Pure Nickel makes deal with Japanese group

A major Japanese conglomerate has agreed to invest up to $40 million in Pure Nickel‘s (NIC-T, PNCKF-O) MAN project in Alaska over seven years.

ITOCHU, a multi-billion dollar company based in Tokyo, will have the option to earn a 75% interest in the nickel-copper-platinum group metal project between now and 2014.

Pure Nickel president and CEO, David McPherson, says the investment by the Japanese firm has come at a good time.

“Pure Nickel is now in a desirable position, especially in the context of the chaotic stock market and the less than friendly investment atmosphere that has overshadowed the mining and exploration sector,” McPherson said in a statement.

Energy, Metals & Minerals Co., a division of ITOCHU will reimburse Pure Nickel for 2008 exploration spending and pay for work in 2009, totaling a combined maximum of $6.5 million for both years.

After 2009, all of Pure Nickel’s exploration activity will be funded through 2014 by ITOCHU, which will have to exercise an option to continue in 2009 and 2013.

ITOCHU has the option to earn a 60% interest in MAN after spending $30 million over the first six years, and will earn the additional 15% in the property by spending $10 million during the seventh year.

ITOCHU group manager of mineral resource development, Satoshi Kondo, says the company looked at many platinum group metals and base metals projects around the world before deciding on the MAN project.

“The MAN project has a high probability of becoming a world class project and fits well with our policies and concepts,” Kondo said in a statement.

The project is spread across 750 sq. km and is 100% owned by Pure Nickel. The company says it has widespread high-grade nickel-copper-platinum group element showings ranging up to 15.4% nickel, 7.19% copper and 170 grams PGE plus gold and silver per tonne.

MAN is 400 km northesast of Anchorage and is accessible from two major highways and is near an airstrip. The company has found five Triassic ultramafic-mafic intrusive complexes that host nickel-copper-PGE mineralization on the property.

Pure Nickel shares closed were up 3.5 today to 10.5 on a trading volume of 2.2 million shares. The company has a 52-week trading range between 2.5-$1.09 and nearly 67.8 million shares outstanding.