DailyLetter
Friday, February 6, 1998 Analysts' Breaking News
* SPECULATIVE BUY Weda Bay-update on Halmahera resources (Graeme
Currie)
* Weda Bay Minerals (WDA : ASE : $1.30 : Issued 17.8M)
Weda Bay has provided a further update on the nickel laterite
resources on its Halmahera nickel project in Indonesia. This progress
report follows up the announcement on January 29 of the approval of
the Contract of Work for this project.
Weda Bay holds a 90% interest in the Halmahera nickel/cobalt project,
with 10% interest held by Indonesia's state-owned mining company, P.T.
Aneka Tambang. Based on 808 short drill holes covering a total of
11,195 m, an indicated resource of 63.8M dry tonnes of 1.51% Ni and
0.09% Co have been calculated. This resource is calculated from six
zones located on the large prospect. In past publications regarding
Weda Bay, we stated that we believe a 100.0M-tonne potential exists on
the project, thus the above noted resource update does not surprise us.
Given that there are still numerous, large target areas to be drill
tested, as well as extensions of existing targets to be drilled on a
100 x 200 m grid, this 100.0M-tonne potential at above noted similar
grades still remains very probable.
Importantly, Weda Bay also provided updates of laboratory scale test
work regarding the mineralizations' amenability to pressure acid leach
recoveries. These lab tests indicate extraction rates in excess of 95%
for both nickel and cobalt with moderate acid consumption. Further
metallurgical test work will occur here in Canada, and the Company has
stated that it intends to transport a bulk sample for pilot plant
evaluation.
As previously noted, Weda Bay has undergone what can only be termed a
double whammy" in the marketplace, being negatively affected by both
declining nickel prices and perception fallout regarding Indonesia,
courtesy of Bre-X. Despite these negative influences, we continue to
feel that the Halmahera project offers sound fundamental leverage as a
potential, future, economic nickel deposit. The key focus remains
confirmation of metallurgy for the project. Initial testing is very
positive. For risk accounts only, we continue to rate WDA a
SPECULATIVE BUY.
Graeme Currie (604) 643-7405 |
