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Explorer Metminco has bailed on its acquisition of the Jejevo Nickel Project in the Solomon Islands, sending its share price down 14 per cent in morning trade to 0.3c.

Metminco (ASX:MNC) had been undertaking ‘due diligence’ on the project since signing an agreement to buy private company Sunshine Minerals — which holds an 80 per cent of Jejevo — in September.

While continuing to believe the project was attractive, the company was unable to complete due diligence “to its satisfaction” and has given notice of its withdrawal from the agreement, Metminco told investors.

The explorer no longer needs to raise up to $2.5 million to fund the acquisition, it said, and was “working towards a new funding strategy, the details of which will be announced to the market shortly”.

Jejevo was owned by mining giant BHP, which completed a feasibility on the project in 1972 but never moved to production.

The Metminco (ASX:MNC) share price has not performed well over the past year.
The Metminco (ASX:MNC) share price has not performed well over the past year.

It was also held by Japanese giant Sumitomo Metals Mining up to about 2016, when legal disputes and a low nickel price saw it leave the Solomon Islands completely.

Metminco still has its Chuscal gold project in Colombia, where discussions with major gold miner AngloGold Ashanti “are well advanced” to formalise a farm-in/joint venture agreement.