JOHANNESBURG (miningweekly.com) – Dual-listed royalty company Anglo Pacific has entered into an agreement with UK-based Brazil Nickel to acquire a gross revenue royalty (GRR) interest for the development of the Piauí nickel/cobalt project, in north-eastern Brazil.
This is in line with Anglo Pacific’s strategy to invest in development opportunities with significant growth potential that will complement the company’s existing portfolio of income-producing assets.
“The Piauí royalty reflects the company's strategy of investing into earlier-stage, high-growth potential royalties,” said Anglo Pacific CEO Julian Treger in a note published Thursday.
Treger further explained that the company’s investment in Piauí, like its Maracás Menchen vanadium royalty, represents Anglo Pacific’s “continuing strategic pivot into metals”, which are exposed to the burgeoning electric vehicle market.
In exchange for a 1% GRR over the project, Anglo Pacific will provide Brazil Nickel with an initial cash payment of $2-million, payable immediately, which will be funded from internal sources.
Brazil Nickel will use this consideration for further project assessment and/or the development of the PNP1000, a nickel and cobalt pilot plant with a nameplate production capacity of 1 000 t/y of nickel contained in a saleable product.
Treger noted that the royalty would help deliver Anglo Pacific’s asset base and commodity exposure in a lower-risk manner through the incremental structure of the investment, adding that Piauí had the potential to deliver high returns once in production.
“This investment also has the potential to contribute significantly to our cash flows in the coming years as the project ramps up through the expanded production phases,” he said.
Treger added that the acquisition was consistent with Anglo Pacific's strategy to acquire royalties on mining assets that are “competitively positioned on the cost curve” and located in established mining jurisdictions.
The Piauí nickel/cobalt project has a Joint Ore Reserves Committee-compliant measured resource of 52.9-million tons at 1.03% nickel and 0.05% cobalt, plus indicated resources of 19.3-million tons at 0.92% nickel and 0.05% cobalt at a 0.6% nickel cutoff grade.