Axiom Mining is emerging from a cocoon of legal uncertainty and is wasting no time in flexing its wings as it soars towards production. The company’s flagship is the large-scale Isabel nickel project on Santa Isabel Island, a joint venture between Axiom (80%) and the landowning tribes.

The 49sq.km Isabel nickel and cobalt laterite project sits in the same mineralised corridor as Newcrest Mining’s large-scale Lihir gold mine.

“We’re forging ahead to deliver a nickel laterite direct-shipping ore (DSO) operation by the end of this year with an initial production target of two million tonnes per annum,” managing director Ryan Mount told RESOURCESTOCKS.

“We’ll be a significant player in the nickel DSO market in the Asia-Pacific region in years to come.”

Axiom has six drill rigs working to prove up a JORC nickel resource, to formally establish the scope of the likely multi-million tonne nickel project, which was discovered by International Nickel Company (INCO) in 1956.

INCO spent millions on exploration, followed by Kaiser Engineers, yet Axiom has already discovered greater grades and depths of mineralisation, with an initial drill hole recording 20.7m at 1.74% nickel from surface, including 7.65m at 2.67% nickel from 8.25m.

Axiom is targeting a 4-7Mt resource to start a 3-5 year 2Mtpa DSO operation, with a modest estimated capital cost of $US25 million and an expected positive cash flow within 12 months.

Mount said the resource definition was expected later this year and the potential scale was huge.

“Based on the historical exploratory work that was conducted by INCO and Kaiser Engineers and our initial exploration, this has the potential to be one of the largest deposits in the Pacific,” he said.

“As such, we are comfortable to be able to say we’ll be a significant player in the nickel laterite DSO market.”

Isabel’s mineralisation is very close to surface and production is a straightforward process of digging, hauling and shipping. The company is also poised to benefit as analysts tip increasing DSO nickel prices, due to Indonesia’s continuing export ban on unprocessed ore and a likely supply deficit.

Axiom prides itself on the relationships it has established in the Solomon Islands and Mount said this was one of Axiom’s standout attributes as it moves to become one of the country’s successful miners.

The company won a High Court battle late last year, which validated Axiom’s access to Isabel and dismissed an injunction preventing development. Sumitomo Mining Metals Solomon’s last chance concluded in the Court of Appeal in June, with a decision imminent as RESOURCESTOCKS went to press, but Axiom is confident of success.

“We do remain confident of our legal rights,” Mount said diplomatically.

Sumitomo’s action was labelled “an abuse of the court’s process” by the High Court last year and Axiom will gain $A4.8 million in costs if Sumitomo’s appeal fails.

“It’s been a long and arduous ride for shareholders,” Mount acknowledged.

“It’s a credit to our shareholders and to the community and the government of Solomon Islands that they’ve forged forward. This coupled with confidence in our legal rights spurred us through the whole process. Through the stakeholder support, we’ve been able to get back on site allowing management to lead the development of this project.”

The community support has been reflected in a significant number of job applications and Mount said the company was going through a detailed, systematic process so it could hire from local communities first, then the wider Solomon Islands.

“I’m very pleased to say there is a significant number of skilled workers able to assist in the development of this project,” he said.

Axiom is refurbishing the 100-man camp and plans to upsize that to accommodate 300 people by the end of this year.

The company has also started basic training with the local workforce and surrounding communities.

“We’ll progress over the next few months to specific skills training for particular roles on our site,” Mount said.

The project’s development has been boosted by a private placement of $4 million in May and a strategic partnership with Papua New Guinean mining services firm Anitua Ltd. Under the partnership agreement struck in December 2014, Anitua took a 7% stake in the company and will provide a range of mining services.

“We’re pleased to have their support,” Mount said.

“They have over 20 years’ experience of mining in the Pacific, so it’s good to be able to rely on them and have them assist with their mining expertise.”

In May, Axiom’s coffers were boosted by the $3 million private placement and $1 million in convertible notes were issued.

“The $4 million from high net worth individuals and institutions was to commence resource definition drilling program and for establishing some infrastructure for our mine site,” Mount said.

“We also have $8 million of options that are in the money and due by the end of September, which with the $4.8 million in the awarded legal costs puts us in a reasonably comfortable position to ensure we don’t have too many capital constraints in developing this project.”

Axiom is already looking to supplement the Isabel project through newly acquired exploration rights on neighbouring San Jorge Island, 5km southwest.

“We’ll commence exploration as well as a resource definition program at San Jorge in the coming months,” Mount said.

“We think San Jorge Island is very similar in size and grade to our tenement at Kolosori on Isabel Island. The San Jorge deposit will allow us to increase our production in future years and there’ll be synergies in developing those assets at the same time.”

Axiom’s other projects in Queensland and Vietnam are meanwhile waiting in the wings while the Isabel project moves towards production.

“Axiom will be the only tropical laterite miner on the ASX,” Mount said. “We give investors one of the only and best exposures to the structural issue of the ban of shipping ore in Indonesia, and we are one of the only companies to successfully operate in the geologically gifted Solomon Islands.”

*A version of this report, first published in the July-August 2015 edition of RESOURCESTOCKS magazine, was commissioned by Axiom Mining.