Rick Rule Canada Nickel Company CNC-X RISKY Jul 19, 2024

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The results from the last quarter were good. There are positive indicators overall in terms of good metallurgy and consistencies to other zones. Progressing well. A good small cap metal play with good momentum. Unlock Premium - Try 5i Free

CNC recently confirmed widespread mineralization at its Mann Northwest property, confirming its discovery. But this was more or less assumed, anyway, from the company's earlier announcements in July. We would certainly keep it in the 'speculative' category. But it has a large deposit in a safe jurisdiction, and as the stock drifts lower it does become more interesting for small cap sector players. 
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Near term, the nickel market will continue to be depressed. The market will turn 4-5 years from now. Not the lowest-cost producer, but will enjoy market favour because it's a Canadian company. Expects it to do well.

CEO has a glorious history in the space. Caught up in nickel prices. For things to hum, need nickel in $12-15 range. General malaise in nickel, despite excitement around energy transition. ESG agenda. 

CNC is a small ($205M market cap) nickel miner. Nickel as a commodity is expected to be in a shortage over the mid to long-term with minimal supply growth outside of China and Indonesia. It is pre-revenue and issues shares to fund its operations. It has a decent balance sheet, with minimal debt and a good equity balance. We think it looks interesting if one is looking for exposure to nickel, but its share price has been in a downtrend since 2021, and until that trend reverses, we would likely expect more downside pressure on its share price.
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