Canada Nickel Company (TSXV: CNC; US-OTC: CNIKF) is partnering with the Taykwa Tagamou First Nation to develop electric power for its Crawford nickel-cobalt sulphide project in Ontario’s Timmins-Cochrane mining camp.
Under a memorandum of understanding, the Taykwa Tagamou Nation will develop the electrical transmission assets to supply Crawford with reliable power and the junior exploration company will then rent the assets from TTN over the life of the mine or for a 20-year period, whichever comes first.
TTN has already arranged access to the capital needed for the power project, which Mark Selby, Canada Nickel’s president and CEO, estimates will cost somewhere in the range of tens of millions of dollars up to about $100 million, depending on the results of engineering studies.
“TTN threw this idea on the table and it makes complete sense,” Selby said in an interview. “Basically it allows them to build a business that goes well beyond and after the mining project is gone. The fact that they’re willing to put their capital to work is a massive benefit to this project.”
Selby said Canada Nickel will rent the assets “on fair market terms – we’re not going to be paying extra and they’re not subsidizing us.”
“They are trying to protect and enhance the value they get for their land,” he said, “and when you enter into that sort of spirit right out of the gate, it allows these very constructive ideas to come forward.”
“This MOU is a starting point for our community to have a seat at the table and have an equity stake in the project,” Bruce Archibald, TTN’s chief, told The Northern Miner via email. “We are ready and able to invest capital where there is attractive investment opportunities. By developing the necessary transmission to serve Canada Nickel, we advance our transmission business.”
Indeed this won’t be the first time the First Nation has developed power generation assets. “They have other power businesses, and that’s a key focus for them going forward,” Selby said.
In 2017, TTN, through its subsidiary Coral Rapids Power, co-invested with Ontario Power Generation in the 28 megawatt, Peter Sutherland Sr. Generating Station, and has been an advocate with the Independent System Operator (IESO) for upgrading and expanding the energy transmission network on their traditional lands. It has also partnered on other facilities including the Yellow Falls Hydroelectric Generating Station and the Cochrane Solar Farm, in addition to the construction of the Detour mine’s transmission line.
Archibald noted that the fair market rental rate for Canada Nickel will be based on the recovery of construction, operation and maintenance costs “plus a small margin for the risk.”
“The location of the connection point will have a lot influence on those costs,” the Chief explained. “That connection point will be determined through the regulatory process. We will have more clarity when we start the permitting in early 2021.”
Canada Nickel has also signed an MOU with the Matachewan and Mattagami First Nations in relation to exploration and development operations at Crawford. The MOU – announced two days before the TTN agreement – underscored Canada Nickel’s commitment to engage in “ongoing consultation and establish a mutually beneficial cooperative and productive relationship with the First Nations located in the project area,” which could include business opportunities, employment and training and financial compensation and consultation, the company said.
“The First Nations groups in Timmins know the benefit of working with mining companies,” Selby said, “and the fact that they’re willing to take the relations to the next level is tremendous.”
Greg Rickford, Ontario’s Minister of Energy, Northern Development and Mines, and Minister of Indigenous Affairs, congratulated the company on the agreement, Selby said, and government support is vital.
“You don’t see very many ministerial comments of support for an exploration project,” he said. “The fact that we’re an exploration stage asset, the fact that we’re willing to work constructively with First Nations, and the fact that we’re going to be targeting net zero carbon emissions and products for the EV market, already helps get the government support.”
The company plans to complete a preliminary economic assessment of Crawford shortly, and expects to complete a feasibility study on Crawford and produce a net zero carbon nickel-cobalt product and a net zero carbon iron product on a pilot plant scale before the end of 2021.
It plans to drill more than 20,000 metres at Crawford during the first six months of 2021.
“Mark Selby is a progressive thinker and a true business player that recognizes the Inherent and Treaty Rights of our community,” Chief Archibald said. “Mark and his team have been engaged with our economic development team and open in hearing our ideas for participation.”