PERTH (miningweekly.com) – Minerals explorer Talisman Mining has signed an agreement with major Glencore’s Xstrata Nickel Australasia Operations to acquire the Sinclair nickel mine, in Western Australia, for a deal valued at A$10-million.
Under the terms of the agreement, Talisman would make a cash payment of A$8-million to Xstrata Nickel at the completion of the transaction, as well as a A$2-million deferred payment, which would be triggered by production being restarted within six years of the transaction being completed.
The Sinclair project, which was placed on care and maintenance in August 2013, historically produced about 38 500 t of nickel and included infrastructure, a 300 000 t/y plant, a 200-room accommodation village, an existing opencut and underground mine, and a 2 km sealed airstrip.
Talisman MD Gary Lethridge said the project would provide the company with a unique combination of immediate exploration potential, which with success, offered the optionality to fast-track a return to production, subject to the prevailing nickel price.
“Over the course of 2014, we have identified and conducted due diligence on a large number of resource assets. The Sinclair project represents by far the best opportunity that we have seen. It offers a rare combination of exceptional exploration upside, an existing opencut and underground mine, plus well-maintained and near-new on-site processing plant and concentrator with extensive surface infrastructure, which removes a critical hurdle in terms of potentially advancing rapidly toward production in the future.”
Lethridge noted that the exploration potential included an immediate extension of the Sinclair nickel deposit, which has been identified in drilling for over 1 km beyond the end of the mining development, and near-mine targets such as Skye and Stirling, which offer the potential to develop an entirely new mineralised system below the Sinclair deposit.
“The regional exploration picture is also very encouraging and will provide Talisman with a smorgasbord of exploration opportunities for several years to come,” he added.
Lethridge added that the pace at which Talisman would progress the project – either as an exploration play or a more advanced near-production opportunity – depended on the results of exploration activities, the prevailing nickel price and the overall economic environment.
Meanwhile, the acquisition of the Sinclair project also complemented Talisman’s existing Bryah basin copper/gold portfolio, where ASX-listed Sandfire Resources was currently funding active exploration as part of a A$15-million joint venture.
“Moving forward, the Sinclair nickel project is now our clear principal corporate focus, although we should not forget that Talisman retains significant exposure to the exploration potential of the Bryah basin,” Lethridge added.