Mindoro Resources has received positive results with significant iron and nickel upgrades from bench and larger scale thermal upgrading tests on laterite samples from the Agata Nickel Project. On the basis of the encouraging results Mindoro has started a scoping study to examine two scales of iron-nickel sinter production, to be completed by September 2011.1

The process of sintering and partial reduction involves heating lateritic material in a furnace in excess of 1000 degrees Celsius in the presence of a reductant such as coal. This has the effect of driving off all moisture, including water within the clay minerals, and also reducing oxygen content by reaction with coal. A reduced iron-nickel ‘sinter’ has no moisture, much improved blending properties and importantly, a dramatically reduced shipping cost, which results in added-value over direct shipping of unprocessed lateritic ores.

Mindoro’s president and CEO Jon Dugdale says, “We are very pleased with the results of the thermal upgrading testing program. This is a key milestone towards value-adding and enhancing the economics of a potential first stage of production. The completion of a scoping study with a positive economic assessment would precede a feasibility study into stage 1 production.”

Mindoro is pursuing an integrated two-stage development approach to the Agata project. Stage 1 was initially based on direct shipping of ore (DSO) only. Thermal upgrading has been identified as having the potential to significantly enhance the economics of stage 1 and mitigate the current market uncertainty for unprocessed DSO material.

The Agata laterite has a layer at the top of the profile termed the Ferruginous Laterite that is iron-rich but has lower nickel grades. Recent drilling at Agata South included thicker intersections of this material. Discussions with potential off-takers indicate this material is in demand as a DSO product for the Chinese steel-making market.

Mindoro is investigating the potential market for an upgraded iron-nickel sinter based on this near surface material that would otherwise be sub-grade ‘overburden’ for the stage 2 acid-leach processing operation.

The scoping study and preliminary economic analysis will examine two scales of the thermal upgrading project - one producing 120,000 tonnes of iron-nickel sinter annually and the second producing 600,000 tonnes of iron-nickel sinter. The study will examine capital and operating costs, supporting infrastructure and marketing the final product.

The scoping study will provide the necessary information upon which Mindoro can upgrade permitting and progress the stage 1 iron-nickel sinter project to feasibility.

The stage 2 pre-feasibility study is progressing well, based on the positive preliminary economic assessment released March 29, 2011 that described a 15 year project annually producing 18,000 tonnes of nickel in intermediate product at low operating costs of US$1.65 per nickel pound, with by-product credits, and a net present value at US$10/lb nickel price of US$390 million.