Tiberon Minerals, with its 77.5% interest in the Nui Phao mining project in Vietnam, is poised to become one of the world’s largest and lowest cost producers of tungsten and acid-grade fluorspar.
Solid fundamentals for higher tungsten and fluorspar pricing are the result of supply restrictions out of China, the largest producer, combined with new applications for these strategic commodities.
Through development of Nui Phao, Tiberon is well positioned to become the largest single producer of tungsten and a major supplier of acid-grade fluorspar. Production of these strategic commodities will enable the company to capitalize on the need for non-Chinese sources of supply to meet rising demand.
Tiberon and its two Vietnamese partners, Thai Nguyen Mineral Company (15% interest) and Export-Import Investment Company Thai Nguyen or “Intraco” (7.5% interest) have formed the Nui Phao Mining Joint Venture Company Ltd. (“Nuiphaovica”) to develop and operate the open pit mine.
Low Projected Costs
Early in 2005, the Board of Directors received the Final Feasibility Study outlining Nui Phao’s potential as a low-cost producer of high-grade tungsten and acid-grade fluorspar concentrates. Significant revenue is also projected to come from bismuth and copper/gold production.
The final feasibility study projects Nui Phao will generate gross revenue of US$1.7 billion over the current 16-year mine life, and cash flow averaging US$73 million after tax annually. The project’s after-tax internal rate of return exceeds 23%, assuming project financing based on a 75:25 debt to equity ratio.
Favourable Tax Structure Nuiphaovica will benefit from Vietnam’s very favourable tax structure. The joint venture company will receive a three-year tax holiday after achieving profitability, followed by an eight-year period of a 50% reduction in the corporate tax rate. During the first 12-year period the corporate tax rate, prior to incentives, is 15%; thereafter the rate is 28% before any tax incentives.
Timely Development The timely development of the Nui Phao mine is Tiberon’s top priority. Basic engineering is scheduled to begin in the second half of 2005, the first step toward anticipated start-up in Q4 2007, with commercial production beginning in early in 2008.
Excellent Infrastructure The Nui Phao Investment License provides exclusive rights for mining and exploration over a 55.46 km2 area located approximately 80 km northwest of Hanoi, 150 km south of the Chinese border.
The site is well served by existing infrastructure, including road, rail, power and communications. The capital cost, including a contingency of US$24.3 million, is estimated at US$228.9 million.
Two existing port facilities, Hai Phong and the recently constructed port of Cai Lan (Quang Ninh) are located approximately 180 km and 240 km respectively to the southeast of the project. Hai Phong will be used to receive equipment and materials during construction and operation; the more modern port of Cai Lan will be used to export mineral concentrates produced at Nui Phao.
Conventional Milling and Processing
Nui Phao will be developed as a conventional open pit mining operation using 90 tonne haul trucks. A total of 3.5 million tonnes of ore will be mined annually from the single open pit with a waste-to-ore ratio of 1.67:1.
Reserves To date, a proven and probable ore reserve of 55.7 million tonnes has been delineated. The deposit itself is flat-lying, and potential exists to increase the current mine life through the conversion of 27.4 million tonnes of inferred resources into proven and probable reserves. The mining license, extending over 0.9 square kilometres, covers the known proven and probable reserves.
Additional tungsten/fluorspar exploration potential has been defined on the Nui Phao property, and will be evaluated in due course.
Copper/gold and bismuth will be recovered by conventional sulphide flotation, fluorspar will be recovered using conventional oxide flotation and standard gravity methods will be used for tungsten recovery.
Annual concentrate production is projected to average 4,869 tonnes of tungsten, 213,739 tonnes of fluorspar, 5,537 tonnes of copper, 2,274 ounces of gold and 1,991 tonnes of bismuth. Operating cost is estimated at US$2.59 per tonne of ore. For the two principal products, tungsten and acid-grade fluorspar concentrates, average annual cash costs are expected to be US$7 per MTU and US$16 per tonne respectively, placing Nui Phao at the low end of the cost curve for these products.
Solid and Committed Financial Partners In August, 2004, the Company signed a mandate letter with Fortis Bank S.A./N.V. and WestLB AG regarding the debt portion of the project financing. And in July 2005, Tiberon announced the closing of a US$10 million bridge loan facility with WestLB AG. Shortly thereafter, Tiberon raised CDN$80 million through an equity financing.
In November, 2004, Nuiphaovica signed a memorandum of understanding with Sidech S.A. (“Sidech”), the world’s leading producer of bismuth end products. Under the agreement, Sidech will purchase 100% of Nui Phao’s bismuth output for the first five years of production. In May 2005, Nuiphaovica signed an offtake agreement with Osram Sylvania for approximately 40 percent of Nui Phao's tungsten output for a minimum of five years, with an option for Sylvania to take 100 percent.
The company is currently negotiating fluorspar offtake agreements with leading end-users, and anticipates signing a long-term deal for this commodity during the second half of 2005.
Strong Local Presence Tiberon is committed to being a responsible corporate citizen in all aspects of its operations. As such, all of the company’s activities are planned and executed to minimize any potential negative impact on local communities and the environment.
A significant portion of the projected capital cost relates to ensuring all aspects of the mine and processing are designed to meet or exceed relevant international environmental standards. The capital cost estimate also includes US$25.9 million for compensation and resettlement of families that will be affected by the mine’s development. Through consultation with local authorities, non-government organizations and affected people, a comprehensive Compensation and Resettlement Plan has been developed.
While relocation of certain individuals is unavoidable, the Plan is designed to ensure that all affected persons are appropriately compensated and provided with rehabilitation measures to assist in improving their living standards and earning ability. This involves the mine, helping to develop business opportunities to provide products and services to the mine, and providing funding and training to assist in the development of new businesses to serve the population in the surrounding area.
The company and its partners will continue to work closely with affected entities to ensure efficient completion of the process and sustainable development during the mine life.
Exploration Upside
Tiberon’s corporate focus is on the timely development of the Nui Phao Mine. With this in mind, Tiberon has entered into joint venture agreements on three precious metal mineral exploration licenses for which it has applied in Vietnam with Takara Limited, an indirect wholly-owned subsidiary of Triple Plate Junction Plc. The commercial basis of the joint venture arrangement provides that Takara will earn a 50% interest in the exploration licenses, if and when issued, after an initial contribution of US$1 million.
About Tiberon Poised for Production
Tiberon Minerals Ltd. is positioned to become the world’s largest primary tungsten producer and a major producer of fluorspar, as well as bismuth, copper and gold, with the development of the Nui Phao deposit in Vietnam. Tiberon’s long-term objective is to become a significant, low-cost producer of strategic commodities through:
* Production beginning in 2008 at the 77.5%-owned Nui Phao mine;
* The identification of existing mining operations where management's expertise can be applied to add value, lower costs and increase financial returns; and,
* The strategic acquisition of exploration and development projects with the potential to become low-cost mines.
Head Office Scotia Plaza
100 Yonge Street, Suite 1101
Toronto, Ontario
Canada
M5C 2W1
Tel: 416.214.1877
Fax: 416.214.0091
Toll Free:1.866.616.2404
Company Email: info@tiberon.com Hanoi Office 29 Xuan Dieu Tay Ho, Ha Noi
Vietnam
Tel: +84.4.718.2490
Fax: +84.4.718.2491
Principal organisation information Thông tin chính
