Weda Bay terminates PSA with OM Group
Thursday, May 26 2005 - 12:38 AM WIB
Under the agreement Weda Bay would will advance to OMG an initial loan repayment of US$2.5 million on or before September 30, 2005. On completion of Project Finance, Weda Bay may elect to either pay OMG US$20 million or an Annual Payment equivalent to 1% of the net smelter revenue for 30 years of project life. The completion by Weda Bay of either option will result in the full and final repayment of the balance of the outstanding loan to OMG inclusive of accrued interest.
All other agreements between the Companies, including the PSA, will terminate as of the date the initial payment is made by Weda Bay. OMG and the Directors and officers of WDA have agreed to retain their shareholding in Weda Bay for a period of 18 months unless mutually agreed otherwise.
Michael Garvey, Chairman Weda Bay Board of Directors, states "This is an extremely positive development for Weda Bay Minerals as it allows the Company to aggressively advance the outstanding Halmahera nickel cobalt project toward a Bankable Feasibility Study and Project Finance. The Company can now negotiate with other interested parties the rights to production from the Company's project. The termination of all the agreements with OMG will allow the Company to partner substantial companies interested in investing in the nickel and cobalt industry. We are expecting very positive further developments in the coming months."
Weda Bay is an exploration and development company focused on nickel and cobalt laterite project on the island of Halmahera. The project resources are 155 million tonnes grading 1.45% Ni and 0.09% Co of measured and indicated resources plus 123 million tonnes grading 1.53% Ni and 0.08% Co of inferred resource. Resource estimates are at a cutoff grade of 1.0% Ni.
The Company is now working towards the commencement of a Bankable Feasibility Study on the project.(alex)