Minerals explorer Axiom Mining (ASX: AVQ), via its 80%-owned subsidiary AxiomKB, has been formally granted a mining lease by the Solomon Islands government for the San Jorge nickel deposit, which sits within the company’s flagship Isabel nickel project.
The 25-year lease has been issued for the extraction, export and sale of nickel ore and associated commodities from San Jorge and allows Axiom to commence construction at Isabel, with a view to commercial production in early 2019.
In awarding the lease, Solomon Islands Minister for Mines, Energy and Rural Electrification Bradley Tovosia commented on Axiom’s contribition to the local region.
“The Isabel project is to be an important part of our economy, and it is exciting to see real production now moving forward for everyone’s benefit,” he said.
Upgrades of a temporary exploration camp to a long-term mining camp have commenced, in addition to the construction of supporting roads and loading facilities.
Community consultations are also underway in preparation for the first shipment of ore.
Financing for life of mine construction and development is in the advanced stages and due to be finalised over the coming weeks.
The Pacific’s largest nickel deposit
The Isabel nickel project is widely considered one of the largest nickel laterite deposits in the Pacific region, hosting a historical non-JORC deposit of 159 million tonnes at 1.1% nickel and 0.07% cobalt.
It comprises a number of deposits within the Solomon Islands’ Isabel province, including the key deposits of San Jorge and Kolosori, operated by AxiomKB (Axiom 80% ownership) in partnership with local landowners (20%).
Both are spread over 36 square kilometres each, with San Jorge accounting for approximately 50% of the known deposits within the Isabel acreage.
The deposits at San Jorge sit very close to the surface in uninhabited land along a shore which encompasses a natural deep water harbour – all qualities which will enable Axiom to bring a direct shipping of ore operation to the market in a timely and environmentally-acceptable way.
Axiom’s milestone signifies the first time in the Isabel nickel project’s history that an owner has been granted a mining lease.
Previous San Jorge tenement owner and former nickel major, Inco Ltd (now owned by Brazilian mining giant Vale) conducted feasibility studies during the 1970s based on results from over 7000 drill holes and pits and 10,000 samples.
In 1991, Kaiser Engineers completed its own study on Inco’s data, determining preliminary capital and operating expenditures and conducting economic analyses and financial modelling.
Development by either owner did not progress further due to a failure to win the support of customary landowners from the Kolosori and Bungusule tribes.
In December 2010, Axiom’s collaborative approach resulted in a partnership with the landowners and the Axiom KB joint venture was established. Then in September 2014, AxiomKB emerged successful after three years of litigation proceedings instigated by Sumitomo Mining Metals Solomon over the Isabel nickel deposit.
Last month, Axiom announced it would be recruiting key positions and growing its board of directors to enhance its operational expertise and strengthen its position during the project’s development.
At midday, shares in Axiom were trading 34.02% higher at $0.130.