Mr. Mark Selby reports

CANADA NICKEL SUCCESSFULLY COMPLETES FRONT END ENGINEERING DESIGN FOR THE CRAWFORD PROJECT AND PROVIDES CORPORATE UPDATE

Canada Nickel Company Inc. has provided results of front-end engineering and design (FEED) activities for its Crawford project, which were completed by the company's consultants. Engineering activities focused on the initial capital cost utilizing data collected from a winter geotechnical program, a test piling program and updated quotes. The mine plan was also resequenced to accelerate delivery of higher-value ore from the East zone and reduce prestripping by 30 per cent. (All amounts are in U.S. dollars, unless otherwise indicated.)

Highlights:

• The NPV (net present value) discounted at 8 per cent improved by more than $300-million to $2.8-billion.
• The IRR (internal rate of return) improved by 0.5 per cent to 17.6 per cent versus feasibility study.
• The increase in initial capital cost was held to 5 per cent to $2-billion.

Mark Selby, chief executive officer of Canada Nickel, said: "We are very pleased to complete another major milestone as we advance Crawford towards a construction decision. Many mining development projects have seen significant cost inflation over the last several years -- I am very proud of our team and the robustness of our project that the initial capital cost increased by only 5 per cent, particularly since the feasibility study had a cost basis dating from December, 2022. The resequencing of the mining plan and updated operating costs have also yielded improved economics for the project."

Mr. Selby continued: "With this milestone complete, we look forward to working with our project financing partners Scotiabank, Deutsche Bank and Cutfield Freeman to complete the funding package for Crawford by year-end to be positioned to make a construction decision once permits are received. We are planning to utilize capital from this funding package for order placement of long-lead items and engineering activities. The company is also pursuing a number of non-equity financing initiatives -- including government funding -- to provide the funding to complete the remaining permitting and engineering activities this year."

Front-end engineering design results

Table 1 compares key metrics for the FEED design with the company's feasibility study in respect of the Crawford project that was published in November, 2023. To maintain comparability, all key economic assumptions are unchanged since the feasibility study, such as the notable exclusion of the carbon capture, utilization and storage investment tax credits (CCUS credits), for which the company believes it would qualify. Inclusion of CCUS credits would increase the NPV (discounted at 8 per cent) to $2.9-billion and the IRR to 18.9 per cent.

The primary focus of FEED was to update the initial capital cost estimate. The associated engineering has progressed to approximately 30 per cent and is sufficient for preparation of long-lead orders. Since completion of the feasibility study, there has been significant inflationary pressure. However, the increase in overall capital cost has been held to 5 per cent through optimization of the mining schedule and simplification to designs. Table 2 summarizes the change to key capital elements since the feasibility study.

The other key change was a resequencing of the mine plan. Ore from the East zone will now be mined and processed first, being brought forward on average 12 years. Ore from the Main zone has correspondingly been deferred. With the reduced depth of overburden overlying the East zone, this resequencing allows the prestrip tonnage to be reduced by 30 per cent. With East zone ore now comprising the bulk of material processed during the payback period, additional metallurgy testing was performed. The resultant update to recoveries for East zone ore has led to an increase in the average value of East zone ore of 7.4 per cent to $31.18 per tonne. Recovery forecasts for Main zone ore remain unchanged.

The capital cost estimate incorporates costs of $23-million, including the cost of the previously announced option to acquire surface rights announced on Jan. 7, 2025, and estimates to acquire the remaining surface rights required for the project. Additionally, the company can extend the option annually up to a further five years for an additional payment of 2.5 per cent of the option payment amount in cash for each such annual extension.

Further to the Jan. 7, 2025, press release, the company has entered into an assignment agreement with Noble Mineral Exploration Inc. for the right to purchase 5,000 acres of real property located in Northern Ontario and shall pay Noble $150,000 as consideration for the assignment lands. The assignment is subject to the approval of the TSX Venture Exchange.

About Canada Nickel Company Inc.

Canada Nickel Company is advancing the next generation of nickel-sulphide projects to deliver nickel required to feed the high-growth electric vehicle and stainless steel markets. Canada Nickel Company has applied in multiple jurisdictions to trademark the terms NetZero Nickel, NetZero Cobalt and NetZero Iron and is pursuing the development of processes to allow the production of net-zero carbon nickel, cobalt and iron products. Canada Nickel provides investors with leverage to nickel in low-political-risk jurisdictions. Canada Nickel is currently anchored by its 100-per-cent-owned flagship Crawford nickel-cobalt sulphide project in the heart of the prolific Timmins Cochrane mining camp.

Qualified person

Stephen J. Balch, PGeo (Ontario), vice-president, exploration, of Canada Nickel and a qualified person as such term is defined by National Instrument 43-101, has verified the data disclosed in this news release and has otherwise reviewed and approved the technical information in this news release on behalf of Canada Nickel.

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