15/04/2014 - 15:54

QCG plans $40m Avebury nickel mine buy

15/04/2014 - 15:54

Bookmark

Upgrade your subscription to use this feature.

Perth-based private company QCG Resources has agreed to purchase the mothballed Avesbury nickel mine in Tasmania from Chinese-controlled miner MMG for $40 million.

QCG plans $40m Avebury nickel mine buy

Perth-based private company QCG Resources has agreed to purchase the mothballed Avebury nickel mine in Tasmania from Chinese-controlled miner MMG for $40 million. 

QCG, which is chaired by mining veteran Doug Daws, has entered into a binding agreement with MMG and says it is in advanced discussions with finance organisations to source funding for the purchase.

The purchase price includes a $1.75 million deposit, a $33.25 million closing payment, and two payments worth a combined $5 million subject to meeting nickel in concentrate production targets.

The Avebury mine was commissioned in 2008 but placed on care and maintenance just a year later due to low nickel prices.

Mr Daws said internal studies conducted by QCG as part of its due diligence process showed that the project was economic at current nickel prices and could be restored to production within a short timeframe.

"We are genuinely excited to be acquiring a project that has great mine and associated infrastructure in place at a time of rising nickel prices," Mr Daws said.

The agreement is subject to QCG raising the funds required for its closing payment, MMG board approval, and regulatory approval.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options