BHP announce new investment on Gag Island nickel project
Press release from Broken Hill Proprietary (BHP) - Jul 12
Wednesday, July 12 2000 - 08:00 AM WIB
The Broken Hill Proprietary Company Ltd (BHP) today announced that it had reached agreement with Falconbridge Limited on the formation of a Joint Venture which may lead to development of the Gag nickel laterite project in Indonesia.
The basis of the agreement is that Falconbridge would spend US$75 million to earn a 37.5 per cent interest in the Gag Island nickel project. It is expected the investment would primarily be directed towards completing a Gag Island project feasibility study, to be managed by Falconbridge, over the next 2 years.
A number of substantial matters need to be resolved before the Joint Venture can become effective including:
? clarification of the commercial arrangements with P.T. Aneka Tambang;
? resolution of the forestry classification on Gag Island; and
? resolution of the scope of work for the proposed feasibility study.
Following completion of the Falconbridge earn-in, shareholders in the project would be BHP 37.5 per cent, Falconbridge 37.5 per cent and P.T. Aneka Tambang 25 per cent. Currently BHP holds a 75 per cent interest in the project and the remaining 25 per cent stake is held by P.T. Aneka Tambang.
The Gag Island nickel project is located in Republic of Indonesia. The current resource estimate which contains both oxide and silicate laterite zones is tabled below. At this stage there is no commitment to proceed with the project beyond the feasibility study.
Gag Island Project Mineral Resource Estimate
Resource Class Tonnage* (Mt dry) Nickel Grade Cobalt Grade
Measured 12 million 1.33% 0.09%
Indicated 93 million 1.46% 0.07%
Inferred 135 million 1.3% 0.09%
Total Resource 240 million 1.35% 0.08%
* - Totals have been rounded.
The Gag Island nickel project is consistent with BHP's strategy of adding material growth opportunities and further diversifying its minerals asset portfolio. The agreement with Falconbridge delivers on BHP's stated intention to seek an experienced nickel partner to assist in developing the project.
BHP is a global natural resources company with a regional steel focus. Its portfolio includes copper, iron ore, coal, diamonds, oil and gas, silver, lead, zinc and steel making assets. BHP is Australian based with significant operations in Australia, New Zealand, Indonesia, Canada, USA, UK, Chile, Papua New Guinea, Brazil, Peru, Malaysia, Thailand and China.
Falconbridge is one of the world's leading nickel companies. It is based in Canada and has operations in Canada, The Dominican Republic, Norway and Chile.
P.T. Aneka Tambang is a publicly listed Indonesian mining company with interests in nickel, gold and bauxite.
Other BHP News Releases can be found on out internet site at:
http://www.bhp.com.au/press/news.htm
Contact:
MEDIA RELATIONS INVESTOR RELATIONS
Harry Tumengkol Andrew Nairn
External Affairs Advisor Senior Business Analyst
PT BHP Indonesia Ph: 61 3 9609 3952
Ph : 021 5706281