Talisman has reached a binding agreement with Xstrata Nickel Australasia Operations Pty Ltd., a subsidiary of Glencore, to acquire the Sinclair nickel project in Western Australia for $8 million plus a deferred $2 million payment contingent upon a recommencement of mine production. Sinclair, an advanced, high-quality nickel sulphide project, was placed on care and maintenance in August 2013.

The acquisition includes extensive, near-new infrastructure and a 300,000-metric-ton-per-year (mt/y) plant; 200-room accommodation village and associated facilities; an existing open-cut and underground mine; and 2-km sealed airstrip. The project will provide Talisman with a unique combination of immediate exploration potential that, with success, offers optionality to fast-track a return to production, subject to prevailing nickel prices.

“Sinclair is as close to the perfect acquisition as we could have hoped for,” said Talisman Chairman Alan Senior. “It has an existing known deposit extension, huge untapped regional exploration potential and established mine infrastructure with two emerging exploration discoveries immediately adjacent to the existing mine. It fits perfectly with our skills and capabilities as a company and positions us for a very exciting future.”

Talisman will assume all environmental liabilities and obligations associated with the Sinclair nickel project.

Talisman has agreed to grant Glencore the right to make an offer for off-take for the first 20,000 mt of contained nickel-in-concentrate produced from the Sinclair Nickel Project. Talisman may accept or reject this offer. Glencore has also been granted the right to match the best third party off-take offer should Talisman elect to seek alternative offers.