Inomin, Sumitomo team up on BC nickel project

Inomin Mines (TSXV: MINE) is partnering with Japan’s Sumitomo Metal Mining to advance the Beaver-Lynx project into what it says could be a major nickel source in British Columbia’s gold-mining region.

Sumitomo can earn an 80% interest in the project by spending at least $8 million on exploration, according to a term sheet dated Nov. 1. The earn-in is to be in two stages, with the first requiring $3 million in spending for a 60% interest, then $5 million for an additional 20% interest, Inomin said Monday. 

“With Sumitomo’s involvement, we believe Beaver-Lynx’s large mineral resource potential will be realized,” Inomin president John Gomez said in a release. “The property could develop into another major mine in a mineral and infrastructure-rich district.”

The Beaver-Lynx property comprises 253.5 sq. km of mineral claims in south-central B.C. It’s about 50 km from the city of Williams Lake and beside Taseko Mines‘ (TSX: TKO; LSE: TKO; NYSE: TGB) Gibraltar mine, one of the largest open-pit copper operations in Canada.

Due diligence

Inomin will be the operator of the project during at least the initial earn-in period, entitling the company to a fee equal to 10% of project exploration expenditures. Sumitomo is conducting due diligence on the claims comprising the project. Upon successful completion, the parties may sign a definitive agreement on the earn-in and joint venture.

Inomin acquired the Beaver-Lynx project in 2019 through staking for its potential nickel resource. At the time, it was considered two separate properties.

Past exploration on the Beaver side focused on gold but also found nickel sulphides. Ultramafic rock hosting the nickel, delineated by magnetic surveys and drilling, covers a 4 km by 8 km footprint, Inomin said. The property has potential for large, bulk tonnage, near-surface nickel.

2021 discovery

In 2021, Inomin kicked off its first drill program on the Beaver property with a critical minerals discovery. It found 252.1 metres grading 20.6% magnesium and 0.16% nickel. The program tested mineralization over a strike length of 5.7 km, the company said. 

On the Lynx side, drilling has yet to be done. Inomin staked the property following a site visit that confirmed the existence of “extensive” nickel in outcroppings. It also noted the similar geological environment to Beaver, as well as both projects’ proximity to the Gibraltar and Mount Polley porphyry deposits. It’s a geological setting conducive for hosting substantial mineral deposits, Inomin said. 

Shares of Inomin Mines rose by 1¢ to 4.5¢ apiece in Toronto on Monday afternoon, valuing the company at $1.6 million. They’ve traded in a 52-week range of 2.5¢ to 6.5¢.