FPX Nickel shares rally on battery metals MOU

VANCOUVER –FPX Nickel Corp. [TSXV-FPX] shares rallied Friday after the company announced details of a battery supply chain memorandum of understanding (MOU) with Japan Organization for Metals and Energy Security (JOGMEC) and the Prime Planet Energy & Solutions (PPES) joint venture between Toyota Motor Co. and Panasonic Corp.

FPX said the non-binding MOU provides a framework for FPX and PPES to explore collaborative opportunities for the vertical integration of nickel production involving the development of FPX’s Baptiste nickel deposit in central British Columbia through to the production of nickel sulphate and cathode active materials for the PPES supply chain.

Under the terms of the MOU, FPX, PPES and JOGMEC will work collaboratively to share technical information and expertise, and to explore potential strategic arrangements and business structures.

FPX said it is anticipated that any potential binding agreements among the parties would provide FPX with additional funding to advance the Baptiste project, including the preparation of a feasibility study and activities relating to the environmental assessment and permitting processes.

FPX shares advanced on the news, rising 8.1% or $0.035 to 46.5 cents on volume of 261,260. The shares are currently trading in a 52-week range of 61 cents and 31.5 cents.

Baptiste is located in the Decar Nickel District, a greenfield discovery of nickel mineralization in the form of a naturally-occurring nickel-iron alloy called awaruite. Covering 245 square kilometres, it represents a promising target for bulk tonnage, open pit mining, the company has said.

Back in April, 2023, FPX delivered an updated resource estimate for its Baptiste deposit, which the company said will serve as the basis for an upcoming feasibility study to be completed by the second half of 2023.

The indicated resource at Baptiste is pegged at 1.8 billion tonnes at 0.129% nickel, 0.0035% cobalt and 2.40% iron (2.435 million tonnes of contained nickel). On top of that is an inferred resource of 339 million tonnes at 0.131% nickel, 0.0037% cobalt and 2.55% iron (444,000 tonnes of contained nickel).

The company said the estimate was based on a new geological modelling approach and newly improved dike model, all of which contribute to significantly improved Davis Tube recoverable (DTR) nickel grades.

The estimate reported for the first time, the content of total nickel and potential by product elements, cobalt and iron.

FPX previously launched an internal scoping study to evaluate the option to produce nickel sulphate for the electric vehicle (EV) battery supply chain from the high-grade nickel concentrate produced by the Baptiste deposit.

The company said the study incorporates the positive results of previous leaching test work on the clean, high-grade Baptiste nickel concentrate (63% nickel), which confirmed the project’s potential to be a significant supplier of high-purity feedstock for the EV battery market.

However, on Friday, the company said the MOU is non-exclusive and non-binding, and there can be no certainty that a binding commercial agreement will be reached.

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