17/10/2007 - 15:25

Stonehenge to acquire 85% nickel stake for cash, scrip issue

17/10/2007 - 15:25

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Perth-based tin and nickel miner Stonehenge Metals Ltd will acquire an 85 per cent stake in an Indonesian nickel project for a cash and scrip issue, the company has announced.

Stonehenge to acquire 85% nickel stake for cash, scrip issue

Perth-based tin and nickel miner Stonehenge Metals Ltd will acquire an 85 per cent stake in an Indonesian nickel project for a cash and scrip issue, the company has announced.

Under the agreement with Indonesia-based PT. Global Titik Persada, Stonehenge will pay $400,00 up front as a non-refundable option fee.

The company will issue 15 million shares to the vendor, as well as purchasing 2.4 million shares, worth around $600,000, in Sunda Resources Pty Ltd - a related party to Global Titik Persada.

Under their agreement, Stonehenge will issue a further 30 million shares once a JORC compliant resource of at least 50 million tonnes at 1.3 per cent nickel is established;

 

 

The full text of a company announcement is pasted below

  • Stonehenge to acquire 85% interest in Indonesian nickel laterite project
  • Extensive nickel mineralisation over 4.2 square kilometres
  • Exploration target of 40 to 60Mt at 1.2 to 1.4% nickel
  • Drilling to commence immediately after shareholders approve transaction

Stonehenge Metals Limited (Stonehenge) is pleased to announce that an acquisition agreement has been signed with Indonesian company PT. Global Titik Persada to acquire an 85% interest in the Mandiodo laterite nickel project located on the Southeast coast of Sulawesi, Indonesia (Figure 1).

Mandiodo Nickel Project Details

The project consists of two adjoining explorations licenses covering 3104 hectares. Extensive drilling (approximately 400 holes) during the 1990's identified nickel laterite mineralisation over an area 4.2 km long by 1 km wide with an average thickness of 13 metres (Figure 2). The mineralised drill hole intersections had average grades of 1.3% nickel. A review of the project by geological consultants has indicated that the deposit will require approximately 40 additional drill holes to validate the existing drill hole information (i.e. thickness, grade, distribution) and allow a JORC compliant resource to be calculated.

Consequently, the company has an initial exploration target for the deposit of 40-60 Mt @ 1.2 to 1.4% nickel based on the grades, widths and extents of the existing drilling results described above. Note that the potential quantity and grade of the above exploration target is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

The project is untested to the North and West and there is significant potential to expand the size of the deposit. In addition, a portion of the deposit has metallurgical characteristics potentially amenable to direct smelting and may be suitable for direct shipping to nickel smelters in Australia and Japan.

Acquisition Terms and Conditions

Stonehenge has the right to acquire an 85% interest in the Mandiodo nickel laterite project on the following terms;

  • An initial upfront cash payment of $400,000 as a non-refundable option fee to secure project exclusivity;
  • A 30 day due diligence period commencing 14 October 2007 during which time Stonehenge will undertake a full technical, commercial and legal review of the project opportunity;

Consideration for the acquisition comprises:

  • The purchase of 2.4 million shares in Sunda Resources Pty Limited ($600,000) at completion of due diligence. Sunda Resources is a related party of the vendor and controls the exploration permits surrounding the Mandiodo nickel project. The investment provides a strategic opportunity to be involved in further acquisitions in the immediate project vicinity;
  • The issue of 15 million Stonehenge shares at completion; and
  • The issue of a further 30 million Stonehenge shares once a JORC compliant resource of at least 50 million tonnes at 1.3% nickel is established;

Key conditions on the acquisition include;

  • The Vendor obtaining all required shareholder and regulatory approvals, consents and authorisations to implement the transactions and to initiate transfer of an unencumbered registered legal 85% interest in the Project or PT. Global Titik Persada to Stonehenge;
  • The receipt of all regulatory and shareholder approvals that may be required to implement the transactions contemplated in this letter (including but not limited to the Corporations Act, ASX Listing Rules, s611 of the Corporations Act and Foreign Investment Review Board) and;
  • The acquisition is subject to shareholder approval and the parties entering into formal acquisition documentation usual for transactions of this nature.

Proposed Schedule

The acquisition agreement will be put before shareholders as soon as the required due diligence and legal requirements are completed (anticipated mid December 2007). The drilling required to convert the existing mineralisation to a JORC compliant resource will commence as soon as shareholder approval is gained. In addition, further drilling will commence to expand the project and metallurgical samples will be collected to evaluate those area's of the deposit suitable for direct smelting.

Managing Director Todd Hibberd commented that "The Mandiodo nickel deposit has the hallmarks of a becoming a company making project. The deposit has outstanding potential to become a major nickel mine and the company will be vigorously pursuing this outcome"

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