Canadian firm sweetens BCL deal with P4.3bn

Premium Nickel Resource Corporation, the Canadian company recently named as the frontrunner to take over BCL Ltd, has pledged to spend US$400 million in various operational processes required to bring the mines back to operation.

In a public notice seen by publisher, Mmegi, BCL Ltd liquidators said the Canadian minerals investor had also pledged to make a financial contribution to the care and maintenance activities taking place at BCL Ltd. The BCL Ltd group, which includes BCL and Tati Nickel mines, closed in October 2016 with the loss of over 5,000 jobs. The Government is currently paying the bill for care and maintenance activities. The Canadian firm has six months to conduct a due diligence exercise on the mines before making an offer for the outright purchase of the BCL Ltd assets it wants.

“Premium Nickel has undertaken to make a substantial contribution to the care and maintenance costs associated with the mines during the period of its due diligence and, subject to a feasibility study being undertaken, it will initiate the engineering, construction and commissioning of the mining infrastructure preparatory to the commencement of mining operations, with an envisaged investment exceeding US$400 million,” the liquidators’ notice reads.

Liquidators said the Canadian firm “in terms of the anticipated final agreement, would make a “substantial capital investment” in the mines.

“Premium Nickel has expressed its willingness to foster cooperation with the Government of Botswana and local communities to pursue partnerships with local businesses and to undertake a positive engagement with associations and civil society,” the liquidators’ notice said.

As previously reported by MmegiOnline, the Canadian firm has told investors it intends to raise US$26.5 million (P287 million) for various studies intended to upgrade BCL Ltd’s resource levels to prepare for operation. US$2.5 million will be used to support 120 days of due diligence “culminating in the asset purchase,” while another US$12 million will be used to advance the assets to prefeasibility compliance within 12 months. A further US$12 million will move the process to a compliant feasibility study level in another six months. 

“The proposed transaction represents a rare and attractive opportunity to participate in a nickel-copper-cobalt sulphide mine restart in an attractive mining jurisdiction,” the investor presentation reads.

Source: https://www.mmegi.bw/index.php?aid=88783&dir=2021/february/19

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