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Samsung eyes nickel play
Samsung eyes nickel play

Shares in Metal X rose 11 per today after it announced that it had signed memorandum of understanding with Samsung to advance its $2.5 billion Wingellina laterite nickel project in the State's north-east.

At 12.40pm, Metal X was up .015 cents, or 11.1 per cent, to 15 cents after it announced Samsung, one of South Korea's biggest conglomerates, was to inject a much-needed boost of confidence into WA's frail base metals sector.

Owned by diversified mining house Metals X, the giant project has been languishing because of low metal prices and its isolated location on the intersection of the WA, Northern Territory and South Australian borders.
Wingellina contains a resource of 180 million tonnes grading one per cent nickel and 0.07 per cent cobalt.

But Metals X announced oday that had signed a non-binding memorandum of understanding with Samsung Construction & Technology to complete an updated definitive feasibility study of Wingellina with a view to the Korean giant then using its global reach to arrange funding for the mine's development.

Analysts have placed a $2.5 billion capital cost on turning Wingellina into a mine capable of producing 40,000 tonnes of nickel and 3000t of cobalt annually for 40 years.

It is understood that all funding options will be considered, as long as Metals X retains a free-carried stake of at least 30 per cent in Wingellina.

It is unclear whether Samsung harbours ambitions to take a major stake in Wingellina or will simply insist on being awarded the project's engineering, procurement and construction contract as part of its efforts to diversify out of Korea.

The company late last year confirmed reports out of Korea that Samsung was one of several international groups that had expressed an interest in Wingellina.

Metals X has completed most of the resource drilling required at Wingellina.

An updated DFS is likely to cost $12 million and take one year to complete, at the conclusion of which Metals X and Samsung intend to make a decision on the project go-ahead.

Metals X has long searched for a partner to help get Wingellina off the ground. An earlier plan for Chinese nickel giant Jinchuan to convert its 13.1 per cent stake in Metals X into a direct 20 per cent interest in Wingellina was thwarted by Chinese authorities late last year.

There are unconfirmed reports that China's National Development and Reform Commission, which signs off on major overseas investments, has responded to a number of disastrous high-profile investments in WA by banning any further resources deals in WA until the AnSteel-backed Karara magnetite project is up and running.