After Gold and Silver: Nickel on the Move! Kinross Gold, Power Nickel, Royal Gold

Nickel - Increasingly essential for many sectors of the economy!

The transformation from fossil fuels to renewable energies is still in flux. One raw material that plays a central role in the transition is the transition metal nickel from the iron-platinum group. Due to its resistance to high temperatures and corrosion, nickel is used in everything from wind turbines and solar modules to nuclear power plants. Nickel is also likely to play the most important role in battery production, where the metal can greatly increase energy density and is significantly cheaper to produce than lithium or cobalt.

The International Energy Agency (IEA) forecasts an increase in nickel demand by a factor of 40 by 2024. The strongest demand will likely come from electromobility and the energy storage industry. A growing industrial sector that few people were aware of before the proclaimed turnaround following Russia's invasion of Ukraine is the use of the metal in the armaments industry in the production of drones. According to marketsandmarkets.com, the market for drone batteries is expected to more than double by 2026.

Around half of nickel production takes place in Indonesia. In addition, Australia, Brazil, Russia and New Caledonia, including the island state in Southeast Asia, are responsible for 84% of annual production. After a sharp drop due to overproduction in Indonesia, the base price has been bottoming out for months and has risen by around 15% to USD 19.59 per kg since the beginning of the year. The forward curve of the nickel price is interesting, as it provides information on the expected price development of the metal and forecasts prices of well over USD 20 by the end of 2025.

Power Nickel - Further high-grade expansion

The industrial metal is mined in a total of 25 countries. One company that is likely to contribute to increasing the critical North American supply is Power Nickel. The Canadian junior exploration company based in Toronto focuses on promising nickel, copper, gold and other battery metal projects in Canada and Chile.

Its flagship project is the 80% owned NISK high-grade nickel-copper sulphide deposit in Quebec, a 20 km strike-length property containing numerous high-grade intercepts. Power Nickel benefits from generous provincial tax credits that cover 50% of exploration and development costs. In addition to the first-class infrastructure - the Hydro Quebec substation is just a few meters away, and supplies low-carbon, low-cost hydroelectricity - the shallow depth of the minerals is another unique selling point.

Just last week, CEO Terry Lynch announced the extension of the near-surface high-grade copper, platinum and palladium zone northeast of NISK by another 5 km. The published report on drill hole PN-24-044 also shows maximum values of 24.3 g gold over 0.6 meters, 5.7 g silver, 5.29% copper, 3.26 g palladium, 0.29 g platinum and 3.31% nickel.

In addition to NISK, the Company also owns land packages in British Columbia and Chile, which are to be incorporated into a separate company as part of an arrangement plan, which should create additional potential for existing shareholders.

Thanks to the strong results, Power Nickel shares have doubled to CAD 0.38 in recent weeks. The analysts at Hannam & Partners issued a target price of CAD 0.45 in their latest study.

Kinross Gold, Royal Gold - Further upside potential

The gold price continues to rush from one record high to the next. While initially, gold producers showed little correlation with the base price during the first impulse, they have been catching up significantly in recent weeks and are gradually minimizing the gap in underperformance. One of the shares that has performed even better in recent months is Kinross Gold. The Toronto-based company, which has a market capitalization of USD 8.32 billion, has doubled to USD 6.77 in the past 12 months and should generate a further buy signal with a follow-on potential of USD 8.34 if the horizontal resistance at USD 7.11 is breached.

Kinross Gold expects gold equivalent production of 2.1 million ounces in 2024. The total production costs are USD 1,360 per ounce, which is favorable compared to the industry. The Company will publish its results for the first quarter of 2024 on May 7.

In addition to gold, companies in the silver and copper sectors are also shining. One interesting company that combines all three metals is the streaming and royalty company Royal Gold.

At the end of the year, Royal Gold had contracts with 37 active mines and 22 mining projects in the development phase. In total, the Company held interests in 178 properties. The projects in the portfolio are geographically spread across five continents and, therefore, offer good diversification. In addition, the existing portfolio has considerable growth potential for the coming years.

Since the beginning of the decade, the Company has more than doubled to USD 122.73. If precious metal and copper prices continue to rise, the next prominent resistance, a triple high from 2020, 2022 and 2023 at USD 147.82, should be broken, which would mean a new all-time high.

In addition to gold and silver, the industrial metal nickel, which is fundamental to the climate transition, is also likely to have bottomed out. Power Nickel was able to report excellent results. Despite the strong performance of recent months, Kinross Gold and Royal Gold have further potential.