Ungava eyes more legal action

Vancouver — Still fuming over the inclusion of a key piece of ground into Canadian Royalties‘ (CZZ-T) Phoenix nickel-copper-platinum-palladium property in northern Quebec, Ungava Minerals (UNGV-C) has now filed a statement of claim against the University of Toronto and James Mungall for breach of contract.

In early 1999, Ungava Minerals hired Mungall of the University of Toronto to recover samples from its Ungava trough properties originally collected in 1997, and then to analyze them for both major and trace elements. The samples comprised drill core from the Expo Ungava deposit, as well as grab samples collected elsewhere on the property.

Ungava Minerals claims that if the samples were analyzed, as instructed, platinum group metals would have been found. The junior does not know whether or not the analysis was carried out before the company inked an option agreement allowing Canadian Royalties the right to earn an 80% stake in the Ungava property.

This marks the second legal manoeuvre by Ungava Minerals. In early April, Ungava Minerals sent notice to Canadian Royalties that the junior was in default of its option and joint-venture agreement because the border area, which includes the Mesamax NW grid and TK copper-nickel platinum-palladium discovery, was subsequently included into the Phoenix property.

Canadian Royalties says Ungava Minerals properly transferred the land in question when the Expo-Ungava property was expanded and the boundary repositioned in June 2001. Also, it maintains that the allegations by Ungava Minerals are frivolous and wholly without merit.

Last year, Canadian Royalties hit significant platinum-palladium mineralization in the TK area of the Phoenix property, which is 20 km south of Falconbridge‘s (FL-T) Raglan mine in Nunavik. Hole 4 cut the most significant mineralized lens; drilled at 85 it intersected 2.7% nickel, 0.78% copper, 0.13% cobalt and 2.67 grams combined platinum-palladium-gold per tonne over 5.4 metres from 128 metres down-hole. Just below the massive sulphide intercept, a 1.1-metre section ran 6.48 grams combined platinum-palladium-gold.

The new discovery is 6 km east of the Expo-Ungava deposit. Mineralization is associated with disseminated, net-textured and even massive sulphides within, and adjacent to, an ultramafic host. The holes define a broad zone of platinum-palladium-gold and sulphide mineralization that extends from surface to a vertical depth of 130 metres and stretch in a north-south direction for some 75 metres.

The ultramafic host at the TK Area represents the same ultramafic body that extends easterly to the Mesamax Northwest and Mesamax Main platinum-group-metal (PGM) zones.

Lying 15 km south of the Raglan nickel mine and mill complex, the Expo-Ungava property hosts three mineralized structures discovered in the 1960s, namely Expo, Cominga and Mesamax. Work by Amax Minerals on the Expo prospect in the 1970s led to a resource of 19 million tons grading 0.47% nickel and 0.51% copper with significant cobalt and precious metal credits. Included in that resource are 4.2 million tons grading 0.75% nickel and 0.85% copper considered amenable to open-pit mining at a waste-to-ore ratio of 2.75-to-1. Explored over a strike length of 900 metres, mineralization consists of disseminated pyrrhotite, chalcopyrite and pentlandite in a serpentinite intrusive rock. Previous work had identified seven other mineralized zones and 11 electromagnetic anomalies.

Canadian Royalties subsequently recalculated the resource, which now stands at 17 million tonnes grading 0.6% nickel and 0.8% copper. Included is a higher-grade core of some 3 million tonnes grading 1% nickel and 1% copper.