Vancouver —
Barclays and CIBC will set about securing loans from commercial banks, and well as investigate other avenues, such as capital markets, export credit agencies and suppliers.
The financiers will appoint an independent engineer to participate in Canico’s feasibility study to ensure the study will be bankable upon completion.
As compensation, Barclays and CIBC will receive 1.25 million non-transferable warrants exercisable into 1.25 million shares. The warrants have an exercise price of $15.55 per share and will expire in November 2007.
The number of warrants available for exercise by the banks will be subject to the arrangement of financing and a satisfactory level of participation in such financing by the banks.
The Ona-Puma laterites are flat-lying, near-surface deposits that appear to be suitable for conventional, pyrometallurgical processing.
Using a 1.5% nickel cutoff grade, resources at Ona-Puma stand at 104.4 million tonnes averaging 2.15% nickel and 0.105% cobalt. Ona contains 69.8 million tonnes averaging 2.12% nickel and 0.123% cobalt, whereas Puma West hosts 34.6 million tonnes of 2.21% nickel and 0.07% cobalt.
Based on a 1% nickel cutoff, Ona-Puma hosts an inferred resource of 197.5 million tonnes averaging 1.72% nickel and 0.113% cobalt. Ona hosts 140.8 million tonnes averaging 1.67% nickel and 0.125% cobalt, whereas Puma West hosts 56.8 million tonnes of 1.83% nickel and 0.082% cobalt.
The Ona estimate is based on 485 diamond drill holes completed in Canico’s 2003 evaluation program. The revision to the Puma estimate is based on the results of an additional 24 diamond drill holes west of the main Puma ridge.
A full feasibility study on the Ona-Puma project is scheduled to be completed in late 2004. The company has yet to decide on a cutoff grade for use in mine planning and financial modeling.
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