Consolidation of Nickel Producers Begin, page-160

Are you suggesting that Wyloo would break the current OTCPA between BHP & MCR in favour of trucking/railing MCR's raw ore to the IGO/Wyloo JV's mooted Ni sulphate plant at Kwinana? That's highly unlikely imo because the ore would still need to be primary processed first (as feedstock for the sulphate plant) and they would never build the concentrator so far away from the mines. The transport costs alone would make it uneconomical -- not to mention costs associated with breaking the offtake agreement.

If AF wants the resultant Ni-bearing concentrate to feed his sulphate plant (in JV with IGO) he would need to build a concentrator in the Eastern Goldfields for MCR. The current OTCPA agreement has ~4yr, 3m remaining (i.e. 5 years after first ore delivery under the agreement) so it would be far more likely he would let the offtake run its course and plan to build his own capacity to coincide with expiry of that agreement. He may even have an eye on purchasing and relocating IGO's Nova plant, assuming that project is unable to extend its life, which seems to be the consensus, sans a surprise discovery.

In any case Wyloo's MCR deal now looks certain. Although it's opportunistic, MCR SHs should be very grateful the As ore rejection issue didn't come to light before Wyloo's bid. The bid price would have otherwise been materially lower (i.e. a bid premium applied to a materially lower SP).