Name of the Project
Kolosori nickel project.

Location
Solomon Islands.

Project Owner/s
Pacific Nickel.

Project Description
The Kolosori nickel project is an advanced stage direct shipping ore (DSO) nickel laterite project progressing to development.

The project has a Joint Ore Reserves Committee-compliant mineral resource estimated of 6.02-milllion tonnes at 1.52% nickel.

The scoping study envisages estimated production of 1.3-million tonnes a year at 1.5% nickel for 19 500 t of contained nickel.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated net present value of A$85-million and an internal rate of return of 152%, with a payback of one year.

Capital Expenditure
The project is estimated at $20-million.

Planned Start/End Date
Direct shipping ore production is expected to start in the third quarter of 2023.

Latest Developments
Pacific Nickel is hoping to start DSO production at Kolosori nickel late in the third quarter of this year, subject to financing and contractor mobilisation.

The company has advanced to the project execution stage while critical path construction work has started, pending the finalisation of financing facilities being offered by Glencore International.

Glencore signed a nonbinding indicative termsheet last year to provide a $22-million pre-export finance facility, along with a four-year offtake arrangement for all the production from the Kolosori nickel project.

These facilities remain subject to Glencore’s completing its final due diligence, approval of the Kolosori mining licence, credit approvals and full documentation. As part of this agreement, Glencore has been granted an exclusivity period from the date of the nonbinding indicative termsheet until 120 days after the delivery of the Kolosori DFS.

Glencore is finalising its technical review of the DFS.

Meanwhile, in anticipation of the Glencore financing becoming available for drawdown, Pacific Nickel is proceeding with discussions with barging and mining contractors.

The company will aim to increase the mine life of the project through further exploration to convert current inferred resources of about two-million tonnes that are not included in the financial model, into indicated resources, and conduct drilling on the new areas identified in the exploration resource target from 2.5-million to 4-million tonnes at between 1.2% to 1.6% nickel.

Key Contracts, Suppliers and Consultants
Resindo (DFS manager and front-end engineering design); and HBS PNG early contractor arrangement).

Contact Details for Project Information
Pacific Nickel, tel +61 403 940 518 or email info@pacificnickel.com.