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RNC seeks alternatives for Beta Hunt as it prioritises Dumont development

23rd March 2018

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – The TSX-quoted equity of diversified miner RNC Minerals jumped 11.5% on Thursday following the company announcing that it will prioritise development of the Dumont nickel/cobalt project, in the Abitibi region of Quebec, and seek alternatives for its Beta Hunt gold and nickel mine, in Western Australia.

The Toronto-based company informed the market that it has engaged PCF Capital and Haywood to run the strategic process to dispose of the now noncore asset, which it acquired in 2016 from Salt Lake Mining.

“With the positive outlook for nickel and cobalt underpinned by growing demand from electric vehicles, the potential for the Dumont project to be a large multiple of the value of Beta Hunt, and with one of the industry-leading nickel-cobalt management teams, now is the time to aggressively advance Dumont towards making a decision to begin construction in 2019," said president and CEO Mark Selby.

RNC announced in January that it is engaging a number of potential strategic investors, offtake partners and financiers who could provide the $1.3-billion capital financing required to start construction of the shovel-ready Dumont project.

“Based on inbound interest we've received and the recent increase in M&A [merger and acquisition] activity in the gold sector, our view is that Beta Hunt may be attractive to numerous companies, including the following two groups: a gold-focused company which can provide the capital and local management expertise to unlock the massive gold exploration and production potential of this asset, in a region where we believe there is significant synergy with a number of Western Australian gold assets; or a nickel-focused company looking to take advantage of Beta Hunt's combined nickel/gold scale and strategic position to launch a consolidation of Kambalda's nickel assets at a time when the type of high-grade nickel sulphides produced in the Kambalda district is in high global demand by battery makers,” Selby stated.

The Beta Hunt mine is located 600 km from Perth, in Kambalda, Western Australia. All processing is conducted under tolling contracts with local processing plants. Nickel mineralisation is trucked 3 km to BHP’s concentrator in Kambalda. Concentrate is treated at BHP’s Kalgoorlie smelter. Gold mineralisation is trucked to FMR Investments’ mill for processing.

RNC has successfully expanded the Beta Hunt operation since its acquisition and reported fourth-quarter output being up 21% year-over-year at 12 722 oz of gold. Beta Hunt also produced 7 000 t of nickel in concentrate, grading 2.64% nickel. The company said that mine productivity continues to improve and it expects to hit the fifth consecutive quarter of increases in gold ounces, tonnes mined, and grade in the current period. Further growth is also expected in the second quarter.

The Beta Hunt mine has massive exploration potential, with known gold showings over 4 km along strike. As at February 1, 2016, Beta Hunt's measured and indicated mineral resource was 379 000 t grading 4.2% nickel for 15 840 t of contained metal and 815 000 t grading 3.5 g/t gold for 92 000 oz. The inferred resources stood at 216 000 t grading 3.4% nickel for 7 400 t of contained metal and 2.91-million tonnes grading 3.4 g/t gold for 321 000 oz of contained gold.

The market welcomed the news, pushing RNC's share price up to an intraday high of C$0.29 a share on Thursday.

Edited by Creamer Media Reporter

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