A recently inked agreement paves the way for Crowflight Minerals (CML-V) to enter the ranks of nickel producers by acquiring Falconbridge‘s (FL-T) Bucko resource block in the Thompson nickel belt.
Under the deal, Crowflight can first take a 50% stake in the Bucko block, plus a 25% interest in the Bucko/Bowden, Halfway Lake and Resting Lake claims, by spending $18 million over three years. The company can then acquire the Bucko block outright by completing a feasibility study, making a production decision and arranging financing. Similarly, the company can boost its stake in the other claims to 50% by spending another $7 million on exploration.
The deal also calls for Crowflight to immediately issue Falconbridge 2 million shares and 5 million warrants; half of the warrants are exercisable at 35 per share for two years; the remaining half, at 75 for two years. Thereafter, Crowflight would issue Falconbridge another 1 million shares in June of each of the subsequent four years.
In 1992, Falconbridge pegged the Bucko block resource at 2.5 million tonnes grading 2.23% nickel and 0.17% copper; that was included in a global resource of 19 million tonnes running 1% nickel. Crowflight says the estimate does not conform to National Instrument 43-101 standards.
The properties cover some 190 sq. km in the Wabowden segment of the nickel belt, and are situated about 100 km south of Inco‘s (N-T) Thompson and Birchtree mines. Those mines churned out more than 2 million tonnes of ore running 2.1% nickel in 2003.
Crowflight plans to launch a feasibility study on the Bucko deposit this year.
The deal is subject to regulatory approval.
Shares in Crowflight were off 2 at 31 in late afternoon trading in Vancouver on June 16. The company currently has 49.7 million shares outstanding.
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