Mindoro Resources has started drilling at the Agata nickel laterite prospect with five coring drill rigs in operation.

The objective is to define a NI 43-101 compliant resource, adequate initially for three to five years of production at a rate of 500,000 to 700,000 wet metric tones per annum of direct shipping-grade material for the very high demand ferro-nickel markets of China and SE Asia.

Preliminary marketing studies and environmental permitting have started. Target production date is the first half of 2008.

Mindoro president Tony Climie, says: "This is an important step in our company's growth. The very high demand for ferro-nickel feedstock for stainless steel production in our region, and high nickel prices, presents a great opportunity to get our Agata Project into production fast, and to generate early cash flow.

"Uniquely, direct shipping grade nickel laterite deposits offer a low-capital cost and rapid route to production and cash-flow."

The nickel laterite prospect is situated on the Agata Project, Surigao Gold District, northern Mindanao, Philippines. In addition to the nickel laterite mineralization, Agata has a cluster of porphyry copper-gold prospects and two epithermal gold prospects which are also being advanced by Mindoro.

There are several nickel laterite mines already in production in the Surigao District, providing direct shipping-grade ore to markets and processing plants in China, Japan, Korea and Australia. The geological extension of the Agata nickel laterite mineralization into an adjacent property, one kilometre south of Agata, recently went into production.