Nickel laterite deposits in the Sorowako and Petea area are generally classified into two main types, West Block and East Block types, depending upon the nature of bedrock, the level of serpentinisation, ease of mining, size of boulders, degree of fracturing of the bedrock, optimum screen fraction that carries nickel grades, and the silica-to-magnesia ratios in the mineralisation.

West Block type deposits are developed over a relatively unserpentinised peridotite bedrock; commercially mineable grades are confined to the -1" fines fraction; and silica to magnesia ratios are high (2.2 to 2.6 range).

West Block type deposits are categorized into Types 1, 2 and 3, depending on the degree of fracturing in the bedrock and the size of the resulting boulders. Type 1 deposits are the most difficult to mine due to weak fracturing of the bedrock and the resulting large size of the boulders. Type 2 and Type 3 deposits are successively easier to mine and are formed over more fractured bedrock resulting in boulders within the mineralisation profile that mining equipment can handle.

Optimum nickel grades in all West Block type deposits are confined to -1" screen fraction. Oversize is generally barren or very low grade. Exceptions exist in breccia mineralisation where siliceous garnierite carries respectable grades in the +1" fraction.

East Block type and Petea deposits. These deposits are developed over bedrock that is much more serpentinised and characterized by generally low silica to magnesia ratios. They are further categorized into three types based on upgrading characteristics of the mineralisation as follows:

18" mineralisation type in which all fractions up to 18" size are mineralisation grading. This is also referred to as "Pure East Type mineralisation".

6" mineralisation type in which only material less than 6" in size is mineralisation grading; oversize rock is low grade and needs to be rejected.

1" mineralisation type in which only -1" material is mineralisation grading and all oversized material is waste. This mineralisation type is further divided into two types depending on the olivine content of the +1-6" size fraction:

Low-olivine -1" mineralisation type in which the olivine content of the +1-6" rock is generally less than 22%. This mineralisation type can be screened at 1" size for maximum nickel upgrading, or screened at 6" size for maximum mineralisation recovery. In either case olivine content is acceptable for the electric furnaces.

High-olivine -1" mineralisation type in which the olivine content of the +1-6" fraction is generally more than 22%. This mineralisation type must be screened at 1" size to ensure that excessive olivine does not enter the electric furnaces.

East Block 6"/18" mineralisation type form an arcuate zone extending from Sumasang in the north to Lamangka South and Fiona-Farah in the south-east. East of this zone, and up to the shore of Lake Matano, the area is underlain largely by -1" high-olivine mineralisation type. East Block -1" low-olivine mineralisation type only forms irregular patches within the 6"/18" mineralisation type and the -1" high-olivine mineralisation type.

In the Mahalona North area, the 6"/18" mineralisation type has numerous small raisin-like zones of the other two East Block mineralisation types.

Petea area was originally classified as -18" mineralisation type but was not supported after reviewing borehole and test pit data. Recent results from mining (screening results) indicate that Petea is generally a - 6" mineralisation type. Petea will continue to be treated as -6" mineralisation. The -1" mineralisation type identified in Petea is treated at -6".

The surface mining is not traditional pit mining but more an “open cast” system by truck and shovel where contour side cuts are made into a hill. Anywhere from eight to ten hills are actively mined to provide ROM that meets the quality specifications (ore chemistry) of feed for the nickel processing plant.

The processing plant in Sorowako has three furnace dryers, five oil-fired reduction kilns, four electric furnaces and three Pierce-Smith converters.

The pyrometallurgy nickel processing involves in initial mineralisation drying process, followed by reduction, smelting and converting to produce the final dried product.

Drying - Wet mineralisation from the Wet Ore Stockpile is fed to three rotary kiln dryers. This process partially dries the feed mineralisation from a moisture content of 30 to 40% to produce the Dryer Kiln Product , with a reduced moisture content of 19 to 21%. East and West type mineralisation are separately screened to produce -1” the Dryer Kiln Product, with the product of each type mineralisation placed in separate piles in Dried Ore Storage buildings.

Reduction - From the Dried Ore Storage, mineralisation is fed to the counter-current fired reduction kiln. A blend of East and West type mineralisation is used. The reduction kiln comprises three zones with increasing temperatures and reduction potentials. The first zone pre-heats the Dryer Kiln Product feed with 19 to 21% moisture, completely drying it. The second zone, referred to as the calcination zone, removes the water of crystallisation. The third zone, referred to as the reduction zone, contributes to most of the partial reduction, which is achieved by the injection of High Sulphur Fuel Oil. Sulphur is introduced and combines with the iron and nickel to form iron nickel sulphides. The product from the reduction kiln is called calcine. Calcine mineralisation overflows the discharge end of the reduction kiln into a refractory-lined surge bin and transported to the furnace feed bins.

Smelting – The calcine is smelted in the electric furnaces operating in an open arc mode. Here, the oxide (slag) phase separates from the sulphide (matte) phase. The slag is skimmed from the furnace almost continuously and is disposed. The matte is tapped periodically as required by the converters. The assay of the furnace matte is in the range of 25-28% Ni.

Molten furnace matte is transferred to the converters through ladles. Air/oxygen is blown in to oxidise the remaining iron. Silica flux is added to flux the oxidised iron that is then slagged away. During converting, the lower grade electric furnace matte is converted to Bessemer matte with a nominal analysis of 78% Ni, 20% S and 2% Co.

Finally, converter product is granulated, dried, screened and packed in bags for shipment.