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| December 09, 2010 --- Vol. 04, No. 49 | December 2010
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Northwest Territories
COPPER/SILVER – StoneShield Capital Corp. Dec. 9 said it signed an option with Andesite Capital LLC to acquire up to a 100 percent interest in the Risby copper-silver-lead-zinc project located near the Yukon Territory border in Northwest Territories. Situated within the Mackenzie Mountains some 80 kilometers, or 50 miles, east of the MacMillan Pass in Yukon, the Risby Project is comprised of 93 claims totaling about 89,040 acres or 360 square kilometers. The southern claim blocks are located at the northern boundary of the Redstone copper/silver deposit owned by Western Copper Corp. and host to an inferred resource of 33.6 million metric tons grading 3.92 percent copper and 9.0 grams per metric ton silver (NI 43-101-compliant and contained metals of 2.94 billion pounds copper and 9.8 million ounces silver). The Redstone deposit is estimated to be continuous over a surface area 3.6 kilometers, or 2.2 miles, long and 2.4 kilometers, or 1.5 miles, wide with an average thickness of 0.8 meter. The Redstone deposit is a laterally persistent, stratabound, blanket-like deposit, very similar to other sediment-hosted copper deposits, such as the Kupferschiefer in Poland and the copper belts of Zambia and the Congo. Under the terms of the option agreement, StoneShield can acquire an initial 75 percent undivided interest in the Risby Project by incurring a total of C$3 million in exploration expenditures on the Risby Project as follows: C$600,000 in the first year following TSX Venture Exchange approval of the option agreement, C$1 million in the second year, and C$1.4 million in the third year. In addition, StoneShield will make cash payments of C$40,000 to Andesite within 10 business days of regulatory acceptance, C$60,000 to Andesite on the first anniversary date of acceptance and C$100,000 to Andesite a year later as well as issue to Andesite 500,000 StoneShield shares within 10 business days of acceptance, 500,000 shares on the option’s first anniversary date and 500,000 shares a year after that. StoneShield holds a further option to acquire an additional 25 percent undivided interest (for a total 100 percent interest) in the Risby Project by either: (a) paying to Andesite C$3 million; or (b) incurring an additional C$3 million in expenditures by the fifth year after the option’s approval; paying to Andesite C$100,000 on the deal’s third anniversary and C$100,000 on the fourth anniversary; and issuing to Andesite 1 million shares each on the option’s third and fourth anniversary dates. Andesite shall retain a 2 percent net smelter returns royalty. “The Risby Project is situated in a belt of sedimentary rock several hundred kilometers in length that is host to numerous base metal prospects,” said StoneShield Director Allen Ambrose. “The district-scale size of the land package with extensive mineralization already encountered in several areas, further highlight the highly prospective potential of this region to host copper, lead, and zinc mineralization. StoneShield will be well positioned in this emerging region of the Northwest Territories that has had only limited exploration in the recent past.” The separate property blocks are divided into two main groups based on two main explorations targets: those of sediment-hosted copper affinity, termed the Proterozoic Copper/Silver properties; and those of Mississippi-Valley type affinity, termed the Paleozoic Lead-Zinc properties. Sediment-hosted deposits are among the largest in the world and contain about 25 percent of the world’s copper resources. Many of the copper occurrences on the Risby Project have similar stratabound geologic characteristics to the Redstone deposit and other sediment-hosted copper deposits. The primary exploration target consists of sediment-hosted copper occurrences within Proterozoic sediments that are scattered over the 300-kilometer, or 186-mile, long Redstone Copper Belt. The property includes claims within two of six structural embayments that host copper mineralization. Copper mineralization is typically hosted near the contact between an oxidized clastic sediment footwall and a reduced carbonate sediment hangingwall, which is typical for these deposits. Numerous sedimentary copper occurrences have been discovered on two separate claim blocks. The Keele block is the largest of the claim blocks and contains five main copper showings and four other untested occurrences. The June showing was drill tested in the mid-1970s by Shell Canada Ltd. and returned drill results including 52 meters of 2.3 percent copper. Drilling at the Jay showing returned drill results including 12 meters of 2.7 percent in one Shell drill hole. Both areas require additional drilling to determine the extent of the mineralization. Drilling by Phelps Dodge at the Ann showing resulted in 3.5 meters of 1 percent copper and 1.6 meters of 1.2 percent copper in two separate holes. This zone is considered to be open in all directions. All three of these showings (June, Jay and Ann) are hosted within the transitional stratigraphy between the underlying redbeds and overlying carbonates (typical for redbed copper deposits) and the same stratigraphic horizon as the Redstone deposit. The Nite and Hammer/Pat Creek showings are hosted within carbonates that are stratigraphically higher than the June, Jay and Ann and contain copper mineralization that is structurally complex. Assays from surface exposures range from 13.7 m of 1 percent copper in a trench to an average sample value of 1-1.2 percent copper over 400 meters of surface strike length. Three holes drilled by Phelps Dodge in 2007 each penetrated 1- to 2-meter-thick mineralized intervals grading from 1 to 2 percent copper. The Mississippi Valley style lead-zinc mineralization is hosted in structural and hydrothermal dissolution features in Devonian carbonates and occurs in numerous locations within three separate claim blocks (KAP, Boom, AdyJo). The KAP area contains drill intercepts by Cominco Ltd. of 9.5 meters grading 25 percent zinc and 13.5 meters of 16 percent zinc. Gravity survey anomalies have been only partially tested by drilling. Nine high-grade zinc samples contained an average of 0.019 percent gallium and 0.077 percent germanium, both rare metals in high demand.
DIAMONDS – Mountain Province Diamonds Inc. Dec. 7 reported the filing of a NI 43-101 Technical Report on the Gahcho Kué Project with regulators and that the document can be accessed on SEDAR and its website. The results of the independent definitive feasibility study, dated Oct. 15, indicate positive economics for the development of the Gahcho Kué diamond project located in Northwest Territories. Mountain Province is a 49 percent participant in the Gahcho Kué Joint Venture with De Beers Canada (51 percent). The Gahcho Kué Project consists of a cluster of kimberlites, three of which have a probable mineral reserve of 31.3 million metric tons grading 1.57 carats per metric ton for total diamond content of 49 million carats. Highlights of the feasibility study include a projected internal rate of return including sunk costs of 20.7 percent with average annual diamond production of 4.45 million carats based on an average realized diamond price of US$102.48 per carat; initial project capital costs of C$549.5 million, working capital costs of C$49.4 million and sustaining capital costs of including mine closure C$36.1 million over a projected mine life of 11 years. Diamond production for the proposed mine is estimated to total 49 million carats. “The feasibility study delivers an economically viable, technically credible and environmentally sound development plan for the Gahcho Kué Project,” said Mountain Province President and CEO Patrick Evans in announcing the filing Dec. 7. “Our immediate focus now is the completion of the Gahcho Kué Environmental Impact Statement, which will be filed with the Mackenzie Valley Environmental Review Board before the end of the year.”
FINANCE – Merc International Minerals Inc. Dec. 7 said it completed a non-brokered private placement offering of about 9.09 million units at C11 cents per unit for gross proceeds of about C$1 million. Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one additional common share at an exercise price of C14 cents per share until Sept. 23, 2012. All securities issued are subject to a hold period expiring April 8. The net proceeds from the sale of the units will be used for general corporate purposes. The private placement, which is not available in the United States, remains subject to the final approval of the TSX Venture Exchange.
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