Sirius close to second nickel supply pact

By Reuters Time of article published May 13, 2015

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Sydney - Australia's Sirius Resources is close to reaching a commercial agreement to supply up to 13 000 tons of nickel concentrate annually from a nickel and copper mine under development in Western Australia state.

Sirius agreed in March to ship half its forecast 26 000-tons-a-year nickel-in-concentrate production from its Nova mine to BHP's Nickel West smelting division, most likely starting in late 2016, following commissioning.

At the time, Sirius Managing Director Mark Bennett told Reuters it was in his company's best interest to diversify its customer base beyond a single buyer.

Sirius ignited interest in the Australian nickel sector three years ago when it made a major discovery, which it named Nova because it was found by prospector Mark Creasy while looking for debris from Nasa’s Skylab space station.

“Offtake negotiations for the remaining unallocated future nickel sulphide concentrate production from Nova to another party are at an advanced stage,” the company said.

Australia's no. 3 nickel miner, Western Areas, in November reached a two-year agreement to supply Chinese metals group Jinchuan with 26 000 tons of nickel concentrate and has been mentioned as a potential buyer of Sirius' material.

Sirius also said it had reached a confidential supply contract with commodities trader Trafigura covering copper concentrate produced in the first three years of the mine's projected 10-year operating life.

On Tuesday, fellow Australian miner Independence Group, responding to media speculation it was seeking to acquire Sirius in a deal valued at $3 billion, said it had not entered into any agreement.

Creasy owns 35 percent of Sirius and is seen as crucial to any deal. He could not be reached for immediate comment.

Sirius stock was trading 7 percent higher at A$3.29 on Wednesday after closing 5 percent higher in the previous session.

Reuters

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