On 7 March 2010 MMG signed a Letter of Intent with Diamonds North Resources Ltd (Diamonds North) whereby MMG may earn a 75% interest in any nickel and other base metals on Diamonds North’s Amaruk Property in Nunavut, Canada, by spending C$6,000,000 and completing a pre-feasibility study on any base metal deposit identified on Amaruk.
The projected exploration budget for 2010 is estimated between C$2 to $2.5 million. MMG and Diamonds North plan to mobilize crews into the Amaruk camp mid-March, 2010. Included in this year’s explorations plans is:
- A +40 kilometre Crone pulse EM survey over Tunerq
- Up to 1500 metres of NQ drilling
- Regional prospecting to identify additional mafic and ultra-mafic bodies
- Detailed mapping of other mafic and ultra-mafic bodies across the property
Based on the work completed by Diamonds North, the Tunerq nickel prospect is a significant early stage discovery and Amaruk is demonstrating nickel district potential.
“MMG is very excited to support the Amaruk project through this Letter of Intent,” said MMG Exploration Manager Americas Mr David Kelley. MMG has shown an interest in the project since announcement of a discovery at Tunerq.
“MMG will bring nickel exploration expertise to the project while the project will build on MMG’s current portfolio of international exploration and development opportunities,” said Mr Kelley.
“MMG is already familiar with the Nunavut area through its ownership of the High Lake and Izok Lake deposits.”
Drilling of the Tunerq nickel prospect by the Diamonds North in 2008 intersected nickel copper sulfides yielding 2.49% Ni, 0.56% Cu and 0.05% Co over a 9.1 metre zone within a 34.6 metre zone containing 1.05% Ni, 0.26% Cu and 0.02% Co. In addition to Tunerq, more than 30 ultramafic and mafic targets have been identified on the property. The abundance of mafic and ultramafic intrusive bodies on Amaruk and the nickel grades of Tunerq demonstrate Amaruk as a prime target area for nickel exploration.
Details of the material terms of the Letter of Intent.
In order for MMG to earn a seventy-five (75%) per cent interest in the nickel and base metals on the Amaruk Property, MMG must:
- incur a total of C$6,000,000 in expenditures on the Property within 4 years of signing the formal agreement. MMG must incur expenditure of no less than C$750,000 per year until the C$6,000,000 threshold is reached; and
- complete and deliver to Diamonds North, a scoping study and a pre-feasibility study on one project area within the Property within ten (10) years of execution of the
Until all earn-in conditions are satisfied, MMG must continue to spend at least C$750,000 per year for years 5 through 8 and C$1,000,000 during years 9 and 10 on the Amaruk Property to maintain its right to a 75% interest in the nickel and base metals.
At any time during years 5 through 8 MMG has the option to suspend, on a one time basis only, exploration expenditures for a particular year.
In the event that that Diamonds North dilutes its interest to 10% or less, such interest will convert to a 2% Net Smelter Royalty (NSR) where ½ of the NSR may be purchased for C$500,000.
MMG may terminate the agreement prior to earning its interest in the Amaruk Property without penalty subject to the remediation of all sites used by MMG and any environmental damage caused by MMG.
MMG and Diamonds North have 45 days to complete a formal agreement which is subject to regulatory approval.
Bruce Kienlen (P.Geol) and Graham Gill (P. Geo) are Diamonds North's qualified persons reviewing this project. They are responsible for the design and conduct of the exploration programs and the verification and quality assurance of analytical results.
MMG owns and operates a portfolio of world-class base metal mining operations, development projects and exploration fields. The group is a substantial producer of zinc, copper, lead, gold and silver with mining operations located in Australia and Asia and a large portfolio of advanced and early stage exploration projects through Australia, Asia and North America. Current mining operations include the Century, Golden Grove and Rosebery mines in Australia and the Sepon mine in Laos, South-East Asia.
About Diamonds North
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