Sally Malay Mining has announced that it will not exercise its pre-emptive right to acquire the outstanding 25 per cent shareholding in the Lanfranchi nickel joint venture, now to be controlled by Canadian company Brilliant Mining Corp.
Sally Malay's move followed the news that Brilliant is to acquire Ian and Leigh Junk's private company Donnegal Resources Pty Ltd, which indirectly owns the 25 per cent Lanfranchi stake.
The Perth-based miner already holds a 75 per cent interest in Lanfranchi and had first right of refusal to acquire Donnegal's stake.
It said Brilliant has extensive exploration interests in Canada and would bring a significant amount of nickel sulphide exploration experience to the joint venture.
The Brilliant transaction indicates that the Lanfranchi project has increased in value nearly four-fold in the past 15 months.
The project was acquired by the Lanfranchi joint venture (Sally Malay 75 per cent, Donnegal 25 per cent) from WMC Resources in November 2004 for $25 million, of which $21 million has been paid and the balance is payable in tranches over the next two years.
Sally Malay said the transaction valued Donnegal's 25 per cent at "in excess of $20 million".
The joint venture commenced operations in January 2005, initially mining remnant ore and then developing a decline to access the high grade Helmut South ore.
It produced 21,328 tonnes of ore in the December quarter and is ramping-up to full production at the rate of 12,000 to 15,000 tonnes per month.
The Junk brothers will continue to be involved in the Lanfranchi joint venture as board members and shareholders of Brilliant.
