IMX in $7m Tanzanian nickel sale

Mineral developer IMX Resources will sell part of its Ntaka Hill nickel mine to Mauritius-based private equity company Fig Tree Resources Fund II, with plans to use the cash to fund its nearby graphite project. 
Fig Tree vehicle Loricatus Resource Investments will acquire nearly 71 per cent of the project for $7.2 million in cash, with a right to maintain that interest on completion of a feasibility study within five years.

Fig’s interest in the joint venture will fall to 50 per cent if it does not complete a sole funded feasibility study.

Chief executive Phil Hoskins said he recently spent time on the site with representatives from Fig Tree, who shared a similar view on the project’s potential.

“The terms of the Fig Tree transaction imply a valuation of Ntaka Hill well above the current market capitalisation of IMX and, upon completion, IMX will be well capitalised to focus on the exciting exploration prospects within the broader Nachingwea joint venture, including the continued development of our exciting Chilalo Graphite Project,” he said.

Graphite has received strong interest this year, with a variety of high-technology applications driving exploration in the sector.

The Chilalo project is located in the same belt as two other major deposits, Syrah Resources’ Balama and Magnis Resources’ Nachu projects.

Syrah received an informal takeover offer from commodities giant Glencore in July that valued it at up to $2 billion.

Similarly, nickel prices are up on this time last year despite a fall in September, on the back of a ban of exports from Indonesia.

Mr Hoskins acknowledged the global nickel market was strengthening.

“Ntaka Hill is one of only a handful of advanced nickel sulphide assets in the region and, as a result, we experienced a strong level of genuine interest in Ntaka Hill from several parties,’’ Mr Hoskins said.

“Fig Tree was selected based not only on the financial terms of their proposal, but their extensive relevant expertise and on the basis of their strategy to develop the project without necessarily relying on further exploration success, a strategy that fits well with our own corporate objectives."

IMX was in a trading halt today, but last changed hands at 1.2 cents per share.