Landmark Kambalda Acquisition

18 December 2006 | 09:59 Code : 12129 Geoscience events
The landmark acquisition represents one of the most significant growth initiatives....

  Kambalda nickel producer Mincor Resources has reached an agreement with privately owned group Goldfields Mine Management Pty Ltd (GMM) to acquire a portfolio of historic Kambalda nickel mines, including an extensive existing nickel resource inventory and surrounding land package, for $30 million in cash plus a royalty.

The landmark acquisition represents one of the most significant growth initiatives for Mincor in the Kambalda region since its pioneering acquisition of the Miitel and Wannaway nickel mines from WMC Resources in 2001. Subject to its successful completion, the GMM acquisition is expected to lay the foundations for a significant new exploration and production front for Mincor in the Kambalda District.Under the agreement announced yesterday, Mincor will acquire GMM’s entire interest in the historic McMahon and Durkin nickel mines together with the surrounding exploration portfolio. The consideration is $30 million in cash, which will be funded from Mincor’s internal cash resources, plus the undertaking to pay a Net Smelter Return royalty (NSR) linked to the nickel price.The transaction is subject to the satisfactory completion of Mincor’s due diligence, the approval of Mincor’s Board and a number of other Conditions Precedent, including statutory and other approvals. The proposed acquisition does not include any interest in the Otter-Juan Mine, which is currently leased and operated by GMM. However GMM has granted Mincor a first and last right of refusal on any future divestment by GMM of the Otter-Juan Mine.“We are very pleased with this opportunity to acquire a new production and exploration centre on the Kambalda Dome – the site of the first nickel discoveries in the Kambalda District,” said Mincor’s Managing Director, David Moore.“While our four mines in the Widgiemooltha area have made Mincor the largest single producer of nickel in the Kambalda District, there is no doubting the remarkable nickel endowment of the original Kambalda Dome,” he added.“It is also a striking fact that there has been only negligible exploration since 1998 on these immensely prolific tenements, despite the nickel boom – a quirk of history and circumstance that creates an exceptional opportunity for a growth-orientated nickel mining company such as Mincor.”

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