Vale has sold the Jaguar nickel sulphide project to Centaurus Metals in a US$7 million ($10.3 million) deal.
The sale will involve an up-front payment of US$250,000, with US$1.75 million due on commencement of a bankable feasibility study, securement of construction funding, or three years from the agreement signing, whichever occurs first.
A deferred consideration of US$5 million is due after first commercial production.
Centaurus will also provide net operating revenue royalty of 0.75 per cent on all concentrate production from the project, along with a 1.8 per cent net operating revenue royalty to Brazil’s National Bank for Economic and Social Development.
Vale has agreed to a future off-take agreement to purchase 100 per cent of the production from the project at market prices.
Centaurus managing director Darren Gordon said the project was a “transformational acquisition”.
“Being able to acquire such an outstanding asset with genuine company making potential is a great result for the company and our shareholders and reflects the strong and deep relationships which Centaurus has built up in Brazil over the past 10 years,” Gordon said.
“Very rarely does an opportunity arise to acquire a high-quality advanced nickel sulphide asset like Jaguar. With near-surface resources of 40.4 million tonnes at 0.78 per cent nickel for 315,00 tonnes of contained nickel, Jaguar immediately puts Centaurus into rarefied space in the nickel sulphide development sector.
“And the timing for this acquisition could not be better. The nickel price recently soared to five-year highs after the Indonesian Government confirmed a ban on ore exports from December this year, putting further pressure on an already tight supply pipeline.
“Supply disruptions from Papua New Guinea have added further upward pressure to the nickel market, adding further impetus to the search for potential new nickel sulphide deposits worldwide.”
The Jaguar project is in the Carajás Mineral Province in northern Brazil, with Centaurus estimating start of drilling by end of October.
“We intend to focus our initial efforts on the high-grade potential of the already-defined deposits, while also testing potential extensions indicated by geophysics,” Gordon said.
“The opportunity to fast-track a new nickel sulphide development over the next two years could well prove to be a game-changer for the company.”