Some comments from Barry Fitzgerald Chinese consortium arrives...

Some comments from
Barry Fitzgerald

Chinese consortium arrives at Cassini
BHP made a splash at Diggers & Dealers with its plan to accelerate the swing by its Nickel West unit from supplier to the stainless steel marke, to the lead supplier of nickel sulphate to the battery metals market.

BHP wants to capture the 10-15% premium nickel sulphate commands in the battery materials market over nickel products in the stainless steel market. The plan to make the switch is a response to overwhelming demand coming down the pipeline for the battery revolution.

The demand wave has just picked up little Cassini (CZI), which went in to a trading halt earlier in the week pending details of a capital raising.
It is likely to confirm today a $4.2m raising at 6.1c a share for working capital purposes. But the bigger news is that about 75% of the placement has found its way in to the hands of a group of Chinese investors with a background in battery materials.

Cassini has that in spades, courtesy of its West Musgrave nickel-copper-cobalt joint venture in WA where OZ Minerals is on its way to earning a 70% interest, leaving Cassini with 30%.

Cassini is funded to the point of a development decision on a $730-$800 million mine development likely to produce up to 25,000tpa of nickel, 30,000tpa of copper, and 1,000tpa of cobalt from mid-2022 at robust cash costs of $US2-$US2.30/lb nickel (after by-product credits).

The entry on to the Cassini register by the Chinese investors (15% of post placement capital) has obvious strategic implications for the financing of its 30% share as the likely development of West Musgrave draws closer.

It is also another reminder that while western markets have gone weak at the knees at the moment on metal prices in general, the Chinese are looking further ahead to the tsunami of demand to come from the EV and renewable energy storage revolution. It’s all about securing future supply.