BHP Billiton has sold its West Musgrave nickel and copper project for $250,000.
West Australian-based Cassini Resources picked up the Nebo-Babel nickel-copper deposits as well as the Succoth copper play, located in WA near the South Australian border.
Cassini paid just $250,000 for the resources, but will hand over $10 million 12 months after production starts at the sites and a 2 per cent royalty on output.
The company said it is a natural owner of the project given its nearby tenure and its experience in operating in the region.
“Cassini intends to apply a new, innovative approach to the development of these assets with the goal of becoming a significant base metal producer in a relatively short timeframe,” the company said.
Cassini said its strategy will be to undertake resource definition to infill higher-grade zones in order to build a higher grade subset to the overall Nebo-Babel mineral resource.
It said it will focus on conducting metallurgical testing to ensure higher-grade ore is recoverable, complete JORC compliant mineral resource estimates at Succoth, and target further generation work across the project.
Cassini managing director, Richard Bevans, said getting its hands on the deposits was a win for the company.
“These are truly significant assets, and it is a great result for Cassini to have been successful in acquiring them.”
“As a smaller company, we can apply a different, innovative approach to these assets, focusing on higher grade opportunities, with the aim of progressing their development to production as a priority.”
It is expected more projects which do not meet the company’s standards, like West Musgrave, will also begin to be shifted as it focuses attention on iron ore, copper, petroleum and coking coal projects.
Former BC Iron chief executive and chairman of Cassini, Mike Young, said many companies could be in a position to take advantage of BHP’s asset sell-off plans.
“The divestment of assets by major companies has been the genesis of some of today’s most prominent, mid-capped, base metal companies,” Young said.
“We believe that history is repeating itself and that this acquisition is the start of a prominent new base metals company.”
BC Iron, of which Young was a founding MD, was developed on an asset which fell below the development threshold of the majors and is now an ASX200 company.
Young said it was possible to repeat the same success at Cassini.