QCG Resources will buy MMG’s idle Tasmanian Avebury nickel mine for $40 million and is looking to restart production in a quick timeframe, leading to 200 new jobs.
The mine, located 8kms west of Zeehan on Tasmania’s west coast, has been in care and maintenance since February but new owners say they are confident current nickel prices could lead the restart of production.
QCG is a privately owned exploration company and chairman Doug Daws said the mine could be up and running shortly.
“The diligence to which the care and maintenance program has been conducted means that mining could recommence within a short time frame once we are able to make necessary modifications to the milling circuit,” Daws said.
A recommencement of mining at the site would create 200 new jobs.
The $40 million deal is subject to conditions, including QCG raising the funds needed for a $33.25 million closing payment.
The company said it was in talks with a number of finance organisations both in Australia and overseas to help fund the final payment.
“We are genuinely excited to be acquiring a project that has great mine and associated infrastructure in place at a time of rising nickel prices,” Daws said.
MMG executive general manager Michael Nossal said QCG was well placed to bring the Avebury operation back into production.
“We believe this offer represents the best outcome for both MMG and the Avebury asset,” he said.
“QCG is committed to a restart of the mine and MMG is confident that if the sale is completed, it will reinvigorate the Zeehan area, by providing new jobs and economic benefit to the region.”