Australian resources group Kagara has signed an agreement with Western Areas to mine its Lounge Lizard Nickel deposit in Australia by accessing ore from Western Areas’ Flying Fox mine.

The agreement brings together one of Australia’s largest high-grade nickel mines with a combined mineral resource of more than 2.5 million tones.

Under the agreement, Western Areas will receive capital costs for developing the Flying Fox decline and related mine infrastructure in stages along with another non-refundable A$20m.

Kagara will gain early nickel production from Lounge Lizard starting September 2009 at an initial production rate of 50,000tpa ore.

By staff writer