A pre-feasibility study for stage 1 of Intex Resources’ Mindoro Nickel Project indicates that it will be among the lowest capital cost facilities in the industry due to its location in the Philippines and favourable laterite ore processing properties.

The study, completed by Aker Kvaerner Australia and based on the planned stage 1 development, shows that capital costs are projected to be US$2050 million, which includes US$342 million in contingencies and more than US$100 million in preparatory installations for stage 2.

Operating costs are estimated to be US$3.60 per pound nickel before cobalt credits at the design capacity of 40,000 tonnes per annum. These costs are expected to decrease towards US$3.00 per pound nickel before cobalt credits when Stage 2 is implemented.

The capital costs are higher than previously indicated due to several factors, including contingency for higher nickel production, a weaker US dollar and dramatically increased costs of energy and equipment in 2007.

However, in comparison with other projects under advanced development, Mindoro Nickel stands out with remarkable margins. The project uses proven technology from existing facilities ensuring that the favourable results for Mindoro Nickel will see the project move to a bankable feasibility study and potentially establish a new benchmark for the industry.

The completed study addresses the planned stage 1 development of Mindoro Nickel only and is based on a two-autoclave High Pressure Acid Leach facility for limonite processing at a rate to make 40,000 tonnes per annum nickel.

Limonite resources for 12-15 years of production have been independently verified by Golder Associates in the Lower Kisluyan area, which constitutes about 20% of the licence area and additional 10 years limonite resources are being upgraded through drilling in the Buraboy subarea, adjacent to Lower Kisluyan.

Golder Associates have classified 56 million tonnes as indicated resources and 91 million tonnes as inferred resources at 0.90% and 0.87% nickel, and 0.07 and 0.08% cobalt, respectively.

Preliminary mine plans are based on sequential development of adjacent areas, each around 50 hectares. A mined out area will undergo rehabilitation and replanting while the adjacent area will undergo mining and a third block will be prepared for subsequent mining. This sequential mining schedule will minimize environmental impacts and reflects discussions with local communities. The projected production rate will involve mining about two area blocks per year. Remediation and replanting of mined areas takes place continuously.

The stage 1 processing study and resource definitions have focused primarily on limonite resources. Substantial additional saprolite resources with higher nickel grade are also present in the area. These resources are subject to detailed evaluation and will form the basis for the stage 2 development plans. A moderate additional capital cost is expected to provide significantly higher production to more than 75,000 tonnes per annum nickel. Saprolite resources will be mined simultaneously where warranted, and stockpiled during the mining of the limonite ore. Any mined out resource blocks therefore will be rehabilitated and re-vegetated without delays.

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