VANCOUVER, March 8 /CNW/ - Nanika Resources Inc. (TSX-V: NKA and FSE: C7X) has entered into a new Option Agreement on the Lucky Ship Molybdenum Property in British Columbia, Canada. The terms of the new Lucky Ship Option Agreement effective March 4, 2010 require Nanika to make an initial payment of $40,000 (which has been paid) and thereafter $80,000 per year for 8 years commencing on January 31, 2011 for a total of $680,000. There is a 2% Net Smelter Royalty (NSR) of which Nanika has the right, at any time, to purchase one-half of the NSR (1%) for $1,000,000. Nanika and the property Optionors are the only parties to the new Lucky Ship Option Agreement. The new Agreement was entered into after a default under a previous option agreement.
The Lucky Ship Molybdenum Property has 24,812 metres of drilling in 94 holes since 2006 that have an Indicated mineral resource of 65.66 million tonnes of average 0.064% Molybdenum or 92.6 million pounds of Molybdenum. Nanika has filed a NI 43-101 compliant Preliminary Economic Assessment report on June 19, 2007 and a NI 43-101 compliant Technical Report on July 2, 2008, both available at www.sedar.com for public viewing.
Pursuant to the terms of a previous Lucky Ship option agreement Nanika had made a $40,000 payment before January 31, 2010. However, Nanika's partners did not make a $40,000 payment. As a result of the non-payment of the $40,000 property payment, the underlying mineral property owners issued a thirty day Notice of Default on February 1, 2010, which default was not remedied as of March 3, 2010. The Lucky Ship Molybdenum Property Option was terminated automatically by the underlying property owners on that date pursuant to the terms of their agreement.
It is the intention of Nanika to continue exploration and development under the new agreement on the Lucky Ship Molybdenum Property. As of March 5, 2010 Nanika was advised by the previous investors that they would like to hold meetings in Vancouver before the end of March 2010 to review the current situation. Nanika will pursue discussions with the companies previously involved to ascertain their current position and intentions going forward.
President and CEO, James Jacuta stated that, "The price of Molybdenum in March 2005 was in the range of $40-45 US / lb. and then dropped in March 2009 to about $7 -8 US / lb. at the bottom of the economic crisis. The current price in March 2010 has been moving up nicely again and it is at about $18.25 US / lb. I am looking forward to what the price of Molybdenum is going to do in the next 3 to 6 months with optimism."
About Nanika Resources Inc.
Nanika Resources Inc. is a TSX Venture listed mineral exploration and development company focusing on the advancement of its mineral properties, all of which are located within Canada.
On Behalf of the Board,
James D. Jacuta, Chairman, President and CEO
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