Shares in North Coogee-based Pacific Ore have soared after it negotiated a deal to sell technology used to extract low grade nickel to miner Western Areas.
Pacific Ore's shares more than doubled to a high of 5.1 cents before easing to 3.8c at 12:55 AEST, up 1.6c or 73 per cent from yesterday's close.
Under the deal, Western Areas has an option period of up to six months to conduct due diligence on the BioHeap bacterial leaching technology.
Western Areas will pay Pacific Ore $100,000 for each month during the options period and can elect to acquire the asset at any time after three months by committing to pay a 2 per cent net refinery royalty that will apply to ore treated by the technology.
The nickel miner can buy back the royalty interest from Pacific Ore at any time in the future with a payment of $5 million.
"BioHeap offers potential to unlock significant value from the large volume of lower grade mineralisation already outlined adjacent to our existing and planned mines at Forrestania, at low capital cost," Western Areas managing director Julian Hanna said.
The deal is subject to Pacific Ore shareholder approval.
