Donner-Falco alliance expanded (February 26, 2002)

Vancouver Having already teamed-up to explore for nickel in the Voisey’s Bay area of Labrador, Donner Minerals (DML-V) and Falconbridge (FL-T) have agreed to a new deal aimed at exploring the projected extension of the prolific Thompson nickel belt in Manitoba.

The partners will target Falconbridge’s Stephens Lake property. Covering 1,898-sq.-km, the property is almost entirely covered by overburden and has had very little exploration activity. In 1999, the Manitoba government and the Geological Survey of Canada released newly compiled and re-processed airborne magnetic geophysical data, which according to Falconbridge shows a geophysical signature over the Stephens Lake property similar to the signature of the Thompson nickel belt.

The Thompson nickel belt is an elongated Proterozoic sedimentary basin at the western margin of the Archean Superior Craton. Inco (N-T) discovered the Thompson nickel deposit (100 million tonnes grading 2.5% nickel) in the late 1950’s and since then four other major deposits have been defined over a distance of 200 km.

Mineralization occurs in ultramafic rocks in close proximity to sulphide iron formation. The deposits are magnetic and conductive showing up as coincident magnetic highs and conductors on geophysical surveys.

An airborne (GEOTEM) electromagnetic and magnetic geophysical survey will be launched shortly.

Donner can earn a 50% stake in the property by spending $5 million before the end of 2006. Donner must spend a minimum of $1 million per year to keep the option in good standing. In exchange, Falconbridge agreed to take a private placement in Donner amounting to $250,000 for the first $1 million in exploration costs increasing in stages to $450,000 once $5 million is spent on exploring the ground.

Falconbridge will be the operator and is entitled to charge an administrative and overhead fee of 10% of direct project costs during the option period. As long as Falconbridge retains a 30% stake in the ground, the major retains the right to earn an addition 20% stake in all or part of the project area by completing a bankable feasibility study, plus another 5% interest by arranging debt financing and bank guarantees for both parties for development of the project.

Earlier this year, the companies team-up to explore for Voisey’s Bay type nickel-copper-cobalt deposits outside of the South Voisey’s Bay joint venture property in Labrador.