JUNIOR explorer Pelican Resources has signed an agreement with BHP Billiton for offtake from the emerging Romblon nickel laterite project in The Philippines.
The offtake agreement is to supply 500,000 wet tonnes of product annually for an initial period of five years, with options to extend for a further eight years.
The agreement is dependent on Pelican confirming a 2.5 million tonne nickel reserve at Romblon and BHP Billiton's satisfaction of the ore grade.
Romblon has an inferred resource of 7.26 million tonnes, with an average grade of 1.56 per cent nickel.
BHP Billiton has also committed to fund a $US250,000 ($290,500) exploration program at Romblon.
Pelican director John Hills said the offtake agreement with BHP Billiton reflected the economic potential of the Romblon project.
"The company looks forward to the commencement of the exploration and evaluation program at the Romblon nickel project ... and to working closely with BHP Billiton and its subsidiaries to develop a long-term, cooperative relationship into the future," Dr Hills said.
Nickel laterite is low-grade and requires intensive processing or a low-cost heap-leaching process where crushed ore is put into mounds and irrigated with acid to extract the metal.
The agreement was signed between BHP Billiton and Pelican's Philippines subsidiary, Sibuyan nickel Properties Development Corporation Ltd (SNPDC).
Pelican holds a 75 per cent stake of SNPDC while All-Acacia Resources Inc holds the balance.
Pelican shares had dropped two cents to 28 cents by 11.01am (AEST).
The offtake agreement is to supply 500,000 wet tonnes of product annually for an initial period of five years, with options to extend for a further eight years.
The agreement is dependent on Pelican confirming a 2.5 million tonne nickel reserve at Romblon and BHP Billiton's satisfaction of the ore grade.
Romblon has an inferred resource of 7.26 million tonnes, with an average grade of 1.56 per cent nickel.
BHP Billiton has also committed to fund a $US250,000 ($290,500) exploration program at Romblon.
Pelican director John Hills said the offtake agreement with BHP Billiton reflected the economic potential of the Romblon project.
"The company looks forward to the commencement of the exploration and evaluation program at the Romblon nickel project ... and to working closely with BHP Billiton and its subsidiaries to develop a long-term, cooperative relationship into the future," Dr Hills said.
Nickel laterite is low-grade and requires intensive processing or a low-cost heap-leaching process where crushed ore is put into mounds and irrigated with acid to extract the metal.
The agreement was signed between BHP Billiton and Pelican's Philippines subsidiary, Sibuyan nickel Properties Development Corporation Ltd (SNPDC).
Pelican holds a 75 per cent stake of SNPDC while All-Acacia Resources Inc holds the balance.
Pelican shares had dropped two cents to 28 cents by 11.01am (AEST).
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