Operations Update
January 30 2008 - 2:02AM
UK Regulatory
Operations Update
30 January 2008
TOLEDO MINING CORPORATION PLC
OPERATIONS UPDATE
The Directors of Toledo Mining Corporation plc (the "Company")
(AIM:TMC) wish to inform and update the market on the following
activities of the Berong nickel mine and Ipilan nickel project which
have been carried out during the quarter ended 31 December 2007.
Berong Nickel Project
A total of 55,447 wet metric tons of laterite nickel ore at an
average grade of 1.49% Ni (approximately 544 tonnes contained nickel
on a dry basis) was shipped to Australia and China. Shipments were
impacted by the wet season on Palawan Island and high sea swells.
Total shipments during 2007 amounted to 530,168 wet metric tons at an
average grade of 1.53% Ni. A further 141,000 wet metric tons of ore
were stockpiled at the coast awaiting shipping. A BHP Billiton
vessel is scheduled for loading in late January.
Market conditions remain strong for Berong ore, especially for
shipment grades above 1.4% Ni.
The wet season on Palawan started later than normal and extended well
into December 2007, a period of 6 weeks longer than in 2006. Total
rainfall for the year was 429 centimetres, with highest falls
associated with typhoons in the December quarter. Wet weather makes
mining difficult, prevents the laterite ore from drying, and
restricts shipments because of the high moisture content.
At least 13 typhoons impacted the Philippines, with two typhoons in
late November (Lando & Mina) causing damage to the mine access road
and the causeway. Typhoon Lando passed through Palawan which is
unusual as typhoon activity is normally associated with the northern
part of the Philippines. The damage has been repaired but resulted
in loss of production.
The period from October through December was also challenging from
the view point of ship loading with excessive sea swells preventing
the offshore transhipment of ore. This is likely to be an annual
event until such time a trestle conveyor is built. Studies on a
trestle conveyor continue.
Because of the wet conditions, a total of approximately 52,000 wet
metric tons of ore was mined in the December quarter. However, the
slowdown in mining operations was used to replace some of the
temporary facilities with permanent facilities. A permanent mine
office was constructed, accommodation facilities for the workforce
were put into place, the assay laboratory was brought on stream, and
the pedestrian footbridge over the Berong River was opened. Further,
the crusher/aggregate plant was commissioned to provide necessary
road base and stockpile sheeting material. Construction also
commenced on the heavy equipment workshops and maintenance
facilities.
Permit approvals continue to delay the construction of the Dangla
Road, a dedicated haul road without community development along its
route. Production ramp-up for 2008 is heavily dependent upon gaining
the approvals for the construction of the Dangla Road. Upon
completion of the Dangla Road, production would be expected to be at
an annualised rate of about 1.5 million wet metric tons.. Little or
no production is expected from Long Point and/or Moorsom since these
adjacent areas will require drill testing and pitting, environmental
approvals and a feasibility study before development. This is
planned to be completed over 2008.
Rehabilitation of the first area initially mined was completed. The
company has already met in full its obligations for the trees cut in
the initial 13 hectares cleared. Approximately 130,000 endemic
trees, 350,000 strands of vetiver grasses and thousands of fruit
trees and seedlings have been planted. The company is obligated to
plant 50 trees for every tree cut. International certification for
ISO 14001 (Environmental Management Systems) and ISO 18001
(Occupational Health and Safety Systems) is expected to be completed
in 2008.
The assessment of processing options to add value to the large
lateritic resources at Berong continued. The investigation and due
diligence of a Joint Venture with two Chinese companies to produce
nickel pig iron and stainless steel in China was terminated late in
the quarter. Although disappointing, a number of other Chinese
producers have expressed an interest in forming a JV in both China
and the Philippines. Discussions are underway with a number of
parties.
Metallurgical leach test work on samples from both Berong and Ipilan
shows very good recoveries for both nickel and cobalt. Whilst at an
early stage of testing, more complete results will become available
early in the March 2008 quarter.
Ipilan Nickel Project
Field exploration and evaluation activities continued, with good
progress being made using mainly company owned drill rigs. A total
of over 75,000 metres of drilling and test pitting has been completed
since the commencement of the evaluation program in May 2006.
+-------------------------------------------------------------------+
| | | Quarter | Year to | Total |
| | | Ended | Date | Program |
| | | 31st Dec | 2007 | Since May |
| | | 2007 | | 2006 |
|---------------+------------------+----------+---------+-----------|
| Test Pits: | # Re-Sampled | | | 427 |
|---------------+------------------+----------+---------+-----------|
| | # Samples | | | 2,321 |
| | Collected | | | |
|---------------+------------------+----------+---------+-----------|
| Test Pits: | # Re-Deepened | | | 64 |
|---------------+------------------+----------+---------+-----------|
| | # Samples | | | 295 |
| | Collected | | | |
|---------------+------------------+----------+---------+-----------|
| Test Pits: | # New Pits | 347 | 3,011 | 4,353 |
|---------------+------------------+----------+---------+-----------|
| | # Metres Sampled | 2,208 | 15,739 | 22,310 |
|---------------+------------------+----------+---------+-----------|
| | # Samples | 2,510 | 18,040 | 24,697 |
| | Collected | | | |
|---------------+------------------+----------+---------+-----------|
| Drill Holes: | # New Holes | 325 | 2,753 | 2,902 |
|---------------+------------------+----------+---------+-----------|
| | # Metres Drilled | 3,638 | 47,457 | 50,516 |
|---------------+------------------+----------+---------+-----------|
| | # Samples | 4,809 | 54,233 | 57,289 |
| | Collected | | | |
|---------------+------------------+----------+---------+-----------|
| Lines Cleared | - kms | | | 339 |
|---------------+------------------+----------+---------+-----------|
| GPR Survey | - kms | | | 83 |
|---------------+------------------+----------+---------+-----------|
| Density: | # Measurements | | | 2,648 |
|---------------+------------------+----------+---------+-----------|
| Surveying: | Topographic - ha | | | 796 |
+-------------------------------------------------------------------+
Drilling continued to be used where the ore body is too deep for hand
pitting. Drilling has mainly been undertaken on a grid spacing of 25
metres x 25 metres and shows the thickness of mineralisation to be
between 15 to 20 metres, with the thickest intersections being up to
55 metres. Over the areas tested, this would indicate more than 60
to 70 million tonnes of laterite nickel mineralisation within a small
footprint of less than 600 hectares. Historical records from widely
spaced test pits and old drilling indicate the average grade of this
mineralisation is likely to be between 1.2% and 1.3% Ni. Preliminary
assay results appear to confirm these grades. This estimate of
mineralisation grade and tonnage is conceptual in nature, with
insufficient exploration to define a mineral resource and uncertainty
as to whether further exploration will result in the determination of
a mineral resource. A JORC compliant ore resource estimate is
expected to be released in March 2008 quarter.
The drilling and test pitting undertaken to date is more than
adequate for an initial Direct Shipping Operation (DSO) followed by a
value added processing plant of at least 30 years life.
Metallurgical test work indicates the ore types are ideal for
leaching, and similar to the laterite ores being processed through
the HPAL plant at Rio Tuba on Palawan. The ore types appear amenable
to atmospheric agitation leaching and/or heap leaching and/or the
Chinese blast furnace process for producing nickel pig iron.
Project activities have focussed on the early development of a DSO.
Leighton Contractors (Philippines) Inc has commenced the preliminary
engineering and infrastructure scoping studies. Environmental
studies have also commenced with the gathering of base line data.
Scoping of the marine bathymetric survey is underway as is
preliminary ore body modelling. Community consultations have also
commenced. All studies are directed at an initial 1.5 million wet
metric ton per year mining operation.
George Bujtor, Chief Executive Officer of Toledo Mining, is a member
of the Australasian Institute of Mining and Metallurgy and is the
qualified person that has reviewed and approved the technical
information contained in this announcement.
For further information contact:
Annie Richards, Toledo Mining Corporation plc +44 (0) 20
7514 1480
Charles Vivian, Pelham Public +44 (0) 20
Relations 7743 6670
Klara Kaczmarek, Pelham Public Relations +44 (0) 20
3159 4395
James MacFarlane, Pelham Public Relations +44 (0) 20
7743 6375
Hugh Oram, Nabarro Wells & Co Limited +44 (0) 20
7710 7400
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