Mindoro Nickel Project – Philippines

The Mindoro project is also now proposed to be designed as a staged project, with experience gained during earlier stages being fed into later stages. This flexibility will significantly lower the financial and technical risks associated with the project.

Aglubang Mining Corp (AMC) and Alagag Mining Corp (AMI) have a minerals production sharing agreement (MPSA) with the government of the Philippines until the mid 2020s. AMC and AMI are owned by a consortium of Crew Minerals ASA (40%) and a group of associated Philippine partners (60%).

According to Philippine mining legislation at least 60% of an MPSA must be held by Philippine-controlled companies or individuals. Under a Financial Technical Assistance Agreement, however, 100% foreign ownership is allowed. Crew Minerals AS has an option to acquire the outstanding 60% in AMC and AMI from the Philippine holding corporations should the projects qualify for an FTAA.

Agreements have been signed with the resident indigenous tribes in the area (Mangyans), granting them a royalty of 2% based on net profits of the mining revenues.

Location and geology
The nickel project is located on the Island of Mindoro, approximately 200 kilometers south of Manila. The concession comprises a 9,720 hectare area straddling the border between the Provinces of Oriental and Occidental Mindoro about 30 kilometers from the coast.

The area is underlain by an extensive laterite mineralization as a result of the accumulation of nickel and cobalt in the tropical soil profile following intensive chemical weathering of the ultramafic source rocks.

Feasibility study
The project is well into its feasibility stage. We have completed the collection of a quantitative bulk sampling for metallurgical testing in Lakefield laboratories in Perth Australia, by intensive drilling of three representative areas. The bench-scale test work will define critical parameters of the leach processing for both limonite and saprolite ore-types.

Plans are being completed for a comprehensive in-fill drilling program in certain parts of the concession where rich saprolite is expected. Integrating the saprolite resource into the leach processing and the process flow means an increase in metal output by approximately 50%.

The Mindoro project is also now proposed to be designed as a staged project, with experience gained during earlier stages being fed into later stages. This flexibility will significantly lower the financial and technical risks associated with the project.

Overview of Operations

Work conducted
The Corporation has completed more than 1,200 drill holes and testpits to date, and conducted metallurgical test work as well as extensive environmental base-line studies. A computer-assisted resource model, based on more than 10,000 assay results, has been prepared and independently verified by Australian consultants IMC.

The incorporation of new analytical data and the update of the resource database has been completed and includes data from 243 new drill holes and test pits, of which 119 holes were targeting resource expansion in sub-areas adjacent to and outside of the current resource definition.

The Corporation has now completed the collection of a quantitative bulk sampling for metallurgical testing in Lakefield laboratories in Perth Australia, by intensive drilling of three representative areas. The test work will define critical parameters of the leach processing for both limonite and saprolite ore-types. Plans are being completed for a comprehensive in-fill drilling program in certain parts of the concession where rich saprolite is expected.

Mining and ore processing
The proposed mining method is surface mining or shallow open pit mining. After the topsoil has been removed, ore will be mined from horizontal benches and loaded into trucks for hauling to the beneficiation plant located at the coast. Management believes the operation will not require drilling and blasting and will only involve removal of the uppermost 5-15 m of the resource profile.

The preferred processing route for the production of nickel is based on high-pressure acid leaching (HPAL) of the limonite ore, and does not involve smelting. The solution from the autoclave stage, which contains dissolved Ni and Co, will be neutralized and treated to yield a mixed Ni-Co sulphide product, which can be sold to commercial Ni-smelters or, at a later stage, treated further in a local metals-refinery. Acid neutralization can utilize saprolite as a substitute for limestone, and significantly reduce the need for limestone shipping as well as adding further Ni.

The Corporation controls a local sulphide deposit on the Negros Island of the Philippines (See page 32) and sourcing the sulphur from this site will provide additional local employment and earnings opportunities, a fixed cost for sulphuric acid for use in the Mindoro project, and – through the heat generated by the acid plant and the use of steam turbines – all the power needed for the processing plant.

Protection of the environment
The Mangyans in the concession area utilize the natural forest environment for their traditional lifestyle. It is a goal of the environmental program to rehabilitate the forest, which has been exposed to erosion in the past, and to re-introduce the natural wildlife.

The concession area itself is drained from three small streams, which run in a generally north east direction, and divide it into a number of equally sized and nearly parallel sub-areas. This drainage pattern will allow a simple and efficient diversion of water from above the operation sites, and minimize the risk of flooding and other unwanted effects. There will be no dam construction in relation to stream diversions and the operation will have negligible effects on the natural drainage system.

Tailings can be deposited in natural depressions on land or in a deep marine environment. In both cases, the materials will have a composition close to that of the natural geological materials already there.

The project will have a full-time environmental monitoring task force to supervise its operations and support the improvement of the general environmental standards of the province.

The project is well into its feasibility stage. We have completed the collection of a quantitative bulk sampling for metallurgical testing. The bench-scale test work will define critical parameters of the leach processing for both limonite and saprolite ore-types.

Socio-economic and industrial development
The Mindoro Project may bring about major changes to Mindoro Island, which will have beneficial industrial and infrastructure implications for the province of Oriental Mindoro.

At the mine site, the most obvious changes will be improved road access, including bridges to and from the operations site, and the establishment of a reliable power grid. The processing facility and harbor will entail industrial development on a large scale and provide a large number of employment opportunities for local residents, including transport, construction work, stevedoring and housing development.

The project will also include a first-class technical training facility to facilitate specialized training and the full transfer of technology.