Partners test McCreedy’s PM zone (June 04, 2003)

Continued underground drilling by partners FNX Mining (FNX-T) and Dynatec (DY-T) on the PM zone on the McCreedy West mine in Sudbury, Ont., continues to return high-grade copper-platinum-palladium-gold values.

The latest holes focussed on the southeast and northwest corners of the PM zone owing to underground access limitations.

Nineteen holes tested the Southeast area. Selected results include:

• Hole 93 – 20 ft. grading 2.5% copper, 1.2% nickel, and 35.4grams combined platinum-palladium-gold (PGM) per tonne;
• Hole 94 – 3 ft. averaging 15.7% copper, 1.3% nickel and 101.2 grams PGM;
• Hole 108 – 84.4 ft. running 0.9% copper, 0.3% nickel and 6.7 grams PGM;
• Hole 131 – 11.5 ft. of 6% copper, 0.5% nickel and 23.4 grams PGM; and
• Hole 132 – 4.2 ft. grading 20.5% copper, 8.2% nickel and 140.4 grams PGM.

The remaining holes generally returned lower grades over similar intervals.

Drilling on the Northwest area generally returned better results, including:

• Hole 57 – 33.7 ft. grading 3.5% copper, 0.5% nickel, and 14.1 grams PGM;
• Hole 58 – 36.9 ft. averaging 1.4% copper, 0.4% nickel and 4.3 grams PGM;
• Hole 59 – 9.1 ft. running 4.2% copper, 0.4% nickel and 6.8 grams PGM; and
• Hole 115 – 90.6 ft. of 1.4% copper, 0.2% nickel and 5.2 grams PGM.

The partners say the core intersection represent about 90-100% of true widths.

The central area of the deposit has seen limited drilling. Previously FNX 250 ft. grading 1.2% copper and 6.2 grams PGM, including 24.6 ft. of 2.1% copper and 24.6 grams PGM. An older hole returned 20 ft. of 1% copper plus 5.3 grams PGM, and 101.2 ft. of 1% copper and 7.9 grams PGM.

The 1,000-by-1,500-ft. PM zone, which was previously mined to the 1,450-ft. level, is situated in the footwall of the McCreedy West mine. The zone varies in thickness from several ft. to more than 150 ft. in true thickness.

Underground drilling continues from the 1600 level with two rigs testing the PM zone and two rigs drilling the Inter Main zone. Another drill on the 950 level switches its focus between the PM zone and other targets.

McCreedy West is the most advanced of five properties FNX picked up from Inco (N-T) in early 2002. The others are Levack, Victoria, Kirkwood and Norman, all of which are past producers near Sudbury.

According to the deal, FNX must spend $30 million by 2006.

Inco holds a back-in right for 51% in any new discovery that contains more than 599 million lbs. contained nickel. Should it exercise this right, it is required to spend 200% of the costs incurred by FNX and Dynatec.

Inco also retains the right to process all concentrate produced by FNX, or, in the event of third-party processing, to collect a 2% net smelter return royalty for nickel, copper and cobalt plus a 2.5-5% NSR for precious metals. Inco retains a right of first refusal on the sale of any property.