Although logically, it sounds like the new arrangement is good for us, it looks anyway like WSA were forced into doing something about the offtake agreement :
"Nickel miner Western Areas is seeking to finalise a new offtake arrangement after announcing a major restructure of its old offtake agreement with Norilsk Nickel, which is closing its Australian mining operations.
Western Areas said today its revised Norilsk agreement would deliver greater flexibility, and soon after making that annoucnement requested a new trading halt "pending an announcement to be made by the company regarding offtake arrangements".
The changes come at a time when many nickel miners have either closed mines or scaled back production in response to the sharp fall in global nickel prices.
Hartleys resources analyst Andrew Muir said in a research note today that the revised agreement gives Western Areas (WSA) significantly more flexibility to achieve better terms for its concentrate, whilst initially keeping the base case of selling concentrate to Norilsk.
The changes to the agreement also enables the blending of more from WSA's Spotted Quoll and Flying Fox mines, giving significant flexibility on the feed for the concentrate plant,
"We understand that Norilsk was keen not to have to treat WSA ore at Norilsk's Lake Johnson plant, and was willing to trade this off by agreeing to reduce the amount of nickel purchased from WSA's Forrestania project," Mr Muir said.
"As WSA now has its Cosmic Boy concentrator, the Company is able to treat its own ore and does not need the Norilsk concentrator."
WSA Price at posting:
$4.00 Sentiment: LT Buy Disclosure: Held
