McNickel’s Lac St. Jean prospect is uneconomic

The McNickel discovery, which earlier this year touched off a staking rush involving more than 20 companies and 12,500 claims, has not yielded an economic orebody.

With all the final assay results now available from a major fall drilling campaign, McNickel has confirmed the sulphide deposit it tested is uneconomic. Other partners in the project include Vancouver- based St. Phillips Resources (VSE) and Ramcor Resources (VSE).

The share prices of all three junior companies began to drop dramatically in September when the first drill results started to reveal lower than expected grades of copper and nickel on the property.

After completing nearly 50,000 ft of drilling in 158 holes, McNickel has concluded the deposit is of insufficient size and grade to be economic at current base metal prices.

According to McNickel, drill- indicated reserves stand at 5.8 million tons grading 0.209% nickel, 0.106% copper and 0.029% cobalt. The reserves are hosted within a sulphide-bearing horizon measuring roughly 230×1,300 ft on the 40-claim property.

Undaunted by the lack of success at its Lac St. Jean property, McNickel’s Steve Brunelle was philosophical. “If no one tried to explore a new area, there would never be any new mining camps found,” he told The Northern Miner. “We saw an opportunity in an area that had never been tested before, but unfortunately the tonnage and grades were not as great as we had hoped for.”

The Toronto-based junior company earned a 25% direct interest in the 40-claim property by spending $1 million. No further work is planned on the property, in light of the subeconomic results obtained to date.

“To describe the results at Lac St. Jean as disappointing would be an understatement,” said Brunelle. “But disappointment is often a part of exploration. Sometimes if a project doesn’t work out, then you just have to move on to the next one.”

With more than $500,000 left in its treasury from a previous $3- million public financing, McNickel has already begun to look at another prospect in Saskatchewan. Drilling is under way on that property where earlier work outlined a probable reserve of 1.77 million tons containing 0.735 nickel equivalent (three copper units equal one nickel equivalent unit).

Shares of McNickel are trading at a low of 25 cents while those of St. Phillips Resources have dropped to a low of 38 cents . Both stocks had traded at levels above $4 per share when speculation surrounding the Lac St. Jean play was at its peak five months ago.

There are currently about six million shares of McNickel issued and outstanding (fully diluted) of which more than 60% are held equally by the company’s president and vice- president, John McAdam and J. T. Flanagan.

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