Nikolai Prospect Could Answer Domestic Need for Nickel

In 2020, Millrock acquired the mineral rights to the Nikolai Project, which consists of the Eureka and Canwell claim blocks. The Eureka block, which AEM owns 100 percent, comprises 104 state mining claims across roughly 15,750 acres; Canwell, which AEM has the option to purchase, contains 42 state mining claims across roughly 6,721 acres.

The acquisition prompted Beischer to change not just the company’s focus but its name as well.

“We decided to focus strictly on this one project, Nikolai, in part because I feel so strongly about the potential,” he says. “I hated to give up the name Millrock since we’d developed quite a good reputation in Alaska, but it was a new start, so a new name was in order.”

Focus on Energy

According to the US Geological Survey, 77 percent of the Western world’s nickel production is used to make stainless steel or combined with other metals to make alloys. The remaining 23 percent is used for alloy steels, rechargeable batteries, catalysts, and other chemicals, coins, and plating.

“Nickel’s main use by far has always been the manufacture of stainless steel,” Beischer says. “A little bit of nickel is alloyed with iron, and the steel becomes stainless: that great, shiny metal that we see all over the place, from dishwashers to kitchen sinks to dishes and utensils. It’s used in the aerospace industry, as well,” for turbine blades, discs, and critical jet engine parts.

More recently, nickel has become a critical component in lithium-ion batteries that power electric vehicles, which is at the heart of the increased demand. Next to graphite and aluminum, nickel is the third highest mineral, by weight, in some types of lithium-ion batteries.

“They call them lithium-ion batteries, but we should call them graphite-nickel batteries,” Beischer says. “There are 29 kilograms, or 64 pounds, of nickel in every electric vehicle battery.”

Domestic supply cannot meet growing demand. According to GlobalData, which tracks and profiles mines and mining projects, there are more than 186 nickel mines currently in operation worldwide. The Eagle Mine in Michigan’s Upper Peninsula is the only one in the United States, and its end-of-life is anticipated in 2027.

The United States imports approximately 45 percent of its nickel from Canada, and with the S&P 500 Index forecasting the country’s demand for nickel, cobalt, and lithium to multiply twenty-three times by 2035, the end of the Eagle Mine will only increase US dependence on foreign sources.

“We really are going to need these metals, and we really do need a secure domestic supply,” Beischer says. “There’s no other nickel production in the United States, and not likely to be,” other than in five states: Alaska, Minnesota, Missouri, and Montana, in addition to Michigan.

A Path Toward Production

Though the need to develop a homegrown source of nickel is clear, finding a path toward domestic production isn’t so simple.

“Nickel is a really tough metal to find,” Beischer says. “It’s not distributed over the surface of the Earth very well. It only occurs in specific types of rocks, and geologists have been looking hard for it for over a century because it’s such a good use for steel.”

Then there’s the fact that its widespread application means the “easy pickings” have already been used, forcing geologists to work harder to locate deposits.

“It’s going to be very difficult for us exploration geologists to keep up with the demand that’s going to be placed on us to find more nickel,” Beischer says. “And so I think, as a result, our industry will be forced to mine lower concentration deposits. The rich, high-grade deposits, the easy pickings, have already been found. Low-grade can work, so long as it’s homegrown.”

Beischer thinks AEM can find those deposits at Nikolai, and the company began initial drilling at the site in June. The area had “quite a series of historical holes,” some previously explored by Beischer and his former Inco Limited crew. Each of those holes, he says, intersected the mineralized zone at almost the same grade or concentration of metal in the ground, but they weren’t enough for AEM to estimate potential yield.

“Those historical holes are spread a little far apart for us to be able to calculate a tonnage or concern that we can rely on,” he explains, “so we set out to drill our own holes on a grid pattern, with 300 meters spacing, that will allow us to do just that.”

AEM drilled 4,000 meters between June and September, gathering enough information to publish an initial maiden resource in the spring. The company will update its resource calculation after next summer’s drilling, which Beischer hopes will be two to three times more than the 2023 season.

“Over the course of the fall and by next March, we’ll be able to determine a tonnage over a certain concentration,” he says. “As long as the grade and thickness hold up, then we should have several billion pounds of nickel metal in the ground, as well as the accessory metals that go with it, which includes copper, cobalt, platinum, palladium, and even a little bit of gold. That should be a big move for our company.”

AEM has begun early engineering work for the pre-feasibility study and started the baseline water quality and environmental work. Beischer anticipates concerns about mine development in the area if the project goes forward, but believes Nikolai is “in a really permittable place.”

“The creeks and rivers that flow off the project area are those really silty, glacial creeks that really don’t support any fish life at all,” he says. “With no salmon spawning anywhere near the project, I think that really helps in permitting. There are no people that live immediately nearby, and there are no archaeological places in the immediate project area, so I think we’re in a very good permittable site.”

For now, Beischer says the focus is on determining whether Nikolai is, if not the complete answer, then at least part of the solution to securing the country’s energy future.

“Right now, it’s an exploration project,” he says. “Soon, I hope we can call it a development project, but it’s probably a decade away in the best-case scenario from being a mine.”