Global Ferronickel posts 80% hike in mineral deposits

MANILA, Philippines — Listed Global Ferronickel Holdings Inc. (FNI) reported an almost 80 percent increase in mineral resources following its drilling and exploration program in its Cagdianao mine.

In a regulatory filing, FNI said subsidiary Platinum Group Metals Corp. saw a 78 percent increase or equivalent to about 5.6 million dry metric tons (DMT) at the Cagdianao area 3 deposit (CAGA 3).

The company did not provide a value on the additional resources given the dynamic pricing in the world market.

However, the additional 5.6 million DMT is also equivalent to 7.5 million wet metric tons (WMT) that can be exported, surpassing the annual average shipment of around six million WMT.

Measured and indicated resources currently stand at 12.8 million DMT with an average grade of 1.2 percent nickel and 27.5 percent iron.

Material mix consists of 75 percent medium-grade, 14 percent high-grade and 11 percent low-grade.

The CAGA 3 deposit, on the other hand, contains additional inferred resources of 2.2 million DMT with an average grade of 1.12 percent nickel and 20.11 percent iron.

“A key part of our strategy is to continuously upgrade our resource and reserve base within Cagdianao deposit areas. This result highlights the effectiveness of our planned exploration program and the exploration potential of Cagdianao areas 6 and 7 which remain unexplored,” FNI president Dante Bravo said.

The company’s exploration program is focused on increasing its existing resource inventory and converting inferred and indicated resources to a higher level in all its seven deposit areas in Cagdianao in Claver, Surigao del Norte.

FNI posted an income of nearly P150 million for the first half of the year, a turnaround from the P318 million loss incurred a year ago due to strong volume growth, improved operational efficiencies and recovery of nickel prices.

Total export revenues surged two-fold to P1.9 billion on higher volumes shipped and the improving price of nickel ore.

 FNI, the second largest nickel producer in the country and the largest single lateritic mine exporter in the world, remains on track to hit its six million WMT target for 2017 from 4.3 million WMT last year.

Based on the recent World Bank’s Commodity Outlook Report, the recovery of nickel prices in both real and nominal terms is seen to continue this year.

For 2017, nickel price is expected to climb to $11,000 per MT from the $9,595 average last year, with further upside in 2018 and beyond.

FNI has set aside a $5 million capital expenditure this year which will be allocated mostly for road development, equipment, and exploration.