Canico feasibility still not ready

Vancouver – Hatch’s much anticipated feasibility study for Canico’s (CNI-T) Onca-Puma ferro-nickel laterite project in Brazil now won’t be ready until the end of July. The company’s are looking at what needs to be done to complete the work by that date and Canico is still hopeful of the start-up of production at Onca-Puma around the end of 2007.

Engineering studies are under way to prepare for a construction contract for a nickel smelter and support facilities at Onca-Puma.

Meanwhile, fourteen diamond drills are turning as part of the company’s infill drilling geared towards planning and scheduling for mining the high-grade areas of the Onca-Puma deposits.

Crews are constructing local access roads to the deposit area together with the State of Para which is upgrading and repairing the public highways to link the deposits to major trans-shipping sites.

With regard to the 400-km powerline construction contract, several bidders have expressed interest in building the transmission facilities at their cost and operating and transferring the line to the company over 20 years. This could potentially reduce the company’s capital costs.

Michael Kenyon, company President, believes the extra time for the study is worthwhile. “Despite the extra time needed for the study, Onca-Puma is progressing rapidly and appears likely to become one of the world’s best conventional pyrometallurgical nickel producers when the development of our first production line is completed.”

Plans call for a second line to be built shortly after the first, and the company sees the potential for additional lines based on independent resource estimates.

The Ona-Puma nickel laterite project is situated in the north-central Brazilian state of Para. The ferronickel operation is expected to start producing by late 2007, with ore derived from two deposits, Ona and Puma, which are 16 km apart.

The Ona-Puma nickel laterite deposits were discovered in the late 1970s but sat idle until a scoping study affirmed they could be exploited using conventional smelting technology.

Hatch Associates began the feasibility study in mid-2004. Analysts estimate the project will have a capital cost of US$750 million.

Construction is expected to last 33 months. The project received its environmental licence in August 2004.


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