Q4 FINANCIAL REPORT 2009
HIGHLIGHTS Q4 2009
The Mindoro Nickel project matures significantly
• The Definitive Feasibility Study (DFS) concludes that Mindoro Nickel can be a major, low cost producer close to the biggest markets for nickel for many decades. The study was released on 19 February 2010. The results indicate an IRR of 23.6 % and an NPV (10%) of USD 2.3 billion with a cash cost after credits of USD 0.56 per pound of nickel metal produced, based on a long term nickel price of USD 8.25/lb
• 126 million tonnes of Proved and Probable JORC2 compliant laterite ore reserves of 0.95% nickel and 0.06% cobalt, containing approximately 1.2 million tonnes of nickel (represents a 70% increase)
• Total ore resources of 315 million tonnes of 0.83% nickel and 0.06% cobalt, containing approximately 2.6 million tonnes of nickel (represents a 50% increase)
• An Environmental Compliance Certificate was issued on 14 October 2009, and in a letter dated 18 November the DENR notified the company that the ECC was suspended for 90 days
• Average nickel price of USD 7.95/lb for the fourth quarter
The company’s capital base continues to be strong
• The company has no interest-bearing debt as of 31 December 2009
• In December 2009, Intex received USD 7.35 million after it sold its Crew Gold Corporation (CGC) debt to a third party
• Available cash and cash equivalents amounted to USD 43.9 million as of 31 December 2009
• Loss before taxes was USD 4.95 mill for the quarter (Q408: profit of USD 3.4 mill.), hereof USD 0.1 million in net currency loss (Q408: net currency gain of USD 4 million). The year of 2009 shows a loss before taxes of USD 12 million (2008: loss of 5 mill.), hereof USD 2.2 million in currency loss (2008: gain of USD 5.4 million)
The Mindoro Nickel project matures significantly
• The Definitive Feasibility Study (DFS) concludes that Mindoro Nickel can be a major, low cost producer close to the biggest markets for nickel for many decades. The study was released on 19 February 2010. The results indicate an IRR of 23.6 % and an NPV (10%) of USD 2.3 billion with a cash cost after credits of USD 0.56 per pound of nickel metal produced, based on a long term nickel price of USD 8.25/lb
• 126 million tonnes of Proved and Probable JORC2 compliant laterite ore reserves of 0.95% nickel and 0.06% cobalt, containing approximately 1.2 million tonnes of nickel (represents a 70% increase)
• Total ore resources of 315 million tonnes of 0.83% nickel and 0.06% cobalt, containing approximately 2.6 million tonnes of nickel (represents a 50% increase)
• An Environmental Compliance Certificate was issued on 14 October 2009, and in a letter dated 18 November the DENR notified the company that the ECC was suspended for 90 days
• Average nickel price of USD 7.95/lb for the fourth quarter
The company’s capital base continues to be strong
• The company has no interest-bearing debt as of 31 December 2009
• In December 2009, Intex received USD 7.35 million after it sold its Crew Gold Corporation (CGC) debt to a third party
• Available cash and cash equivalents amounted to USD 43.9 million as of 31 December 2009
• Loss before taxes was USD 4.95 mill for the quarter (Q408: profit of USD 3.4 mill.), hereof USD 0.1 million in net currency loss (Q408: net currency gain of USD 4 million). The year of 2009 shows a loss before taxes of USD 12 million (2008: loss of 5 mill.), hereof USD 2.2 million in currency loss (2008: gain of USD 5.4 million)
During the fourth quarter of 2009, the Mindoro Nickel project matured significantly. Results from earlier drilling programs encouraged Intex to expand the basis of the Definitive Feasibility Study (DFS) to include saprolite ore as well as laterite ore. This required a scope change and the completion of the DFS was therefore rescheduled to February 2010.
The Definitive Feasibility Study has now been completed with a projected annual production of 52,700 tonnes of LME-grade nickel briquettes, 15,920 tonnes of cobalt sulphate, 74,100 tonnes of chromite concentrate and 147,100 tonnes of ammonium sulphate per annum. Other potential marketable products include zinc sulphide (1,490 tonnes per annum) and electricity. Power will be generated from steam produced by the sulphuric acid plant rather than fossil fuel. This will produce 110 MW of which approximately 90 MW will be used by the plant. With this, the project could become a major low cost producer of nickel, located close to the Asian markets, which currently consume almost 60 % of all nickel in the world. The economics are attractive with an NPV (10%) of USD 2.3 billion and IRR of 23.6 % at a Ni price of USD 8.25/lb. The Mindoro Nickel DFS estimates a capital cost of USD 2 455 million, including a contingency of USD 339 million, which gives the project a low capital intensity of USD 21 per pound nickel annually. The DFS also estimates a direct cash cost of USD 2.11 per pound nickel metal, and a direct cash cost after credits of USD 0.56 per pound of nickel metal.
A new JORC compliant Ore Reserve calculation was provided in early February 2010. The Proved and Probable Ore Reserves are now 126.3 million tonnes (Mt) with 0.95% Ni and 0.06% Co, containing approximately 1.2 Mt of nickel and 76 000 tonnes of cobalt. Updated mineral resources were also released in February 2010 indicating that for the ¾ of the license area that has now been drilled, there are JORC compliant Measured and Indicated resources of 224 million tonnes of 0.86% Ni and 0.06% Co, containing 1.9 million tonnes of nickel, and total Measured, Indicated and Inferred laterite resources of 315 million tonnes of 0.83% nickel and 0.06% cobalt, containing approximately 2.6 million tonnes of nickel.
On 18 November 2009 the company was notified by the DENR of a 90 day suspension of the Environmental Compliance Certificate (ECC). The company has not received any further notification and the suspension period ended on 16 February. On 17 February the company notified the DENR of the lapse of the 90 day period. Through the media and informal contact the company has learnt that the DENR, in a response to the protests, has proposed an investigation to look into three specific matters which were already covered extensively by Environmental Impact Assessment (EIA). The company is confident that the issues raised have been adequately addressed during the EIA/EIS process and handled in an open and transparent way.
On 19 February the company announced that it has engaged CIBC World Markets (CIBC) as a financial advisor, and the law firm Wiersholm, Mellbye & Bech (Wiersholm) as its legal advisor, to assist the company with its stated goal to conduct a potential strategic transaction for its main asset.
The nickel price fluctuated during the quarter around USD 8/lb, the average for the period remained in line with that of the previous quarter.
The company’s capital base continues to be strong. The company has no interest bearing debt as of 31 December 2009. Available cash and cash equivalents amounted to USD 43.9 million as of 31 December 2009.
In December 2009 Intex received USD 7.35 million as full and final settlement for the receivable on Crew Gold Corporation.
The initial phase of the Mindoro Nickel project, the completion of the DFS and the application for the Environmental Compliance Certificate (ECC) for the project, is by the end of February 2010 almost over. The Company has sufficient funds to meet its obligations, as well as to proceed with a strategic process to attract the right partner for this project in its next phase. This work has already been initiated and will continue in the months to come.
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
The Definitive Feasibility Study has now been completed with a projected annual production of 52,700 tonnes of LME-grade nickel briquettes, 15,920 tonnes of cobalt sulphate, 74,100 tonnes of chromite concentrate and 147,100 tonnes of ammonium sulphate per annum. Other potential marketable products include zinc sulphide (1,490 tonnes per annum) and electricity. Power will be generated from steam produced by the sulphuric acid plant rather than fossil fuel. This will produce 110 MW of which approximately 90 MW will be used by the plant. With this, the project could become a major low cost producer of nickel, located close to the Asian markets, which currently consume almost 60 % of all nickel in the world. The economics are attractive with an NPV (10%) of USD 2.3 billion and IRR of 23.6 % at a Ni price of USD 8.25/lb. The Mindoro Nickel DFS estimates a capital cost of USD 2 455 million, including a contingency of USD 339 million, which gives the project a low capital intensity of USD 21 per pound nickel annually. The DFS also estimates a direct cash cost of USD 2.11 per pound nickel metal, and a direct cash cost after credits of USD 0.56 per pound of nickel metal.
A new JORC compliant Ore Reserve calculation was provided in early February 2010. The Proved and Probable Ore Reserves are now 126.3 million tonnes (Mt) with 0.95% Ni and 0.06% Co, containing approximately 1.2 Mt of nickel and 76 000 tonnes of cobalt. Updated mineral resources were also released in February 2010 indicating that for the ¾ of the license area that has now been drilled, there are JORC compliant Measured and Indicated resources of 224 million tonnes of 0.86% Ni and 0.06% Co, containing 1.9 million tonnes of nickel, and total Measured, Indicated and Inferred laterite resources of 315 million tonnes of 0.83% nickel and 0.06% cobalt, containing approximately 2.6 million tonnes of nickel.
On 18 November 2009 the company was notified by the DENR of a 90 day suspension of the Environmental Compliance Certificate (ECC). The company has not received any further notification and the suspension period ended on 16 February. On 17 February the company notified the DENR of the lapse of the 90 day period. Through the media and informal contact the company has learnt that the DENR, in a response to the protests, has proposed an investigation to look into three specific matters which were already covered extensively by Environmental Impact Assessment (EIA). The company is confident that the issues raised have been adequately addressed during the EIA/EIS process and handled in an open and transparent way.
On 19 February the company announced that it has engaged CIBC World Markets (CIBC) as a financial advisor, and the law firm Wiersholm, Mellbye & Bech (Wiersholm) as its legal advisor, to assist the company with its stated goal to conduct a potential strategic transaction for its main asset.
The nickel price fluctuated during the quarter around USD 8/lb, the average for the period remained in line with that of the previous quarter.
The company’s capital base continues to be strong. The company has no interest bearing debt as of 31 December 2009. Available cash and cash equivalents amounted to USD 43.9 million as of 31 December 2009.
In December 2009 Intex received USD 7.35 million as full and final settlement for the receivable on Crew Gold Corporation.
The initial phase of the Mindoro Nickel project, the completion of the DFS and the application for the Environmental Compliance Certificate (ECC) for the project, is by the end of February 2010 almost over. The Company has sufficient funds to meet its obligations, as well as to proceed with a strategic process to attract the right partner for this project in its next phase. This work has already been initiated and will continue in the months to come.
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
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