TORONTO, Feb. 1, 2012 /CNW/ - Pure Nickel Inc. (TSX: NIC) (the "Company") today released its operating highlights and its financial results for the year ended November 30, 2011. (All dollar amounts herein are in Canadian funds unless otherwise indicated.)
2011 Operating Highlights
- The Company's working capital at year end was strong at $5.5 million.
- The Company announced it had reached a final settlement on its Milford Utah copper properties; terms of the agreement included a cash payment of US$3.5 million over 12 months, US$1.0 million already received. In addition the Company was granted a 1% NSR (capped at US$8.0 million).
- The Company announced that its partner on the MAN Alaska property confirmed its continued participation in the joint venture agreement and committed to fund the 2011 exploration program.
- The MAN Alaska 2011 exploration program completed 2,580 metres of drilling in 11 holes and 151 line kilometres of detailed ground magnetometer surveys.
- Pure Nickel's option partner on the Tower Property continued a second phase of drilling, completing 18 holes with many intersections of high grade copper-gold mineralization.
Milford Utah Copper Properties
The Company reported that it had signed a final settlement agreement with Skye Mineral Partners and CS Mining LLC ("Skye") with respect to its Milford Utah properties. Terms of the agreement consist of a series of payments from Skye to Pure Nickel including:
- Payment of US$1.0 million immediately upon signing - Funds have been received.
- Payment of US$1.0 million 180 days after signing.
- Payment of US$1.5 million 12 months after signing.
In addition, Skye has granted to Pure Nickel a 1% Net Smelter Royalty (NSR) on all properties acquired by Skye and its partners. The NSR is subject to a royalty cap of US$8.0 million. As part of the agreement, both parties have filed documentation dismissing pending litigation, claims and counter claims against each other.
The MAN Alaska property was one of the main exploration focuses in 2011. In early 2011, our project partner Itochu Corporation formalized the funding of our exploration program at the MAN Alaska property. During the year, US$4.1 million ($4.2 million) was expended on the program. Itochu has earned a 30% interest in the property and to date has funded approximately US$17 million ($18 million) of exploration costs since 2008. Itochu may earn up to a 75% interest by incurring US$40 million ($41 million) of exploration expenditures on the MAN property by 2013. A total of 2,580 metres in 11 holes was completed along with 151 line kilometres of detailed ground magnetometer surveys and 6.9 kilometres of ground EM surveys. Work completed in 2011 has been very valuable in developing new models for mineralization on the property, several key target areas have been identified for follow-up work. Interpretation of results and planning for the 2012 work program is ongoing. The Company expects notification from Itochu about its 2012 commitment by early March. Jon Findlay, Ph.D, P.Geo. is the designated Qualified Person for this project.
Salt Chuck Alaska
The permitting process for the Salt Chuck property has been initiated and plans for a 2012 exploration program are being readied. The property is located on Prince of Wales Island on the Alaskan Panhandle. The property consists of 146 contiguous federal lode mining claims. The Salt Chuck mine produced approximately 300,000 metric tonnes of ore, reported by US government summaries (1948) to be 0.95 % copper, 1.96 g/t palladium, 1.12 g/t gold and 5.29 g/t silver. The mine was the largest producer of palladium in the USA during its era of production. Jon Findlay, Ph.D. P.Geo. is the designated Qualified Person for this project.
Tower Extension, Manitoba
The Tower property is contiguous with Pure Nickel's William Lake claims in the Thompson Nickel Belt, and is currently under option to Rockcliff Resources Inc. Rockcliff Resources continued its drilling program in 2011 (6 holes were completed in Q4 2010) with the completion of 18 holes which encountered numerous high grade copper gold mineralized intersections. In addition to the drilling, a DPEM geophysical survey has identified potential extensions to the mineralization and a new massive sulphide anomaly adjacent to it. Drilling in 2012 has recently commenced and a minimum of 5,000 metres of drilling is scheduled. Rockcliff Resources has an option to earn up to 70% interest in the property. Ken Lapierre, P.Geo. is the designated Qualified Person for this property.
On a semi annual basis the Company continues to evaluate the properties in its portfolio. An analysis is performed taking into account the claim maintenance costs and property potential for exploration success and decisions regarding divestiture are made. In 2011 Pure Nickel, along with its partner Manicouagan Minerals, relinquished the Forgues, Quebec claims. The Company also dissolved its joint venture with Crowflight Minerals on the Manibridge, Manitoba property and the joint venture claims have reverted back to the original owners.
2012 Pure Nickel Business Objectives
In 2012, Pure Nickel will continue to seek joint venture partners to develop its properties as well as identify and acquire additional properties. The Company is committed to advance projects that have significant potential and to continue to exploit the nickel and PGE potential at the MAN Alaska property, including previously unexplored areas.
Results for the Year Ended November 30, 2011
Pure Nickel reported that at November 30, 2011, it had cash and short-term investments on hand of $3.0 million. The Company reported that its net loss was in line with expectations: $1.3 million ($0.02 per share) for the year ended November 30, 2011, compared to a net loss of $2.3 million ($0.03 per share) for the prior year. Total cash flows used in operating activities were $3.9 million in 2011, compared to $1.1 million in the prior year. For the three months ended November 30, 2011, the net loss was $0.2 million ($0.003 per share), compared to $0.8 million ($0.01 per share) in the same quarter in the prior year. For further information please refer to Pure Nickel's consolidated financial statements and the accompanying management's discussion and analysis on the Company's website at www.purenickel.com, and on SEDAR at www.sedar.com.
About Pure Nickel Inc.
Pure Nickel is a mineral exploration company with a diverse collection of Nickel, Copper and Platinum Group Element exploration projects in North America. With approximately $5.5 million working capital, Pure Nickel is in a strong position to advance its property portfolio.
Forward Looking Statements
Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, expectations, plans, and objectives of Pure Nickel are forward-looking statements that involve various risks. The following are important factors that could cause Pure Nickel's actual results to differ materially from those expressed or implied by such forward-looking statements: changes in the world wide price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future exploration activities and cash flows, and the uncertainty of access to additional capital. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events may differ materially from those anticipated in such statements. Pure Nickel undertakes no obligation to update such forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on such forward-looking statements.
The TSX Exchange does not accept responsibility for the adequacy or accuracy of this release.
For further information:
|CHF Investor Relations||The Howard Group Investor Relations|
|Cathy Hume||Jeff Walker|
|T. (416) 868-1079 x 231||T. (888) 221-0915|
|Email: [email protected]||Email: [email protected]|
|Website: www.chfir.com||Website: www.howardgroupinc.com|
|Pure Nickel Inc.|
|President and CEO|
|T. (416) 644-0066|
|Email: [email protected]|