Crowflight Minerals (CML.TSXV) heading out the gate
Near-term nickel miner Crowflight Minerals (CML.TSX Venture Exchange) looks set to go. The stock was up $0.04 to $0.62 Cdn today today, probably on speculation that the Canadian goverment will issue a full mining permit for its wholly-owned Bucko Lake project in Manitoba’s Thompson Nickel Belt (TNB).
A few weeks ago it hired a general contractor to prepare the underground workings at Bucko Lake, a precursor to building a mine.
Crowflight is one of the biggest landholders in the TNB, along with Xstrata plc (nee Falconbridge). Earlier this month the company confirmed it had permission in principle from environmental regulators in the province of Manitoba to proceed, paving the way for a mining licence from the federal government.
Bucko Lake will generate a 23.9% rate of return with a net present value of $22.6 million, based on at an average life-of-mine nickel price of US$5.00 per pound.
Those figures increase to 41.6% and $53.1 million respectively with an average nickel price of $6 per pound. Also, subsequent drilling at Bucko Lake has added 32% to the indicated resource category.
What will impact the stock price in a positive way will be final approval from Canada’s federal government and the proving up of those additional resources.
Some investors are a little skittish about the environmental impact of using the shallow Bucko Lake for a tailings pond, but I think it’s a slam dunk. The Tories are in Ottawa, at least for now, and the feds have always been bullish on mining anyway.
Canada isn’t quite the tree hugging paradise the world perceives it to be. I remember when the federal government approved a molybdenum mine in British Columbia that ran its tailings into the sea, wiping out a First Nations crab fishery.
In 1981 it cast the deciding vote that resulted in a raised quota for whale hunting at the international Law of the Sea Conference.
Politicans in Ottawa love to create jobs in the country’s far flung regions.
Oh and by the way, it looks like 2007 will be an election year in Canada.
admin on March 21st 2007 in Commodity investing, Molybdenum
