Nickel Mines has agreed to acquire Bolt Metals’ 100% stake in the Cyclops nickel-cobalt project in located in Papua province, Indonesia.

Under the conditional share sale and purchase agreement, Bolt and its subsidiaries will receive cash payments in the aggregate amount of $6m in exchange for its 65% stake in the Cyclops project.

Nickel Mines will have an option to purchase a 45% stake in the Cyclops project from Bolt and its subsidiaries, by paying a total consideration of $750,000 and an additional consideration of $980,000 to underlying Cyclops project owners, if the shareholders of Bolt do not approve the transaction.

Bolt Metals president and CEO Ranjeet Sundher said: “We believe the opportunity to take the Company in a new direction with a strong balance sheet is the correct way to provide long term value for our shareholders.

“The transaction value is an approximate 375% premium to the Company’s current market capitalization, is overwhelmingly endorsed by management and directors and we anticipate it will also be strongly supported by our shareholders.”

Subject to Bolt shareholder approval of the transaction, Nickel Mines will purchase a 100% stake in the Cyclops project for $8.5m in cash.

Cyclops, which is a 5,000ha nickel-cobalt project, is estimated to contain significant near-surface nickel and cobalt mineralisation over 1205ha with drilling intersecting significant mineralisation in the limonite, transition and saprolite zones of the laterite profile.

The deal is subject to customary due diligence, regulatory and shareholder approval, as well as the successful extension of the production operation IUP mining permit for the Cyclops project.

Earlier this month, Nickel Mines has signed an agreement with Shanghai Decent Investment (Group) to purchase a 70% stake in the Oracle Nickel project in Indonesia in a deal worth $525m.