Aussie firm acquires Sulawesi nickel project

Australian mining firm Stonehenge Metals Limited announced Tuesday it had signed an acquisition agreement has been signed with Indonesian company PT. Global Titik Persada to acquire an 85% interest in the Mandiodo laterite nickel project located on the Southeast coast of Sulawesi.

Under the deal, the company will pay initial upfront cash payment of A$400,000 as a non-refundable option fee to secure project exclusivity and a 30-day due diligence period commencing 14 October 2007 during which time Stonehenge will undertake a full technical, commercial and legal review of the project opportunity.

According to the company, the project consists of two adjoining explorations licenses covering 3104 hectares. Extensive drilling during the 1990?s identified nickel laterite mineralisation over an area 4.2 km long by 1 km wide with an average thickness of 13 meters. The mineralised drill hole intersections had average grades of 1.3% nickel.

A review of the project by geological consultants has indicated that the deposit will require approximately 40 additional drill holes to validate the existing drill hole information and allow a JORC compliant resource to be calculated.

The company has an initial exploration target for the deposit of 40-60 Mt @ 1.2 to 1.4% nickel based on the grades, widths and extents of the existing drilling results described above.

The project is untested to the North and West and there is significant potential to expand the size of the deposit. In addition, a portion of the deposit has metallurgical characteristics potentially amenable to direct smelting and may be suitable for direct shipping to nickel smelters in Australia and Japan, the company said.

The drilling required to convert the existing mineralisation to a JORC compliant resource will commence as soon as shareholder approval is gained. In addition, further drilling will commence to expand the project and metallurgical samples will be collected to evaluate those area?s of the deposit suitable for direct smelting, it said. (alex)