Alliance Nickel Reports Promising Phase 1 Vat Leach Results for NiWest Project

Alliance Nickel advances NiWest project after DFS values it at $1.5 billion NPV.

What the company is saying

Alliance Nickel positions its NiWest nickel-cobalt project in Western Australia as a commercially attractive, long-life asset, highlighting the results of its 2024 definitive feasibility study (DFS). The company emphasizes a post-tax net present value of $1.5 billion, a 17.6% post-tax internal rate of return, and an ore reserve of 84.7 million tonnes grading 0.94% nickel and 0.06% cobalt. The announcement frames recent Phase 1 vat leach test work as 'promising' and 'encouraging', though no quantitative extraction results are disclosed. The narrative stresses that Phase 2 testing, now approved, will better simulate commercial conditions and assess ore variability across the Mt Kilkenny orebody. The company claims that vat leaching could reduce water infrastructure costs and potentially improve leaching performance compared to the on/off heap leach flowsheet in the DFS. The tone is positive and forward-looking, with the company targeting completion of Phase 2 testing by year end to inform an update to feasibility work.

What the data suggests

The only realised technical milestone is the dispatch of a 2-tonne NiWest ore sample for Phase 1 vat leach testing, with no extraction or recovery metrics disclosed. The DFS remains the primary quantitative foundation, projecting a $1.5 billion post-tax NPV and a 17.6% post-tax IRR based on a 35-year open pit operation producing battery-grade nickel-cobalt sulphate. Ore reserves are stated at 84.7 million tonnes at 0.94% nickel and 0.06% cobalt, supporting the project's scale. Claims of 'promising' and 'encouraging' Phase 1 results are not substantiated by any recovery rates or acid consumption figures. The company is moving to Phase 2 testing, which is designed to be more representative of commercial conditions and to evaluate ore variability, but no new economic or technical data is provided beyond the DFS. The disclosure is complete regarding DFS metrics but lacks transparency on the actual outcomes of recent test work, making it difficult to independently assess technical progress or the impact of the capital cost optimisation program.

Analysis

The announcement uses positive language to describe Phase 1 vat leach results as 'promising' and 'encouraging,' but does not disclose any specific numerical outcomes or recovery rates from the testing. The only concrete, realised facts are the dispatch of a 2-tonne ore sample and the completion of a 2024 DFS, which provides standard project metrics (NPV, IRR, ore reserve, grades). Most of the key claims about future benefits—such as improved leaching performance, reduced water infrastructure costs, and the commercial viability of vat leaching—are forward-looking and contingent on the results of Phase 2 testing, which is not yet complete. The DFS metrics are projections based on assumptions, not realised financial or operational performance. The project is capital intensive, with a 35-year mine life and large-scale development, but there is no evidence of near-term earnings or cash flow. The gap between the company's positive narrative and the actual disclosed progress is moderate: the language inflates the significance of early-stage test work, while the data supports only incremental technical advancement.

Risk flags

• ●The absence of quantitative results from Phase 1 vat leach testing introduces uncertainty about the technical viability and potential cost savings of the proposed flowsheet change. Without recovery rates or acid consumption data, investors cannot gauge whether the new approach will deliver the claimed benefits.
• ●All financial and operating metrics are derived from the 2024 DFS, which is a projection rather than a record of realised performance. The $1.5 billion NPV and 17.6% IRR are contingent on successful project execution, market conditions, and the technical assumptions in the DFS.
• ●The project remains at a pre-construction stage, with key technical and economic decisions dependent on the outcome of Phase 2 testing and subsequent feasibility updates. This exposes the company to execution risk, potential delays, and further capital requirements before any revenue is realised.

Bottom line

Alliance Nickel's update signals incremental technical progress at the NiWest project, but the investment case still rests almost entirely on DFS projections: a $1.5 billion post-tax NPV, 17.6% IRR, and 84.7 million tonnes of ore at 0.94% nickel and 0.06% cobalt. The move to Phase 2 vat leach testing is framed as a positive step, yet the lack of disclosed recovery or cost data from Phase 1 means there is no new evidence to validate the proposed flowsheet's advantages. Investors should focus on the upcoming Phase 2 results, as these will determine whether vat leaching can materially improve project economics or reduce capital intensity. Until then, the project's value remains theoretical, and the main risk is that technical or economic assumptions in the DFS may not be realised. The most important takeaway is that tangible de-risking will only occur when the company delivers measurable, independently verifiable test outcomes and updates its feasibility case accordingly.

Announcement summary

(ASX: AXN) Alliance Nickel has reported Phase 1 vat leach results as part of a capital cost optimisation program for its NiWest nickel-cobalt project in Western Australia. The company sent a 2-tonne sample of NiWest ore to an overseas facility to assess ore sizing, agglomeration conditions, leach kinetics, and nickel-cobalt recoveries. The extraction outcomes from Phase 1 have led the company to approve moving to Phase 2 testing. Phase 2 is designed to better represent expected commercial vat operating conditions, including acid usage, and will assess ore variability across a greater extent of the main Mt Kilkenny orebody. A second suite of composite samples, representative of the life-of-mine ore profile, will be used to support the continued evaluation of vat leaching as an alternative flowsheet to the on/off heap leach configuration outlined in the project's 2024 definitive feasibility study (DFS). The DFS confirmed NiWest as a commercially attractive development opportunity based on a 35-year open pit operation producing battery-grade nickel-cobalt sulphate. The DFS estimated a post-tax net present value of $1.5 billion. The DFS also estimated a 17.6% post-tax internal rate of return. The DFS outlined first-quartile all-in sustaining costs. The ore reserve is 84.7 million tonnes at 0.94% nickel and 0.06% cobalt. Alliance Nickel has targeted completion of Phase 2 testing by year end. The results of Phase 2 are expected to inform an update to the feasibility work.

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