Mindoro Resources announces that Agata Mining Ventures (AMVI) is modifying its high-iron/low nickel direct shipping ore (DSO) operations to include shipments of nickel laterite containing higher nickel content in order to maximize revenues at the Agata nickel laterite project in northern Mindanao.

AMVI, a joint venture company in which Mindoro holds a 40% interest and TVI Resource Development (Phils) (TVIRD) holds a 60% interest and is the operator, has also commenced an exploration program aimed at upgrading the previously defined nickel laterite resource and to identify additional resources at the project.

“We are fortunate that during these challenging times for the resource industry, the Agata project offers multiple near and longer term development opportunities,” says Mindoro’s CEO Penny Gould.

“Maximizing revenue during this start-up phase of operations is important and it makes sense to consider commercializing limited amounts of the higher-grade nickel saprolite, which lies directly beneath the high iron/low nickel limonite zone already being mined and shipped as DSO.

“While the amount of saprolite slated for shipping should not materially impact the planned processing operations, we are pleased to note the emerging potential to upgrade the nickel laterite resource, based on higher than expected nickel and iron grades and thicker saprolite intersections being encountered in the current in-fill and resource expansion drill program.”
AMVI’s original DSO operational plan at the nickel laterite project was to ship approximately 55,000 wet metric tonnes (wmt) of high-iron/low nickel DSO grading a minimum of 48% iron and

0.6% nickel approximately every three to four weeks upon commencement of operations. To date, two shipments have been completed and a third shipment is nearing completion. However, current market prices for nickel laterite containing 0.6% to 0.9% nickel and 49% iron have fallen to US$13 to US$15 per tonne from an average price of US$21 to US$23 per wmt in the earlier part of 2014 and all of 2013, which has impacted operating margins.

Meanwhile, Mindoro is also negotiating with TVI Resource Development (Phils) (TVIRD), the Philippines subsidiary of TVI Pacific, for a Can$400,000 bridge loan and Can$2 million convertible debenture.

Mindoro’s board of directors has approved the following key terms of the bridge loan:

• 8% per annum interest rate;
• Principal and accrued interest shall be due on the earlier of January 31, 2015 or upon receipt of the proceeds from a proposed $2 million convertible debenture issue to TVIRD;
• The bridge loan will be secured by the shares of stock of Mindoro’s Philippine subsidiary, MRL Nickel Phils.
• Mindoro has also undertaken negotiations to issue a Can$2 million convertible debenture to TVIRD on similar financial terms as the interim loan, except with a two year term and a conversion feature in accordance with the rules of the TSX Venture Exchange.

Mindoro has joint venture arrangements with TVIRD on the Agata and Pan de Azucar Projects in the Philippines. TVIRD is also owned by Prime Resources Holdings (68%) and TVI Pacific (31%) which also own 26% and 14%, respectively, of Mindoro's issued and outstanding shares.

“We are pleased with the support shown by our joint venture partner as we look to fill the financial gap between the start of direct shipping ore operations at our Agata project in the Philippines and the receipt of revenue to Mindoro from those operations,” says Penny Gould. “TVIRD has stepped up to offer financial support in the midst of very challenging market conditions for resource companies. Our objective is to finalize the bridge loan next week and the larger financing before the end of the year.”