
Nickel Industries Limited (ASX:NIC) has announced significant progress in its Sampala Project in West Papua, following the signing of binding acquisition agreements in September 2024.
The company’s recent exploration efforts have yielded impressive results, potentially positioning the Sampala Project as one of the world’s largest nickel deposits.
The exploration program has identified an exploration target of 350 to 700 million dry metric tonnes (dmt) with nickel grades between 0.9 per cent to 1.1 per cent.
This is in addition to the existing JORC-compliant mineral resource of 187 million dmt at 1.2 per cent nickel and 0.09 per cent cobalt, covering just 900 hectares (ha) of the project area.
In 2024, Nickel Industries completed an extensive drilling campaign, totaling 48,646 metres across 1,844 holes and covering 1,600 ha.
This brings the total exploration to 95,630 metres (3,736 holes) across 2,500 ha of a 4,700 ha prospective mapped laterite area.
The campaign yielded exceptional results, with peak assays reaching 7.41 per cent nickel and 1.37 per cent cobalt.
Managing Director Justin Werner expressed enthusiasm about the project’s potential, stating: “The Sampala Project has the potential to become one of the largest nickel deposits globally.
“This positions Nickel Industries as one of the world’s largest holders of contained nickel metal.”
The company has already commenced mine development and main haul road construction. With current market prices for saprolite ore (1.6%) at US$45 per wet metric tonne (wmt) and limonite ore (1.2%) at US$20/wmt, the project shows promising economic potential.
Nickel Industries plans to develop the Sampala Project with an initial production target of six million wmt per annum, gradually increasing to 20 million wmt per annum.
The company has submitted its feasibility study and environmental application (AMDAL) to expedite the project’s progression to production.
The Sampala Project, comprising three contiguous nickel-cobalt projects covering 6,654 ha, is located just 36.9 km from the company’s existing operations in the Indonesia Morowali Industrial Park (IMIP).
This proximity is expected to facilitate self-sufficiency in nickel ore supply for Nickel Industries’ downstream operations.
As the company moves forward with the Sampala Project, it aims to secure a long-term, high-quality ore supply for its processing operations at IMIP, potentially contributing significantly to future earnings with a relatively low capital development cost of approximately US$50 million.