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Price Performance (1-year)
One polymetallic project, four copper-gold projects, and royalties in a development-stage copper project owned by Teck (TSX: TECK)
NISK is located in an active mining region, hosting several advanced stage lithium projects. Excellent infrastructure in place, including access to water, and low-cost hydro power
Nisk Polymetallic Project (Quebec)
The Nisk property, covering 45.9 km2, is located in an established mining region near James Bay, Quebec.
Nisk Location Map
The property hosts high-grade nickel-copper-PGM-gold-silver mineralization.
Primary Mineralized Zones
PNPN has identified two primary zones of mineralization – the Nisk Main zone, and the recently discovered Lion zone (5.5 km apart)
Lion Zone
Earlier this year, PNPN completed a 16-hole (7,832 m) drill program, leading to the discovery of the polymetallic-rich Lion zone. The drill program aimed to follow up on the discovery hole PN-23-031A, located 5.5 km northeast of the Nisk Main deposit, originally drilled to assess an airborne electromagnetic (EM) anomaly.
15 out of 16 holes intersected PGM-rich mineralization
Drill results reported weighted average grades of 3.11% Cu, 5.07 g/t Pd, 4.27 g/t Pt, 0.55 g/t Au, 23.53 g/t Ag, and 0.25% Ni (6.04% CuEq) vs 0.2-2% Cu, 0-10 g/t Au and PGMs, and 0.5-3% Ni for typical Ni-Cu-PGE deposits
Drill Highlights
Multiple high-grade copper, gold, silver and PGM intercepts, including 5 m of 19.89% CuEq, 15.3 m of 9.54%, 17.3 m of 4.5%, and 15.8 m of 4.5%
The Lion zone measures 350 m long x 5-6 m wide x 375 m deep, and remains open in multiple directions
Based on our review of the drilling results, projected dimensions, and the Lion Zone anomaly, we believe the deposit could host up to 1 Blbs of high-grade CuEq.
Potential for hosting a high-grade/medium-tonnage deposit
The Nisk Main zone hosts a high-grade nickel sulphide deposit encompassing open-pit, and underground resources. 70% of resources are in the indicated category, implying high confidence
2023 Resource Estimate (Nisk Main)
In addition to high-grade nickel, the deposit hosts low-medium grade copper, and low-grade gold, silver, PGM, and cobalt. We believe there is significant resource expansion potential as the deposit remains open at depth
In addition, several targets remain untested
Management has commenced a 20-hole/8,000 m drill program, and ground EM and gravimetry surveys, primarily focused on testing the lateral and depth continuity of the Lion and Nisk Main zones. Additionally, PNPN has partnered with a privately held metal refining technology provider (CVMR Corporation) to conduct a feasibility study.
Drilling and geophysics underway
Strong balance sheet. Subsequent to Q1-2024, PNPN raised $22M through equity financings
In-the-money options and warrants can bring in $13M
With the company’s shift from a nickel-focused junior to a broader polymetallic play, we are moving away from valuing it solely through comparisons with nickel juniors. Instead, we are introducing a preliminary Discounted Cash Flow (DCF) valuation model. This model assumes a 4,000 tonnes-per-day (tpd) operation, with 50% dedicated to processing copper sulfides, and the other 50% for nickel sulfides.
Our DCF valuation on Nisk is $1.09/share, and our fair value estimate on PNPN is $1.17/share
Our previous valuation, based exclusively on the Nisk Main zone and using a comparable valuation model, was just $0.41/share
Our valuation is highly sensitive to copper and nickel prices
We are reiterating our BUY rating, and raising our fair value estimate from $0.41 to $1.17/share. Upcoming catalysts include resource delineation/expansion drilling, and a feasibility study. We believe our preliminary/speculative estimate will offer insights to the market ahead of Lion's maiden resource estimate. We anticipate the stock will gradually align with our fair value as investors become more aware of the Lion zone’s potential.
We believe the company is exposed to the following key risks (not exhaustive):
Maintaining our risk rating of 5 (Highly Speculative)
