The world’s premier mining and mining investment website Canada`s HudBay to sell Guatemala`s Fenix nickel project to Russia`s Solway – BASE METALS | Mineweb
Canada’s HudBay to sell Guatemala’s Fenix nickel project to Russia’s Solway
HudBay’s $170 million cash sale of the eastern Guatemalan nickel operation to Russia’s Solway Group will help strengthen the Canadian miner’s balance sheet.
Author: Dorothy Kosich
Posted: Monday , 08 Aug 2011
RENO, NV –
HudBay Minerals said it has entered into an agreement to sell 100% of its 98.2%-owned Fenix ferro-nickel project in Guatemala to Russia’s Solway Group for US$140 million in cash at closing and $30 million during the course of Solway’s development of the project.
HudBay expects to record a non-cash charge related to its Fenix investment of $217.2 million in consolidated financial results.
The transaction is expected to close in the third quarter of this year.
“While we believe that Fenix is a robust project that warrants development, the project does not fit our strategy of focusing on VMS and porphyry deposits,” said David Garofalo, HudBay CEO. “We believe the sales proceeds will further strengthen our balance sheet as we develop our Lalor and Constancia projects.”
“We are also pleased to see the project in the hands of an experienced ferro-nickel operator, such as the Solway Group, which is committed to the development of Fenix,” he added.
Russia’s Solway Investment Group, which has its residence in Cyprus, plans to build a $3 billion nickel smelter in Indonesia, operates the Pobugsky Ferro-Nickel Plant in the Ukraine, and has invested in a number of gold, copper and polymetallic projects in Peru, Laos, and in Russia.
The Fenix Nickel Project is believed to have 41.4 million tons of mineral reserves and may yield 50 million pounds of nickel annually. The operation, which has been on care and maintenance since 1980 includes a brownfield nickel laterite mine and a process plant located in eastern Guatemala. The existing 25-million pound per year process plant will be upgraded to 50 million pounds.
Production over the 30-year project life is estimated to be 1.3 billion pounds of nickel.