Cuba open to Graynic development

18/03/2009 - 22:00


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SUBIACO-BASED Graynic Metals is looking to Latin America to help establish itself as a developing nickel explorer and developer.

POSITIVE APPROACH: Bronwyn Barnes says Graynic has been made to feel welcome in Cuba. Photo: Grant Currall

SUBIACO-BASED Graynic Metals is looking to Latin America to help establish itself as a developing nickel explorer and developer.

The company has signed a farm-in agreement with private Canadian company Nichromet Extractions Inc to develop one project in Cuba and three in Guatemala. Nichromet has a joint venture agreement with the Cuban government through its wholly owned subsidiary, Nichromet Dominicana SA.

Graynic managing director Bronwyn Barnes said there were exciting opportunities for nickel exploration in Cuba, which had a third of the world's resources but was only the sixth largest producer.

She also spoke highly of the "welcoming" climate in this communist country so close to the US.

"We are WA's only resources or ASX-listed company in Cuba, although I understand that other local companies are assessing opportunities there," Ms Barnes said last week.

Graynic's Australian assets include base metal projects at Nullagine in the Pilbara and Broken Hill and Tamworth in NSW. It has now decided to concentrate on nickel - a reflection of management and board skills.

"While the outlook for nickel is very exciting, Australia is a hard place to gain support for nickel laterite development," Ms Barnes said.

Graynic will spend $US3 million over the next 36 months to earn a 50 per cent interest in Nichromet and can then elect to outlay a further $US6 million to earn an additional 25 per cent.

Nichromet's former joint venture partner, Brazil-based Vale, the world's top nickel producer, spent $US6 million on Nichromet's Guatemalan projects during the past three years.

Ms Barnes said Graynic's agreement with Nichromet was a significant opportunity to take a regional strategic position in Central America.

The nickel projects are Cajalbana in Cuba and Rio Negro, Santa Anita and Baja Varapaz in Guatemala, with Cajalbana and Rio Negro the priority projects.

Graynic directors believe the four projects will deliver numerous potential development opportunities in districts of proven profitable nickel laterite production.

"Cuba is seeking international investment and our dealings with the country so far have been very good," Ms Barnes said.

"The government is very open and takes a commonsense approach in dealing with new companies. We have been very happy with the dealings we have had.

"We have only been in Cuba for around nine months, but in that time we have found the climate welcoming of foreign investment and the Cuban government appears to be seeking diversity in its international investment partners.

"We know Italy, France and Canada are current trading partners with Cuba and that companies from those countries have invested in Cuba in the tourism, telecommunications and resource sectors.

"The skills and experience of those within the mining sector is outstanding, given Cuba's history of nickel laterite development and other resource development activity.

"Cubans generally have a very high level of education and this is reflected in those working in the mining sector."

Ms Barnes said the Cuban government recognised nickel as its most significant mineral commodity.

The government owns all mineral deposits, which hold the best quality nickel laterite in the world.

Nickel even has its own government department, whereas all other mineral resources share a department.

Graynic is using Cuban government engineers, drillers and other personnel in its exploration work. It has its own managers based in the Dominican Republic and Guatemala.

Ms Barnes said Graynic was keen to move on the two priority projects after due diligence was completed in early April.

The drilling program in Cuba was completed in late 2008 and follow-up drilling is about to start. There has also been a fair amount of drilling at the Rio Negro project and it shouldn't take much work to define its resource capability.



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