EDMONTON, ALBERTA--(Marketwired - Oct. 23, 2014) - Mindoro Resources Ltd. (TSX VENTURE:MIO)(FRANKFURT:WKN 906167) is pleased to report that the first shipment of high-iron/low nickel direct shipping ore ("DSO") has been completed from the Agata project located in northern Mindanao, the Philippines. Upon final exercise of a 25% option in the Agata project, Mindoro will hold a 40% direct interest in Agata Mining Ventures Inc. ("AMVI"), a joint venture company in which TVI Resource Development (Phils.), Inc. ("TVIRD") also holds a 60% interest in the project.
A total of 54,181 wet metric tonnes (wmt) of limonite high-iron/low nickel ore containing 0.70% nickel and 49% iron left the port of Payong-Payong in Agusan del Norte, Mindanao, on October 19, 2014. In accordance with an off-take arrangement between AMVI and Tewoo Hoperay (Singapore) Pte. Ltd., AMVI expects to receive gross revenue of US$0.89 million for this shipment.
"We congratulate operator TVIRD on their efficiency in loading our first high-iron/low nickel DSO shipment in just seven days," stated Penny Gould, CEO of Mindoro. "Mindoro's transition towards becoming a cash flow generating company, through its interest in AMVI, hails a major milestone in Mindoro's strategy to rebuild value for its shareholders."
Production remains steady at the Agata project and remaining inventory to date is approximately 26,669 wmt of limonite high-iron/low nickel ore with nickel and iron content levels between 0.7% and 0.9% and 48% and 49%, respectively. It is anticipated that future shipments of approximately 55,000 wmt high-iron/low nickel DSO will continue approximately every three to four weeks with shipping rates expected to accelerate rapidly to 2.5 million wmt per year in 2015.
About the Agata Project
The Agata Project is located in Agusan del Norte province, within the Surigao mining region on the island of Mindanao, Philippines. The Surigao region is a major nickel producing region providing ore to processing plants in Australia, China, Korea and Japan. The region has hosted between thirteen and fifteen DSO operations since 2011 and exported 27 million wet metric tonnes in 2013.
An initial offtake agreement was signed in June 2014 between AMVI and Tewoo Hoperay, a subsidiary of Tianjin Hoperay Mineral Limited Company, a major Chinese State Owned Enterprise, to sell one million wet metric tonnes of high-iron/low nickel DSO. A second agreement was signed in August 2014 to sell five hundred thousand wet metric tonnes. Advance payments of US$2 million have been received by the joint venture against the initial agreement to fund initial operating costs and a further US$1 million advance is expected in connection with the second agreement.
On September 10, 2013, Mindoro and its joint venture partner and operator of the Agata Project, TVI Resource Development Phils., Inc., an affiliate of TVI Pacific Inc. (TSX:TVI)(OTCQX:TVIPF), released a National Instrument 43-101 compliant Feasibility Study indicating robust economics for a DSO operation of the high iron laterite resources at the Agata Project. The Feasibility Study concluded:
-- Low initial start-up capital of US$10.1 million, high Internal Rate of
Return of 187% and payback within the first year of operation;
-- Post-tax Net Present Value (10% discount) of US$37.9 million; and,
-- DSO product to grade 48% Fe and 0.9% Ni - a product in consistent
An NI 43-101 Compliant Mineral Resource estimate released on April 10, 2013 shows the Agata DSO project to have reported Proven and Probable Reserves of 9.70 million wmt with a grade of 48% Fe with 0.9% Ni. The report is available for viewing on www.sedar.com and www.mindoro.com.
In addition to market demand factors, DSO prices are subject to seasonal fluctuations influenced by weather patterns. During the monsoon season, from approximately November to February, the rough ocean off the east coast of the Mindanao peninsula prohibits shipping. DSO projects on the west coast, where Agata is located, are more sheltered and can ship ore 12 months a year and take advantage of potential seasonal price spikes.
Photos of the DSO loading process are available at the following link: http://www.mindoro.com/i/pdf/2014-10-14-DSO-Shippings.pdf and with Mindoro's October 16, 2014, press release on www.mindoro.com.
On behalf of the Board of Directors
Penny Gould, CEO
Mindoro is a Tier 1 Issuer trading on the TSX Venture Exchange (MIO) and Frankfurt Stock Exchange (WKN 906167). Mindoro has a 15% interest in the Agata Mining Joint Venture and 75% interest in the Agata Processing Joint Venture with options to acquire an additional 25% interest in both the Agata Mining and Processing Joint Ventures. Mindoro also holds 75% interest in the Pan de Azucar Sulphur-Copper-Gold Project, Iloilo. TVI Resource Development (Phils.), Inc. ("TVIRD") has the option to earn up to a 60% interest in the Agata Processing and Pan de Azucar projects by meeting the earn-in requirements outlined in the June 24, 2013, press release, which include producing a definitive feasibility study for a nickel processing facility. Mindoro also holds 75% interest and an option to acquire an additional 25% in the Tapian San Francisco Copper-Gold Project, Mindanao.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This release contains forward-looking statements including management's assessments of future plans and operations, and expectations of future production. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to, the risks associated with the mining and exploration industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty with respect to results of exploration, the uncertainty of estimates and projections relating to production and the uncertainty of the availability of capital). The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company does not undertake to update forward-looking statements except where required to do so by law.
FOR FURTHER INFORMATION PLEASE CONTACT:
For investor relations inquiries:
Penny Gould or Clayton Northey
+1 780 413 8187
Jeanny So, CHF Investor Relations
+1 416 868 1079 ext. 225
Source: Mindoro Resources Ltd.
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