Axiom Mining has won a David versus Goliath battle in the Solomon Islands High Court with Axiom triumphing over Sumitomo’s claims.

The High Court dismissed Sumitomo’s claims, finding “the proceedings have been shown to be an abuse of the court’s process.

The High Court discharged Sumitomo’s injunction preventing Axiom’s exploration or mining activities. It also placed a continuing permanent injunction restraining Sumitomo from interfering with Axiom’s business activities in Solomon Islands.

The company is targeting to start a direct shipping ore operation within the next 12 to 18 months.

Axiom’s claim for costs and damages will now be pursued.

“This judgment vindicates Axiom’s assertions that we have always acted correctly and with integrity,” chief executive officer Ryan Mount said.

“With our Prospecting Licence and registered lease recognised, we can now re-commence our exploration of the tenement with our partners, the Kolosori and Bungusule landowners.

“Work on this tenement—one of the largest nickel laterite deposits in the Pacific—will start on Monday.

“We are targeting the start of a Direct Shipping Ore operation within 12 to 18 months.”

Chair of the Kolosori Trustees Mr Elliot Cortez said, “We are very pleased that we have been able to successfully defend our land rights.

“We look forward to working closely with Axiom to develop the nickel deposit as well as hopefully constructing a mine.”

“We are glad to have Axiom back on the land and look forward to the results of their exploration in developing the world-class Isabel nickel deposit,” Solomon Island Minister for Mines, Energy and Rural Electrification Moses Garu said.

“We hope to receive a mining lease application for this project from Axiom in the not too distant future.”
High Court Decision

High Court Judge John Brown ruled in favour of Axiom KB Limited, the local subsidiary of Axiom Mining, in the Solomon Islands High Court case 258/11 between SMM Solomon Limited (“Sumitomo”) and others v Axiom, Solomon Islands Government and others.

His judgements include:

- validation of Axiom’s registered lease and Prospecting Licence over the Isabel nickel deposit;
- Rejection of all of Sumitomo’s claims;
- Discharge of the injunction preventing Axiom’s exploration activities on the Isabel nickel deposit;
- Sumitomo’s undertaking as to damages continues in respect of any damages claimed by Axiom;
- Order for a continuing permanent injunction restraining Sumitomo from interfering in Axiom’s mining, prospecting or other business interests in Solomon Islands; and
- Arguments on costs to be determined.

Axiom had commenced exploration activities on Santa Isabel Island in 2011 when the Prospecting Licence was awarded, however activities were halted by an injunction brought on by a civil claim by Sumitomo.

Isabel Nickel Project

The Isabel Nickel Project is 80% owned by Axiom KB, where KB stands for Kolosori and Bungusule being the two original customary landowning tribes, who collectively own the remaining 20% interest.

The Kolosori tenement covers 49 square kilometres on Isabel Island and is covered by Axiom’s leasehold and prospecting licence.

The second nickel resource has been identified within the Bungusule tenement on nearby San Jorge Island that lies and is currently subject to a Letter of Intent between Axiom AB and local landowners. The Bungusule tenement covers 36 square kilometres.

Kolosori and Bungusule are among the largest nickel laterite deposits in the Pacific and was previously explored and developed by International Nickel Company (INCO) and then Kaiser Engineering.

INCO carried out extensive testing of both Kolosori and Bungusule resources from the 1960’s to 1970’s with the completion of 4,409 test pits, 1,484 power auger holes, 394 hand auger holes, 121 drill holes, 43 diamond drill holes and a feasibility study.

Kaiser carried out further evaluation from 1993 to 1995 with the excavation of an additional 34 test pits that validated earlier work completed by INCO. This work confirmed that the deposit contained a high iron limonite zone that lies on the surface, and overlies a low iron saprolite zone at depth.

The total thickness of saprolite which carries the highest nickel and cobalt grades was never fully tested due to limitations of drilling equipment and depth of test pits.

Deeply weathered regoliths have been forming in South East Asia for over 100 million years and have potential to range down to a depth of 150 metres.

Kaiser concluded that the resources were sufficient to operate a heap leach mine for 15 years at a process rate of 2,800 tonnes per day. The historic and non-JORC resources were estimated at 159 million tonnes at 1.045% nickel and 0.07% cobalt.

Axiom has previously indicated that they intend to evaluate the entire tenement at Kolosori to a depth of 20 to 30 metres and define a JORC compliant resource.

The project has a number of attractive characteristics that include:

- Main area of nickel cobalt mineralisation is not inhabited by the local population.

- Mineralisation commences at surface and requires no costly stripping.

- Deposit is close to the shoreline and allows for low cost seaborne access and egress to regional processing plants.

- A deep water area adjoins Isabel Island and presents an opportunity for development of a loading facility and harbor.

Low cost open pit mining can very quickly generate a direct shipping ore that significantly reduces both operating cash cost and capital cost for plant, power requirements and infrastructure.

This approach removes the requirement for construction of a conventional high pressure acid leach plant that carry a capital cost measured in a range from one half billion dollars to one billion dollars.


The Highs Court victory is a massive win for Axiom in a David versus Goliath battle which saw the junior prevail against the multi-national behemoth that is Sumitomo.

Significantly, the world-class Isabel nickel deposit can be developed by Axiom as it looks to fast track a DSO mining operation.

We would expect Axiom will look obtain a mining lease as soon as possible.

Axiom will also complete a resource and reserve update to comply with JORC standards and application for mining permits.

Isabel’s resources commence at surface and are located next to a prime site for a deep water port. Very low cost mining operations can be initiated with direct shipping of ore to Asian refineries

The project represents an opportunity to develop a very large nickel and cobalt resource with a mine life that can exceed 20 years.

Given the potential scale and earnings potential of the Isabel operation, it is a large prize. On our early calculations, we estimate a share price for Axiom in the range of $0.041 - $0.053 within 12 - 18 months.