N.A. Palladium can acquire half Arctic platinum project
2006-06-20 15:10 MT - News Release
Mr. Jim Excell reports
NORTH AMERICAN PALLADIUM FORMALIZES AGREEMENTS WITH GOLD FIELDS AND INCO AND PROVIDES AN EXPLORATION UPDATE
North American Palladium Ltd. and Gold Fields Ltd. have formalized an agreement entitling NAP to earn a 50-per-cent interest in the Arctic platinum project and up to a 60-per cent interest in certain circumstances. The project has been extensively explored by Gold Fields since 2000 as part of a joint venture with Outokumpu Oyj. Following Outokumpu's decision to divest its mining operations, Gold Fields acquired Outokumpu's 49-per-cent share in Arctic platinum project in September, 2003. Stockwatch reported on Oct. 18, 2005, that NAP and Gold Fields had signed a letter of intent to form a joint venture on the Arctic platinum project.
Arctic platinum project
The Arctic platinum project covers several advanced-stage exploration properties including the Konttijarvi and Ahmavaara open pit projects that were the subject of a feasibility study completed by Gold Fields in 2005. Also included are the nearby Narkaus (SK Reef) and the Penikat (SJ Reef) projects, both of which are believed to host significant platinum group and base-metal mineralization associated with large, layered mafic complexes. The project is located Arctic platinum project approximately 60 kilometres south of the town of Rovaniemi, the capital of Lapland and a major regional centre with excellent infrastructure. The port of Kemi on the Gulf of Bothnia is located 120 kilometres southwest of Rovaniemi.
For 2006, NAP plans to re-evaluate the Suhanko project at higher cut-off grades and explore other opportunities to improve project economics. NAP has contracted Aker Kvaerner ASA to complete the Arctic platinum project rescoping study and P&E Mining Consultants Inc. to conduct the open pit designs and optimization. Since February, 2006, three drill rigs have been mobilized to initiate a definition/delineation drill program on the SK Reef/Narkaus project. Drilling to the end of May, 2006, at the Narkaus project has totalled 30 holes for 6,600 metres with a further 33 holes for some 8,000 metres expected to be completed by the third quarter. Metallurgical testwork is being conducted by SGS Lakefield Research to examine different processing options in an attempt to improve metal recoveries and reduce operating costs. The results are expected to be incorporated in an updated mineral resource estimate which is scheduled for completion in early to mid-2007.
The mining lease and environmental and water permits for the Suhanko project were Arctic platinum project roved by the Northern Finland Permitting Authority earlier this year.
In accordance with the terms of the agreement, NAP has budgeted $7.5-million for a rescoping study and exploration program towards a $5-million feasibility study to be completed on or before Aug. 31, 2008.
Offset high-grade zone (Lac des Iles)
NAP has Arctic platinum project roved a $3.3-million dollar budget for 2006 to better define and upgrade a portion of the known inferred resource of the Offset high-grade zone at the Lac des Iles mine in Ontario.
To date in 2006, five wedged holes, totalling 4,054 metres, have been completed. The wedged holes are designed as part of an infill drill program to upgrade a portion of the known inferred resource into the indicated category as well as to gain a better understanding of the geometry and distribution of the higher grade material within the central portion of the Offset high-grade zone. Three additional wedges, to be completed by the end of July, are planned after which the company will undertake an updated resource estimate.
The following is a summary of the final assay results received from the Offset high-grade zone:
Hole ID From To Interval Palladium Platinum Gold Nickel Copper
(m) (m) (m) (g/t) (g/t) (g/t) (%) (%)
05-006W1 1021.35 1096.00 74.65 7.231 0.465 0.622 0.145 0.153
incl 1024.00 1064.00 40.00 10.375 0.648 0.968 0.210 0.223
05-006W2 abandoned
05-006W3 1043.70 1069.00 25.30 7.606 0.557 0.645 0.161 0.123
incl 1053.00 1066.00 13.00 10.244 0.658 0.724 0.155 0.103
05-016W1 986.60 995.00 8.40 6.268 0.518 0.794 0.230 0.349
and 1012.75 1060.00 47.25 5.083 0.339 0.400 0.181 0.217
incl 1024.00 1038.20 14.20 8.600 0.424 0.250 0.090 0.159
and 1083.00 1094.00 11.00 7.337 0.384 0.222 0.055 0.081
05-016W2 965.75 975.15 9.40 9.560 0.669 0.769 0.273 0.269
and 982.00 994.00 12.00 5.381 0.373 0.322 0.090 0.217
05-016W3 1021.00 1071.00 50.00 6.446 0.465 0.360 0.096 0.077
incl 1021.00 1048.00 27.00 8.198 0.585 0.387 0.100 0.072
incl 1021.00 1033.00 12.00 10.197 0.690 0.338 0.091 0.069
Note: True widths are estimated to be 60 to 70 per cent of the above-drilled widths.
It is still anticipated that by the fourth quarter of 2006, the underground development will be sufficiently advanced to allow for the process of upgrading and delineation of the known mineral resource within the Offset high-grade zone to be carried out more quickly and cost effectively from underground rather than from the current surface drilling program.
Shakespeare, Porter Baldwin
In April 2006, URSA Major Minerals Inc. completed an option and joint venture agreement with NAP on URSA Major's mining claims in Porter, Baldwin, and adjacent townships. NAP has been granted an option to acquire a 50-per-cent undivided interest in URSA's 100-per-cent-owned adjoining Porter-Baldwin property by financing $1-million of exploration expenditures over a three-year period. NAP is to finance $300,000 in the first 12 months. The Porter-Baldwin property covers over 19,000 acres and extends over 15 kilometres from the Shakespeare deposit towards the Sudbury intrusive complex, including several grassroots nickel-copper prospects.
The Shakespeare deposit is hosted by the Shakespeare intrusive complex, part of the 2.2-Ga-year-old Nipissing Gabbro suite that occurs along the southern margin of the Canadian Shield in Central Ontario. The Nipissing intrusives are known to host or be associated with magmatic and/or hydrothermal related nickel, copper and platinum-group-element prospects of which the Shakespeare deposit is the most economically significant.
Shebandowan
NAP continues its exploration activities on Inco Ltd.'s Haines and Conacher properties, located Arctic platinum project approximately 80 kilometres southwest of Thunder Bay and the subject of an option joint venture agreement with Inco.
The Haines and Conacher properties surround Inco's former Shebandowan mine. Recently, an amendment to the option and joint venture agreement added the Shebandowan mine to the property package. In order to earn a 50-per-cent interest in the property, the company must make cash payments of $200,000 and incur exploration expenditures of $3-million on or before March 30, 2008. To date the company has spent $575,000 in exploration on the property and made payments of $75,000. Under certain conditions, Inco retains a back-in right to increase its interest by an additional 10 per cent.
NAP is currently drilling 2,500 metres over 15 holes to test the strike extension of the past producing Shebandowan mine, west of the No. 1 shaft. The exploration targets are known for komatite-hosted, "Kambalda-style" nickel, copper and platinum-group-element deposits, similar to that found at the past-producing Shebandowan mine and in a series of nickel-copper occurrences located west of the No. 1 shaft. Results from a drill program carried out in late 2005 around the historic D zone, located 1,500 metres west of the No. 1 shaft, include 4.55 metres of 3 per cent nickel, 0.9 per cent copper, 0.062 per cent cobalt and 2.33 grams per tonne two-platinum-group-element plus gold from hole SP-05-005 (as reported in Stockwatch on March 2, 2006).
Tyko
In January, 2005, NAP entered into an option agreement to earn a 100-per-cent interest (subject to a net smelter return royalty) on the Tyko property located Arctic platinum project approximately 30 kilometres southeast of Manitouwadge, Ont.
The Tyko property comprises 20 claims totalling over 4,100 hectares and covers several grassroots nickel, copper and platinum-group-element prospects (including the Tyko and RJ) associated with the Tyko intrusive, a relatively small (less than 25 square kilometres) body consisting of variably serpentinized peridotite, pyroxenite and medium- to coarse-grained gabbro.
In March of 2006, two drill holes were completed to test the main Tyko showing. Three more holes were drilled to test the area of the RJ showing. A total of 711 metres of drilling was completed on the property. Assay intercepts included 12.8 metres of 0.76 per cent nickel, 0.375 per cent copper and 0.977 per cent nickel, 0.625 per cent copper over 20 metres from hole TK-06-006.
Future work planned for the property in 2006 will include additional mapping and prospecting.
Bird River and Lynn Lake
In order for the company to concentrate its efforts on more advanced exploration projects, NAP has elected not to renew its option beyond March 30, 2006, on Gossan Resources Ltd.'s Bird River sill property or its option on Rare Earth Metal Corp.'s Lynn Lake Gabbros property beyond May 30, 2006. NAP wishes to acknowledge both Gossan and Rare Earth for the opportunity to work with their teams over the option period.
Split core from the Lac des Iles mine and the Shebandowan mine exploration programs is assayed by an independent lab, Accurassay Laboratories Ltd. of Thunder Bay, Ont. Precious metal values are determined by fire assay with a lead collection followed by atomic absorption finish and base metals are treated with a multiacid digest with an atomic absorption finish.
Bruce Mackie, MSc, PGeol, vice-president of exploration, is the designated qualified person for the company's exploration projects and has reviewed the content of this release.
North American Palladium's annual shareholder's meeting will be held on Wednesday, June 21, 2006, at 10 a.m. at the Toronto Stock Exchange Gallery, Exchange Tower, 130 King Street W., Toronto.
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