Project developer Nickel Creek Platinum lost a third of its value on the TSX on Tuesday after the company announced that its flagship project in Yukon would not be advanced until prices strengthened and nickel settled in the range of $9/lb to $11/lb.

Shares fell by as much as 44%, before closing 34% lower at C$0.105.

Nickel Creek explained that testing during its Phase 2 metallurgical programme had identified a strong correlation between nickel recovery and total sulphide content. It was determined that the presence of sulphides was an important marker of nickel recovery, meaning that the areas of higher sulphur yielded higher recoveries, and areas of lower sulphur yielded lower recoveries, irrespective of nickel head grade.

The company said it had incorporated these findings into a nickel-sulphur recovery formula and tested it against numerous recent and historical metallurgical testwork results. This review demonstrated a high correlation between the nickel-sulphur recovery model and actual nickel recovery results.

Nickel Creek said it had analysed the impact of this new relationship on the project and that it had resulted in a reduction in the average nickel recoveries to levels below those observed in the Phase II metallurgical programme. By applying the nickel sulphur recovery formula, the company estimated that the project's 2017 stated mineral resource tonnage would be reduced by about 10% using a nickel price of $8.25/lb.

“Given this new understanding, combined with current and projected long-term commodity prices and financial market conditions, the company believes it wouldn't be prudent to complete a preliminary economic assessment until the emergence of improved financial market conditions and a stronger commodity price environment,” the company said.

In the interim, Nickel Creek said it would follow up on the 2018 field season programme, maintain environmental baseline activities, consider optimisation alternatives and investigate other opportunities.

The Nickel Shaw project, offering a unique mix of metals including copper, cobalt, platinum-group metals and gold, remains a flagship project of the company.