Phelps Dodge of Canada, a unit of Phelps Dodge (NYSE), has signed an agreement to option a 51% interest in each of three Nova Scotia properties from Scotia Prime Minerals (ASE). The agreements pave the way for base metal exploration on the properties’ 1,391 claims (55,640 acres) on Cape Breton Island and near New Glasgow, N.S.
By spending $2.1 million on exploration over the next 30-36 months, Phelps can earn a 51% interest in the Ferrona, West Bay and Loch Lomond properties. The company also has the option to purchase 1.9 million shares (30%) of Scotia Prime.
As part of the deal, Phelps is committed to spend $300,000 on the Ferrona and West Bay properties over the next 12 months.
Drilling is expected to get under way on the Ferrona property in mid-April, said Scotia President Craig Miller. Scotia, as operator, will drill about 3,000 ft. to test for carbonate-hosted lead-zinc-silver mineralization.
Other programs are also scheduled for the West Bay and Loch Lomond properties on Cape Breton Island, where the main targets are coincident geochemical and geophysical anomalies.
Upon earning a 51% interest in the three properties, Phelps Dodge may elect to increase its interests to 70% by spending an additional $2.5 million per property before entering into a formal joint venture with Scotia.
Agreements covering three additional properties, or 352 claims, are also in the works, Scotia says.
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