Axiom Mining Limited

Published : August 12th, 2016

Pre-Feasibility Study for the Isabel Nickel Project

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Pre-Feasibility Study for the Isabel Nickel Project

Axiom Mining Limited

ARBN 119 698 770

Level 6, 15 Astor Terrace Spring Hill QLD 4000

Australia

T + 61 7 3319 4100

[email protected] www.axiom-mining.com

12 August 2016

ASX Announcement

Company Update - Pre-Feasibility Study highlights world class potential of the Isabel Nickel Project (San Jorge and Kolosori deposits)

Highlights

  • Economics:

    8%

    • After-Tax Net Present Value (NPV1

      ) of US $188M and an IRR of 95%, based on most recent Nickel market

      forecast.

    • Net Profit Margin2 of 35% over Life of Mine.

  • Low CAPEX: US $18.2M.

  • Low Operational FOB cost: US $11.49/WMT3 currently one of the most competitive in the region.

  • Production: an average of 2.2 WMT per annum.

  • Life of Mine:

    • 18 years.

    • First five years of mining schedule developed using mostly Measured and Indicated Resources.

  • Deposit:

    • The Isabel Nickel Project will be able to produce a consistent, saprolite product for which customers will pay a premium, unlike other supply sources such as the Philippines.

    • Significant opportunity to upgrade resource in both grade and tonnage through further drilling.

      Axiom CEO Mr Ryan Mount states "The pre-feasibility study has confirmed the economic viability and the world class potential of the Isabel Nickel Project. It also highlights the competitiveness of our operation and validates our previously published scoping details. We will continue to work with the Solomon Islands government to bring this project into production as quickly as possible."

      1 NPV: Net Present Value

      2 Net Profit Margin: Profit margin after income tax and royalties

      3 WMT: Wet Metric Tonnes

      Summary

      Axiom Mining Limited ('Axiom' or 'the Company' ) is pleased to announce the positive results from the Pre-Feasibility Study (PFS) conducted by IMC Mining Pty Ltd (IMC) on the world class nickel bearing deposits of the Isabel Nickel Project in the Solomon Islands. This study builds on the JORC Mineral Resource upgrade which was completed and announced on 29 December 2015 and establishes a detailed mine plan that defines the 18 years of mine life.

      This report presents the mine operations plan for nickel laterite mining on the Kolosori and San Jorge deposits, collectively known as the Isabel Nickel Project ('The Project'). The Kolosori deposit is currently not owned by Axiom, however the company has re-applied for the Prospecting Licence. The Company currently owns 80% of the San Jorge deposit, and it is anticipated it will own 80% of the Kolosori tenement, if successful with the application.

      The deposits are located 135 km north-west of the capital Honiara; San Jorge is adjacent to Santa Isabel, as shown in Figure 1.1.

      Figure 1.1 Geography of the Isabel Nickel Project

      Based on a Life of Mine (LOM) of up to 18 years, this PFS is focussed on the development and production of a mine production target of 1.5 Mtpa (wet) product in year one to full operating capacity of 2.2 Mtpa (wet) product by year three.

      The scheduling of mining operations has been carried out on the basis of developing the best balance between the optimisation of the resource and maximising the NPV of the project. This has been achieved by dividing the scheduled mine development into mining phases which include year's one to five (Phase 1) targeting saprolite material that would result in an average of 1.6% Ni (insitu).

      For years six to eighteen (Phases 2-4) the PFS incorporates the historical drilling by Inco, which in many cases did not define the full profile of the laterite.

      Financial Evaluation

      The PFS confirms the financial viability of The Project with an NPV of US $188M and a Net Profit Margin of 35% over the life of the project. IMC have estimated an operational FOB cost of US $11.49/WMT which is low in comparison to other worldwide nickel laterite DSO4 projects.

      Axiom is able to differentiate itself from other laterite nickel projects due to the following factors:

      • A large proportion of saprolite can be readily accessed;

      • Very low stripping ratio (almost no waste overlays);

      • Access to a readily available labour force;

      • Easy access to port and world shipping networks; and

      • Low initial pre-production capital outlay.

The combination of the above factors indicates that the Project's operations will be a low cost saprolite nickel producer able to provide a steady and reliable premium product to its customers.

Figure 1.2 Aerial view of the Isabel Nickel Project

4 DSO: Direct Shipping Ore

Basis for the Financial Evaluation

Table 1.1 provides the assumptions and calculations on which the financial evaluation is based upon.

Category

Measurement

Commencement Date

2016

Mining Rate (Years 1 to 5)

10.07 WMT

Life of Mine (LOM)

18 years

Average Stripping Ratio

(0.83:1)

Nickel Prices

2016 to 2035*

Total Pre-Capital Costs (Chart 1.2)

$18.2m

Total Operating costs - FOB (Chart 1.3)

$11.49

Mineral Royalty

3%

Discount Rate

8%

Tax Rate

35%

Net Present Value (NPV) (Base Case)

$188m

Internal Rate of Return (IRR)

95%

Net Margin (after tax and royalties)

35%

Payback on Capital Costs

PFS Accuracy

+ / - 25%

Table 1.1 Financial Assumptions

*based on Wood Mackenzie forecast

All dollars reported in this document are US $ unless otherwise stated.

Read the rest of the article at www.publicnow.com
Data and Statistics for these countries : Australia | Georgia | Philippines | Solomon Islands | All
Gold and Silver Prices for these countries : Australia | Georgia | Philippines | Solomon Islands | All

Axiom Mining Limited

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CODE : AVQ.AX
ISIN : AU000000ASX7
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Axiom Mining is a silver and gold exploration company based in Australia.

Its main exploration properties are OK MINE, MT MOLLOY, CARDROSS, PINEVALE and WHITE HILLS in Australia and PU SAM CAP, QUANG BINH and QUANG TRI in Vietnam.

Axiom Mining is listed in Australia. Its market capitalisation is AU$ 8.7 millions as of today (US$ 6.7 millions, € 5.5 millions).

Its stock quote reached its highest recent level on April 12, 2011 at AU$ 1.26, and its lowest recent point on May 24, 2019 at AU$ 0.02.

Axiom Mining has 348 620 000 shares outstanding.

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Annual reports of Axiom Mining Limited
2007 Annual report
2006 Annual Report
Nominations of Axiom Mining Limited
6/4/2007appointment of Mr John Cook as a non-executive independent
Project news of Axiom Mining Limited
8/12/2016Pre-Feasibility Study for the Isabel Nickel Project
12/3/2015Isabel Nickel Project resource definition drilling update
11/4/2015Isabel Nickel Project resource definition drilling update
9/22/2015Isabel Nickel Project resource definition drilling update
9/14/2015Isabel Nickel Project resource definition drilling update
9/7/2015Isabel Nickel Project resource definition drilling update
8/31/2015Isabel Nickel Project resource definition drilling update
8/24/2015Isabel Nickel Project drilling defines thick mineralisation
8/6/2015Isabel Nickel Project resource drilling uncovers 3% Ni
7/13/2015Isabel orientation drilling program successfully completed
4/24/2015Isabel Nickel Project drilling update
4/10/2015Drilling indicates continuous high grade mineralis
9/26/2008(Nightflower)First Resource Estimate - Nightflower Project
Corporate news of Axiom Mining Limited
8/1/2016Change of Share Registry
7/31/2016Funding for development of the Isabel Nickel Project
7/29/2016Quarterly Activities Report
7/28/2016Trading Halt
7/26/2016Key executive management appointment
7/25/2016Axiom Mining Company Update
6/10/2016Half Year Financial Report 31 March 2016
6/1/2016Notice of Expiry of Options
5/12/2016Axiom Mining EGM 12 May 2016 - Results
5/9/2016Isabel Nickel Project update
5/1/2016Quarterly Activities Report
4/19/2016Axiom Mining Loyalty Bonus Issue
4/19/2016Notice to the Financial Markets Authority
4/7/2016Appendix 3B
4/5/2016Cleansing Statement
4/1/2016Notice of Expiry
4/1/2016Reinstatement to Official Quotation
4/1/2016Axiom moves forward litigation-free with new funding
3/31/2016Axiom Mining 2016 AGM Results
3/30/2016New strategic shareholder
3/23/2016Solomon Islands Court of Appeal Update
3/23/2016Suspension from Official Quotation
3/21/2016Trading Halt
2/2/2016Axiom Mining Company Update
1/18/2016Change of Australian registered office address
12/31/2015Notice of Expiry
12/29/2015Isabel Nickel Project defines first 5 years of production
12/22/2015Appendix 3B
12/21/2015Annual Financial Statements
12/21/2015Off-take agreement and funding with Gunvor
12/16/2015Notice of Expiry and Appendix 3B
12/4/2015Axiom Mining EGM 4 December 2015 - Results
12/4/2015Axiom Mining EGM 4 December 2015 - Chairman's Address
11/3/2015Major funding and partnership for Isabel Nickel Project
11/2/2015Quarterly Activities Report
10/21/2015Change of Director's Interest Notice
10/15/2015Axiom Mining EGM 15 October 2015 - Results
10/15/2015Axiom Mining EGM 15 October 2015 - Chairman's Address
9/30/2015Isabel Nickel Project Maiden Mineral Resource Estimate
9/28/2015Appendix 3B
9/14/2015Notice of Extraordinary General Meeting
9/7/2015Isabel Nickel Project JORC Resource statement imminent
8/21/2015Axiom Mining Key Appointment
8/11/2015Appendix 3B
8/4/2015Appendix 3B
7/31/2015Quarterly Activities Report
7/31/2015Trading Halt
7/31/2015West Guadalcanal Project technical review complete
7/29/2015Axiom Mining Key Management Appointments
7/28/2015$5 million to fund development of Isabel Nickel Project
7/24/2015Trading Halt Request
7/20/2015Appendix 3B
7/17/2015Axiom Mining Solomon Islands Litigation Proceedings Update
7/13/2015Appendix 3B
4/21/2015Response to Price Query
4/15/2015Completion of consolidation
4/14/2015Axiom Mining Solomon Islands Litigation Proceeding
4/2/2015Notice of Expiry
3/31/2015Axiom Mining 2015 AGM Results
3/30/2015Axiom Mining 2015 AGM Chairman's Address
3/9/2015Further high grade results on Isabel Nickel Projec
3/6/2015Notice of Annual General Meeting
2/16/2015Appendix 3B
2/16/2015Cleansing Statement
2/13/2015Anitua extends support for Axiom
2/12/2015Court of Appeal hearing date confirmed
1/23/2015Quarterly Activities Report
1/19/2015Sumitomo provides AU$5 million in bank guarantees
2/22/2008Western Plains - Large increase in Buzzard direct shipping i...
1/31/2008$1.3m exploration for the quarter - significant acqu isition...
11/1/2007 builds on successfuy September quarter exploration a ctivi...
8/16/2007Raises $4m in share placement to accelrate its progr ams in ...
7/31/2007Exciting Results continue from aggressive Exploration in Que...
6/26/2007New geophysical anomalies indicate prime drill targets at Ax...
4/4/2007new tenement grants in aggressive acquisition thru st in Nor...
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