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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Toledo Copper | LSE:TCU | London | Ordinary Share | GB00B00K3B10 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.00 | - |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:3476B Toledo Copper Corporation PLC 29 July 2004 TOLEDO COPPER CORPORATION PLC ACQUISITION OF NICKEL PROJECTS IN PHILIPPINES AND NOTICE OF EXTRAORDINARY GENERAL MEETING London 29 July 2004 Toledo Copper Corporation PLC (AIM : TCU) announces that it has reached agreement to acquire an interest in two large nickel laterites located on the Island of Palawan in the Philippines. The first property, the Berong Nickel Project, is being developed initially for a direct shipping operation to ferro-nickel smelters in Japan while feasibility studies are conducted into a later, on-site large scale operation utilizing acid leaching or smelting. A pre-feasibility study into the direct shipping operation was completed by mining engineer Rescan Engineering Ltd (now Hatch Associates Limited, Vancouver). Acid leach metallurgical test work has been conducted on the second property, the Celestial Nickel Project, and a pre-feasibility study conducted by international engineering group H.A. Symons Ltd (now Amec) has demonstrated economic viability, subject to more detailed work being carried out for a bankable feasibility study. Internationally, the Philippines has a very competitive edge for the supply of nickel, being located close to the major markets and having a low cost structure. Historically, the Philippines has a long, well established mining history. The Directors believe these acquisitions will complement the Company's previously announced option to acquire a 40% interest in the Toledo copper mine and its agreement to provide management services for that project. Information on the Berong Nickel Project The Berong Nickel property comprises four nickel laterite deposits (Berong, Moorsom, Long Point and Tagkawayan) having an aggregate area of 10,659 ha. These are located adjacent to the coast in mid western Palawan adjacent to the South China Sea. The Company will hold a 44% economic interest in the property. The remaining interests will be held by Australian Stock Exchange listed Investika Ltd (20%) and Philippines Stock Exchange listed Atlas Consolidated Mining and Development Corporation (36%). The nickel resources within the four deposits of the property, based on 2,069 test pits (spaced at 300m x 300m) have been calculated by independent geological consultants to be 275 million dmt @ 1.30% Ni and 0.074% Co. at a cut-off grade-of 0.90% Ni. The resource is one of the largest in the world; possibly the 4th largest based on contained nickel of 3.5 M tons (8 B lbs). Extensive testing of the property was carried out during the late 1960's and early 1970's, culminating in an independent bankable feasibility study by Parsons Juerden of San Francisco into the development of an ammonia leach plant producing 60 million lbs of nickel metal per year. The planned development was shelved in 1973 due to spiralling oil prices and a declining nickel price. A further 1,197 test pits were sunk in a selected area of 324 ha in Berong on a 50m and 25m spacing to establish the direct shipping ore content. An independent pre-feasibility study was carried out by Rescan of Canada into a direct shipping operation from Berong in 1996. As part of the 1996 pre-feasibility study of Rescan, John Nillson, an independent Canadian consultant, estimated the ore reserves within the selected area to be 2.105 million dmt @ 2.3% Ni. At a cut-off grade of 2.0% Ni, the estimated indicated resource within the selected area was estimated to be 4.2 million dmt @ 2.3% Ni. At a reduced cut-off of 1.8% Ni, the resource increases to 7.0 million dmt @ 2.1% Ni, a grade that is currently acceptable to the Japanese ferro-nickel producers. Initially the focus of the Company's activities will be the development of a direct shipping operation from the selected area at Berong. The first shipment is scheduled for March 2005. The 1996 Rescan pre-feasibility costs have been updated and the estimated funding requirement to positive cash flow is US$6 million. The operating cash break-even cost of the direct shipping operation is estimated to be $1.30/lb of payable nickel, or 35c/lb of contained nickel, which at 300,000 tpa, will be approximately 15 million lbs per year. It is expected payment will be 25% of the LME price, FOB basis, on the contained nickel. Negotiations for sales agreements are well advanced with Japanese ferro nickel smelters via Japanese trading companies. Once operations have commenced, it is the intention of the Company to expand production to 500,000 tpa at an appropriate date. The direct shipping project is planned to generate a significant cash flow. Part of this cash flow will be utilized to fund the Company's ongoing program of completing a bankable feasibility study into a subsequent large scale (+50 million lbs/year) operation, for which four development options have been identified. A direct shipping operation, similar to that planned by the Company, has been conducted in Palawan for the past 25 years at Rio Tuba, where the construction of a $200 million HPAL processing plant, by the Sumitomo consortia, is almost complete. The consideration for the Company's 44% economic interest in the Berong Nickel Project will be satisfied by the Company issuing 150 million fully paid ordinary shares to the vendors and the payment to them of US$400,000. The Company will also commit to advance by way of interest free loan, US$2million to the project to be utilized for exploration and development, such loan to be repaid out of project cash flow. In addition to the economic interest, the agreement provides that the Company will be engaged to provide management services for the Berong Nickel Project. Information on the Celestial Nickel Project The Celestial Nickel laterite property covers an area of 2,835 ha and is also located on Palawan Island in the Philippines. This property is well advanced and has substantial permitting already in place. The Company will initially hold a 52% economic interest in the property with the remaining interests held by Brooks Nickel Ventures Inc (Brooks, 24%) and Celestial Nickel Mining Exploration Corporation (Celestial, 24%). The Company will have the right to increase its economic interest to 71.2%. The property has been well explored, yielding a current resource estimate of 77 million tons of 1.25% Ni and 0.10% Co within an area of 800 ha. This is reported in a 1998 pre-feasibility study performed by HA Symons. Metallurgical test work was carried out by Sherritt International Consultants Inc. (now Dynatec) for suitability for a High Pressure Acid Leach (HPAL) plant, and a proposal was generated to use this technology to produce 40,000 tons of Ni metal per annum at a capital cost of US$ 840M (US$9.55/annual lb of capacity), with a projected operating cost of US$1.38/lb before cobalt credits. The H.A. Symons study is quite comprehensive, and recommends proceeding to the full feasibility study. Subsequent experience with HPAL in Australia has lead to wide scepticism as to its economic viability, notwithstanding that it has worked profitably in Cuba for decades. The process has since been refined by BHP Billiton, Sumitomo and others and now represents a credible alternative for bringing this property into profitable production. However, in the last two years several new technologies have been developed, including atmospheric heap leaching and elevated temperature vat leaching, which together with advancements made in the metal recovery and refining process, suggest that better alternatives to HPAL are now practical, offering, lower capital cost, lower operating cost and less down time. The previous operators of the property have already performed metallurgical tests on an atmospheric vat leach with modest success, achieving a recovery of about 65%. The Company believes that this method has excellent potential, and that an advanced form of this technology with better recovery potential is now available. It is proposed as part of the future program to conduct an evaluation of vat leaching and other alternative technologies. The property also contains indications of the presence of direct shipping ore which requires further investigation. The consideration for the Company's 52% economic interest in the Celestial Nickel Project will be satisfied by the Company issuing to the vendors 75 million fully paid ordinary shares, 75 million options over ordinary shares in the Company exercisable at 2.5p per share within two years and the reimbursement of costs incurred by them of US$100,000. The Company will also commit to advance US$2 million to the project to be utilized for exploration and development. In addition, the Company will pay Celestial US$200,000 per annum up until the time the Celestial Nickel Project commences commercial production. The Company also holds the option to increase its interest in the Celestial Nickel Project to 71.2% by acquiring shares from Brooks and Celestial on the payment of further monies. In addition to the economic interest, the agreement provides that the Company will be engaged to provide management services for the Celestial Nickel Project. Extraordinary general meeting In order to provide funding for these two acquisitions as well as general working capital, the Company will seek to raise additional equity capital. Accordingly, the directors have resolved to call an extraordinary general meeting, to be held on Tuesday 24 August 2004, whereat the directors will seek authority to allot ordinary shares on a non-pre-emptive basis to a maximum of nominal amount of approximately #1,500,000. To more fairly describe the activities of the Company following these two Nickel acquisitions, a resolution will be put to shareholders at the extraordinary general meeting to change the Company's name to Toledo Mining Corporation plc. Enquiries Chris Kyriakou Chairman Tel: 0870 010 6044 This information is provided by RNS The company news service from the London Stock Exchange END ACQEAEXNAAFLEEE
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