Metallurgical Test Work

In August 2006 the Company commissioned a Sonic drill rig program to recover full core samples through the 1% nickel envelope. A total of sixteen drill holes were located over the Hepi and Mt Kilkenny resources to provide representative sample of the ore types in each resource.

The core samples were then cut, assayed, agglomerated and loaded into four separate four metre column. The column leach tests, which, commenced in November 2006 were undertaken at SGS Lakefield Oretest laboratories in Perth.

The column tests exceeded the targeted Nickel extraction rate of 70% and were decommissioned (March 2007) in preparation of Geotechnical work to confirm the strength of the agglomerates. Details of the metal extraction results from the column tests are shown in the tables below.

Throughout the test duration all columns maintained consistently high leach solution percolation rates. The percolation rates confirm that the Hepi and Mt Kilkenny agglomerates have remained stable throughout the test period, with minimal slump observed. This is a significant step forward as the stability of the agglomerate is a fundamental aspect in achieving a successful Heap Leach operation.

Table 3: 120 Day Column Test Results
4 Meter Column Tests Number Days Extraction % Ni Rate % Co Column Head Grade % Ni
Hepi #1 120 82.6 99.1 1.74
MK North #1 120 80.5 98.7 1.29
MK Central #1 120 78.8 86.0 1.37
Mk North #2 120 81.3 89.1 1.12

Metallurgical test programs have been a feature of ongoing work since 2007. In December 2013 two patents lodged by the Company over its Acid Regeneration and Ore Pelletisation process were granted. Both of these important innovations will be utilised in the NiWest flow sheet.

The acid regeneration process is designed to reduce acid consumption by regenerating a significant proportion of the acid for re use in the heap leach stage. Test work to date indicates that up to 30% of the consumed acid can be regenerated.

The pelletisation process is designed to stabilise the ore and commence the leaching cycle prior to the pellets being stacked on the heap. Both leach cycle and stabilisation of the heap is a critical aspect in any heap leaching operation. Further refinement of the acid regeneration process is planned and is expected to lead to a greater percentage of acid regenerated.

From the Scoping Study 2014, it was recommended that the Company proceed with a high level metallurgical test program to validate the “Proof of Concept” test work. To this end, the Company recently completed a Sonic Core drilling program that generated over five tonnes of sample to be used in the test program which is designed to cover all aspects of the flow sheet and provide engineering data required to feed into a Definitive Feasibility Study (DFS). The test work to be covered in the program includes:

The final stage of the NiWest flow sheet, which has been developed along similar lines to a copper processing plant, includes an Electrowinning (EW) refinery that will produce LME grade nickel cathode and a high grade cobalt carbonate concentrate.

Completing the current test program which is expected to take twelve months will be a major milestone for the Company in its aspiration to move the NiWest Project forward to development. The test program is expected to deliver a number of key outcomes that will allow the project to continue seamlessly into a DFS.

During the Sept 2014 quarter, a detailed Metallurgical Sonic Drilling programme was completed at the Mount Kilkenny and Hepi ore bodies. The geological logging reflected consistency and robustness of these two significant Ni laterite ore bodies. The metallurgical samples divided into separate 1m intervals were then delivered to Hydromet Research Laboratories in Brisbane.

The laterite ores have a naturally high moisture content. As a consequence, it was necessary to partially dry the laterite samples prior to sample preparation to ensure that subsequent representative sampling could be achieved. The air drying was conducted under controlled conditions to ensure minimal sample degradation occurred.

The partially dried samples have now undergone sample preparation and subsamples have now been submitted in for detailed chemical analysis.

Preliminary bottle roll characterisation testing has been conducted and a further 200 bottle rolls will be completed over the next month. This will provide a detailed metallurgical understanding of the two ore bodies and allow the metallurgical characteristics to be captured within the future resource modelling. This will allow for further project resource optimisation based on Ni grade, impurity concentrations and acid consumption characteristics.

An example of the results obtained from the preliminary testing is provided below showing the excellent performance characteristics of the saprolitic laterite ore type with +90% Ni recovery at an acid consumption of 500kg/t. This graph also shows the tests allow for a clear determination of the poorly performing non – saprolitic materials. The differentiation of the non saproltic ores types which form a minor proportion of total resource (generally located in the top one to two metres of the mineralised profile) is a key to the future resource optimisation.

Good progress continues to be made in relation to the large scale metallurgical test work being undertaken at HRL laboratory in Brisbane. The aim of the program is to refine the proposed NiWest flow sheet that is based on the development of a nickel heap leaching operation coupled to a Direct Solvent Extraction – Electrowinning (HL-DSX-EW) processing facility.

Status of Program

To date the program has been focused on establishing the leach kinetics of the various ore types located through the resource profile. Every 2 metres of ore has been subjected to bottle roll testing to determine the criteria for sample selection in the column test program.

With this stage of the program now completed the focus moves to geotechnical testwork to establish the optimal acid addition for the agglomeration process and stacking height for the heap leach. This work is being undertaken by HyrdoGeosense based in Tuscon USA. The geotechnical work is expected to completed in late February and will be applied in the agglomeration process for the column tests.

The column test stage is scheduled to commence in March and will run for 2-3 months. Once sufficient pregnant solution has been produced Fe removal/neutralisation and SX piloting will commence.

The Company has elected to increase the scope of the SX program to include separate piloting on Hepi and Mt Kilkenny ore types. The program will also be increased to test an alternate SX flow sheet that utilises non-proprietary chemicals so that a comparison can be measured against the Bateman Tenova proposed Nicksyn based SX process. The new scope of work will extend the program by approximately two months and is now expected to be completed by October 2015.

The column test stage is scheduled to commence in March and will run for 2-3 months. Once sufficient pregnant solution has been produced the most significant stage of the metallurgical program, the Fe removal/neutralisation and SX piloting will commence.