PERTH (miningweekly.com) – ASX-listed Mincor Resources has signed an offtake term sheet with the Nickel West division of mining major BHP.
The term sheet will form the basis for a binding ore tolling and concentrate purchase agreement, which will replace the 20-year agreement that Mincor had with Nickel West, which expired in February this year.
The term sheet included a number of commercial parameters, including a provision that Nickel West process a minimum of 200 000 t/y and a maximum of 600 000 t/y of nickel ore through the Kambalda concentrator, with the contract to conclude on the earliest of the fifth anniversary of first delivery, or by the end of December 2025.
Mincor MD David Southam said on Tuesday that the term sheet with BHP set the foundation for a commercially attractive processing and offtake solution for Mincor’s Kambalda nickel sulphide business, which would underpin its plans to fast-track the restart of nickel mining.
“We are very pleased to have achieved this milestone position with a Tier 1 offtake partner which we expect to deliver benefits to both companies while also delivering significant value to the Kambalda and Coolgardie communities.”
Southam noted that the company had clearly outlined its strategy to restart mining operations in Kambalda to take advantage of the change in the nickel market, with the signing of the term sheet marking a critical step towards realising the vision.
“We weighed up the alternatives, including investing in our own standalone nickel concentrator and the option of toll treating our ore via third parties. The term sheet we negotiated with BHP Nickel West is compelling on a number of levels, most importantly with respect to price, risk and capital intensity, which clearly meant that this was the best economic outcome for our shareholders over the contract term, with the lowest risk.”