Victory Nickel

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One of Canada's largest undeveloped nickel sulphite plays, with a twist

The nickel-producing landscape in North America is not necessarily set in stone. While this trend may have taken hold over the last few years, Victory Nickel, an aspiring mid-tier producer is ready and willing to bridge the gap.

“There’s kind of a vacuum in North America between very large nickel producers and very small ones,” says Steve Harapiak, COO at Victory Nickel. “We’re trying to position ourselves as a mid-tier producer. We’ve got the resources to do that in terms of ore in the ground and now it’s for us to get the funding and execute those projects.” Headquartered in Toronto, the company has projects in Quebec and Manitoba.

The projects Harapiak speaks of are:
 
- Minago, Victory Nickel’s 100-per-cent-owned principle project with a surprising twist, located in Manitoba, Canada and one of the country’s largest undeveloped sulphide nickel deposits.

- Mel (100 per cent), located 25 kilometres from Vale Inco Limited’s metallurgical facility, in Manitoba.

- Lac Rocher (100 per cent), located in northern Quebec.

- Lynn Lake, currently under option to Prophecy Resource Corporation, also in Manitoba.

“Minago is certainly the flagship project, but I think we’re rather unique in the sense that we have four advanced projects,” says Sean Stokes, vice president corporate affairs and corporate secretary at Victory Nickel. “Given the right nickel price, these projects could be in production very quickly. Sometimes companies only have one project and if there’s a negative to that project, it can have a very big impact. But we have spread ourselves around amongst four.”

The plan is to focus on Minago, all the while keeping Mel and Lac Rocher ready so that when the nickel price hits an appropriate level, Victory Nickel can put them into production very quickly and start generating cash.

Spinning into Victory Nickel

The story of Victory Nickel begins back in 2006. Spun out from Nuinsco during 2006 and 2007, Victory Nickel was created to house the original company’s nickel assets: Minago, Mel and Lac Rocher.

“We spun those three projects off along with some cash and created Victory Nickel, which started trading in 2007 and then, subsequent to that, in 2008, we acquired a company called Independent Nickel,” Stokes explains. “Independent Nickel was also publically traded and its assets were a royalty on our Minago project, which is the most advanced project. They also had their own nickel project in Manitoba which is called the Lynn Lake Mine. With that acquisition, we bought back our royalty on Minago and also acquired the Lynn Lake Project.”

With Victory Nickel’s focus remaining firmly focused on Minago, an approach from Prophecy Resource, a vanadium, moly and nickel resource house headquartered from Vancouver, saw Lynn Lake optioned. Under this transaction, Prophecy is required to invest and pay for Lynn Lake, although it remains part of Victory Nickel’s portfolio. With Lynn Lake taken care of, Victory Nickel has been focusing more on its three main projects, paying particular care and attention to Minago.

Mel and Lac Rocher

Stokes says that on the Mel project, located so close to Vale Inco Limited’s facility, Victory Nickel is joint venturing with its neighbours. “They can back in for 100 per cent of the project but they have to put in the same amount of money as we have in the project,” Stokes continues.

Victory Nickel is currently doing some metallurgical test work on Mel, and Stokes says the results of this will determine where the company takes this project next. “For that project we’ll probably be doing something further on in the next couple of years,” Harapiak adds.

Meanwhile, in Quebec lies the Lac Rocher project where Victory Nickel is preparing the project for production in the right market climate. “We’ve done a lot of work on that to get it shovel-ready. It’s one of those small high-grade projects, but it requires a higher nickel price than we have now.”
Herein lies a large part of Victory Nickels plan—readying prime projects to take advantage when the right nickel price comes along. Whilst waiting for this, Victory Nickel has been conducting some engineering and processing work on Lac Rocher to make it more economical. However, the best is yet to come.

Minago

While Victory Nickel is conducting business as usual at both Mel and Lac Rocher, the excitement surrounding Minago is undeniable. The company has recently completed its definitive feasibility study on Minago and filed it with the regulatory bodies. There is road work underway which will provide year-round access to the mine, scheduled for completion within the next couple of weeks.

“We also have a drilling programme of 7,500 metres currently underway as well. That should help us to better define and increase the reserves on that property,” Harapiak says. “Subject to accessing the funding we would be on that project this coming year and working towards getting a permanent power supply, towards establishing the infrastructure we need to get camps and start dredging on it in 2011.”

If the funding is secured, Victory Nickel will begin building this infrastructure and doing necessary excavation work to open up the Minago ore body. This would enable the company to begin producing frac sand in the first quarter of 2013 and nickel in the first quarter of 2014. “There’s a lot of work. It’s a project which is just shy of US$600 million dollars,” Harapiak says.

Then there is a pause as Minago’s twist is unveiled—a lucrative layer of frac sand which outlines the nickel ore body.

“When we were drilling for nickel at Minago we encountered a layer of sandstone and that overlies the nickel ore body. We didn’t know what it was, we thought it was waste, but one of our geologists suggested we get it tested for hydraulic frac sand,” Stokes explains.

“We went ahead and did that and low and behold, it met the criteria for frac sand. Those criteria include a certain PSI compressive strength and a certain roundness of the grains. Basically what frac sand is used for is pumping down oil and gas wells.”

This frac sand, used to hold fractures in rock formations open during oil drilling, presents the sort of unique and lucrative surprise many mining companies might wish for.

“It’s not a common product, but it’s a very high-value product, so from our perspective, it’s a very valuable by-product of mining nickel,” Stokes says. “In order to mine the pit and get down to the nickel ore body we do have to get through a layer of limestone and this layer of sandstone.”

Harapiak says there has been great interest in this from the transportation industry, end-users and the people that service oil and gas wells. Essentially, Victory Nickel has taken what was already a very exciting project and a truly unique one in Canada, then stumbled upon another enviable project within this project by discovering the frac sand. Just as Harapiak says, of the company’s strength in having these three main projects, each of which offering something new (in particular Minago), Victory Nickel is holding a lot of nickel potential and the rest looks little more than a waiting game.

www.victorynickel.ca

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