Toledo Welcomes European Nickel
TOLEDO MINING CORPORATION PLC
Toledo Welcomes European Nickel
The Directors of Toledo Mining Corporation PLC ("Toledo" or the
"Company"), (AIM: TMC) are pleased to report that the boards of
Toledo and Atlas Consolidated Mining and Development Corporation
("Atlas") have formally waived their direct and indirect pre-emption
rights of first refusal with respect to the sale by Investika Ltd
(now named Natasa Mining Ltd) of its 18.7% interest in Berong Nickel
Corporation (BNC) to European Nickel PLC ("European Nickel") (AIM:
ENK) pursuant to the 29th September 2004 BNC Shareholders' Agreement
and Clause 14.9 of the 29 January 2005 BNC Venture Agreement.
European Nickel hopes to conclude the transaction within two business
days of 27 June, subject now only to Investika shareholder approval
of the transaction at a shareholder meeting to be held on that date.
This paves the way for European Nickel to own an overall 19.3%
interest in Toledo and an 18.7% direct interest in Berong Nickel
Corporation.
The entry of European Nickel is seen as positive and is warmly
welcomed by both Toledo and Atlas, and will enable Toledo to quickly
leverage off its large laterite resource base (approximately 375
million tonnes at an estimated grade of 1.3% nickel) and accelerate
the commercial development of one or more of the value added
processing options currently under study. European Nickel has leading
edge experience in heap leaching of laterite ores, whilst Toledo has
undertaken extensive metallurgical testing and studies on agitation
atmospheric leaching and high pressure acid leaching. Combined, these
cover all the acid leaching technologies currently available for
laterite nickel ores.
Recognising the potential contribution of European Nickel to the
commercial development of Toledo's nickel resource, European Nickel
has been invited to nominate two directors to the Toledo Board.
Notwithstanding this invitation and the large shareholding of
European Nickel, Toledo will continue to operate and function as an
independent company to ensure the interests of all shareholders are
maintained. Enhanced corporate governance, through the planned
addition of new independent directors, and an independent Chairman,
will also help considerably in this area. The current Chairman, Mr.
Chris Kyriakou will resign and leave the Board on the successful
conclusion of the transaction. The Board wishes to thank Mr. Kyriakou
for his invaluable contribution to the development of Toledo thus
far.
The Berong Nickel Corporation has been direct shipping laterite
nickel ore to Australia and China for the past 15 months. In 2007,
approximately 530,000 wet metric tonnes of laterite ore at an average
grade of 1.53% nickel were mined and shipped. In 2008, approximately
190,000 wet metric tonnes of similar nickel grades have been shipped
notwithstanding the very wet weather conditions during the first half
of the year. Considerable efforts are being exerted to maximize
production using the existing facilities already in place. Internal
estimates suggest up to 1 million wet metric tonnes can be mined and
hauled before the need to build the Dangla Road at which time
production and hauling capacity could more than double.
At the Ipilan Project, approximately 80,000 meters of drilling and
test pitting has been carried out over the last 2 years to establish
the geological resource. Internal estimates suggest mineralization of
over 100 million tonnes of laterite ore at an estimated grade of
around 1.25% nickel. Snowden Mining Industry Consultants is currently
preparing the JORC compliant report which should be ready for release
in the third quarter. Studies continue on the development of a
'Direct Shipping Operation' to complement the ore currently being
shipped out from Berong. The Ipilan Project is located on the east
coast of Palawan and will therefore benefit from year round shipping.
Strategically, the long term future of Toledo rests with value added
processing where laterite ore is processed on site. To this end,
considerable metallurgical test work has already been undertaken on
representative ore samples from both Berong and Ipilan. All test work
has been carried out in Perth by SGS-Lakefield Oretest under
controlled conditions. The test work results from heap leaching,
agitation atmospheric leaching, and high pressure acid leaching
("HPAL") (including combinations of all three) formed the basis of
the preliminary flow sheet designs and the 'order of magnitude'
capital and operating cost estimates undertaken by SNC- Lavlin
Australia for processing plants of 20,000 to 40,000 tonnes per year
nickel in mixed hydroxide product.
The results of the metallurgical test work have been excellent with
very high dissolution rates for both nickel and cobalt over short
periods of time. As expected, results vary by technology-
Heap Leaching: Ni and Co extraction greater than 75%
Agitation Leaching: Ni and Co extraction of greater than 85%
HPAL: Ni and Co extraction of greater than
95%
European Nickel is proceeding rapidly with the test program on Berong
ore at its test facility near Subic Bay in the Philippines. The
results from this program will enable the Company to make a decision
on which process route is to be adopted.
In addition to leaching, the Company is also assessing the electric
arc furnace process for treating laterite nickel ore in the
Philippines. The electric arc furnace process is relatively low cost
compared to the blast furnace process and can produce a higher grade
ferro-nickel product (nickel pig iron), which is better accepted by
the market place.
As previously reported, discussion and negotiations continue with
several Chinese companies who are very keen on entering into a Joint
Venture to develop a leach processing plant based on the large Ipilan
resource already defined. An MOU is expected to be finalised early in
the third quarter.
George Bujtor, CEO of Toledo commented, "Toledo sees value added
processing as the future of the company, with the direct shipping
business viewed as a valuable adjunct. Whilst we have already
undertaken considerable metallurgical test work on our own, the
incorporation of process knowledge and understanding by European
Nickel, subject to intellectual property rights, can only enhance the
impressive results we have already achieved. The interest in Toledo
shown by European Nickel is a compliment to the dedicated work
undertaken by the whole team. I welcome European Nickel as a major
shareholder of Toledo and look forward to working together on
advancing our projects"
3 June 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.
For further information contact:
Annie Richards, Toledo Mining Corporation plc +44 (0) 20
7514 1480
Hugh Oram, Nabarro Wells & Co. Limited +44 (0) 20
7634 4700
Charles Vivian, Pelham Public +44 (0) 20
Relations 7743 6670
Klara Kaczmarek, Pelham Public Relations +44 (0) 20
3159 4395
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