Juniors join forces in PGM hunt

Junior explorer New Millennium Metals (PGM-V) and Platinum Group Metals (PTG-V) plan to merge and consolidate their respective land positions in the Lac des les region of northwestern Ontario,

Platinum Group Metals’ president Michael Jones said, "This is a decisive move to bring together two companies with excellent exploration projects in the Lac des les and Sudbury regions. We will have established a camp that effectively surrounds the existing [Lac des les] mine with numerous targets to pursue."

Subject to regulatory and shareholder approval, the two will amalgamate and continue operations under the Platinum Group Metals banner.

Under the proposed deal, Platinum Group Metals shares holders will receive 1 share of the new company for every Platinum Group Metals share held and New Millennium Metals shareholders will get one share of the new company in return for 1.65 shares of New Millennium. All outstanding options, warrants and other convertible securities in either issue will be exchanged for comparable securities in the new entity, after adjustment based on the above exchange ratios.

Platinum Group Metals recently began exploring the Stucco palladium property near Thunder Bay, Ont. The Stucco property lies 30 km east of North American Palladium‘s (PDL-T) Lac des les palladium mine and covers 48 sq. km of staked mineral rights. Sulphide-bearing gabbros are known in the area, and a single hole, drilled in 1968, passed through 40 metres of such material, though none of the core was analyzed for platinum group metals.

Platinum Group Metals can earn a 60% interest by spending $1 million on exploration, paying $65,000 in cash and completing a feasibility study. The company can also earn a 60% stake in the South Legris, 11 km southeast of Lac des les, by spending $1 million, making an additional $20,000 in cash payments, and completing a feasibility study.

About 12 km north of the Lac des les mine, New Millennium Metals recently uncovered a new platinum-palladium-gold zone on the Shelby Lake property in Ontario. Dubbed Stringer, the zone was discovered along strike from the Powder Hill prospect. Initial sampling returned up to 6 grams palladium, 0.9 gram platinum and 0.43 gram gold per tonne. New Millennium is earning a 60% stake in the property from fellow junior New Claymore Resources (NCS-V) by spending $1 million and issuing 25,000 shares.

The combined entity will also have a stake in the Agnew Lake property, west of Sudbury Ontario, plus a significant land positions in the River Valley area east of Sudbury.

Jones stands to become president and CEO of the combined company and New Millennium’s CEO Frank Hallam will join PTG’s existing board to form the new company’s board.

On the financial front, Platinum Group Metals intends to issue up to $2 million worth of special warrants convertible into common shares. Griffiths McBurney & Partners will act as lead agent in the financing, which is expected to wrap up by the end of November.

In another deal, the company has entered into a letter of intent with the same agent for a private placement of special warrants at 25 to 30 apiece, for proceeds of up to $2 million. The agents will receive a 6% commission. Proceeds will be used to advance the company’s properties and for general working capital.