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Re: News Release - Tuesday, July 22, 2008
Nanika Resources Molybdenum Project Update
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July 22, 2008: Nanika Resources Inc. (TSX-V: NKA and FSE: C7X) (the
"Company") or "Nanika") announces that work has been progressing
steadily with environmental baseline and engineering studies required
for the development of Nanika's Molybdenum Project located
approximately 85 kilometers southwest of Houston, British Columbia.
Korean Negotiations Update:
In addition to the technical update that follows below Nanika is
pleased to update on the status of negotiations with Korean partners
Palm Clean Energy Inc. and Daewon Chemical Co. Ltd. The signing of any
final Joint Venture Agreement (JVA) being negotiated will be subject to
the completion of due diligence and the approval of Nanika's board.
Nanika has now agreed to use its best efforts to conclude negotiations
before September 15, 2008. Any Memorandum of Understanding (MOU) signed
representing the key business terms of the formal JVA will be
non-binding and the previously signed Option Agreement entered into on
December 13, 2006 remains in force. That Option Agreement contained
terms that provided the parties would subsequently enter into a formal
joint venture agreement. Negotiations on the terms of the MOU and
formal JVA agreement continue and although moving slowly the
discussions are moving positively towards conclusion.
Engineering and Environmental Studies Update:
The following studies are either completed or are in progress:
BGC Engineering Inc. (BGC) completed prefeasibility evaluations and
geotechnical assessment of the proposed T6B - Tailings Storage Facility
and selected plantsite. They as well completed a program of terrain
mapping throughout the Project area.. The above assessments are
reported in the Prefeasibility Site Investigation Proposed Plant Site,
Terrain Inventory Mapping and Prefeasibility Site Investigation
Proposed Tailings Storage Facility.
G&T Metallurgical Services Ltd. (G&T) completed a detailed program of
metallurgical study, including a pilot mill test program, for the
purpose of developing a process flow sheet. The relevant data on the
metallurgical work has been compiled into a report entitled
"Metallurgical Assessment of the Lucky Ship Molybdenum Project".
SRK Consulting Engineers and Scientists (SRK) completed a scoping study
(first pass review) with the focus on determining the viability of
underground extraction and, if viable, how it might complement an open
pit mine.
ECOS Environmental Consulting Inc. (ECOS) has completed a draft Project
Description for the Project. The Project Description is the basis for
entry of the project into the British Columbia Environmental Assessment
(EA) process and is intended to also meet the requirements for entry
into any federal review process.
Lorax Environmental Services Ltd. (Lorax) continues to work on programs
pertaining to surface water and groundwater quality, sediment quality
and metal leaching/acid rock drainage (ML/ARD). Evaluations on
groundwater (hydrogeology) quality and flows within the mineralized
zone continue to be carried out through monitoring of existing wells.
During this past winter and spring an extensive groundwater drilling
program (Phase 3) was completed on the Project, in order to acquire
information pertinent to the groundwater regime located between the
deposit and the Nanika River. As well during this period, Lorax has
continued to work on the kinetic and static assessments (ML/ARD) of
lithological units.
Jacques Whitford AXYS Ltd. completed extensive aquatic biota, fish &
fish habitat and fish tissue assessment programs, designed to obtain
pertinent fisheries information for all of the watersheds associated
with the proposed mine site, plant site and Tailing Storage Facility.
Knight Piesold Ltd, ECOS and Golder Associates have continued to gather
baseline information relating to climate and surface water hydrology
for the Project area.
Dave Bustard and Associates has completed a detailed spring season
evaluation of the proposed Tailing Storage Facility - T6B area
fisheries. Results of these studies have not yet been reported to the
company.
Nanika Resources Inc. has held discussions and is awaiting a decision
from the Korean partners prior to continuing discussions with MQes -
Mine and Quarry Engineering Services, Inc of San Mateo, CA, in regards
to completing a preliminary feasibility study on a process plant and
ancillary facilities.
National Instrument 43-101 Technical Report Update:
The Company filed July 2, 2008 the National Instrument 43-101 report
that was news released on May 14, 2008. The Company commissioned A. C.
A. Howe International Limited of Toronto, Ontario to prepare a further
technical report regarding the Lucky Ship Molybdenum Project. This
report is dated May 1, 2008, as amended June 30, 2008 and is available
for viewing under Nanika's corporate profile on SEDAR (www.sedar.com).
Extract from Table 15-2 Howe Mineral Resource Estimate (pg. 51 Report
No. 919)
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Report Class Tonnes Mo%
Cut-Off (Million (Uncut)
tonnes)
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0.03%
Molybdenum INDICATED 65.66 0.064
(~ 92.6 million pounds
Molybdenum)
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0.03%
Molybdenum INFERRED 10.24 0.054 (~ 12.2 million
pounds Molybdenum)
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Molybdenum Market Update:
Nanika's consultant on the molybdenum market, Denis Battrum, MBA,
M.Sc., B. Sc., advises that the market for molybdenum can be fairly
described as strong and getting stronger -- financial results from the
United States notwithstanding. Molybdenum demand is 75-80 percent
related to steel ---- which is growing 5.6 to 5.8 percent a year, based
on the most recent statistics from the International Iron and Steel
Institute. Molybdenum is also supported by the catalyst business, which
is growing much faster than oil refining generally because of its
capability to reduce sulfur when used in catalysts. Catalyst producers
put the demand for molybdenum in their business as growing 8-11 percent
annually. The molybdenum market can be said to be growing in a range
between 5.6% and 11%. The spot price is rising at $35.40 US/lb at July
15, 2008 up from $35.25 US/lb. as at July 11, 2008 as quoted by Ryan's
Notes. It is reported that traders cannot find spot material for new
incremental demand because producers are largely sold out. Denis
Battrum advises further that there remains a supply question in South
America due to structural labour problems.
Qualified Persons
Bruce Graff, P. Eng., a qualified person under National Instrument
43-101, has been supervising Nanika Resources environmental and
engineering developmental studies for the Lucky Ship Project. He has
reviewed and approved the technical disclosure in this news release
regarding the studies. The extract from the report prepared by ACA Howe
International Ltd. has been reviewed and approved by Felix Lee. P. Eng.
a qualified person under National Instrument 43-101.
About Nanika Resources Inc.
Nanika Resources Inc. is a TSX Venture listed mineral exploration and
development company focusing on the development of its Molybdenum
Property in west central British Columbia and the advancement of its
other mineral exploration properties, all of which are located within
Canada.
On Behalf of the Board
"James. D Jacuta"
Chairman, President & CEO.
For further information contact:
Doug Kerr
Telephone: 604-638-0699
Toll Free 1-866-580-0699
Email: kerr@nanikaresources.com
Derek Huston
Telephone: 604-929-2337
Toll Free 1-800-665-4288
http://www.nanikaresources.com
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of the
information contained herein.
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Copyright (c) 2008 NANIKA RESOURCES INC. (NCV) All rights reserved.
For more information visit our website at
http://www.nanikaresources.com/ or send mailto:info@nanikaresources.com
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