Western Areas to Buy Kagara’s Lounge Lizard Deposit
Wall Street Journal
Western Areas is expected to announce Friday the acquisition of Kagara’s Lounge Lizard deposit for between A$60 million and A$80 million, a person familiar with the matter told Deal Journal Australia.
Associated Press A lounging lizard, also the name of the nickel mine to be bought by Western AreasLounge Lizard is adjacent to Western Areas’ 100% owned Flying Fox nickel mine.
Early Thursday, both companies entered trading halts pending the announcement of a corporate transaction. Hours later, Kagara was suspended from official quotation for failing to lodge either Half Year Reports and/or Accounts for the period ended Dec. 31.
Late last year, Kagara announced the appointment of Goldman Sachs as adviser with a view to finalize the sale process of its Forrestania nickel assets, including the nickel rights to Lounge Lizard by the first quarter of 2012.
On Oct. 13, Western Areas said it did not intend to participate in the sales process.
Currently, Western Areas manages all aspects of mine development, mining and processing of ore from Lounge Lizard. Concentrate produced from Lounge Lizard ore at the Forrestania nickel concentrate plant and is sold into Western Areas’ offtake contracts.
In May 2009, Western Areas and Kagara announced an agreement to mine and process around 50,000 tons a year of ore from Lounge Lizard. Kagara made a one-off payment to Western Areas A$20 million for access to Western Area’s Flying Fox mine infrastructure.
A spokesperson for Kagara did not immediately return a call for comment and a spokesperson for Western Areas declined to comment.
KZL Price at posting:
31.0¢ Sentiment: LT Buy Disclosure: Held
