Canada Nickel Co. Inc. (CNC:TSX.V; CNIKF:OTCMKTS) has improved its in-process tailings (IPT) technology for capturing carbon during ore processing, which "may prove to be very valuable," reported Research Capital Corp. analyst Adam Schatzker in a June 8 research note.
"Overall, we think the process improvements for IPT coupled with the potential tax benefits are showing the potential for valuable carbon sequestration at Crawford," Schatzker wrote.
Attractive ROI
As such, Research Capital maintained its Speculative Buy rating and its CA$3.45 per share target price on the nickel-focused explorer.
Given its current share price is about CA$1.32, the implied possible return for investors is significant, at 161%.
Benefits of Using IPT
Schatzker presented some of the ways this proprietary technology could benefit its developer, Canada Nickel.
The Toronto, Ontario-based company has reduced the residence time required to sequester carbon using IPT to 6.5 hours from 12 to 24 hours. This significant change, noted Schatzker, "may result in material capital and operating cost savings."
By employing IPT at its Crawford project, Canada Nickel estimates it could sequester 1,000,000 tons of carbon per year, Schatzker relayed. The company also indicated using IPT at Crawford may qualify portions of project capex for carbon capture and storage refundable investment tax credits.
While it is too early to know what costs may or may meet the requirements, added Schatzker, "We think that there is a chance a material portion of the capital may be eligible for the refundable tax credit, which could further enhance the economics of the project."
Update on Feasibility Study
All that is left for Canada Nickel to do on the feasibility study of Crawford is to complete and integrate the IPT component into it, reported Schatzker. All other needed engineering work is done.
The release of this study, the next major catalyst for the company, is now expected in September 2023 versus Q2/23 previously. The slight delay is due to the Canada Nickel being unable to access, until summertime, the pilot scale testing facilities it needed to use for its IPT.
This delay, however, according to management, will not affect the Crawford timeline and schedule. The team still expects to receive permits for it by mid-2025.
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Disclosures for Research Capital Corp., Canada Nickel Company Inc., June 8, 2023
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