Giga Metals : Earnings Document - Heilongjiang Concrete Materials Group

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following information, prepared as of August 28, 2023, should be read in conjunction with the condensed interim consolidated financial statements of Giga Metals Corporation (the "Company") for the three and six months ended June 30, 2023, together with the audited consolidated financial statements of the Company for the year ended December 31, 2022 and the accompanying management's Discussion and Analysis (the "Annual MD&A") for that fiscal year. The referenced condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All amounts are expressed in Canadian dollars unless otherwise stated.

Forward-Looking Statements and Risk Notice

This MD&A is a review of the Company's operations and financial position as at and for the three and six months ended June 30, 2023 and plans for the future based on facts and circumstances as of August 28, 2023. Except for statements of historical fact relating to the Company, including our 85% interest in the Turnagain Property, certain information contained herein constitutes forwarding-looking statements. When we discuss: mine plans; our costs and timing of current and proposed exploration; development; production and marketing; capital expenditures; cash flow; working capital requirements; and the requirement for additional capital; operations; revenue; margins and earnings; future prices of nickel and cobalt; foreign currency exchange rates; future accounting changes; or other things that have not yet happened in this review we are making statements considered to be forward-lookingstatements under Canadian and United States securities laws. We refer to them in this review as forward-lookinginformation. The forward-looking information in this review typically includes words and phrases about the future, such as: plan, expect, forecast, intend, anticipate, estimate, budget, scheduled, believe, may, could, would, might and will. We can give no assurance that the forward-looking information will prove to be accurate. It is based on a number of assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company's operations, no material adverse change in the market price of commodities and exchange rates and such other assumptions and factors as set out herein. It is also subject to risks associated with our business, including but not limited to risk inherent in the mining and metals business; commodity price fluctuations and hedging; competition for mining properties; sale of products and future market access; mineral reserves and recovery estimates; currency fluctuations; interest rate risk; financing risk; environment risk; legal proceedings; and other risks that are set out in our annual information form and below. If our assumptions prove to be incorrect or risks materialize, our actual results and events may vary materially from what we currently expect as set out in this review. We recommend that you review our annual information form and this Management's Discussion and Analysis, which include a discussion of material risks that could cause actual results to differ materially from our current expectations. Forward- looking information is designed to help you understand management's current views of our near and longer term prospects, and it may not be appropriate for other purposes. We will not necessarily update this information unless we are required to be securities laws.

For additional risk factors relating to the Company, refer to the short-form base shelf prospectus filed on www.sedar.comon January 31, 2022.

Scientific and technical information disclosed in this document has been reviewed and approved by Greg Ross, P. Geo., and Lyle Trytten, P. Eng., both Qualified Persons consistent with NI 43-101.

Mitsubishi Corporation Transaction

On August 15, 2022, the Company announced that it had entered into a binding agreement with Mitsubishi Corporation ("MC") to form a new joint venture company, Hard Creek Nickel Corp. ("Hard Creek"), to jointly pursue the development of the Turnagain Nickel-Cobalt Project. The transaction closed on September 1, 2022.

Hard Creek issued 15% of its common shares for cash consideration of $8,000,000 and 85% of its common shares in exchange for all related assets and liabilities for the Turnagain Nickel-Cobalt Project. Pursuant to the terms of a shareholders' agreement governing Hard Creek, the Company, with support from MC, will operate the joint venture.

The $8,000,000 cash consideration will be used to complete a Pre-Feasibility Study ("PFS"). Once the Company completes a PFS, further expenditures in the joint venture will be split in accordance with the equity interests of the parties.

Overall Performance

The Company has an 85% interest in Hard Creek, which itself has a 100% interest in the Turnagain Nickel- Cobalt Project located in the Liard Mining Division in northern British Columbia, approximately 65 km east of Dease Lake. The Turnagain Nickel-Cobalt Project currently has 75 mineral claims with a total area of approximately 40,069 ha. Seventy-two of these claims form one block of contiguous claims totalling approximately 38,782 ha. Sixty-eight of these claims contain the core area of the Turnagain property, including the Turnagain resource. A total of 36,068 hectares have expiry dates ranging from October 2031 to December 2032. Four more recently acquired contiguous claims (approximately 2,714 ha) have expiry dates ranging from August 2023 to April 2025. The Company expects to advance the contiguous claims with 2022 work credits and/or cash payment(s)-in lieu of work. The Project currently also includes three non-contiguous claims totalling approximately 1,287 ha with expiry dates ranging from February 2024 to January 2025. These claims may be extended with future work credits and/or cash in lieu of work depending on strategic objectives.

The Turnagain project was not actively explored between 2011 and 2018 due to low nickel prices and difficult financial conditions. The price of nickel improved in 2017, and, during the third quarter of 2017, the Company completed equity financings allowing the Company to conduct an exploration program in the summer of 2018.

The Company started its 2018 exploration program in July with the commencement of archaeological and wildlife surveys and the arrival of drill rigs on site.

The 2018 field work program completed a total of 10,835 metres of core drilling in forty holes (hole numbers DDH18-267 to DDH18-306). On January 30, 2019, the Company announced analytical results from 38 of the 40 holes and the results for the remaining 2 holes were released on February 25, 2019.

The 2018 work program included:

Refer to the January 30, 2019 and February 25, 2019 news releases for details of the analytical results. The analytical results reported demonstrate the continuity of mineralization in the Horsetrail and Northwest zones.

The Company is continuing to advance the project through ongoing:

During July 2018 the Company closed the sale of a 2% Net Smelter Return ("NSR") royalty on all future nickel and cobalt production from the Turnagain Nickel-Cobalt Project to Cobalt 27 Capital Corp. ("Cobalt 27" now Nickel 28 Capital Corp.) for consideration of US$1,000,000 in cash and 1,125,000 Cobalt 27 common shares at $7.40 per share for a fair value of $8,325,000.

In spring and summer of 2019, the Company began metallurgical test work, including comminution, flow sheet development, and variability testing. Additionally, field work began for geotechnical and geochemical investigations in support of low-grade stockpile and waste rock storage design. Environmental baseline data continues to be collected.

In 2019 Natural Resources Canada ("NRCan") agreed to be part of a consortium of government agencies and industry partners, including GIGA, that have agreed to fund a research initiative investigating carbon dioxide (CO2) sequestration in silicate mine residue, including ultramafic residue from mineral deposits such as GIGA's Turnagain nickel-cobalt deposit. A total of $3.5 million was committed to the project, including $2 million from NRCan with the balance from other government geoscience agencies and from industry. More than a decade of research by project lead Dr. Greg Dipple has shown that silicate mineral residue, when exposed to the atmosphere, absorbs CO2 and converts it to carbonate minerals, and the CO2 would remain locked in the carbonates over geological time scales. There is a real possibility that the Turnagain project, if developed into a mine, could achieve our goal of being carbon neutral. Refer to the news release for further details. An update on Dr. Dipple's work was included in an August 4, 2020 news release. On June 1, 2021, the Company announced that test work conducted on Turnagain mineralized material at the University of British Columbia has demonstrated significant mineral sequestration of CO2.

In September 2019 the Company announced an updated NI 43-101 mineral resource estimate based on the additional 36 infill holes drilled in 2018 in the areas of the conceptual open pit described in the Preliminary Economic Assessment dated December, 2011 by AMC Consultants of Vancouver, B.C., and also based on updated geological modeling supported by core logs, rock geochemistry, mapping, alteration modeling and other information. The updated resource estimate increased Measured plus Indicated resources at Turnagain by 24% to 1.07 billion tonnes, while contained nickel increased by 28.3% to 5.2 billion pounds.

On October 15, 2019, a project update news release was issued on metallurgical and engineering work on the Turnagain project. On February 12, 2020 a further news release was issued noting that metallurgical test work is ongoing and the new results will be included in an updated Preliminary Economic Assessment (the "2020 PEA"). On October 28, 2020, the Company announced the results of the 2020 PEA for the production of high-grade nickel concentrate from the Turnagain Nickel Deposit. Refer to the news release dated October 28, 2020 for details. The NI 43-101 technical report for the 2020 PEA was filed on www.sedar.comon November 20, 2020 and on our website at www.gigametals.com. A subsequent amendment to the NI 43-101 technical report for the 2020 PEA was filed on www.sedar.comon February 22, 2021 and on Giga's website.

During the summer and fall of 2020, we did not conduct significant field work at the Turnagain project and instead focused on metallurgy and engineering. Additional fieldwork resumed at the Turnagain project in early 2021 to gather the site data necessary to advance the project to Pre-Feasibility. In March 2021, the Company increased the reclamation bonds with the Ministry of Energy, Mines and Petroleum Resources from $232,000 to $424,000 in advance of planned fieldwork.

An internal study was conducted comparing the economics, technical risk and environmental impacts of the Company's Turnagain project with one operating and a basket of prospective High Temperature Acid Leach ("HPAL") projects and the results of that study were summarized in a press release on November 3, 2020.

The Company concluded its 2021 field program at Turnagain in October, having completed 6,295 metres of core drilling in 15 drill holes. In addition to collecting resource and geological information, 6 holes were also utilized to collect geotechnical data for pit wall design and to install piezometers for groundwater modeling. The Company further conducted 8,400 metres of seismic refraction survey for tailings storage facility design. Due to labour shortages in 2021, the Company was unable to complete all the planned work and data collection for a Pre-Feasibility Study. The Company conducted a work program in 2022 to complete this data acquisition; which included geotechnical drilling in the area of the potential Tailings Management Facility and excavator test pits and geotechnical drilling for stockpile and waste storage designs.

On May 19, 2022, the Company released assay results from its 15-hole 2021 work program and reported on the collection of geotechnical and hydrogeological data and installations, and the completion and interpretation of a seismic refraction survey. These works are expected to move Inferred resources into Indicated resources and to provide valuable data with which to advance project engineering.

On August 3, 2022, the Company reported that it had completed its 2022 field work program, consisting of five helicopter-supported combination 4" Sonic/HQ geotechnical holes totaling 415 metres within the proposed tailings storage main and saddle dam alignments, and 18 excavator test pits within the proposed stockpile and waste storage areas in support of PFS-level mine engineering design.

On October 27, 2022, an updated NI 43-101 mineral resource estimate was announced, based on the additional 15 drill holes totaling 6,295 metres drilled in 2021 that were drilled for resource expansion and resource classification update in addition to supplying geotechnical data. Refer to the October 27, 2022 and November 1, 2022 news releases for additional details, as well as the Turnagain Nickel-Cobalt Project section below.

The Company is in the process of preparing a Pre-Feasibility Study on the Turnagain Nickel-Cobalt Project which will be announced once completed. Expenditures during the six months ended June 30, 2023 included geological and engineering services and metallurgy in connection with the Pre-Feasibility Study.

In May 2023, Hard Creek acquired all the camp equipment at the Turnagain Nickel-Cobalt Project from a supplier that had been renting the equipment to the Company. The acquisition cost was $695,500. The description of goods included shelters, generators, kitchen equipment, plumbing fixtures, appliances, heaters and other items.

Balance,

Change in

Balance,

December 31,

period

June 30,

2022

2023

Turnagain Nickel-Cobalt Project

Mineral property interests

179,500

Assays and testing

2,656,162

11,576

2,667,738

Claims renewal / staking

486,060

3,118

489,178

Drilling

17,467,503

Environmental studies

2,368,988

85,865

2,454,853

Exploration data management

1,010,452

First Nations

383,301

107,040

490,341

Geochemistry

111,066

Geological and engineering services

14,223,862

1,443,472

15,667,334

Geophysical services

972,398

Metallurgy

5,363,274

407,422

5,770,696

Petrographic work

43,957

Project management

106,015

Survey, mapping and camp

5,482,534

85,573

5,568,107

Transportation

3,802,357

1,377

3,803,734

Advances

276,287

(95,920)

180,367

Cost recovery

(56,480)

Asset retirement obligations

485,000

Property impairments

(33,058,924)

BC refundable mining tax credits

(3,424,958)

Federal non-refundable mining tax credits, net

of valuation allowance

(61,185)

Book value at date of sale of net smelter

royalty

(1,777,377)

17,039,792

2,049,523

19,089,315

Brazil Project

Assays and testing

13,311

Claims renewal / staking

72,683

5,387

78,070

Drilling

51,979

Geological and engineering services

28,993

227

29,220

Transportation

1,013

Property impairments

(173,417)

(5,614)

(179,031)

Foreign exchange translation adjustment

5,438

17,039,792

2,049,523

19,089,315

Turnagain Nickel-Cobalt Project

The Turnagain Project hosts the Horsetrail nickel-cobalt deposit, among the world's largest undeveloped nickel-cobalt sulphide deposits, located in British Columbia, Canada. Giga Metals owns 85% of the project which hosts an updated (October 27, 2022) NI 43-101 Mineral Resource containing:

Attachments

Disclaimer

Giga Metals Corporation published this content on 28 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 August 2023 18:35:21 UTC.

AttachmentsDisclaimerGiga Metals Corporation28 August 202328 August 2023 18:35:21 UTC