Base metals: Independence Group sells Long op to Mincor in strategic nickel play
Mining major Independence Group (ASX: IGO) is selling its Long nickel operation in WA’s Kabalda district.
Mincor Resources (ASX: MCR) is the buyer, acquiring a 100 per cent stake in a deal valued at up to $9.5m (pending performance conditions).
The mine has lain dormant since last year, which left the market speculating as to whether it still had much of a useful life.
But Mincor says it spotted an opportunity to expand its operations in the area as part of a broader nickel-focused strategy.
Shares in both companies were unchanged in morning trade.
Long is an underground nickel sulphide mine which was in operation from 1979 to 2018, when IGO placed it in care & maintenance.
Mincor MD David Southam said the deal will help the company “boost its strategic footprint” in the area, as well as leverage the existing mine infrastructure already in place at the site.
The company will pay IGO an upfront consideration of $3.5 million through the issue of 7,777,778 fully-paid shares.
Under the terms of the deal, Mincor will pay an additional amount up to the value of $6m if certain nickel production targets are met.
Nickel makes up a core component of the latest generation of lithium-ion batteries, and is therefore viewed by the mining industry as a valuable mineral in connection with the global battery boom.
As evidence of its increased importance, global heavyweight BHP recently announced it now intends to retain its Nickel West operations.
Independence Group CEO Peter Bradford said the deal fits within the respective strategic plans of both companies.
“While IGO recognises the opportunity for future discovery at Long, we are focused on belt-scale discoveries aligned with our strategy to be a globally relevant supplier of metals critical to clean energy and energy storage,” he said.
Shares in minnow explorer Carnavale Resources (ASX: CAV) got a bounce as results from its latest drilling program revealed high-grade tin mineralisation at its Kikagati project in Uganda.
MD Andy Beckwith said the company will continue to next round of drilling to establish an inferred resource and “assess the potential for bulk open pit mining methods”.
Shares in CAV were up 25 per cent to 0.5 cents.