Q3 FINANCIAL REPORT 2009
Q3 FINANCIAL REPORT 2009
HIGHLIGHTS Q3 2009
Mindoro Nickel development remains a top priority
Proved and Probable Reserves estimate for limonite from the subareas Lower Kisluyan and Buraboy (1/3 of the concession area) of 72.4 million tonnes of 0.9% nickel at 0.7% cog, representing a 96 % conversion rate from measured and indicated resources
Economic Resources from the same areas substantially increased to 161.7 million tonnes with 0.92% nickel at 0.7% cog
Feasibility study scope expanded to include saprolite reserves and processing. The expanded feasibility study is progressing on time on budget, and is scheduled for completion in February 2010
Environmental Compliance Certificate (ECC) issued on 14 October 2009, and temporarily suspended for 90 days on 18 November 2009. However, as of 27 November 2009, the Company has been informed that DENR Secretary Atienza temporarily revoked the ECC pending completion of a through and impartial investigation of the allegations filed by the anti-mining lobby
Expansion and infill drilling is ongoing in subareas Shabo and Upper Kisluyan to further increase the total resources
LME nickel prices rose to USD 8,03/lb on average for the third quarter, up from an average level of USD 5,31/lb recorded in the first half of 2009
Utmål claims granted for exclusive development of Hurdal Molybdenum
The company’s capital base continues to be strong
The company has no interest-bearing debt as of 30 September 2009
Available cash and cash equivalents amounted to USD 40.4 million as of 30 September 2009
Estimated remaining capital requirement for completion of the DFS/ECC for Mindoro Nickel is USD 2.5 million
Loss before taxes was USD 3.1 mill for the quarter (Q308: loss of USD 2 mill.), hereof USD 1.6 million in unrealised currency loss (Q308: unrealised currency gain of USD 2.8 million). The first nine months of 2009 shows a loss before taxes of USD 7 (9M08: loss of 8.4 mill.), hereof USD 2.2 million in unrealised currency loss (9M08: gain of USD 1.4 million).
During the third quarter of 2009, Intex Resources continued to advance the development of Mindoro Nickel in the Philippines, as planned. The project matured as significant measured and indicated resources, as well as limonite proved and probable reserves, were confirmed in two main areas of the concession at Lower Kisluyan and Buraboy. This was made possible by the extensive drilling programs conducted before and during the quarter.
Another important milestone was the issuance of the Environmental Compliance Certificate (ECC) in mid-October. Over the past two years beginning September 2007, the company has conducted extensive environmental baseline and social scanning studies in the island of Mindoro. The environmental baseline studies covered modules on freshwater biodiversity assessment, marine ecology assessment, health impact assessment, meteorology/air quality/noise assessment, soils survey and land-use studies, geology and geomorphology, hydrology and hydrogeology, and oceanography, among others. Complementing the environmental baseline studies were socio-economic and cultural heritage assessment studies as well as public consultations with stakeholders.
The issuance of the ECC caused groups that oppose the project to start a hunger strike on 17 November 2009. The Department of Environment and Natural Resources (DENR) then temporarily suspended the ECC for 90 days on 18 November 2009, with a request to supply documentation of specifically the public consultations held and if insufficient, to “comply with the provision of the law on such consultations”. Also, the company has been requested to look into the matter “whether or not the proposed project is within the portion of the watershed area”, as claimed by the parties, “to ascertain and verify this matter to satisfy the intensions of the law”. On 27 November, the Department of Environment and Natural Resources (DENR) issued a special order for the temporary revocation of the ECC issued. The special order directed the creation of an investigation team composed of independent experts chosen by local government and DENR as well as representatives from civil society organizations and indigenous peoples’ federations based in Mindoro.
The above issues have been dealt with extensively during the Environmental Impact Assessment (EIA) conducted over the last year and the company is currently preparing a submission of the requested information to the DENR office. The company is confident that the issues raised have been addressed during the EIA/EIS process and handled in an open and transparent way. The company acknowledges the opportunity for dialog with concerned parties and will continue to provide factual information about the project and its concerns and opportunities whenever needed. We are confident that the continuous dialogue with environmental authorities will ensure that all emerging issues will be handled responsibly and expeditiously.
Mindoro Nickel is estimated to provide 8,000 jobs during the construction phase of the mine, and 2,000 permanent jobs during operation. Mindoreños will have priority for employment, and the company is encouraged by the number of well qualified applicants that it has already added to its database. Emphasis now will be on mapping the training required in the interim in order to give as many local inhabitants a chance to prepare for a well paid secure job to the best of their abilities once the construction and operation periods occur. As always, the project will pay equal wages for equal work. Emphasis will also be on small/local business opportunities for service providers during the construction and operation phases of Mindoro Nickel.
The economic mineral resources at Mindoro Nickel continued to grow significantly in size during the quarter, with substantial measured and indicated (M&I) resources confirmed by independent consultant Dr. M A Audet, and Snowden, for both the limonite and saprolite mineralization at Lower Kisluyan and Buraboy. These two subareas cover approximately 1/3 of the 9,800 hectare license areas. The drilling program, which was accomplished using 16 drills, has provided almost complete 100-120 m grid sampling in both subareas.
The new work increased the measured and indicated resources of Mindoro Nickel by 75% from 92.4 million tonnes published in May 2009 to a total of 161.7 million tonnes with 0.92% Ni at a 0.7% cut off grade (cog). Ongoing mine studies by independent consultant Snowden have shown that a lower cog of 0.5% is economical at the long-term Ni price of 7.6 USD/lb, and the measured and indicated resources have therefore been calculated also to this cog, providing a new total laterite resources estimate of 198.9 million tonnes at 0.86% Ni, which is a 115% increase since May 2009. The contained nickel in this resource is estimated to 3.8 billion pounds of nickel (1,713,864 tonnes nickel).
The quality and size of the M&I resources in the saprolite layer of the deposit have encouraged the company to include saprolite reserves in Mindoro Nickel’s Definitive Feasibility Study. This allows for the most optimal development of the deposit. The extended study is expected at the end of February 2010.
The company recently released the first ore reserve estimation for the project, with 74.2 dry million tonnes (DMT) of proved and probable limonite ore reserves for the Lower Kisluyan and Buraboy subareas. This estimation was prepared by Snowden Mining Industry consultants Pty Ltd (Snowden) on the basis of a mine plan and financial factors for the project according to guidelines provided by the “Australasian code for reporting of Exploration Results, Mineral Resources and Ore Reserves”, Joint Ore Reserves Committee, December 2004” (JORC Code, 2004). Saprolite reserves will be released as available.
An extensive expansion and infill drilling program is ongoing at Upper Kisluyan and Shabo, and updated inferred resource will be released for these additional areas as soon as it is available.
The company’s capital base continues to be strong and the company has sufficient funds to complete the initial phase of the Mindoro Nickel project as well as other current obligations. The estimated remaining capital requirement (excl. admin. and overhead costs) for completion of the DFS and the Environmental Compliance Certificate (ECC) for Mindoro Nickel is approximately USD 2,5 million. The company has no interest bearing debt as of 30 September 2009. Available cash and cash equivalents amounted to USD 40.4 million as of 30 September 2009. In line with the settlement agreement with Crew Gold Corporation, Intex received the first instalment of USD 3 million in July.
Erlend Grimstad
President & CEO
Intex Resources ASA
For further information please contact:
Andrea Båsen, VP Corporate Development & IR
Phone: +47 23 11 33 40
Mobile: +47 412 39 704
Email: ab@intexresources.com
Intex Resources ASA
Munkedamsveien 45 A
0250 Oslo
Norway
NO 976 094 875 MVA
Phone: +47 23 11 33 44
Fax: +47 23 11 33 45
Mindoro Nickel development remains a top priority
Proved and Probable Reserves estimate for limonite from the subareas Lower Kisluyan and Buraboy (1/3 of the concession area) of 72.4 million tonnes of 0.9% nickel at 0.7% cog, representing a 96 % conversion rate from measured and indicated resources
Economic Resources from the same areas substantially increased to 161.7 million tonnes with 0.92% nickel at 0.7% cog
Feasibility study scope expanded to include saprolite reserves and processing. The expanded feasibility study is progressing on time on budget, and is scheduled for completion in February 2010
Environmental Compliance Certificate (ECC) issued on 14 October 2009, and temporarily suspended for 90 days on 18 November 2009. However, as of 27 November 2009, the Company has been informed that DENR Secretary Atienza temporarily revoked the ECC pending completion of a through and impartial investigation of the allegations filed by the anti-mining lobby
Expansion and infill drilling is ongoing in subareas Shabo and Upper Kisluyan to further increase the total resources
LME nickel prices rose to USD 8,03/lb on average for the third quarter, up from an average level of USD 5,31/lb recorded in the first half of 2009
Utmål claims granted for exclusive development of Hurdal Molybdenum
The company’s capital base continues to be strong
The company has no interest-bearing debt as of 30 September 2009
Available cash and cash equivalents amounted to USD 40.4 million as of 30 September 2009
Estimated remaining capital requirement for completion of the DFS/ECC for Mindoro Nickel is USD 2.5 million
Loss before taxes was USD 3.1 mill for the quarter (Q308: loss of USD 2 mill.), hereof USD 1.6 million in unrealised currency loss (Q308: unrealised currency gain of USD 2.8 million). The first nine months of 2009 shows a loss before taxes of USD 7 (9M08: loss of 8.4 mill.), hereof USD 2.2 million in unrealised currency loss (9M08: gain of USD 1.4 million).
During the third quarter of 2009, Intex Resources continued to advance the development of Mindoro Nickel in the Philippines, as planned. The project matured as significant measured and indicated resources, as well as limonite proved and probable reserves, were confirmed in two main areas of the concession at Lower Kisluyan and Buraboy. This was made possible by the extensive drilling programs conducted before and during the quarter.
Another important milestone was the issuance of the Environmental Compliance Certificate (ECC) in mid-October. Over the past two years beginning September 2007, the company has conducted extensive environmental baseline and social scanning studies in the island of Mindoro. The environmental baseline studies covered modules on freshwater biodiversity assessment, marine ecology assessment, health impact assessment, meteorology/air quality/noise assessment, soils survey and land-use studies, geology and geomorphology, hydrology and hydrogeology, and oceanography, among others. Complementing the environmental baseline studies were socio-economic and cultural heritage assessment studies as well as public consultations with stakeholders.
The issuance of the ECC caused groups that oppose the project to start a hunger strike on 17 November 2009. The Department of Environment and Natural Resources (DENR) then temporarily suspended the ECC for 90 days on 18 November 2009, with a request to supply documentation of specifically the public consultations held and if insufficient, to “comply with the provision of the law on such consultations”. Also, the company has been requested to look into the matter “whether or not the proposed project is within the portion of the watershed area”, as claimed by the parties, “to ascertain and verify this matter to satisfy the intensions of the law”. On 27 November, the Department of Environment and Natural Resources (DENR) issued a special order for the temporary revocation of the ECC issued. The special order directed the creation of an investigation team composed of independent experts chosen by local government and DENR as well as representatives from civil society organizations and indigenous peoples’ federations based in Mindoro.
The above issues have been dealt with extensively during the Environmental Impact Assessment (EIA) conducted over the last year and the company is currently preparing a submission of the requested information to the DENR office. The company is confident that the issues raised have been addressed during the EIA/EIS process and handled in an open and transparent way. The company acknowledges the opportunity for dialog with concerned parties and will continue to provide factual information about the project and its concerns and opportunities whenever needed. We are confident that the continuous dialogue with environmental authorities will ensure that all emerging issues will be handled responsibly and expeditiously.
Mindoro Nickel is estimated to provide 8,000 jobs during the construction phase of the mine, and 2,000 permanent jobs during operation. Mindoreños will have priority for employment, and the company is encouraged by the number of well qualified applicants that it has already added to its database. Emphasis now will be on mapping the training required in the interim in order to give as many local inhabitants a chance to prepare for a well paid secure job to the best of their abilities once the construction and operation periods occur. As always, the project will pay equal wages for equal work. Emphasis will also be on small/local business opportunities for service providers during the construction and operation phases of Mindoro Nickel.
The economic mineral resources at Mindoro Nickel continued to grow significantly in size during the quarter, with substantial measured and indicated (M&I) resources confirmed by independent consultant Dr. M A Audet, and Snowden, for both the limonite and saprolite mineralization at Lower Kisluyan and Buraboy. These two subareas cover approximately 1/3 of the 9,800 hectare license areas. The drilling program, which was accomplished using 16 drills, has provided almost complete 100-120 m grid sampling in both subareas.
The new work increased the measured and indicated resources of Mindoro Nickel by 75% from 92.4 million tonnes published in May 2009 to a total of 161.7 million tonnes with 0.92% Ni at a 0.7% cut off grade (cog). Ongoing mine studies by independent consultant Snowden have shown that a lower cog of 0.5% is economical at the long-term Ni price of 7.6 USD/lb, and the measured and indicated resources have therefore been calculated also to this cog, providing a new total laterite resources estimate of 198.9 million tonnes at 0.86% Ni, which is a 115% increase since May 2009. The contained nickel in this resource is estimated to 3.8 billion pounds of nickel (1,713,864 tonnes nickel).
The quality and size of the M&I resources in the saprolite layer of the deposit have encouraged the company to include saprolite reserves in Mindoro Nickel’s Definitive Feasibility Study. This allows for the most optimal development of the deposit. The extended study is expected at the end of February 2010.
The company recently released the first ore reserve estimation for the project, with 74.2 dry million tonnes (DMT) of proved and probable limonite ore reserves for the Lower Kisluyan and Buraboy subareas. This estimation was prepared by Snowden Mining Industry consultants Pty Ltd (Snowden) on the basis of a mine plan and financial factors for the project according to guidelines provided by the “Australasian code for reporting of Exploration Results, Mineral Resources and Ore Reserves”, Joint Ore Reserves Committee, December 2004” (JORC Code, 2004). Saprolite reserves will be released as available.
An extensive expansion and infill drilling program is ongoing at Upper Kisluyan and Shabo, and updated inferred resource will be released for these additional areas as soon as it is available.
The company’s capital base continues to be strong and the company has sufficient funds to complete the initial phase of the Mindoro Nickel project as well as other current obligations. The estimated remaining capital requirement (excl. admin. and overhead costs) for completion of the DFS and the Environmental Compliance Certificate (ECC) for Mindoro Nickel is approximately USD 2,5 million. The company has no interest bearing debt as of 30 September 2009. Available cash and cash equivalents amounted to USD 40.4 million as of 30 September 2009. In line with the settlement agreement with Crew Gold Corporation, Intex received the first instalment of USD 3 million in July.
Erlend Grimstad
President & CEO
Intex Resources ASA
For further information please contact:
Andrea Båsen, VP Corporate Development & IR
Phone: +47 23 11 33 40
Mobile: +47 412 39 704
Email: ab@intexresources.com
Intex Resources ASA
Munkedamsveien 45 A
0250 Oslo
Norway
NO 976 094 875 MVA
Phone: +47 23 11 33 44
Fax: +47 23 11 33 45
Documents
Interim report Q3 2009 (EN)Back to top
