Signs MOU with Chinese Jiangxi Group
Toledo Signs MOU with Chinese Jiangxi Group for Nickel Leach Plant at
Ipilan/Celestial Project in the Philippines
9th July 2008
Toledo Mining Corporation plc ("Toledo" or the "Company", (AIM: TMC))
is pleased to announce the signing of a Memorandum of Understanding
(MOU) with Jiangxi Rare Earth & Rare Metals Tungsten Group Co. Ltd
("JXCT") on the development of a nickel-cobalt leaching plant at the
Ipilan/Celestial nickel laterite deposit on Palawan in the
Philippines.
George Bujtor, CEO of Toledo commented, "The MOU with JXCT on the
Ipilan/Celestial deposit is a very exciting development for Toledo as
it will transform the company into a mid-tier, vertically integrated
nickel producer. Furthermore, we have structured this transaction in
order to insulate Toledo from any construction and project risk in
return for a long term supply agreement.
Combined with heap leach development activities planned with European
Nickel at Berong, the future of the Company is most promising. The
direct shipping of laterite ore such as under the long term contract
with BHP Billiton will remain a valuable adjunct".
The details of the MOU are summarized as follows-
(i) The MOU was signed by Ipilan Nickel Corporation
("Ipilan") and JXCT. Ipilan is owned by Toledo (52% economic
interest), Celestial Nickel Mining Exploration Corporation
("Celestial") (24%) and Brookes Nickel Ventures, Inc ("Brookes")
(24%). Toledo has the right to increase its interest in Ipilan from
52% to 71.2% by exercising its option over 40% of the shares in both
Celestial and Brookes for a total consideration of US$13 million.
(ii) The MOU covers the building of a Joint Venture
atmospheric leach (AL) plant or high pressure acid leach (HPAL) plant
with a design capacity of 40,000 tonnes per year mixed nickel-cobalt
hydroxide product.
(iii) The entire mixed nickel-cobalt hydroxide product
would be sold to JXCT under a long term off-take arrangement, and
will reflect international market prices linked to the LME nickel and
cobalt price.
(iv) JXCT will fund the entire capital cost of the leach
plant and associated infrastructure in exchange for either an equity
interest in Ipilan or a guaranteed long term laterite ore supply
agreement. The JV leach plant will be owned by Ipilan (35% to 49%)
and JXCT (65% to 51%), with the final ownership percentages to be
agreed after completion of detailed negotiations.
(v) JXCT will fund the feasibility study as well as
arrange a qualified Chinese engineering company to manage the EPCM
contract.
(vi) In order to speed up the development program, JXCT
will immediately commence the construction of a pilot processing
plant in China with a capacity of 3,000 to 5,000 tonnes of
nickel-cobalt mixed hydroxide product. The plant is expected to be
completed by Q4, 2009, and will be solely supplied by laterite ore
from the Ipilan/Celestial mine. The pilot processing plant will
require up to 600,000 tpy laterite ore feed from Ipilan/Celestial and
will run for at least one year. TMC will be paid for the ore at
prevailing market rates linked to the LME nickel price at the time of
the sales.
(vii) Construction of the full scale leach plant is
expected to start in late 2010/early 2011, following completion of
the feasibility study, test work results and the establishment of the
plant parameters from the trial processing plant in China.
(viii) In addition to the leach processing plant, JXCT will
establish a separate company and construct a refinery in China to
process the mixed nickel-cobalt product from the leach plant and
produce approximately 40,000 tonnes nickel and associated cobalt
metal products. Ipilan will have an option to acquire an equity
interest of up to 25% in the Refinery
The Ipilan/Celestial deposit has been drilled and test pitted on a
grid spacing of essentially 25m x 25m. The nickel laterite
mineralization averages between 10 to 15 meters in thickness over an
area of less than 1000 ha. The maximum thickness of mineralization is
up to 55 meters. The mineralization is comprised of both limonite and
saprolite in approximately equal proportions, with saprolite being
higher in nickel grades.
For the areas tested, internal estimates suggest over 100 million wet
tonnes of mineralization with an average nickel grade of 1.2% to
1.3%. Theses grades are similar to that shown by historical records
based on widely spaced test pits. Snowdens Mining Industry
Consultants (Perth) are currently preparing a JORC compliant resource
estimate, which is expected to be released during the third quarter
of 2008.
George Bujtor, Chief Executive Officer of Toledo Mining, is a member
of the Australasian Institute of Mining and Metallurgy and is the
qualified person that has reviewed and approved the technical
information contained in this announcement.
Note to Editors:
Jiangxi Rare Earth & Rare Metals Tungsten Group Corporation ("JXTC"
or the "Company") is a large provincial state-owned company, under
the management of State-owned Assets Supervision & Administration
Commission (SASAC) of Jiangxi Province in China. JXTC is the largest
Tungsten and Rare Metals mining and processing company in the world,
with more than 7,000 employees. In 2007, the company had gross sales
of over USD 700 million (up 42% over 2006), gross profits of over USD
100 million (up 25% over 2006). With its experience, technology
development and research capabilities, JXTC has diversified its
businesses into base metal mining and processing, especially
lateritic nickel ore processing. Currently, JXTC is preparing an IPO
to take the Company public on the Shanghai Stock Exchange during the
first half of 2009 to raise approximately USD1.5 billion. The company
is targeting total revenue of USD 7 billion by 2012.
Enquiries:
For further information contact:
Annie Richards, Toledo Mining Corporation plc +44 (0) 20
7514 1480
Hugh Oram, Nabarro Wells & Co. Ltd +44 (0) 20
7634 4700
Charles Vivian, Pelham Public
Relations +44 (0) 20
7743 6670
Klara Kaczmarek, Pelham Public Relations +44 (0) 20
3159 4395
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