Giga announces internal analysis of Turnagain project vs HPAL projects

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November 3 2020 TSX.V - GIGA

Giga announces internal analysis of

Turnagain project vs HPAL projects

Vancouver, B.C. – Martin Vydra, President of Giga Metals Corp. (TSX.V -GIGA), today

provided a summary of an internal analysis that compares Giga’s Turnagain project to High

Pressure, High Temperature Acid Leach (HPAL) projects both producing and in

development.

“Our Preliminary Economic Assessment (PEA), announced October 28, 2020, modelled a

mine that would produce an average of 33,000 tonnes per year of nickel over a mine life of

37 years with marginal economics at current nickel prices, ” said Mr. Vydra. “The nickel

would be contained in an exceptionally clean sulphide concentrate grading 18% nickel and

1% cobalt, suitable for smelting and refining into Class I nickel, as modelled in the PEA.

We are also planning to conduct further testwork to confirm the amenability of Turnagain

concentrate to direct refining via hydrometallurgy into recovered nickel suitable for the

battery industry whether it be powder, briquettes or sulphate. We note that Sherritt

International’s Fort Saskatchewan refinery, Voisey’s Bay Long Harbor refinery and BHP’s

Kwinana refinery were all designed to direct ly refine nickel concentrates o f similar

composition.”

Mr. Vydra added, “One of the key benefits of Turnagain is the ability of the waste residue

to absorb CO2 from the atmosphere. This is supported by Dr. Greg Dipple’s work at UBC

and Giga Metals will be advancing work in 2021 in an effort to quantify the sequestration

in order that data can be applied to future technical reports. In speaking to OEM’s, battery

manufacturers and institutional investors, the potential for Turnagain to be a carbon neutral

nickel mine without the need to purchase offset credits has significant value. This value is

not reflected in the basic economic analysis conducted in the PEA. Aside from the potential

to be able to generate revenue from selling excess CO 2 credits, investors and consumers

wishing to secure carbon neutral and ethical nickel have indicated that they would ascribe

a premium to a nickel mine that was genuinely carbon neutral.”

A market study by Wood Mac kenzie estimates that demand for nickel from battery

manufacturers will rise from a current 170,000 tonnes per year (2019) to 700,000 tonnes

per year by 2030 and to 1,600,000 tonnes per year by 2040, driven largely by demand for

electric vehicles (EV). To satisfy that demand, allowing for some displacement of Class I

nickel from current uses, up to fifteen new mines in the range of 35,000 tonnes of nickel

per year would have to come onstream by 2030, plus a further 25 mines of a similar size

by 2040.

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“The market believes that most of the demand for battery grade nickel will be filled by new

HPAL projects which are expected to be built within schedules an d budgets that are

unprecedented compared to the previous HPAL operations that have been commissioned

in the last 25 years ” said Mr. Vydra. “These projects, like the Turnagain project, have

marginal economics at current nickel prices. Wood Mackenzie estimates that the average

HPAL project in development would require a nickel price of US$10.86 per pound to

provide a pre-tax Internal Rate of Return (IRR) of 12%. We wanted to understand how

our project stands relative to HPAL projects in terms of pure economics , capital and

technical risk, and environmental impact.”

ECONOMICS AND CAPITAL RISK

“We decided to compare ourselves to an operating HPAL project and to a basket of projects

under study,” said Lyle Trytten, Giga Manager of Development. “Ramu, located in Papua

New Guinea, is among the most successful HPAL projects built in the last 25 years. It was

commissioned in 2012, but we updated their Capex to 2020 dollars for the analysis. The

development projects in our analysis are of a range of capacities and located in Australia

and the Philippines.”

Mr. Trytten continued “Our recently completed PEA included a sensitivity analysis around

nickel price. While Wood Mackenzie provided long term nickel price guidance of

US$7.50/lb (Base Case) and US$8.50/lb (ESG Case), they commented that the incentive

price for new Western Worl d HPAL projects is higher at $10.86/lb. We developed

cumulative cash flow comparisons using the PEA model at the ESG Case and the lower

and upper bounds of the sensitivity analysis, US$6.00/lb and US$11.00/lb , to understand

our competitive positioning. In all cases, cobalt pricing is US$22.30/lb.”

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“In all pricing scenarios, Turnagain is competitive with these types of projects and

represents a lower capital risk,” said Mr. Trytten. “The project works well if built in two

stages, so less money is on the line to achieve similar nickel production rates as the more

capital intensive HPAL projects. Of course, we could always build Turnagain in a single

exercise, improving financial returns.”

As noted in the PEA, the price sensitivity analysis range runs from a pre -tax IRR of 0.2%

to 15.7%, and from a pre-tax NPV of -US$1,035 million to US$1,519 million. “At all the

sensitivity pri cing cases examined, Turnagain’s IRR and NPV are comparable if not

superior to HPAL projects we understand are being contemplated ,” said Mr. Trytten .

While there is no prediction that any of these prices will occur, they offer comparison points

for Turnagain against new HPAL projects.

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TECHNICAL RISK

The Turnagain project is designed as an open pit mine with a very simple processing circuit.

Mined material is crushed, ground, and put through froth flotation comprising a rougher

circuit and three stages of cleaning to produce a sulphide concentrate for shipping. The

technology has been used reliably for many decades in sulphide nickel, copper, and zinc

mines, and there is nothing experimental or complex in the processing circuit. Ramp up

times to full capacity for this type of simple circuit are from 6 to 18 months. Tech nical

risk is considered very low.

HPAL projects strip mine nickel in fine-grained limonite ores, often with significant clay

content, which are pumped into high-pressure autoclaves for treatment with large amounts

of sulphuric acid at high temperatures. These complex facilities must deal with corrosive

solutions, large-scale dissolution and re-precipitation of solids, sealing of the rotating shafts

of pumps and agitators at the extreme conditions, and significant erosive steam flashing for

heat recycle, resulting in exotic and expensive materials of construction and significant

maintenance challenges. Ramp up times to full capacity are from 3 to 6 years, and some

projects never reach name plate capacity. Technical risk is considered very high and every

new process innovation adds risk.

ENVIRONMENTAL IMPACT

Turnagain is located in an area of very low seismic risk and relatively low precipitation.

Designed as an open pit mine, the area of disturbance is moderate relative to the volume of

material processed. The tailings management facility is designed to the highest safety

standards. The mine residue will be mostly basic minerals with a very low percentage of

unrecovered sulphides, so risk of acid generation is exceptionally low.

Power will be sourced from the provincial grid which is principally supplied with

hydroelectric power, and the mine residue is known to sequester CO2 from the atmosphere,

something Giga is actively researching. Our goal is to be the world’s first carbon neutral

mine. Another advantage is that, as the silicate sand residue absorbs CO 2 and converts to

carbonate minerals, it undergoes a process of cementation that will further increase the

stability of the tailings management facility.

HPAL projects under development outside of Australia are mostly contained within the

“coral triangle”, an area of the Pacific Ocean that is recognized as the global center of

marine biodiversity and a global priority for conservation, and it is an area of high seismic

risk and very high precipitation.

The clay deposits are relatively thin and support rare tropical rainforests, which are cut

down as the deposits are strip mined over a wide area relative to the volume of material

processed. (The rainforests are rare because they are adapted to high nickel content in the

soils). The fine-grained deposits are prone to significant erosion into streams, rivers, and

the ocean.

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Once mined and processed, dealing with mine waste, which is in the form of a slurry with

extremely fine particle size, is a very difficult problem. The fine particles can be separated

from solution and stored in a tailings management facility, but high rainfall and high

seismic activity in the coral triangle area of the Pacific add risk and complexity to tailings

storage. Many HPAL projects that are planned for these areas will require ocean disposal

of their effluent regardless of their tailings management plans.

HPAL projects require large amounts of heat as well as power that is generally supplied by

burning coal or other fossil fuels. They also use limestone to neutralize excess acid, which

causes significant CO 2 emissions from the limestone. They are very large CO 2 emitters,

with emissions in the range of 25 tonnes of CO2 emitted per tonne of nickel produced, and

higher during their frequently prolonged ramp-ups.

“Based on Western environmental standards and Return on Investment required by

Western producers, it is difficult to understand why HPAL projects are being considered

by Western organizations ,” said Mr. Vydra. “However, the strategic consideration of

securing long term supplies of battery grade nickel combined with an extremely low cost

of capital is incenting the Chinese, among others, to build these projects. Securing decades

worth of nickel supply at the cost of production will provide a long term competitive

advantage to battery and electric vehicle manufacturers.”

Technical information in this press release has been approved by Lyle Trytten, P.Eng., a Quali fied Person

as defined by NI 43-101. Financial modelling used herein is based on the Preliminary Economic Assessment

(PEA) results released on October 28, 2020 that were authored by Hatch Ltd, a global engineering firm. The

PEA includes the use of inferred mineral resources that are considered too speculative geologically to have

economic considerations applied to them that would enable them to be categorized as mineral reserves. The

study is preliminary in nature and there is no assurance the mining, metal production or cash flow scenarios

outlined in this report would ever be realized. Mineral resources are not mineral reserves and do not have

demonstrated economic viability.

Forward looking statements

Certain statements in this news release are forward -looking statements, which reflect the expectations of

management regarding the Turnagain Project. Forward -looking statements consist of statements that are

not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding

the future. Such statements include, but are not limited to, statements with respect to the future financial or

operating performance of the Company and its mineral projects, the estimation of mineral resources and

mineral prices, steps to be taken towards commercialization of the resource, the timing and amount of

estimated future production and capital, operating and exploration expenditures, and the expectation that

the risk level is lower than some other mining projects; that our project is similar in many ways and in some

ways favourably comparable to other nickel projects; that battery companies will use much more nickel in

future; that a price premium could accrue to a nickel mine that was genuinely carbon neutral; and that we

can produce nickel with low net carbon emissions. Such statements are subject to risks and uncertainties that

may cause actual results, performance or developments to differ materially from those contained in the

statements. No assurance can be given that any of the events anticipated by the forward -looking statements

will occur or, if they do occur, what benefits the Company will obtain from them. These forward -looking

statements reflect management's current views and are based on certain expectations, estimates and

assumptions which may prove to be incorrect, including the statements relating to future exploration and

development of the Project and mineral resource and mineral reserve estimations relating to the Proje ct. A

number of risks and uncertainties could cause our actual results to differ materially from those expressed or

implied by the forward -looking statements, including: (1) the mineral resource estimates relating to the

Project could prove to be inaccura te for any reason whatsoever, (2) Giga is unable to finance the Project,

(3) prices for nickel and cobalt or project costs could differ substantially and batteries may not in future

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depend on nickel (4) inferred and indicated resources may not material ize, (5) permits, environmental

opposition, government regulation, cost overruns or any of many other factors may prevent the Company

from commercializing the Turnagain Project, (6) additional but currently unforeseen work may be required

to advance to the pre-feasibility stage, (7) risk may be higher than expected for a number of reasons, some

foreseeable and others unforeseeable such as indigenous land claims, natural disaster, and many other

possibilities; (8) despite our expectations that we are comparable to other nickel projects, on closer

examination and upon project start-up we may find that our expected comparisons were not valid; and (9)

even if the Project goes into production, there is no assurance that operations will be profitable or that we

can reduce carbon emissions compared to other producers. These forward -looking statements are made as

of the date of this news release and, except as required by applicable securities laws, the Company assumes

no obligation to update these forward-looking statements, or to update the reasons why actual results differed

from those projected in the forward -looking statements. Additional information about these and other

assumptions, risks and uncertainties are set out in the "Risks and Uncertainties" section i n the Company's

most recent MD&A filed with Canadian security regulators.

On behalf of the Board of Directors,

“Martin Vydra”

MARTIN VYDRA, President

GIGA METALS CORPORATION

Tel - 604 681 2300

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is

defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy

or accuracy of this release.

Suite 203 – 700 West Pender St., Vancouver, BC, Canada V6C 1G8

T: 604-681-2300 E: [email protected] W: www.gigametals.com