NiHao Mineral Resources International (formerly Magnum Holdings Inc.) has signed an agreement with QNI Philippines Inc., the Philippine flagship of Australia-based BHP Billiton Ltd., to jointly explore nickel laterite deposits in Zambales.
In a disclosure to the Philippine Stoock Exchange, Nihao said the agreement covers its 7,102 hectare- Botolan nickel prospect within the Zambales Mountain Range in northern Luzon.
Under the agreement, Nihao will conduct a preliminary exploration and drilling program on the property with BHP Billiton providing technical expertise and advice through a joint exploration management committee.
Zambales is traditionally known for its chromite mines.
The agreement also contains commercial terms for the offtake agreement at BHP Billiton’s option, between Nihao and BHP Billiton’s Yabulu nickel refinery in Queensland, Australia.
The Yaubulu refinery is one of the world’s major nickel processing facilities.
The offtake agreement will take effect once the exploration and drilling program is concluded and will extend for a period of five years. Under the agreement, the company expects to deliver 500,000 wet metric tons of nickel ore per annum based on London Metal Exchange prices.
BHP Billiton, the world’s largest mining company, is the product of a 2001 merger of Australia’s Broken Hill Proprietary Company (BHP) and the UK’s Billiton.
Nihao is planning to raise P700 million from a stock rights offering to fund its exploration activities and acquisition of two or three more highly-nickel and copper prospective tenements in Mindanao.
Based on its amended articles of incorporation, NiHao is engaged in the exploration, development and operation of mineral properties and the mining of metallic and non-metallic minerals including but not limited to nickel, gold, and copper.