One for the Nickel fans from Bell Potter

Western Areas (WSA.AU) looks to have made a smart move in buying the Cosmos nickel mining complex from Glencore (GLEN.LN) for A$24.5 million, says Bell Potter. The broker says the deal metrics compare favorably with Independence Group's (IGO.AU) proposed takeover of Sirius Resources (SIR.AU) for A$1.8 billion. The Cosmos project includes a development option in the Odysseus deposit, which has a mineral resource of 7.3 million tons of ore at 2.4% nickel--equating to 174,000 tons of contained nickel. "On an enterprise value-to-resources basis the purchase price equates to A$0.06/lb nickel contained, which compares with the A$2.50/lb paid by Independence for Sirius's Nova deposit," analyst David Coates. Bell Potter rates Western Areas at buy, with a revised A$4.90/share price target. WSA last traded at A$3.70.