Nico Resources Advances Wingellina Project Amid Market Headwinds
Nico Resources Limited reports steady progress on its flagship Wingellina nickel-cobalt project, highlighted by successful metallurgical testwork and Major Project Status recognition, despite cautious spending amid weak market conditions.
- Completion of updated Mineral Resource Estimate and geometallurgical modelling
- Successful High Pressure Acid Leach (HPAL) metallurgical testwork confirming saleable nickel-cobalt product
- Wingellina Project awarded Major Project Status by the Australian Federal Government
- Company reduces discretionary expenditure due to short-term weak nickel market
- Receipt of $1.04 million tax refund boosting cash reserves to $7.1 million
Steady Progress in Challenging Market
Nico Resources Limited has delivered a comprehensive update for the December 2024 quarter, underscoring continued advancement of its Wingellina nickel-cobalt project in Western Australia. Despite prevailing weak market conditions for nickel, the company has maintained momentum through key technical milestones and strategic government recognition.
The Wingellina project, a world-class oxide-type nickel-cobalt deposit, boasts an initial reserve of 1.56 million tonnes of contained nickel, with the capacity to produce approximately 40,000 tonnes of nickel and 3,000 tonnes of cobalt annually over a 42-year mine life. The December quarter saw the completion of an updated Mineral Resource Estimate (MRE) and the progression of a detailed geometallurgical model, which will underpin future mine planning and processing optimisation.
Metallurgical Testwork Validates Processing Pathway
One of the quarter’s highlights was the receipt and analysis of final reports from High Pressure Acid Leach (HPAL) bench scale metallurgical testwork conducted by ALS Laboratories. The results confirmed improved nickel and cobalt recoveries, validating the production of a saleable Mixed Hydroxide Precipitate (MHP) product from Wingellina ore. This testwork is critical as it informs the Definitive Feasibility Study (DFS) design parameters, including metal recovery rates, reagent consumption, and equipment sizing.
Notably, the testwork identified an optimal sulphuric acid injection range for high iron limonitic ore between 240 and 270 kilograms per tonne, balancing extraction efficiency and operating costs. The study also highlighted the importance of oxidation-reduction potential, driven by chromate concentration, in maximizing nickel and cobalt extraction.
Government Endorsement and Stakeholder Engagement
In a significant endorsement, the Wingellina project was awarded Major Project Status by the Australian Federal Government during the quarter. This designation recognises the project’s strategic importance to Australia’s critical minerals sector and the global energy transition. It also grants Nico access to the Major Projects Facilitation Agency, which is expected to streamline regulatory approvals and provide additional support resources.
Alongside government engagement, Nico has maintained active dialogue with Traditional Owners and the Ngaanyatjarra Council, progressing cultural heritage management plans and archaeological assessments. The company’s commitment to social and environmental governance remains a cornerstone of its development strategy.
Financial Position and Outlook
Financially, Nico closed the quarter with $7.1 million in cash, bolstered by a $1.04 million tax refund related to Research and Development activities. The company prudently reduced discretionary expenditure amid the subdued nickel price environment, with exploration and evaluation spend totaling $215,000 for the quarter. With an enterprise value of approximately $10 million and a strong cash position, Nico is positioned to sustain its development program while awaiting a more favourable market backdrop.
Looking ahead, the company plans to complete its geometallurgical model, conduct infill drilling to upgrade resource classifications, and advance water supply planning. These steps will further de-risk the project and refine the DFS scope, setting the stage for a potential final investment decision when market conditions improve.
Bottom Line?
Nico’s disciplined progress and government backing position Wingellina as a compelling long-term nickel-cobalt asset, but market recovery remains the key catalyst.
Questions in the middle?
- How will the Major Project Status accelerate regulatory approvals and project timelines?
- What are the implications of current metallurgical findings on capital and operating costs in the DFS?
- When might nickel market conditions improve sufficiently to trigger increased project investment?
