LONDON (AFX) - Gladstone Pacific Nickel Ltd reported a swing to profit in the year to end-June after a gain on the sale of Weda Bay Minerals Inc of 4.3 mln aud.

The company built up a stake in Weda Bay as part of a strategy to work together for mutual benefit and it said it sold the stake once it became clear that the Weda Bay management were not interested in progressing discussions.

Gladstone also announced today that has signed a binding Heads of Agreement that secures substantial long-term limonite nickel ore supply from New Caledonia.

GPNL has entered into the heads of agreement with Societe des Mines de la Tontouta ('SMT'), a company that owns nickel ore mines and numerous nickel ore tenements on the east coast of New Caledonia.

As well as its obligation to purchase set amounts of nickel ore per annum, Gladstone will participate in the development of a new mine to provide for a substantial increase in ore supply that will be required for the proposed high-pressure acid leach ('HPAL') plant.

SMT will hold 51 pct of the equity in the capital of a new company to be set up to operate the mine with GPNL providing all development costs and start-up costs through shareholder loans.

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