Pure Minerals may develop an ore processing plant in Townsville, Queensland following its acquisition of emerging nickel-cobalt company Queensland Pacific Metals (QPM).
The company announced it would purchase 100 per cent of QPM pending a 45-day due diligence period.
Small cap QPM has an ore supply agreement for the purchase of nickel-cobalt in place with two companies — Societe des Mines de la Tontouta (SMT) and Societe Miniere Georges Montagnat (SMGM) — in the South Pacific territory of New Caledonia.
In addition, QPM holds a nickel-cobalt exploration venture in Marlborough, Queensland, the Eden Garry project.
QPM is also collaborating with the Queensland State Development Authority regarding the development of the Townsville processing plant and intends to produce a feasibility study in future.
The company plans to use ore supplied from SMT and SMGM from their mines in New Caledonia as feed for the plant should it go ahead.
It is not the only recent development proposed for Townsville. Last month, Clive Palmer proposed the development of a $154 billion, 700MW coal-fired power station in the Galilee Basin, Queensland to potentially commence development in 2020.
The three companies are participants in a five-year shipping agreement (commencing June 2020) for the supply of 600,000t/y nickel-cobalt, subject to completion of QPM’s intended feasibility study.
This ore would be used to produce around 25,000t of nickel sulphide and 3000t of cobalt sulphate per year.
According to a report released by Pure Minerals, “Townsville is considered a preferred location as it is well supported by existing infrastructure, skilled labour, engineering support proximity and a long history in handling New Caledonia ore.”
The report also cited Townsville’s relatively close proximity to New Caledonia, located around 2000km away, as a plus.
Pure Minerals paid $75,000 deposit for its QPM exclusivity rights and due diligence period. Overall payment includes $870,000 in Pure Minerals shares, $500,000 in cash and over 333 million deferred consideration shares subject to four performance milestones.