Alliance Nickel Ltd (ASX: AXN) shares are on fire on Thursday.
In morning trade, the ASX mining stock is up a remarkable 83% to 5.5 cents.
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Why is this ASX mining stock rocketing?
Investors have been scrambling to get hold of the nickel and critical minerals development company's shares after it made a major announcement.
According to the release, the company has signed a non-binding term sheet with Samsung SDI for the future offtake of battery grade nickel and cobalt sulphate products from the NiWest Nickel-Cobalt Project in Western Australia.
Korea-based Samsung SDI is a world-leading battery and electronic material manufacturer aiming to redefine the worlds of electric vehicles, energy storage systems, and IT devices.
Subject to final negotiations of the definitive terms and conditions and satisfaction of customary conditions, it will enter into a binding offtake agreement with the ASX mining stock for an initial period of six years.
In addition, it was revealed that Samsung SDI and Alliance Nickel will discuss a potential acquisition by Samsung SDI of an equity interest in a project company to be formed by the latter that will hold the NiWest Project.
Management notes that this approach is consistent with its commercial strategy of aligning offtake agreements and project funding.
'Delighted'
The ASX mining stock's managing director and CEO, Paul Kopejtka, was delighted with the news. He said:
We are delighted to introduce Samsung SDI as a new potential long term strategic partner in the NiWest Project, particularly given the current challenging market conditions facing the critical minerals sector.
The term sheet is further validation of the credentials of the NiWest Project, its strategic significance to Tier-one automakers and battery manufacturers and the importance of the supply of specialty materials that comply with the US Inflation Reduction Act. Samsung SDI has an existing business relationship with our strategic partner and cornerstone investor Stellantis N.V. and we look forward to building a strong partnership as we move towards first production from NiWest.
