Nico Resources has completed about 70% of a 6,000-metre infill drilling program at its Wingellina nickel-cobalt project, with initial assays expected in November. The technical progress comes as nickel and cobalt prices weaken and a proposed downstream partnership remains non-binding.
- 65 RC holes and 4,300 metres completed at Wingellina
- Assays expected around mid-November
- Drilling and density work aimed at upgrading parts of the resource to Measured
- Nickel fell to about US$15,500 a tonne and cobalt to US$38,200
- Quarter-end cash and working capital stood at $4.318 million
Wingellina drilling reaches 70% completion
Nico Resources Limited (ASX:NC1) has moved its flagship Wingellina project into the data-gathering phase that could support a higher-confidence resource classification, completing 65 reverse-circulation holes for 4,300 metres by the end of September. That represents about 70% of the planned 94-hole, 6,062-metre program, with the balance due in the December quarter.
The campaign is designed to improve local knowledge of the orebody, collect additional metallurgical samples and support the conversion of parts of the Indicated resource to Measured. It is accompanied by downhole density work, which Nico says is needed to improve estimates of tonnes within the regolith. First assay results are expected around the middle of November. The drilling program had been prepared for several months before minor rig-maintenance delays and unseasonal weather pushed its start into early September, after the company had received the necessary clearing and community approvals.
The work continues the drilling campaign previously scheduled for Wingellina, which had been prepared to target resource upgrades and metallurgical understanding. Nico now has 2,400 two-metre composite samples at Intertek for analysis across a standard nickel-laterite suite, but the filing contains no assay results yet.
Resource definition meets a weaker nickel market
Wingellina’s 2024 Mineral Resource Estimate stands at 187.3 million tonnes grading 0.91% nickel and 0.06% cobalt, containing 1.698 million tonnes of nickel and 106,000 tonnes of cobalt. The resource is predominantly Indicated, with 164.1 million tonnes in that category and 23.3 million tonnes classified as Inferred.
Nico is aiming to tighten the geological and geometallurgical model, particularly across higher-grade areas expected to be important to the first 10 years of a potential operation. The company says a full 25-metre by 25-metre drilling grid would require roughly 200,000 metres of additional RC drilling, so the current campaign is a staged exercise rather than a complete definition of the deposit.
That technical work is advancing against an unhelpful commodity backdrop. Nickel retreated from more than US$19,000 a tonne in May to about US$15,500 by the end of the quarter, while cobalt fell from roughly US$56,000 to US$38,200. Nico attributed the pressure to increased Indonesian mining quota availability, elevated inventories and weaker-than-expected battery demand. LME nickel inventories reached approximately 279,000 tonnes in late September, according to the company.
Ore preparation remains central to project economics
Metallurgical studies continued during the quarter, with Nico reviewing bench-scale testwork and possible ore-preparation flowsheets. Earlier work indicated that rejecting the coarse fraction could lift nickel head grade by about 10% while also removing some acid-consuming elements, a result the company says may improve autoclave efficiency and reduce sulphuric acid consumption.
The proposed processing route remains a substantial HPAL circuit involving scrubbing, beneficiation, high-pressure acid leaching, neutralisation, impurity removal and mixed hydroxide precipitate production. Nico is continuing to build the geometallurgical model before progressing the project toward a Definitive Feasibility Study, with recovery, upgrade, hardness, grindability and acid consumption among the variables still being assessed.
Pure Battery Technologies discussions remain exploratory
Discussions with Pure Battery Technologies continued, but the quarter produced no definitive agreement or material new development. The parties are evaluating whether Wingellina’s nickel-cobalt resources could supply mixed hydroxide precipitate for downstream conversion into nickel-manganese-cobalt precursor cathode material, potentially across facilities in Australia, the United States and Europe.
The arrangement remains governed by a non-binding memorandum of understanding and does not commit either party to a development or final investment decision. That leaves the proposed refining pathway at the evaluation stage, while Nico’s immediate work remains focused on drilling, metallurgical definition, permitting and DFS preparation.
Cash position and December-quarter priorities
Nico finished September with cash and working capital of $4.318 million, after spending $362,732 on exploration and evaluation during the quarter. Mining production expenditure was nil. The company says it has reduced discretionary expenditure and corporate overheads over the past year as it advances the project cautiously.
The next operational markers are clear: complete the infill drilling, receive and interpret the assays, expand the geometallurgical model and refine the ore-preparation work. Whether those results translate into a Measured resource upgrade, a more compelling processing case or a firmer downstream partnership will determine how much of Wingellina’s long-term potential can be converted into a financeable development proposition.
Bottom Line?
November assays are the next hard data point, but the larger test is whether better resource definition can offset weaker nickel economics and limited project-stage cash.
Questions in the middle?
- Will the November assays support a meaningful conversion of Indicated material to Measured resources?
- Can ore preparation deliver the expected grade uplift and lower acid burden at larger-scale testing?
- How long can Nico progress drilling and DFS preparation before additional funding becomes necessary?