Just as in Canada, the nickel industry in Australia is seeing the emergence of small and middle-tier producers growing through consolidation. In the latest move, Consolidated Minerals (CSM-A, CNM-L) has bid to take over junior producer Titan Resources (TIR-A) for A$29 million.
It is a small takeover in market terms but significant for Consmin in bringing a number of projects under a single corporate roof. Consolidated already owns 19.9% of Titan and is offering one Consmin share for 35 Titan shares, which effectively values Titan shares at A7.77. The offer is a premium of 34% to the closing price immediately before the offer.
Titan’s major assets are in the Widgiemooltha nickel camp of Western Australia, where it holds a 227 sq. km land package. Four of its projects have defined nickel resources, including two (Armstong and Munda) that are already equal joint ventures with Consmin.
Consmin has an operating mine at Beta Hunt in the Kambalda district, northwest of Widgiemooltha, and is developing another, East Alpha. The two projects will have an annual production capacity of about 10,000 tonnes of nickel, and expansions on the drawing board — which would probably require feed from the Titan projects — would bring Consmin’s annual nickel production capacity to 20,000 tonnes or more.
The deal has no minimum acceptance criterion and there has been no deadline date set for it.
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