Pacific Nickel’s $5.25m placement to fast track Kolosori nickel play
Pacific Nickel will fast track early capital works at its Kolosori nickel project in the Solomon Islands after receiving strong investor support for its $5.25m placement.
Existing shareholders and a large number of new institutional and sophisticated investors from Australia, UK and Europe backed the placement of 52.5 million shares priced at 10c per share, or a 11.7% discount to the 15-day volume weighted average price.
Proceeds from the placement will be used by Pacific Nickel Mines (ASX:PNM) for ongoing exploration and feasibility work for its Solomon Islands direct shipping ore (DSO) nickel projects with a focus on the Kolosori project, which will also be subject to an early works capital program.
Kolosori currently hosts a resource of 5.89 million tonnes grading 1.55% nickel that can be easily dug up and sold with no processing, which explains the company’s focus on bringing the project into production as quickly as possible.
“The company is delighted with the outstanding response from investors to the capital raising and in particular the participation from existing shareholders and new institutional shareholders,” chief executive Geoff Hiller said.
“The funds 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.”
Early works for the project include preparation of pads and drainage for the wharf, camp, and mining fleet maintenance areas.
Pacific Nickel has an 80% interest in the Kolosori and Jejevo projects on Santa Isabel Island, both of which are close to the coast, have no processing requirements, a low capital route to direct shipping, and local landowner support.
Kolosori is the more advanced of the two projects with a definitive feasibility study due for completion before the end of this year.
The company has also submitted a Mining Lease Application and Environmental and Social Impact Assessment for the project with the Mining Lease expected to be approved in the first quarter of 2022 with development starting in the second quarter.
Further resource upgrades are also expected with more than 230 holes drilled since the initial JORC resource was release on 19 November 2020.
Discussions are also underway with offtakers and financiers for the development of the Kolosori project.
Jejovo has a resource of 7.82 million tonnes at 1.46 % nickel with the company expecting to complete a feasibility study and apply for a mining lease in 2022.
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.