Nginx - PHP 7 - Drupal 8 - Image Styles - Help

Hey everyone,

We are facing a rather peculiar issue with our new stack of Ubunt, Nginx, PHP 7 & Drupal 8. Specifically image styles are not being generated.

Our current NGINX conf is the following:

server {
    listen      123.123.123.123:80;
    server_name domain.com;
    root        /home/user/web/domain.com/public_html;
    index       index.php index.html index.htm;
    access_log  /var/log/nginx/domains/domain.com.log combined;
    access_log  /var/log/nginx/domains/domain.com.bytes bytes;
    error_log   /var/log/nginx/domains/domain.com.error.log error;

    location = /favicon.ico {
        log_not_found off;
        access_log off;
    }

    location = /robots.txt {
        allow all;
        log_not_found off;
        access_log off;
    }

    location ~* "/\.(htaccess|htpasswd|git)$" {
        deny all;
        access_log off;
        log_not_found off;
    }

    location ~ ^/sites/.*/private/ {
        deny all;
        access_log off;
        log_not_found off;
    }

    location ~ ^/sites/[^/]+/settings.php$ {
        deny all;
        access_log off;
        log_not_found off;
    }

    location ~ /(readme.html|license.txt) {
        deny all;
        access_log off;
        log_not_found off;
    }

    location / {
        try_files $uri @rewrite;
        location ~* ^.+\.(ogg|ogv|svg|svgz|swf|eot|otf|woff|mov|mp3|mp4|webm|flv|ttf|rss|atom|jpg|jpeg|gif|png|ico|bmp|mid|midi|wav|rtf|css|js|jar)$ {
            expires 365d;
            access_log off;
        }

        location ~ \.php$|^/update.php {
            fastcgi_param SCRIPT_FILENAME $document_root$fastcgi_script_name;
            if (!-f $document_root$fastcgi_script_name) {
                return 404;
            }

            fastcgi_pass    unix:/var/run/php/domain.com.sock;
            fastcgi_index   index.php;
            fastcgi_intercept_errors on;
            include         /etc/nginx/fastcgi_params;

            fastcgi_cache microcache;
            fastcgi_cache_valid 200 1m;
            fastcgi_cache_valid 301 302 1m;
            fastcgi_cache_valid 404 1m;
            fastcgi_cache_bypass $no_cache;
            fastcgi_no_cache $no_cache;

            set $no_cache 0;
                if ($request_method !~ ^(GET|HEAD)$) {
                    set $no_cache 1;
                }
                if ($no_cache = "1") {
                    add_header Set-Cookie "_mcnc=1; Max-Age=2; Path=/";
                    add_header X-Microcachable "0";
                }
                if ($http_cookie ~ SESS) {
                    set $no_cache "1";
                }
        }
    }

    location @rewrite {
        rewrite ^ /index.php last;
    }

    location ~ ^/sites/.*/files/styles/ {
        try_files $uri @rewrite;
    }

    error_page  403 /error/404.html;
    error_page  404 /error/404.html;
    error_page  500 502 503 504 /error/50x.html;

    location /error/ {
        alias   /home/user/web/domain.com/document_errors/;
    }

    location /vstats/ {
        alias   /home/user/web/domain.com/stats/;
        include /home/user/web/domain.com/stats/auth.conf*;
    }

    include     /etc/nginx/conf.d/phpmyadmin.inc*;
    include     /etc/nginx/conf.d/phppgadmin.inc*;
    include     /etc/nginx/conf.d/webmail.inc*;

    include     /home/user/conf/web/nginx.domain.com.conf*;
}

Any thoughts on this, would be greatly appreciated