Mincor Resources is expecting first cash-flow from its Kambalda nickel operations restart in the June quarter after firming up the details of an offtake agreement with BHP Nickel West.
Shares in the West Perth-based aspirant lifted after informing the market it would be re-joining the ranks of Australian nickel producers, locking in nickel concentrate production for May 2022.
It comes after Mincor reached an agreement with partner BHP Nickel West to update the terms of an ore tolling and offtake purchase agreement for its Kambalda operations.
According to Mincor managing director David Southam, it means Mincor’s ore deliveries to the end of May 2022 will be converted into an imputed nickel in concentrate using a grade-recovery curve.
“The recent amendments to the ore tolling and offtake purchase agreement agreed with BHP represent an elegant and sensible solution for the measurement of nickel concentrate within the Kambalda processing plant,” Mr Southam said.
“Mincor’s ore deliveries to the end of May 2022 will be converted into an Imputed Nickel in Concentrate, using a grade-recovery curve, thereby meeting our commitment to shareholders of delivering first production in the June 2022 Quarter.”
Mincor announced in October last year of its intent to deliver first ore from the namesake nickel operation as part of an arrangement struck between the parties.
First production had initially been slated for the March quarter but was pushed back due to a lack of skilled labour in the state.
Its return to production comes at a time of high price volatility for nickel, with the current nickel spot price at roughly A$46,000 per tonne.
“Looking forward, Mincor will continue to ramp up ore production during the commissioning phase as we look to increase nickel concentrate production rates towards the end of the September 2022 quarter, at which time we intend to release inaugural FY23 guidance,” Mr Southam said.
Mincor shares closed the day up 4.6 per cent to trade at $2.50.
