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Diversified miner Glencore has inked formal loan documentation and an amended sales agreement with ASX-listed Pacific Nickel Mines over a loan facility of up to $22-million to develop the Kolosori nickel project, in the Solomon Islands.

“Pacific Nickel Mines has now signed formal documentation with Glencore for a senior secured debt facility of up to $22-million for the Kolosori nickel project. The company has established a strong working relationship with Glencore who, by executing these documents, have confirmed their commitment to the development of the Kolosori nickel project,” said Pacific Nickel CEO Geoff Hiller.

“The company anticipates that it will be in a position to effect an initial drawdown of $3-million once the initial conditions precedent have been satisfied. This drawdown is expected to be imminent and will enable the company to materially advance the current development works.

“The balance of the facility is expected to be drawn down in due course to fund the ongoing development of the Kolosori nickel project. The company believes that capital payback will be achieved in under 12 months.”

The loan agreement would have a three-year repayment term, starting from the first shipment of nickel.

Under the six-year take-or-pay offtake agreement, all of the nickel produced at Kolosori will be taken up by Glencore, with the price received linked to an agreed 1.5% direct shipping ore nickel benchmarks.