Halifax-based Scotia Prime Minerals (ASE) and Phelps Dodge of Canada, a unit of major copper producer Phelps Dodge (NYSE), have teamed up to explore three base metal properties in Nova Scotia. Under a letter of understanding between the two companies, Scotia has granted Phelps Dodge the option to acquire a 51% interest in the in both its Ferrona and West Bay claim groups in return for expenditures of $1 million over a 30-month period. The major can also earn a 51% interest in the Loch Lomond claim group by spending $650,000 over a 30-month period.
If Phelps spends an additional $2.5 million per property, the major can earn an extra 19% interest on each of the three properties. Phelps Dodge can also subscribe for up to 1.89 million flow-through shares of Scotia Prime, representing about 30% of the shares issued and outstanding, and has the exclusive right to examine six other claim groups until Dec. 31.
“We are most enthusiastic about the exploration properties,” said Michael Gray, vice-president of exploration for Phelps Dodge of Canada. But Gray was reluctant to say more about the joint venture until the deal is final.
Underlain by rocks of the lower Carboniferous age, the claim groups have the potential for structurally controlled, carbonate-hosted lead- zinc-silver deposits, Scotia President Craig Miller said. The three properties, covering a total of 1,987 claims, are dotted with mineralized boulders carrying lead and zinc values, he said.
Both the Loch Lomond and West Bay groups lie on Cape Breton Island.
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