Kolosori Nickel Project (80%)
The Kolosori Nickel Project is a direct shipping ore nickel laterite project currently being developed on Isabel Island in the Solomon Islands. The Company holds an 80% shareholding in Pacific Nickel Mines Kolosori Limited (“KNML”), the holding company of ML 02/22. The landowners associated with the Kolosori Project own the remaining 20% of KNML.
The Company is advancing its flagship Kolosori Nickel Project into production, which is anticipated for first shipment in November 2023. The Kolosori Project is a Direct Shipping Ore (DSO) with a high-grade nickel laterite Mineral Resource Estimate totalling 7.06 million tonnes at 1.57% Ni at a 1.2% Ni cut off.
Definitive Feasibility Study
Two production scenarios were provided by Australian Mines Design and Development PL (AMDAD in the DFS). The first incorporates the ore reserve (97%) and a small proportion of inferred resources (3%) – referred to as the “Base Case”. The second incorporates the ore reserve (68%) and a larger proportion of inferred resources (32%) – referred to as the “Expanded Case”. The Expanded Case includes inferred resources which either naturally fit within open pits as part of the Base Case or have sufficient continuity to be included in stand-alone pits.
A reserve statement prepared by AMDAD was released as part of the DFS.
| Item | Base Case ($US) | Expanded Case ($US) |
| NPV Post-Tax | $64m (A$91m) | $83m (A$118m) |
| IRR Post-Tax | 156% | 170% |
| Payback Period (Months) | 6 | 6 |
| Ore Mined | 3.8 Mwmt @ 1.57% Ni | 6.1 Mwmt @ 1.51% Ni |
| Peak Annual Ore Shipping (M wmt pa) | 1.40 | 1.45 |
| Mine Life (years) | 3.0 | 5.8 |
| Initial CapEx | $21.3m | $21.3 |
| LOM Sales Price 1.5% Ni CIF China (USD/wmt) | $75.00 | $75.00 |
| LOM C1 Costs ($/wmt sold FOB) | $31.08 | $30.70 |
| LOM Taxes and Royalties ($/wmt sold FOB) | $2.96 | $2.84 |
Kolosori JORC (2012) Resource Estimate
| LITHOLOGY | RESOURCE CATEGORY | Dry Kt (‘000) | Ni % | Co % |
| TRANSITIONAL | MEASURED | 127 | 1.81 | 0.08 |
| INDICATED | 583 | 1.52 | 0.07 | |
| INFERRED | 1,300 | 1.33 | 0.07 | |
| SUB TOTAL | 2,009 | 1.51 | 0.07 | |
| SAPROLITE | MEASURED | 893 | 1.73 | 0.02 |
| INDICATED | 2,264 | 1.48 | 0.02 | |
| INFERRED | 4,040 | 1.42 | 0.02 | |
| SUB TOTAL | 7,197 | 1.48 | 0.02 | |
| TOTAL (M+I+I) | 9,206 | 1.46 | 0.03 |
Kolosori JORC MRE at a 1.0% Ni Cut off
| LITHOLOGY | RESOURCE CATEGORY | Dry Kt (‘000) | Ni % | Co % |
| TRANSITIONAL | MEASURED | 127 | 1.81 | 0.08 |
| INDICATED | 469 | 1.62 | 0.07 | |
| INFERRED | 812 | 1.48 | 0.06 | |
| SUB TOTAL | 1,408 | 1.56 | 0.07 | |
| SAPROLITE | MEASURED | 846 | 1.77 | 0.02 |
| INDICATED | 1,833 | 1.57 | 0.02 | |
| INFERRED | 2,989 | 1.53 | 0.02 | |
| SUB TOTAL | 5,668 | 1.58 | 0.02 | |
| TOTAL (M+I+I) | 7,076 | 1.57 | 0.03 |
Kolosori JORC MRE at a 1.2% Ni Cut off
Development Work
Construction of the Project began in earnest in August 2023 following the arrival of the contract mining equipment from PNG via the mining contractor, HBS. The Project is currently in development with first shipment of ore scheduled for November 2023.
A second tranche of HBS mining equipment arrived on site in September 2023 and has allowed the Company to utilise a two-shift (24-hour) operation to accelerate the removal of overburden and is sufficient for ore mining and loading of barges for shipment.
