Royal Nickel aims to start building Quebec mine in 2016: CEO
By Susan Taylor
TORONTO (Reuters) - Royal Nickel Corp RNX.TO aims to start construction of a major new nickel mine in Quebec by early 2016 and complete financing of the $1.2 billion project by the end of 2015, Chief Executive Mark Selby said.
The company, which earlier this week appointed Swedbank Norway as adviser for a planned $600 million senior bond financing, received a key permit on Thursday to develop the mine, the Dumont nickel project.
Selby said the miner is interested in selling up to a 50 percent stake in the Dumont project and start the final stages of talks to raise an additional $300 million to $400 million in September.
The project could appeal to stainless steel companies, trading houses, private equity pension funds and mining companies, he said.
Dumont will rank as the world's fifth-largest nickel sulfide operation by annual output, producing 33,000 tonnes annually for the first five years and 54,000 tonnes per year thereafter. The mine is expected to produce nickel for more than 30 years.
Analysts at some major commodity banks have been slashing price forecasts for the stainless steel input this week, on fears of deteriorating demand. The metal, at $12,695 per tonne, is down about 14 percent from the start of January.
But building at the bottom of the cycle has its benefits, Selby said.
"I have my pick of engineering firms, I have my pick of equipment suppliers, lead times have disappeared and people will actually negotiate pricing even though I'm a little junior mining company," the former Inco executive said. Continued...