Power Nickel Inc (TSX-V:PNPN) has announced the continuation of its agreement with CVMR Corporation as it progresses to the next stage of its feasibility study of its Nisk Nickel Sulfide Project near Nemaska in Quebec.

The news sent the company’s shares 13% higher to C$0.26 by midday in Toronto.

In a statement, the company noted that CVMR — a leader in nickel powder, wire and anode production and a key supplier to the battery, defence and aerospace industries — is coordinating the production of advanced bench scale, piloting, and engineering studies on the project to determine feasibility. The agreement is staged, allowing the companies to work together on various stages of engineering studies.

Under the extended agreement, Power Nickel said it has arranged for WCPD Group to organize a consortium of Quebec-based investors who will make an initial investment of $2.75 million representing 3,055,556 flow-through (FT) shares at $0.90 each. CVMR will acquire these shares from the front-end purchasers for $0.45 per share.

The gross proceeds from the sale of the FT shares will be used for exploration activities on the Nisk property and to incur eligible Canadian exploration expenses that will qualify for the federal 30% Critical Mineral Exploration Tax Credit.

Power Nickel said it expects to close the deal by the end of November.

“CVMR has enjoyed technical success in its benchmark studies to date, and after reviewing the preliminary reports, we are very encouraged with how well the mineralization is being processed,” Power Nickel CEO Terry Lynch said.

“We look forward to reviewing the final benchmarking report soon and to our ongoing collaboration with CVMR.”

Meanwhile, CVMR said it is “very encouraged” with the ongoing drilling and exploration success at Nisk and an upcoming NI 43-101 technical report is likely to suggest a commercial tonnage of nickel can be obtained from the project, along with copper, cobalt, palladium and platinum.

“Our benchmarking tests have gone very well, and we believe the mineralization can be processed in the CVMR system in a manner that will provide very favorable yields,” commented CVMR CEO Kamran Khozan.

“We are excited to deliver the final benchmarking studies shortly and look forward to conducting the prototype trial runs which will provide us further insight and confidence in the commercial viability of Nisk.”

While the benchmarking studies will provide the first formal science on the recoveries, Power Nickel said it and CVMR are confident enough to greenlight this next stage.

Apart from recovering more metals from the mineralization it processes using the CVMR system, by delivering finished products like powders, nanopowders, wire, anodes and EV (electric vehicle) precursors, it said it believes it will be able to earn two to three times the revenue with minimal incremental cost.

“At this time, the economics of using the CVMR process look even more compelling,” Lynch added.

“Typically, a Nickel miner will make a concentrate to sell to the refiners and leave at least 25% of their nickel unrecovered, with much of the metal byproducts unrecovered or minimally recovered. Through the CVMR process to date, we have seen excellent recoveries in the nickel and in the metal byproducts.”

Further to its previous announcement on August 15, 2023, the company also said it will make the next payment of $2.25 million to CVMR to complete the next stage of the feasibility study.

~Updated with share price movement~

Power Nickel is a Canadian junior exploration company focusing on developing the high-grade Nisk project into Canada’s first carbon-neutral nickel mine.

In addition to the Nisk project, the company owns significant land packages in British Colombia and Chile.

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