just Sweden but the whole of the European Union is really pushing to get mining with these kind of low-carbon, socially acceptable metals.
“These are exceptional targets, the world is crying out for nickel sulphides.
“Two-thirds of the world’s cobalt comes from the Congo and it’s needed in a lot of lithium-ion batteries, nickel is needed in most lithium-ion batteries and if you’re dealing with a big laterite nickel project, it will be really a messy business and very destructive to the environment.
“This is the first class nickel we are talking about, nickel sulphides of this type are very rare and it is exceptional to get high cobalt credits and copper credits from them.
“It’s in a great location and I think the timing is immaculate in terms of putting something like this in place.”
In addition to the main Lainejaur project, Bayrock also plans to explore five nearby projects acquired from EMX Royalty Corporation covering some 340.7 km² of land in northeast Sweden, prospective for nickel and cobalt, referred to as projects Northern Nickel Line.
Bayrock already has drilling permits for Lainejaur and is planning airborne EM and SkyTM surveys to assist in targeting across Northern Nickel Line assets.
Some have walking targets, with pre-Vuostok drilling showing shallow finds of nickel and copper of up to 2.3% and 0.6% respectively.
Although the projects are accessible for exploration year-round, much of Bayrock’s mandate is hidden, meaning it was not easy for alumni to make deep discoveries without the benefits of technology. of modern exploration.
“Some of the other targets are similar to Lainejaur; it will be a small pipe-like mineralization near surface,” Pringle said.
“We have very good targets which are near surface, in fact we have similar grades at Lainejaur at 10m depth at Vuostok which is our most north-westerly project.
“But we also have very large geophysical anomalies that look like very large, much deeper style deposits. Obviously, they will be much more attractive to larger companies.