Anglo Pacific Group has signed an agreement to acquire a 1% gross revenue royalty (GRR) interest over Brazilian Nickel's (BRN) Piauí nickel-cobalt project in north eastern Brazil.
The agreement is consistent with Anglo Pacific’s strategy to invest in development opportunities that complement its existing portfolio of assets.
Under the agreement, in order to acquire the GRR, Anglo Pacific will offer an initial payment of $2m to BRN. This will use the amount for the development of a Ni and Co pilot plant with a nameplate production capacity of 1,000t per annum of Ni.
Anglo Pacific has the right to earn additional GRR for a total of up to $70m, which is based on approval from its board and the achievement of certain development milestones.
Anglo Pacific Group CEO Julian Treger said: "The Piauí royalty reflects the company’s strategy of investing into earlier stage, high-growth potential royalties.
"Combined with our Maracás Menchen vanadium royalty, this investment also represents a continuing strategic pivot into metals which are exposed to the burgeoning electric vehicle story."
The project has measured resources of 52.9Mt at 1.03% Ni and 0.05% Co, in addition to indicated resources of 19.3Mt at 0.92% Ni and 0.05% Co at a 0.6% nickel cut-of-grade.
Treger further added: "The royalty will deliver further diversification for the company’s asset base and commodity exposure in a lower risk manner through the incremental structure of the investment, and has the potential to deliver very high returns once in production."