How does First Atlantic's nickel grade and recovery compare to other nickel producers in the region and globally?
Grade & Recovery in Context
First Atlantic’s Phase 2 drill hole returned a 1.27 % Ni over a 447‑m interval in the RPM zone, with a magnetic concentrate that also contains 1.69 % Cr. In the global laterite‑nickel landscape, most projects hover between 0.8 % and 1.5 % Ni (e.g., Indonesian laterite projects such as PT Antam, Indonesian‑Australian joint ventures, and the New Caledonia Jinchuan‑style deposits). Only a few high‑grade laterite pockets (e.g., the Sartob and Murrin Murrin operations) regularly exceed 1.5 %–2 % Ni, while sulfide‑focused assets such as Norilsk or Vale’s Brazil deposits routinely deliver 2 %–3 % Ni. Thus, First Atlantic’s 1.27 % places it solidly in the mid‑range of laterite grades – higher than many bulk‑tonnage laterites but still below the premium sulfide or the very few high‑grade laterite projects.
Recovery Benchmarking
The reported 81.4 % recovery via the Direct‑to‑Rhodium (DTR) process is noteworthy. Conventional laterite processing (HPAL, atmospheric leach, or pyrometallurgy) typically achieves 60 %‑75 % nickel recovery, with only a few advanced HPAL plants reaching 80 %–85 % under optimal conditions. Therefore, First Atlantic’s recovery sits at the upper end of the industry spectrum, especially for a laterite resource that also contains a significant chromium component (which can complicate leach chemistry). This high recovery rate suggests lower operating costs per tonne of nickel produced and provides a competitive edge against regional peers such as Nickel West, Jinchuan‑Goro, and the Indonesian “Baba” project, which generally report 65 %‑78 % recovery.
Trading Implications
From a market perspective, the combination of moderate‑high grade and high‑recovery strengthens First Atlantic’s cost‑per‑unit economics, especially if nickel prices remain above USD 15–$20 lb⁻¹. The long 447‑m interval adds confidence to the resource expansion, potentially boosting the company's resource‑to‑reserve conversion rate. Traders should view the drill result as a catalyst for a short‑ to medium‑term upside in FAN stock, particularly if the company can confirm the grade and recovery at scale (full‑scale pilot or metallurgical testwork). However, investors should temper expectations against the higher grade sulfide assets that dominate the global price premium; the stock’s upside is more tied to operational efficiency and cost‑advantage than to a premium-grade premium. In a bullish nickel environment, FAN could outperform regional peers, but downside risk remains if the high‑recovery DTR process does not translate to commercial‑scale throughput or if commodity prices decline sharply.