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.”