Canico to contract feasibility for Onca-Puma

Canadian mining junior Canico Resource (TSX: CNI) plans to contract a feasibility study shortly for its Onca-Puma nickel laterite project in Para state, northern Brazil, company president Michael Kenyon told BNamericas. "The actual contract will be awarded soon. It will include a Brazilian component for sub-contracting and other services," he said. The study is expected to by completed by the end of 2004 and will determine the cost of establishing a mining operation at the site. Initial capex estimates for the project are US$525mn based on similar deposits such as the Loma de Niquel project owned by London-based mining house Anglo American (LSE: AAL) in Venezuela. "Onca-Puma will be of a similar size and scope initially at least, but given the higher grades at Onca-Puma, the nickel output could be substantially higher," the executive said. The inferred resource at the Brazilian deposit is estimated to exceed 100Mt. Loma de Niquel is designed to produce 18,000t/y of the metal. Kenyon said that Onca-Puma has characteristics that could make it a low cost nickel producer ranging from US$1.35/lb to as high as US$1.85/lb. The company expects to finance development through a combination of bank debt and equity, he said. "Canico will spend about US$15mn on this work over the next year and has spent about US$18mn already on exploration and acquisitions," Kenyon said.