Chinas nickel demand is surging.

On August 26th Barclays Capital reported "[Chinese] nickel imports surged by over 50 percent" in July on top of a reported 80% increase in June.

The rebound demand has pushed nickel prices from a 2008 low of less than US$4 per pound to more than US$9 today.

Chinas surging growth in nickel consumption doesnt appear to be a short-term trend either. Toru Higo, general manager of nickel sales at Sumitomo Metal Mining Company, predicts Chinas production of stainless steel (which nickel is a key component) will push this years nickel demand up a total of 65% from 2008 levels.

The worlds leading nickel consumers and producers are taking note and moving to ensure there is sufficient supply over the long-term. Chinese nickel companies are scouring the world to secure nickel production.

The problem is there are very few nickel sulphide deposits- the most economical type of nickel deposits - left in the world. The few that do remain, and the owners of them, are partnering up with Chinese nickel companies.

One of those owners of a number of nickel sulphide deposits and which has a controlling interest in a significant portion of one of the last undeveloped nickel-sulphide camps in the world and which recently announced deal with Jilin Jien Nickel Industry Co Ltd - a leading Chinese nickel company - is Goldbrook Ventures (TSXV:GBK) of Vancouver, B.C.

Attractive Economics Earns Landmark China-Funded Production Deal

Goldbrooks flagship projects are the exploration stage Raglan Nickel Project and its 25% interest in the developing Nunavik Nickel Project. Both projects are found within the prolific Raglan Mining district in northern Quebecs Nunavik region. Between these two projects Goldbrook and its partner Jilin Jien Nickel control much of the entire Raglan Nickel Belt.

The Nunavik Nickel Project owned by Jien Canada Mining Ltd (Goldbrook 25%; Jilin Jien Nickel 75%) contains a resource estimate of 21.34 million tonnes of mineral-rich ore in seven distinct nickel sulphide deposits - Mesamax, Allammaq, Mequillon, Expo, Ivakkak, TK and Puimajuq deposits.

The official resource estimates the deposits contain a total of 21.34 million tonnes ore in the "Indicated" resource category. The project also contains an additional 560,000 tonnes of "Measured" and 5.24 million tonnes of "Inferred" resources.

The Indicated Resources grade 0.93% nickel, 1.15% copper, 0.05% cobalt, 0.54 g/t platinum, 2.17 g/t palladium, and 0.14 g/t gold.

Those high grades including the high-value platinum, palladium, and gold put the in-situ value of each tonne of ore at between $300 and $500 per tonne depending on current metal prices. Meanwhile, a 2007 feasibility study estimated the cost of processing the ore between $40 and $50 per tonne for open pit resources and about twice that for underground. Most of the defined resources are considered open-pittable.

The primary driver of the impressive economics is that the deposits are nickel sulphides which have significantly lower costs than nickel laterite. The average cost of production per pound of nickel sulphide is between $2 and $4 while the costs of producing nickel laterite deposits is between $10 to $12 per pound.

The low-cost/high-value nature of Goldbrooks project certainly played a big role in attracting a big Chinese partner and why Goldbrook has made a deal that is truly a win/win.

As part of the deal to put the Nunavik project into production by 2012, Jilin Jien puts up 100% of the up-front capital expenditure requirements and maintains a 75% stake in Jien Canada Mining Ltd - the private subsidiary which owns the Nunavik Nickel Project. Goldbrook has no funding requirements for the project and retains a 25% stake. That means no shareholder dilution as the $465+ million Nunavik Nickel Project is underway.

The project is moving forward too. On August 17th 2010, Jien Canada Mining Ltds board of directors approved the initial outlay of $122.4 million dollars to start construction in the Nunavik Nickel Project.

Only Scratching the Surface

The Jien Canada Mining Ltd, Nunavik Nickel Project is just one of Goldbrooks projects though. It has a lot more potential.

Goldbrook has amassed the largest land claim in the heart of one of the most economical nickel belts in the world. Since 2003 the company has been acquiring claims in the Raglan District in Nunavik area of Quebec. It owns a 100% interest in 863,000 acres of mineral rights in the up-and-coming Raglan District and it is this large land position which was the focus of the original Joint Venture-Option agreement with Jilin Jien Nickel Industry Co Ltd in 2008.

This is very important because the region holds a lot of potential for additional, large, highly economical discoveries to be made. To this end Goldbrook has contracted with P&E Engineering Consultants to produce an NI43-101 compliant report on the Option-JV sulphide Nickel discoveries by early fall 2010. The resources from potentially six new deposits are anticipated to add significantly to the economics of the Raglan Belt holdings of Goldbrook and its partner Jilin Jien Nickel.

Basically, the Raglan Belt compares geologically to the Thompson belt in Manitoba and Australian nickel belt which both host some very large sulphide nickel mines.

As an example of the mining potential of the Raglan District, you can just look at the largest mining operation in the area - Xstrata Nickels Raglan Mine.

Xstrata Nickel describes its Raglan Mine as a "property that stretches 70 kilometers from east to west [and contains] a series of high-grade ore deposits scattered along its length. Significant quantities of palladium and platinum as well as cobalt are also produced."

As further proof of the regions economic vitality, the Raglan Mine began operation in 1998 and has been in production ever since - even through the base and precious metals bear market a decade ago.

Goldbrook and its partner control up to 300 km east-west and 70 km north-south of the Raglan Belt and border the Xstrata holdings on the east, west and south.

Goldbrook Ventures Share Structure:

Shares Outstanding: 183,213,171
Warrants: 29,592,640
Stock Options: 17,893,000
Fully Diluted: 230,698,811
Market Capitalization @ 35 cents per share: $64 million

Management

Pulling the entire project together is a team of people experienced in all facets of mining from exploration to engineering and development to financing:

David Baker - Chairman and a Director - has over 25 years experience in the financial industry, with particular expertise in managing and financing junior mining companies. His experience includes strategic planning, corporate structuring and reorganization, sourcing and structuring public and private financings, due diligence reviews and mergers and acquisitions.

Edward T. Gardner - CEO and a Director - resigned his position as Senior Vice President/Corporate Finance with Gilford Securities in New York, USA, to join the Goldbrook team in April 2010. Mr. Gardner was a senior member of the investment banking team at Gilford Securities focusing on Energy, Natural Resources and Technology. Prior to joining Gilford Mr. Gardner ran his own financial advisory firm and spent seventeen years at Alex Brown Securities in corporate finance and institutional sales. Mr. Gardner was a principal of Heafitz, Widman, McMahon & Gardner, a project finance business focused on the energy business. Previously he was an institutional salesman at Donaldson, Lufkin & Jenrette, White Weld and Smith Barney. Mr. Gardner graduated from Fordham University with a degree in Economics.

Brian Grant, PGeo - President, COO and Director - Prior to Goldbrook, Brian was a Director with the BC Geological Survey, he also had significant expertise in mineral exploration from his career with a number of senior mining companies, notably Falconbridge and the exploration of the Donaldson and Katinniq deposits in Raglan in the 1970s. Brians career also includes managing exploration programs in Peru, project geologist exploring for diamonds in Africa, managing gold and base metal projects in B.C. for BP-Selco, made uranium discoveries by deep drilling along the Virgin River fault in the southern Athabasca Basin while managing exploration around Key Lake for Uranerz Exploration and Mining.

Kevin Wells, PGeo - General Manager - has overall direct responsibility for the execution of the 2010 exploration program. Kevin has a BSc in Geology from Laurentian University with 28 years of experience in the exploration and mining industry. Since his graduation in 1994 he has worked extensively in Ni-Cu-PGE mineral exploration for Falconbridge Ltd. and most recently for Anglo American Exploration Canada Ltd. based in Vancouver. He worked as a senior geologist with Anglo American Canada on a variety of projects throughout North America, and recently completed a three year secondment to Anglo Platinums Ni-Cu-PGE exploration projects in Sichuan Province, China. Kevin brings to Goldbrook a strong technical background and excellent project management skills.

The Bottom Line

The Goldbrook Ventures (TSXV:GBK) story is a relatively simple one.

Nickel demand has rebounded sharply and is expected to continue to grow well into the future.

Goldbrook has amassed a very large claim area in one of the most economical nickel-sulphide producing regions in the world.

Its flagship projects have very impressive economics. In situ ore values of between $300 to $500 per tonne and expected costs of production between $40 and $50 per tonne can create some significant profit margins and very quick payback periods.

It has already started advancing its partnership agreement with one of Chinas leading nickel companies to provide the funding to put its Nunavik Nickel project into production and they are near completion of an NI43-101 resource estimate on their Option-JV property in the Raglan Belt.

Then there is still a lot of exploration upside. The Raglan District already has proven economics and Goldbrooks steady stream of land acquisitions since 2003 have put the company in good position to explore some very high-potential areas for a long-time to come.

You can follow Goldbrook Ventures (TSXV:GBK) ongoing development at

Sources: