Saracen Planning to Restart Idled Norilsk Nickel Mines

Bloomberg reported that over the next year and a half, Saracen Mineral Holdings Ltd. (ASX:SAR) will be looking to restart Western Australia-based mines that it recently acquired from Norilsk Nickel (MCX:GMKN). Those include a nickel mine that was idled in 2008, as well as two idled gold mines and a processing facility.

As quoted in the market news:

Norilsk, the world’s biggest nickel producer, acquired the mines through the $6.4 billion takeover of LionOre Mining International Ltd. in 2007. It idled some mines in Australia on low prices and high production costs.

Saracen will pay A$20 million in cash and A$3 million when production resumes, or if the gold price in Australian dollar terms rises above A$1,550 an ounce. The company may also pay potential royalties of as much as A$17 million under the deal, it said in the statement.

The sale is expected to close in the first half and has a total aggregate value of as much as A$40 million, Norilsk said in a separate statement.

Click here to read the full Bloomberg report.