Vancouver — Needing to raise some $20 million over the next 12 months to secure title to the Ona-Puma nickel laterite project in north-central Brazil, newly created Canico Resources (CNI-V) began trading at $2.60 per share.
Formed through the merger of Oliver Gold and privately-held Hastings Resource, Canico’s main asset is the right to acquire 100% of the promising property from Inco (N-T). Under the deal, Canico must raise at least US$22.5 million by Jan.31, 2003. At the end of the day, Inco will receive no cash payments but hold an 18% stake in Canico. To date, the company has about $4 million in cash.
Canico and Inco have also agreed to an offtake and a technical service agreement. The offtake deal allows Inco to purchase all nickel matte produced from the property. The technical service agreement gives Canico the license of Inco’s reduction smelting process for the Onca-Puma property
Worked by Inco in the 1970’s, the Ona-Puma project covers 39,940 ha and hosts a near surface inferred resource of 50 million tonnes grading 2.3% nickel and 0.09% cobalt using a 1.5% nickel cut-off grade. About 25% of this resource lie within an indigenous reserve and may not be available for development.
Based on a 1997 scoping study, consulting firm Watts, Griffis and McOuat believes that the deposit could be exploited using conventional smelting technology. Based on a single-line pyrometallurgical process similar to that used by Inco in Indonesia, a throughput of 1.1 million tonnes of laterite annually, would yield 50 million lbs of nickel matte yearly over a 20-year mine life.
Ona-Puma lies 150 km from rail facilities and about 100 km from major electrical power.
Canico is planning further drilling as part of a feasibility assessment and hopes to have a bankable feasibility study in hand by 2004.
Be the first to comment on "Canico starts to trade"