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Nickel developer Mincor Resources is gearing up to start production at its Kambalda operations, in Western Australia, in May this year, after reaching an agreement with the Nickel West division of major BHP to update the terms of an ore tolling and offtake purchase agreement (OTCPA).

Under the amendments, future sales would be based in imputed nickel-in-concentrate production through the implementation of a grade-recovery curve applied to the  nickel ore delivered to BHP’s Kambalda nickel concentrator (NKC).

Mincor said on Friday that the ore delivered to the NCK by the end of May this year, will be converted to imputed concentrate production, resulting in first cash flow from concentrate sales being generated by Mincor in June this year.

“The recent amendments to the OTCPA agreed with BHP represents an elegant and sensible solution for the measurement of nickel concentrate within the Kambalda processing plant,” said Mincor MD David Southam.

“Mincor’s ore deliveries to the end of May 2022 will be converted into an imputed nickel-in-concentrate, using a grade-recovery curve, thereby meeting our commitment to shareholders of delivering first production in the June quarter. Importantly, this will result in cash flow from first concentrate sales in June.”

Looking forward, Southam said that Mincor would continue to ramp-up ore production during the commissioning phase, as the company looks to increase nickel concentrate production rates towards the end of the September quarter.

The Mincor in 2020 approved the A$68-million development of the Kambalda project, with the project forecast to produce 71 000 t of nickel and 5 000 t of copper over a five-year mine life.

The Kambalda operations consist of the Cassini and Northern operations, at the start, with the Miitel mine contributing at the back half of the project life. The flagship Cassini mine will contribute 56% of the total nickel-in-concentrate production over the initial life of the project.