CaNickel Mining has granted Cobalt One Energy an option to purchase CaNickel’s Bucko Lake nickel project for C$80 million ($59m). The mine is located about 110 km southwest of Thompson, Manitoba, near the town of Wabowden.

Although the Bucko Lake mine was in production, with outputs of nickel, copper, and cobalt, CaNickel ran into financial difficulties and was unable to refinance the project, said CEO Shirley Anthony. “We are pleased to have signed an option agreement with Cobalt One, which is owned by Blackstone Minerals … headquartered in Perth, Australia.”

CaNickel will make an initial payment of C$20 million in cash and C$10 million in Blackstone shares upon closing. A second cash payment of C$10 million is to be paid 18 months after closing, and a third payment of C$15 million is to be paid when the Bucko Lake project is fully permitted. A fourth cash payment of C$25 million is due when the mine reaches commercial production. Cobalt One and Blackstone also have the option to move up exercising the asset purchase within five days after notice.

The Bucko Lake mine operated from 2009 to 2012, and although operational challenges occurred, CaNickel is confident that there are no significant technical issues that stand in the way of restarting the mine.

Measured and indicated resources total 5.7 million tonnes grading 1.24% nickel (156 million contained lb.) and 0.11% copper (13.4 million contained lb.) The inferred resource is 10.6 million tonnes grading 1.18% nickel and 0.13% copper.