I think your missing the point. Your focused on the operator as opposed to who Western Area sells the bulk of this nickel too. I can't remember when exactly - Dec 2009? But Western Areas secured an extended off-take agreement with BHP Billiton to sell an additional 2000 tonnes of nickel concentrate mined from Kagara's Lounge Lizard deposit.
So clearly BHP would have a strong interest in taking over the mine to eliminate a lof of margin. Now how would you feel as the operator if your customer was also the manufacturer and you are just the retailer in between.
Those agreements aren't lifetime and that's probably what Western Areas is worried about. Renegotiated fees every 2-3 years with someone who also buys the stuff.
If BHP make an offer then WA must match it or retain the right of first refusal. This scenario will work to Kagara's advanatge because I am sure BHP know what it's worth too. After all they buy it from WA after KZL mine it.
That doesn't exclude any other third party of course that might want a piece of the action.
KZL Price at posting:
44.5¢ Sentiment: Buy Disclosure: Held
