Base metals company Pacific Nickel Mines has agreed to sell its Solomon Islands subsidiaries, including the Kolosori nickel project, to Green Rock for a nominal price of A$1, exiting the operation amid weak nickel market conditions.
Under a share sale and purchase agreement, Pacific Nickel’s unit Pacific Nickel International will sell 100% of Pacific Nickel Mines, which owns 80% of the Kolosori project and the Jejevo project. The remaining 20% of those assets are held by other shareholders who will retain their interests.
The sale is subject to several conditions, including shareholder and regulatory approvals, completion of a presale restructure, and execution of related agreements with financier Glencore International and contractors.
As part of the deal, Pacific Nickel has entered into a deed of release with Glencore, which financed the Kolosori project through a $22-million secured facility, later increased to $25-million. The release will discharge Pacific Nickel from any liabilities under the facility once the sale is completed.
The buyer will also pay Pacific Nickel a 1% royalty on nickel ore shipped from Kolosori, provided that monthly shipments exceed 170 000 t and benchmark prices on the Shanghai Metals Market average above $72/t.
Pacific Nickel said the decision followed a review of the Kolosori operation conducted with Glencore, which concluded that continuing operations was not viable given operational challenges and a weak nickel price outlook in the short to medium term.