Western Areas NL (WSA.AU) said Thursday it has struck an offtake deal that will see BHP Billiton Ltd. (BHP) buy nickel concentrate from its Forrestania project and provide A$45 million in financing.

The pair have signed an agreement that will see BHP buy up to 10,000 metric tons of high grade blended nickel in concentrate a year from the Forrestania nickel concentrator.

As a part of the offtake deal, BHP will also provide A$45 million in financing to Western Areas, most of which will be used for early development of the Spotted Quoll deposit and the expansion of the processing plant.

Repayment of the loan from BHP will begin in July 2012 and is subordinated to Western Area's senior lender, the ANZ Banking Group Ltd. (ANZ.AU).

Western Areas Managing Director Julian Hanna said the deal offers significant benefits to the miner and the terms of the offtake agreement are an improvement on the existing agreement with Norilsk Nickel (NILSY).

-By Alex Wilson, Dow Jones Newswires; 61-3-9671-4313; alex.wilson@dowjones.com
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