Blackstone Minerals (ASX:BSX) is looking to acquire the Wabowden Nickel Sulphide Project in Manitoba — which lies within the fifth largest nickel sulphide camp in the world — for C$80 million.
The $41.68 million market capitalisation company says it has secured a 12-month option to acquire a 100% interest in the project from CaNickel Mining (TSX.V:CML) for a mix of cash and scrip.
The project sits in the Manitoba region of Canada and has a ‘large-scale’ resource base of 230 million tonnes (Mt) at 0.56% nickel for 1.3Mt of contained nickel, with ‘significant’ growth potential.
Under the terms of the acquisition, Blackstone will make a cash option payment of C$1.1 million upon agreeing to the option, and upon exercising of the option and satisfying associated closing conditions, it will pay CaNickel C$70 million (minus the option payment) in cash and an additional $10 million in shares.
The payments will be made in 4-stages: a cash payment of C$20 million and C$10 million in Blackstone shares upon closing; another C$10 million cash payment to be paid 18 months later; a C$15 million payment upon Wabowden achieving fully permitted status; and a C$25 million payment upon Wabowden achieving commercial production.
Blackstone says the project represents an ‘attractive’ opportunity for the company given its ‘large-scale’ resource base, established infrastructure, low-cost hydropower, and synergies with the company’s other strategic nickel interests in the Manitoba region.
The company notes the acquisition also provides it with ‘significant’ optionality and can remove its need to secure third-party feed to fill its Ta Khoa Refinery for multiple decades.
Further, the deal gives Blackstone the ability to benefit from Manitoba’s critical minerals strategy and the US’ Inflation Reduction Act. The deal also provides the company with the well-maintained Bucko mine and processing facility, which retains key operating permits.
Managing Director Scott Williamson says Wabowden represents one of the ‘most advanced’ nickel sulphide projects in North America today and provides the company with an option to potentially consolidate its existing nickel interests in Manitoba.
“Blackstone’s strategy is to progress a much larger scale operation better suited to the large-scale resource and by changing mining methods and leverage existing infrastructure to develop a potentially globally significant nickel mine, capable of completely filling the nickel concentrate requirements at Ta Khoa.”
“Blackstone’s strategy is to progress a much larger scale operation better suited to the large-scale resource…”
The company says it plans to complete preliminary / scoping-level mining studies and develop JORC resources for key deposits at Wabowden over the next 12 months.
Blackstone says the feasibility works are being undertaken to identify possible operating scenarios at the project and will be funded through a $10.2 million accelerated non-renounceable pro rata entitlement offer.
Proceeds from the offer are expected to support the completion of a Definitive Feasibility Study (DFS) for the Ta Khoa Refinery and progress Blackstone’s strategic partnerships process.
Wabowden sits in the centre of the ‘world-class’ Thompson Nickel Belt, which covers more than 300km of strike and has produced more than 2.5 million tonnes of nickel, in Manitoba, Canada.
Blackstone Minerals is focused on building an integrated battery metals processing business in Vietnam that produces nickel-cobalt-manganese precursor products for Asia’s growing lithium-ion battery industry.
Blackstone had $6.045 million cash and cash equivalents at hand as of 30 September 2023, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Blackstone Minerals