How Is Nico Resources Navigating Weak Nickel Prices While Advancing Wingellina?

Wingellina Project Overview

Nico Resources Limited has provided a comprehensive update on its flagship Wingellina nickel-cobalt project in Western Australia for the quarter ending 30 June 2025. Wingellina remains a globally significant, long-life asset with a JORC-compliant reserve of 1.56 million tonnes of contained nickel, capable of producing approximately 40,000 tonnes of nickel and 3,000 tonnes of cobalt annually over a 42-year mine life. The project’s low-cost, oxide-type nickel-cobalt deposit underpins its Tier 1 status, confirmed by a pre-feasibility study completed in late 2022.

Despite these strong fundamentals, the company acknowledges the current nickel market remains weak and oversupplied, largely due to increased output from low-cost Indonesian HPAL operations. Nickel prices are trading below the cost curve, prompting Nico to reduce discretionary expenditure over recent quarters while maintaining confidence in a medium-term price recovery.

Operational and Technical Progress

During the quarter, Nico completed a $1.1 million share placement to institutional and sophisticated investors at $0.08 per share, slightly above prevailing market prices, strengthening its cash position to $3.635 million. This capital injection supports ongoing technical work and project development.

Significant progress was made on the geometallurgical front, with Phase 2 of the model development advancing. This includes detailed infill drilling plans designed to upgrade resource classification from Indicated to Measured, particularly focusing on higher-grade zones expected to feed the initial 10 years of production. Approximately 200,000 metres of additional drilling is planned to achieve a nominal 25x25 metre spacing, enhancing confidence in resource estimates and providing critical samples for metallurgical testing.

Metallurgical testwork continued to validate the processing flowsheet, including ore scrubbing, beneficiation, high-pressure acid leaching (HPAL), and mixed hydroxide precipitate (MHP) production. Notably, testwork on the nearby Lewis calcrete deposit confirmed its suitability as a locally sourced acid neutralisation agent, which could significantly reduce operating costs by replacing imported lime. The Lewis calcrete resource itself is substantial, with 44.8 million tonnes at a high calcium oxide grade, supporting the project’s long-term sustainability.

Environmental, Social, and Governance Initiatives

Nico continues to prioritize environmental and social governance, aligning its management systems with international standards such as ISO 14001. The company reported no health and safety incidents during the quarter, reflecting robust protocols. Engagement with Traditional Owners, the Ngaanyatjarra Council, and government agencies remains active and transparent, particularly following the project’s designation as a Major Project Status by the Federal Government. This status facilitates regulatory approvals and underscores Wingellina’s strategic importance in Australia’s critical minerals sector.

Financial Position and Outlook

Financially, Nico reported exploration and evaluation expenditure of $101,029 for the quarter, consistent with its cautious approach amid subdued market conditions. The company’s working capital position remains solid, providing a runway to advance the Definitive Feasibility Study (DFS) and further technical programs planned for the coming quarters. These include continued metallurgical testwork, infill drilling, water supply investigations, and stakeholder engagement.

While the nickel market’s near-term outlook remains uncertain, Nico’s strategic focus on cost control, resource upgrading, and process optimisation positions the Wingellina project well to capitalise on any future price recovery. The company’s methodical approach to de-risking and value maximisation reflects a mature development strategy for one of Australia’s largest undeveloped nickel resources.