Developers of a nickel laterite project in the Solomon Islands have set a four point objective over the next six months to ensure the much debated project achieves its goal of first production and maiden cash flow by around June next year.
Addressing the Paydirt 2016 Australian Nickel Conference in Perth, Axiom Mining managing director Ryan Mount said the company had to now sign off on a prefeasibility study, secure a prospecting licence and two mining leases to bring the Isabel Nickel Project on San Jorge and nearby Santa Isabel Island into production.
The latest project targets follow success by the company earlier this year in winning a key Court of Appeal judgement after a five year legal battle with Sumitomo where the Japanese company was found to be land banking and should not have been awarded the rights to the Melanesian nickel prospective tenements.
The ruling has allowed Axiom to re-apply for the prospecting tenure on the high grade Kolosori nickel acreage it had to relinquish on Santa Isabel Island, directly opposite San Jorge Island and on which wharfside loading infrastructure had also been planned.
Pending the court ruling, Axiom moved quickly to prove up alternative Direct Shipping ore on its San Jorge holdings including a drilling program in anticipation of further infrastructure development.
Ryan Mount said the company had commenced a drill program on San Jorge to define sufficient JORC resources and initial DSO mining volumes and was completing the environmental studies required for the mining lease approval. San Jorge comprises around half of the known Isabel nickel deposits.
“We are aiming for mine development costs to be no more than A$20 million and our payback for that will in the same year of first production – of which will be subject to detailed studies,” he said.
Axiom has half a million tonnes of ore contracted to the global Gunvor commodities trading house. It is also working with Gunvor to pre-pay the majority of the value of each shipment and provide A$10 million of debt finance to Axiom if the company can provide Gunvor with offtake for up to four years of production. That agreement is subject to due diligence and final documentation.