Canico kicks off second phase at Onca-Puma

Vancouver — Canico Resource (CNI-V) has commenced a second phase infill drill program which will also include a few step-out exploration drill holes at the Puma West portion of the Onca-Puma nickel laterite project in Para, State Brazil.

Canico states that this next stage of the work will consist of 35,000 metres of drilling and will increase the confidence level for both deposits. In addition, some holes will be drilled for geotechnical purposes around the proposed plant site.

Engineering work is ongoing and a full feasibility study expected by the second half of 2004. Environmental base line studies and social studies are also underway and some preliminary metallurgical tests have also been completed. In addition, Canico is in discussions to start pilot plant tests later this year.

As part of the feasibility study, a scoping study will evaluate the capital and operating costs for a conventional smelter nickel project. This review will compare the costs associated with single line (1.25 million tonnes per year), or a double line (2.5 million tonnes per year), ferronickel and nickel matte operation.

Canico states that so far preliminary engineering work has advanced faster than the exploration and resource drilling. To date, drilling has shown that the Onca nickel laterite deposit is more extensive and thicker than historical work had originally indicated. As a result the engineering modeling of the old Onca resources will not be usefull in a new scoping study. About 100 additional holes will be drilled at Onca and a new resource will be completed once all assays are received from the current drill campaign.