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PERTH (miningweekly.com) – ASX-listed Alliance Nickel has inked a binding offtake and share subscription agreement with automotive maker Stellantis NV over the NiWest nickel and cobalt project, in Western Australia.
Under the terms of the agreement, Alliance, which was formerly known as GME Resources, would supply some 170 000 t of nickel sulphate and 12 000 t of cobalt sulphate over an initial five-year offtake term, amounting to some 40% of the future annual forecast from NiWest.
The offtake agreement is subject to the successful start-up of commercial production, product qualification and other clauses.
In addition, Stellantis will subscribe for A$15-million in new shares in Alliance, at a price of 18c each, giving the company an 11.5% shareholding in Alliance and the right to nominate a director to the Alliance board.
The placement will be undertaken in two tranches, with the first consisting of 70.6-million shares to be issued under the company’s existing capacity within the next five business days. The second tranche of some 12.73-million shares is subject to Australian Foreign Investment Review Board approval, which is expected in the June quarter.
Completion of the share subscription agreement is conditional upon the binding offtake agreement not being terminated by Alliance.
“The binding agreements with Stellantis, one of the world’s leading and most forward-thinking vehicle manufacturers, are transformative for the future of Alliance. It validates our development strategy for the NiWest nickel-cobalt project and opens critical new funding options by securing a premier Tier 1 cornerstone customer and investor,” said Alliance MD and CEO Paul Kopejtka.
“We look forward to a long partnership with Stellantis as we continue to execute our strategy to become the next Australian supplier to the global markets of premium battery-grade nickel and cobalt sulphate. This is truly a ‘We Win Together’ outcome for both companies.”
Funds raised in the placement will go towards completion the definitive feasibility study and engineering design works for the NiWest project.
Alliance last year updated the capital cost estimates for the NiWest project to just over A$1.26-billion, with the 2018 prefeasibility study estimating that the project could produce 456 000 t of nickel and 31 400 t of cobalt over a 27-year mine life, based on a nameplate processing capacity of 2.4-million tonnes a year.