Karora Resources to sell 28% of Quebec nickel project

Karora Resources to sell 28% of Quebec nickel project
Mining News Pro - Canada’s Karora Resources (TSX: KRR), formerly known as RNC Minerals, is selling its 28% interest in the Dumont project in Quebec, one of the globe’s largest undeveloped nickel assets, to two private funds advised by Waterton Global Resource Management, for a total of up to $48 million.

The move, the Toronto-miner said, would allow it to focus on becoming a profitable, mid-tier gold miner.

As part of the deal, Karora will have the right to receive a portion of future proceeds of any future sale of Dumont or other monetization event. It will be entitled to 15% of the net proceeds per sale, up to a maximum of $40.2 million.

“The structure of the deal provides immediate cash to Karora to further invest in increasing our gold production, cost reduction initiatives and aggressively explore our numerous high-quality exploration targets at our Beta Hunt and Higginsville operations,” chief executive Paul Andre Huet said in the statement.

Karora will receive $10.7 million, consisting of $7.4 million from Waterton for its interest and a $3.3 million refund of Karora’s share of the cash held within the Dumont joint venture.

Waterton will become the operator and manager of the Dumont project upon closing of the deal, which is expected before the end of July.

Dumont is a shovel-ready and permitted nickel-cobalt-PGM development project.

Once in production, it is expected to produce an average of 39,000 tonnes of nickel over a 30-year mine life at all-in sustaining cash costs of $3.8 per pound.

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