Vancouver —
Recent financings allowed the junior to fulfil its requirement under a deal with the major to raise US$22.5 million. At the end of the day, Inco will receive no cash payments but hold an 18% stake in the junior, as well as several warrants. The warrants are designed so that Inco can buy shares to maintain its 18% stake in Canico.
“Our exploration efforts to date have yielded excellent results, and the supply-demand picture for nickel couldn’t be better,” says Canico President Michael Kenyon. “We have all the money we need to complete a feasibility study by late 2004 and finish assembling the team we need to manage the tasks ahead.”
The Puma deposit occupies the 400-sq.-km Ona-Puma property, which hosts a near-surface inferred resource of 50 million tonnes grading 2.3% nickel and 0.09% cobalt, based on a cutoff grade of 1.5% nickel.
The resource consists of three separate targets. The Ona target comprises an area measuring 18 by 1 km, with the mineralized laterite having an average thickness of 4.1 metres. Moving 10 km northeast, the Puma West target extends for 10 km along strike and is also about 1 km wide. The mineralization is slightly lower-grade but has an average thickness of 5.1 metres. Between the two deposits lies an iron formation. Another 3 km to the northeast is the smallest zone, Puma East, which measures 7 km long by 500 metres wide.
Half of Puma West and all of Puma East lie within an indigenous reserve and are not available for development. Even when the 10-11 million tonnes of ore-grade material that occur on the native lands are excluded, the project economics appear robust, and Canico has already increased the tonnage of the deposits.
The junior aims to drill more than 400 drill holes in its current program. Initial results have boosted the resources at Puma West. At a 1.5% nickel cutoff, the Puma West inferred resources come in at 33.8 million tonnes grading 2.21% nickel. Using a 1% nickel cutoff, the inferred resource hits 54.2 million tonnes grading 1.84% nickel.
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