Nico Resources Plans 6,000m RC Drilling and Signs MOU with Battery Tech Firm

Infill Drilling Program Ready to Unlock Wingellina's Potential

Nico Resources Limited (ASX:NC1) is gearing up to commence a 6,062-metre reverse circulation (RC) infill drilling program at its flagship Wingellina nickel-cobalt project in Western Australia. Final site preparations, including drill site clearing and engagement of Stark Drilling with a 450 Schramm rig, were completed in the June quarter, with drilling expected to begin early August and continue through the September quarter.

The program targets the South Domain of the deposit with 94 holes on a staggered 50m x 25m grid, designed to tighten the geological model and support upgrading a significant portion of the resource from Indicated to Measured status. This upgrade is crucial for advancing project development and refining mine planning. Further infill drilling is planned for the Central and Northern Domains, with a long-term objective of approximately 200,000 metres of RC drilling to achieve a nominal 25m x 25m spacing across the orebody.

Strategic Partnership with Pure Battery Technologies

In a significant development, Nico signed a non-binding Memorandum of Understanding (MOU) with Brisbane-based Pure Battery Technologies Ltd (PBT) to jointly explore establishing regional nickel and cobalt refining platforms in Australia, the US, and Europe. The collaboration aims to leverage PBT's patented hydrometallurgical technology to process Mixed Hydroxide Precipitate (MHP) from Wingellina into battery-grade nickel-manganese-cobalt (NMC) precursor cathode active material (pCAM).

PBT operates a commercial refinery in Hagen, Germany, with plans to expand capacity to 15,000 tonnes per annum of pCAM, positioning it among the few western producers with an established operating plant. Discussions are also underway with US government agencies to potentially establish a domestic refining facility, underscoring the strategic importance of secure, low-carbon battery materials supply chains.

Metallurgical Testwork Advances Project Design

Ongoing bench-scale metallurgical testwork at ALS continues to inform optimisation of the Wingellina processing flowsheet, which centres on High-Pressure Acid Leaching (HPAL) to extract nickel and cobalt. Recent assessments indicate a potential 10% upgrade in nickel head grade by rejecting coarse ore fractions during preparation, which also reduces acid-consuming impurities.

The testwork delivers critical data on metal recoveries, material handling properties, reagent consumption, and product purity, all feeding into the Definitive Feasibility Study (DFS) currently in scope definition. The company aims to maximise metal recovery and reduce operating costs while mitigating risks across the orebody.

Nickel Market Volatility Influences Project Timing

The nickel market experienced sharp volatility during the June quarter, with prices rallying above US$19,000 per tonne in May before retreating to just over US$16,000 by June. This rollercoaster was driven by Indonesian government policy shifts, including initial cuts to ore mining quotas followed by signals of a significant quota increase, which unsettled supply expectations.

Additional pressures stem from geopolitical tensions in the Middle East, impacting HPAL input costs. Despite these headwinds, the market remains structurally balanced with robust demand growth in battery and stainless steel sectors. Physical nickel inventories remain elevated, but the outlook anticipates a tighter supply-demand balance as Indonesian supply growth moderates in 2027.

Stakeholder Engagement and Environmental Management

Nico continues to engage constructively with Traditional Owners, the Ngaanyatjarra Council, and government agencies. The June quarter included a community meeting at the Irrunytju (Wingellina) Community and on-site heritage monitoring, both receiving positive feedback with no objections to the drilling plans. Clearing works for drill access were completed by Ngaanyatjarra Civil, supporting local employment initiatives.

The company maintains a strong focus on environmental and social governance, aligning its Environmental and Social Management System with ISO 14001 standards. Health and safety protocols remain effective, with no reportable incidents during the quarter.

Financial Position and Outlook

At quarter-end, Nico held cash reserves of AUD 4.86 million and reported exploration expenditure of AUD 335,299, with no mining production costs incurred. The company has reduced discretionary spending and corporate overheads over the past year, maintaining a disciplined approach as it advances the Wingellina project toward a DFS.

Looking ahead, Nico plans to complete the infill drilling, continue metallurgical testwork analysis, advance the geometallurgical model, explore greenfield opportunities in the Musgrave region, and progress water supply planning. Engagement with State and Federal governments and local stakeholders remains a priority as the project moves closer to development decisions.