Initial resource on Puimajuq boosts Canadian Royalties

In the Inuktitut language “Puimajuq” means “near surface” and Canadian Royalties (CZZ-T) hopes its deposit of the same name in the Raglan mining district of northern Quebec can be developed using open-pit mining methods.

The Val d’Or-based company recently commissioned an initial resource estimate specifically to evaluate the scenario of mining the near-surface deposit as an open pit.

Today the company announced that the results of its resource modeling exercise highlight the possibility of mining the high-grade deposit by open-pit methods. More work needs to be done however to optimize an open-pit scenario, including detailed economic modeling that will determine the viability of Puimajuq’s inclusion in a revised mine plan.

The resource study incorporated geology and results from twenty-five holes totaling 1,843.6 metres, including 1,402.0 metres in seventeen NQ drill holes completed last year.

With the publication of the new resource on Puimajuq, Canadian Royalties has completed resource estimates on seven of its deposits that make up its Nunavik nickel project.

The resource estimate adds about 7.5 million pounds of contained nickel and 12.6 million pounds of contained copper to the indicated resource of the Nunavik nickel project. Puimajuq also has significant platinum and palladium values.

In the measured and indicated category, Puimajuq contains 209,000 tonnes grading 1.64% nickel, 2.73% copper, 0.06% cobalt, 0.09 gram gold per tonne, 0.92 platinum per tonne and 2.48 grams palladium per tonne. An additional 12,000 tonnes in the inferred category returned 2.31% nickel, 3.23% copper, 0.09% cobalt, 0.14 gram gold, 1.18 grams platinum per tonne and 2.63 grams palladium per tonne.

The new resource was estimated on the basis of the 24-month trailing average metal prices of US$9.02 per lb. nickel, US$2.84 per lb. copper, US$20 per lb. cobalt, US$871 per oz. gold, US$1,398 per oz. platinum and US$311 per oz. palladium.

A Net Smelter Return cutoff of $40 per tonne was also used, along with $5 per tonne ore mining and $3.50 per tonne waste mining in a 50-degree slope optimized pit shell.

With the added resources from Puimajuq, the Nunavik nickel project contains a total of 21.9 million tonnes in the indicated category grading 0.93% nickel, 1.15% copper, 0.04% cobalt, 0.14 gram gold per tonne, 0.54 gram platinum per tonne and 2.19 grams palladium.

In the inferred category the Nunavik project contains 5.24 million tonnes grading 0.72% nickel, 0.93% copper, 0.04% cobalt, 0.13 gram gold per tonne, 0.51 gram platinum per tonne and 2.03 grams palladium per tonne.

In terms of contained metal, the Nunavik project now has about 204,000 tonnes of nickel, 252,000 tonnes of copper, 380,000 ounces of platinum and 1,539,000 ounces of palladium in the measured and indicated category and roughly 38,000 tonnes of nickel, 48,000 tonnes of copper, 85,000 ounces of platinum and 343,000 ounces of palladium in the inferred category..

Canadian Royalties has finished a bankable feasibility study and has received its environmental certificate of authorization; it has also received mine leases for four sites, namely the Ivakkak, Mequillon, Expo, and Mesamax deposits.

An impact and benefits agreement (IBA) has also been concluded with three Inuit communities and the Makivik Corporation, the Inuit’s non-profit legal representative of the Inuit.

The IBA is the company’s formal commitment to ensure a fair and sustainable distribution of economic benefits stemming from the project.

The project moved into development in 2007 but was put on care and maintenance last year after the outbreak of the financial crisis.

At presstime Canadian Royalties was trading at 59¢ a share. Over the last year the company has traded in a band of 15¢-67¢ per share.

The company has 102.1 million shares outstanding.