I bought more FPX Nickel (FPX.V) at .245 cents this week. It is my biggest holding at 21% of my portfolio. See my 2023 write-up for my overall reasons for owning the stock.
Relevant Background
The stock fell in fall 2023 when one of its four First Natoin stakeholders, the Tl’azt’en First Nation, unilaterally announced that it was terminating the Memorandum of Understanding (MOU) agreement with FPX it had held since 2012. This bad news first broke August 9th when FPX issued an NR responding to Tl’azt’en’s August newsletter that announced they were terminating the MOU.
This was a blow. The stated reason was to protect their lands and waters, but other factors may have contributed: discontent with past logging agreements on their lands, the inclusion of neighbouring nations in the consultation process, and the prospect of the mine becoming very real as the PFS approached. I don’t believe it was due to a lack of engagement with FPX. The reasons, nevertheless, are moot at this stage. Evidence strongly suggests the relationship has ameliorated. Better yet, the announcement of an MOU with the provincial government is imminent.
Putting in the Work
In the past 1.75 years, FPX has continued to advance the Baptiste project, aiming for entry into the Environmental Assessment (EA) process in H22025 (soon) and the publication of a Feasibility Study (FS) in 2027. Notable developments related to FN relationships:
- Announcement of a unique collaborative approach with impacted First Nations groups. Excerpt: “In 2024, FPX supported the formation of a First Nations working group involving multiple nations to define a process for multi-lateral information sharing and collaborative decision-making, with the objectives of working with the First Nations to assess and define the project, and to consider socio-economic impacts and opportunities.”
- Opening a physical office in Fort St. James (“Community Office”) and the hiring of a locally-based Community Manager to support ongoing and increased engagement with First Nation governments.
- Hiring local indigenous owned/affiliated companies for help with environmental and cultural baseline studies.
- Tl’azt’en’s election of a new chief, Chief Edward John, replacing Chief Leslie Aslin. Tthe MOU was terminated under Aslin’s leadership.
- In May, 2025, FPX signing a collaboration MOU with the other three First Nations stakeholders, the Yekooche, Binche Whut’en and Takla, showing their willingness to partner in and advance the project.
The BC government has also indicated strong support for FPX’s Baptiste project, indicating they recognize the value of it offers the province (and are not concerned with one stakeholder terminating an MOU). Examples include:
- Designating the project as the first in the government’s Critical Minerals Office service, designed to help the development of mines in BC. The first goal of this office is to “[e]xpand First Nations partnerships, shared decision-making and reconciliation.”
- BC Minister of Mines Jagrup Brar’s supportive comments in January 2025: “I want to recognize FPX Nickel Corp. for being the first company supported by that Office. The Baptiste Project has tremendous potential, and we are excited to see what the future holds. Together, we are creating opportunities, collaborating with First Nations to the benefit of all, and advancing projects that could be the critical minerals mines of tomorrow.”
- FPX was selected to participate in BC Premier David Eby’s trade mission to Japan in June.
Meanwhile, the strategic investors continue to hold their stakes while FPX buys back its shares on the open market. This and the above developments show the project is moving forward and has strong government backing.
Scuttlebutt: Following the Breadcrumbs
Though the tone of the original Tl’Azt’en newsletter post indicated they were not at the table, many breadcrumbs left behind show that this is no longer the case.
1) Passage from the General Assembly Showing Project is Being Discussed (September 2024)
2) Notices of FPX Presentations to Community (May 2025). There have been several similar notices.
4) The significant proof and the catalyst of this post, however, came on June 18th in the May 2025 newsletter.
Note from Tl’Azt’en Councillor Mina Holmes (May 2025)
This states, in clear terms, that the nation is finalizing an MOU with the BC Ministry of Mining and Critical Minerals.
Since the discovery of this news by a CEO.ca investor on June 18th, the stock has had a slight increase in volume but it continues to trade in the same .25c range. The market remains largely unaware not only of the improving relationship but also that a new MOU is imminent. This is the opportunity and why I bought more this week.
What will happen when the MOU is announced?
The share price moves upward. I doubt it will immediately jump to the 0.51c level of 09/2023. The stock has been holding its breath for a long time. Clearing this obstacle can make way for more positive newsflow and public endorsement. This could come via the announcement of another strategic investor, the unveiling of the name of the unnamed strategic, positive developments at a JOGMEC property, or better yet, strength in the nickel price.
Playing with Valuation
If we look at Wyloo’s acquisition of Noront, the project was acquired for $616.9M, which was 1.1x higher than its FS NPV8. The buyout price was spurred by a bidding war. Assuming FPX’s FS will have similar economics to its PFS, Grok suggests the Baptiste project would fetch 0.7-0.9x NPV range for a buyout, in the absence of a bidding war. Conservatively, if we went for 0.5% NPV, that would be C$1.37B, which is incomprehensibly far from where FPX sits today. To break it down:
FPX's current MCAP is a measly 77M, with 314.92M shares out, for a share price of 0.245c.
A sale at a conservative 1.37B, assuming the share count stays relatively the same, is a share price of $4.35. That would be a 17.8 bagger.
Hyperbolic claims abound in the junior mining space, but even when viewed conservatively, it’s hard to ignore the value disconnect here. Aside from the nickel price being in the dumps, I’m arguing that one reason for the disconnect is information asymmetry, which will soon disappear when the MOU is announced.
Even in news this week, FPX has received its Multi-Year Area-Based Permit (MYAB) to complete drilling necessary for the FS. This wouldn’t be possible without local FN consent. It’s also clear through FPX’s alliance with JOGMEC, a Japanese-government run organization focusing on discovering more awaruite nickel deposits, that FPX is more than just the Baptiste project.
It’s hard to be a contrarian and put money into a nickel play during a PM bull market. Still, within a year I believe we’ll look back at this period as an opportunity and wish we had bought more.
My cost basis is now .289c, higher than where it currently sits.
– MB
Disclaimer: This content is for informational purposes only and should not be construed as financial advice. The views expressed are those of the author, who is not liable for any losses or damages arising from any actions taken based on the information provided in this blog. Investing and trading involve risk; you are solely responsible for your decisions.