Name of the Project
Kolosori nickel project.

Location
Solomon Islands.

Project Owner/s
Base metals company Pacific Nickel Mines.

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 estimate of 6.02-million tonnes at 1.52% nickel.

In the base case, production is estimated at 1.4-million tonnes a year over a mine life of three years. In the expanded case, the project is expected to produce 1.45-million tonnes a year over a mine life of 5.8 years.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated net present value (NPV) of A$91-million and an internal rate of return (IRR) of 156%. In the expanded case the project has an NPV of A$118-million and an IRR of 170%. In both cases payback is six months.

Capital Expenditure
The project is estimated at $21.3-million in the base case and the expanded case.

Planned Start/End Date
Production started in 2023.

Latest Developments
Pacific Nickel requested a further extension of a voluntary suspension of its securities on the ASX on February 11 while it continues discussions regarding project funding.

Pacific Nickel added that discussions with project financier Glencore remained ongoing and that talks may continue for a further three weeks.

Glencore provided a $22-million secure loan facility for the development of the Kolosori project. Pacific Nickel has worked in close collaboration with Glencore since the start of production in late December 2023. By June 2024, Pacific Nickel had not yet started repayment of the Glencore loan as originally anticipated and Glencore has reserved its rights with regard to the project debt.

After a review of the Kolosori operation in July 2024, the company and Glencore agreed that the best course of action in the short term was to cease operations and review the project in light of the operational issues and the weak nickel price outlook in the short to medium term.

By the end of August 2024, mining equipment had been demobilised from site.

During the December quarter, a local mining contactor was engaged to return to site to ensure compliance of the operation under its mining licence. One shipment of nickel ore was made late in the quarter to assist in funding those site activities.

Key Contracts, Suppliers and Consultants
Resindo (definitive feasibility study 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.