Saracen Mineral Holdings is set to acquire the Sinclair nickel project from Talisman Mining for $10 million, strengthening the company’s assets in Western Australia.
Sinclair, 25 kilometres south-west of Saracen’s Thunderbox operations, offers extensive infrastructure and underexplored gold tenure.
The infrastructure includes a 200-person camp, mine buildings and workshops, a core yard, a two kilometres airstrip and quality water that can be reticulated to the Thunderbox plant.
Sinclair also includes a 350,000 tonnes per annum processing plant and mineral resources of 720,000 tonnes at 2.3 per cent nickel.
The Thunderbox underground mine is set to benefit from primary and secondary ventilations fans, electrical starter boxes and refuge chambers which are currently held in storage at Sinclair.
Saracen managing director Raleigh Finlayson said the Sinclair acquisition was consistent with the company’s organic growth strategy.
“Saracen believes Sinclair offers significant gold exploration upside close to the Thunderbox mill, this means it ticks two key boxes for us,” Finlayson said.
“The extensive infrastructure and other assets at Sinclair also provide opportunities to further enhance the Thunderbox mine and mill, adding further value to the acquisition.”
Talisman managing director Dan Madden said the transaction would benefit the company’s financial position.
“The Saracen offer represents the best outcome for Talisman shareholders in terms of certainty of value through an upfront $10 million cash payment and exposure to any potential future metal production from Sinclair,” Madden said.
“Upon completion, Talisman will have approximately $18 million in funding to support our increasing exploration activities at the Lachlan copper-gold project and Lucknow gold project in NSW.”
The agreement involves a $10 million cash consideration which is paid upon completion and a two per cent net smelter return on metal production from the Sinclair tenements and non-precious metals production from the Saracen’s Waterloo tenement.