MOA AND OFFTAKE AGREEMENT SIGNEDFOR ROMBLON NICKEL PROJECT,...

MOA AND OFFTAKE AGREEMENT SIGNED
FOR ROMBLON NICKEL PROJECT, PHILIPPINES
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Australian minerals exploration company Pelican Resources Limited (ASX:
PEL) is pleased to announce the execution of a Memorandum of Agreement
between BHP Billiton and Sibuyan Nickel Properties Development
Corporation Limited (SNPDC), the holder of the Romblon Nickel Project in
the Philippines.
Simultaneously with the execution of the agreement, SNPDC has also
executed a term sheet for an offtake agreement with BHP Billiton for the
purchase of product (Offtake Agreement) extracted from the project
operations.
Subject to the terms of the agreement, SNPDC has granted BHP Billiton or
its related entity and permitted assigns, the exclusive rights to purchase
laterite nickel ore mined by SNPDC in the MPSA project area at the
Romblon Nickel Project.
BHP Billiton is the world’s largest resources company and third largest
primary nickel producer.
There are three prospects on this near-term project: Bato, Binaya-an and
Taclobo with a current total JORC compliant inferred resource of 7.26
million tonnes averaging 1.56% nickel at a cut-off grade of 1.3% nickel.
Under the terms of the agreement, an exploration and drilling evaluation
program will be undertaken with the costs of the program to be met solely
by BHP Billiton. This program totals approximately US$250,000. The
program may be extended by mutual agreement following this initial phase.
The commencement of works and the financing of the exploration drilling
and evaluation program is subject to the granting of the MPSA to SNPDC
by the Department of Environment & Natural Resources in the Philippines.
The offtake agreement is for the supply of 500,000 wet tonnes of product
per annum as base tonnage and SNPDC is not restricted in its rights to sell
product in excess of that quantity to any third party.
The offtake agreement is for an initial period of five years with options
granted to extend for a further five years and three years (total 13 years).
Commenting on the off-take agreement Director of Pelican Resources John
Hills said the Company was pleased to secure an offtake agreement with
BHP Billiton and its subsidiaries, both in the Philippines and Australia,
which demonstrated the economic potential of the Romblon Nickel Project.
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“We are very pleased to announce this off-take agreement following the conclusion of negotiations for our
high-grade nickel ores in the Philippines,” Dr Hills said.
“The Company looks forward to the commencement of the exploration and evaluation program at the
Romblon Nickel Project upon the granting of the MPSA and to working closely with BHP Billiton and its
subsidiaries to develop a long-term, cooperative relationship into the future.”