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Mincor Reconnects with BHP on Nickel Processing
Mincor Resources has signed an offtake term sheet with BHP Nickel West to process nickel sulfide ore at the Kambalda nickel concentrator.
Mincor Resources (ASX:MCR,OTC Pink:MCRZF) has signed an offtake term sheet with BHP’s (ASX:BHP,NYSE:BHP,LSE:BLT) Nickel West to process nickel sulfide ore at the Kambalda nickel concentrator.
The freshly signed agreement replaces a previous 20-year agreement that Mincor had held with Nickel West, which expired in February. The contract is set to begin upon the delivery of first ore, and will wrap up on the five-year mark of the start date or on December 31, 2025, dependent on which comes first.
However, Mincor is required to give six months notice before the start date; if notice is not given by June 30, 2022, the offtake agreement will be terminated.
Under the contract, Mincor is allowed to have Nickel West process anywhere between 200,000 to 600,000 tonnes per year of nickel ore through the Kambalda nickel concentrator and its related infrastructure. While the processing costs have been kept confidential, Mincor stated that the fees are “consistent” with charges from comparable nickel concentrators in Western Australia.
“This is a really important development for Mincor and our shareholders. It clearly demonstrates our commitment to restart nickel operations as quickly and efficiently as possible in one of the world’s most prolific sulfide nickel provinces,” Mincor Managing Director David Southam said in a statement.
“Mincor has clearly outlined its strategy to re-commence mining operations in Kambalda to take advantage of what we see as a looming generational change in the nickel market — and the signing of this term sheet marks a critical step towards realizing that vision.”
As Mincor continues to take steps towards restarting its nickel operations in the Kambalda district, Southam elaborated that he believes the market is on “the cusp of a new era” as demand from the stainless steel market and lithium-ion battery industry both rise.
“With respect to nickel content in batteries, our firm belief is that the overwhelming trend is for high nickel content batteries that will predominantly be sourced from nickel sulfide ores. In this regard, our timing for this term sheet and our restart plans could not be better.”
Going forward, Mincor intends to fully conclude the offtake agreement, ramp up resource extension and exploration activity, update studies with fresh pricing and resource work and analyze early start options with Nickel West.
As of March 18, nickel was trading at US$12,805 per tonne on the London Metal Exchange.
Mincor’s share price skyrocketed 12 percent by the end of close on Tuesday (March 19) on the ASX, ending the day at AU$0.42. Meanwhile, BHP’s share price grew 1.65 percent to close at AU$37.59 on the ASX.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.
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A graduate of Durham College's broadcast journalism program, Olivia has a passion for all things newsworthy. She got her start writing about esports (competitive video games), where she specialized in professional Call of Duty coverage. Since then, Olivia has transitioned into business writing for INN where her beats have included Australian mining and base metals.
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