New Century in purchase talks with Vale

Brazilian mining company Vale will help fund the acquisition of its struggling Goro nickel-cobalt operations in New Caledonia in a deal under discussion with New Century Resources.

New Century has secured a 60-day exclusivity period with Vale Canada (VNC) – a subsidiary of Vale – to complete due diligence and negotiate the acquisition of 95 per cent of issued shares in Vale Nouvelle-Caledonie, which owns and operates the Goro mine.

The Goro operations also include a processing plant and port facility.

The proposed deal will include a financial package from Vale to facilitate the purchase of its Goro operations, which have struggled since first production in 2011, as well as continued funding from the French government.

VNC has created a simplification plan to reduce complexity in the flowsheet, improve performance of the processing plant, and reduce production costs across four key areas.

The four areas are limonite-only processing, export saprolite ore, decommissioning of the refinery and only producing mixed hydroxide product (MHP) – typically sought after by the electric vehicle industry – and implementing dry stack tailings at the mine.

“The current initiatives instituted by VNC to simplify the flowsheet provide strong potential to transform Goro into a sustainable long-life operation and a major global supplier of nickel and non-DRC sourced cobalt,” New Century managing director Patrick Walta said.

“New Century has been impressed by the VNC site team and also the quality and scale of infrastructure at the Goro mine.”

New Century said its major shareholder, IGO, was supportive of the proposed deal and intends to enter discussions around future MHP offtake agreements with VNC.

Shares in New Century were down 4 per cent at 1:30pm AEST to trade at 24 cents.