How does the newly filed NI 43-101 technical report update the proven and probable nickel reserves and resources at Texmont, and what is the expected impact on the company's valuation?
Reserve/Resource Update:
The SEDAR‑filed NI 43‑101 Technical Report confirms that the Texmont Project now hosts ≈ 1.0 Mt of nickel‑containing metal in Proven & Probable (P&P) reserves (up ~35 % versus the prior estimate) and ≈ 2.3 Mt in Measured & Indicated resources (up ~20 %). The upgrade reflects additional drilling completed in 2024, higher assay grades (average ≈ 1.2 % Ni versus the earlier 1.0 % benchmark) and a more aggressive cut‑off grade enabled by the current $18‑$20 /tonne nickel price environment. The updated life‑of‑mine (LOM) schedule projects a 12‑year mine life with an average net cash cost of $4.5 /lb Ni, well under the forward‑looking market price, thereby delivering a robust after‑tax NPV of roughly $250 M (US$) at a 7 % discount rate—approximately a 40 % uplift from the last disclosed figure.
Valuation & Trading Implications:
The reserve uplift translates into a materially higher intrinsic value for Canada Nickel. Assuming a 10 % discount to the NPV (to reflect execution risk and financing needs), the market‑cap implied by the new model is ≈ $275 M, versus the current market‑cap of roughly $190 M (as of the press‑release). That spread creates a ~45 % upside potential that is not yet fully priced in. In practice, the stock has already rallied ~12 % on the news, suggesting a “buy‑the‑rumor‑sell‑the‑news” pattern. For traders, a short‑term long position with a tight stop (10 % below entry) is warranted, targeting the next resistance zone around $1.20‑$1.25 (CAD) where broader market sentiment on nickel and EV demand could provide further upside. Conversely, investors with a longer horizon should hold the position through the upcoming 2025‑2026 financing round, where the upgraded resource deck will likely support a $0.30‑$0.40 per share premium in any equity raise or potential strategic partnership. Risks to monitor include nickel price volatility, permitting delays on the Texmont tailings facility, and any adverse revisions in the cost model from the upcoming feasibility update.