Rick Mills: The nickel glut is nonexistent and nickel is going to rally. There is no doubt nickel has been the worst-performing metal lately. However, BNP Paribas is now forecasting a much smaller-than-expected supply in 2013. It has cut its projection three times since April. Credit Suisse and Citigroup have lowered their forecasts. They're saying nickel is going to average 15% more in the second quarter than now.
TCMR: Where can an investor find companies with deposits that are cheaper to process in areas without jurisdictional and geographic problems? How can an investor participate in the nickel market if there's this kind of a looming shortage?
RM: One of the reasons market watchers are paring the supply forecasts is because all of these projects are falling behind schedule. The market balance is much tighter than everybody, except apparently me, has been predicting. There are a lot of operations and capacity that have run into various issues. Investors have to figure out which companies don't have these problems.
One that doesn't have these issues is North American Nickel. It owns a nearly 80-kilometer trend of historical nickel mineralization in Greenland. It has done a small drill program this year to start to define one of its almost 80 targets and had some very encouraging assays come back. It is going to be able to put together a much larger program and get at it next year.
The company is well backed by The Sentient Group and a large institutional player. VMS Ventures owns 26% of its shares and doesn't want to be diluted; financing is not going to be a problem. This is a company in which an investor can start to take a position and slowly increase it, knowing that there is some time to work on it.
For rest of interview, see: http://www.theaureport.com/pub/na/14807