Mirabela Nickel Ltd says a lift in the nickel price last week may explain a recent surge in its share price.
Mirabela shares were up 35 cents, or 38.89 per cent, at $1.25 on Monday after closing at 90 cents, up 5.26 per cent, on Friday.
The price of nickel for three month delivery on the London Metal Exchange (LME) jumped 15.8 per cent to $US13,500 per tonne on Friday while the settlement price was $US12,710 a tonne.
"This is material to the price of the company's securities," Mirabela said to the Australian stock exchange.
IG Markets research analyst Ben Potter said the higher nickel price on Friday was driven by end-of-year short covering and speculative buying ahead of fund rebalancing.
On Monday, three-month nickel futures fell to $US12,550 per tonne after China's top nickel miner Jinchuan Group said it would increase metals output this year.
Nickel was one of the worst performing commodities last year, sinking from more than $US33,000 a tonne in March to sub-$US9,000 in October due to lower demand from steel makers.
Mirabela said on Monday that it was making good progress in finalising its senior debt financing arrangements for its large Santa Rita project in Brazil.
"The company is aiming to secure appropriate financing commitments by the end of January."
