COMET Resources Limited and QNI Pty Ltd, a wholly owned subsidiary of Billiton plc, have taken a significant step forward in the development of the Ravensthorpe nickel project by acquiring the entire interest in the project previously held by a private syndicate of individuals (the ELW Group).Comet and QNI have also agreed to jointly buy the rights to minerals below 35 metres from surface at the Shoemaker/Levy deposit of the Ravensthorpe project.The rights were previously held by Greenstone Resources NL (75 per cent) and the ELW Group (25 per cent).Greenstone announced on July 21 that it would sell its rights and certain minor associated tenement interests to Billiton Nickel (Ravensthorpe) Pty Ltd, a subsidiary of Billiton plc, for $2.1 million.As a result of these transactions, the Ravensthorpe Nickel Project will be owned, financed and developed 50 per cent by Comet and 50 per cent by QNI/Billiton. Comet’s net cash outgoings from these acquisitions are about $9 million, exclusive of an unsecured $2 million loan from the ELW Group which effectively enables deferred payment by either cash or Comet shares, at Comet’s election.The loan is interest free until June 30, then bears interest at commercial rates. Comet and QNI have also agreed to pay the ELW Group a production royalty which, at the estimated long-term nickel price of US$3.25/lb, will equate to less than US$0.02/lb of production.Comet’s net cash position after these acquisitions will be just under $20 million, of which $10 million has been committed to the pre-project financing phase of the project (Front End Engineering Design) due for completion in the first half of 2001.The agreement also brings to an end the legal proceedings between Comet and the ELW Group announced on September 20 last year.
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