The Nickel Industries Ltd (ASX: NIC) share price has been a strong performer on Monday.
In early afternoon trade, the nickel producer's shares are up 7% to 96 cents.
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Why is the Nickel Industries share price racing higher?
Investors have been scrambling to buy this nickel producer's shares following the release of an update on its Hengjaya Mine in Indonesia.
According to the release, the company has upgraded its mineral resource to 300 million dry metric tons (dmt), with an average grade of 1.22% nickel and 0.09% cobalt. This equates to approximately 3,700,000 tons of nickel metal and 270,000 tons of cobalt.
Since the last resource estimate in June 2020, measured resources have increased 333%, indicated resources are up 20%, and inferred resources are up 53%. Management notes that this delivers a significant conversion of inferred and indicated to measured resources and provides increased confidence in the current remaining resource estimate.
This mineral resource estimate is based on data incorporating 529 kilometres of ultra-ground penetrating radar survey, 4,657 drill holes, and 111,643 sample assays from drill cores taken from a 3,000-hectare area at the Hengjaya Mine.
Nickel Industries' Resource managing director, Justin Werner, was delighted with the news. He said:
We are delighted to deliver a significant increase in our Resource at the Hengjaya Mine from 2.4 million tonnes to 3.7 million tonnes of contained nickel metal representing a 56% increase, with further upside remaining. This places the Hengjaya Mine amongst the top 10 global nickel resources, highlighting the world class size of the deposit.
The Hengjaya Mine is the closest large tonnage, high grade saprolite and limonite mine to the Indonesia Morowali Industrial Park ('IMIP') and one of its largest ore suppliers. This underscores the important strategic value of the mine in providing secure, long-term supply to the Company's RKEF operations within IMIP, being HNI and RNI, as well as Oracle Nickel ('ONI') which is currently under construction and due to commission in October this year.
