Wedoany.com Report-Nov. 5, Pacific Nickel Mines (PNM), through its subsidiary Pacific Nickel International (PNI), has agreed to sell 100% of its shares in the Kolosori nickel project in the Solomon Islands to Green Rock under a share sale and purchase agreement (SPA). The Kolosori project, located on Isabel Island, is a direct shipping ore nickel laterite operation and has been one of PNM’s key assets in the region.

PNM holds an 80% stake in PNMK, the owner and operator of the Kolosori nickel project.

PNM currently holds an 80% interest in Pacific Nickel Mines Kolosori (PNMK), the owner and operator of the Kolosori project, as well as Pacific Nickel Mines Varei, which holds the Lejevo project. As part of the transaction, GRP & Associates has agreed to guarantee Green Rock’s obligations under the SPA to ensure completion of the deal.

A significant aspect of the sale is the Glencore deed of release, signed with Glencore International, the project’s financier. This deed will release PNM from all liabilities related to the Glencore secured facility agreement, which currently stands at US$22 million (A$33.85 million), plus approximately US$8.6 million in accrued interest. The deed of release will become effective upon completion of the SPA and serves as a condition precedent to closing the transaction.

Glencore had initially provided a loan facility to support the development of the Kolosori nickel project, which was later increased to US$25 million as project requirements evolved. The conclusion of this agreement effectively resolves all financial obligations between PNM and Glencore regarding the project.

In addition to the sale, PNI has entered into a royalty agreement with Green Rock, granting PNM a 1% royalty on nickel ore shipments from the Kolosori project. This applies only if monthly shipments exceed 170,000 tonnes (t) and the benchmark nickel price on the Shanghai Metals Market averages above US$72/t.

PNM stated that the transaction will not result in any changes to its board composition or senior management. The company emphasized that the sale follows a comprehensive review of the Kolosori operation, undertaken in consultation with Glencore, after identifying operational challenges and a weaker short- to medium-term nickel price outlook.

Earlier this year, PNM announced the suspension of operations at the Kolosori site while reassessing the project’s long-term viability. Following this evaluation, the PNM board concluded that proceeding with the SPA and divesting the project represents the most prudent course of action to safeguard shareholder value and strengthen the company’s financial position.

The sale to Green Rock marks a strategic shift for Pacific Nickel Mines, allowing the company to reduce debt exposure, streamline operations, and reposition its portfolio amid fluctuating nickel market conditions. PNM reaffirmed its commitment to maintaining operational stability and exploring new growth opportunities within its existing resource portfolio.