OZ Minerals to acquire West Musgrave Project partner Cassini Resources

OZ Minerals will acquire Australia-based precious metals developer and explorer Cassini Resources for AUD76 million ($52.41 million) in a move to take full ownership of the West Musgrave Project, a copper and nickel sulphide mine in Western Australia.

Currently, OZ Minerals has a 70% stake in the copper and nickel sulphide project, while Cassini Resources holds the remaining 30% stake.

Three existing nickel and copper sulphide deposits, which include the Nebo and Babel nickel-sulphide deposits (Nebo-Babel), and the Succoth copper deposit, make up the West Musgrave Project. In addition to that, the project has various other early-stage exploration targets such as Yappsu, Esagila, and One Tree Hill nickel-copper targets.

OZ Minerals earned its stake in the undeveloped copper nickel deposit by fulfilling certain conditions set in an agreement made in 2016 with Cassini Resources.

OZ Minerals to acquire West Musgrave Project partner Cassini Resources. Photo courtesy of Cassini Resources Limited.

The Adelaide-based mining company will acquire Cassini Resources through a scheme of arrangement by offering an implied value of AUD0.16 per share to the latter’s shareholders.

OZ Minerals believes that the deal will improve optionality about the optimal development approach, timing, and funding for the copper and nickel sulphide project.

As per a pre-feasibility study (PFS) released in February 2020, the West Musgrave asset, which is located in the Musgrave Province, has been shown to be a low cost, long life (26 years), copper-nickel open pit project with a low carbon footprint.

Andrew Cole – OZ Minerals Chief Executive said: “We appreciate the quality project Cassini introduced to OZ Minerals and we have valued their input in the project throughout the Further Scoping Study and Pre-Feasibility Study. This acquisition gives OZ Minerals 100% ownership of the project allowing flexibility regarding future funding and development options.

“This is a promising project with strong sustainability credentials both in terms of the copper and nickel to be mined being critical inputs for the renewable economy and also in relation to its low carbon footprint with some 80% of power generated through renewable sources including solar and wind.

“We are also pleased to welcome Cassini shareholders on to OZ Minerals’ register to continue to benefit from further progress at West Musgrave which complements our operations at Prominent Hill and Carrapateena in South Australia and the Carajás hub in Brazil.”

Cassini Resources has agreed to carry out an inter-conditional demerger of its other assets – Yarawindah Brook, an early-stage nickel-copper-cobalt project in Western Australia, and Mount Squires gold project, which is located near the West Musgrave Project. The two assets will be merged into a new company called Caspin Resources, which is planned to be listed on the Australian Securities Exchange (ASX).

Richard Bevan – Cassini Resources Chief Executive said: “In accepting the offer, Cassini shareholders are able to realise immediate value for their stake in the West Musgrave Project whilst retaining their exposure to the Project via the OZ Minerals shares that form part of the consideration.

“In addition, we are excited to be launching a new company, that intends to apply for listing on the ASX (subject to regulatory approvals), and in which Cassini shareholders will receive pro-rata shares. Caspin will focus on the highly prospective exploration projects at Yarawindah Brook and Mount Squires.”