Mindoro permit withdrawn

The cancellation of a key permit by a branch of the Philippine government has forced Crew Development (CRU-T) to suspend development at its nickel laterite project on the island of Mindoro.

The licence, known as a Mineral Production Agreement, gave Crew the right to mine 72 million dry metric tonnes, grading 0.94% nickel and 0.06% cobalt, over 25 years. It does not extend to the Pamplona sulphur deposit on Negros Island, in which Crew can earn a 100% interest.

Crew says it was notified of the cancellation by the Department of Environment and Natural Resources. Another administration was in place when the permit was issued earlier this year. Crew said it considers the decision baseless and is reviewing all legal avenues to have its tenure re-established. However, all work must stop until then.

Crew’s plans call for the use of High Pressure Acid Leaching (HPAL) to produce 40,000 tonnes nickel, 3,050 tonnes cobalt and 126,000 tonnes ammonium sulphate (rice fertilizer) annually. Total cash costs are estimated at US$1.06 per lb. nickel. A 1998 prefeasibility study pegged capital costs at US$665 million, which translates into a net present value of US$467 million at a 10% discount. The internal rate of return rings in at 39%.

Pamplona is seen as a stand-alone project, but may serve as a source of feed for Mindoro and other similar projects in the region. Open-pittable reserves stand at 60 million tonnes grading 30.8% sulphur.