Karora will retain the right to receive a portion of future proceeds of any future Dumont sale or other monetisation event
Nickel spheres made by the Mond process. (Credit: René Rausch/Wikipedia)
Canadian multi-asset mineral resource company Karora Resources has agreed to sell its remaining 28% stake in the Dumont nickel project to two private funds advised by Waterton Global Resource Management for a total of up to $48m.
Located in the Canadian province of Québec, the Dumont project is one of the world’s largest undeveloped, permitted and shovel ready nickel sulphide deposits. It is said to contain the second largest nickel reserve in the world.
The Dumont deposit comprises nearly 6.1 billion pounds of nickel in the proven and probable reserve categories.
As per the terms of the agreement, Karora will retain the right to receive a portion of future proceeds of any future Dumont sale or other monetisation event. It will be entitled to receive a 15% of the net proceeds of a sale, up to a maximum of an additional $40.2m.
Upon completion of the deal by the end of July, Waterton will take up the operations and management of the project through the existing management structure.
Waterton will own the 100% stake of Magneto Investments
Karora chairman and CEO Paul Andre Huet said: “The sale of Karora’s remaining 28% stake in the Dumont project to Waterton is another clear demonstration of our focus on building a mid-tier, profitable gold company.
“The structure of the deal provides immediate cash to Karora of $10.7 million 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.”
The deal will be completed through the two private funds that are advised by Waterton and it will own the 100% stake of Magneto Investments.
The Dumont nickel project and all associated assets, permits and agreements have been held 100% by Magneto since its formation in 2017.
Karora said that the management team of the project will be fully transited to Magneto to ensure the continuity of technical expertise and stakeholder relations of the Dumont project.