| | | June 28, 2004
MBMI Acquires Three Nickel Laterite Properties
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| | MBMI RESOURCES INC. (MBR-TSXV) "MBMI" and Olympic Mines & Development Corporation ("Olympic") have signed an agreement under which MBMI can earn a major interest in three nickel laterite properties in Palawan Philippines. The agreement enables MBMI to hold both directly and indirectly up to a 60% interest in the joint venture. The transaction is subject to compliance with Philippine law, and Exchange approval.
MBMI will focus on the potential for Direct Shipping Ore (DSO) nickel laterite material from these projects, a strategy the Company believes will allow it to generate cash flow with minimal capital cost. Two of the Olympic properties being acquired are contiguous to Sumitomo Metal Mining Co. Ltd's "Coral Bay" project which has been operating a successful direct shipping ore facility for many years.
Evaluation of historic drill results and geological data has enabled MBMI to identify primary drilling targets on these properties. The Joint Venture Agreement is structured to facilitate a cost effective exploration program and anticipate an accelerated development of these properties. Drilling and exploration conducted during the 1970's and 1980's by Olympic and its strategic affiliates had disclosed the following historic resource profiles which were calculated prior to National Instrument 43-101. These resource estimates may not conform to NI-43-101 parameters.
| PROJECT/LOCATION AND SIZE |
ESTIMATED RESOURCE |
| LIMONITE |
MIXED |
SAPROLITE |
REFRACTORY
CHROMITE |
| Bethlehem, Narra EPA47 |
15 million tons |
10 million tons |
2 million tons |
5 million tons |
| (3,402 hectares) |
1.5 % nickel |
1.7 -- 2.1 % nickel |
2.3 % nickel |
60 % Cr203 + |
|
0.15% cobalt |
|
|
Al 203 |
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|
|
|
|
| Rio Tuba, Bataraza |
15 million tons |
8 million tons |
2 million tons |
|
| EPA45 |
1.5 % nickel |
1.7 -- 2.1 % nickel |
2.3 % nickel |
|
| (1,782 hectares) |
0.10 % cobalt |
|
|
|
|
|
|
|
|
| Northern |
10 million tons |
|
2 million tons |
|
| Rio Tuba, Bataraza |
0.75 -- 1.5 % nickel |
|
2.3 % nickel |
|
| EPA44 |
|
|
|
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| (3720 hectares) |
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| TOTAL |
40 million tons
0.75%-1.5% nickel
0.10% cobalt |
18 million tons
1.7-2.1% nickel |
6 million tons
2.3% nickel |
5 million tons
60% Cr203+ Al 203 |
The agreement signed includes a term sheet and binding letter of intent which sets out some of the salient terms and conditions of a Joint Venture Agreement (JV) to be entered into by the parties with respect to the three Olympic nickel properties. MBMI can earn its interest in the joint venture by making a total of US$95,000 in property payments per property on a Phased basis and by financing exploration costs through to development status. Properties can be "dropped" at any time thus halting further payments per specific property. Should any or all properties reach production status, MBMI shall make a further $150,000 payment per property and issue up to a total of 2.5 million common shares. Project funding will require contributions by each equity participant based upon their respective pro-rata equity position. A finder's fee may be paid in connection with the transaction.
The acquisition of these projects is a result of the Company's long term presence in Palawan Philippines, its expertise in nickel laterites, and contacts with major nickel buyers in Asia. The Company had previously completed a prefeasibility study on its Celestial nickel project also located on Palawan. After lengthy discussions, the Company signed an agreement in principle in first quarter 2004 for the restructuring of the Mining Rights Agreement (MRA) pertaining to the Celestial property. The agreement in principle confirmed that the MRA was in good standing and contemplated that the parties would negotiate in good faith, a revised MRA. Management has worked diligently to complete this restructuring, however to date has been unable to finalize a revised agreement.
The Company intends to take advantage of the current lack of nickel supply in the market and positive long term outlook for the metal.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.
For further information, contact:
David G. Tafel - VP Corporate Development
Tel: 604-683-1991
Email: mbr@mbmiresources.com
Website: www.mbmiresources.com
The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections. |
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