Axiom wins mining permit for Solomon Islands nickel project; shares rocket 55pc
Junior explorer Axiom Mining has been granted a mining lease for its Isabel nickel project – news that sent shares up as much as 55 per cent this morning.
The grant of the 25-year mining lease for the San Jorge deposit, which is located in the Solomon Islands, means Axiom (ASX:AVQ) is now fully permitted to start mining.
Shareholders applauded the news, pushing shares up to an intra-day high of 15c.
This is the first time that any miner has been granted a mining lease for the Isabel project, chief Ryan Mount told investors.
“We look forward to efficiently move through all phases of development to commercial production due in early 2019,” he said.
Axiom endured delays in advancing its Isabel project into production while it battled its ownership out in court with global trading giant Sumitomo.
The five-year battle concluded with Axiom being named the victor.
The company is now sorting out the financing for the Isabel mine, which Axiom says is at an advanced stage and due to be squared away in the coming weeks.
Mr Mount told Stockhead in June that Axiom will need about $12-20 million to get the mine up and running – which is likely to be borrowed from a buyer of output from the mine, with the funding linked to an offtake agreement.
Development and construction of the mine has begun and the upgrade of the exploration camp to a long-term mining camp is also now underway.
While most of Axiom’s nickel will be destined for the stainless steel market, there is the potential for the company to sell to battery makers.
“There has been some discussions with a number of operators who at the end of the chain may have access to the battery market,” Mr Mount told Stockhead following the grant of the mining lease.
“Initially it is going to be the stainless steel market and what we’re seeing is that some of the supply is going toward the battery market.”
Axiom previously inked an offtake agreement in December 2015, but recently started the process again to secure new supply deals.
“We’ve been going through this process reasonably extensively for basically all of this year,” Mr Mount explained.
“This mining lease really is the trigger to bring finality to the process and we’d anticipate by the end of October we’ll have that finalised and announced, and it’s likely that offtake will come with development finance capital as well.”