Ground Breakers: BHP and Forrest end talks on nickel deal, and QPM chases $30m for nickel plant
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BHP (ASX:BHP) faces the prospect of having Andrew Forrest as a minority shareholder in its takeover of Canadian nickel play Noront Resources, after the big miner ended talks with Forrest’s Wyloo Metals on a deal to join forces.
Little known nickel explorer Noront, which holds a strong position in Canada’s Ring of Fire exploration district, has become the subject of a pitched takeover battle this year between mining billionaire Forrest and BHP.
It drove BHP to outbid Wyloo’s C$0.70 bid for Noront back in October with a C$0.75 offer at a 213% premium to Noront’s value when the pissing match began.
That prompted the parties to sit down and have a chat, in talks that dragged on through several extensions and now appear dead in the water.
Forrest controls around 37% of Noront through Wyloo, but BHP has just a 50% bid acceptance threshold on its takeover offer, meaning it could acquire a controlling stake in the Canadian junior and still have Forrest on the register.
Noront seems like small fry in the context of BHP and the iron ore and green energy magnate, but is reflective of the increased focus among mining industry on so-called “green metals” like nickel and copper.
Speaking of nickel, Australian nickel junior Queensland Pacific Metals (ASX:QPM) is on the hunt for $30 million to back a DFS on its Townsville Energy Chemicals Hub in North Queensland.
Foster Stockbroking and Petra Capital are on the placement, seeking $30 million at 16c a share — an 8.6% discount to QPM’s last traded price according to an offer sent to clients today.
QPM entered a trading halt today to arrange the fundraising, and expects to being trading again on Wednesday.
QPM has deals with some global majors, with LG and POSCO having invested US$15 million with a binding offtake agreement from LG for 7000tpa of nickel and 700tpa of cobalt, and with POSCO for 3000tpa of nickel and 300tpa of cobalt.
The TECH project will use an alternative to high pressure acid leach processing called the DNi Process, which QPM says will extract metals from nickel laterite ores (to be imported from New Caledonia) at a lower capital cost and with better environmental outcomes.
QPM plans to have the DFS completed by mid-2022 with production slated for 2024.
According to an updated PFS last year the TECH project would deliver $261 million in EBITDA at a base case, with a post tax NPV of $1.47 billion and IRR of 30.7%.
Neometals (ASX:NMT), the early lithium mover which has skyrocketed into mid-cap status this year with its plans to become a battery recycler in Europe, is dusting off the lithium processing technology it owns with mining giant Mineral Resources (ASX:MIN).
Neometals announced plans to develop a $200 million lithium refinery in Kalgoorlie to much fanfare several years ago, before quietly placing them on the backburner as prices for the battery mineral sunk and early studies revealed higher than expected costs.
The company has since turned its attention to Europe, the world’s largest EV market last year where automakers are feverishly looking to source local lithium supply outside of the China dominated global supply chain.
Its battery recycling and vanadium recovery projects have driven a 280%+ rise in the Neometals share price in 2021.
Neometals says the electrolytic lithium process it owns through its 70-30 Reed Advanced Materials JV with MinRes, will be used in a proposed 25,000tpa lithium refinery with Bondalti Chemicals.
If successful it would be the first commercialisation of the process in Europe. Bondalti and RAM will co-fund the construction and operation of a pilot plant at Estarreja in Portugal over 18 months, at a combined cost of US$4 million.
It will be integrated with Bondalti’s existing chlor-alkali operations, a similar processing method to the ELi process patented by RAM.
“We are eager to take another step towards commercialising our ELi process and building a globally competitive, high purity ‘battery quality’ lithium chemical facility,” Neometals MD Chris Reed said.
“Bondalti is a highly credentialed chemical producer and operator of chlor-alkali facilities which use electrolysis to produce sodium hydroxide.”
“Moreover, Bondalti’s existing by-product hydrogen and chlorine gases provide a ready market for the by-products of the ELi Process.”
“The Co-Operation is an exciting milestone for Neometals and its ELi co-owner, Mineral Resources Ltd, who have been steadfast supporters of this potentially game-changing technology since its genesis in 2012.”