TORONTO, April 24, 2012 /CNW/ - Pure Nickel Inc. (TSX: NIC) (the "Company") today released its operating highlights and its financial results for the three months ended February 29, 2012. (All dollar amounts herein are in Canadian funds unless otherwise indicated).
First quarter operating highlights
Strong Working Capital
Pure Nickel ended the quarter with a strong financial position: working capital of $4.9 million, including $2.3 million in cash and short-term investments, and $2.5 million of amounts receivable. Using that working capital, as well as US$4.8 million of further funding for the MAN Alaska property (discussed in the next paragraph), the Company will continue to actively advance its property portfolio.
Pure Nickel's partner on the MAN Alaska property, Itochu Corporation, confirmed its continued participation in the project with a commitment to fund exploration expenditures totalling US$4.8 million. Exploration is scheduled to start in late May with mapping, soil geochemical and ground geophysical (induced polarization) surveys. Exploration drilling is expected to commence by mid-June, and a total of 2,600 meters will be completed by the end of the program. This will mark the fifth year that Itochu has funded exploration: to date they have spent US$17 million and earned a 30% interest in the MAN property. The joint venture agreement allows Itochu to earn up to 75% interest by incurring US$40 million of exploration expenditures. Jon Findlay, Ph.D., P.Geo. is the designated Qualified Person for this project.
Salt Chuck Alaska
A 2200 meter drilling program designed to test coincident geochemical and geophysical anomalies on the Salt Chuck property is planned for summer/fall 2012. Permitting has been initiated, and review of the plan of operations is expected to be completed by May 15th. The start date of the drill program will depend on final permit approval. The property is located on Prince of Wales Island of the Alaskan Panhandle, and consists of 146 contiguous federal lode mining claims. The Salt Chuck mine produced approximately 300,000 metric tonnes of ore, with a reported average grade of grade 0.95 % copper, 1.96 g/t palladium, 1.12 g/t gold and 5.29 g/t silver (US government summaries,1948). 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. During March, Rockcliff exercised its option to earn a 50% interest in the property having completed the expenditures of $2 million over two years and the minimum drilling commitment of 2,000 meters required by the option agreement. Rockcliff has indicated that they are planning to continue exploration to earn an additional 20% interest in the property over the next two years. A drill is currently turning at the property to test the T-3 anomaly that was discovered by a geophysical Time Domain Electromagnetic Survey. Since the start of the current program, Rockcliff has reported that the first hole was lost before it reached the target. The second hole intersected a narrow lens of massive sulphides (pyrrhotite rich) which failed to explain the source of the T-3 anomaly. A borehole geophysical survey identified a strong conductor below and to the north of the hole, which is interpreted to be the location of the T-3 anomaly. Hole three is presently testing this target to determine its significance. Core samples from hole two are being assayed and will be reported when results are received from the assay lab. Ken Lapierre, P.Geo. is the designated Qualified Person for this property.
The William Lake property is located in the Thompson Nickel Belt, one of the most prolific nickel camps in the world. William Lake was previously owned and explored by Falconbridge (now Xstrata Nickel), who completed approximately 200 drill holes testing nickel mineralization on the property. Relatively few Platinum Group Element (PGE) assays were completed on the core by Falconbridge, however, and the Company plans to initiate a core re-sampling program in early summer to better quantify PGE content of the mineralization. Jon Findlay, Ph.D, P.Geo. is the designated Qualified Person for this project.
During the quarter, Pure Nickel relinquished certain claims that form part of the Rainbow property in Nunavut and consequently $0.1 million of mineral properties were written off during the quarter.
On March 29, 2012 the Company held its annual general meeting of the shareholders. The following directors were re-elected to hold office until the next annual meeting: Mr. R. David Russell (Chair), Mr. Harry Blum, Mr. David McPherson, Mr. Constantine Salamis and Mr. Steve Vaughan. On April 24, the Board of Directors granted an aggregate of 1,605,000 stock options to certain management, directors, and employees. The options have an exercise price of $0.095, a term of three years and are subject to the terms and conditions of the Company's Stock Option Plan. Of these options 1,102,500 vest immediately and the remaining vest equally on the first and second anniversary date.
Results for the three months ended February 29, 2012
Pure Nickel reported that its net loss was in line with expectations: $481,230 ($0.01 per share) for the three months ended February 29, 2012, compared to a net loss of $360,701 ($0.01 per share) for three months ended February 28, 2011. For further information refer to Pure Nickel's unaudited condensed interim financial statements and the accompanying management 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. The Company is currently active on its flagship MAN property, which is fully funded under an option agreement with Itochu Corporation of Tokyo, Japan. The Company will also undertake an initial drill program on its 100% owned Salt Chuck property in the coming months, and will embark on a re-assay program at its William Lake project in the Thompson Nickel Belt once weather conditions allow. In addition, the Company is actively pursuing other, non-nickel, properties in North America and overseas. With approximately $4.9 million in working capital, Pure Nickel is in a strong position to further advance its property portfolio and acquire additional projects.
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.
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