Agata North - Global Exploration Target


Agata North - Global Exploration Target

The Global Exploration Target for Agata North for the combined ferruginous overburden, limonite and saprolite horizons is as follows: 30 to 40 million wet metric tonnes (WMT) at a grade of 0.9 to 1.5 percent nickel and 18 to 28 percent iron.

The reader is cautioned that the potential quantity and grade of the Exploration Target described is conceptual in nature, that there has been insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource. Until a feasibility study has been completed there is no certainty that the Company's projections will be economically viable.

The Agata North nickel laterite mineralization, as interpreted to date, covers approximately 379 hectares. A total of 181 drill holes have been completed to date within this area. The Exploration Target does not include additional areas of nickel laterite mineralization on the Agata South project, where Mindoro is in a joint venture with a Philippine mining contractor (Delta Earthmoving). Nor does it include potential areas of nickel laterite on the adjacent Tapian Main, Tapian SF and Mat-I tenements.

Agata South: Delta Joint Venture

In August of 2007, Mindoro announced that it had reached agreement with Delta Earthmoving, Inc., an experienced Philippine nickel laterite mining contractor, to explore, and advance to production if warranted, the Agata South nickel laterite project. The agreement does not cover Agata North. A total of 176 drill holes with a total of 2,281 meters have been drilled, covering 54 hectares, near the southern boundary. Only partial assay results have been reported by Delta to date.

Enhanced Value, On-Site Processing Alternatives

While much of the Surigao District nickel laterite production has been as DSO to processing plants in Japan, Australia and China, several attractive alternatives are emerging for local processing, which include, at the low technology end of the spectrum, constructing an on-site electric arc furnace for nickel pig iron (a low grade ferronickel product) production, ferronickel smelting, heap-leaching for which pilot testing on another Philippine laterite deposit has produced promising results, atmospheric (tank) leaching, and an improved generation of High Pressure Acid Leach (HPAL) plants. HPAL technology is currently being used with great success by Sumitomo on its Philippine Coral Bay operation, and shows considerable promise for the local processing of Surigao ores. In fact, Sumitomo recently announced plans to proceed with permitting to construct an HPAL plant in the Surigao District. This HPAL technology has a proven track record. An HPAL plant would likely require a resource in excess of 50 million tonnes, whereas for smaller resources the most appropriate technologies may include
atmospheric (tank) leaching, ferro-nickel smelting to produce high iron / high nickel content product, or low grade ferro-nickel (nickel-pig iron) product from an electric arc furnace. A ferronickel smelting plant was recently built and is in operation near Cagayon de Oro, northern Mindanao. New laterite processing technologies are being aggressively developed globally since nickel laterite ores will constitute the bulk of future nickel production.

There is abundant evidence of the beginning of a trend for local/on-site processing of Philippine laterite ores, and the growth of a large high-value industry in the Philippines. We expect that the prolifically nickel laterite-mineralized Surigao District will be an important part of this evolution.

Construction of a local processing plant, rather than simply shipping out raw product, would greatly increase the returns to all stakeholders; including Mindoro, its Philippine partner, the local people, local government units, and to the Philippines itself.

Global Nickel Laterite Resource Potential of Mindoro's Surigao Tenements

Reconnaissance geological mapping was recently carried out over Mindoro's Surigao tenements with the objective of defining areas of potential nickel laterite mineralization. These tenements are on the continuation of the geological trend north from the nickel laterite mineralization in the SRMI tenement, and from the Agata project where resource delineation drilling programs are in progress.

Nickel laterite in the Surigao District is manifested by the development of thick, purple-coloured clayey soils over favorable ultra-mafic rocks. Geological mapping by Mindoro has outlined lateritic soils on ultra-mafic rocks over extensive areas on these projects, as shown on the map "Surigao -- A Major Copper-Gold and Nickel District" on pages 8-9. Significant areas of lateritic soils were defined on the Tapian Main, Tapian SF and Mat-I projects.

Based on the mapping alone, there is no guarantee that nickel grades and thickness will be of commercial interest. Accordingly, a program of reconnaissance auger drilling is in progress to give a preliminary indication of nickel content and laterite thickness. This will be followed by detailed NI 43-101 compliant resource delineation drilling programs.



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