BRAZIL – CANICO RESOURCE CORP. of Vancouver has updated its mineral resource estimates for the Onca-Puma nickel laterite project in Para State. The estimates are presented on Canico’s website, www.canico.com. Measured and indicated resources are 98.6 million tonnes grading 1.7% Ni and 18% Fe, with a SiO2/MgO ratio of 1.79 (1% Ni cutoff). The inferred resource at the same cutoff is 137.2 million tonnes grading 1.48% Ni, 23.7% Fe and a SiO2/MgO ratio of 2.14.
The Puma deposit has been drilled at close spacing, with the result that almost all of the inferred mineral resources previously announced for Puma have been converted to measured and indicated mineral resources at similar grades and tonnages. While there are now substantial measured and indicated mineral resources estimated for the Onca deposit, drilling at Onca is less advanced, and accordingly a significant portion of the mineral resources are still in the inferred category. Reclassification of a large proportion of these inferred mineral resources to the measured and indicated categories is expected to continue with the incorporation of the results of some 1,700 additional drill holes already completed (for which assay data is awaited) and as the ongoing infill drilling proceeds over the coming months.
The new mineral resource estimates continue to support the presence of a substantial tonnage of laterite above a cut-off grade of 2.5% nickel. This material will be targeted for initial mine production to maximize project cash flows during early years of operation. There are also substantial tonnages at a 1.0% nickel cut-off grade with a silica to magnesia ratio below 2.0. This creates opportunities for a much longer mine life than was estimated in the November 2003 scoping study.
A feasibility study is underway to assess the construction of a large-scale ferronickel production facility at Onca-Puma, and should be completed early in the second quarter of 2005.