Mincor nabs mothballed WA nickel mine off Independence Group in $9.5m deal
Mincor has cut a $9.5m deal to buy Independence Group’s mothballed Long nickel mine.
West Australia’s Mincor Resources has underlined nickel’s emerging status as resources industry hotspot after cutting a $9.5 million deal to buy Independence Group’s mothballed Long nickel mine in WA.
While the deal is relatively small, it comes after BHP Group surprised many last week by saying it now regarded its Nickel West business as a core part of its growth outlook, raising the level of interest in WA’s long-suffering mid-tier nickel sector.
Mincor (MCR), which mothballed its own mines as the nickel price plunged a few years ago, cut a deal with BHP’s Nickel West in March to process ore through the major’s Kambalda concentrator.
Its play for Independence Group’s Long mine underlines hopes that WA’s Kambalda nickel district — one of the few regions in the world with a rich endowment of nickel sulphide ore, increasingly prized by battery makers — could be facing a revival in its fortunes following years of nickel-price induced depression.
Kambalda’s nickel mines were the basis of the success of legendary Australian miner Western Mining Corporation, but were closed in the 1990s as the nickel price fell and then split up and sold off to smaller miners such as Mincor and Independence Group.
Nickel hit extraordinary prices just ahead of the global financial crisis — Mincor was once worth more than $1 billion — but the mines were progressively mothballed in the past few years as nickel prices fell again.
Mincor will hand Independence Group $3.5 million in shares for the first part of the transaction — at 45c, the company’s last trading price — with another $6m due when the Long hits milestones on its return to production.
Mincor remains in a trading halt ahead of a capital raising, in which Independence Group will take up another $1.5m worth of stock.
The nickel deposit at Long was first discovered in 1971, although mining did not begin until the end of the decade.
It still contains a high-grade reserve of 32kt of Nickel at 4.2 per cent Ni, with all of its infrastructure still intact. The operation was mothballed in the middle of last year.
Mincor last traded at 45c.