Cobalt One Energy, which is owned by Blackstone Minerals, has signed an agreement to acquire the Bucko Lake nickel mine in Manitoba, Canada, from CaNickel Mining for approximately C$80m ($59.1m).

The Bucko Lake Mine is a past-producing class 1 nickel sulfide mine located 2km outside the town of Wabowden in Manitoba.

The mine began production in 2009 and was operational until 2012.

Under the agreement, Cobalt One has an exclusive right and option for a one year period to purchase Bucko Lake mine project by making payments in tranches.

Cobalt One will initially make a cash payment of C$20m as well as C$10m in Blackstone shares upon closing of the deal.

The company will then make a second cash payment of C$10m 18 months after the closing of the transaction.

A third payment of C$15m will be made by Cobalt One when the Bucko Lake project is fully permitted.

Cobalt One will make the fourth cash payment of C$25m when the mine reaches commercial production.

CaNickel CEO Shirley Anthony said: "After every effort was made to restructure CaNickel's corporate debt with our creditor, it was determined that the most viable path forward for the ccompany was to sell the Bucko Lake Mine to a motivated buyer with a strong balance sheet that can advance the project.

“Their impressive board and highly experienced executive team have exhibited strong conviction in the technical merits of the Bucko Lake Mine, and we are confident they will have the resources to complete the purchase of the project in the coming year."

Cobalt One and Blackstone Minerals will take on all of CaNickel's responsibilities and liabilities pertaining to the project-related assets should the option be exercised and the deal completed in accordance with the terms of the asset purchase agreement, CaNickel said.