For Canada to create a sustainable nickel industry a massive, long-term grassroots exploration program is needed

By Patrick Whiteway

When Inco Ltd. went looking for nickel deposits beyond the Sudbury Basin in the 1940's, the company financed an intensive, regional-scale exploration program in northern Manitoba. Over a 10-year period and an expenditure of some $31 million (in 1956 dollars), two small deposits were outlined at Moak Lake and the near-by Mystery deposit. But then, in 1956 the Thompson deposit was discovered and within five years it was producing nickel from an orebody that would feed a concentrator, smelter and refinery for the next 50 years.

Today, Vale SA the present owners of the Thompson operation plans to shut the nickel smelter down, claiming it cannot afford to make the necessary investment to reduce sulphur dioxide emissions. That would be a sad end to an impressive story, or it could be the beginning of an exiting new story.

Diamond drilling in Thompson, Man. 1956

The type of large-scale, long-term, well-financed exploration effort designed to find high-grade, low-cost nickel sulphide deposits in the Precambrian Shield that Inco launched in the 1940s just doesn't happen today. Canada has many square kilometers of prospective geology; it has the geological expertise and the advanced exploration technology to undertake such a program but there is a lack of leadership to launch such a venture.

Major nickel producers are simply not willing to invest in a 10-year effort to locate new greenfields deposits. Such an effort could, however, be led by a number of innovative junior exploration companies working together in a consortia. They have a great story to tell potential investors. Here's how the story line could go:

Nickel sulphides have a much lower ecological footprint than the energy-hungry, water-gulping, land-hungry laterite producers in Indonesia, New Caledonia, Madagasgar and Australia.

Canada has a surplus of low-carbon-emitting hydro electric power and can therefore produce the lowest carbon-emittting nickel in the world provided significant nickel sulphide deposits can be located for long-term reserves.

These two advantages alone would make sulphide nickel mining in Canada lower cost than any laterite nickel operation in the world, especially when some form of carbon tax or global carbon emissions trading system becomes reality worldwide.

Furthermore, Canada could encourage existing downstream users: stainless steel and nickel alloy producers to set up shop in Canada to add value to the nickel produced here before it is exported. In fact, in the long term, industries that use nickel-containing materials could also set up shop here.

This is a compelling commentary for investors with long-term vision.

Who, then, are the most likely candidates to undertake such a venture? Junior companies with Canadian nickel sulphide properties include:

Ontario

Noront Resources (Eagle's Nest)

Fencamp Exploration (Ring of Fire)

Bold Ventures Inc (Ring of Fire)

Cliffs Natural Resources (chromite)

Mustang Minerals

First Nickel Inc (Lockerby)

URSA Major Minerals Inc. (Shakespeare)

Manitoba

Crowflight Minerals (Bucko Lake)

Corazon Mining Ltd. (Lynn Lake)

Pacific Coast Nickel (Lynn Lake)

HTX Minerals Corp.

Quebec

Jilin Jien Nickel, Canadian Royalties (Nunavik)

Copper One Inc. (Riviere Dore)

Royal Nickel Corp (Dumont)

On the government side, the provincial governments of Ontario and of Newfoundland and Labrador are the leaders at the present time, though Manitoba could pick up the slack.