By starting mining operations in the Solomon Islands without doing the usual stuff, like establishing an actual JORC Resource or completing a feasibility study, freshly minted nickel producer Axiom (ASX:AVQ) is taking some huge risks.

Establishing an official mineral resource is important because it tells companies what they have in the ground, with varying levels of geologic knowledge and confidence.

And miners undertake feasibility studies to determine whether or not a resource can be mined economically.

Both these things reduce the chances that everything will go pear-shaped.

Axiom acknowledges as much, but appears confident that a commercial decision to commence mine operations at San Jorge “based upon the circumstances at the time … is an appropriate commercial strategy”.

San Jorge is a tropical laterite nickel deposit, which Axiom says is suitable for a low cost and technically less complex direct shipping ore operation.

But a number of factors – some completely out of Axiom’s hands — have led to its first shipment being delayed, once again, until May.

Just after mining commenced in late January the effects of Cyclone Oma hit the Solomon Islands, and disrupted mining operations throughout February.

Then operations were affected by the Solomon Islands general election on April 3, “which significantly reduced the availability of inter-island transport to supply labour, necessary materials and consumables required for operations”, Axiom says.

“The impact of this was greater than originally planned, particularly on Axiom’s ability to recover time lost due to adverse weather events in February and March.”

Most of the workforce is back in action.

But now authorities want Axiom’s first two ore shipments to enter and exit at Honiara Port, rather than accessing San Jorge directly.

“The authorities advised that this is a temporary requirement for administrative reasons and Axiom believes that, after the initial shipments, direct access to San Jorge can occur,” Axiom says.

“This requirement, combined with the recent Easter holiday period (causing limited availability of Government officials), has resulted in a further delay in the first shipment which is now scheduled to occur in May 2019.”

Axiom was contacted for additional comment.

 

In other base metals news today:

Nearology play Cohiba Minerals (ASX:CHK) jumps 10 per cent. The company reckons a magnetotelluric (MT) survey may have delineated a second possible “feeder” zone at its Horse Well IOCG project. These MT survey results will provide additional drilling targets for Cohiba’s next program of work, the company says.

The junior explorer’s share price spiked in late November last year, when tenement neighbour and mining giant BHP announced a spectacular new iron oxide copper gold (IOCG) discovery, 65km southeast of its mammoth Olympic Dam operations in South Australia.

 

Consolidated Zinc (ASX:CZL) is forced to retract a maiden ore reserve statement by the ASX.

“Consolidated Zinc today announced a maiden Ore Reserve at its producing Plomosas mine derived from the Tres Amigos Indicated Resource only,” managing director Brad Marwood says. “CZL is currently working on completing a Feasibility Study and therefore retracts today’s maiden Ore Reserve announcement. CZL will update the market upon completion of those studies.”

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