Axiom Sets December Start Date for Isabel Nickel Mine

Australian nickel miner Axiom Mining (ASX:AVQ) has announced that it has set itself a December deadline for mining to commence at its Isabel Nickel project in the Solomon Islands.

In the Wednesday (October 3) release, the company said that with mining commencing in the last month of the year, it expected the first ore shipment to be in Q1 of 2019.

Axiom added that it was currently negotiating offtake-for-funding agreements with a number of parties after a previous offtake and funding agreement announced in 2015 expired without being triggered.

“The expiration of this agreement has enabled Axiom to consider other offers and to obtain preferential terms considering the new dynamics in the nickel ore market,” said the company.

Since the end of 2015, when the previous agreement was announced, the price of nickel has increased from US$8,600 then to US$12,390 as of October 3 2018 —but the price has ridden higher in the meantime, well above US$15,000 a tonne in June 2018, before persistent trade war fears started pushing down the base metals sector.

The company said that since the September 20 granting of a mining lease for the San Jorge deposit of the Isabel project (only 2 weeks ago), “there has been an increase of interest and demand from nickel ore consumers for Axiom’s San Jorge material.

“As the company is in advanced stages of negotiations with a number of parties (which began prior to the grant of the mining lease), Axiom deemed it prudent to provide a fixed time period to facilitate and evaluate this recent new interest.”

The company said that “a number of qualified interested parties” have conducted due diligence and it was in closing dialogues with them.

“Terms and conditions of proposed agreements continue to be refined and are in a final stage of negotiation. The company anticipates announcing a new offtake and financing arrangement(s) shortly after the completion of the request for final proposals.”

Axiom’s shiny new mining lease for the San Jorge deposit is for 25 years of extraction from what it described as “one of the largest nickel laterite deposits in the Pacific” with plenty of redeeming features—from easy access to the ocean for direct shipping to being located in an uninhabited area of the Solomon Islands.

The company is currently constructing an ore loading facility at the San Jorge deposit, where drilling conducted in 2016 and 2017 returned highlights such as 23.2m at 1.36 percent nickel from 0.9m including 10.6m at 1.8 percent nickel from 7.5m.

On the assays, the company said that “assay results established the presence of promising grades of cobalt and scandium at significant levels for wet tropical laterite deposits. Having scandium and/or cobalt as a by-product significantly enhances both the potential value and marketability of the limonite product at San Jorge.”

On the ASX, Axiom was trading at AU$0.11 at market close on Thursday, down 4.35 percent. The company enjoyed a jump to AU$0.14 on the day of the release, but its value quickly corrected back towards its monthly average of AU$0.11.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.