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Nickel Offsets Property
Subsequent to the year-end, URSA Major entered into a binding letter
of intent with United Reef Limited (“United Reef”)(TSXV:URP) whereby
URSA Major can earn a 70% interest in United Reef’s 100% owned Nickel
Offsets property, located 40 km northwest of Sudbury, Ontario. The
Nickel Offsets Property is located in Foy Township, Ontario and consists
of twelve contiguous patented mining claims and five unpatented mining
claims covering 358 ha (884 acres). The property hosts the
past-producing Nickel Offsets (Ross) Mine which between 1943 and 1957
produced 208,551 tons of nickel and copper ore with reported recoveries
of 4.56 million lbs of nickel and 3.32 million lbs of copper. The
past-producing mine has two shafts and was developed to a maximum depth
of 1,599 ft (487 m). The property covers a 2.25 km strike length of the
Foy Offset Dike which is part of the Sudbury basin. Sulphide
mineralization on the property consists of pods, lenses and veins of
massive and semi-massive pyrrhotite, pentlandite and chalcopyrite.
Subsequent to the historical production, the property was explored by
United Reef Petroleums Limited (1987-1988), Inco Limited (1990) with
8,680 meters of drilling in 10 holes, and United Reef Limited –
International CHS Resources Corporation (2004-2005) with 1,830 meters in
9 holes.
URSA Major can earn a 70% interest in the Nickel Offsets property by
making cash payments totalling $75,000 and completing exploration
expenditures on the property totalling $1.25 million over a period of
three years from the date of the formal option and joint venture
agreement. URSA Major will complete a minimum expenditure of $250,000
during the first year of the option. Upon URSA Major making the required
payments and incurring $1.25 million in expenditures, the parties will
form a joint venture for the further exploration and development of the
property. URSA Major will have a 70% interest and be the operator with
United Reef having a 30% interest in the joint venture. In the event
that URSA Major fails to incur the cash payments and $1.25 million of
expenditures on or before the third anniversary, URSA Major’s option
will terminate and the property will revert to United Reef. Once a joint
venture is formed, United Reef may elect to fund its 30% interest in the
joint venture or convert its interest to a 2% net smelter royalty and
allow URSA Major to vest a 100% interest in the property. Should United
Reef elect to convert its interest to a net smelter royalty, URSA Major
would have the right to purchase 1% of the royalty from United Reef for
a consideration of $1 million at any time. The transaction is subject to
negotiation and execution of formal option and joint venture agreements
and to obtaining all required regulatory or governmental approvals or
consents. |
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