Stonehenge updates Indonesian nickel project
Thursday, January 31 2008 - 03:01 AM WIB
Mandiodo Nickel Laterite Project, Sulawesi, Indonesia
On the 17th of October the company announced an agreement to acquire an 85% interest in the Mandiodo nickel project in Sulawesi, Indonesia. Subsequently on 10 December 2007, the company announced that it had completed its due diligence and would seek shareholder approval. On January 25th 2008, Shareholders approved the acquisition. The company is now proceeding to complete the acquisition. The following is a summary of the project:
Mandiodo Nickel Project Details
The Mandiodo nickel project consists of two adjoining explorations licenses (KPI8 and KP 19) covering 3104 hectares. Access is straight forward with daily air services to the regional city of Kendari, 65 km south of the project. Access to the project is via mainly sealed roads. The deposit is located on moderately sloping hills about the coastal town of Mandiodo. Access to the existing drill locations is via unsealed forestry roads and tracks. The area has been subject to extensively logging and is relatively well cleared.
Extensive drilling (approximately 400 holes) 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 metres. 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 (i.e. thickness, grade, distribution) and allow a JORC compliant resource to be calculated.
Consequently, 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. Note that the potential quantity and grade of the above exploration target is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain, if further exploration will result in the determination of a Mineral Resource.
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.
Process Timetable
In January shareholders approved the transaction and the company is currently completing legal agreements and forming the necessary corporate structures to operate in Indonesia. This process should be completed by mid March.
Drilling approvals have been received from the Sulawesi Regional Government and the drilling required to convert the existing mineralisation to a JORC compliant resource will commence in early February. Drilling is expected to take two months followed by a resource calculation scheduled for June.
In addition, further drilling will commence to expand the project and metallurgical samples will be collected to evaluate those areas of the deposit suitable for direct smelting.
Due Diligence
Stonehenge completed due diligence on the Mandiodo Nickel Project during the quarter. Technical due diligence has verified drill hole locations, original copies of the assay results and geological logs. In addition, Stonehenge has confirmed that PT Global has legal title to the project, local government approvals, mining permits and land access rights. Further the deposit is located on the coast on easily accessible terrain with local power, roads, telephony and shipping access.
Heads of Agreement
The Company executed a formal Heads of Agreement (HOA) during the quarter to replace the initial acquisition agreement dated 12 October 2007. Under the HOA, the company will acquire an 85% interest in the Mandiodo Nickel Project pursuant to a Mining Services Agreement whereby Stonehenge has the exclusive right to explore and mine the project. (End of edited excerpt)