Solway Group :: AQUILA PROJECT, INDONESIA

Aquila is a principal greenfield FeNi project, aimed at the construction of independent ferronickel plants in Indonesia. The most advanced such project is located in Maba on Halmahera Island. Currently, the project is estimated to have resources amounting to over 120 million tons of dry saprolite ore, with an average Ni grade of 1.58%. The Solway Group acquired the license to the holding company in 2007. In early 2014, Solway completed a feasibility study and acquired all the necessary permits required to proceed to the next stage. The project is currently at the engineering, design, and construction planning stage.

The primary objective for this project is to unlock the potential of its Tier-1 nickel ore reserves. The long-term priorities are to complete a downstream facilities configuration, develop new state-of-the-art processing technologies, and complete the design for and construction of a world-class ferronickel smelting facility, to ensure export of value-added nickel products.

In addition to the Aquila Project, the Group is developing a FeNi smelting facility on Maba, and a simplified technology for other smaller deposits in Indonesia:

Asera

The Group launched its first Indonesian operation in early 2011 with the export of nickel ore from the Asera deposit. The Asera deposit is located on the coast of Sulawesi Island, Indonesia. The Group mines ore from the Asera deposit using open pits. The mining operations are supported by several ore storage areas, two piers for loading the ore onto ships, as well as access roads and other supplementary infrastructure. Automated diesel generators provide power. According to the Group’s internal estimates, the Asera deposit has an estimated resource base of 7.5 million metric tons of nickel ore at an average nickel grade of 1.7 to 1.8%. In addition, the Group believes that there are further exploration opportunities with a potential resource base of 40 million metric tons within the license area.

Bahoomahi

The Group’s third DSO project in Indonesia is the Bahoomahi deposit, located in a mountainous region of the Sulawesi Island. The closest seaport is 25 kilometers from the mining site. Construction of basic infrastructure is currently underway at the site. Automated diesel generators provide the necessary power. Mined ore will be delivered to the seaport by trucks. The Bahoomahi deposit has an estimated resource base of 14 million metric tons with potential for an extra 13 million metric tons of nickel ore at an average nickel grade of 2%, according to the Group’s internal estimates. The Group estimates the possible production capacity rate as 100,000 metric tons of nickel ore per month.

Sorowalio

The Group acquired rights to the Sorowalio deposit in 2009. The Sorowalio deposit is located inland on Buton Island, Indonesia. The closest seaport is 20 kilometers from the mining site. The mining operations are conducted from open pits and supported by several ore storage areas, access roads, and other supplementary infrastructure. Automated diesel generators provide the necessary power. Trucks will deliver mined ore to the seaport. The Sorowalio deposit has an estimated resource base of 6.6 million metric tons of nickel ore at an average nickel grade of 2%, according to the Group’s internal estimates. In August 2012, the Group received a forestry permit and began full-scale development of the mining site.

In January 2015, due to a change in licensing, the territory of the resource base was revised as follows: 7.7 million metric tons of nickel ore at an average nickel grade of 1.94% with 810,000 metric tons at an average nickel grade of 1.8% beyond the new concession borders.

The Asera, Bahoomahi, and Sorowalio projects are now ready to commence mining, as all infrastructure is in place.

Sponge Nickel Technology

At the moment, due to current Indonesian regulations on raw materials, the Group is working on developing sponge nickel technology.

The technology is based on a reduction process undertaken in a rotary hearth furnace with further treatment in a magnetic separator and gas furnace.

Solway’s strategy is to produce an intermediate nickel product, at the earliest stages of the project, which will pass the Indonesian requirement for export and take advantage of the limited international market for nickel products formed due to the raw materials ban by Indonesia. The resulting sponge nickel product can be further smelted at consumer locations. Relatively low investments allow development at a high-grade depository.

Based on 2 years of investigations, the company has identified the most efficient, economically viable and technologically risk-free approach for production of sponge nickel at a greenfield location.

A preliminary feasibility study with supporting laboratory results and pilot testing has been completed. Nickel ore resources are 7,652 mln dryt metric tons of 1,82% Ni.

After the successful opening of the plant, the company plans to quickly increase production capacity by the acquisition of additional nickel mines in the area and additional technological expansion.