Weda Bay resumes drilling program at N. Maluku nickel-cobalt project

Canadian junior exploration firm Weda Bay Minerals Inc. announced on Monday it had resumed field activities at its nickel-cobalt project on the island of Halmahera in North Maluku. The company said it was aiming to increase the resource base at two of the main deposits, Santa Monica and Pintu.

?Further metallurgical testwork has also been commissioned focusing on atmospheric leaching of the project's extensive lower saprolite resources. The completion of both these programs will enable the definition of a clear path towards a Bankable Feasibility Study and onwards to mine development,? the company said in a statement.

The Weda Bay nickel cobalt resources rank in the top five largest undeveloped nickel laterite deposits in the world. The currently open-ended resource base consists of 215 million tonnes of 1.35% nickel and 0.11% cobalt and represents less than half the identified nickel cobalt laterites within the project area.

The drilling program, comprising 3,800 metres of diamond core drilling, is expected to significantly increase the resource base at the Santa Monica and Pintu deposits.

According to the company, the Pre-Feasibility Study indicates that given a production scenario of 60,000 tonnes per annum of nickel and 5,000 tonnes per annum cobalt in an intermediate product, the capital cost is estimated at US$902 million. The project has an Internal Rate of Return of 35% on a 60/40-debt equity basis at a nickel price of US$4.00/lb and cobalt price of US$10.00/lb. At these metal prices the average annual project earnings before taxes, interest and depreciation are in excess of US$300 million.

Weda Bay Minerals Inc through its subsidiary PT Weda Bay Nickel owns 90 percent of the project while state miner PT.Aneka Tambang holds the remaining 10 percent stake. (alex)