VANCOUVER, BRITISH COLUMBIA -- (MARKETWIRE) -- 07/22/08 -- Nanika Resources Inc. (TSX VENTURE: NKA)(FRANKFURT: C7X) (the "Company") or "Nanika") announces that work has been progressing steadily with environmental baseline and engineering studies required for the development of Nanika's Molybdenum Project located approximately 85 kilometers southwest of Houston, British Columbia. Korean Negotiations Update: In addition to the technical update that follows below Nanika is pleased to update on the status of negotiations with Korean partners Palm Clean Energy Inc. and Daewon Chemical Co. Ltd. The signing of any final Joint Venture Agreement (JVA) being negotiated will be subject to the completion of due diligence and the approval of Nanika's board. Nanika has now agreed to use its best efforts to conclude negotiations before September 15, 2008. Any Memorandum of Understanding (MOU) signed representing the key business terms of the formal JVA will be non-binding and the previously signed Option Agreement entered into on December 13, 2006 remains in force. That Option Agreement contained terms that provided the parties would subsequently enter into a formal joint venture agreement. Negotiations on the terms of the MOU and formal JVA agreement continue and although moving slowly the discussions are moving positively towards conclusion. Engineering and Environmental Studies Update: The following studies are either completed or are in progress: BGC Engineering Inc. (BGC) completed prefeasibility evaluations and geotechnical assessment of the proposed T6B-Tailings Storage Facility and selected plantsite. They as well completed a program of terrain mapping throughout the Project area.. The above assessments are reported in the Prefeasibility Site Investigation Proposed Plant Site, Terrain Inventory Mapping and Prefeasibility Site Investigation Proposed Tailings Storage Facility. G&T Metallurgical Services Ltd. (G&T) completed a detailed program of metallurgical study, including a pilot mill test program, for the purpose of developing a process flow sheet. The relevant data on the metallurgical work has been compiled into a report entitled "Metallurgical Assessment of the Lucky Ship Molybdenum Project". SRK Consulting Engineers and Scientists (SRK) completed a scoping study (first pass review) with the focus on determining the viability of underground extraction and, if viable, how it might complement an open pit mine. ECOS Environmental Consulting Inc. (ECOS) has completed a draft Project Description for the Project. The Project Description is the basis for entry of the project into the British Columbia Environmental Assessment (EA) process and is intended to also meet the requirements for entry into any federal review process. Lorax Environmental Services Ltd. (Lorax) continues to work on programs pertaining to surface water and groundwater quality, sediment quality and metal leaching/acid rock drainage (ML/ARD). Evaluations on groundwater (hydrogeology) quality and flows within the mineralized zone continue to be carried out through monitoring of existing wells. During this past winter and spring an extensive groundwater drilling program (Phase 3) was completed on the Project, in order to acquire information pertinent to the groundwater regime located between the deposit and the Nanika River. As well during this period, Lorax has continued to work on the kinetic and static assessments (ML/ARD) of lithological units. Jacques Whitford AXYS Ltd. completed extensive aquatic biota, fish & fish habitat and fish tissue assessment programs, designed to obtain pertinent fisheries information for all of the watersheds associated with the proposed mine site, plant site and Tailing Storage Facility. Knight Piesold Ltd, ECOS and Golder Associates have continued to gather baseline information relating to climate and surface water hydrology for the Project area. Dave Bustard and Associates has completed a detailed spring season evaluation of the proposed Tailing Storage Facility-T6B area fisheries. Results of these studies have not yet been reported to the company. Nanika Resources Inc. has held discussions and is awaiting a decision from the Korean partners prior to continuing discussions with MQes - Mine and Quarry Engineering Services, Inc of San Mateo, CA, in regards to completing a preliminary feasibility study on a process plant and ancillary facilities. National Instrument 43-101 Technical Report Update: The Company filed July 2, 2008 the National Instrument 43-101 report that was news released on May 14, 2008. The Company commissioned A. C. A. Howe International Limited of Toronto, Ontario to prepare a further technical report regarding the Lucky Ship Molybdenum Project. This report is dated May 1, 2008, as amended June 30, 2008 and is available for viewing under Nanika's corporate profile on SEDAR (www.sedar.com). Extract from Table 15-2 Howe Mineral Resource Estimate (pg. 51 Report No. 919) ------------------------------------------------------------------------- Report Tonnes Mo% Cut-off Class (Million tonnes) (uncut) ------------------------------------------------------------------------- 0.03% INDICATED 65.66 0.064 Molybdenum (approximately 92.6 million pounds Molybdenum) ------------------------------------------------------------------------- 0.03% INFERRED 10.24 0.054 Molybdenum (approximately 12.2 million pounds Molybdenum) ------------------------------------------------------------------------- Molybdenum Market Update: Nanika's consultant on the molybdenum market, Denis Battrum, MBA, M.Sc., B. Sc., advises that the market for molybdenum can be fairly described as strong and getting stronger - financial results from the United States notwithstanding. Molybdenum demand is 75-80 percent related to steel - which is growing 5.6 to 5.8 percent a year, based on the most recent statistics from the International Iron and Steel Institute. Molybdenum is also supported by the catalyst business, which is growing much faster than oil refining generally because of its capability to reduce sulfur when used in catalysts. Catalyst producers put the demand for molybdenum in their business as growing 8-11 percent annually. The molybdenum market can be said to be growing in a range between 5.6% and 11%. The spot price is rising at $35.40 US/lb at July 15, 2008 up from $35.25 US/lb. as at July 11, 2008 as quoted by Ryan's Notes. It is reported that traders cannot find spot material for new incremental demand because producers are largely sold out. Denis Battrum advises further that there remains a supply question in South America due to structural labour problems. Qualified Persons Bruce Graff, P. Eng., a qualified person under National Instrument 43-101, has been supervising Nanika Resources environmental and engineering developmental studies for the Lucky Ship Project. He has reviewed and approved the technical disclosure in this news release regarding the studies. The extract from the report prepared by ACA Howe International Ltd. has been reviewed and approved by Felix Lee. P. Eng. a qualified person under National Instrument 43-101. About Nanika Resources Inc. Nanika Resources Inc. is a TSX Venture listed mineral exploration and development company focusing on the development of its Molybdenum Property in west central British Columbia and the advancement of its other mineral exploration properties, all of which are located within Canada. On Behalf of the Board James. D Jacuta, Chairman, President & CEO The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of the information contained herein. Contacts: Nanika Resources Inc. Doug Kerr (604) 638-0699 or Toll Free: 1-866-580-0699 Email: kerr@nanikaresources.com Nanika Resources Inc. Derek Huston (604) 929-2337 or Toll Free: 1-800-665-4288 Website: www.nanikaresources.com Copyright © Hugin AS 2008. All rights reserved.
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