THE BOURSE WHISPERER: Talisman Mining (ASX: TLM) has reached a binding agreement with Xstrata Nickel Australasia Operations Pty Ltd, a subsidiary of Glencore, to acquire the Sinclair nickel project in Western Australia.

Talisman will pay $8 million plus a deferred $2 million payment contingent upon a recommencement of mine production at Sinclair, which was placed on care and maintenance in August 2013.

Talisman described Sinclair as an advanced, high-quality nickel sulphide project, which is located in the Southern portion of the Agnew-Wiluna Greenstone Belt in WA.

The acquisition includes:

Extensive, near-new infrastructure and a 300,000 tonnes per annum plant;

A 200-room accommodation village and associated facilities;

An existing open cut and underground mine; and

A sealed airstrip (approx. 2 kilometres).

 

Sinclair nickel project – 300,000 tonnes per annum process plant and concentrator. Source: Company announcement

 

Talisman believes the project offers a great deal of exploration upside with potential to confirm an extension of the Sinclair nickel deposit along strike and beyond the end of existing mining development.

Historical drilling has identified nickel sulphide mineralisation for a further 1km.

According to Talisman other immediate near-mine targets exist within the Stirling and Skye ultramafic channels, located adjacent to and below the Sinclair deposit.

The company considers its acquisition of the Sinclair nickel project is a transformational opportunity for it to potentially join the nickel sulphide industry.

“Over the course of 2014, we have identified and conducted due diligence on a large number of resource assets,” Talisman Mining managing director Gary Lethridge said in the company’s announcement to the Australian Securities Exchange.

“The Sinclair nickel project represents by far the best opportunity that we have seen.

“It offers a rare combination of exceptional exploration upside, an existing open-cut and underground mine, plus a 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 towards production in the future.

“The exploration potential includes both an immediate extension of the Sinclair nickel deposit, which has been identified in drilling for over one kilometre beyond the end of 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.

“The combination of all of these factors gives Talisman great optionality in terms of the pace at which we wish to progress the project – as either an exploration play or a potentially more advanced near-production opportunity.

“This strategy will depend upon the results of exploration activities, the prevailing nickel price and the overall economic environment.”

Email: info@talismanmining.com.au

Website: www.talismanmining.com.au

THE BOURSE WHISPERER: Australian Bauxite (ASX: ABX), through its wholly-owned subsidiary company ABx4 Pty Ltd, has signed a binding term sheet with Noble Resources International.

The deal grants Noble the exclusive global marketing rights in respect to ABX’s Tasmanian project, which includes the company’s first bauxite mine at Bald Hill, in consideration for Noble agreeing to enter into the Loan Facility and supportive marketing-off-take agreements.

Bald Hill is targeted for production in late 2014.

 

Locations of projects and infrastructure in Tasmania. Source: Company announcement

 

Noble Resources International director Will Randall said the alliance will accelerate ABx’s entry into the current strong bauxite market by providing finance and access to Noble’s global marketing network.

Under the new deal Noble will provide $6 million project finance, supported by a $2 million stand-by facility – if required – to expand the operations.

The $6 million and $2 million loan facilities are to each be repaid within two years from their first drawdown dates.

ABX explained it anticipates $1 million will be required for the first drawn-down by December 2014 when the project is planned to commence.

The company will provide a guarantee over its Tasmanian assets as security and Noble has been granted the first right of refusal on providing further funding in respect to the Tasmanian project.

Noble will be the marketing agent for all product for the life of the Tasmanian project, with open-book administrative, procedural and reporting arrangements with ABx4 so that sales will be mutually agreed.

Noble has agreed to purchase 50 per cent of product from the Tasmanian project for the first four years at an agreed fixed price Marketing Royalty Deed.

Noble will also be a paid a royalty of 2.5 per cent on all product sold for the life of the Tasmanian project but not for tonnes purchased by Noble under the Noble Offtake Agreement.

“Noble has a proven track record in helping independent miners in Australia,” Australian Bauxite CEO Ian Levy said in the company’s announcement to the Australian Securities Exchange.

“Noble provides the funding, supportive off-take and marketing alliance that we wanted to rapidly enter the bauxite market.

“ABX has the same market outlook as Noble and has the flexibility to exploit market niches and grow stronger every year.

“We look forward to a long, mutually beneficial relationship with Noble.”

Email: corporate@australianbauxite.com.au

Website: www.australianbauxite.com.au

THE BOURSE WHISPERER: Poseidon Nickel (ASX: POS) has completed a capital raising with commitments received for a placement of Fully Paid Ordinary Shares to raise $30 million.

The placement is for just over 166.6 million shares at 18 cents per share to strategic, professional and sophisticated investors.

According to Poseidon the purpose of the Placement is to enable it to complete the remaining refurbishment activities at Mt Windarra, to commence capital works at Lake Johnston, repay the Minderoo debt and for normal operating expenses.

At Mt Windarra, Poseidon will prepare the mine for the recommencement of mining operations, the restart costs for which have previously been estimated at $11 million.

Under the terms of the recently-announced ore tolling and concentrate purchase agreement (OTCPA) with Nickel West, ore from Mt Windarra will be truck hauled and toll treated into a smeltable grade concentrate at the concentrator facility at Leinster.

The concentrate produced will be purchased by Nickel West.

Upon completion of the purchase of the Lake Johnston nickel project announced in September, Poseidon will commence the capital works required to restart that operation.

The company indicated it is in the process of finalising the capital costs for the restart which it anticipates to be less than $10 million excluding working capital.

“We have been delighted by the strong support from investors to provide the necessary funding for Poseidon to get ready for production,” Poseidon Nickel CEO David Singleton said in the company’s announcement to the Australian Securities Exchange.

“We now have an enviable pipeline of projects, supported by a strong balance sheet with an emerging nickel market.”

Email: admin@poseidon-nickel.com.au

Website: www.poseidon-nickel.com.au

THE BOURSE WHISPERER: Western Areas (ASX: WSA) has executed Farm-in and Joint Venture Agreements with Gunson Resources (ASX: GUN) and Monax Mining (ASX: MOX).

The Agreements provide for Western Areas to acquire up to a 90 per cent interest in a number of tenements within the Western Gawler region of South Australia.

The total area included under the proposed Western Gawler JV projects is approximately 2,746 square kilometres.

 

Project tenure and existing deep drilling, overlaying magnetics (TMI). Source: Company announcement

 

The deals are part of what Western Areas describes as its ‘regional exploration strategy’, which covers exploration programs external to the company’s “near mine” Forrestania tenements, utilising its cashflow position to effectively evaluate early to mid-stage exploration opportunities in an efficient and cost effective manner.

Western Areas explained the program targets opportunities with discovery potential for high-grade massive sulphide poly-metallic mineralisation.

In other words, Western Areas is aiming to increase its existing resource inventory through additional exploration success, in conjunction with other companies and their ongoing growth activities.

“Western Areas has been conducting due diligence on a number of farm-in and joint venture opportunities over the last six months as part of our regional exploration strategy and we believe the Western Gawler opportunity offers the significant discovery potential we are looking for,” Western Areas managing director Dan Lougher said in the company’s announcement to the Australian Securities Exchange.

“Regional exploration sits alongside our Forrestania exploration program and we have been very clear that with our positive cashflow generation that we would look to take first mover style opportunities where the initial investment is relatively low, but the potential rewards are high.

“Our exploration team is ready to immediately begin a work program aimed at identifying high-priority drill targets.”

The initial work program is planned to consist of detailed airborne geophysical surveys (Magnetics) over the project area to facilitate the geological interpretations, and allow for initial target generation using the higher resolution data.

A combination of drilling and further geophysics will then be used to screen the initial targets and generate further targets for detailed assessment.

Key Terms of the Agreement with Gunson include:

Western Areas may earn interests in the Gunson JV tenement (EL4440) by:

Stage 1:
Western Areas may acquire 75 per cent interest in the tenement by spending $0.8 million within 2.5 years of the Agreement date. Western Areas may withdraw at any time without having any residual interest.

Stage 2:
Western Areas can elect to earn an additional 15 per cent interest in the tenement by the additional expenditure of $0.4 million within an additional 18 month period. If Western Areas elects to cease expenditure during this stage, a joint venture will be formed with the Parties’ initial participating interests being Western Areas 75 per cent and Gunson 25 per cent.

Stage 2 Completion:
Following the completion of Stage 2, a joint venture will be formed with the Parties’ initial participating interests being Western Areas 90 per cent and Gunson 10 per cent. Gunson may convert its remaining 10 per cent tenement interest to a 1 per cent net smelter royalty.

Key Terms of the Agreement with Monax:
The terms of the Monax agreement (tenements EL5077, EL5199, EL5200) are the same as those of the Gunson agreement except for a minimum committed expenditure of $0.4 million, over 1.5 years within Stage 1, before Western Areas may withdraw.

Website: www.westernareas.com.au