Pacific Nickel to sell Solomon Islands assets, exit Kolosori nickel project
Base metals company Pacific Nickel Mines has agreed to sell its Solomon Islands subsidiaries, including the Kolosori nickel project, to Green Rock for a nominal price of A$1, exiting the operation amid weak nickel market conditions.
Under a share sale and purchase agreement, Pacific Nickel’s unit Pacific Nickel International will sell 100% of Pacific Nickel Mines, which owns 80% of the Kolosori project and the Jejevo project. The remaining 20% of those assets are held by other shareholders who will retain their interests.
The sale is subject to several conditions, including shareholder and regulatory approvals, completion of a presale restructure, and execution of related agreements with financier Glencore International and contractors.
As part of the deal, Pacific Nickel has entered into a deed of release with Glencore, which financed the Kolosori project through a $22-million secured facility, later increased to $25-million. The release will discharge Pacific Nickel from any liabilities under the facility once the sale is completed.
The buyer will also pay Pacific Nickel a 1% royalty on nickel ore shipped from Kolosori, provided that monthly shipments exceed 170 000 t and benchmark prices on the Shanghai Metals Market average above $72/t.
Pacific Nickel said the decision followed a review of the Kolosori operation conducted with Glencore, which concluded that continuing operations was not viable given operational challenges and a weak nickel price outlook in the short to medium term.
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