TORONTO, June 27, 2012 /CNW/ - Pure Nickel Inc. (TSX: NIC) today released its operating highlights and financial results for the three- and six-month periods ended May 31, 2012.
MAN Alaska Property
During the second quarter, Pure Nickel completed the final planning for its MAN Alaska property, along with its exploration partner, Itochu Corporation which has agreed to fund exploration expenditures totalling US$4.9 million. Exploration commenced in late May, with mapping, soil geochemistry and IP surveys. The drill started turning on June 20, 2012 and a total of 2,600 meters is expected to be completed by the end of the program. This year is the fifth year that Itochu has funded exploration: to date it has expended US$17 million and earned a 30% interest. The agreement with Itochu allows for them to earn up to 75% interest by incurring US$40 million of exploration expenditures by 2013. Jon Findlay, Ph.D., P.Geo is the designated Qualified Person for this project.
Tower, Manitoba Property
Pure Nickel's option partner on the Tower property in central Manitoba, Rockcliff Resources Inc. announced on May 23, 2012 a near-surface drill discovery of a new copper zone at the Tower Property. Termed the T-2 Copper Zone, it is located at the very south edge of a recently identified +500m long untested DPEM geophysical anomaly. Discovery hole (TP12-025) intersected 4 metres grading 2.44% copper, 0.7 g/t gold, 18.2 g/t silver, 0.3% zinc starting at 161 meters down the hole including 2 metres grading 3.3% copper, 0.8 g/t gold, 24.6g/t silver, 0.4% zinc. Ken Lapierre, P.Geo., of Rockcliff Resources Inc., is the designated Qualified Persons for this project.
Salt Chuck, Alaska Property
The permitting process for the Salt Chuck property is in its last stages and plans for a late summer or fall exploration program are being readied. Located on Prince of Wales Island in 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 United States during its era of production. Jon Findlay, D.Sc., P.Geo is the designated Qualified Person for this project.
Milford Copper property
In November 2011, Pure Nickel signed an agreement with CS Mining, LLC and Skye Mineral Partners, LLC (jointly referred to as "CS Mining") with respect to its Milford, Utah, copper property. Under the agreement, Pure Nickel received a payment of US$1.0 million ($1.0 million) at that time, and was to also receive a payment of US$1.0 million in May 2012 and a payment of US$1.5 million ($1.5 million) in November 2012. In addition, Pure Nickel will receive a 1% net smelter royalty capped at US$8.0 million ($8.0 million).
On June 4, 2012, Pure Nickel announced it agreed with CS Mining to amend the settlement agreement. CS Mining paid US$0.5 million ($0.5 million) towards the payment that was due in May 2012 and will place the balance of $0.5 million in escrow with an independent third party, First American Title Insurance Company. The escrowed funds will be released to Pure Nickel once a disputed net profits interest, discussed below, is resolved.
In the agreement signed with CS Mining in November 2011, Pure Nickel had provided CS Mining with certain indemnities regarding title to the properties that its subsidiary, Nevada Star Resource Corp. (U.S.) had previously controlled. The indemnity specifically addressed a 12% net profits interest that was purportedly owned by among others, former officers and directors of Nevada Star.
On April 25, 2012 Pure Nickel and its subsidiary filed a complaint in United States District Court, District of Utah, Central Division against Robert Angrisano, Monty D. Moore, Scott Nicholson and Monty L. Moore. Monty D. Moore and Robert Angrisano were former officers and directors of Nevada Star and former directors of Pure Nickel. The claim seeks:
- A court determination that the net profits interest is invalid and unenforceable due to, among other things, breach of fiduciary duties.
- A court determination that the net profits interest is unenforceable because it is specific to the mining activities of Nevada Star and it is not tied to the mining claims.
- Compensation to Pure Nickel for damages due to the pursuit of the invalid and unenforceable net profits interest and interference in the business relationship between us and CS Mining.
- Compensation to Pure Nickel for the costs and damages of other title deficiencies.
Results for three- and six-month periods ended May 31, 2012
Pure Nickel reported that its net loss was in line with expectations: $485,000 ($0.01 per share) for the three months ended May 31, 2011, compared to a net loss of $526,000 ($0.01 per share) for three months ended May 31, 2011, and a net loss of $967,000 ($0.01 per share) for the six months ended May 31, 2012, compared with a net loss of $887,000 ($0.01 per share) in the prior year. For further information please refer to Pure Nickel's unaudited condensed interim consolidated financial statements and the accompanying management's discussion and analysis on the company's website at www.purenickel.com, on SEDAR at www.sedar.com. (All dollar amounts herein are in Canadian funds unless otherwise indicated.)
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 at 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. In addition, the Company is actively pursuing other, non-nickel, properties in North America and overseas.
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 market 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. Actual results and future events may differ materially from those anticipated in forward-looking statements. Pure Nickel undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on any forward-looking statements.
The TSX Exchange does not accept responsibility for the adequacy or accuracy of this release.
For further information: