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Federal Resources Minister Madeleine King has designated nickel as a critical mineral, unlocking access to billions of dollars in relief for nickel companies.

Since the last update of the critical minerals list on December 16 last year, several nickel facilities have either reduced operations or entered care and maintenance. Among those affected are Andrew Forrest’s Wyloo, IGO, First Quantum Minerals, Chalice Mining, and Panoramic Resources.

BHP recently announced the closure of part of its Kambalda processing operations, and it's contemplating placing its Nickel West operations into care and maintenance, potentially jeopardizing thousands of jobs.

However, the inclusion of nickel on the critical minerals list means companies can now access financing through $4 billion in critical minerals grant programs, including the $40 million international partnerships program. Such grants could help operators navigate the nickel downturn and prevent closures.

Minister King acknowledged the significant challenges facing the nickel industry, with low international nickel prices expected to persist until the market surplus is addressed.

The decision to classify nickel as a critical mineral follows a roundtable discussion led by Minister King and Western Australian Minister for Mines David Michael, where industry challenges were addressed. Both federal and state governments committed to expediting nickel taxation and royalties incentivization.

WA Premier Roger Cook announced a 50% royalty relief program if the average price of nickel concentrate falls below $US20,000 per tonne, with companies required to repay the rebate in equal quarterly installments over 24 months.

AMEC CEO Warren Pearce welcomed the addition of nickel to the critical minerals list and the relief packages but emphasized the need for further action, suggesting the introduction of a Production Tax Credit (PTC) similar to the one in the United States. This, he argued, would ensure Australia remains competitive in the global energy transition.

Greatland Gold plc (AIM:GGP) is delighted to announce the successful completion of the WA Government Exploration Incentive Scheme (EIS) co-funded drilling program at the Meadows gold prospect within the Company's 100% owned Ernest Giles project (Ernest Giles).

Key Highlights:

• Two diamond core (DD) holes were drilled, totaling 1,267.7 meters.
• EGD006 returned anomalous mineralization of 8 meters at 0.12g/t Au from 316 meters, associated with alteration and anomalous pathfinder geochemistry.
• The drilling results provide crucial geological and structural information for planning a systematic reverse circulation drill program scheduled for this year to test highly prospective targets at Meadows prospect.
• A ground induced polarization (IP) survey is planned for later in 2024 to further refine targets, along with additional airborne geophysics.

Greatland's Managing Director, Shaun Day, commented:

The completion of the Land Access Agreement and EIS co-funded drilling at Ernest Giles marks a significant milestone for the project, representing the first on-ground exploration in over five years."

"Ernest Giles is an exciting 100% owned project situated outside our strong foothold in the Paterson region, in an underexplored Archean greenstone belt known to host many Tier 1 deposits."

"These initial results are encouraging and confirm the prospectivity of the project. The results will inform further exploration work, including a more extensive drilling program this year."

Completed Drilling Program:

The two completed EIS co-funded diamond core drill holes, EGD005 & EGD006, provided critical geological understanding of the project and guided future targeting. Gold anomalism was confirmed to be hosted within altered basalts, banded iron formation (BIF), and syenite.

The results suggest encouraging broad, weak (Au-Ag-Cu-Zn) mineralization, possibly indicating the edge of a larger system. Further drilling will utilize this information to better target mineralized areas.

Follow-up RC Drilling Program and IP Survey:

A follow-up RC drilling program is planned for H2 2024, utilizing information gained from the recent drilling to systematically test highly prospective geological targets at Meadows prospect.

A detailed ground IP survey is also planned for later in 2024 to refine targeting approaches. This survey will help identify sulphide haloes around orebodies, providing cost-effective identification of mineralization.

Project Location and Tenure:

The Ernest Giles project is located approximately 250km north-east of Laverton and covers a folded belt of magnetic greenstone rocks typical of the highly gold and nickel endowed parts of the Archean Goldfields of Western Australia.

Greatland's tenure at Ernest Giles comprises a comprehensive holding over the most prospective near-surface portions of the Ernest Giles belt, covering more than 1,950km2.

MES is actively looking for Open Pit and Underground Mine Surveyors to join mining operations focused on gold and base metals within the mid-tier range. For further details, please contact Taj Pritchard on 6467 4807

De Grey Mining and gold explorer Kalamazoo Resources have entered an exclusive option agreement regarding Kalamazoo’s Ashburton gold project (AGP).

Situated on the southern edge of the Pilbara Craton in Western Australia, the AGP was acquired by Kalamazoo from Northern Star Resources in 2020.

Luke Reinehr, Executive Chair of Kalamazoo, expressed satisfaction with the agreement, stating, “We are pleased to have reached this agreement with De Grey for the future sale of the Ashburton gold project.”

Reinehr highlighted the substantial value added to the project since its acquisition in 2020 and outlined the terms of the agreement, which include a potential total payment of $33 million to Kalamazoo in cash and/or De Grey shares should De Grey exercise the option to acquire the AGP.

The agreement grants De Grey a 12-month option, extendable for an additional six months, to purchase the Ashburton project, boasting 1.44 million ounces (Moz) of gold resources along with all associated mining and exploration licenses and applications.

During the option period, De Grey plans to conduct metallurgical drilling and test-work, remodel geological domains for processing and mining purposes, and conduct open pit optimizations at the AGP's Mount Olympus resource.

De Grey is obligated to invest a minimum of $1 million in exploration and assessment activities at the AGP and share all results with Kalamazoo.

Glenn Jardine, Managing Director of De Grey Mining, discussed the strategic significance of the proposed 10Mtpa gold plant at Hemi, including a 0.8Mtpa POx circuit, as a regionally strategic asset capable of processing gold ore and concentrates from other regional gold projects.

De Grey sees the AGP as an opportunity to enhance the regional opportunities surrounding the Hemi gold project, potentially increasing Hemi’s annual gold production rate, economic returns, and project life.

Silver Lake Resources and Red 5 are set to merge, forming a diversified mid-tier gold company projected to produce around 445,000 ounces per year.

Silver Lake acquired 11% of Red 5's shares in September 2023. Shareholders of Silver Lake will receive approximately 3.434 Red 5 shares for each Silver Lake share they own.

Upon completion of the merger, the combined company will rank just behind Regis Resources in annual gold production, solidifying its position as a mid-tier player in the industry.

The merger process is expected to begin with a court hearing in mid-to-late April, aiming for implementation by June.

Following the merger, the company will control four gold projects: King of the Hills (KOTH), Deflector, and Mount Monger in Western Australia, as well as Sugar Zone in Ontario, Canada.

According to the presentation, the merger will offer shareholders of both companies the chance to be part of a stronger entity, providing benefits that would not be attainable independently.

The management team of the merged entity will be led by Luke Tonkin from Silver Lake as the managing director and chief executive officer, supported by Richard Hay from Red 5 as chief operating officer, and Struan Richards from Silver Lake as chief financial officer.

Following a review of its Cosmos nickel mine in WA, IGO has opted to transition the site into a state of care and maintenance. The closure is projected to be finalized by the end of May of this year, while IGO evaluates the potential value of continuing select exploration initiatives in the vicinity.

This decision coincides with IGO's announcement regarding the endurance of the current downturn in lithium prices, coupled with a reduction in production at its Greenbushes lithium joint venture in WA.

In the words of IGO's managing director and chief executive officer, Ivan Vella, "This outcome is not what anyone at IGO desired. However, the operational and financial risks of further development at Cosmos in the present climate cannot be overlooked." Vella further emphasized the company's belief in the intrinsic value of Cosmos but stressed the necessity for disciplined capital allocation amidst the nickel market's challenges, while maintaining the flexibility to resume operations if market conditions improve.

In its December 2023 quarterly report, IGO revealed reductions in both net cash and group nickel production, reflecting the broader industry challenges and uncertainties amid downturns in the nickel and lithium sectors.

As a consequence of the closure, redundancies are anticipated, yet IGO is dedicated to supporting its workforce during this transition. Vella expressed gratitude to the on-site team for their exceptional efforts in navigating challenges and advancing the project. He reiterated the company's commitment to prioritizing the welfare of its employees and pledged to provide comprehensive support to those affected by the transition.

Silver Lake Resources and Sandfire Resources released their quarterly results for December 2023, highlighting robust production of gold and copper.

Silver Lake Resources

During the December 2023 quarter, Silver Lake Resources achieved a gold production of 56,629 ounces (oz) and a copper production of 236 tonnes (t).

The Australian gold producer reported the sale of 57,360oz of gold and 239t of copper at an average price of $3025/oz, with an all-in sustaining cost (AISC) of $1868/oz.

Year-to-date production for Silver Lake totaled 121,699oz of gold and 541t of copper, with sales reaching 122,781oz and 534t respectively, at an average sales price of $2986/oz and an AISC of $1791/oz.

The company's cash and bullion position at the end of the quarter stood at $284.1 million.

Silver Lake expressed satisfaction with its operating performance during Q2 FY24, emphasizing strong free cash generation in Western Australia. Plans for Q3 FY24 include the commencement of open pit mining at the Santa Complex and development projects at Stage 2 Santa open pit and Flora Dora, holding 285,000oz in ore reserves.

Sandfire Resources

Sandfire Resources reported a five percent increase in group copper equivalent (CuEq) production during the December 2023 quarter, totaling 32,400t.

The company achieved a record production rate of 4.6 million tonnes per annum (Mtpa) at its underground mines at MATSA in Spain during the first half of FY24, resulting in 13,700t of copper, 24,200t of zinc, and 23,100t of CuEq.

Additionally, Sandfire signed a framework agreement with the Yugunga-Nya Traditional Owners to address cultural heritage protection at the DeGrussa operation in WA.

Sandfire's managing director and CEO, Brendan Harris, emphasized the decision to retain and rehabilitate the DeGrussa operation, ensuring a sustained presence in the region and aiming for meaningful, sustainable outcomes for the community.

Sandfire reaffirmed its FY24 production, cost, and capital expenditure guidance, aiming for over 50 percent growth in copper equivalent production from continuing operations by the end of FY25.

IGO has unveiled strategies to navigate the current downturn in lithium prices.

Together with Tianqi Lithium, IGO holds a 51 percent stake in the Greenbushes lithium project situated in Western Australia. The remaining 49 percent is under the ownership of Albermarle Corporation.

Discussions are ongoing between the involved parties regarding spodumene offtake volumes and pricing arrangements concerning spodumene concentrate sales from Greenbushes.

A novel pricing mechanism will be implemented for spodumene concentrate offtake volumes, resetting monthly based on the average of the previous month, drawing reference from four price reporting agencies: Fastmarkets, Asian Metals, Benchmark Minerals Intelligence, and S&P Platts.

IGO anticipates that sales for the latter half of the 2023–24 financial year (FY24) will be around 20 percent lower than production due to inventory accumulation at Greenbushes.

To align with the inventory build, the company is likely to reduce production at the site, leading to a revision of its slated FY24 production guidance for Greenbushes to between 1.3 million tonnes per annum (Mtpa) and 1.4Mtpa of spodumene concentrate, down from the previously forecasted 1.4Mtpa–1.5Mtpa.

Furthermore, Talison – the mine's operator – is currently progressing with the construction of a third chemical-grade processing plant (CGP3) at Greenbushes, as scheduled.

While there is no immediate alteration to its cash production cost guidance, IGO anticipates these costs to exceed the upper limit of its guidance.

Ivan Vella, Managing Director and Chief Executive Officer of IGO, expressed satisfaction with the new arrangements, emphasizing their ability to address short-term market challenges while maintaining the superior status of the Greenbushes asset and committing to the development of CGP3.

Vella also highlighted the collaborative efforts with industry leaders and their shared vision to realize the full potential of the asset within the burgeoning lithium industry.

This week witnessed the temporary shutdown of Wyloo's Cassini, Long, and Durkin nickel mines, along with BHP pausing a segment of its Kambalda processing operations, responding to recent nickel price declines in Australia.

The nickel market downturn has impacted various nickel miners in Australia, including Chalice Mining, First Quantum Minerals, IGO, and Panoramic Resources. This situation raises the crucial question: What is the optimal path forward for Australian nickel?

Given BHP's recent decision, the Association of Mining and Exploration Companies (AMEC) is urging the Federal Government to offer support to the nickel sector. Neil van Drunen, the acting CEO of AMEC, emphasized the need for government intervention to stimulate downstream processing, stating, "The commercial challenges faced by the nickel industry in Australia warrant some form of government intervention to encourage downstream processing. If the current nickel and lithium price downturn persists, the government should explore all options to reassure the sector, including potential royalty relief."

As part of its proposal, AMEC, set to participate in a minerals-focused roundtable with Federal Resources Minister Madeleine King on January 25, suggests introducing tax incentives to bolster Australia's critical minerals sector. Drunen explained, "AMEC is advocating for the implementation of a production tax credit (PTC) to support critical minerals producers, making Australia 10 percent more competitive in downstream processing. Including a PTC in the upcoming Commonwealth budget plans would send a powerful message to the industry, investors, and global markets that Australia remains a significant player."

The proposed PTC, inspired by a similar US Government initiative under the Inflation Reduction Act, would grant miners a 10 percent reduction in their tax obligations for producing refined critical mineral products.

Wyloo's CEO, Luca Giacovazzi, views the 10 percent production tax credit as one aspect of the solution and advocates for additional measures to provide relief to the critical minerals sector. Giacovazzi calls for incentivizing Australian nickel production through the introduction of the production tax credit, revising the royalties scheme, and facilitating access to funding support for capital investment.

Furthermore, Giacovazzi proposes the establishment of a 'green nickel price premium,' differentiating Australian-produced nickel adhering to robust environmental, social, and governance (ESG) standards from 'dirty' nickel produced in countries like Indonesia. He stresses the need for structural changes in nickel pricing to recognize the ESG credentials of nickel products and safeguard Australia's position as a supplier of low-carbon nickel under the United States' Inflation Reduction Act.

The push for pricing reform has garnered support from Minister King and Andrew Forrest. On January 25, WA nickel miners, including BHP, Glencore, IGO, and Wyloo, will convene for the roundtable to discuss potential solutions and the future of the Australian nickel industry.

Lynas Rare Earths characterized the fourth quarter of 2023 as a period marked by significant progress in various facets of the business.

The construction of the rare earths processing facility in Kalgoorlie, Western Australia, saw substantial completion during the quarter, accompanied by the comprehensive commissioning of the entire plant.

After finalizing kiln heating and other commissioning activities, the initial batch of material from Mount Weld was introduced into the Kalgoorlie facility in December 2023.

Lynas anticipates the gradual introduction of mixed rare earth carbonate (MREC) from the Kalgoorlie facility to the Lynas Malaysia plant, commencing in the latter part of the first quarter of 2024.

The Mount Weld expansion project remains on schedule, with early-stage activities progressing as outlined in the plan. This encompasses Stage 1 structural, mechanical, and piping (SMP) works in the thickener and filter circuit, as well as the initiation of electrical works in December. The company is in advanced negotiations with potential contractors for Stage 2 SMP works, and the tender for the construction of the tailings storage facility has been issued.

The Western Australian Environmental Protection Authority concluded its evaluation of the Mount Weld life-of-mine proposal, recommending environmental approval—an essential milestone in securing full project approvals.

In financial terms, Lynas recorded $112.5 million in quarterly sales, a decrease from the preceding quarter's $128.1 million. The company attributed this decline to lower production levels, the product sales mix, and persistently low rare earth prices, with the average NdPr market price at $US60/kg during the quarter.

The improvement in rare earths market prices is contingent upon China's economic recovery, according to Lynas.

Furthermore, Lynas successfully concluded its exploration drilling program into fresh carbonatite beneath the current Mount Weld open pit mine. The program, consisting of 165 reverse circulation (RC) holes covering 31,754 meters, yielded promising results, with assays indicating rare earth oxide concentrations averaging up to 3.3 percent in fresh carbonatite.

Amanda Lacaze, Managing Director and Chief Executive Officer of Lynas Rare Earths, expressed optimism about the Mount Weld resource's future, stating that the drilling results confirm extensive rare earth element mineralization below and around the current mine pit floor. This newfound understanding enhances opportunities for Lynas to develop a more targeted mine plan, taking into account specific elements in addition to grade considerations.