Cannon Resources

STEVE LYNN

CEO

(ASX:CNR)

◾ Company Name: Cannon Resources ◾ Company ASX code: CNR ◾ Key commodities: Nickel ◾ Key Personnel: Steve Lynn, CEO | Alex Passmore, Non-Exec Chairman Director | Chris Hunt, Company Secretary ◾ Locations: Western Australia ◾ Market Cap as of 15/07/22: $25.63M ◾ Share price range over 12 months as of 15/07/22: $0.655 - $0.245 ◾ Company Website: cannonres.com.au

COMPANY PROFILE

Cannon’s progress since listing in August last year has been nothing short of impressive.

At the time its flagship Fisher East project boasted a resource of 78,000t at 1.9% nickel across three deposits – Camelwood, Cannonball and Musket.

The secondary Collurabbie project some 65km to the east contained 0.573Mt of ore at 1.63% nickel, 1.19% copper, 0.082% cobalt and 1.49g/t and 0.85g/t respectively of platinum group elements palladium and platinum.

It has since been busy building on those resources, boosting Fisher East’s inventory by 49% to 116,300t at 1.8% Ni, including a 44% increase at Musket (45,500t at 1.9% Ni) and a maiden resource of 24,500t at the new Sabre deposit.

“It was clearly under drilled in areas like Sabre and the down plunge extension of Musket,” Cannon CEO Steve Lynn says.

“So there was plenty of scope to do fairly rapid work and rapidly increase the resource as a consequence, and that’s what we did - we went in hard. We backed ourselves.”

Geologist Lynn has played a key role in the discovery of nickel and VMS style base metal deposits in WA across a global career with stints at majors like IGO, Great Central Mines and Gold Fields.

Cannon’s emergence has dovetailed with a rapid rise in the nickel price, trading over US$20,000/t consistently this year and briefly touching record levels of ~US$50,000/t in March.

“I call it ‘next level’, because we had an existing and substantial resource. When Cannon first got it, we had 78kt of contained nickel at good grade of just under 2%,” he said.

“There’s still a lot of upside at Musket because it’s still completely open down plunge and all the deposits are completely open down pledge for that matter.”

High grade results in recent drilling at Sabre have improved the outlook even further.

“I’m hopeful for an uptick in the tonnes and I’m also hopeful for an uptick in the grade,” Lynn said.

Fisher East and Collurabbie are ‘class 1 nickel’, the kind historically produced in Australia by companies like Western Mining Corporation, BHP and Mincor, which is the main feedstock for nickel in batteries.

While nickel is supplied primarily to stainless steel producers, the biggest growth market for the commodity is in EVs, batteries and energy storage.

“The big change in the outlook at the moment is people realise high performance batteries for electric vehicles and storage of electricity are going to be in high demand and it’s going to become an increasing component of the use of nickel,” Lynn said.

“At the moment the very high performance batteries used by Tesla and some of the other manufacturers use around 80% nickel in the cathode.”

It is a direction BHP has been heading after securing major supply deals with EV makers Tesla and Toyota. That bodes well for Cannon, which is ideally placed to be a supplier of class 1 nickel to BHP, with its nearby Mt Keith and Leinster concentrators within 200km of Cannon’s deposits.

Lynn says scoping studies will take place soon at Fisher East, with feasibility studies planned for 2023 and 2024 and a final investment decision likely towards the end of 2024.

KEY INVESTMENT HIGHLIGHTS

JUNE 21, 2022: Cannon reports high grade results from drilling at the Sabre nickel deposit including 5.7m at 4.5% nickel from 310.28m and 8.3m at 2.7% Ni from 132.95m. APRIL 5, 2022: CNR boosts Fisher East nickel resources by total 49% to 116,300t with maiden resource at Sabre after upgrading Musket deposit. AUGUST 12, 2021: CNR lists on the ASX in a $6m IPO.