Release: Weda Bay Minerals project update
Wednesday, March 5 2003 - 01:19 AM WIB
New Scoping Study for Lower Capital Cost
Weda Bay Minerals Inc. is continuing to advance its Halmahera nickel and cobalt project in Indonesia. A recently completed scoping study by the Company indicates that an integrated plant using the pressure acid leach process in conjunction with atmospheric leaching and saprolite neutralization can produce 40,000 tons of nickel and 3,000 tons of cobalt per annum in a sulphide intermediate product. The capital cost for such a project would be approximately US$600 million. This scenario presents an opportunity for a lower capital cost facility than previously envisaged whilst still producing the quantities of nickel and cobalt required for a financially robust project. The Company plans to further study this lower capital cost alternative.
Indonesian Government Support For The Weda Bay Minerals Project
The Company has always placed importance on maintaining Central and Local Government contacts in Indonesia. Through open communication and consistent achievements Weda Bay Minerals has developed strong relationships at all levels of Government. The Government continues to support the company and considers the Halmahera nickel and cobalt development to be a project of merit and importance. A consequence of the good relationships has recently resulted in outcomes of benefit to the company.
The Government has agreed to extend the Contract of Work timeframe within which the company is obligated to complete its exploration, feasibility and development activities. The Contract of Work remains valid and binding on both parties but as a result of the extension Weda Bay Minerals is able to reschedule its obligations to progress the project.
The Company is also in discussions with Government on how to address the situation that has developed with respect to open pit mining in areas of forest reserve. Weda Bay Minerals is one of two companies that has been given priority and it expects to be able to make an announcement of resolution in the near future.
Product Sales Agreement
With the support of Aneka Tambang (the Indonesian, partly state owned, mining company), the payment terms for nickel, to be supplied by Weda Bay Minerals Inc to OM Group Inc under its Product Supply Agreement have been enhanced to the benefit of the Company. This will increase the financial robustness of the project when in full production. (*)
Weda Bay Minerals Inc.; John E. Lynch, President and Chief Executive Officer.