MMG sells Avebury mine
PERTH (miningweekly.com) – Hong Kong-listed MMG on Tuesday signed a sales agreement with exploration and mining development company QCG Resources (QCG) to sell its Avebury nickel mine, in Tasmania, for A$40-million.
The Avebury mine has been on care and maintenance since February 2009, and MMG initially launched an expression of interest in the asset in 2011. The project is capable of producing some 7 000 t/y of nickel concentrate and is the subject of a supply agreement with a Chinese nickel refining company for all the nickel it can ship.
Under the terms of the QCG offer, the unlisted junior would provide a A$1.75-million deposit, payable within 15 business days of signing, A further A$33.25-million would be payable on closing the transaction, while A$2.5-million would be payable on production of the first 10 000 t of nickel in concentrate.
A further milestone payment of A$2.5-million was payable on production of the second 10 000 t of nickel in concentrate.
MMG said on Tuesday that the sale of the Avebury mine offered the best opportunity to restart the mine.
“We believe this offer represents the best outcome for both MMG and the Avebury asset,” said MMG executive general manager for business development Michael Nossal.
“QCG is committed to a restart of the mine and MMG is confident that if the sale is completed, it will reinvigorate the Zeehan area, by providing new jobs and economic benefit to the region.”
The sale was subject to a number of conditions precedent including QCG raising the funds required for its closing payment, MMG board approval and regulatory approval.
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