Local miner Heron Resources has signed a letter of intent to enter into a joint venture with US-based Inco Limited to develop its $1.4 billion Kalgoorlie nickel laterite project.
The terms of the letter are that Inco will fund the remainder of the project costs, including any remaining feasibility studies and 95.5 per cent of equity financing.
In terms of earnings from the project, Inco will earn 60 per cent, with Heron retaining a 40 per cent interest.
According to managing director Ian Buchhorn, finding a suitable joint venture partner completed one of the major milestones for the project.
“What this [letter of intent] does, is it clears the pathway to develop the mine,” he said.
“Whereas before, all we could say is we had a significant resource base, but no means of developing it.”
Heron had previously tried to develop its KNP with two other joint venture partners, including Centaur Nickel in 1999 and the Chinese Jinchuan Group in 2003.
Centaur was placed into receivership in 2002, while Jinchuan was understood not to be satisfied with the grade of nickel at that stage.
Shares in Heron closed 45 per cent higher on news of the announcement.
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