Partners test McCreedy’s PM zone (June 16, 2003)

Underground drilling by partners FNX Mining (FNX-T) and Dynatec (DY-T) at the McCreedy West mine in Sudbury, Ont., continues to return high-grade values of copper, platinum, palladium and gold.

The latest holes focused on the southeast and northwest corners of the PM zone. Highlights from the 19 holes that tested the 350-by-750-ft. Southeast area are as follows:

— Hole 93 — 20 ft. grading 2.5% copper, 1.2% nickel and 35.4 grams combined platinum-palladium-gold (PGM) per tonne.

— Hole 94 — 3 ft. averaging 15.7% copper, 1.3% nickel and 101.2 grams PGM.

— Hole 108 — 84.4 ft. running 0.9% copper, 0.3% nickel and 6.7 grams PGM.

— Hole 131 — 11.5 ft. of 6% copper, 0.5% nickel and 23.4 grams PGM.

— Hole 132 — 4.2 ft. grading 20.5% copper, 8.2% nickel and 140.4 grams PGM.

The remaining holes generally returned lower grades over similar intervals.

Drilling on the 400-by-800-ft. Northwest area generally returned better results, including:

— Hole 57 — 33.7 ft. grading 3.5% copper, 0.5% nickel and 14.1 grams PGM;

— Hole 58 — 36.9 ft. averaging 1.4% copper, 0.4% nickel and 4.3 grams PGM;

— Hole 115 — 90.6 ft. of 1.4% copper, 0.2% nickel and 5.2 grams PGM.

The partners say the intersections represent 90-100% of true widths.

The central area of the deposit has seen limited drilling. Previously, FNX reported 250 ft. grading 1.2% copper and 6.2 grams PGM, including 24.6 ft. of 2.1% copper and 24.6 grams PGM. An older hole returned 20 ft. of 1% copper plus 5.3 grams PGM, and 101.2 ft. of 1% copper and 7.9 grams PGM.

The 1,000-by-1,500-ft. PM zone, which was previously mined to the 1,450-ft. level, is in the footwall of the McCreedy West mine. The zone varies in thickness from several feet to more than 150 ft. in true thickness.

Underground drilling continues from the 1600 level, with two rigs testing the PM zone and two drilling the Inter Main zone. Another drill, on the 950 level, is testing the PM zone as well as other targets.

The partners intend to build an exploration ramp from the 1600 level into the PM zone to enable collection of a 10,000-ton bulk sample. The 6-month, $1.5-million program is to begin in July.

A feasibility study of the PM zone is planned for later this year.

McCreedy West is the most advanced of five properties FNX picked up from Inco (N-T) in early 2002. The others are Levack, Victoria, Kirkwood and Norman, all of which are past producers near Sudbury.

According to the deal, FNX must spend $30 million by 2006.

Inco holds a back-in right for 51% in any new discovery that contains more than 599 million lbs. contained nickel. Should it exercise this right, it is required to spend 200% of the costs incurred by FNX and Dynatec.

Inco also retains the right to process all concentrate produced by FNX, or, in the event of third-party processing, to collect a 2% net smelter return royalty for nickel, copper and cobalt plus a 2.5-5% NSR for precious metals. Inco retains a right of first refusal on the sale of any property.