Venezuela’s mines ministry has approved the development plan for the Loma de Hierro nickel deposit, 50 km southwest of Caracas. And Jordex Resources (TSE), owner of a 45% interest, is looking forward to rapid environmental approval.
A feasibility study by AMSA, a unit of Minorco, concludes that an annual production rate of 1.1 million tonnes of laterite ore would support an on-site smelting operation. Project costs before taxes are estimated at US$345 million.
AMSA, which owns a 10% interest in Loma de Hierro, has taken an option to buy an additional 75% interest from Jordex and Venezuelan partner Corporacion Caracas. AMSA must reach a production decision by mid-February to buy the interest for $33 million. The other partners would each retain 7.5% working interests.
Recent strength in the nickel markets has improved the economics of Loma de Hierro. The London Metal Exchange inventory, listed at 150,000 tonnes a year ago, has fallen to 50,000 tonnes, and global stocks of nickel now provide for 11 weeks of demand. Increasing stainless steel production has meant greater demand for nickel, leading Metal Bulletin to predict a supply crunch in the coming year.
Jordex has also proposed an international share offering to raise about $1.25 million. The financing, which awaits regulatory approval, will be used for exploration at the Rancho Orkho silver-copper prospect in southern Bolivia.
The offering, based on Jordex’s volume-weighted average trading price for the 10 trading days from Oct. 11 to Oct. 25 of this year, includes units composed of one common share and one half-warrant. A full warrant is exercisable for a year at a price 13% above the unit price.
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