Glencore have agreed to let the Sinclair Nickel Project go to Talisman Mining for $10 million.
Talisman reached a binding agreement with Xstrata Nickel Australiasia (a subsidiary of Glencore) which states the mine will be sold for $8 million plus a deferred payment of $2 million.
The deferred payment will be contingent on production being recommenced within six years of the initial transaction completion.
Talisman has also agreed to grant Glencore the right to make an offer for off-take of the first 20,000 tonnes of contained nickel produced at Sinclair.
Talisman managing director Gary Lethbridge said the acquisition was a transformational opportunity to join the nickel sulphide industry.
“The Sinclair Nickel Project represents by far the best opportunity that we have seen,” he said.
“It offers a rare combination of exceptional exploration upside, and existing open-cut and underground mine, plus a well-maintained and near-new on-site processing plant and concentrator with extensive surface infrastructure.”
The mine was developed and commissioned in 2008, but was closed in 2009 due to plunging nickel prices.
The mine was again placed into care and maintenance in August 2013.
Glencore (Xstrata) took over the mine in 2009 in its $2.2 billion acquisition of Jubilee Mines.
Jubilee estimated in 2007 that the construction and mine development of Sinclair would cost $90 million.