BHP eyes nickel prospect in Manitoba

Vancouver — BHP Billiton Diamonds, a unit of mega-miner BHP Billiton (BHP-N), has secured rights to earn up to 70% of the so-called Big claims, held by ValGold Resources (VAL-V) in northern Manitoba.

The Big claims are adjacent to the Stephens Lake property, previously optioned to BHP Billiton by ValGold and two associated companies, Cream Minerals (CMA-V) and Sultan Minerals (SUL-V).

The combined land package is believed to be geologically similar to the Thompson belt, one of Canada’s most important nickel-producing regions.

To earn an initial 51% interest in the Big claims, BHP Billiton must assume most of ValGold’s option obligations to the original vendor. ValGold signed an agreement earlier this year whereby it could earn 70% of the Big claims by issuing 200,000 of its shares and paying about $400,000 to the vendor by late 2005.

BHP Billiton can boost its interest in the Big Claims to 75% by completing a feasibility study within 10 years. ValGold would retain a 17.5% interest, and the vendor would have 7.5%.

At Stephens Lake, ValGold had previously intersected serpentized pyroxenite, a favourable host rock for nickel mineralization, while exploring for diamonds in the region.

An airborne geophysical program will attempt to define drill targets, including a magnetic anomaly that may represent a flat-lying massive sulphide target.

ValGold also is exploring the Tower Mountain gold project, near Thunder Bay, Ont. Drilling has returned encouraging results, such as 12 metres averaging 76.43 grams gold per tonne. That intersection includes 3 metres of 304 grams gold, which in turn includes a 1.5-metre section averaging 588.9 grams.