The Kolosori Nickel Project is a direct shipping ore (DSO) nickel laterite project located within Mining Lease (ML) 02/2022 on Isabel Island, Solomon Islands, an island country in Oceania.

Australian Securities Exchange (ASX)-listed Pacific Nickel Mines holds an 80% stake in Pacific Nickel Mines Kolosori Limited (PNMKL), the holding company of ML 02/22. The remaining 20% is owned by local traditional landowners.

Pacific Nickel will fund and develop the Kolosori Nickel Project.

The Environment and Conservation Division of the Solomon Islands Ministry of Environment awarded the development consent for the project in December 2021 and the mining lease was received in September 2022.

Pacific Nickel Mines commenced works to develop the nickel project in March 2023 following the release of the Definitive Feasibility Study (DFS).

Mining DSO operations are expected to commence in late 2023. At peak, Kolosori is expected to produce 1.5 million wet metric tonnes per annum of DSO ore.

The project is expected to have an operating mine life of six years, however, the company plans to carry out further exploration in 2023 to extend the project’s mine life.

In March 2023, Pacific Nickel announced that approval for an export permit for the project was granted. It will enable the company to sell and export nickel ore produced from the Kolosori project.

Location and Site details

The Kolosori Nickel Project within ML 02/22 on Isabel Island is situated in the Kolosori Bay area near the Havihua Village.

In October 2020, Pacific Nickel executed a share purchase agreement to acquire majority stake in PNMKL.

The property is being developed as a DSO nickel laterite project with transitional and saprolitic ores as saleable products.

Overall, the lease includes an area of about 15.13km2.

Kolosori Nickel Project Geology and Mineralisation

The Kolosori deposit encompasses an area of approximately 2km by 3km on Isabel Island.

The deposit, consisting of a wet tropical laterite profile, comprises five key geological zones that are modelled to form the basis of the mineral resource estimate.

These are Fe-Cap, Limonite, Transition, Saprolite and weathered Bedrock domains.

According to the Environmental and Social Impact Assessment, published in September 2021, the laterite profile in Kolosori tenement can be divided into two distinct zones.

The lower zone features saprolitic rock, rocky saprolite and saprolite, while the upper oxide zone is composed of ferruginous saprolite, limonite, ferruginous zone and soil types.

The nickel mineralisation at Kolosori is a thin layer with a thickness of 1m to 8m overlain by soil and limonite.

Nickel grades are usually developed in the upper part of the saprolite zone. It was found to be lower and locally less variable in the limonite than in the saprolite.

Nickel is found in multiple mineral associations including partially oxidised bedrock minerals, newly developed iron oxides and garnierite, a family of bright apple-green nickel-silicates.

Mineral Resource Estimate

In November 2022, Pacific Nickel Mines updated JORC (2012) mineral resource estimate (MRE) for Kolosori Nickel Project delivering a significant increase in contained nickel.

The updated resource was 9.21 million tonnes at 1.46% Ni at a 1.0% Ni cut-off (approximately 134,000 tonnes of contained nickel) or 7.08 million tonnes at 1.57% Ni at a 1.2% Ni cut off (approximately 111,000 tonnes contained nickel).

The updated MRE represents an increase of 17% in total Mineral Resource tonnages.

Mining operations at Kolosori

The property’s steep topography and dense vegetation cover will make it difficult to drill the entire target area. As a result, a significant part of the resource is classified as Inferred.

The inferred resource was considered during mine planning to determine possible material movements, haul roads and disturbed areas.

As inferred resources could not be included in an Ore Reserve under the JORC Code 2012, the project’s DFS presented two production scenarios.

The first one, called ‘Base Case’, incorporates the ore reserve (97%) and a small proportion of inferred resources (3%).

The second scenario is referred to as the ‘Expanded Case’ and includes the reserve (68%) and a larger proportion of inferred resources (32%). The expanded case will have an operating mine life of 5.8 years.

However, both the cases will have same production rate and will use the same infrastructure, mining and ore handling systems.

At Kolosori, Pacific Nickel will use open pit mining method. The conventional mining technique will involve the use of hydraulic excavators and trucks mining each pit area in a series of strips.

The project does not include the construction of a processing facility or tailings dams. The nickel ore mined from the deposit will be exported in an unrefined state and processed overseas.

A total of ten pits were identified that can be commercialised. These pits will be connected to the port through a haul road.

The project will also build a drying stockpile area for pre-shipment drying and stockpiling. The ore will be transferred from the barge to the bulk carriers from a trans-shipment point.

The saprolite is expected to be shipped to China for the Rotary Kiln Electric Arc Furnace (RKEF) plants, which will produce a nickel pig iron to make stainless steel.

Contractors Involved

The DFS of Kolosori Nickel Project was prepared by Maxwell Energy and Resources with inputs provided by Australian Mine Design and Development (AMDAD), Mining One Consultants, and Resindo Resources & Energy Group.

HBS PNG was selected as the preferred mining contractor. As of April 2023, project delivery discussions with HBS are at an advanced stage with mining equipment ready for delivery.

Ecological Solutions (Solomon Islands) undertook the ecological studies for marine and terrestrial ecosystems, while the baseline water sampling was undertaken by Quantum 7.

Blackbird Commodity Partners was employed as a corporate advisor.

INCO, Kaiser Engineering and Axiom Mining carried out most of the historical exploration work within the resource area.

The diamond drilling programmes were completed by Axiom Mining between 2014 and 2016.