Adelaide, Mar 8, 2007 AEST (ABN Newswire) - Australia's Rusina Mining Limited (ASX: RML)(LSE: RML) is set to become a nickel producer within months under a financing and mining contract announced yesterday for part of its lucrative Acoje project in the Philippines.
The deal will see 5 million tonnes of Acoje's surface nickel laterites mined over the next five years under a profit sharing, partnering contract signed with one of Manila's most prominent and growth oriented contractors and developers, the listed DMCI Holdings group (PSE code: DMC).
Rusina ("RMLA") will share 50:50 with DMCI in all net profits from the sale of the mined laterites at Acoje, a multi-layered mineral deposit hosting Chromite, Nickel and Platinum Group Metals (PGM).
The contract commits DMCI to be responsible for all funding, mining, grade control, rehabilitation, road and port development work, as well as the marketing and sales obligations, for the agreed 5 Mt ore parcel.
A trial shipment is due to be mined as soon as requisite permits are in place with a move to fulltime mining operations scheduled by the third quarter 2007 following completion of the Environmental Compliance Certificate.
The agreement does not require any capital injection by Rusina, generates its maiden cash flows from mining, and brings forward the Australian company's
previously announced nickel production timetable by at least 12 months.
It also overtakes the Company's former plans to later this year mine Acoje's remaining chromite resource which is currently under feasibility study as a quick, low cost cash flow operation while Rusina continues to expand and prove up the primary nickel targets.
"Acoje ferro-nickel will come onto the market at a time the commodity is commanding premium prices of around US$18-29 a tonne," Rusina's Managing Director, Mr Robert Gregory, said today.
"Significantly, the agreement generates cash flow for Rusina with zero investment from an ore body not even proven up 12 months ago, has not required sale of project equity nor shareholder dilution," Mr Gregory said.
"The upside ensures we can continue to explore Acoje's suite of mineral assets out of cash flow - particularly the potential of the deeper PGM mineralisation.
"We will continue current feasibility work on mining the chromite later this year with contracting arrangements already in place, ensuring Rusina enters 2008 with an exceptionally strong exploration, development and mining impetus."
Mr Gregory said DMCI had proven expertise in project start-up and cash flow generation and had long-term plans to develop a local pig iron plant, ensuring a sales opportunity for Acoje's high iron content nickel limonite.
Rusina last month announced a maiden nickel JORC resource of 33 million tonnes of nickel laterite grading 0.95% nickel and 0.07% cobalt for Acoje, located on Luzon Island.
The resource represents 315,000 tonnes of contained nickel and includes both Indicated and Inferred estimates - with more than half of the figure already in the Indicated category.
The JORC estimate is only for the upper shallow geological zone of Acoje's nickel mineralisation - its limonite resources - and does not include the higher grade, harder saprolite resource immediately beneath it.
On site, Rusina is currently undertaking a diamond drilling program into the saprolite to contribute to a resource update by May to include the saprolite zone and recently announced its pit deepening program with world class nickel saprolite intersections of 3.2m @ 2.94% Ni and 4.5m @ 2.71% Ni
About DMCI
DMCI, a highly successful civil and mining contractor in the Philippines, has just partnered with Hong Kong-based First Pacific Group to secure a major privatisation water supply contract in Manila.
The Company has been a pioneer in advanced property construction and real estate development and counts among its major projects the Tacloban Coca Cola plant, Bacnotan cement factory, world class hotels in Manila and Cebu, a Brunei palace and hospitals.
DMCI also manages the 3.5 Mtpa Semirara coal mine in the southern Philippines.
Terms of nickel mining contract
Under the terms of the mining contract announced today, DMCI will mine Acoje for 5 Mt of laterite ore or five years, whichever comes first, but can continue under mutual consent.
The contract only applies to Acoje's surface laterites but chromite will be mined under agreed mine plans between both parties. DMCI will not own any equity in Acoje itself.
Under the contract terms, any infrastructure developed on the property will revert to Rusina, and the contract is on a cost-plus, open-book basis.
Rusina retains the right to authorise all activities, particularly specific best practice clauses on environment and community responsibilities.
The two parties have also agreed first right of refusal terms on a non Acoje property where Rusina will be the exploration leader and DMCI will take a 60% interest to potentially service its long-term access needs to ferronickel as a feedstock for a pig iron smelter to be developed near its Semirara coal mine.
Contact
Kevin Skinner
Senior Consultant
FIELD PUBLIC RELATIONS
231 South Road
MILE END SA 5031
Tel: (08) 8234 9555
Fax: (08) 8234 9566
Mob: 0414 822 631
kevin@fieldpr.com.au
| ||
|
