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Company Summary Informational Purpose
Base Metal Mining
Nickel Rock Resources Inc. (TSXV: NICL; OTCQB: NIKLF; FRA: NMK2)
Diversified Green Metal Mineral Exploration and Development Company
Nickel Rock Resources, Inc. (“the Company”) is a mineral exploration and development company with assets in both
Canada and the United States in multiple locations contained diverse metal resources. With the rising demand for
electric vehicles (EV) batteries and climate change initiatives, the expectation for “green metal” mineral demand and
for the mining industry has climbed to a record high. The United States, European Community, and China all have
decarbonization plans that require large supplies of these “green metals”, which include nickel and lithium. As a
mining exploration and development company, Nickel Rock Resources, Inc. has in development several resources to
address the expanding needs of these “green metals”. Nickel Rock has positioned itself in the center of this mining
revolution as a Company with several unique investment characteristics, including the following:
• Consistent Corporate Philosophy: The Company not only mines
“green” metals but also calls for the green working environment.
The office is small, modest but modern with minimum amount
usage of non-renewable resources. The Company encourage their
employees to work remotely to decrease the carbon emissions, and,
at the same time, increase the shareholders’ value
• Large Potential Market: The Company is focused on the
exploration of Nickel and Lithium, which are widely used in
batteries for electric vehicles (EV). To date, a larger global battery
metals market is forecasted by the rising demand from the EV
industry. According to the International Energy Agency Global EV
Outlook 2020, by the year 2030, the demand for EV batteries will
increase by more than 900% compared to today. From the
perspective of the government, U.S President Joseph Biden’s
climate change plan promises $2 trillion investment in clean energy
and has been showing his support of the development of domestic
production of EV batteries. • Diversification to Minimize Risks: The Company operates mining assets in Canada, USA and Germany. They are
holding multiple high-valued base metal resources. Besides nickel and lithium, the properties have shown the
occurrence of awaruite. Multiple countries with different metals help the Company to minimize the country risks and
pricing risks.
• Clear Competitive Advantages and Environmental Advantages: The Company is managing abundant resources
in a mining-friendly environment. British Columbia, Canada is one of the most suitable places for metal mining with
the most skilled laborers and equipment. Moreover, The Company is running under mining-friendly jurisdiction in
Nevada, USA. The locations of the Company’s projects are all adjoining the world-renowned projects such as the
FPX Nickel Baptiste project in British Columbia, which are documented as Tier-1 assets with sizable ore bodies. As
for the lithium project, the property in Clayton Valley based in Nevada is neighboring the only major lithium brine
mining area in North America, adjoining the large Silver Peak Lithium Project of Albermarle Corp (NYSE: ALB).
• High Stock Liquidity and Solid Capital Market Foundation: The Company has 53.5 million shares outstanding
with a market valuation of only US$12.3 million and C$1.4 million of cash in the Treasury. This low valuation is
despite the multiple assets that span multiple countries and multiple metals. The average daily trading volume is
averaging US$531,814 per day providing trading liquidity for investors looking for a speculative mining play.
Stock Data
Price (3/29/21 on OTCQB) $0.23 Market Cap $12.31
52-Week Range $0.035-$1.51
Shares Outstanding 53.50M Average Daily (30 Day) Volume 531,814 Short Interest 3,256 Fiscal Year-End June 30
Balance Sheet (C$ million)
2020* 2019 2018 Cash $1.41 $0.71 $1.10 Working Capital $1.37 $0.61 $1.01 All figures in US$ unless noted with C$ *Ended December 31
Source: www.otcmarkets.com
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COMPANY OVERVIEW
Nickel Rock Resource, Inc. is a Canadian-based mineral exploration and development company that is managing
several mineral resources located in North America and Europe. The Company was founded in 2011 and was formerly
known as “Nevada Energy Metals, Inc”. On Nov. 9, 2020, the Company announced a name change to its current name
“Nickel Rock Resources, Inc.” The head office is located at Suite 1220, 789 West Pender Street, Vancouver, British
Columbia, V6C 1H2. The Company is listed on numerous stock exchanges such as on the TSX Venture Exchange
(TSXV: NICL), on the OTCQB Venture Market (OTCQB: NIKLF), and on the Frankfurt Stock Exchange (FRA:
NMK2). It is of the few TSXV mining companies that have resources in both nickel and lithium. In the upcoming
years, the Company will focus on the exploration and development of nickel projects in British Columbia and lithium
projects in the USA.
The Canadian property is at an early stage of mining the resource, with the occurrence of metal in the claims being
various and abundant. Canada is one of the largest regions in the race to develop efficient and productive EV batteries.
There are considerable investment opportunities in both mining and battery manufacturing. Many skilled mining
specialists and technical batteries specialists are based in the country creating an industry foundation that is developing
an exhaustive and sustainable supply chain. Canada has abundant base metal resources such as lithium, nickel,
graphite, and cobalt, which are the key components of batteries. Thus, Canada is becoming one of the top players in
the world for green metal mine exploration and for EV battery development. The Company has focused their business
on base metals like Nickel and Lithium, to take advantage of this important global trend in the rapidly growing Electric
Vehicle (EV) Market.
Recently, the Company has been actively expanding its property portfolio, which currently has more than 8 claims.
Those expanded areas all contain highly elevated values of nickel, cobalt, and chromium. Currently, the Company is
focused on and is running four major non-contiguous Nickel projects in Canada: (i) Hard Nickel 3, (ii) Hard Nickel
4, (iii) Hard Nickel Center (iv) Nickel 100 Group, and the company has another major Lithium project called Clayton
Valley Lithium Project in Nevada. None of the projects of the Company has any known environmental liabilities or
exploration permits in arrears. The upcoming milestones include:
i) Creation of the G.I.S exploration data compilation project for the Nickel Project
ii) Developing 3-D GPS co-ordinates for selected data locations
iii) Commencement of reverse circulation drilling for Lithium Project in Nevada
Management Team:
The global effort to exploit the resources is being led and managed by a very capable management team of mining
experts and financing specialists with many years of mining experience with major industry players:
➢ Robert Setter – President & CEO & Director: Mr. Setter is the former Senior Financial Editor for Report
on Mining and has been consulting with publicly trading companies for over a decade. In addition to Fuse,
he also sits on the boards of two other listed mining companies and holds a degree from University of British
Columbia (UBC). Since 2000, he has held several key positions including Research Manager, Corporate
Research and Analytics and has been involved in the launch of dozens of new enterprises assisting with
financing, cash flow forecasting, strategic client acquisition and planning. Mr. Setter brings over two decades
of business development, marketing and resource experience to the Company.
➢ Ali H. Alizadeh – Director: Mr. Hassan Alizadeh is a senior geologist possessing extensive experience in
mineral exploration & project management. He graduated with a Geology degree in 1991 a M.Sc. in Petrology
in 1995 and an MBA at Queen’s University in 2010. Building on his experiences as Project Geologist &
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➢ Project Manager, Ali has been responsible for a number of Uranium, Gold and Base Metal projects during
his exploration career with various exploration companies. Ali is a member of the Association of Professional
Engineers and Geoscientists of British Columbia.
➢ Alan Morris - Geological Advisor: Mr. Morris is owner of Ruby Mountain GIS, founded in 2003 and
specializing in property and project evaluations and acquisitions. He has over 37 years of experience in the
minerals industry, exploring for precious and base metals, uranium, lithium and other minerals in a variety of
geologic environments, with an emphasis in the western U.S., particularly Nevada, Alaska, and Yukon,
Canada. His experience with lithium brine deposits in western Nevada dates from 2010. He has held
exploration geologist positions at various companies during his career, including Gulf Mineral Resources
Corp., Fischer Watt Mining Company, Barrick Gold Exploration, Placer Dome Corp., Agnico-Eagle Mines
Ltd., U.S. Gold Corp. (McEwen Mining), and Kinross Gold Corp. Mr. Morris has supervised numerous
generative and drilling projects including planning, budgeting, permitting, contract administration,
reclamation, and reporting. Mr. Morris is a Certified Professional Geologist with the American Institute of
Professional Geologists (AIPG), a Licensed Geologist in the state of Utah, USA, and a Registered
Professional Geologist in the State of Alaska, USA. Mr. Morris is a fellow with the Society of Economic
Geologists, a member and past officer of the Geological Society of Nevada, and a member of the Nevada
Mineral Exploration Coalition.
➢ Ursula Mowat - Geological Advisor: In 2015, Mr. Mowat, along with Peter Bradshaw and Ron Britten of
FPX Nickel Inc, was the recipient of the H.H. “Spud” Huestis Award for excellence in prospecting and
mineral exploration in recognition of their efforts in identifying and commencing development of a new type
of nickel deposit exemplified by the Decar project in central British Columbia. It is rare to identify a new
deposit type and even more unusual to then become the first to significantly advance one. Ms. Mowat, after
graduating from the university of British Columbia with a B.Sc. in geology and then working for several
mining companies, turned to prospecting in the Mount Sidney Williams area. She acquired claims in 1986,
which she then option portions of the ground to junior companies exploring for gold over the next decade.
Aware of the potential for chromite, nickel and platinum group elements, Ms. Mowat noted that petrographic
PhD work from Peter Whittaker indicated the presence of natural occurring nickel-iron alloy called awaruite
in several samples. By honoring her with this award it recognized her part in the discovery of an important
and unique, bulk tonnage, low-grade nickel deposit.
➢ Bill Morton, MSc. P.GEO - Geological Advisor: Mr. Morton has an impressive 40+ years in the fields
of mining and geoscience, and nearly 20 years in a senior management position for public resource
companies. He has been involved with several major metal exploration projects across Canada, the USA, and
in Mexico. Bill is a member of APEGBC and holds or has held director positions for Eastfield Resources
Ltd., Lorrain Copper Corp., Cariboo Rose Resources Ltd., and Consolidated Woodjam Copper Corp. Bill has
his B.Sc. from Carleton University, and completed his graduate studies from UBC.
➢ J. Malcolm Bell -Geological Advisor: Mr. J. Malcolm Bell has over 50 years of industry experience either
as principal, senior officer, or director. In 1980, he founded Hi-Tec Resource Management Ltd., a minerals
exploration company providing geological consulting services in Western Canada, the Yukon and the North
West Territories. In 1986, he founded the International Investment and Business Opportunities Exposition,
the first trade show company in Vancouver that provided private public companies the opportunity to
showcase themselves to an international audience. In 1997, he co-founded British Canadian Mines Ltd., the
largest privately held mineral exploration company in Newfoundland, and subsequently completed a $13-
million reverse merger into publicly traded Canaco Resources Ltd. In 2002, he helped negotiate a $20-million
merger between Olympic Resources and Whittier Energy Corp., and in 2003, he co-founded PB Energy
Partners, an oil and gas exploration partnership. Currently, Mr. Bell is the managing director of Malcolm Bell
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& Associates Ltd., a private Vancouver, B.C., In addition to activities in mineral exploration in North and
south America the Company arranges and sources capital for private and public companies engaged in
mining, renewable energy and technology ventures.
➢ Jacques Houle, P. Eng. - QP & Geological Advisor: With 42 years of experience in exploration and
mining industry, including 13 years at management level, Mr. Houle has 5 years of U/G mine geology, 3
years with government, and 17 years as an independent consultant and QP.
➢ Jay Oness – Director: Mr. Oness has extensive experience in all aspects of corporate management with
particular strengths in strategic planning, business development & investor relations for public companies.
He has served as a Director, senior executive and consultant to public companies in resource and non-resource
sectors over a successful 20-year career. He is currently VP, Business/Corporate Development of Southern
Silver Exploration Corp.
➢ Konstantin Lichtenwald – CFP: Mr. Lichtenwald specializes in providing corporate finance, valuation,
taxation, financial reporting, consulting and other accounting services to both small businesses as well as
public commodity resource companies. He also assists in many aspects of clients’ administration, financing
and other activities. Mr. Lichtenwald also worked at Ernst & Young GmbH, Germany, in the assurance
department. He earned his Bachelor of Business Administration from Pforzheim University, Germany, and
holds the professional designation of chartered professional accountant (CPA, CGA), and he is a member of
Chartered Professional Accountants of British Columbia and Canada. Mr. Lichtenwald has had extensive
experience as a controller and CFO of numerous publicly traded and private corporations in several industries.
➢ Tina Whyte - Corporate Secretary: Tina Whyte brings over 20 years of experience in the corporate and
securities industry. Her expertise spans to areas of corporate governance, continuous disclosure, financing
transactions and regulatory filings and compliance. Ms. Whyte holds corporate secretary positions with other
publicly listed companies.
➢ Bill Macdonald - Legal Advisor: Mr. Macdonald is a founder and principal of Macdonald Tuskey,
Corporate and Securities Lawyers, a boutique securities and corporate finance firm located in Vancouver,
British Columbia established in April 2008. Prior thereto, from February 1998 to April 2008, Mr. Macdonald
was a partner with Clark Wilson LLP and a member of the firm’s Corporate Finance / Securities Practice
Group. Since May 2008 Mr. Macdonald has been a director of Blackbird Energy Inc., an oil and gas
exploration company listed on the Exchange and was also the President of Blackbird from May 2008 until
February 2013. In addition, Mr. Macdonald currently serves as a director of Viscount Mining Corp., a position
he has held since October 2011, a director of Patriot Petroleum Corp. since December 2015 and a director
and founder of Black Lion Capital Corp. since its inception on January 20, 2015. Mr. Macdonald was also
previously a director of First Americas Gold Corporation, formerly Pannonia Ventures Corp. and Benz
Capital Corp. Mr. Macdonald has been a member of the Law Society of British Columbia since February
1998 and a member of the New York State Bar since February 2002.
The Company has hired many specialists and advisors that will lead the Company from successful exploration to
production creating tremendous shareholders value.
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ELECTRIC VEHICLES INDUSTRY OUTLOOK
There is a consensus worldwide that the evolution from fossil fuels to renewable energy will cause a striking increase
on the demand for green metals and minerals. The development of green energy and decarbonization already has
strong momentum in 2021. The new US administration climate change plan promises a $2 trillion investment in clean
energy and the European Commission backed a Green Deal in December 2019 intending to meet net-zero carbon
emission by 2050. As the biggest U.S vehicle market, California has announced that the state intends to make EV
entirely replace the usage of fossil-fuel cars by 2035. According to International Energy Agency (IEA), the number
of electric vehicles is expected to increase from 5 million units today to 140 million units in 2030. The increasing
demand of the EV industry will activate the rising future demand of key “green” metals and energy metal miners like
Nickel Rock Resources.
For now, the mining capacity of green metals cannot meet the rising demand since demand of nickel is expected to
increase by 14x and that of lithium is expected to increase by 9x in the next 10 years, according to Bloomberg NEF.
Thus, mining those base metals under the regulation of environmental protection will be the key trend in the next 10
years. With the large potential market and the Company’s strong property portfolio, the Company has a bright future
for developing its assets that contains such abundant battery metals’ resources.
Before the growth of EV market, nickel and lithium were necessary elements in other markets. As for nickel, the
primary use is in the manufacturing of stainless steel to increase the corrosion and resistance of the product. The
stainless-steel market is already a large market with a stable demand growth rate. According to Precedence Research,
the market size of stainless steel will climb to approximately $168.24 billion by 2027, a 3% annual compounded rate.
As for lithium, it is used extensively in the medical industry and in glass manufacturing. As a key element to treat
mental illness, lithium can be used to cure mood disorders, such as mania, depression, and bipolar disorder. In glass
production, lithium helps increase the melt rate of glass.
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NICKEL MARKET PERFORMANCE
Nickel is a chemical element that is often found in some of the world’s most inhospitable places and found in regions
with a small amount. The metal is inevitable and irreplaceable in modern technologies, especially in the production
of electric vehicle (EV) batteries. Nickel usage in battery technologies has been climbing steadily and now constitutes
46% of the cost of an EV battery. Treasured for its higher energy density and greater storage capacity with a lower
cost than other metals, Nickel is becoming even more important in the manufacturing of the EV battery. While the
cathode on the original EV battery contained equal parts of nickel, cobalt, and manganese, nowadays the cathode
contains eight parts of nickel to each one of the other two metals. As an example, the Volkswagen Group’s usage of
nickel has increased 1198% during the 2018 to 2020 period, which is the largest rise among all other raw materials in
their EVs, according to their press release.
As for prices, from 2011 to 2015 the price of Nickel declined in price. As a natural response, many of the mining
companies transferred their properties from North America to low-cost regions, less environmentally sensitive Asia
and Africa which has driven a decrease in the domestic supply chain in Canada and in the United States. Fortunately,
during 2016, the market started to recover and has continued to grow. Recently, the price of nickel climbed close to
the five-year peak, despite the Coronavirus pandemic’s impact on global economic growth (see the 1-year Nickel
Price chart below).
Source: www.nickelrockresources.com
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Recently, the largest nickel mining area in the world, Indonesia, has banned the export of nickel to preserve the
environment and to control domestic supplies, which brought in a rise in nickel prices in 2020. While a few players
announced new projects, not all of the Nickel mined is suitable for battery productions. Nickel can be separated into
several categories but only Nickel exploited from sulfide and limonite deposits are usable in the manufacturing of
batteries. According to the article “Nickel Supply Energized by Electric Vehicle” written by Adam Webb, only 49%
of 2017 Nickel supply was usable in the industry. Other Nickel mining is uncompetitive in the market due to the high
cost of production. For now, the occurrence of qualified Nickel in the Company’s properties has been tested and
documented which presents the Company with a competitive advantage.
Given the rise in prices and the widening gap between demand and supply for Nickel, the Canadian government has
started to aggressively push the development of local mining. As one of the few mining companies in Canada, Nickel
Rock Resources has a large potential market in nickel and other minerals. According to the Company’s NI43101
mining resource report, the Company has lucrative claims that with proper development can yield substantial
quantities of minerals. All the scientific information and technical data about the projects of the Company mentioned
in this report are gathered from the National Instrument 43-101 Technical Report (“the Report”) released by the
Company on Jan. 21, 2021.
NICKEL PRICES FROM MARCH 2004 to MARCH 2020
Source: https://markets.businessinsider.com/commodities/nickel-price
LITHIUM MARKET PERFORMANCE
Lithium is a chemical element widely used in prescription medications for mental illnesses and more recently
scientists have found its application in batteries, including those for electric vehicles. Lithium-ion battery are widely
used in commodity electronics and in the military and aerospace sector. The advantages of lithium-ion batteries are
including but are not limited to long durability, high energy density, and cost reduction. Due to its simple atomic
characteristics, lithium-ion makes the batteries rechargeable as the ion and electrons move easily back and forth
between electrodes. This advantage has made the metal crucial to EV battery production. According to the press
release by the Volkswagen Group, the demand of lithium used in the EV battery increased 973% over the 2018 to
2020 period, which is the second highest rise in all cathode raw materials over the 2018.
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ONE YEAR PRICE CHART FOR LITHIUM
Source: https://tradingeconomics.com/commodity/lithium
According to the one-year price chart indicates, there was a price drop last year due to an oversupply of raw materials
given the Coronavirus pandemic. Despite a drop in prices during the Coronavirus pandemic economic slowdown, we
have seen a strong rebound in 2021 for lithium driven by a rise in the value of battery metals in electric vehicles sold
globally. According to Adamas Intelligence which tracks battery capacity of electric vehicles sold, the total battery
capacity of EVs sold during February rose by 107% year-on-year. According to the Benchmark Mineral Intelligence,
lithium prices are expected to continue to surge in 2021 with the rising popularity of Lithium Iron Phosphate (LFP)
batteries for EVs (used in the Tesla Model 3 sold in China). Moreover, Lithium usage in EV batteries will likely
increase its portion of overall battery value (cost) from the current 22%. Scientists forecast that the supply of lithium
will lag far behind the demand, with manufacturers of the EV battery likely to sign long-term contract with the supplier
of those raw materials to ensure a stable supply, which means that the Company will have a stable income by mining
lithium.
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MINING RESOURCES UNDER DEVELOPMENT
Given the rising prices for Nickel and Lithium and an enlarging gap between supply and demand, Nickel Rock has
begun an aggressive development plan. The Company has three priority strategies that we will discuss:
Project 1 - Hard Nickel Group
Property Overview. According to the Company’s NI-43101 report, the Hard Nickel Project is an early-stage
exploration and development project that contains four non-contiguous groups with 11 mineral titles, groups named
Hard Nickel 3, Hard Nickel 4, Hard Nickel Center, and Nickel 100 Groups. The first three groups mentioned above
are referred to as the Hard Nickel Group. The Company made agreements with vendors Malcolm Bell and Ursula
Mowat to gain 100% interest in claim groups, subject to a 2% NSR.
Source: Company website
Location. A map of properties can be seen below, provided by the Company. The locations that have been marked
as stars are the places with mineral occurrences. The site of the Project is helicopter and road accessible from Fort St.
James. The Canadian government has constructed province-maintained paved roads and forestry-maintained gravel
roads there. Based on the Report, the Hard Nickel Group is located in the surroundings of Mount Sidney Williams.
It’s in the Takla Lake area of central British Columbia, adjoining the Decar Nickel Project of FPX Nickel Corp, and
approx. 100km west of Centerra Gold’s Mount Milligan Copper-Gold Mine. The Hard Nickel Project consists of 9
mineral claims in total with a total area of 7,575 hectares. During June to October, there is no snow covering on the
sites, which means that geological mapping and geochemical sampling can be performed. British Columbia, Canada
is one of the most suitable regions for miners. The B.C. government has made a C$736 million investment for local
infrastructure construction and permanently enacted the “flow-through tax benefit investment incentives,” which is
positive for investment in the region. Investors are showing significant interest in mining firms operating in British
Columbia. For example, Newmont Goldcorp (NYSE: NEM) as one of the largest global mining companies, invested
in the Galore Creek Partnership based in British Colombia with Teck Resources (TSE: TECK.B.)
Geology. According to the Report, the claims are underlain by east-dipping phyllite and volcanic units of the Cache
Creek complex, fragmented and serpentinized harzburgite and dunite sill-like bodies of the Trembleur ultramafic unit
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and younger gabbro, diorite and diabase stocks and dikes of the Rubyrock Intrusive complex. The Company
announced a 12-man, helicopter-supported camp work application. The camp will be built on the north slope of a
mountain at the west part of Mount Sydney Williams. On Feb 10, 2021, the Company claimed a work program of the
Project, including trenching, surface exploration diamond drilling, camp construction, soil sampling, and so on.
Mineral Occurrences. Part of the Nickel Project is the region underlain by rocks of the Trembleur Ultramafic
UniThe rocks contain various serpentinized harzburgite, dunite and orthopyroxenite, and locally carbonate-talc rocks
and listwanite. Nickel, cobalt, and chromium have appeared in the minerals. By testing the metallic mineralization of
rocks, the occurrence of a nickel-iron alloy awaruite and some sulphide minerals, as heazlewoodite, bravoite, and
siegenite, has been proved and documented.
As a vital base metal, awaruite has a lot of advantages in the production of EV batteries, including the little capacity
to cause acid mine drainage, no acid leaching for processing, and waste rock usage by absorbing carbon. Most
importantly, the waste rock after mining awaruite has a significant advantage, the carbon sequestering abilities. In
contrast with some of the other metals mining, awaruite is much eco-friendlier and cleaner in the process of
production.
Project 2 - Nickel 100 Group
Property Overview. Nickel 100 Group has 2 cell mineral claims in total with a total area of 3,134.7 hectares. The
accessibility and climate are the same as that of Hard Nickel Project mentioned above. As an exploration project in
the early stage of development, the occurrence of all other types of mineralization should be considered.
Source: www.nickelrockresources.com
Location. Based on the 43101 technical report, the Project is located at the east side of Nesabut Peaks in the Mitchell
Range, midway between Takla Lake to the west and Tchentlo Lake to the east. The location of Nickel 100 Group can
be seen in the geography map above in the Hard Nickel Group Section.
Geology. Based on the Report, the site of the Nickel 100 Group is underlain by the similar folded and fragmented
sequence of rocks as that of Hard Nickel Group Project mentioned above.
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Mineral Occurrences. In Nickel 100 Group, the mineral mineralization includes nickel, cobalt, and chromium.
Most of the past mining work in the area did not explore much on nickel so that the future exploration and development
targeting on nickel and nickel-iron alloy awaruite can be expected.
Mining Development of the Nickel Project
The Company shows the confidence in the NI 43-101 Report that the Nickel Project deserves a systematic exploration
and development work plan to explore the developed or undeveloped area with nickel and other possible metallic
mineralization in the properties. In the Report, the Nickel Project’s cost estimate has been calculated as follows: $
500,000 in Phase 1, Year 1 and conditionally $1,000,000 in Phase 2, Year 2.
The Company has been focused on the Phase 1 work program in the 1st quarter of 2021 with respect to the G.I.S
exploration data compilation of the Nickel Project and in the geo-referencing selected scanned maps of historical data.
For now, since only a small part has been developed, all the data will be geo-referenced in the process. The Company
aims to link every point of the properties with the value and indicator elements and to create a comprehensive network
of the data for the properties with favorable trends. Based on the Report, the Company will start to prepare the 5-year
area-based notice of work application to the British Columbia government, which is about the permission to allow
mechanized trenching and diamond drilling on the Hard Nickel Project. Furthermore, the Company will implement
the mineralogy work on the ore of the properties to verify the occurrence of awaruite and nickel sulphides
mineralization. All of the mineralogy work will be expected to be done in the early 4th quarter of 2021.
Second, the start of Phase 2 work plan is based on the performance of Phase 1 work. The 5-year area-based notice of
work for Phase 2 will be prepared in the 1st quarter of 2022 on condition that there are valuable results in the
exploration and development of Phase 1 work.
Project 3 - Clayton Valley Lithium
Property Overview. The Clayton Valley Lithium Project is an early-stage project with lithium brine in Esmeralda
County, Nevada. The Company made agreements with vendors to gain 100% interest in claim groups. Nevada ranked
1st place in worldwide top mining destinations. According to the 2020 Survey of Mining Resource and Exploration
by the Fraser Institute, Nevada is the most attractive region for mining companies. All the mining areas have been
scored from two parts in the Survey: i) the practices mineral potential as the geologic attractiveness, and ii) Policy
Perception Index, which assesses the effect of government regulatory policy. According to the Mining Journal, in the
first two months of 2021, over US$175 million in total has been invested into mining projects in Nevada. In 2020, a
total of US$331 million was invested in the region, showing a strong surge in development.
Location. The property of the Project is located at Silver Peak near Tonopah, Nevada, adjoining the Silver Peak
Lithium Project of Albemarle Corporation (NYSE: ALB.) The area has groundwater deposits with abundant dissolved
lithium. As one of the oldest mining areas in Nevada, Silver Peak has various and abundant mineral resources as
supported by the exploration and extraction of over 300 million pounds of lithium carbonate by Albemarle Corp, a
mining firm, since 1964. The location of the project is about 3.5 hours away from the Tesla’s Gigafactory.
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Source: www.nickelrockresources.com
Geology. The major mining area of Clayton Valley basin is well-known for its graben structure. The Clayton Valley
Project consists of 118 mineral claims in total with a total area of about 930 hectares. the property is separated into a
northerly-trending, 1-2 km-wide sub-basin with different escarpment on each side. Proven by the other operators’
review, the Clayton Valley has vital deposits of lithium bearing claystone.
Mining Plans. In terms of self-sufficiency, the North American region has not developed many resources of lithium
and other necessary base metals. By managing the project on the only lithium mining area, the Company has a large
potential market in North America. The Company plans to prepare for the exploration work of this Project in mid-
March 2021. On March 24, 2021, the Company announced the commencement of the reverse circulation drilling on
Silver Peak, Clayton Valley. The strategic land package covers about 2300 acres, adjoining the western portion of
Albemarle’s property and Cyprus Development Corp.’s Clay Project. The project will result in up to six exploration
holes on Silver Peak. The CEO of the Nickel Rock Resources stated that, “the Company’s claims cover likely
concealed faults shown in geophysical studies conducted by Sierra Geothermal Power Corporation in the 2008-2010
period, which the Company believes to be important in the formation of lithium-bearing clays. We are excited about
capturing the renewed investor interest for the potential of lithium-bearing clays in the region.”
COMPETITION AND SUPPLY TRENDS
The competition in Nickel is limited with four operating nickel mines in Canada and one mine in the United States.
Glencore PLC (LSE: GLEN), Vale S.A. (NYSE: VALE), and Lundin Mining (TSE: LUN) are the three major mining
companies operating these nickel mines in North America. Another noteworthy competitor of the Company is FPX
Nickel Corp since the property resources of FPX Nickel Corp are adjoining the claim groups of the Nickel Rock
Resources, Inc. The two companies share a similar geological structure and similar property characteristics:
➢ FPX Nickel Corp (TSXV: FPX). FPX is one of the world’s largest nickel mining and development
companies. FPX Nickel has two famous projects, the Baptiste nickel project and the Decar Project and both
of them are world-class nickel resources. The Baptiste Nickel Project is a PEA (Preliminary Economic
Assessment) stage development project with sizable and sustainable nickel deposits. FPX Nickel is fully
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funded for its 2021 exploration and development plan. FPX Nickel has C$5.9 million in treasury and a market
cap of over C$100 million. On Jan 07, 2020, FPX Nickel announced an achievement of nickel recoveries of
99.5% in the production of high-purity chemical solution at Baptiste project. The mining process and
development of FPX Nickel have been judged as high quality and have proven the potential economic
viability.
As for Lithium mining competition, the comparable company would be Albemarle and Cypress Development Corp,
since the Clayton Valley Project adjoins the Albemarle’s lithium evaporation ponds and the Cyprus’s property. As a
result, the Company will likely share the same market with those two companies:
➢ Albemarle Corporation (NYSE: ALB). ALB is a fine chemical manufacturing company that mainly focuses
on the exploration of lithium, bromine specialties and catalysts. ALB is a leader in the industry of lithium and
its derivatives. The corporation was the largest provider of lithium for EV batteries in 2020. The corporation
has announced a net income of US$84.6 million in 2020. On Jan 7, 2021, ALB announced that they will
double the lithium production by 2025 at the Silver Peak by raising US$30 million to US$50 million in
additional investment.
➢ Cypress Development Corp (TSX-V: CYP). The company is focused on the mining and development of
the Clayton Valley Lithium Clay Project in Nevada. The location of the property is adjoining the lithium
project of Nickel Rock Resources. The Cypress project is known as a large world-class resource of lithium-
bearing claystone. The company has an average production rate of 15,000 tons per day to produce 27,400
tons of lithium carbonate equivalent annually, with an expected 40-year mine-life. According to the press
release, the company recently entered into an upsized “bought” deal offering of C$17,000,000, which shows
strong interest from investors for lithium.
By sharing the same geological features of the Albemarle and Cypress properties, Nickel Rock Resources has
confidence and reasons to believe that the Clayton Valley Project property has considerable potential for lithium
bearing clay deposits in lake sediments and concealed faults. As Robert Setter, President and CEO of the Company,
stated “It is apparent that lithium extraction in Clayton Valley from both lithium brine and lithium clays is fast
becoming a reality and Nickel Rock needs to be part of that reality.” The Company is planning for a detailed
exploration program on the project shortly.
RISK ANALYSIS
As with any mining exploration company, there are inherent risks that investors need to note and consider. These
include:
Liquidity risk. Since the Company’s projects are at an early stage, the Company may not have sufficient cash to
meet the financial obligations required to properly and efficiently develop the project. For now, the Company has
been successful in raising equity financing. There is no assurance that it will be able to do so in the future, but it has
a loyal base of investors that have been willing to fund over C$1.5 million. The properties of all the projects were
acquired for the cost of staking, with no overriding royalties.
Currency risk. The Company is exposed to currency risk by incurring certain expenditures and holding assets
denominated in currencies other than the Canadian dollar. The Company does not use derivative instruments to reduce
its currency risk. Assuming all other variables remain constant, a 1% change in the Canadian dollar against the US
dollar would not result in a significant change to the Company’s operations.
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Climate risk. The location of the property of Nickel Project is adjoining the transition between the mountains of the
Hogem Ranges to the northwest and the rolling hills and lakes of the Nechako Plateau to the southeast. The climate
there is northern temperature with cold snowy winters and warm summers. The geological mapping and geochemical
sampling cannot be conducted when there is snow covering. The Company’s strategy is to focus on their Nevada
assets during cold Canadian winter months.
Manufacturing and infrastructure construction. The Company needs to improve and upgrade the equipment
and the infrastructure for the projects. The property’s elevations range from about 700 meters at the surface of
Trembleur and Takla Lakes to about 2000 meters at the peaks of Mt. Sidney Williams and Nesabut Peaks in the
Mitchell Range. There is no road access to the known metallic mineral occurrences on the Nickel Projects. The
Company has already announced a 12-man, helicopter-supported camp work application. Further constructions are
needed.
Valuation
The Company is holding more cash and cash equivalent than the debt according to its last financial statements. With
a current ratio of 49.19, which means that now the Company has sufficient cash to pay for the first stage of mining.
The short ratio of the stock is 0.36, which means that most of the public traders are long the stock as the number of
shares short is much less than the average daily trading volume. According to the Finbox, the Altman Z-score of the
Company is about 6.5, signifying that the stock has a stable financial environment and is expected to have strong
growth in the future.
According to the most recent financial filings, the Company is not exposed to significant interest, currency, or credit
risks arising from the financial instruments the Company issued. As the FY2020 annual report announced, the
Company’s available capital resources, including cash and cash equivalents, were in a total amount of $1.4 million
which should last during the first 6 months of the Phase 1 of the Work Plan.
Based on the current financial situation, the Company needs to raise additional funding to be able to meet the
requirement of mining and adequate infrastructure constructions. For now, the Company has successfully raised
equity financing. The Company has 53.5 million shares outstanding with a market valuation of only US$12.1 million
and C$1.4 million of cash in the Treasury. This low valuation is despite the multiple assets that span multiple
countries and multiple metals. The average daily trading volume is averaging US$531,814 per day providing trading
liquidity for investors looking for a speculative mining play.
This Company Summary is a document for discussion purposes only and contains general business information. There is no
indication of interest nor an offer to sell or purchase securities and is not binding on any parties. Although the statements in the
Summary have been obtained from and are based upon recognized statistical services, company management, press releases,
public communications or other sources that the firm believes to be reliable, we cannot guarantee their accuracy. The information
contained herein is confidential and intended only for the person approved by Network 1 Financial Securities Inc. and Edward
Cabrera at [email protected].
Founded in 1983, Network 1 Financial Securities, Inc. is a full-service broker/dealer. Our clients include high net worth
individuals from many countries, institutional investors, managed pension funds and hedge funds. We are committed to servicing
each client on a personal level to help meet their individual financial goals. We believe that this commitment strengthens client
relationships and, in turn, creates long-term associations.
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Nickel Rock Resources Inc. Price Chart
(OTCQB: NIKLF)
03/17/2021
Source: www.tradingview.com
16
Nickel Rock Resources Inc.
Condensed Consolidated Interim Statements of Financial Position
As at 31 December 2020
(Expressed in Canadian dollars)
Source: www.otcmarkets.com
17
Nickel Rock Resources Inc.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
As at 31 December 2020
(Expressed in Canadian dollars)
Source: www.otcmarkets.com
18
Nickel Rock Resources Inc.
Condensed Consolidated Interim Statements of Cash Flows
As at 31 December 2020
(Expressed in Canadian dollars)
Source: www.otcmarkets.com
