MMG Ltd. has agreed to sell its Avebury nickel mine in western Tasmania, currently on care and maintenance, to QCG Resources for A$40 million. QCG is a privately owned exploration and mining development company based in Perth, Western Australia.
Consideration for the transaction includes an A$1.75 million deposit, payable within 15 business days of signing; an A$33.25 million closing payment; A$2.5 million payable on production of the first 10,000 mt of nickel in concentrate; and A$2.5 million payable on production of the second 10,000 mt of nickel in concentrate.
The Avebury mine has been on care and maintenance since February 2009. MMG initiated an internal review and external expression of interest process for the asset in 2011. The company believes the QCG offer provides the best opportunity to re-start the mine. MMG expects completion of the sale within six months.
MMG Executive General Manager-Business Development Michael Nossal said, “We believe this offer represents the best outcome for both MMG and the Avebury asset. QCG is committed to a restart of the mine, and MMG is confident that if the sale is completed, it will reinvigorate the Zeehan area of Tasmania, by providing new jobs and economic benefit to the region.”