Toledo Mining Corp: Berong Nickel Mine Production Reduced

Toledo Mining Corporation said Monday that for the quarter ended December 31, 2008, at the Berong Nickel Mine only 16,279 tonnes of ore was mined and hauled to the coast.

Production was reduced in response to the increasing stock levels, deteriorating markets and onset of the non-shipping window. From late October through to February inclusive, laterite ore shipments are difficult due to the irregularly rough sea conditions making loading unsafe.

In October, a total of 47,995 wet metric tonnes of nickel laterite ore was shipped to BHP Billiton in Australia at an average grade of 1.54% nickel (approximately 492 tonnes contained nickel on a dry basis) and 34.13% iron.

Approximately 297,000 tonnes of ore was stockpiled at the coast at the end of December awaiting shipment. Of the stockpiled ore, approximately 150,000 tonnes meets the BHP Billiton quality specifications, the remainder being lower in nickel and iron grade.

Production and shipping volumes for the full year 2008 was 476,850 tonnes (53,000 tonnes less than 2007).

Considering the extreme wet weather conditions during the first half of 2008 and the state of the Chinese laterite market throughout the year, operating performance has been good and has shown continuous improvement quarter on quarter.

The Chinese market for laterite ore declined further during the quarter and is expected to remain depressed well into 2009. This is an expected response to the continued depressed LME nickel prices. Anecdotal evidence suggests more than eight million tonnes of laterite ore is currently stockpiled at Chinese ports.

The markets for both the blast furnace process and the electric arc furnace process have been impacted with reports that over 90% of the production capacity have been shut down.

Imports into China for the last quarter are expected to be less than 1.5 million tonnes, a large portion of which is low grade nickel laterite (