Resource upgrade has Pacific Nickel on verge of production
Pacific Nickel’s plans to start production of direct shipping ore from its Kolosori nickel project in the Solomon Islands has been boosted by an upgrade in its resources.
Overall resources increased modestly from 5.89Mt grading 1.55% nickel for 91,000t of contained nickel to 6.02Mt at 1.52% nickel for 93,000t of contained nickel at the 1.2% nickel cut-off. However, the real prize was the 27% increase in resources under the higher confidence Measured and Indicated categories.
With nearly half (49%) of the resource now contained in these two resource categories, Pacific Nickel Mines (ASX:PNM) has a strong base from which to push its plan to produce 1.3 million wet metric tonnes of direct shipping nickel ore in 2023.
Further drilling is planned in 2023 to further upgrade Inferred Resources and to test extensions of current deposits.
Kolosori’s Exploration Target of between 1.94Mt and 3.19Mt at 1.2% nickel to 1.6% nickel remains unchanged.
The company was recently awarded a Mining Lease for the advanced stage Kolosori project by the Solomon Islands Minister of the Ministry of Mines, Energy and Rural Electrification.
It has also entered into a Surface Access Rights Agreement with landowners and a Mining Agreement with the Government of the Solomon Island – which sets out the mining, environmental and fiscal terms for the project.
With the upgrade of resources in the bag, work is now underway to complete the Definitive Feasibility Study (DFS) for the project, expedite the wharf and haul road construction and establish a construction camp.
Pacific Nickel also has a non-binding terms sheet in place with a Glencore subsidiary for a US$22m debt facility and nickel offtake earlier, which could neatly provide construction funding and a ready customer for its DSO nickel.
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.