PERTH (miningweekly.com) – Base metals developer Centaurus Metals has reached an agreement with Vale Base Metals to acquire all of the offtake rights for the nickel products from its Jaguar project, in Brazil, in exchange for an increase in Vale’s net operating royalty over the project.
The offtake rights stem from the 2019 sale and purchase agreement when Centaurus acquired the Jaguar project from Vale.
With Vale now agreeing to extinguish the offtake right, the company’s royalty will be increased by 1.2% for nickel sulphate product and 1.25% for nickel concentrate and other products produced from Jaguar, meaning a 1.75% royalty for nickel sulphate will apply and a 2% royalty for nickel concentrate and other products.
Centaurus MD Darren Gordon said on Monday that the transaction represented a pivotal moment in the development pathway of the project, giving Centaurus full control and optionality over the sale and marketing of Jaguar’s nickel sulphate product.
“Securing 100% control over the sale of our nickel sulphate product will significantly increase the suite of strategic pathways available to us to fund and de-risk the Jaguar development.
“We anticipate that our low-greenhouse gas emission nickel sulphate product will be highly sought after in the global market, particularly amongst end-users, with Centaurus now able to freely explore a range of strategic funding and offtake options to support the project’s development. The battery materials market is expanding exponentially, and we are increasingly seeing OEMs and other electric vehicle battery players moving further upstream as they seek to secure long-term supplies of key raw materials,” said Gordon.
“The clean transaction structure allows the company to retain its cash for ongoing definitive feasibility study and project development activities at Jaguar and avoids any equity dilution of existing Centaurus shareholders while delivering enhanced funding and partnering flexibility.
“The doubling in Jaguar’s measured and indicated mineral resource estimate late in 2022 and the recent production of a high-quality battery grade nickel sulphate product from the company’s refinery pilot plant test work program has cemented its position as a Tier-1 global nickel sulphide development project with class-leading greenhouse gas emission credentials. With the unencumbering of the nickel units held within the Jaguar project, the company can now actively explore a much wider variety of funding options at both a corporate and project level.”