Exmibal advancing agreements to reactivate nickel project

Guatemalan company Exmibal is advancing plans to reach an agreement with the government to reactivate the Fénix nickel project in the country's north. Meanwhile, Hatch Engineering is performing a project feasibility study for Exmibal 's parent company that is due to wrap up in the first half of next year. Exmibal, controlled by Vancouver-based Skye Resources (TSX-V: SKR), held 40-year concessions for nickel development in different areas of the country. In December 2004, Skye finished acquiring a 70% interest held by Eximibal from Canada's Inco (NYSE: N). During 2004 negotiations the company gave up its concessions and agreed to a new legal framework, Guatemala's mining and energy deputy minister Jorge Antonio García told BNamericas. "The negotiations allowed the company to give up concessions in exchange for exploration licenses to be able to finish verifying mineral reserves and carry out the environmental impact study (EIS)," he said. A major part of project negotiations involves deciding what the government would do with its 30% share in the project, Skye CEO Ian Austin said. "They [the government] have either to participate or do something with it," he said about the project. According to the agreement the company has to develop a pilot plant with new technology "and after an enquiry process with the communities of the area, the company can opt for a mining license," García said. If everything works out, the company would start plant expansion and construction, which would take three years. Recently Skye held debates with members of the local community near Fénix, where the majority of the people understand the project benefits to the community. OUTLOOK The government's strategy is to take advantage of the country's mining potential, considering mining deposits are in the poorest areas, the deputy minister said. "We also have to take advantage of Chile and Peru's experience and therefore try to improve practices from an environmental point of view," he added.