Q1 FINANCIAL REPORT 2010
HIGHLIGHTS Q1 2010
• Mindoro Nickel is confirmed to be a world class project
o The Definitive Feasibility Study (DFS) concludes that Mindoro Nickel can be a major, low cost producer for many decades, centrally located in SE Asia
o 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
o 126 million tonnes of Proved and Probable JORC compliant laterite ore reserves of 0.95% nickel and 0.06% cobalt, containing approximately 1.2 million tonnes of nickel (represents a 70% increase)
o 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)
o Advisors engaged to assist with a potential strategic transaction
o Global nickel prices increased dramatically from USD 8.5/lb in January to USD 11.3/lb at the end of March
o The Environmental Compliance Certificate which was issued in October 2009 is claimed to be temporarily revoked.
• The company’s capital base continues to be strong
o The company has no interest-bearing debt as of 31 March 2010
o Available cash and cash equivalents amounted to USD 41.4 million as of 31 March
2010
o Loss before taxes was USD 0.5 mill for the quarter (Q109: loss of USD 5.3 mill.), hereof USD 1.2 million in net currency gain (Q109: net currency loss of USD 4 million).
• Mindoro Nickel is confirmed to be a world class project
o The Definitive Feasibility Study (DFS) concludes that Mindoro Nickel can be a major, low cost producer for many decades, centrally located in SE Asia
o 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
o 126 million tonnes of Proved and Probable JORC compliant laterite ore reserves of 0.95% nickel and 0.06% cobalt, containing approximately 1.2 million tonnes of nickel (represents a 70% increase)
o 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)
o Advisors engaged to assist with a potential strategic transaction
o Global nickel prices increased dramatically from USD 8.5/lb in January to USD 11.3/lb at the end of March
o The Environmental Compliance Certificate which was issued in October 2009 is claimed to be temporarily revoked.
• The company’s capital base continues to be strong
o The company has no interest-bearing debt as of 31 March 2010
o Available cash and cash equivalents amounted to USD 41.4 million as of 31 March
2010
o Loss before taxes was USD 0.5 mill for the quarter (Q109: loss of USD 5.3 mill.), hereof USD 1.2 million in net currency gain (Q109: net currency loss of USD 4 million).
During the first quarter of 2010, Mindoro Nickel confirmed that it is a world class project. The project could become a major low cost producer of nickel, located close to the Asian markets which currently represent almost 60% of world nickel demand. The project will also produce ammonium sulphate fertilizer, the main fertilizer imported by the Philippines for rice production, in amounts that will help the Philippines to become self-sufficient in supporting its agriculture sector.
The Definitive Feasibility Study (DFS) was 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. The project will also generate 110 MW of CO2-free power, of which 90 MW will be used by the plant.
The Mindoro Nickel economics are attractive with an NPV (10%) of USD 2.3 billion and an IRR of 23.6% at a nickel price of USD 8.25/lb. The DFS estimates a capital cost of USD 2 455 million, including a contingency of USD 339 million, which gives the project a low capital investment intensity of USD 21 per pound nickel produced annually. The DFS also estimates a direct cash cost of USD 2.11 per pound nickel metal, and 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% nickel (Ni) and 0.06% cobalt (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 laterite 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% Ni and 0.06% Co, containing approximately 2.6 million tonnes of nickel.
The company is still working with the aim of getting the DENR to declare the reinstatement of the Environmental Compliance Certificate (ECC). The Norwegian Ambassador to the Philippines visited Mindoro in late 2009, in order to interview both supporters and detractors of the Mindoro Nickel project, at the request of the Norwegian OECD Contact Point. His findings are available on Intex’s website. The Ambassador spoke to over 100 people, and made himself available to whomever the local anti mining lobby suggested. The Ambassador’s report did not reveal any wrongdoing or violation of the OECD guidelines by Intex. The company notes that none of the numerous investigations on the company’s operations in the Philippines have revealed any violation of the strict legal and ethical guidelines that remain the governing principles of the company.
Regarding the Minelco decision to cease production at the Seqi Olivine mine in Greenland, the company is currently in contact with Minelco, and it is considering its options.
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 (DFS) was 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. The project will also generate 110 MW of CO2-free power, of which 90 MW will be used by the plant.
The Mindoro Nickel economics are attractive with an NPV (10%) of USD 2.3 billion and an IRR of 23.6% at a nickel price of USD 8.25/lb. The DFS estimates a capital cost of USD 2 455 million, including a contingency of USD 339 million, which gives the project a low capital investment intensity of USD 21 per pound nickel produced annually. The DFS also estimates a direct cash cost of USD 2.11 per pound nickel metal, and 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% nickel (Ni) and 0.06% cobalt (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 laterite 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% Ni and 0.06% Co, containing approximately 2.6 million tonnes of nickel.
The company is still working with the aim of getting the DENR to declare the reinstatement of the Environmental Compliance Certificate (ECC). The Norwegian Ambassador to the Philippines visited Mindoro in late 2009, in order to interview both supporters and detractors of the Mindoro Nickel project, at the request of the Norwegian OECD Contact Point. His findings are available on Intex’s website. The Ambassador spoke to over 100 people, and made himself available to whomever the local anti mining lobby suggested. The Ambassador’s report did not reveal any wrongdoing or violation of the OECD guidelines by Intex. The company notes that none of the numerous investigations on the company’s operations in the Philippines have revealed any violation of the strict legal and ethical guidelines that remain the governing principles of the company.
Regarding the Minelco decision to cease production at the Seqi Olivine mine in Greenland, the company is currently in contact with Minelco, and it is considering its options.
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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