Independence Group plans to sell its Stockman copper-zinc project in Victoria to CopperChem for $47.2 million, clearing the way for it to focus on advancing the Nova operation in Western Australia.
The transaction involves $32.2 million in cash payments and a 1.5 per cent smelter royalty of up to $15 million, Independence announced today.
According to Perth-based Independence, the sale of Stockman is consistent with a strategy of focusing on high-quality assets of scale, longevity and geographical focus.
Offloading Stockman will allow Independence to shift additional focus on ramping up its Nova nickel-copper-cobalt underground project in WA’s Fraser Range Belt to nameplate production capacity of 1.5 million tonne per annum (Mtpa) by the September quarter.
Independence transported first nickel concentrate from Nova to BHP Nickel West in Kambalda last December.
Independence managing director Peter Bradford said the company was committed to the development and operation of a quality portfolio of assets.
“With the significant continued growth of Independence Group, including the ramping up of the Nova operation to reach nameplate capacity in the September 2017 quarter, the development of the Stockman project is not consistent with this strategy,” Bradford explained.
“Although Independence Group recognises the value of the Stockman project, CopperChem is ideally positioned to continue its exploration and development, while we have retained upside exposure.”
CopperChem, a subsidiary of Washington H. Soul Pattison and Company, will add Stockman to an asset portfolio that includes operations and projects in the Cloncurry region of Queensland.
The transaction is subject to several conditions, including ministerial approval for the transfer of the Stockman mining tenements.
A completed sale, which is targeted for the September quarter, would see Independence record an impairment on the project of up to $20 million in the 2017 financial year.