14/04/2008 - 14:56

Kagara says Lounge Lizard nickel deposit is not for sale

14/04/2008 - 14:56

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West Perth-based Kagara Ltd has issued a response to media reports to advise shareholders that the Lounge Lizard nickel sulphide deposit at Forrestania is not for sale.

West Perth-based Kagara Ltd has issued a response to media reports to advise shareholders that the Lounge Lizard nickel sulphide deposit at Forrestania is not for sale.

 

The full statement from the company's executive chairman s pasted below:

 

In response to press reports circulating at present, Kagara wishes to advise shareholders that the Lounge Lizard nickel sulphide deposit at Forrestania is not for sale and no statement to that effect has been made either privately or publicly by myself.

What the Company has said however is that nickel is not a core commodity and that one option for funding a future development of the large Admiral Bay zinc-lead-silver-barite deposit in the Canning Basin of Western Australia would be to sell Lounge Lizard at a point when its value has been fully evaluated by an ongoing diamond drilling program.

This drilling program, which will be fast tracked with the arrival of a second rig in July, will also test other nickel targets within the highly prospective package of tenements within the Forrestania area.

Other options for funding Admiral Bay would be conventional debt or introducing a joint venture partner.

With respect to joint venturing, we are not holding talks, but have been approached by several international mining companies with a view to joint venturing into the project.

It is our plan to advance the project further to a JORC compliant resource and reserve status with additional infill diamond drilling by wedging from parent holes drilled in 2007, before settling on a path forward.

In the meantime, metallurgical testwork and engineering scoping studies are being advanced and the results will be released as they soon as come to hand.

Bearing in mind that no resource has yet been calculated for either Admiral Bay or Lounge Lizard, decisions on both projects are unlikely before the end of 2008.

However it is evident, based on drilling results to date, that both deposits have the potential to be low cost producers of their respective commodities.

Initial resources for both Admiral Bay and Lounge Lizard will be announced during the current quarter.

On another matter, it appears that the wet season in far North Queensland is finally over and we advise that full production from the Thalanga treatment facility recommenced on 27 March.

Our trucking fleet is now operating at full capacity with no load restrictions and the large stockpiles of concentrates built up at Mt Garnet during road closures over the last three months are being trucked to the Sun Metals refinery or the Townsville port.

Production for the 2007/08 financial year remains on target for 40,000 tonnes of zinc and 27,000 tonnes of copper metal.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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