The Cosmos property also includes an area of 88 km2 in the Agnew Wiluna nickel belt. Substantial exploration opportunities remain largely untested, and Western Areas expects to initiate a 24-month exploration program once the acquisition is complete.

Perth-based Western Areas operates the Flying Fox and Spotted Quoll underground nickel mines and the Cosmic Boy concentrator at its Forrestania operations in southwest Western Australia. The company anticipates that the Forrestania operations will produce an average of 25,000 mt/y of nickel in concentrates over the next 10 years.

Regarding the Cosmos acquisition, Western Areas Managing Director Dan Lougher said, “The Cosmos nickel complex will complement our existing Forrestania nickel operations and is an excellent, prudent, and low-cost investment that is consistent with our brownfields acquisition strategy. Western Areas’ strong track record in exploration, successful project development, and low-cost operations is precisely what this project needs to prosper outside of the large corporate environment.”

Western Areas considers the Odysseus deposit to have significant potential to become its third operating nickel mine and plans to update and advance previous internal development studies. Additional resource modeling and drilling will be undertaken, as the company’s due diligence reviews have noted significant historic high-grade massive sulphide intersections grading more than 11% nickel.

The Odysseus deposit occurs at a depth of approximately 1,000 m, similar to the depth of Western Areas’ current Flying Fox operations. The company expects to be able to leverage the existing Cosmos decline, which is developed to a depth of 960 m, for Odysseus development. Development synergies also may be available with Western Area’s Forrestania operations, including possible marketing and nickel concentrate blending benefits.

Western Areas will acquire 100% of the Cosmos assets for a total cash consideration of A$24.5 million to be paid in three instalments: A$11.5 million upon transaction completion; A$7 million nine months following completion; and A$6 million 18 months following completion. Western Areas has granted off-take rights to Glencore for a maximum of 7,000 mt of nickel contained in concentrate produced per calendar year from the Cosmos tenements, with a total cap of 50,000 mt of nickel in concentrate.