Alliance Nickel (ASX:AXN) has appointed Blackbird Commodity Partners as its financial advisor to support the company’s financing strategy for the NiWest Nickel-Cobalt Project in Western Australia.
The company says Blackbird is a specialised natural resources financial advisor with an ‘extensive’ track record advising companies on financing strategies for mining and resource projects.
Shares in Alliance spiked 10.53% to $0.105 at 3:33pm AEST on 12 May 2023. The company has a $75 million market cap.
Alliance reports debt financing alternatives for NiWest will be evaluated and advanced alongside the Definitive Feasibility Study (DFS) for the project. The company expects the project financing process will be completed in the first half of 2024.
Commenting on Blackbird’s appointment, Alliance Nickel Managing Director and Chief Executive Officer (CEO) Paul Kopejtka says: “We are delighted to bring Blackbird onboard as financial advisor to assist with securing future project funding for the development of the NiWest Nickel-Cobalt Project.
NiWest is an advanced nickel project with a high-grade laterite resource located close to established transport and power infrastructure in the Northern Goldfields mining region of Western Australia.
There is a strong need to bring new, high-quality nickel and cobalt projects like NiWest into production to supply the materials needed to meet global decarbonisation targets.
A range of private and public funding opportunities exist to provide the capital needed to support this objective, and we look forward to working closely with Blackbird to find the optimum financing structure for the NiWest Project.”
Alliance reports the recruitment of Blackbird follows a recently announced strategic partnership and offtake agreement with multinational automotive manufacturer Stellantis (BIT:STLAM), announced on 3 May 2023.
Under the binding offtake agreement, Alliance will supply about 170,000 tonnes of nickel sulphate and 12,000 tonnes of cobalt sulphate to Stellantis over an initial 5-year period.
In return, Stellantis is investing a total of $15 million in Alliance through 2 tranches. The first tranche saw Stellantis pay $12.7 million to Alliance for about 40% of forecast annual production from NiWest. Alliance also issued 70.6 million shares to Stellantis at $0.18 per share under this tranche.
The remaining $2.3 million is expected to be paid to Alliance in the June 2023 quarter pending approval from the Foreign Investment Review Board (FIRB).
Once Stellantis pays the second tranche, it will hold an 11.5% shareholding in Alliance and will also have the right to nominate a director to Alliance’s board.
Alliance Nickel is an ASX-listed nickel and critical minerals developer operating its flagship NiWest Nickel-Cobalt Project near Leonora in Western Australia. The company says NiWest is one of the ‘largest’ and ‘highest-grade’ undeveloped nickel-cobalt deposits in Australia and notes it lies close to Glencore’s (LON:GLEN) Murrin Murrin operation.
According to an updated Prefeasibility Study (PFS) completed in 2022, NiWest has a 27-year mine life and will have a nameplate ore throughput of 2.4 million tonnes per annum with an average production profile of 19,200 tonnes of nickel per annum and 1,400 tonnes of cobalt per annum for the first 15 years.
Images: Alliance Nickel Ltd
