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Lomiko puts out strong PEA as demand for battery-grade graphite expected to challenge supply

2021.07.31
Lomiko Metals (TSXV:LMR, OTC:LMRMF, Frankfurt:DH8C) is exploring for lithium and graphite in the Canadian province of Quebec.
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This article was originally published by A Head of the Herd

2021.07.31

Lomiko Metals (TSXV:LMR, OTC:LMRMF, Frankfurt:DH8C) is exploring for lithium and graphite in the Canadian province of Quebec.

The mining-friendly jurisdiction placed in the top 10 of the Fraser Institute Annual Survey of Mining Companies 2020, for investment attractiveness. Also last year, the province unveiled the Quebec Plan for the Development of Strategic Minerals 2020-25, signaling its intention to transition to a lower-carbon economy. Quebec has also established a list of 22 minerals considered critical and strategic, among them lithium, graphite, nickel, cobalt and rare earths.

Lomiko’s flagship project is the La Loutre flake graphite property, located 117 km northwest of Montreal, and 53 km east of Imerys Carbon and Graphite’s Lac des Iles mine.

Originally explored for base and precious metals, historical reports showed graphite to be present on the property in quartzite and biotite gneiss, and in shear zones where the graphite content ranges from 1-10% on surface including visible flakes. A recent grab sampling and mapping program confirmed a graphite-bearing structure of approximately 7 km by 1 km, with results up to 22% graphite in multiple parallel zones 30m to 50m wide. Another 2 km x 1 km area consisting of multiple parallel zones, 20m to 50m, includes up to 18% graphite.

The property already has a resource of 18.4 million tonnes carbon flake graphite (Cg) grading 3.19% in the indicated category, and 16.7Mt @ 3.75% inferred. Using a 3% cut-off grade, the resource amounts to 4.1Mt @ 6.5% Cg indicated, and 6.2Mt @ 6.1% inferred.

A preliminary economic assessment released by Lomiko this week shows robust economics for the project.

Completed by Ausenco Engineering and compliant with National Instrument (NI) 43-101 standards, the report uses a measured and indicated resource of 1.04 million tonnes of graphite at a 1.5% Cg cut-off grade as the base case scenario.

The PEA supports an open-pit mine with average annual graphite concentrate production of 108,000 tonnes for the first eight years, and a life of mine average yearly production rate of 97,400t, for 14.7 years.

Cash costs are pegged at US$386 per tonne of graphite concentrate and all-in sustaining costs (AISC) are $406/t. 

Up-front costs (capex) are a reasonably low C$236.1 million, which includes mine pre-production, processing and infrastructure (roads, power line construction, co-disposal tailings facility, ancillary buildings and water management).

According to Lomiko, the La Loutre project has the potential to become a major North American graphite producer, with an after-tax net present value (NPV) of $186 million and a 21.5% internal rate of return (IRR).

Small-cap investors reacted favorably to the PEA, bidding up the stock 16.6% on Friday, to close at C$0.14/sh.

One of the most important aspects for investors to recognize about La Loutre, is its exploration upside.

The PEA indicates the property has the geological potential to extend the mine life beyond the initial 14.7 years, as well as the opportunity to expand the scale of production by increasing the mineral resource through ongoing exploration and drilling.

“La Loutre has shown it has the potential to become a highly profitable graphite mine in one of the most prolific producing regions in Canada, said Lomiko’s President and CEO A. Paul Gill, in the July 29 news release. He added:

“With further drill programs, we will continue to add to and upgrade resources as we seek to move the project forward towards production.”

With a strong treasury to support next steps (in May Lomiko closed a C$1.1M financing @ $0.17), the company aims to initiate a Preliminary Feasibility Study (PFS) and environmental impact studies as it continues to explore and reveal the geological potential of La Loutre.

Critical minerals cooperation

The release of the PEA comes as governments have begun showing their support for critical minerals projects that meet environmental, social and governance (ESG) criteria.

For example, the United States and Canada are planning to execute a home-grown strategy to explore for and mine critical minerals, like graphite, in North America. 

In January 2020, the two governments announced the Joint Action Plan on Critical Mineral Collaboration. The agreement would increase production and establish supply chains for numerous critical minerals the US is dependent on for imports.

Ottawa recently released a critical minerals list like the list of 35 published by the US in 2017; the 31-metal catalogue includes cobalt, graphite, lithium and rare earths.

According to Gill,

“The development of Canada-USA and Canada-EU critical minerals collaboration agreements gives access for graphite products in these markets. There is a focus on projects with environmental, social and governance (ESG) acceptability which Lomiko has also adopted. The strict criteria for the report should result in competitively-priced graphite for customers in the North America and European markets.

“These recent agreements between Canada and the USA and Canada and Europe have identified graphite as a critical element that will be part of a new supply chain. Lomiko is ready to maximize La Loutre’s value by advancing the studies to further refine and de-risk the project.”

The company says it looks forward to working with its partners in the MRC of Papineau region including the Lac-des-Plages and the Duhamel municipalities, as well as the surrounding First Nations communities. Lomiko will also continue to work closely with the Quebec and federal governments to advance the La Loutre project. 

Graphite market update

Lomiko Metals is developing La Loutre during a transformative time in the graphite space.

The demand for “green” metals is pinned on bets that more aggressive climate pledges will accelerate the proliferation of solar panels, wind turbines and electric cars. Beyond electrification and decarbonization, the need is being driven by something more immediate — a worldwide economic recovery from the pandemic.

As countries continue to vaccinate their populations, and infections drop, economies are re-opening, stoking demand for more cars, electronics, and infrastructure, primarily.

On top of surging demand for metals needed to feed so-called “green infrastructure” programs, we have current and emerging structural deficits for several metals, that will keep prices buoyant for the foreseeable future.

Over the past year, tight supply is reflected in the rising prices of copper, nickel, zinc, and lead, for example.

In fact, battery/ energy metals demand is moving at such a break-neck speed, that supply will be extremely challenged to keep up. Without a major push by producers and junior miners to find and develop new mineral deposits, glaring supply deficits are going to beset the industry for some time.

According to a recent report by UBS, a deficit in nickel will come into play this year, for rare earths in 2022, for cobalt in 2023, and in 2024, for lithium and natural graphite.

Moreover, the Swiss investment bank predicts large deficits by 2030 for each of these metals: 170,000 tonnes for cobalt, equal to 42% of the cobalt market; 10.9 million tonnes of copper (about half of current global mined production), representing 31% of the market; 2.1Mt for lithium (50% market share); 3.7Mt for natural graphite and 2.2Mt for nickel (both 37%); and 48,000 tonnes for rare earths, equivalent to 47% of the market.

Graphite is one of the most interesting metal markets to watch, because, like copper, the “EV revolution” doesn’t happen without it.

There are no substitutes for lithium and graphite; these critical metals are expected to remain the foundation of all lithium-ion EV battery chemistries for the foreseeable future. 

Lithium is in the battery cathode and graphite, or more precisely, spherical graphite, is in the anode.

A lithium-ion battery should actually be called a “graphite-ion” battery, since it contains about 20 times more graphite than lithium.

Graphite has long been used in the aviation, automotive, sports, steel and plastic industries, as well as in the manufacture of bearings and lubricants. Graphite, an excellent conductor of heat and electricity, is corrosion- and heat-resistant, strong and light.

The steel industry has traditionally taken the majority of the world’s graphite production, but this is beginning to change. Scotland-based commodities consultancy Wood Mackenzie forecasts a rapid acceleration of demand for the energy storage/ battery sector, rising from just 165,000 tonnes in 2018 to almost 1 million tonnes by 2030. Benchmark Mineral Intelligence estimates that the amount of graphite needed for the anode material in lithium-ion batteries will rocket to 1.75 million metric tons by 2028, a nine-fold increase over 2017 levels.

In 2020 the entire mined production of graphite was 1.1 million tonnes, suggesting a coming supply deficit if more graphite deposits aren’t developed into mines. Remember, in addition to supplying the nearly 1 million tonnes of graphite expected to be demanded by lithium-ion batteries within the next decade, the rest of graphite’s uses aren’t going away and will need to be supplied as well.

Source: USGS

A recently published research report found that the global lithium-ion battery market is expected to grow at a CAGR of 15% from 2020 to 2026. Roskill, a critical minerals intelligence provider, last year found that demand for graphite in batteries could grow by 19% per year by 2029.

Batteries for electric vehicles represent a large chunk of future energy storage demand. Wood Mackenzie has crunched the numbers, stating that EV sales are expected to top a combined 7 million a year in the three main markets of China, Europe and the US by 2025. As sticker prices fall, the firm predicts sales will double to a combined 15 million a year by 2030.

Projecting further out, Wood Mackenzie says by 2047 battery electric vehicles, plug-in hybrids and fuel cell vehicles will combine to eclipse sales of internal combustion engine (ICE) light duty vehicles. By 2050, Woodmac expects EV sales to reach 62 million units per year, and there to be a global EV stock of 700 million. That compares to an estimated billion-plus passenger cars on global roads today.

The White House reportedly told US automakers it wants them to back a voluntary pledge to make at least 40% of new vehicles electric by 2030.

We can already see the amount of graphite demanded by batteries is growing rapidly. According to MINING.com’s EV Metal Index, In April 2021, just over 14,000 tonnes of synthetic and natural graphite were deployed globally in batteries of all newly-sold passenger EVs combined, a 233% jump over the same month last year. 

Will there be enough mined graphite to meet the demand? We can answer this question in a couple of ways. If we take Woodmac’s prediction of 15 million EVs by 2030, the amount of graphite demanded is found by simply multiplying 15 million EVs X an average 70 kg/ 154 lb of graphite per EV (85 kg/ 187 lb is the amount of graphite in a Tesla Model S battery). Already this is approaching the world’s current mined graphite production of 1.1Mt and we haven’t included the graphite tonnage needed for consumer/ military electronics, two-wheeled electric vehicles, buses, trucks, electric planes and trains. Wood Mackenzie predicts that annual commercial EV sales are expected to hit 3 million by 2025 and triple to 9 million by 2030. Batteries for electric vans, trucks, planes, trains and buses are obviously far larger than passenger vehicles and require more graphite.

The 1.150 million tonnes of graphite demanded for 15 million EVs also leaves out all the graphite that will be needed for graphite for vanadium redox batteries used for large-scale energy storage. These batteries, which are the size of a house, will require “copious quantities of graphite felt,” states a 2016 article by The Northern Miner.

Graphite supply is going to be a major obstacle to the kind of EV market penetration Wood Mackenzie and other are predicting.

Tesla global unit production Q1 2016 to Q2 2021

Tesla produced just shy of 510,000 vehicles in 2020, a 39.5 percent increase on the company’s stellar 2019, which had been driven to a large extent by Model 3 production and sales figures. This is only one company. What about all the other EV manufacturers needing to install batteries containing graphite?

By 2025 global installed battery production capacity is expected to increase by over 300%.

In the United States, there are a number of battery plants in the works to join Tesla, whose first gigafactory in Nevada started production of battery cells in 2017. The company has a plant in Buffalo, New York, and plans to open a third (US plant) in Texas by the end of this year. Tesla also has a “pilot line” at its facility in Fremont, California, for R&D technologies.

In 2020 General Motors announced plans to install its first battery cell factory in Ohio, a project called Ultium Cells launched with its Korean partner LG Chem. The latter opened a plant in Holland, Michigan in 2013.

Another South Korean company, SK Innovation, is planning on opening the first of two battery plants in Georgia this year; the company is a supplier to Volkswagen and Ford.

The latter along with American auto icon GM have big plans to electrify their fleets. Ford announced plans to boost spending on electrification by more than a third, and aims to have 40% of its global volume electric by 2030, which translates to more than 1.5 million EVs based on last year’s sales.

GM reportedly aspires to halt all sales of gas-powered vehicles by 2035, with plans to invest $27 billion in electric and autonomous vehicles over the next five years.

There are currently 11 EV start-ups racing to catch up with market leader Tesla, fueled by money from Wall Street. They include Rivian out of Irvine, California, Lucid Motors based in Newark, CA, Lordstown Motors from Ohio, Nikola Corp (Phoenix), Fisker (Los Angeles), Faraday & Future (Los Angeles), Canoo (Torrance), NIO, Li Auto and XPing from China, and Arrival, based in London.

Where is all of this extra graphite going to come from?

As important and valuable as graphite is, the US currently has no domestic production of the mineral, which means all the graphite it uses to build EV batteries come via imports, and that amount is growing year by year – about 40,000 tonnes of graphite material were imported in 2020. 

Meanwhile, its biggest rival China is by far the world’s biggest producer, with 650,000 tonnes of mined graphite recorded in 2020, representing nearly 60% of the world’s total. After China, the next leading graphite producers are Mozambique, Brazil, Madagascar and India.

Only 12,000 tonnes a year is being mined from two existing facilities in Canada, leaving plenty of opportunity for newcomers.

Conclusion

The need for lithium batteries not only for EVs, but energy storage, handheld tools like drills, vacuums, cell phones and laptops, is almost certain to outstrip supply. The lithium-ion battery manufacturing capacity currently under construction would require flake graphite production to double by 2025. 

Only flake graphite, upgradeable to 95.95% purity, can be used as anode material in a lithium-ion battery.

According to MINING.com’s EV Metal Index, graphite prices have held steady above $700 a tonne in 2021, after hitting a low of $644/t last September.

The bullish market forces that are swirling in preparation for what many are calling the next commodities super-cycle, are excellent news for companies on the hunt for minerals that support the electrification of the transportation system, the decarbonization of energy sources, and new spending on infrastructure, both green and traditional/ blacktop.

Lomiko Metals just released a PEA on its La Loutre graphite project in Quebec, a major milestone in the path to production. The market rewarded Lomiko with a 16% bump in the share price and I expect continued momentum as Lomiko drills off more resources, extends the mine life and makes the economics even more attractive.

Lomiko Metals Inc.
TSXV:LMR, OTC:LMRMF, Frankfurt:DH8C
Cdn$0.14, 2021.07.30
Shares Outstanding 76.5m
Market cap Cdn$30.1m
LMR website

Richard (Rick) Mills
aheadoftheherd.com
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Evergrande weighing on Asian markets

China equities bashed on return to work Wall Street had a very noisy and choppy session overnight, buffeted by an impending FOMC, Evergrande, slowing growth…

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China equities bashed on return to work

Wall Street had a very noisy and choppy session overnight, buffeted by an impending FOMC, Evergrande, slowing growth prospects, Covid-19, the US debt ceiling, and the future of the Democrat’s $3.5 trillion spending bill; chose your crisis. When the dust settled, a few day traders were probably licking wounds, but the main indexes closed not too far from where they finished the day before. The S&P 500 closed just 0.08% lower, the Nasdaq rose 0.22% in a tech-safety play, and the Dow Jones edged 0.14% lower. US futures are almost unchanged in Asia, erring to the heavy side.

 

The return of Mainland China markets hasn’t been a happy one. Despite a CNY 100 bio liquidity injection from the PBOC, and news that a local Evergrande unit will make a local bond coupon payment tomorrow, equity markets have headed south. Evergrande is due to also make an offshore coupon payment tomorrow and there has been no word on whether this will happen, and that could be keeping local equities subdued. The Shanghai Composite has fallen by 1.90% today as Evergrande contagion fears take centre stage. The CSI 300 is 1.10% lower while Hong Kong markets are closed for a public holiday.

The negative day for China has spilled over to regional markets. The Nikkei 225 is 0.50% lower after the BOJ left policy unchanged. After two days of holidays, South Korea remains closed, but Taipei is playing catchup after a return from holidays, the TAIEX slumping by 2.20%. Singapore is 0.60% lower while Kuala Lumpur is down 0.40% while Jakarta is bucking the trend, helped by rebounding commodity and energy prices, rising 0.90%.

Rebounds in iron ore and copper, along with surging energy prices has lifted Australian markets by mid-session, after a slow start. The Evergrande local unit coupon payment news has also lifted sentiment, although Australian markets, seizing on any snippet of good news could be getting ahead of themselves, as no news has emerged on whether an offshore coupon, also due tomorrow, will be paid. Nevertheless, Australian markets are now solidly in the green, the ASX 200 jumping higher by 0.70%, and the All Ordinaries rallying 0.90%.

Given the neutral finish by Wall Street, and the negative tone pervading Asia, and with the FOMC to come later today, European stocks are likely to adopt a cautious stance this afternoon, remaining vulnerable to negative headlines emanating from China. The increasing noise surrounding the gas price rally is also likely to dampen spirits in today’s session.

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Precious Metals

Selloff Puts All Eyes on the Fed

Looking for a dovish Fed … the crypto sector suffers another drawdown … will gold ever register a pulse?

Tomorrow, all eyes are on the Fed.
It’s…

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Looking for a dovish Fed … the crypto sector suffers another drawdown … will gold ever register a pulse?

Tomorrow, all eyes are on the Fed.

It’s the most anticipated Fed announcement in recent memory. Investors are expecting hints about the timing and scope of a Fed bond-purchase tapering.

Economists surveyed by Bloomberg expect the November meeting is when we’ll get a formal announcement on the Fed reducing its monthly purchases of $80B of Treasurys and $40B mortgage-backed securities.

Of the 52 economists surveyed, two-thirds expect November. More than half of them believe the taper will begin in December.

But as we noted in yesterday’s Digest, Louis Navellier believes we’ll get more information tomorrow, which will calm markets.

From Louis’ Platinum Growth Club Flash Alert yesterday:

I am expecting a dovish statement.

I am expecting the Fed will clarify that they will begin tapering.

But it’s probably just going to be a mini-taper, not a big one. And so, I think it will be interpreted as dovish, and the market will rally.

***Louis isn’t the only one expecting a dovish Fed

Our hypergrowth expert, Luke Lango, also expects the Fed will tell the market what it wants to hear, resulting in a late-week rebound.

Interestingly, Luke points toward yesterday’s volatility as a clear signal to Federal Reserve Chairman, Jay Powell.

From Luke’s latest update of Hypergrowth Investing:

The Fed is slated to meet today and tomorrow to discuss monetary policy. Many Fed members have voiced a hawkish tone ahead of that meeting, advocating for some tightening via a tapering of asset purchases.

Wall Street is braced for this – investors are largely “OK” with a gradual and smooth taper.

But Wall Street doesn’t want anything more, and they’re letting the Fed know by selling stocks ahead of the meeting, basically saying: “Hey, Fed, if you tighten more aggressively than you’ve signaled, the stock market’s going to collapse, and the whole world is going to blame you.”

It’s a warning shot.

And it’ll work.

Luke believes that today and tomorrow could be choppy in the markets. But tomorrow at 2 p.m. ET, Powell will take the stage. Luke anticipates he will announce a taper, while delivering it in an ultra-dovish tone – pleasing the markets.

That will lead to a market rebound to close out the week.

***If you follow the money-flows, U.S. investors are also expecting this “Wall-Street-friendly” Fed

From Seeking Alpha:

The market is seeing a “monster reallocation cash-to-stocks as tax redistribution threat recedes & Fed expected to remain Wall St-friendly (liquidity easiest since Jul’07),” Michael Hartnett, BofA chief investment strategist, wrote in the “Flow Show” note on Friday.

How big is this reallocation?

Last week, investors dumped cash in favor of stocks at the greatest pace of the entire year. The outflows from money market funds registered $43.5 billion, the biggest of 2021, according to Refinitiv Lipper.

It also marked the largest inflow into U.S. large-cap funds ever. It was $28.3 billion, to be exact. Growth funds saw nearly $7 billion, with small-caps getting $4.2 billion.

So, the results of tomorrow’s FOMC meeting could be a market-mover. We’ll let you know how it goes here in the Digest.

***Stocks aren’t the only asset class in the red recently – the crypto sector has been suffering a sell-off

It feels like bitcoin and the crypto sector had finally begun turning the corner after the 50%+ drop from the spring. That was, until a flash crash from two weeks ago ushered in more weakness.

Yesterday’s multi-asset class selloff hit crypto as well.

From Forbes:

Cryptocurrency prices plunged Monday morning during a widespread market sell-off sparked by concerns of a potentially catastrophic debt default in China, pushing many of the world’s largest digital currencies to their lowest levels in more than a month.

The value of the world’s cryptocurrencies plunged to a low of less than $1.9 trillion by 8:45 a.m. EDT on Monday, nearly 11% less than 24 hours prior and reflecting a loss of more than $250 billion, according to crypto-data website CoinMarketCap.

Pullbacks like this are never fun to sit through, but they’re not unusual. So, it’s critical to avoid interpreting “temporary weakness” as a sign of “impending doom.” This is just standard crypto volatility.

Luke, who is also our crypto specialist, echoed this same point in his Saturday update of Ultimate Crypto. And this was before yesterday’s sector weakness.

After highlighting bullish adoption news about several holdings in the Ultimate Crypto portfolio, Luke wrote:

That’s not to say we won’t get a big sell-off here soon. We may.

That’s what cryptos do – from time to time, they plunge.

But it is to say that consumer adoption is progressing at breakneck speed, and consumer adoption will ultimately determine the long-term price trajectory of cryptos.

That’s why we’re more bullish than ever, and why we will be huge buyers on any future plunges in cryptos.

By the way, if you missed it, last week, Luke sat down with fellow crypto expert, Charlie Shrem, to discuss the huge opportunities in the crypto sector.

In short, they believe a new massive crypto bull market is forming, and certain cryptos are likely to go parabolic. Weakness like we’re seeing right now is offering investors greatly-discounted entry prices to top-tier cryptos.

If you’ve been looking for a time to begin a crypto portfolio, this is a good opportunity. To watch the free replay of Luke and Charlie’s event, just click here.

***Meanwhile, even with stocks and cryptos down and anxieties up, gold still can’t catch a bid

There was a time when steep selloffs in stocks and other asset classes would frighten investors, resulting in huge inflows into the “chaos hedge” of gold.

Though that time may return, it’s not here right now.

Yesterday, as all three major stock indexes dropped more than 2%, gold yawned, barely inching higher (and silver actually lost 0.6%).

Our macro specialist and the editor of Investment Report, Eric Fry, put a poetic spin on this…

The yellow metal is barely registering a pulse at the moment. Most of the wax figures inside Madame Tussauds museum seem more vibrant and lifelike.

But the thing about gold is it tends to come back from the grave at the exact moment that dejected investors finally leave it for dead.

Back to Eric:

After gold’s decade-long dormancy from 1991 to 2001, for example, it suddenly sprung to life and soared 500% over the ensuing decade.

More recently, the gold price drifted 40% lower during the seven-year span from 2011 to 2018. But then it revived once again and rallied as much as 70% from its 2018 low.

That rally was probably the first phase of what will become a much bigger move. Now that the gold price has spent more than a year going nowhere, it has gained plenty of rest for its next major move higher.

Frankly, the pessimism has grown so intense that gold is beginning to resemble a dream-trade for a contrarian investor.

Back to Eric to put some numbers on this:

Most folks want little to do with gold at the moment.

On a net basis, investors have withdrawn more than $15 billion from the SPDR Gold Shares ETF (GLD) during the last 12 months. That’s the most rapid and sizable retreat from this gold fund since 2013.

To summarize today’s approximate investor attitudes, they like stocks, adore cryptos, and feel sorry for gold and silver.

“Both metals are suffering from a complete lack of investor interest,” griped Ole Hansen, head of commodity strategy at Saxo Bank A/S, during Thursday’s abrupt selloff.

But remember, there are two macro factors in gold’s corner – inflation and soaring government debt.

Eric notes that the 12-month federal deficit stands at $2.8 trillion…which is a whopping 12.5% of U.S. GDP. Meanwhile, the six-month average U.S. inflation rate is hitting levels not seen in 30 years.

Back to Eric:

Historically, great, big governments deficits, coupled with great, big inflation readings, trigger great, big gold rallies.

Perhaps this time is different. But there’s a reason why many seasoned investors say that “This time is different” is the most expensive phrase in finance.

Because it is…

We’ll keep checking for a pulse here in the Digest and will let you know.

See you back here tomorrow for the post-mortem on the Fed announcement.

Have a good evening,

Jeff Remsburg

The post Selloff Puts All Eyes on the Fed appeared first on InvestorPlace.

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Gungnir up 42% on Swedish Nickel Drilling News

Gungnir Resources Inc. [GUG-TSXV, ASWRF-OTC PINK] shares rallied in active trading Tuesday after the company…

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Gungnir Resources Inc. [GUG-TSXV, ASWRF-OTC PINK] shares rallied in active trading Tuesday after the company released additional high-grade nickel results from continuing drilling at its Lappvattnet nickel deposit in Sweden.

Tuesday’s results are expedited assays from hole LAP21-05, located 40 metres along strike from hole LAP21-02, which intersected 3.19% nickel over 4.25 metres.

Drilling highlights from hole LAP21-05 include 2.62% nickel over 5.65 metres within a 14.00-metre interval, grading 1.40% nickel. This drill hole returned high-grade nickel intercepts less than 60 metres below surface.

Gungnir shares advanced on the news, rising 41.6% or $0.05 to 17 cents on volume of 3.68 million. The shares are currently trading in a 52-week range of 13 cents and $0.04.

The Pappvattnet and Rormyrberget nickel deposits are located in the eastern part of the Vasterbotten District, 60 kilometres and 100 kilometres respectively east of the company’s Knaften gold exploration project. The deposits are held 100% by Gungnir under two separate permits covering an area of 471.3 hectares. The properties are accessible year-round with good transportation and industrial infrastructure, including shipping facilities as there are a number of active mines in the area.

They collectively host 177 million pounds of nickel in inferred resources based on NI-43-101-compliant estimates by Gungnir in 2020

The deposits were discovered in the 1970s by the Swedish State Mining Property Commission and were subsequently held by Outokumpu Mining.  Exploration included geophysical surveying, extensive drilling (35,000 metres), metallurgical test work as well as development of an exploration shaft and drifting on the 120-metre level at the Lappvattnet deposit and initial resource estimates for both deposits in 1987.

The deposits came open for staking following exploration work by North Atlantic Resources (NAN), a company owned by Lundin Mining Corp. [LUN-TSX; LUMI-Sweden], and Blackstone Ventures Inc., under an option agreement with NAN in 2006. Gungnir submitted applications to acquire both deposits in 2015.

The Lappvattnet and Rormyrberget deposits are both magmatic nickel sulphide accumulations with tectonic, structural, and geological similarities to documented nickel and copper mines. The Lappvattnet deposit is largely a massive sulphide body that dips steeply to the south and plunges shallowly eastward.

Mineralization at Rormyrberget consists of both massive sulphide and wider disseminated zones.

Lappvattnet contains an inferred resource of 780,000 tonnes of grade 1.35% nickel or 231 million pounds of nickel. Rormyrberget hosts an inferred resource of 36.8 million tonnes of grade 0.19% nickel or 154 million pounds.

Drilling continues with tighter spaced holes at the shallow western part of the Lappvattnet deposit, with a current plan of 15 drill holes covering a strike length of approximately 140 metres.

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