Falconbridge drops East Bull (September 11, 2002)

Shares of Mustang Minerals (YMU-V) fell sharply on Sept. 11, after the company announced that its partner Falconbridge (FL-T) was dropping the East Bull Lake PGE property near Sudbury, Ont.

The major had been earning a half-interest in the 90% of the East Bull Lake property controlled by Mustang, which covered a 22-km-long gabbro-anorthosite intrusion. To earn its stake, Falconbridge was responsible for funding $5 million in exploration before Nov. 14, 2005. Falconbridge also purchased $1 million worth of Mustang’s treasury shares as part of the deal.

Mustang now regains full ownership of the property.

The former partners recently sank 6 holes (totalling 860 metres) over a series of previously cut trenches on the Kid, Parisien and Central showings, each of which extends for more than 1 km and remains open.

The Central zone returned the best trenching results with 15.7 metres averaging 1.92 grams combined platinum, palladium and gold; 15 metres grading 1.62 grams; and 24 metres grading 1.01 grams.

For the most part drilling failed to impress. Combined platinum, palladium, and gold values typically range between 0.53 and about 1 gram per tonne, with a peak value of 1.89 grams over a 5-metre width.

Mustang says it will continue to explore the property on its own, as more than 80% of the margin of the intrusion remains undrilled. The company is currently looking at funding options to resume a surface and drill exploration program.

In late-afternoon trading on Sept. 11, Mustang shares were off 3 or nearly 17% at 15. For their part, Falconbridge shares were fetching $16.30, 30 up on their previous close.