Balmoral Resources CEO Darin Wagner on Diminishing Nickel Supply

Balmoral Resources CEO Darin Wagner on Diminishing Nickel SupplyNickel investors will no doubt have noticed that at the end of August, Scotiabank's Commodity Price Index called for zinc and nickel to "move dramatically higher in 2015."

In it, analyst Patricia Mohr notes that LME nickel rose to US$8.64 per pound in July, up from $6.31 per pound in December of last year. She predicts that the metal will sustain that upward momentum, rising to $10.75 in 2015 and $12 in 2016, driven by Indonesia's mineral export ban and growing global stainless steel demand.

With nickel's outlook looking so positive, it's no surprise that exploration company Balmoral Resources (TSX: BAR) quickly mounted an exploration program when it discovered nickel at its Grasset property in Quebec.

To get a better understanding of what prompted the company to move forward with its nickel project, Nickel Investing News spoke with CEO Darin Wagner, who is certainly bullish on the base metal.

Nickel, nickel everywhere, but not a nickel mine

Diminishing supply, combined with deposit size and grade, is a big reason why nickel mines are so few and far between.

"When we look at the nickel market we see, especially on the nickel sulfide side, a lack of quality projects either in the pipeline or sitting on the shelf," Wagner explained, noting that for the most part, nickel projects lack economic viability.

"There are fairly sizeable assets, but they're quite low grade and they require an enormous amount of CAPEX," he said. Furthermore, those projects "require a fairly high nickel price for a sustained period of time."

Wagner highlighted that to better understand how to approach nickel deposits, miners and investors should take cues from recent happenings in the gold space and approach nickel projects with a great deal of caution.