Pacific Nickel Mines hits high-grade nickel ahead of production 

Pacific Nickel Mines (ASX: PNM) has returned high-grade nickel hits as part of an initial infill and grade control drilling program at its Kolosori Project in the Solomon Islands – Which is expected to hit production status in October 2023.

Assays from five holes (out of the 42 drilled) returned results including:

• 8.5m at 2.00% nickel from 2m

• 8.0 at 2.07% nickel from 2m

• 10.0m at 1.90% nickel from 2m

The purpose of the infill and grade control program is to fill the gaps between existing drill holes and measure the grade of ore at different locations within the ore body. This helps paint a more accurate and complete picture of the ore. The company said it will use this data to finalise pit designs for the initial mining areas at Kolosori.

“Pacific Nickel Mines is pleased with high grade results in these initial mining areas which support steps being taken by the Company to start mining as soon as practicable,” said CEO Geoff Hiller.

The results from the 40m by 40m grade control drilling were consistent with prior geological models and confirmed the area has high-grade nickel grades for initial mining. The data also confirmed the viability of mining at a location closer to cargo loading facilities than what was originally scoped in its Definitive Feasibility Study.

“These results are particularly important in the context of finalising drawdown of the second tranche of funding under the senior secured debt facility of up to US$22 million being provided by Glencore International AG.”

In April, the company secured a senior secured debt facility of up to US$22m from Glencore. The agreement also included a six-year offtake agreement that covers 100% of Kolosori’s mine production. The price that PNM will receive is linked to agreed nickel benchmarks with 85% of payment upon provisional invoicing. 

This suggests cash flows are coming for the junior nickel developer – It just needs to execute. In parallel with the infill and grade control drilling, the company is currently constructing a Direct Shipping Ore (DSO) loadout wharf, an access road to stockpile areas and 200-man camp. 

Pacific Nickel Mines 12-month price chart (Source: Market Index)

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