PERTH (miningweekly.com) – Nickel developer Sirius Resources has secured a syndicated facility agreement worth A$440-million to fund the development of its Nova nickel project, in Western Australia.

Sirius told shareholders that it had agreed to the facility, with Australia and New Zealand Banking Group, BNP Paribas, The Hongkong and Shanghai Banking Corporation and Westpac Banking Corporation, to take advantage of the exceptionally low interest rate environment and to ensure that the project was amply funded for a variety of contingencies, allowing Sirius to retain a significant proportion of its current cash holdings.

The facility comprises a project development tranche of A$420-million for development and working capital funding during the construction, commissioning and ramp-up stages of the project, as well as a cost overrun tranche of A$20-million. 

Both funding tranches would be available through to the completion of the ramp-up and performance-testing phase of the project as defined by the financiers.

“The project financing is another major milestone for Sirius, which is right on track to commence the development and construction of Nova early in the new year,” Sirius MD Mark Bennett said.

“This well-structured and low cost A$440-million facility in combination with Sirius’ current strong cash position of approximately A$250-million and forecast low cost of nickel production positions Sirius with an enviable degree of flexibility to benefit from a wide range of future scenarios without the need to seek further debt or equity funding.”

The A$473-million Nova nickel mine was expected to deliver about 26 000 t/y of nickel, 11 500 t/y of copper and 850 t/y of cobalt over a ten-year mine life.

Bennett said on Wednesday that the statutory permitting process was proceeding to schedule and subject to receipt of the remaining permits, development of the underground mine as well as construction of the village, access road, airstrip and tailings storage facility would commence very early in 2015.

Sirius also in an advanced stage of negotiations with several potential customers for part of its forecast nickel and copper concentrate production.

Meanwhile, the Western Australian Department of Mines and Petroleum has notified the company that it has approved the Nova mining proposal, effectively approving the proposed mining activities on the Nova mining lease and the associated miscellaneous licences for the airstrip and village.

Approval of the mining proposal is the second key permitting milestone following the recent approval of the project management plan. The remaining approvals comprise the works approval from the Department of Environment Regulation, the native vegetation clearing permit, as well as the miscellaneous licence and associated approvals for the access road.