ASX-listed Blackstone Minerals has executed an option agreement to acquire 100% of the Wabowden nickel sulphide project, in the Thompson nickel belt of Manitoba, Canada, from CaNickel for up to C$80-million.

CaNickel CEO Shirley Anthony said after "every effort was made" to restructure its debt, it was determined that selling the asset to a motivated buyer was the most viable path forward for the nickel company.

With a resource of 1.3-million tonnes of contained nickel, Wabowden could secure all the feed required for Blackstone's Ta Khoa refinery, in Vietnam, removing its dependency on sourcing third-party feedstock.

“Securing long term low carbon IRA [US Inflation Reduction Act] compliant nickel feed for the Ta Khoa refinery has been a key question from potential JV [joint venture] partners. This option agreement provides greater certainty over the nickel feed sourcing strategy for Ta Khoa, which is an important factor in the selection of a JV partner, and the company will provide an update on this soon,” said Blackstone MD Scott Williamson.

The Wabowden project includes the well-maintained Bucko mine and processing facility, which retains key operating permits.

The company has taken a 12-month option for a cash payment of C$1.1-million. During the option period, Blackstone will optimise development and funding pathways, including JVs, government funding, royalty, debt and equity opportunities.

Blackstone’s strategy is to progress to a much bigger scale operation that is better suited to the large-scale resource and to change the mining methods.

Wabowden could also establish a key central point of operations in Manitoba for Blackstone to potentially consolidate its existing nickel interests in Manitoba, as well as other nickel assets in the region.

Its existing nickel interests and experience in Manitoba are held through strategic investments in ASX-listed Corazon, or Lynn Lake the nickel/copper project, and TSX-V-listed Flying Nickel, or the Minago nickel project.

“Its location in the tier-one jurisdiction of Manitoba, with access to 100% renewable power, aligns with our goals to produce Green Nickel, meaning that Wabowden ticks all the boxes that are important to our goals and the project would be complementary to the strategy we are executing,” said Williamson.

Blackstone has announced an accelerated nonrenounceable prorate entitlement offer to raise up to A$10.2-million. The proceeds will be used to support Wabowden’s option opportunity, complete the definitive feasibility study for the Ta Khoa refinery and to progress the strategic partnerships process.