Denarius Metals has signed a definitive agreement to acquire a 50% stake in Rio Narcea Recursos (RNR) for a cash consideration of €25m ($27m).

RNR holds rights to exploit the past-producing Aguablanca nickel-copper mine in Monesterio, Extremadura, Spain. It is located about 88km from Denarius’ Lomero Project.

Under the deal terms, Denarius Metals’ wholly owned subsidiary, Alto Minerals, will acquire 50% of all of the issued and outstanding shares of RNR in an arm’s length transaction with the shareholders of RNR (RNR Shareholder Group).

Of the total consideration, Alto Minerals paid €2.5m to RNR Shareholder Group on signing the agreement.

The remaining amount will be paid by Alto in instalments of €5m on 31 March 2024 and about €5.8m at the end of June, September and December 2024.

The acquisition is subject to approval from the TSX Venture Exchange.

Furthermore, a joint venture (JV) agreement has been signed by Denarius, through Alto, with RNR Shareholder Group.

This agreement will see Alto operate the Aguablanca Project while RNR Shareholder Group will provide a credit line to RNR to fund the production restart.

Denarius Metals executive chairman and CEO Serafino Iacono said: “The acquisition gives us ownership in the only nickel deposit in Spain and one of the few in Europe. With our Zancudo Project in Colombia already on track to commence production in 2024, this acquisition gives us a second mine going into operation next year with Aguablanca set to resume production through underground mining in the next 12 months.

“The acquisition also accelerates our path to production from our flagship Lomero Project using excess capacity available in RNR’s 5,000 tonnes per day (“tpd”) processing plant.”

Located about 100km north of Seville within the Monesterio municipal boundary in the south of Badajoz Province, the Aguablanca mine started production in 2005 and operated until 2015 through an open-pit exploitation and on-site processing plant.

The Aguablanca Project’s underground mining plan has already been approved by the local mining authority.