Sampala Project Resource Updated to 1,095 Million Wet Tonnes

Sampala Project Resource Surges Past One Billion Tonnes

Nickel Industries Limited (ASX:NIC) has unveiled a major update to its Sampala Project in Indonesia, reporting a combined JORC Mineral Resource of 1,095 million wet metric tonnes (wmt) grading 1.24% nickel and 0.09% cobalt. This equates to approximately 8 million tonnes of contained nickel metal, positioning Sampala among the largest nickel laterite deposits globally. The resource update is based on an extensive drilling campaign of 4,308 holes totalling 112,588 metres across the ANN and ETL mining concessions.

The company’s Managing Director Justin Werner highlighted the scale and quality of the resource, noting a high-grade saprolite component of around 180 million wmt at 1.6% nickel. This is particularly significant given the saprolite HPM (Harga Patokan Mineral) price is currently US$58 per wet metric tonne, underscoring the project’s economic potential. The resource upgrade notably dwarfs the company’s existing Hengjaya Mine resource, reinforcing Sampala’s strategic importance.

Drilling and resource estimation remain ongoing, with initial results pending for the adjacent GF concession, which covers 624 hectares and has seen 167 holes drilled so far. An updated resource for the ANN infill drilling area is also expected before year-end to support mine planning.

Acquisition Payments and Operational Control Advance Development

Nickel Industries has secured operational control of the ANN concession through an advance payment of US$28.5 million, enabling accelerated development work including progressing regulatory approvals and infrastructure construction. The company is due to make a final acquisition payment of US$144 million in April 2027 for a 60% interest in ANN, with smaller payments for ETL and GF also scheduled or completed.

This deferred payment structure eases near-term liquidity pressures while allowing the project to advance. The acquisition formula, based on US$2.50 per dry metric tonne above 1.7% nickel, is strikingly low compared to current HPM prices which have surged to roughly US$102/dmt for saprolite ore at 1.7% nickel, implying substantial value upside for Nickel Industries.

Development progress is tangible, with 90% completion of the first 8 kilometres of a 24-kilometre haul road that will link Sampala to the company’s existing rotary kiln electric furnace (RKEF) and high-pressure acid leach (HPAL) operations within the Indonesia Morowali Industrial Park (IMIP). Additional infrastructure including a 60-metre bridge, internal mine roads, accommodation, and digital communications are advancing, having already created around 800 local jobs.

Strategic Pricing Shift Boosts Project Economics

The Indonesian government’s recent overhaul of the HPM reference pricing framework has materially lifted the realised value of nickel ores, with limonite prices jumping from about US$13/wmt to US$45/wmt and saprolite from US$17/wmt to US$48/wmt. This pricing reset significantly enhances the project’s economic viability and shortens payback timelines.

Nickel Industries has also signed a memorandum of understanding with a nearby HPAL operator to supply up to 14 million wmt of limonite ore via a slurry pipeline, unlocking value from the limonite portion of the ore body. This aligns with the company’s strategy to secure ore supply for its RKEF operations and expand its footprint in the high-margin parts of the nickel value chain.

Resource Confidence and Next Steps

The updated resource remains largely classified as Inferred, reflecting a 100 x 100 metre drill spacing and pending resurveying of some drill collars for elevation accuracy. The company plans infill drilling to upgrade resource classification and refine mine planning. Metallurgical test work is preliminary but supports suitability for open-pit mining and processing via RKEF and HPAL routes.

Nickel Industries continues to advance feasibility studies, with approval for the ANN IUP feasibility study submitted and ETL’s expected imminently. The company’s broader portfolio, including the Hengjaya Mine and Excelsior Nickel Cobalt (ENC) HPAL project, complements Sampala’s development, providing a diversified nickel supply chain footprint. This resource update follows a period of strong operational performance and margin gains across the group’s nickel processing assets, as highlighted in its recent record Q1 earnings and ore sales and supply deal expansions.