PERTH (miningweekly.com) – ASX-listed Nickel Industries has secured $225-million in debt capital for the acquisition of the Oracle nickel project.
Nickel Industries in December last year inked a definitive agreement with partner Shanghai Decent Investment to acquire a 70% equity interest in the Oracle nickel project for $525-million, comprising of $371-million in acquisition funding and $154-million in shareholder loans.
The ASX-listed company subsequently launched a $225-million capital raise to fund the acquisition of an initial 30% stake in Oracle.
The company on Monday reported that it had now executed binding agreements for $225-million of senior secured notes, at an interest rate of 10% and maturing in August 2025.
Proceeds from the notes will, along with the company’s cash reserves and future earnings from existing operations, be applied towards the remaining payment obligations for the Oracle nickel project.
“The issuance of the notes will position the company to increase its ownership interest in Oracle to 70% and meet its payment obligations to Shanghai Decent for the transaction,” said Nickel Industries MD Justin Werner.
Oracle comprises four rotary kiln electric furnace (RKEF) lines with a nameplate production capacity of 36 000 t of equivalent contained nickel in nickel pig iron (NPI) and a dedicated 380 MW power plant within the Indonesia Morowali Industrial Park, in Central Sulawesi, Indonesia.
The first RKEF line at Oracle is expected to start commissioning in October 2022, well ahead of the contracted February 2023 project delivery date.
Oracle, like the Angel nickel project, is expected to transform the company’s nickel production profile, resulting in a combined nameplate capacity in excess of 100 000 t of nickel in NPI.
“The early commissioning of the Angel RKEF lines, more than six months ahead of schedule, and now the Oracle RKEF lines, expected to commence commissioning in October, has allowed us to significantly bring forward nickel production,” said Werner.
“Once again, we commend our trusted partner and largest shareholder, Shanghai Decent, for this remarkable achievement. The company will soon have 12 RKEF lines in operation and approximately 100 000 t of attributable nickel production, placing us comfortably amongst the top-10 global producers and arguably the largest listed pure-play nickel exposure globally.”