Almost time for Kolosori to shine. Pic: Getty
Mining
Pacific Nickel is zeroing in on the Kolosori project after getting a big, green thumbs up from the Solomon Islands government.
The consent from the Environment and Conservation Division of the Solomon Islands Ministry of Environment is a key step towards a mining lease, expected early 2022.
Pacific Nickel Mines (ASX:PNM) says a workshop and consultation with stakeholders, landowners and various Government departments to review the Environmental and Social Impact Assessment prepared by the company is subject to a number of standard conditions.
The Kolosori project is currently envisioned as a direct shipping ore project thanks to its resource of 5.89 million tonnes grading 1.55% nickel which is easy to access and sold with no processing required.
“Receiving the development consent is a positive endorsement from the Government for the development of the Kolosori project,” chief executive officer Geoff Hiller said.
“We are now focused on the granting of the Mining Lease while we complete the definitive study feasibility.
“We remain committed to fast tracking the project, which is expected to benefit all stakeholders.”
The Kolosori nickel project is the subject of a scoping study that outlined strong financial returns while delivering significant social and economic benefits to landowners.
Development is expected to be straightforward given that the project’s shallow open pit vision with no processing – or tailings dams – required thanks to its DSO nature.
Under the study, the project is expected to produce 93,450t of contained nickel grading 1.5% nickel with the option to mine higher-grades in excess of 1.6% nickel early in the mine schedule.
Capital costs are estimated at a low US$18m to US$20m while operating costs are similarly straight forward, which explains the very attractive net present value and internal rate of return of US$58.3m and 152% respectively.
Pacific Nickel is currently preparing a definitive feasibility study with many of the key infrastructure components already well advanced.
Delivery of this study is largely dependent on the timing of the receipt of assay results from the 220 holes that will form the basis of a revised block model and an updated mineral resource estimate.
Part of the DFS relies on some of the information from the Early Works program, which has commenced with a detailed survey of the initial construction and mining areas.
The Early Works program also allows the company and its contractors to establish a site base at Kolosori in preparation for the main construction program targeted for the end of the current wet season (May) next year.
The company is continuing discussions with a number of potential financiers and is also reviewing potential nickel offtake arrangements for the Kolosori project.
These discussions remain subject to finalisation of the DFS (and particularly the information from the test pits) and the timing of regulatory approvals.
This article was developed in collaboration with Pacific Nickel Mines, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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