Pacific Nickel share offer puts money in the bank for DSO nickel development
Pacific Nickel Mines will raise an additional $500,000 from existing shareholders on top of a recent $5.25 million placement to put its DSO nickel operations in the Solomon Islands on the fast track.
The discounted 10c a share raising will enable current Pacific Nickel Mines (ASX:PNM) shareholders to bolster their stakes in the nickel developer as it looks to transition from exploration to production.
A key milestone will be the granting of a mining lease at its Kolosori nickel laterite project, from which the company could potentially target the nickel pig iron market in China, with its high-grade DSO product from its Solomon Island nickel projects.
Kolosori, which along with the Jejevo project is owned 80% by PNM and 20% by local Solomon Islands landholders, contains a JORC compliant resource of 5.89 million tonnes at 1.55% Ni at a 1.2% Ni cut-off.
That is bound to grow further with an 83-hole drilling program (completed) and a second, 151-hole drill drive designed to increase the confidence level of the resource almost in the books.
The grant of the mining lease and approval of the Kolosori environmental and social impact assessment is expected in the March Quarter, paving the way for development of the low cost, processing-free DSO operation to begin in next year’s June Quarter.
PNM says the SPP funds will be used to continue exploration and feasibility work at Kolosori and Jejevo, as well as early capital works for the Kolosori project.
“The company is pleased that it is able to offer existing shareholders the opportunity to participate in a share purchase plan on the same terms as the placement that it announced on 29 October 2021,” Pacific Nickel CEO Geoff Hillier said.
“The funds raised from the SPP together with those from the placement will enable the company to continue to fast track its 80% interests in two nickel laterite DSO projects in the Solomon Islands.
“The company will now carry out some early works at its Kolosori Project in preparation for its development next year which is subject to a mining lease being granted by early 2022.
“Next year is expected to be a very exciting time with both projects advancing towards production.”
Pacific Nickel Mines will begin early works at Kolosori with the funds from the placement and SPP.
These will include key steps like the preparation of pads and drainage for its wharf, camp and mining fleet maintenance areas.
Discussions with offtakers and financiers are being held for the development of the Kolosori Project.
Meanwhile, PNM is also progressing work on its Jejevo Project, where the company unveiled a maiden resource of 7.82Mt at 1.46 % Ni at a 1.2% Ni cut-off. A feasibility study and mining lease application is due for Jejevo next year.
Drilling for extensions to both resources next is also a major priority.
The SPP offer will be sent to eligible shareholders on November 10 and closes two weeks later on November 24.
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.