- Australian explorer Nickel Mines has hedged its bets on making big returns in Indonesia to expand ownership at the ‘Ranger Nickel’ Project
- Originally spending US$280 million to buy up 17 per cent in interest, the company has announced today it will spend a further US$121.4 million in cash and shares to own 60 per cent – with talks of 80 per cent ownership on the table
- This is the second Indonesian project in the company’s portfolio, sitting alongside the Hengajaya mine which Nickel Mines owns 60 per cent of as well
- Company management believes the dual-wielding of the projects and the latest interest expansion will help towards a yearly targeted production of 20,000 tonnes of nickel per year
Explorer Nickel Mines has shown faith in the Ranger Nickel project, increasing its original ownership from 17 per cent to a majority 60 per cent.
The agreement, which stems from a memorandum of understanding last year, also allows Nickel Mines to increase interest in the Indonesian project to a further 80 per cent if wished.
Initial investments for the 17 per cent ownership cost the company a total of US$280 million.
Today’s expanded acquisition will cost the company a further US$121.4 million.
The payment will be executed through a mixture of cash and company shares through a debt.
“We are delighted to have increased our ownership of the Ranger Nickel Project…” Nickel Mines Managing Director Justin Werner said.
Nickel Mines will pay US$40 million in ordinary shares, and US$1.4 million in cash.
“We would like to thank our operating partner Shanghai Decent for their commitment to supporting the Company’s increased ownership of Ranger Nickel, including the provision of the debt facility and welcome their increased ownership in the Company via accepting NIC shares as part consideration for the transaction,” he added.
Securing the further working interest in Ranger Nickel today will help the company travel towards its goal of producing 20,000 tonnes of nickel per year.
Justin Werner says the combination of Ranger Nickel with separate project Hengjaya Nickel, will push the company towards being a globally significant nickel producer.
Currently, Nickel Mines owns 60 per cent working interest in Hengjaya as well – also situated in Indonesia.
“We look forward to providing further updates to the market as Ranger continues to ramp up to full production over the coming months,” Justin concluded.
Share prices in NIC are only marginally different today, trading for 56 cents apiece after a 2.61 per cent reduction.
The company’s market cap is valued at $877.1 million today.