Alliance Nickel Raises $2.4 Million, Extends Loans, and Progresses Vat Leach Testing

Vat Leach Testing Targets Major Capital Cost Cuts

Alliance Nickel (ASX:AXN) has embarked on vat leach testwork on a 2-tonne bulk sample from its NiWest Nickel-Cobalt Project, seeking to replace the heap leach process outlined in its 2024 Definitive Feasibility Study (DFS). This shift could trim roughly A$310 million from capital costs, mainly by reducing the extensive water infrastructure required under the heap leach configuration. The vat leach method promises improved metallurgical performance with faster kinetics and better solution distribution, potentially accelerating leach cycles and boosting capital efficiency. The test program is due for completion by late Q3 2026, with positive results expected to feed into an updated feasibility assessment refining project design and economics.

Financial Moves Provide Breathing Room

In parallel, Alliance Nickel closed a non-renounceable entitlement offer raising approximately A$2.4 million at $0.035 per share, achieving a 63% take-up. The company issued nearly 69 million shares, including underwritten shortfall shares, though around 50 million shares remain unplaced. Additionally, unsecured loan facilities totalling A$5.2 million were extended from June 2026 to June 2027 with a 13% interest rate, maintaining vital funding flexibility as the company advances project development and explores strategic funding options. These financial manoeuvres underpin the company’s runway while it progresses optimisation initiatives and permitting efforts.

Progress on Groundwater Licensing and Permitting

Alliance is advancing its groundwater licensing at the NiWest site, holding a 5C licence permitting up to 2 GL per annum extraction, though full capacity remains unproven. The company has lodged a 26D application to construct additional production bores, expected to take about six months for regulatory approval. Planned drilling of three to four new production bores aims to refine borefield design and confirm local water sourcing potential. This work is crucial for supporting the vat leach process, which depends on accessible water supplies to reduce infrastructure spend.

NiWest Project Remains a Long-Life, Low-Cost Producer

The NiWest DFS, completed in November 2024, positions the project as a 35-year open pit operation producing approximately 20,000 tonnes per annum of contained nickel and 1,600 tonnes of cobalt, both as battery-grade sulphates. With an ore reserve increase of 31% to 84.7 million tonnes at 0.94% nickel and 0.06% cobalt, NiWest ranks in the first cost quartile for All-In Sustaining Cost (AISC) at US$4.84 per pound nickel over the first 12 years, underscoring its competitive edge against Australian and international peers. The project’s capital cost estimate stands at A$1.65 billion, including contingencies, based on an Engineering, Procurement, Construction and Management (EPCM) approach.

Commodity Market Dynamics and Strategic Positioning

Nickel prices fluctuated between US$16,300 and US$19,500 per tonne during the quarter amid Indonesian supply uncertainties and elevated inventories, while cobalt maintained elevated levels near US$56,000–57,000 per tonne due to supply constraints in the Democratic Republic of Congo. Despite these headwinds, NiWest’s low-cost profile and strong ESG credentials position it favourably to capitalise on growing demand for Class 1 nickel and cobalt driven by electric vehicle battery markets and government policies promoting responsible sourcing. The project’s Major Project status, granted by the Australian Government in May 2024, facilitates streamlined approvals and government engagement.

Cash Position and Expenditure

At quarter-end, Alliance Nickel held A$2.3 million in cash and had drawn its full A$5.2 million unsecured loan facility. Exploration and evaluation expenditure totalled A$361,000, primarily on regulatory and tenement administration, with no mining or production activities conducted. Payments to related parties, mainly directors’ remuneration, amounted to A$96,000. The company estimates it has just over three quarters of funding available based on current expenditure rates, highlighting the importance of ongoing capital management as it awaits vat leach test results and further project milestones.