QCG acquires MMG nickel mine

Chinese-backed MMG has sold its mothballed Tasmanian Avebury nickel mine to QCG Resources for $40 million.

The sale comes on the back of MMG heading up a consortium that acquired the Las Bambas copper project in Peru for $US5.85 billion ($6.223bn).

Privately owned exploration company QCG is headed by Goldfields identities Chris and Doug Daws.

Chairman Doug Daws said studies by the group showed the project was economic at current nickel prices.

“The diligence to which the care and maintenance program has been conducted means that mining could recommence within a short time frame once we are able to make necessary modifications to the milling circuit.”

QCG said it was in talks with a number of finance organisations both in Australia and internationally to source funds for the final payment.

The new owners of the Avebury nickel mine, in southwest Tasmania, said it had produced Australia’s highest-grade nickel concentrate and was capable of producing over 7000 tonnes of nickel in concentrate a year.

The deal will see a $1.75m ­deposit paid within 15 days of the signing of the agreement, a $33.25m closing payment and $2.5m payable on production of the first 10,000 tonnes of nickel in concentrate. There will also be $2.5m payable on production of the second 10,000 tonnes.

MMG executive general manager, business development, Michael Nossal, said QCG Resources was well placed to bring the Avebury operation back into production. “QCG is committed to a restart of the mine and MMG is confident that if the sale is completed it will reinvigorate the Zeehan area by providing new jobs and economic benefit to the region,” he said.