TORONTO (miningweekly.com) – Takeover target Salt Lake Mining (SLM) is on track to double output from its Beta Hunt mine, a low-cost nickel and gold producer located in the prolific Kambalda mining district of Australia, even as TSX-listed Royal Nickel Corporation (RNC) prepares to acquire the asset in a deal that would see it transform into a cash-generating low-cost nickel, copper and gold producer.
Beta Hunt has completed its second gold shipment and had recovered 3 718 oz of gold from 42 144 t of ore in its first two months of gold production, on a 100% basis, in line with expectations.
On February 1, 2016, RNC announced it had agreed to buy a 67% interest in private miner SLM in a deal valued at about C$7.7-million. This included the 20% interest acquired on February 1. The remaining portion of the transaction was expected to close in March.
"I'm pleased that Beta Hunt, after only two months, is already producing more than 20 000 oz of gold on an annualised basis and is ramping up on schedule to double production by year-end. This is particularly good news as the gold price strengthens," stated RNC president and CEO Mark Selby.
In December 2015, SLM signed a tolling agreement with Gold Fields (St Ives) to process Beta Hunt production. The first ore was treated on December 29.
The scheduled production rate was expected to continue to ramp up and was in line with 2016 guidance of between 35 000 oz and 45 000 oz of gold and nickel output of between 3 500 t and 4 500 t on a 100% basis.
RNC had also signed a definitive agreement under which it would acquire TSX-V-listed base metals miner VMS Ventures through a plan of arrangement, with a transaction value of about C$11.4-million. Vancouver-based VMS held a 30% interest in the Reed mine, a fully ramped-up copper producer, located in the Flin Flon/Snow Lake greenstone belt in central Manitoba. Hudbay Minerals owned the other 70% interest in Reed mine and was the operator.
RNC also believed that a nickel supply shortage was developing over the next several years, boding well for its Dumont project, in Quebec, the third-largest nickel project in the world. The project was shovel-ready, awaiting financing on the back of increasing nickel prices.