ABN 23
108 161 593
|
|
Ground×Floor, 8×Colin×Street
|
West Perth××WA××6005
|
|
Tel:×+61×8×9324×1177
|
Fax:×+61×8×9324×2171
|
Email:×info@mirabela.com.au
|
CAPEX
UPDATE FOR LARGER 4.6 MTPA SANTA RITA PROJECT
PERTH,
AUSTRALIA Following the recent (22 January) announcement
of the first mining reserve for the Santa Rita nickel project, Mirabela Nickel Limited (TSX: MNB, ASX: MBN) is pleased to
announce a capital expenditure (CAPEX) update for the project as follows
(all costs in US$ dollars unless otherwise stated):
US$ millions
|
Description
|
|
|
267
|
Updated Plant and Infrastructure for 4.6mtpa project
|
16
|
Additional
resource drilling
|
10
|
Additional
surface land right acquisitions
|
5
|
Additional
geotechnical drilling
|
24
|
8% contingency
|
|
|
$322m
|
Total CAPEX
|
The
new CAPEX of $322m represents a 22% increase from the previous July 2007
estimate of $263m and reflects a 15% increase in production capacity from 4.0
to 4.6 million tonnes per year and a doubling of the
Indicated resource size to 90mt grading 0.60% nickel. It is expected that
the project will remain on track for a mid 2009 start.
This
latest CAPEX estimate follows signed contracts with the lead providers of
construction services with work under these contracts already
underway. About 80% of the new CAPEX is based upon firm contracts
or final quotes and 10% has already been spent, primarily on drilling, long
lead-time items and site infrastructure including a bridge, access roads and
accommodation facilities. The CAPEX estimate is for drilling and
construction of the Santa Rita project and does not include working capital,
mining fleet, finance costs and other activities of the Company. The
capital cost of the mining fleet is incorporated in the mine operating cost as
previously announced.
The
Company currently has US$152m in cash reserves. A debt financing facility
for up to $260m was mandated to BNP Paribas and Credit Suisse in January,
2008. It is expected that the debt facility will be ready for drawdown in
mid 2008.
“Since
the original studies earlier this year, we have doubled the resource size and
increased the plant capacity from 4.0 to 4.6mtpa, so the 22% increase in
construction cost is a worthwhile investment, particularly as it includes the
additional cost of more drilling,” said Managing Director Nick
Poll. “The increase also includes allowances for additional land
acquisitions and some larger equipment, such as a tailings thickener, which
gives the project more flexibility to move to a larger footprint and higher
throughput rates at a later date. We are already considering a move to
increase nickel output from 18,500 to 25,000t a year,” he said.
“Appreciation
of the Brazilian Real has been a concern, but the new cost structure takes this
into account given the Company’s forward exchange contracts in
place,” said Mr Poll.
Advanced
negotiations are underway to sell the concentrate product to a smelter.
At the same time the Company is finalizing a scoping study to build a smelter
at Santa Rita and is expected to announce the results of this work shortly.
The
largest component of the CAPEX increase comes from a $16m allowance to cover an
additional 50,000m of drilling required to complete the drill out of the much
larger Santa Rita Resource. At the time of the previous CAPEX estimate,
the Santa Rita pit contained 46.4mt of Indicated Resource and now, as a result
of substantial strike and depth extensions, the Indicated Resource is 90mt and
growing.
An
allowance for additional land acquisitions totaling $10m has been made in
anticipation of the growing resource, a larger project footprint and a possible
smelter. An additional $5m will be required for geotechnical drilling on
a larger and deeper open-cut mine.
The
exchange rate used to prepare the CAPEX estimate has been adjusted from R$2.05
to R$2.00 to reflect an appreciating Brazilian Real against the US
dollar. The total Real exposure is about 84% of total CAPEX, or US$270m.
The Company has now put in place forward exchange contracts to convert the
entire $270m to Real at a weighted average exchange close to R$2.00.
Background
Mirabela Nickel is
listed on the Australian and Toronto
stock exchanges. With an in-pit Indicated Resource of 90mt at 0.60% Ni,
Santa Rita is the largest greenfields nickel sulphide discovery worldwide in the last 12 years and the
largest nickel sulphide deposit in Latin
America. Exploration is underway to determine underground
mining potential below 500m deep, as mineralization appears to continue well
below current drilling.
Construction
of a nickel sulphide concentrator commenced in
November 2007 and is progressing well. The plant is expected to produce 18,500t
a year of nickel in a sulphide concentrate from one
open-cut mine starting from mid 2009. At this rate of production the
project is expected to have a mine life of at least 18 years. Studies are
underway to increase nickel production to 25,000t a year.
Nick
Poll
Craig Burton
Managing
Director
Corporate Director
Contact
details
Australia
contact:
Toronto contact
(media):
Nick
Poll, Managing
Director
Eric
Tang, Porter Novelli
Telephone:
+61 8 9324
1177
Telephone: +1 (416)
422-7200
nickp@mirabela.com.au
eric.tang@porternovelli.com
www.mirabela.com.au
The
information in this report that relates to Exploration Results, Mineral
Resources or Ore
Reserves is based on information compiled by Nick Poll, who is a Member of The
Australasia Institute of Mining and Metallurgy. Nick
Poll is employed by Mirabela Nickel
Ltd. Nick Poll has sufficient
experience which is relevant to the style of mineralization and type of deposit
under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserve’.
Nick Poll consents to the inclusion
in the report of the matters based on his information in the form and context
in which it appears.
CautionRegarding
Forward Looking Statements: The forward-looking statements made in this
announcement are based on assumptions and judgments of management regarding
future events and results. Such forward-looking statements involve known and
unknown risks, uncertainties, and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any anticipated future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the actual market prices of nickel, the actual results of current exploration,
the actual results of future mining, processing and development activities,
changes in project parameters as plans continue to be evaluated, as well as
those factors disclosed in the Company’s filed documents. There can
be no assurance that the capital expenditures required t construct a mine and
related processing facilities at the Santa Rita Project will be as expected,
that the Company will successfully arrange a project finance facility or that
reserves and resources will be increased.
***
Issued by
Purple Communications
Level 3, 28
Kings Park Road, WEST PERTH WA 6005
Ph: 08 9485 1254 Fax: 08 6263
0455
purple@purplecom.com.au