OXIANA has purchased a strategic stake in West Australian explorer AusQuest in the hope of finding a nickel project worth developing.

The mid-tier Melbourne miner produces copper, gold and zinc, but it has also expressed interest in nickel. It is examining an early-stage laterite project in WA it picked up through its acquisition of Agincourt Resources this year.

AusQuest recently began drilling some nickel prospects in the Pilbara region. Earlier this month, the Perth explorer found nickel sulphides in four of the first eight holes at its Bellary project. The assays are not expected for another three to five weeks.

On Friday AusQuest outed Oxiana as the mystery buyer of 5.4 million shares and 3.6 million options on Wednesday.

Oxiana spokeswoman Natalie Worley said her company purchased the stake because AusQuest’s founders had a good track record for discovering nickel.

“We’ve said we’re looking at nickel,” she said.

“By buying these shares, it’s the start of a relationship with them. In the future it could lead to a joint venture and we could do some kind of funding of their projects.”

Both companies were founded by former Rio Tinto employees. Oxiana’s exploration manager, Tony Manini, knew AusQuest managing director Graeme Drew from their time at Rio.

Mr Drew was involved with the discovery of the Honeymoon Well nickel deposit in WA – one of the largest undeveloped nickel sulphide deposits in the world – which is now owned by LionOre Mining.

AusQuest’s exploration record has been mixed. It signed joint venture deals with Rio on iron ore and diamond prospects but the mining giant withdrew from two following disappointing exploration results.

AusQuest had also signed a joint venture nickel exploration deal with Falconbridge over some of the same prospects in which Oxiana is interested. But Xstrata withdrew from the joint venture in October following its purchase of Falconbridge as part of a portfolio culling exercise.

AusQuest director Greg Hancock said his company’s current focus was its nickel and uranium projects rather than diamonds and iron ore following the earlier disappointments.

AusQuest shares closed 3.5c, or 16 per cent, higher at 26c on Friday.

Files information from smh.com.au