The Sinclair Nickel Project is located in the southern portion of the Agnew-Wiluna Greenstone belt, one of the world’s premier nickel provinces with reported endowment of over 9Mt of nickel and numerous world-class deposits.
The project was acquired from Xstrata Nickel Australasia Operations, a subsidiary of Glencore in October 2014, and represents a counter-cyclical growth opportunity for Talisman in the nickel sulphide space, with the potential to create significant value for shareholders.
The former highly successful nickel miner and explorer, Jubilee Mines NL first discovered the Sinclair nickel deposit in October 2005. The mine was developed and commissioned in 2008 and operated successfully before being placed on care and maintenance in August 2013, having produced approximately 38,500 tonnes of nickel at an average life-of-mine head grade of 2.44% Ni.
Sinclair offers an exceptional Australian nickel sulphide exploration opportunity in an under explored region of a prolific nickel belt, with key targets including:
- Potential immediate extensions of the Sinclair deposit itself;
- Advanced near-mine targets within close proximity of the existing mine infrastructure; and
- A number of drill-ready emerging exploration prospects within a 30km radius of the mine.
The Sinclair Nickel Project includes a fully developed underground mine and extensive high-quality surface infrastructure with a replacement value in excess of A$120 million.
Sinclair has the potential for multiple new nickel sulphide discoveries, extensions to previously mined Ore Reserves and exposure to a low capital transition to production under conditions that maximise value to shareholders.
The Sinclair Nickel Project and tenements showing regional geology nickel production centres and reported contained nickel* of the Agnew-Wiluna Belt (*MINDEX 2012)
Talisman Nickel Pty Ltd, a wholly owned subsidiary of Talisman Mining Limited, entered into a binding Sale and Purchase Agreement in October 2014 with Xstrata Nickel Australasia Operations Pty Ltd, a subsidiary of Glencore to acquire 100% of the Sinclair Nickel Project.
The consideration for the acquisition of the Sinclair Nickel Project consists of a cash payment of $8 million payable at completion of the transaction and a contingent deferred payment of $2 million payable upon production being recommenced within six years of transaction completion.
The contingent consideration is to be paid six months following the receipt of the first payment for the sale of nickel product. Talisman has agreed to grant Glencore the right to make an offer for off-take for the first 20,000 tonnes of contained nickel-in-concentrate produced from the Sinclair Nickel Project. Talisman may accept or reject this offer. Glencore has also been granted the right to match the best third party off-take offer should Talisman elect to seek alternative offers. Completion of the acquisition occurred in February 2015.