Pacific Nickel Mines Limited announced that the company has completed a Definitive Feasibility Study (DFS or Study) for its Kolosori Laterite Nickel Direct Ship Ore (DSO) Project held within Mining Lease ML 02/2022 on Isabel Island, Solomon Islands. The company announced the results of a DFS for the development of its 80% owned Kolosori Nickel Project in the Solomon Islands. Located on Isabel Island the Project is expected to generate strong financial returns while also delivering significant social and economic benefits to the landowners (who hold a 20% carried interest in the Project), local communities and the provincial and federal governments.

The DFS has been prepared by Maxwell Energy and Resources with inputs provided from a group of leading independent consultants from Australia and Indonesia including Australian Mine Design and Development (AMDAD), Mining One Consultants (Mining One), and Resindo Resources & Energy Group (Resindo), overseen by in-house Pacific Nickel personnel who are experienced in mining projects in the region. Two production scenarios have been provided by AMDAD. The first incorporates the ore reserve (97%) and a small proportion of inferred resources (3%) - referred to as the Base Case.

The second incorporates the ore reserve (68%) and a larger proportion of inferred resources (32%) - referred to as the Expanded Case. The Expanded Case includes inferred resources which either naturally fit within open pits as part of the Base Case or have sufficient continuity to be included in stand-alone pits. The company engaged HBS PNG Pty Ltd, a well-established PNG mining contractor, in an early contractor involvement arrangement who provided actual mining contractor rates for incorporation into the DFS.

The key elements of the development of the Project include: Haul road; Wharf and port facilities including small stockpile area; Main Stockpile Area to the east of the wharf; 200-Man Main Camp; 50-man Construction Camp; Contract Mining Facility; Road access from haul road to eastern stockpile area and main camp; Small bridge to cross creek from bottom of haul road to main stockpile and camp. When the DSO loadout wharf and haul road to the mining area are in place, and the mining contractor mobilised, the Kolosori Nickel Project is expected to ramp up to full production (approx. 1.5 million wet metric tonnes per annum of direct shipping nickel ore) during 2023.

Mining DSO operations are expected to commence in late third quarter 2023 subject to financing and contractor mobilisation. Key Study Parameters: The key parameters of the Study were as follows: Shallow open pit mining operation; No processing or tailings dams required (as it is a direct ship ore); Initial haul road from first pit to the port area around 1.5 km; Stockpile management a key to moisture control and loading DSO onto barges; Barging ore less than 1km to 50,000 to 60,000 tonne geared ships for export; Production of up to 1.5 wet mtpa based on port throughput; Saprolite shipped to China for the RKEF plants for the end use in the stainless steel industry. The key outcomes to emerge from the Study are as follows: Base Case: 3.8 million wet metric tonnes of ore; An operating mine life of 3 years; An average nickel grade of 1.57% over the life of mine.