Recently, the nickel and base metals markets have been on fire. Worldwide stainless-steel demand (of which nickel is an integral component) increases at a steady 5% annually, but the big story is booming EV (electric vehicle) demand. Recently Elon Musk made clear his intent to utilize nickel as a substitute for cobalt in EV batteries, provided that there is a reliable supply of carbon-neutral, energy efficient metal. That’s where FPX Nickel (sponsor) comes in. The Baptiste deposit’s nickel metallurgy means there’s no smelting necessary, leading to lower costs and greater environmental friendliness. Nickel is trading around $8.84 per pound, just over its historic $8 average. Copper recently broke $4 per pound and base metals have rapidly appreciated. With nickel demand ready to take off, looming supply deficits and a lack of new world-class projects, there’s a compelling case for vastly higher prices. The bill for decades of sector underinvestment has now come due.
CEO Martin Turenne explains why the British Columbia Baptiste deposit is undervalued relative to peers and FPX’s PEA supports that point. Its Van target is close by and it has a bigger surface footprint and larger, higher metal grades than Baptiste. FPX is trading at just 5% of the project’s estimated $1.7 billion value The market has yet to factor Van into FPX’s valuation.
Owning over 20% of the company, management’s interests are closely aligned with those of shareholders. As a CPA, Martin has kept a very tight rein on FPX’s finances; dilution has been kept to a minimum.
With approaching future supply issues, the apparent beginning of a new commodity super-cycle and at least one or more world-class projects, FPX is uniquely situated to cash in on Elon Musk’s demand for carbon-neutral nickel.
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