Kolosori to ramp up faster for Pacific Nickel Mines as DSO nickel DFS approaches ahead of 2023 take-off
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Pacific Nickel Mines expects to deliver the key definitive feasibility study on its Kolosori DSO nickel mine in the Solomon Islands in January, incorporating improvements that will allow mining operation to ramp up and achieve targeted production rates in a shorter period of time.
Glencore-backed Pacific Nickel Mines (ASX:PNM), which has the Tier-1 miner and metals trader on board as its financier, says a decision to move the ore stockpile for Kolosori to a flat area 1km east of the load out wharf will remove constrictions on initial mining, accelerating its ramp up to the full 1.3Mtpa production rate.
The change was made after consultations with HBS PNG, an established PNG mining contractor, and will simplify its mining and stockpile procedures to improve the delivery of ore for shipping.
A Business Licence for mining has also been granted at Kolosori by the provincial Isabel Island government, with construction of a timber 50-man construction camp for capital works now underway near the loadout wharf.
PNM CEO Geoff Hiller says the emerging miner is working with both HBS and Glencore to deliver a robust project at Kolosori. Glencore has completed a site visit among its due diligence process for a US$22 million project financing facility and DSO offtake sales.
“We are working closely with HBS and Glencore to deliver a robust nickel project at Kolosori. The recent positive adjustments to the mine plan are part of this engagement,” Hillier said.
“Improvements in the mine plan are expected to support the ramp up to full production (around 1.3 million wet metric tonnes per annum of direct shipping nickel ore) during the course of 2023.
Meanwhile work is continuing to firm up the similar Jejevo project, where a mining lease application has been submitted and a preliminary scoping study prepared, demonstrating it could be delivered through a similar path to Kolosori.
“We have also applied for a mining lease for the Jejevo Nickel Project. The Jejevo Nickel Project is expected to commence production in 2024,” Hillier said.
“We continue to work closely with the various landowners and local contractors and appreciate their support for the delivery of both of these projects.”
Also located on Santa Isabel Island, PNM’s scoping work shows the Jejevo project is a “look-alike” for Kolosori.
It can be progressed to the feasibility stage alongside preparation of an environmental and social impact assessment, to start early next year in conjunction with development approvals for the mining lease application.
PNM’s 80% owned Jejevo project delivered an initial JORC resource estimate last year of 14.42Mt at 1.29% nickel at a 1% cut off, with a further conceptual resource extension target of 3-5Mt at 1.2-1.6% Ni.
That compares to Kolosori, which boasts 9.21Mt at 1.46% Ni for 134,000t of nickel at a 1% cut off, or 7.08Mt at 1.57% Ni for 111,000t at a 1.2% cut off as of an upgrade last month.
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.