North Perth-based Stonehenge Metals Ltd has terminated an agreement to acquire a majority stake in an Indonesian nickel project due to unresolved issues surrounding exploration permits.
North Perth-based Stonehenge Metals Ltd has terminated an agreement to acquire a majority stake in an Indonesian nickel project due to unresolved issues surrounding exploration permits.
Below is the full announcement:
Further to the Company's previous announcements of 17 April 2008 and 15 May 2008 the Directors of Stonehenge Metals Limited (Stonehenge) have elected not to proceed with the intended acquisition of an 85% interest in the Mandiodo Nickel project in Sulawesi, Indonesia.
Whilst the Company continues to believe that the Mandiodo Nickel project is potentially commercially attractive, issues of competing permits over the area comprising the Mandiodo exploration permits remain unresolved and in this environment of uncertainty Stonehenge believes that it is in the best interests of shareholders not to proceed with settlement of the acquisition at this time.
Stonehenge and the vendors have agreed to terminate the Heads of Agreement and subject to formal documentation Stonehenge will:
- convert it's investment to date into a 5% shareholding in the entity that seeks to control the Mandiodo project;
- pay no currently outstanding or further costs in respect of the acquisition; and
- receive a 5% shareholding in the entities that seek to control eight other highly prospective nickel leases (KPs) proximate to the Mandiodo Nickel project.
This outcome provides Stonehenge with ongoing potential exposure to the Mandiodo Project and eight other highly prospective nickel leases whilst significantly reducing risk and eliminating any further financial commitments. The Directors are hopeful that the issue of competing permits over the area comprising the Mandiodo exploration permits will in time be resolved therefore allowing Stonehenge to potentially re-enter negotiations with the vendors.
Stonehenge continues to evaluate new project opportunities across a broad spectrum of commodities whilst remaining focused on the processing of stockpiles at the Heemskirk tin treatment plant and on delineation of additional resources and mill feed from the Company's Tasmanian tenements.
Mill Commissioned and Tin Production Commenced
Stonehenge Metals Limited is pleased to advise that operations at the Heemskirk gravity separation mill are progressing with quality of tin concentrate improving as commissioning of the plant is finalised. The operations have experienced some feed issues with the wet clayey ores which have impacted on concentrate production. Feed bin modifications are being implemented to improve feed rates and establish consistent tin production.
The Company is in discussions with Thailand Smelting and Refining Co. Ltd (Thaisarco) for the sale of the concentrate and samples of tin concentrate despatched to Thailand for evaluation returned analyses of 73 to 75% tin with low contaminant levels.
The commissioning of the Heemskirk plant strengthens Stonehenge's commitment to delineate additional resources and mill feed on the Company's projects in western Tasmania. Exploration will concentrate on the Granville East and Central Big H areas to identify oxide ore feed to extend the current milling program.
Drilling to test potential mineralised skarn zones at the Central Big H prospect, located 400 metres west of the Heemskirk mill is planned for November and dewatering and evaluation of the Granville East pit will be undertaken to assess the viability of deepening the current shallow open pit.
Stonehenge will also continue to investigate other opportunities, either through joint venture or acquisition, to secure ore sources in the district.
