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Kismet Ventures Inc. - Positive Prefeasibility Study Date: Wed, 2 Dec 1998 11:05:31 -0800 207.102.98.109 ******************************************************** Company: Kismet Ventures Inc. Symbol: KMV Exchange: VSE Current Price: $0.440 52 Week High-Low: $0.500 / 0.210 ******************************************************** A. Edward McMulin, President of Kismet Ventures Inc. (the "Company"), is pleased to announce that it has received a "Positive" Prefeasibility Study from H.A. Simons Ltd. ("Simons") on the development of a processing facility to extract nickel and cobalt from the lateritic ore resources on the Company's "Celestial Property" located within 10km of tidewater on the Island Province of Palawan, Philippines, and recommending: "Based on the engineering data developed for this Prefeasibility Study and the economic assumptions used in the project Financial Analysis, Simons believes this project merits further development work. A Full Feasibility Study should be implemented to define the optimum parameters for enhancing the project value and to develop a road map for project implementation." This study is based on exploration work carried out by the Company as well as metallurgical testwork performed by Dynatec Corporation (formerly Sherritt International Consultants Inc.). The report reflects the data developed from the above work and site visits by a number of Simon's personnel and reflects the experience of Simons and other consultants in evaluating similar projects. CAPITAL COST: The estimated capital cost to construct the plant and all housing infrastructure is US$840 million with a probable range of accuracy of +/- 25%. OPERATING COST: Annual cash operating costs based on the Dynatec testwork and Simons data on similar projects, and assuming a production rate of 40,000 t/a Nickel, are estimated at US$0.66/lb Nickel after Cobalt credit based on a Cobalt price of US$10.00/lb and excluding any additional by-product credits. This would place the Company, on a cash operating cost basis, well within in the lower quartile (25%) of current and forecasted nickel producers. FINANCIAL ANALYSIS: Using US$2.50 Nickel and US$10.00 Cobalt, the project has a Net Present Value ("NPV") of US$170 million at a 10% discount rate, and an Internal Rate of Return ("IRR") of 17%. PROJECT: The current scope of the project is a processing plant to treat 3,622,000 t/a of feed (on a dry basis) and produce 40,000 t/a of nickel briquettes and 3,130 t/a of cobalt briquettes, plus 288,000 t/a (40 t/h) of ammonium sulfate as a by-product. LOCATION: The location is ideally suited for project logistics since almost all materials for construction and operation, as well as the final products, will be shipped by sea. RESERVE & MINE PLAN: The Company has defined a resource of approximately 77 million tonnes with a nickel grade of 1.25% and a Cobalt grade of 0.10%. MRDI (a wholly-owned subsidiary of Simons) has provided the Company with a set of recommendations for a field program to produce additional geological data which, when implemented, would move the resource to internationally recognized standards (mineable reserves) for a Full Feasibility Study. The mine will likely be able to operate as a backhoe excavator and truck operation, consistent with standard industry methodology. FACILITIES: The process plant will produce briquette nickel and cobalt via sulfide precipitation and releaching, with specification-grade ammonia sulfate as a by-product. The major process steps are proven technology that has been in use for many years by Sherritt International (Moa Bay, Cuba project), and will be used by new projects nearing production such as Anaconda Nickel (Murrin Murrin project in Western Australia). The plant will be near the coast, and fresh water supply is not expected to be a problem. An engineered, submarine tailings disposal system is considered the most appropriate method of tailings management, although other possibilities (conventional impoundment in a tailings pond or backfilling filtered tailings into mine-out zones) are being considered. Power will be provided from a dedicated set of diesel generators, possibly supplemented by co-generation from waste steam from the acid plant. A new port able to berth vessels up to 5,000 DWT in size will be constructed, with larger ships standing offshore and serviced by a barge/lightering system. All support facilities, maintenance and administration will be provided, and a new townsite will be constructed to support operations. SCHEDULE: The current schedule shows a 36-month period from the date overall financing is in place to the production of the first nickel briquette. FINANCING: The Company expects to file a Prospectus early in 1999 to raise sufficient financing to initiate the work proposed by Simons to produce a Full Feasibility Study. ********************************************************* This bulletin is sponsored by the company and/or another party and has been sent to you for no charge. This is a service provided by StockHouse to public companies so they can disseminate recent significant developments, which potentially can affect their share price. This is not an offer to buy and sell any security which can only be made through a registered representative. StockHouse makes no warrantees as to the accuracy or completeness of the above information. 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