Lonmin joins Wallbridge in Sudbury Basin

British-based platinum producer Lonmin has signed a joint venture deal to explore 19 of Wallbridge Mining‘s (WM-T) wholly owned properties in the Sudbury Basin.

Under the deal, Lonmin, the world’s third-biggest listed platinum miner, is committed to fund at least US$4.5 million on exploration over two years. To maintain its rights, Lonmin must spend at least US$2 million annually on exploration or feasibility work for a subsequent two years. Lonmin can extend the two-year periods for another US$2 million.

Wallbridge will remain as operator during the exploration phase. Once an indicated resource is established on any of the properties, Lonmin will vest a 50% interest in the property, and the company can elect to takeover as operator and boost its stake to 65% by completing a full feasibility study.

Upon a positive production decision, Lonmin is responsible for arranging initial development financing, including all necessary third party guarantees. Operating cash flow from the mine will split between the partners based on their respective interest levels. Lonmin will have the right to buy the join ventures production.

Wallbridge’s president Wayne Whymark says, “This transaction takes Wallbridge to the next level in our corporate development. It will finance our Sudbury exploration and any discovery right through to production.”

The partners plan to spend US$4.1 million on exploration during 2002, with US$1.5 million earmarked for the Windy Lake property. Another US$700,000 will spent on the Ministic Offset property. The remaining US$1.9 million will be spread over the remaining 17 properties.

Wallbridge recently acquired a five-year licence to explore 8.4 sq. km of land covered by Windy Lake, 3 km southwest of the historic Levack mines northwest of Sudbury, Ont. The company can lease the property should it find a mineral deposit of economic importance. Geophysical surveys have already located two conductive zones. Diamond drilling and additional surveys are planned.

Wallbridge shares were jumped 15 or about 22% to 85 in late-afternoon trade on the Toronto Stock Exchange. The shares trade in a 52-week range of 15-$1.60.