Anglo American is investing $24 million into Timmins mine developer Canada Nickel and its Crawford Project.
The arrangement will result in the British-listed international miner taking a 9.9 per cent stake in the Toronto company.
The deal also involves an off-take agreement where upon Anglo American can purchase up to 10 per cent of the recoveries of the nickel concentrate, iron and chromium contained in the magnetite concentrates and any related carbon credits from Canada Nickel’s flagship Crawford Nickel Project.
The agreement is expected to close Feb. 28.
Crawford is a proposed open-pit mine 40 kilometres north of the city. It’s considered a low-grade, high tonnage nickel play with a measured and indicated resource of 1.43-billion tonnes of nickel at 0.24 per cent.
There’s also some technical help coming.
Anglo American will receive ore samples of least 100 tonnes from Canada Nickel for testing, using technologies from Anglo’s FutureSmart Mining™ program, aimed at looking for ways to improve processing recoveries and reduce Crawford's energy and water consumption and overall emission footprint.
Canada Nickel regards Anglo’s investment as a “first step” in financing construction of Crawford, which has cleared a number of permitting milestone, appointed project equity advisors and will be appointing a debt finance advisor shortly.
“We are very pleased to welcome Anglo American, a leading global mining company, as a cornerstone investor in Canada Nickel,” said Canada Nickel CEO Mark Selby, in a news release.
“Today’s announcement is another key milestone as we advance Crawford towards production. Our team is looking forward to working with Anglo American to identify opportunities to apply their industry-leading mining innovation technology to add additional value to Crawford.”
Besides Crawford, Canada Nickel has expanded its base of nickel exploration properties over the last year through acquisition and earn-in agreements in picking up ground around Timmins, Cochrane, Iroquois Falls and Matachewan.