Stonehenge quits SE Sulawesi nickel project

Australian mining firm Stonehenge Metals Limited announced on Monday it had elected not to proceed with the intended acquisition of an 85% interest in the Mandiodo Nickel project in Southeast Sulawesi over competing permits within the concession.

?Whilst the company continues to believe that the Mandiodo Nickel project is potentially commercially attractive, issues of competing permits over the area comprising the Mandiodo exploration permits remain unresolved and in this environment of uncertainty Stonehenge believes that it is in the best interests of shareholders not to proceed with settlement of the acquisition at this time,? the company said in a statement.

The company reported in May 2008 that several companies are also holding exploration permits in some of the area comprising the Mandiodo exploration permits.

Stonehenge and the vendors have agreed to terminate the Heads of Agreement and will convert its investment to date into a 5% shareholding in the entity that seeks to control the Mandiodo project and also will receive a 5% shareholding in the entities that seek to control eight other highly prospective nickel leases (KPs) proximate to the Mandiodo Nickel project.

?This outcome provides Stonehenge with ongoing potential exposure to the Mandiodo Project and eight other highly prospective nickel leases whilst significantly reducing risk and eliminating any further financial commitments. The Directors are hopeful that the issue of competing permits over the area comprising the Mandiodo exploration permits will in time be resolved therefore allowing Stonehenge to potentially re-enter negotiations with the vendors,? it said.(denny)