Canadian mining company Inco Ltd has invested $5.6m in Mirabela Nickel Ltd giving it a 15 per cent shareholding in the Brazil-focused miner.
Canadian mining company Inco Ltd has invested $5.6m in Mirabela Nickel Ltd giving it a 15 per cent shareholding in the Brazil-focused miner.
Inco has entered into a farm-in agreement to explore for large nickel sulphide deposits upon
Mirabela's extensive ground position in Brazil. Mirabela is focused on the rapid development of Santa Rita. The Inco capital raising will fund the Santa Rita Bankable Feasibility Study.
The full announcement is below:
Inco invests $5.6m in Mirabela and farms-in for large nickel sulphide discoveries
Highlights
- Inco has entered into a farm-in agreement to explore for large nickel sulphide deposits upon
Mirabela's extensive ground position in Brazil.
- Mirabela is to place 7 million shares at 80 cents each to Inco Limited to raise A$5,600,000.
Inco will hold a 15% shareholding in Mirabela.
- Under the farm-in, Inco may earn a 70% interest in any discovery of more than 100,000 tonnes
of contained nickel by completing a bankable feasibility study. Thereafter, Mirabela may
contribute at 30% equity or be loan carried into production at 15% equity.
- Mirabela will retain 100% of the Santa Rita disseminated nickel discovery. Future
disseminated nickel discoveries that are within open cut limits will be excluded from the Inco
farm-in. The Company's laterite deposits are also excluded.
- Mirabela is focused on the rapid development of Santa Rita. The Inco capital raising will fund
the Santa Rita Bankable Feasibility Study.
Inco Share Subscription
Inco Limited is being allotted 7 million shares at 80 cents each to raise A$5.6 million. Inco is one of the
world's premier mining and metals companies and the second largest producer of nickel globally. The
placement will give Inco a 15.1% shareholding in Mirabela (11.2% on a fully diluted basis).
The placement will take place in two tranches. Inco will subscribe for 1 million shares immediately
with a further 6 million shares subject to Mirabela shareholders' approval. Notice of a shareholders
meeting to approve the second tranche will be issued shortly.
Inco has agreed a 6 month voluntary escrow period. For a period of 3 years Inco will not acquire any
additional shares in Mirabela without Mirabela's prior approval except that during such 3 year period
Inco has the right to participate in 10% of any further issues by Mirabela of shares, options or other
securities on the same terms as other participants. This participation right will not apply to the next
6,000,000 shares or the next 1,400,000 executive options issued by Mirabela.
Inco Farm-in Agreement
Mirabela and Inco have agreed to jointly explore for massive sulphide nickel deposits upon Mirabela's
mineral licences in Brazil. There is a conceptual belief that the Santa Rita disseminated nickel deposit
could be part of a larger and higher-grade system of nickel mineralization. Mirabela's recent focus on
the Santa Rita disseminated nickel discovery has delayed testing of this geological model at Santa Rita
and the commencement of planned nickel exploration at Palestina and Sao Francisco. The Inco farm-in
will allow Mirabela to continue to focus on developing the Santa Rita project whilst at the same time
enabling rapid advancement of exploration for massive sulphide nickel deposits by Inco with
Mirabela's in-country assistance.
The key terms of the Inco farm-in are summarised as follows:
Inco will evaluate the potential for large nickel sulphide deposits within the Santa Rita, Palestina
and Sao Francisco project areas for a period of one year (minimum US$500,000 expenditure).
This will include an airborne EM/magnetic survey over the whole ground position. Following the evaluation period, Inco may enter a farm-in agreement in respect of one or more of
the Santa Rita, Palestina and Sao Francisco project areas, with a separate farm-in agreement for
each project area selected. Each farm-in agreement is subject to minimum annual expenditure of US$300,000 increasing by
US$100,000 annually to a maximum of US$800,000. Inco may earn a 70% equity interest in a project area where it establishes Proven and Probable
Reserves of more than 100,000 tonnes of contained nickel by completing a bankable feasibility
study within 6 years. Following a decision to mine, Mirabela may choose to either contribute its 30% share of costs or
be loan carried into production at 15% equity. Excluded from the Inco farm-in are: - The Santa Rita disseminated nickel sulphide resource and the Serra Azul nickel laterite resource and their extensions within open pit limits. - In respect of the Santa Rita and Palestina project areas, any other disseminated nickel sulphide resources (a grade of less than 1.0% nickel at a cut-off of 0.4%) within open pit
limits. ~3 ~ For further information please contact: MIRABELA NICKEL LTD Registered Office: Ground Floor, 8 Colin St, West Perth 6005 Telephone: +61 8 9324 1177 Facsimile: +61 8 9324 2171 www.mirabela.com.au Email: info@mirabela.com.au ASX Code: MBN - In respect of the Sao Francisco project area, any disseminated nickel sulphide resources within open pit limits that are not part of combined deposits with more than 500,000 tonnes
of contained nickel. - Inco will not have any off take rights in respect of production from any of the above excluded resources. Mirabela may continue to separately explore the project areas for disseminated nickel resources
or laterite resources. Inco has already completed extensive corporate and technical due diligence, so both agreements are
unconditional in that respect. Commentary by Mirabela's Managing Director, Mr Nick Poll
"We are delighted to be partnering with Inco in our Brazil nickel projects; their know-how and
enthusiasm is second to none in the nickel industry. Mirabela welcomes Inco's technical and financial
input to assist ongoing exploration initiatives for massive sulphide nickel discoveries. In addition, we
are pleased to have Inco as a cornerstone shareholder, with the proceeds from this placement
positioning the Company to complete funding of the Santa Rita bankable feasibility study."
Argonaut Capital Limited has provided Mirabela corporate advice in relation to the Inco transaction.
