Royal Nickel (RNX): Little Inco prepares to take flight

Royal Nickel, a company led by a group of former Inco executives, is working to cash in on rising commodity prices by developing a large nickel project near Amos, Quebec.

The Inco boys are back!

Three years after the venerable Canadian nickel mining giant was swallowed by Vale SA (NYSE: VALE, Stock Forum) of Brazil, a group of former Inco executives are working to cash in on rising commodity prices by developing the Dumont nickel deposit in Quebec, at a projected cost of around $2 billion.

This effort is being led by Scott Hand, the 68-year-old ex Inco chief executive officer, who two years ago agreed to become executive chairman of Royal Nickel Corp.(TSX: T.RNX, Stock Forum), the Toronto company that owns 100% of the project.

He is working with a management team that includes former Inco marketing vice-president Peter Goudie, and Tyler Michelson, who was a vice-president and business strategist at Inco.

Mitchelson is now President and chief executive officer at Royal Nickel, which recently raised $45 million from an initial public offering that will be used to finance metallurgical test work and mine feasibility studies.

On December 24, 2010, the stock was trading at $2.09, giving Royal Nickel a market cap of 175.5 million based on 84 million shares outstanding.

"We do have a couple of former Falconbridge people there too," said Hand, referring to the fact that Alger St-Jean, a former senior geologist at Falconbridge, is now vice-president of exploration at Royal Nickel. Falconbridge was Canada's second largest nickel miner, behind Inco, before it was acquired by Xstrata PLC in 2006. (more)