In a bid to break out of a depressed market for junior miners in general and nickel projects in particular, Royal Nickel Corp. is transforming itself into a gold and copper producer.
The Toronto-based company has spent years touting the potential of its Dumont nickel project in Quebec, but the steep decline in the price of the metal has deterred potential backers. As a result, Royal Nickel has yet to generate revenue and its share price has faded in line with the fortunes of its namesake product.
On Monday, it struck off in a new direction when it announced it was acquiring a stake in Salt Lake Mining, an Australian nickel and gold producer, as well as all of Vancouver-based VMS Ventures Inc., part-owner of a copper mine in Manitoba.
“Too many mining companies get focused on being in a certain metal or a certain geography,” Royal Nickel chief executive officer Mark Selby told analysts. “Our belief has always been that it’s all about cash flow.”
Still, the acquisitions mark a big shift for a company that has focused on nickel since it was founded in 2007. Royal Nickel emerged immediately after Canada’s two nickel giants, Inco and Falconbridge, were sold to foreign acquirers in 2006.
For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/royal-nickel-diversifies-with-gold-copper-acquisitions/article28488641/