The continued depressed nickel market has forced Future Battery Minerals (ASX:FBM) to cut the asking price for its Nepean Nickel Project in Western Australia.
Eastern Coolgardie Goldfields, a subsidiary of the junior explorer – which has a market capitalisation of $14.6 million – originally struck a deal in May 2023 to sell the Nepean Project to Rocktivity Nepean for $10 million in cash.
At the time the project was 80% owned by Future Battery Minerals and 20% owned by Lodestar Minerals (ASX:LSR), with Future Battery Minerals to receive $8 million and Lodestar to receive the remaining $2 million.
This was in line with Future Battery Minerals new exploration focus on its lithium discoveries in Western Australia and Nevada, US.
However, with the nickel price having wiped off nearly 35% since the sale was announced, now trading at around $US16,284 ($24,063) a tonne on the London Metals Exchange, the company has had to re-negotiate the deal.
Future Battery Minerals has already received an initial $2.8 million on completion of the tenement sale agreement.
Rocktivity was supposed to pay a further $2.4 million, but Future Battery Minerals announced in June this year that it had agreed to allow Roctivity to defer that payment, which would attract interest.
Future Battery Minerals says Rocktivity is not in a position to meet its deferred payment, due 13 September 2024, and the company has now agreed to cut the remaining payments due from $7.2 million to $1.04 million, comprising $265,000 – which was paid in June 2024 – and a final payment of $773,656 to be paid before 25 September 2024.
If Rocktivity does not make the payment by the deadline, the buyer will be liable for the total consideration payable, including the deferred consideration payments, under the tenement sale agreement.
Under the revised agreement, Rocktivity will also grant Future Battery Metals’ subsidiary Eastern Coolgardie Goldfields a 1% net smelter royalty on all minerals and metals produced and sold or otherwise disposed of for value on the Nepean Nickel Project tenements.
Rocktivity will also pay an additional $500,000 to Eastern Coolgardie Goldfields, once certain milestones have been reached, including the sale of all, or part of, the Nepean Nickel Project tenements for more than $5 million; and the definition of a resource of over 300,000 ounces of gold.
Future Battery Minerals Managing Director Nick Rathjen says the outcome allows the company to conclude the successful disposal of the Nepean asset, in what remains a particularly depressed nickel market environment.
“This further rationalisation of our asset portfolio also allows a sharper focus on our flagship projects, the Kangaroo Hills and Miriam Lithium Projects in the WA Goldfields,” he says.
“The final payment from Rocktivity will further strengthen our cash position, reinforcing our commitment to advancing these strategically positioned projects through smart, cost-effective exploration.”
Future Battery Minerals shares slid over 18% to an intra-day low of $0.018 on Wednesday (18 September).
Write to Angela East at Mining.com.au
Images: Future Battery Minerals
