The assets include a 43.35% stake in Tati Nickel Mining Co., a 7.5% direct interest in BCL, and a 12.65% stake in Botswana RST (which in turn owns 85% of BCL).
As a result, LionOre will own 85% of Tati, with the government of Botswana continuing to hold the remaining 15%.
If the Botswanian government approves the transaction, it will take effect Jan. 1, 2002.
Tati Nickel operates two mines near Francistown: Selkirk, an underground operation, and Phoenix, an open pit. Ore from Selkirk is concentrated and then smelted on a toll basis at BCL’s plant at Selebi-Phikwe. Meanwhile, Phoenix ore is treated at the mine, then further upgraded and smelted at BCL, with nickel matte sent to third parties for refining.
In 2001, Tati produced 6,305 tonnes nickel and 2,157 tonnes copper, and an expansion is under way.
For its part, BCL mines and processes ore in Botswana to produce copper, nickel and some cobalt. Last year, the company produced 12,600 tonnes nickel and 14,900 tonnes copper in matte.
LionOre will finance the acquisition by a combination of debt and equity. RBC Capital Markets and Haywood Securities will privately place special warrants on a best-efforts basis.
Production from Tati and LionOre’s new Emily Ann nickel mine in Australia should boost the company’s annual nickel output to 35 million lbs. (15,890 tonnes) nickel metal, making it one of the world’s 10 largest nickel producers.
Also, LionOre reports success at its exploration-stage Waterloo nickel-platinum-group-metals deposit in Western Australia.
In its gold business, LionOre is building the Thunderbox mine in Australia, which is expected to produce 220,000 oz. gold next year at a cash cost of US$112 per oz. Ownership is divided 60-40 between LionOre and Australia’s Dalrymple Resources.
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