Western Areas buys Glencore's Cosmos Nickel Complex for A$24.5 million
Western Areas acquired Glencore's Cosmos Nickel Complex, a project that will sit nicely alongside Western Area's existing Forrestania Nickel Operation in Western Australia.
Glencore let the nickel operation go for A$24.5 million.
The project is located approximately 28km north‐west of the BHPB Leinster nickel operations and 370km north‐west of Kalgoorlie in Western Australia.
Western Areas Managing Director, Mr Dan Lougher, commented that the acquisition was consistent with its growth strategy and given the company’s successful exploration credentials and its agile and lean approach to projects, Western Areas’ skill sets would be appropriately utilised.
“The Cosmos Nickel Complex will complement our existing Forrestania Nickel Operations, and is an excellent, prudent and low cost investment which is consistent with our brownfields acquisition strategy. Western Areas’ strong track record in exploration, successful project development and low cost operations is precisely what this Project needs to prosper outside of the large corporate environment,” Lougher said.
“We believe we have acquired the project at the correct stage of the current commodity cycle. We’ve now significantly increased our exposure to upside via substantial additional high quality development and exploration opportunities, as the nickel market is expected to move into a tighter demand and supply balance over the coming years.
In a news release, Western Areas highlighted the benefits of the deal.
- World class nickel belt which has yielded one of the highest grade nickel mines ever discovered and operated.
- Substantial exploration opportunities in areas which remain largely untested – 24 month program ready to commence on day one.
- Third potential underground mine with the undeveloped Odysseus high grade deposit hosting a total Mineral Resource of 7.3 million tonnes @ 2.4% nickel containing 174,000 tonnes of nickel
- Extensive and well maintained operating infrastructure including a 450ktpa concentrator, a new SAG mill and large accommodation village to support an early start‐up.
- Consistent with Western Areas’ core strengths – exploration, development, underground mining and conventional flotation utilising a well proven low cost operating model.
- Excellent timing in the commodity cycle with positive forward forecasts for nickel.
- Acquisition price of A$24.5m with A$11.5m payable at close and two deferred payment of A$7m and A$6m nine and eighteen months post‐closing respectively.
- Acquisition cost comfortably accommodated from Western Areas' net cash position and ongoing positive cashflow.