Power Nickel discovery at Lion Zone could transform Nisk project, analysts believe
Published: 16:16 10 Feb 2025 EST
Power Nickel Inc (TSX-V:PNPN, OTCQB:PNPNF) has earned a ‘Buy’ rating in initial coverage from analysts at Roth Capital Partners, who see the company’s high-grade polymetallic Nisk project in Quebec as a potential acquisition target for a major mining company.
“Its Lion Zone discovery has high grades and high-value tonnage, making the project attractive to major mining companies,” analysts wrote in a note to clients.
They believe the Lion Zone, located 5.5 kilometers away from the Nisk Main deposit, “may be the tip of a unicorn’s horn” due to the rare and highly prospective nature of the deposit.
“Our calculation of drill results on its polymetallic Lion Zone discovery, with similar tonnes but with significantly higher grades, could potentially more than double the contained metals in the Nisk Main deposit,” they wrote.
“Based on our pro forma, we calculate a Net Present Value (NPV) of approximately C$1.15 billion plus the potential to increase resources by 50% in 2025.”
Roth analysts highlighted that polymetallic deposits are complex, valuable and rare.
“In addition to nickel, these types of deposits contain copper and platinum group elements (PGEs), which provide diversification across economic cycles,” they wrote. “With characteristic small surface exposures, these types of deposits are easily passed over.”
The analysts likened the style of the mineralization to the Sudbury Basin in Ontario, Canada, and the Norilsk district in Siberia with an estimated value of approximately US$1.4 trillion dollars.
The project’s location in Quebec, a province with a reputation for being mining friendly with generous credits available for exploration, construction and financing, was also highlighted.
Further, analysts noted Power Nickel’s “entrepreneurial and capable” management team.
“Power Nickel’s management team appears to be well suited to this unique polymetallic project. Its team has the necessary operational and academic background to rapidly explore and optimize this unique project,” they wrote. “The project’s potential has attracted respected individuals including Dr. Steve Beresford and investors Rob McEwen and Robert Friedland.”
Roth awarded Power Nickel a C$2.50 price target, implying upside of about 72% at the time of writing.
