Crowflight prepares to take off at Bucko Lake (April 22, 2008)

The next Canadian junior nickel producer could be Crowflight Minerals (CML-V). The company is moving forward aggressively toward production from its Bucko Lake nickel project, part of the Thompson nickel belt in Manitoba. Greg Collins, vice-president of exploration at Crowflight, says that, if everything goes according to plan, production could begin toward the end of the summer.

The project is located near Wabowden, 105 km southwest of Thompson. The company currently has 30 employees, and there are 80 contractors on site. A 1,500-tonne-per-day mill is under construction, and there is an existing shaft with access to one level at a depth of about 330 metres. Underground pre-production development work is progressing, as well as underground delineation drilling. Because the shaft has only a 1,000-tonne-per-day hoisting capacity, a ramp is being driven, which will allow mining to increase by another 500 tonnes per day, so that the mill can run at full capacity.

The project has been optioned from Xstrata (XTA-L), which retains a 2.5% net smelter return (NSR) royalty interest. Crowflight owns 100% of the project, and Xstrata has the right to back-in to an ownership interest, although this is considered unlikely at present. There is an offtake agreement with Xstrata for the concentrate, which will be shipped by rail.

An NI 43-101 technical report from March 2007 estimates that at a cutoff grade of 1.4% nickel, there are 2.5 million tonnes of 2% nickel in the indicated category and 1.2 million tonnes of 2.2% nickel in the inferred category, with copper grades of 0.12% to 0.14%. At a cutoff grade of 1.4% nickel, the technical report estimates the life-of-mine mineral reserves at 2.4 million tonnes of 1.8% nickel and 0.14% copper.

If the cutoff grade is lowered to 1% nickel, the estimate for the indicated category becomes 6.2 million tonnes of 1.5% nickel, and the estimate for the inferred category becomes 3.7 million tonnes of 1.5% nickel, with copper grades of 0.10% to 0.11%. On the basis of metallurgical testwork, nickel and copper recoveries are estimated at 79%.

There are two satellite deposits near Bucko Lake. The M11A deposit is located 4 km from Bucko Lake and has an inferred resource of 330,000 tonnes of 1.4% nickel. The Halfway Lake deposit is located 20 km from Bucko Lake and has an inferred resource of 650,000 tonnes of 1.2% nickel. On April 21 the company announced that a hole from the M11A deposit has returned 26.7 metres grading 1.3% nickel, including 5.8 metres of 3.1% nickel.

The project is well-financed, with $25 million in equity and a debt facility of $55 million. Approximately $34 million has been spent in 2007.

The company is in contact with local communities and keeps them informed of the project. Crowflight’s land package in the Thompson nickel belt totals 700 sq. km.

On April 15 the company announced a bought deal private placement financing for a total of $11 million, consisting of 8 million shares at 62 and 8 million flow-through shares at 75. The financing is being arranged by a syndicate of underwriters led by Macquarie Capital Markets Canada and including Versant Partners. The offering is anticipated to close before May.

Crowflight’s management means business and is moving toward production. If everything works according to plan, the company could be a nickel producer within a few short months.