Alliance Nickel Initiates Vat Leach Testing to Cut Capital Costs at NiWest Nickel-Cobalt Project

Vat Leach Optimisation Program Aims to Lower Water Infrastructure Costs

Alliance Nickel has begun a capital cost optimisation program focusing on vat leach testwork using approximately 2 tonnes of representative NiWest ore. This initiative evaluates an alternative to the heap leach flowsheet featured in the 2024 Definitive Feasibility Study, where a significant portion of the circa A$310 million capital cost is attributed to water infrastructure supporting heap leach operations. Early findings indicate vat leaching could enable sufficient local water sourcing from the Mt Kilkenny tenement, potentially yielding substantial reductions in water infrastructure capital expenditure compared to DFS projections.

Besides cost savings, preliminary analysis points to metallurgical advantages with vat leaching, such as improved solution distribution, enhanced leaching kinetics, and reduced leach cycle durations. These benefits position vat leaching as a promising alternative to decrease overall project capital outlay and enhance capital efficiency. The testwork is slated for completion in late Q3 2026, with positive outcomes expected to inform updates to the existing feasibility study and refine project design parameters.

NiWest Project Resource and DFS Highlights

The NiWest Project features one of Australia's highest-grade undeveloped nickel laterite resources, located adjacent to Glencore's Murrin Murrin operations in Western Australia. It boasts a globally significant JORC resource of 93.4 million tonnes at 1.04% nickel, totaling 971,000 tonnes of contained nickel, as announced in November 2024. The Definitive Feasibility Study from November 2024 confirmed NiWest as a commercially viable project with strong environmental, social, and governance credentials, developed over two years in collaboration with Ausenco Services Pty Limited and other consultants.

Upon operation, NiWest will supply sustainable, ethical premium Class 1 high purity nickel sulphate and cobalt sulphate products, serving as direct-ship precursors for battery cathode manufacturers and critical mineral supply chains. The project forecasts average annual production of approximately 20,000 tonnes of contained nickel and 1,600 tonnes of contained cobalt over the first 12 years of its 35-year mine life. Mining will be conducted via open pit with a low strip ratio, utilising conventional load and haul equipment and minimal blasting. Processing involves on/off heap leaching followed by solvent extraction and crystallisation to produce low-cost, high purity battery-grade products with a low carbon footprint. A recent Ore Reserve update increased reserves by 31% to 84.7 million tonnes at 0.94% nickel and 0.06% cobalt.

Progress on Groundwater Licensing and Hydrogeology

In the June 2026 quarter, Alliance advanced its groundwater licensing application for NiWest with the Department of Water and Environmental Regulation (DWER). The company holds a 5C groundwater licence permitting extraction of up to 2 GL per annum from the Mount Kilkenny fractured rock aquifer, though full volume proof is pending. A 26D application for additional production bore construction has been submitted to DWER, with processing expected to take about six months.

Currently, two production bores and an extensive monitoring bore network exist within the Mount Kilkenny mining licence area. The next drilling phase plans to add three to four production bores and up to two monitoring bores if necessary, providing data to optimise the borefield design. The original borefield concept included up to 26 production bores to meet approximately 1.3 GL water demand, accounting for yield contingencies. This hydrogeological work supports the potential for local water sourcing under a vat leach configuration, which could significantly reduce water infrastructure capital costs compared to DFS estimates.

Major Project Status and Critical Minerals Emphasis

NiWest achieved Major Project Status in May 2024, a key regulatory milestone marking it as the first nickel project to receive this designation following nickel's classification as a Critical Mineral by the Australian government. This status underscores the project's strategic importance within Australia's critical minerals framework and facilitates coordinated assessments and streamlined approvals.

Alliance's focus on producing premium high purity nickel and cobalt sulphate for the battery electric vehicle market places the company in a vital supply chain position. Growing global demand for EV battery materials enhances the value of projects like NiWest that offer sustainable, ethical, and high-purity precursor materials. The combination of Major Project Status, a definitive feasibility study confirming commercial viability, and a significant resource base establishes NiWest as a key contributor to Australia's critical minerals sector and EV supply chain resilience.

Capital Raising and Extended Funding Flexibility

During the June 2026 quarter, Alliance completed a non-renounceable entitlement offer raising approximately A$2.4 million at A$0.035 per share with a 63% take-up rate. This capital supports ongoing optimisation and development activities, including vat leach testwork and hydrogeology assessments, enhancing financial flexibility for advancing technical and permitting work.

Additionally, unsecured loan facilities were extended to 30 June 2027, ensuring continued funding availability. As of 30 June 2026, Alliance held A$2.3 million in cash and had fully drawn unsecured loans totaling A$5.20 million. This financial position supports key workstreams such as vat leach optimisation, hydrogeology licensing, and other project development activities. The loan extension reflects lender confidence in Alliance's development trajectory and provides runway for critical milestones through late 2026.

Heap Leach vs. Vat Leach Processing Considerations

The 2024 Definitive Feasibility Study primarily featured a heap leach flowsheet, selected after thorough evaluation of processing options. However, heap leach operations entail significant water infrastructure capital costs, a major component of the circa A$310 million DFS capex, due to water handling, storage, and recycling needs. Alliance's assessment of vat leaching aims to reduce these costs by leveraging local water sourcing capabilities.

Vat leaching differs from heap leaching in vessel design, residence time control, and solution management, offering more controlled processing conditions, better solution distribution, enhanced kinetics, and shorter leach cycles. Preliminary analysis supports the feasibility of sourcing sufficient water locally under a vat leach scenario. The ongoing testwork will validate these assumptions and determine if vat leaching can deliver the expected capital savings and metallurgical benefits without compromising product quality or economic returns.

Strategic Partnership with Stellantis and Offtake Agreement Update

In 2023, Alliance formed a strategic partnership with global automaker Stellantis NV, including equity investment and an offtake agreement covering about 40% of future NiWest production. This partnership validated the project’s production concept and secured significant demand. However, the company disclosed that the Stellantis offtake agreement is currently under renegotiation. Details on the timing and commercial impacts have not been provided in the June 2026 quarterly report.

This partnership is strategically important, offering both capital support and long-term offtake certainty, which are favorable for project financing and risk mitigation. The renegotiation introduces uncertainty regarding final terms, duration, and volume commitments, which investors will monitor closely as a key milestone influencing project financing and development progress.

NiWest Operational Profile and Capital Efficiency

The NiWest Project is designed for simple mining and processing, utilising heap leaching or potentially vat leaching under the current optimisation program. This approach offers a safer, less capital-intensive alternative to High Pressure Acid Leach (HPAL) technology, which demands complex, costly infrastructure. Alliance’s choice prioritises capital efficiency, operational simplicity, and safety over potentially higher throughput or recovery achievable with HPAL.

The processing flowsheet includes on/off heap or vat leaching followed by solvent extraction and crystallisation to produce battery-grade nickel and cobalt sulphate. This integrated process delivers Class 1 premium products ready for battery cathode manufacturers, eliminating intermediate steps and reducing costs. Mining operations will be open pit with low strip ratios and limited blasting, employing conventional load and haul equipment. These features contribute to the project’s low-cost, low-carbon footprint and align with Alliance’s goal of sustainable, ethical critical mineral supply at competitive costs.

Upcoming Milestones and Timeline

The immediate priority is completing the vat leach testwork by late Q3 2026. Results will determine if vat leaching can achieve the targeted capital reductions and metallurgical improvements versus the heap leach DFS baseline. Positive outcomes will inform updates to the feasibility study, revising capital cost estimates, production forecasts, and economic returns.

Hydrogeology milestones include DWER’s six-month processing of the 26D licence application for additional production bores, followed by drilling of three to four production bores and up to two monitoring bores. This will refine the borefield design and quantify water supply capacity. The resolution of the Stellantis offtake renegotiation remains pending, with no disclosed timeline. These developments through late 2026 and into 2027 will significantly influence NiWest’s refined development strategy and financing readiness.