Alliance Nickel Advances Lower-Capital NiWest Processing Test

Vat Leach Could Remove NiWest's Largest Infrastructure Burden

Alliance Nickel Limited (ASX:AXN) is testing whether a change in processing could do more for the NiWest nickel-cobalt project than simply improve recovery rates. Preliminary vat-leach work has supported a second phase of testing that could potentially remove much of the water infrastructure built into the project's November 2024 feasibility study.

That study included about A$310 million of water infrastructure, including a pipeline extending more than 200 kilometres. Alliance says preliminary assessments indicate vat leaching may allow water to be sourced locally from the Mt Kilkenny area, although sustainable groundwater yield, permitting, process-water demand and engineering requirements remain unresolved. The company has approved groundwater investigation bores, but explicitly says those approvals do not establish a viable operating water supply.

The update extends the same program covered in the September vat-leach approval, when Phase 2 work was approved after initial results supported continued evaluation. Alliance has now dispatched additional composite samples to an overseas testing facility, where the next phase will examine nickel and cobalt extraction, leach kinetics, acid consumption, operating conditions and performance across a wider range of ore types. Completion is targeted for the end of the December quarter.

The 2024 DFS Remains the Official Project Case

The language around the potential savings is deliberately conditional. NiWest's published development case remains the heap-leach configuration, with the 2024 DFS estimating initial capital of A$1.65 billion. That study envisaged average annual production over the first 12 years of about 20,000 tonnes of contained nickel and 1,600 tonnes of contained cobalt, within an estimated 35-year mine life.

Vat leaching is being assessed as an alternative to the heap-leach component, not as a replacement project design already accepted by the company. Positive Phase 2 results would feed further engineering and economic work, and could lead to larger-scale pilot testing and an updated feasibility study. Any change in route depends on acceptable metallurgical performance, confirmed water availability and a commercially supportable overall configuration.

Limited Cash Meets a Long-Dated Development Bill

Alliance ended September with A$1.95 million in cash after spending A$77,000 on exploration and evaluation and recording A$279,000 of corporate and administration outgoings during the quarter. On the current spending rate, the Appendix 5B indicates about 5.55 quarters of funding. The company also carried A$5.2 million of fully drawn unsecured loans, each bearing 13% interest and maturing on 30 June 2027 unless otherwise agreed.

That balance sheet is sufficient for the present testing program on the company's stated run-rate, but it is not a development funding solution for a project with a published A$1.65 billion initial capital estimate. The filing also notes that Alliance's offtake agreement with Stellantis for approximately 40% of future production is being renegotiated, adding a commercial workstream alongside the technical one. The next meaningful evidence will be the Phase 2 extraction and variability data, followed by any decision to move into pilot work or revise the feasibility case.