Page 22 - pd287-Oct20-mag-web_Neat

coVeR

Western Areas’

nickel bet set

to pay out

hen Western Areas Ltd announced its intention to stump up $25 million for the Cosmos
W nickel complex in October 2015, the market response was largely underwhelming.
Shares in the nickel miner didn’t spike immediately, and while they closed up 33% within two
weeks of the announcement, the purchase did little to fire the imagination.

Although Western Areas was a solid In 2020 though, with base metal peers the acquisition.
performer through its Forrestania nickel hunting for suitable projects to expand “At the time, nickel generally was on
operations, the Cosmos deal appeared shrinking reserve bases and projections the nose and Glencore wanted rid of
to be the wrong project, in the wrong for nickel demand at their rosiest in a the asset. Now, the overall view is that
metal at the wrong time. While the rem- generation, the acquisition is beginning we got a bargain,” Lougher explained to
nant ore in the Odysseus deposit was at- to look highly prescient. Paydirt. “There is a lot of nickel at Odys-
tractive, Glencore had walked away from Odysseus not only provides Western seus, a lot of underground development
Cosmos for a reason and it appeared Areas with a second production hub already in place and a lot of surface infra-
Western Areas was taking on a whole away from Forrestania, it has the depth structure we can use.”
new set of risks for a metal which was of reserves and mine life required to give Having completed a DFS in October
fundamentally restricted by the rise of the certainty to the new end-users circling 2018, Western Areas committed to Od-
Asian nickel pig iron (NPI) sector. BHP the world’s nickel suppliers. ysseus’ development in December of
Ltd was considering its exit options at Having announced the start of main that year. Unusually for Australian un-
Nickel West, Norilsk Nickel was walking decline development at Odysseus in derground operations, the company has
away from WA and other than the Fraser September, Western Areas managing chosen a shaft hoisting system to bring
Range story, nickel exploration had ef- director Dan Lougher reflected on the ore from Odysseus to surface.
fectively ground to a halt. journey the company set itself on with “The geometry and the size of the ore-

Page 22 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT