QUARTERLY REPORT FOR THE
PERIOD ENDING 31 DECEMBER 2021
Pacific Nickel Mines Limited (Pacific Nickel or the Company) (ASX: PNM) is pleased to provide an update on its activities for the December 2021 Quarter. The Company's focus for the reporting period was the advancement
only | of the Company's Kolosori and Jejevo Nickel Projects, both located in the | |||
ASX Code: PNM | ||||
Solomon Islands. | ||||
ABN: 86 075 613 268 | HIGHLIGHTS FOR THE DECEMBER 2021 QUARTER | |||
Issued Shares: 270,928,839 | Kolosori Nickel Project | |||
• Stage 1 exploration results from 27 holes of the 83 hole program | ||||
Options: | received with significant high-grade intervals >1.7% Ni returned as follows:1 | |||
use | Exp 17/6/24 @ $0.09 | o HAK-MO7 6.0m @ 1.75% Ni from 3m | ||
71,503,481 | o HAK-MO8 11.5m @ 2.10% Ni from 2.5m | |||
Exp 30/9/23 @ $0.06 | o HAK-MO9 10.5m @ 2.07% Ni from 1.5m | |||
11,500,000 | o HAK-S133 4.0m @ 1.94% Ni from 1m | |||
Performance Rights: | o HAK-S132 10.0m @ 1.75% Ni from 1m | |||
• Stage 2 infill drilling of around 150 holes completed in December - | ||||
6,400,000 | ||||
personal | assays pending2 | |||
Directors | • Completion of Kolosori Scoping Study with Production Target of 6.23m | |||
Terry Cuthbertson | tonnes at 1.5% Ni for 93,450t of contained nickel3 | |||
James Dean | • Development consent (a key component of the mining lease approval) | |||
Geoff Hiller | received in December from the Environment and Conservation Division of | |||
Rob Thomson | the Solomon Islands Government Ministry of Environment. | |||
Top Shareholders | • Commencement of early works program focusing on test pits and | |||
geotechnical work4 | ||||
James Dean | ||||
Terry Cuthbertson | Jejevo Nickel Project | |||
Michael John McCahill <> | ||||
MJ McCahill TA/C> | • Initial JORC mineral resource estimate at Jejevo is 7.82 million tonnes at | |||
Sean McCahill Properties Ltd | 1.46 % Ni at a 1.0% Ni cut off.5 | |||
Head Office | • Conceptual resource extension targets at Jejevo of a further 3.0 million | |||
to 5.0 million tonnes at 1.2% to 1.6% Ni.6 | ||||
Pacific Nickel Mines Limited | • Prospecting License PL 01/18 renewed for a period of two years by the | |||
Level 4 | Solomon Islands Minister of Mines, Energy and Rural Electrification. | |||
283 George St | ||||
For | ||||
SYDNEY NSW 2000 | Corporate | |||
Tel: +61 (0) 403 940 518 | • Completion of share placement of 52.5 million fully paid ordinary shares | |||
E: info@pacificnickel.com | (Shares) at $0.10 per share raising $5.25 million7 | |||
W: www.pacificnickel.com | • An additional $340,500 raised via a Share Purchase Plan (SPP) to | |||
W: www.pacificnickel.com | existing eligible shareholders at $0.10 per share8 | |||
- ASX Announcement 18 November 2021 - Kolosori Nickel Project - Drilling Update
- ASX Announcement 13 October 2021 - STAGE 2 DRILLING AND PROJECT DEVELOPMENT UPDATE KOLOSORI NICKEL PROJECT
- ASX Announcement 18 November 2021 - Release of Scoping Study for Kolosori Nickel Project and Clarification/Retraction of Previous Disclosures
- ASX Announcement 02 December 2021 - Early Works Program Initiated - Kolosori Nickel Project & ASX Announcement Early Works Update - Kolosori Nickel Project
- ASX Announcement 7 October 2021 - INITIAL JORC (2012) RESOURCE ESTIMATE AT JEJEVO
- The potential quantity and grade of an Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. ASX Announcement 7 October 2021 - INITIAL JORC (2012) RESOURCE ESTIMATE AT JEJEVO
- ASX Announcement 29 October 2021 - $5.25M Placement to Advance Nickel Projects
- ASX Announcement 29 October 2021 - Share Purchase Plan in conjunction with recent Placement to Advance Nickel Projects & ASX Announcement 5 January 2022 - Share Purchase Plan Completed
QUARTERLY REPORT
DECEMBER 2021
March Quarter Planned Activities
only | • Updated Mineral Resource Estimate at Kolosori Nickel Project | |
• | Completion of Kolosori early works program in February 2022 in preparation for project development | |
• Continued progression through required regulatory approvals in order to achieve Kolosori mining lease | ||
approval in Q1 2022 | ||
• Finalising Kolosori capital and operating costs based on contractor quotes to be included in an updated | ||
project model to be provided to financiers as soon as practicable. | ||
• Completion of a definitive feasibility study for Kolosori. | ||
use | • Receiving a term sheet from a financier to assist with the funding of the Kolosori Project. | |
Kolosori Nickel Project (80%)
The Kolosori Nickel Project (80% interest held by Pacific Nickel) is an advanced stage direct shipping ore (DSO) nickel laterite project with excellent potential for development, located on Isabel Island in the Solomon Islands.
Development Drilling
personalIn November the Company received assay results for 27 drill holes from the initial 83 hole program designed by Mining One for the Kolosori Project.9
The 83 holes program consisted of 11 holes for metallurgical test work. These holes were distributed across the proposed first mining area to ensure a representative sample. The other 72 holes drilled formed the first stage of infill holes designed to increase the confidence level of the current Mineral Resource in preparation for the development of the Project.
Included in this initial batch of results were the assays from 6 of the 11 holes drilled for the metallurgical test work. The 27 holes drilled by Pacific Nickel Mines from this initial program are shown in Figure 1 below. These holes are plotted in relation to the historical drilling. Importantly, the results from the 6 metallurgical drill holes provide confidence to the thickness and nickel grades encountered from the historical drilling within the Kolosori deposit area.
A second stage drill program of around 151 holes has been completed for the Kolosori Project. The drilling programs designed by Mining One are shown in Figure 1. The second stage holes are part of planned 2021 pre- development activities and are based on the mine planning and scheduling work carried out by Mining One and the Company. The second stage drill program is designed to increase the confidence in the resource to levels
Forsufficient to allow detailed mine planning and reserve assessments to be finalised in support of the proposed project financing.
Assays from this second stage drilling program are pending.
Approximately 45 local contractors (including geologists, drillers and crew) were engaged by the Company as part of the team supporting the second stage drill program.
9 ASX Announcement 18 November 2021 - Kolosori Nickel Project - Drilling Update
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QUARTERLY REPORT DECEMBER 2021
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QUARTERLY REPORT
DECEMBER 2021
Scoping Study for Kolosori Nickel Project
The Scoping Study, which was announced on 18 November 2021, was conducted by a group of leading
onlyindependent consultants from Australia and Indonesia including Resindo and Mining One, overseen by in-house Pacific Nickel personnel who are experienced in mining projects in the region. 10
The key parameters of the Scoping 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 less than 1 km | ||
• Stockpile management a key to moisture control and loading DSO onto barges | ||
use | • Barge ore less than 1km to 50,000 to 60,000 tonne geared ships for export | |
• Production of 1.3 wet mtpa based on port throughput | ||
The key assumptions and result inputs of the Scoping Study were: | ||
• Production Target of 6.23m tonnes at 1.5% Ni for 93,450t of contained nickel | ||
• Production Target contains 43% Measured and Indicated Resources with more than 75% of the | ||
personal | Production Target over the first 2.5 years from Measured and Indicated Resources | |
• The shallowness of mining allows flexibility to mine the Measured and Indicated Mineral | ||
• | Capital payback approximately one year | |
• | Resource as early as possible where required |
• Ability to mine higher grades in excess of 1.6%Ni early in mine schedule
• First production targeted in late 2022
• Capital cost estimate between US$18m and US$20m
• Site operating cost estimate in the range US$15 to US$17/wmt
• Barging costs in the range US$4.50 to US$5.50/wmt
• Shipping cost of around US$38/wmt
• Saprolite shipped to China for the RKEF plants for end use in the stainless steel industry
• Pricing of 1.5% Ni saprolite US$85/wmt (CIF China
• Pricing of 1.6% Ni saprolite US$91/wmt (CIF China)
Early Works Program
The Company commenced an Early Works program in December which has been designed to allow the Company and its contractors to establish a site base at Kolosori in preparation for the main construction program targeted for April/May this year subject to the completion of the Definitive Feasibility Study, regulatory
Forapprovals, and financing. Encouragingly significant progress had been made to date with equipment required for the Early Works having arrived on site in late December 2021 and a temporary camp and a track up to the initial test pit area having been completed. 11
The scope of the Early Works includes the following:
- Carry out a geotechnical assessment of the proposed wharf site;
- Carry out a number of test pits for mining;
- Prepare a temporary camp including fuel tanks;
- Carry out a detailed environmental survey within the main project infrastructure areas;
- Assess quarry sites to provide construction materials for wharf and road construction; and
- ASX Announcement 18 November 2021 - Release of Scoping Study for Kolosori Nickel Project and Clarification/Retraction of Previous Disclosures
- ASX Announcement 02 December 2021 - Early Works Program Initiated - Kolosori Nickel Project & ASX Announcement Early Works Update - Kolosori Nickel Project
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QUARTERLY REPORT
DECEMBER 2021
- Facilitate site visits in December 2021 and January 2022 for third party contractors to assess port construction, barging, site infrastructure, logistics and mining activities.
use only | |
personalFor | Photo: First barge arriving Kolosori site with initial equipment for Early Works |
Test Pits |
The Company has planned a number of test pits throughout the proposed initial mining area. The first two test pits are located in proposed mining areas nearest to the proposed wharf area. The exploration team has drilled grade control holes in the area of these test pits. The grade control holes are closely spaced (approximately 10 metres apart) and will enable a reconciliation of the grades from the drilling compared to the grades from the mined material.
The test pits will also provide the Company with valuable information regarding the ore characteristics with respect to mining productivity and moisture content. The material from the test pit will be stockpiled so that moisture content can be analysed over time to measure its drying characteristics as the moisture content of the ore is an important consideration for barging and shipping.
Photo: Preparation of road from temporary base camp to initial Test Pit site
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Pacific Nickel Mines Ltd. published this content on 27 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2022 21:49:16 UTC.