Nickel 28 Capital Corp. said it is evaluating its options following a proposal to expand the Ramu nickel-cobalt operation in Papua New Guinea, a move that could significantly increase production capacity.
The Toronto-listed company said it had been advised by Ramu NiCo Management (MCC) Limited, the operator of the Ramu operation, that a development proposal has been lodged with Papua New Guinea’s Mineral Resources Authority under the Mining Act.
The proposed phase II expansion is expected to approximately double the operation’s production capacity at an estimated cost of $1.6 billion, subject to regulatory approvals and agreements with the government and other stakeholders.
Nickel 28 holds an indirect interest in the project through its wholly owned subsidiary, Ramu Nickel Limited, which is party to joint venture agreements with MCC, the majority partner, and other stakeholders.
Under these agreements, MCC is required to offer to purchase the interests of minority partners if it proceeds with a qualifying expansion proposal. Minority partners may either sell their stake, contribute to expansion costs proportionally, or accept dilution of their ownership interest based on a predefined formula.
The company said it is currently assessing the implications of the proposal and the options available under the joint venture framework.
“The proposed expansion represents a noteworthy development for Ramu,” President and Chief Executive Craig Lennon said, adding that the company would seek to maximise value for shareholders while working with MCC.
Nickel 28 holds an 8.56% joint venture interest in the Ramu operation, a long-life nickel and cobalt project that provides exposure to metals used in electric vehicles.
