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Gold/Mining/Energy : Mining News of Note

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To: LoneClone who wrote (20743)	6/2/2008 11:13:20 PM
From: LoneClone	Read Replies (1) of 194504

Miner on verge of China joint venture business.theage.com.au * Barry Fitzgerald * June 3, 2008 * THE boom in nickel production could be extended to include Young in NSW under a deal by Melbourne-based junior Jervois Mining with a Chinese consortium headed by construction giant China Railway Group. Jervois went into a trading halt on Friday before an announcement expected today confirming Chinese interests are backing the idea Young could become a world-class producer of 50,000 tonnes a year of nickel, with cobalt credits. The deal is expected to be contingent on Chinese interests completing due diligence, with a formal agreement to be signed by October 31. Chinese and Australian government clearance would be required. Jervois is expected to contribute its licences covering the Young deposits for a retained 30% interest while the Chinese will provide funding and nickel/cobalt processing technology in return for a 70% interest. Jervois last traded at 4.2¢ a share for a market capitalisation of $47 million. For its past work on the joint-venture ground, Jervois will be reimbursed $US3 million ($A3.2 million), $US1 million as an advance, while the Chinese will contribute $A45 million to fund an initial development. This would cover an operation producing 3000 tonnes of nickel a year. It is expected the Chinese would be issued with 19.9% of the then total capital in Jervois at 2¢ a share. The shares would only attract full voting power on a decision to expand Young to 50,000 tonnes of nickel a year. On a decision to move to this world-class annual level — BHP Billiton is working towards it after spending $US2.2 billion at Ravensthorpe in Western Australia — Jervois can pro-rata fund its share of costs or elect to revert to a 20% free-carried interest. A resource calculation was done in 2001 based on 282 drill holes. Resources of 167 million tonnes grading 0.72% nickel and 0.07% cobalt were estimated. According to Jervois, Young has the potential to be one of the top three laterite deposits in Australia.

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