PERTH (miningweekly.com) – Base metals miner New Century Resources has struck an exclusivity agreement with major Vale to negotiate the purchase of a 95% interest in the issued shares of Vale Nouvelle-Caledonie (VNC), which owns the Goro nickel/cobalt mine, in New Caledonia.

Vale said on Tuesday that the negotiations between the two companies would include a financial package aiming to support the transition and continuity of VNC operations from VCL to New Century, while the parties also plan to jointly engage with the French State to secure continued financing support. 

New Century told shareholders that the Goro project, which includes a fully integrated and operational mine, processing plant, and facility, is currently undergoing a simplification plan to remove historical complexity, expanding production of its mixed hydroxide product, and ultimately lowering the cost base.

“New Century is pleased to secure this exclusivity agreement in relation to the potential acquisition of the Goro nickel and cobalt mine. The company is excited to continue to work with Vale on the completion of due diligence and negotiation of a formal agreement for the acquisition,” said New Century MD Patrick Walta.

“New Century has been impressed with the VNC site team and also the quality and scale of infrastructure at the Goro mine. The current initiatives by VNC to simplify the flowsheet provide strong potential to transform Goro into a sustainable long-life operation and a major global supplier of nickel and non-Democratic Republic of Congo-sourced cobalt.”

Production at Goro started in 2011, with the processing plant designed to produce up to 57 000 t/y of nickel, while the refinery is designed to produce an 80:20 split of nickel oxide and mixed hydroxide product, with cobalt also produced as cobalt carbonate.

The simplification plan being undertaken at Goro will consist of four key pillars, including limonite-only processing, the exporting of saprolite ore, the decommissioning of the refinery to only produce mixed hydroxide product, and the implementation of dry stack tailings at the mine.

A draft Bill supported by the New Caledonian government will be presented to the local Congress in June of this year, and will give a legal basis to the export of up to two-million tonnes a year of saprolite ore from Goro.

By decommissioning the refinery operation at Goro, the project would also move to 100% mixed hydroxide production.

New Century on Tuesday said that beyond simplifying the flow sheet and operations, the simplification plan also has a number of other key areas that will be focused on to reduce the overall cost base of the operation, including the removal of bottlenecks to increase throughput, and focused efforts to reduce operating costs through contracting strategy optimisation, marketing and product value uplift, as well as long-term capital planning.

Vale on Tuesday said that the investment held at VNC will be recorded at the fair value and classified as an asset held for sale in the company’s consolidated financial statements, leading to an additional impairment loss of some $400-million.

The major has again reaffirmed its commitment with shareholders to transform its base metals business, simplifying operations flowsheets going forward, and enabling the continuous focus on core assets, while also contributing to the maintenance of a sustainable environment for safe operations continuity.