SPC and Vale consolidate Sudbury nickel/copper deposits

24th January 2023 By: Mariaan Webb - Creamer Media Senior Deputy Editor Online

Canadian junior SPC Nickel and diversified miner Vale’s Canada subsidiary have announced that they will consolidate their adjacent and contiguous West Graham and Crean Hill 3 nickel and copper deposits, in the Sudbury mining camp of Ontario.

The agreement grants SPC Nickel the right to acquire a 100% interest in the surface and mineral rights of the Crean Hill 3 property. In consideration, certain rights and royalties will be extended to Vale across the combined project.  

"The signing of this agreement with Vale represents a transformative growth opportunity for SPC Nickel and its shareholders,” said SPC CEO Grant Mourre.

“The consolidated West Graham and Crean Hill 3 deposits gives SPC Nickel, as operator, the ability to optimise synergies during the exploration, development and production stages of the project.”

With the addition of the Crean Hill 3 property, Mourre see a path for SPC Nickel to significantly grow the West Graham deposit into a high-quality nickel/copper asset in one of the top nickel mining camps in the world.

“Our recently completed drill program at West Graham has provided the technical team with a firm understanding of the types of mineralization we expect to define on the Crean Hill 3 property and, more importantly, the controls on mineralisation that we expect to guide us to higher-grade opportunities across the combined project."

The West Graham and Crean Hill 3 deposits constitute the eastern and western contiguous portions of a large near-surface nickel/copper sulphide deposit at the base of the Sudbury Igneous Complex. The properties are located adjacent to the past-producing Lockerby and Crean Hill mines, about 20 km southwest of the city of Sudbury, Ontario and Vale's Clarabelle mill.

The unmined near-surface West Graham nickel/copper deposit contains more than 47 000 t of nickel and 34 000 t of copper in indicated and inferred resources as defined in a technical report published by First Nickel in 2009 that supported an indicated mineral resource on the property totaling 8.55-million tonnes, grading 0.45% nickel and 0.31% copper, along with an inferred mineral resource of two-million tonnes, grading 0.38% nickel and 0.30% copper.

The company recently completed an 18-hole, 5 200-m drill programme, which has expanded the extents of the high-grade mineralised zone within the West Graham deposit while also adding confidence in the continuity of the resource.

SPC can earn a 100% interest in the Crean Hill 3 property from surface down to an elevation of 264.3 m below mean sea level, pursuant to delivering to Vale a feasibility study for the project by June 30, 2026.

SPC will have the right, at its sole discretion to extend the deadline to June 30, 2028 provided it has completed a National Instrument 43-101-compliant prefeasibility study by the feasibility study deadline.

It must also pay to Vale C$1-million cash at the feasibility study deadline.

Upon earning a 100% interest in the Crean Hill 3 property, SPC Nickel will grant Vale certain rights and royalties over the combined project, including granting Vale a 1% net smelter return on the combined project, a net profits royalty, at a rate of 37%, on net profits generated from the project during each quarterly calculation period.

Vale will also retain a right of first refusal (ROFR) over the sale of the project or any part thereof by SPC. The major will also retain an ROFR for any ore produced from the project and will retain an ROFR on any concentrates that are produced from ores derived from the project through a mill wholly-owned or -controlled by SPC or an affiliate. If SPC Nickel or an affiliate makes an investment decision to construct or acquire a smelter, Vale will have the right to purchase metal concentrates equivalent to those produced from the ore derived from the project.