Royal Nickel Corp. (RNX), the owner of a nickel project in Quebec, gained the most in six months after the company signed a memorandum of understanding with Tsingshan Holding Group Co., a Chinese stainless-steel producer.
Royal Nickel rose 22 percent to 39.5 Canadian cents at 9:57 a.m. in Toronto, where the company is based. The shares earlier gained 23 percent, the most intraday since Aug. 24.
The two companies will consider offtake and partnership agreements after a feasibility study is completed on Royal Nickel’s Dumont project, the company said today in a statement. Tsingshan also expects to build a plant that would use nickel sulphide concentrate, which will be produced at Dumont, to produce stainless steel.
The news is “a positive first step” towards Royal Nickel securing a senior partner for development of the Dumont project, John Hughes, a Toronto-based analyst at Desjardins Securities Inc. said in a note today. Hughes rates the company a buy with a price target of C$1.95.
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