Fortune Minerals NWT, a unit of Fortune Minerals (CDN), has entered into an option agreement with Noranda (TSE) to earn a half interest in the Sue-Dianne copper-silver deposit in the Northwest Territories.
The deposit contains an estimated resource of 9 million tons averaging 0.8% copper. Silver concentration runs from 0.07 oz. per ton over 410 ft. to 1.25 oz. over 75 ft.
Sue-Dianne is 175 km northwest of Yellowknife and 30 km north of Fortune’s Nico copper-cobalt-bismuth-gold
project.
Fortune believes there is good potential to increase the Sue-Dianne reserves with additional drilling and intends to carry out geological mapping, ground geophysical surveys and diamond drilling. This work will be carried out in conjunction with programs already in progress on the company’s other claims in the area.
To earn its interest in the deposit, Fortune must spend $2 million on exploration over three years. The company will act as operator until it vests its interest, whereupon a joint venture will be established; Noranda can then elect to become the operator. Thereafter, both parties will be responsible for funding their pro rata shares for further exploration or have their interest reduced by the standard dilution formula.
The interest of either party, should it be diluted to 10%, will be automatically converted to a 1.5% net smelter return royalty. A 15% net profits interest will be retained by the original vendor of the property.
Provided Fortune earns its 50% interest in the deposit, Noranda will have the option to earn a 50% interest in Fortune’s adjoining, 3,822-acre Olym-Pic-Dam claim group.
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