Highlights

  • The combined Sampala Project Mineral Resource has been updated to 1,095 million wet metric tonnes at 1.24% nickel and 0.09% cobalt, containing 8 million tonnes of nickel metal — a more than 350% increase in the ANN concession's Inferred Resource since the initial estimate in September 2024.
  • Indonesia's revised HPM reference pricing framework has materially increased realised values for saprolite and limonite ore, with limonite reference prices rising from approximately US$13/wmt to US$45/wmt — a development that significantly enhances Sampala's project Economics.
  • NIC shares gained 0.50% to AUD $1.02 on 25 May 2026, extending a 49.26% twelve-month rally, with the final ANN Acquisition payment of US$144 million due in April 2027 as the project advances toward production.

Nickel Industries Limited (ASX:NIC), one of Australia's leading nickel producers with significant operational exposure to Indonesia's Morowali Industrial Park (IMIP), has delivered a landmark resource update for its Sampala Project. The combined Sampala Mineral Resource now stands at 1,095 million wet metric tonnes (wmt) at 1.24% nickel and 0.09% cobalt, containing 8 million tonnes of nickel and 583,000 tonnes of cobalt — positioning the project among the largest known nickel laterite resources globally. NIC shares traded at AUD $1.02 on 25 May 2026, up 0.50% on the day and 49.26% higher over the past twelve months, reflecting the sustained market interest in the company's Indonesia strategy and nickel market positioning.

The resource estimate covers the combined ANN and ETL Mining concessions across the Sampala Project's three contiguous nickel-cobalt concessions spanning 6,654 hectares in Sulawesi, Indonesia. The ANN concession alone now carries an Inferred Mineral Resource of 985 million wmt at 1.25% nickel — more than 350% larger than the initial estimate announced in September 2024. The updated resource was compiled from 112,588 metres of drilling across 4,308 holes covering an area of 3,710 hectares, representing a comprehensive and systematic exploration program of significant scale.

HPM Pricing Reform: A Material Economic Catalyst

Beyond the sheer size of the resource, the economic context for the Sampala Project has been transformed by Indonesia's revised Harga Patokan Mineral (HPM) reference pricing framework. HPM is the Indonesian government's benchmark pricing mechanism for domestic mineral ore sales, and the recent revisions have been material in their impact on Sampala's projected economics.

The HPM reference price for limonite ore at 1.18% nickel has risen from approximately US$13/wmt to US$45/wmt — a 246% increase. For saprolite ore at 1.39% nickel, the reference price has increased from approximately US$17/wmt to US$48/wmt — an increase of 182%. These revised benchmarks directly enhance the Revenue per tonne achievable from Sampala's ore sales, accelerate Capital payback, and improve the internal rates of return on the acquisition Investment. The significance of the HPM change to Sampala's economics cannot be overstated — it transforms what was already a well-priced acquisition into one that looks even more compelling in hindsight.

Acquisition Structure: Disciplined Deferred Payment Model

Nickel Industries' acquisition of the Sampala Project is structured around a formula-based payment mechanism that aligns the acquisition cost with the value of the resource actually delineated. The formula applies 60% of the JORC Resource multiplied by US$2.50 per dry metric tonne above 1.7% nickel. Applying this formula to the updated resource, the final acquisition payments are: ANN — US$144 million for a 60% interest, payable in April 2027; ETL — US$5 million for a 60% interest, payable in the coming months; and GF — US$7 million for a 60% interest, which has already been paid.

The elegance of this structure lies in the comparison it creates: the current HPM reference price for 1.7% nickel saprolite ore is approximately US$102/dmt — more than 40 times the US$2.50/dmt acquisition cost payable under the formula. All nickel tonnes below the 1.7% nickel cut-off are effectively acquired at no cost, meaning the vast majority of the 1,095 million tonne resource — which averages 1.24% nickel — is being acquired for minimal consideration relative to its realised value under current HPM pricing. The deferred payment structure also preserves Nickel Industries' near-term Liquidity while the project advances through development milestones.

Mine Development: Infrastructure Taking Shape

The Sampala Project is not a theoretical resource — active mine development is underway. The first 8 kilometres of the 24-kilometre haul road that connects the project to the existing BDM haul road for a 58-kilometre total haulage distance to IMIP is 90% complete, and a 60-metre bridge has been fully constructed. Internal mine road systems and Stage 1 accommodation are progressing, while a crushing plant has been commissioned and is already producing material to maintain the main haul road as an all-weather capable route.

Digital infrastructure has also been established, including a 70-metre Starlink satellite tower repeater and site-wide long-distance digital radio communications with a 60-kilometre range. The project has created approximately 800 new local jobs to date, with recruitment of critical operational staff underway. The feasibility study for the ANN IUP (mining concession operating licence) has been submitted to Indonesian authorities, and the ETL feasibility study approval is expected during the June 2026 quarter.

Tsingshan HPAL Expansion and Limonite Pipeline

A key commercial development for Sampala is the memorandum of understanding under which Nickel Industries will Supply up to 14 million wmt per annum of limonite ore to Tsingshan's new HPAL expansion adjacent to its existing ENC operations within IMIP. Tsingshan has committed to construct a limonite slurry pipeline to receive this supply, which provides Sampala with a captive, high-Volume offtake pathway for the large limonite portion of its ore body — ore that, under the revised HPM pricing, now generates $45/wmt in reference value.

The proximity of Sampala to IMIP — 58 kilometres by haul road — is a defining Competitive Advantage. Most global nickel laterite projects face significant logistics challenges in accessing refining infrastructure; Sampala's adjacency to IMIP, one of the world's most integrated nickel processing complexes, eliminates a major development risk and cost element that constrains comparable projects in other jurisdictions. The pipeline supply arrangement with Tsingshan monetises the low-grade limonite tonnes that would otherwise be uneconomic to ship or process, adding a meaningful revenue stream that may not have been fully contemplated in early acquisition modelling.

Share Performance and Market Context

NIC's 49.26% twelve-month gain to AUD $1.02 reflects the market's growing appreciation of the Sampala opportunity, the HPM pricing tailwinds, and Nickel Industries' established track record of Indonesian operations. The company's existing RKEF and HPAL Assets at IMIP have provided a financial and operational foundation that reduces the execution risk profile of the Sampala development relative to a greenfield entrant. With the final ANN payment of US$144 million due in April 2027 and production progression underway, the key milestones over the next 12 months will be RKAB approval, ETL feasibility study clearance, and the ramp-up of haul road completion.

Conclusion

Nickel Industries' Sampala Project resource update to 1,095 million wmt at 1.24% nickel, combined with the transformative impact of Indonesia's HPM pricing reforms, has materially strengthened the investment case for one of the most strategically positioned nickel laterite projects in the world. The combination of resource scale, logistics adjacency to IMIP, captive HPAL offtake via Tsingshan, and a formula-based acquisition structure that values the ore at US$2.50/dmt against a market reference of US$102/dmt creates a compelling framework for long-term value creation. With development infrastructure progressing, regulatory milestones being achieved, and a US$144 million final payment due in April 2027, the coming quarters will be pivotal in translating resource scale into operational and financial reality for Nickel Industries shareholders.