Junior nickel and gold explorer St George Mining has entered into a binding agreement with diversified miner BHP Billiton’s Nickel West division, to acquire the Hawaii and Mt Alexander North nickel projects, in Western Australia.

The projects would sit alongside St George’s flagship East Laverton project.

Under the terms of the agreement, St George would acquire the new projects for A$40000, with Nickel West retaining offtake rights to any nickel produced from the acquired tenements.

Nickel West would also be entitled to a possible base royalty of 1% of the proceeds from any mineral production at the tenements, as well as a possible additional levy of 1% on the proceeds of any nickel produced from the tenements, if a minimum Joint Ore Reserves Committee-compliant resource of at least 25000t of contrained nickel was defined.

The additional royalty payment would start 12 months after the start of commercial production.

St George executive chairperson John Prineas said on Friday that the Hawaii and Mt Alexander North projects were underexplored, but located within an area that had an excellent history of major nickel sulphide discoveries.

“This acquisition is consistent with our strategy of identifying early-stage projects, like East Laverton, and creating substantial value through systematic and technically driven exploration.”

Prineas said St George would ramp-up exploration activity at these new projects while continuing its extensive exploration programme at East Laverton.

• [Editor:Juan]