Western Areas, an Australian company whose shares trade on both the Toronto and Australian stock markets, says it has struck a deal with a unit of the Russian miner Norilsk Nickel to restructure its existing ore processing and metal purchase deal for Western's 100 per cent owned Forrestania nickel project, 400 kilometres east of Perth in Western Australia.
Western Areas said on Monday that the change will help the Australian miner and provide additional financial flexibility to pursue its growth plans.
Under the deal, Western Areas has agreed that:
-Norilsk's obligations to treat Western Areas' Forrestania ore at its Lake Johnston concentrate plant will end March 1;
-It will keep the right to sell nickel ore from its Flying Fox mine through its planned Cosmic Boy nickel concentrator to Norilsk on existing terms among other options on the Flying Fox output;
-It will acquire at no cost plant equipment owned by Norilsk, including a ball mill, thickener and flotation cells which are key lead time items required for any future upgrade of the Cosmic Boy plant, which is slated to go into production at the end of the month.
Western Areas said the new agreement with Norilsk has been approved by the Australian company's main financiers, ANZ Bank.
"The new agreement will provide significant benefits to Western Areas with minimal risk," said managing director Julian Hanna.
"These benefits include the ability to blend nickel ores from a range of deposits at Forrestania which will allow Western Areas to optimize recoveries through the Cosmic Boy concentrate plant. It will also provide the opportunity to negotiate improved offtake terms with other parties, increase revenue from production and provide potential funding for future expansion of the Forrestania project by securing finance linked to new offtake agreements."
Source: Canadian Press
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