Benton gets PGM exploration boost (April 30, 2007)

Stillwater Mining (SWC-N) has agreed to pump $1.6 million into Benton Resources’ (BTC-V) Goodchild nickel-copper-platinum group metal project north of Marathon, Ont., giving Stillwater the option to earn up to 75% with continued investment.

Under the agreement, Stillwater can earn a 50% interest in the project by completing three financings for a total of $6 million over three years. Each financing will be priced at a 50% premium to the 20-day trailing average of Benton’s share price.

Benton shares rose 5 to 87 on the TSX Venture Exchange on the news, with 2.1 million shares changing hands. Stillwater’s stock dropped US46 to US$14.35 on the New York Stock Exchange.

Benton will remain the operator at Goodchild for the first three years. If Stillwater earns its 50% interest in the property, the two companies will form a 50-50 joint venture and Stillwater will be able to earn an additional 10% by funding another $4 million in exploration over the following two years.

To increase its interest to 70%, Stillwater will have to invest another $20 million either in exploration or on a feasibility study over the following three years. Benton can also choose to have Stillwater arrange total financing for putting the project into commercial production by allowing Stillwater an added 5% interest. In this case, Benton would reimburse Stillwater with interest for incurring the added financing costs.

Benton will soon do a detailed airborne survey over the Goodchild property, which consists of 221 claims over an ultramafic intrusion that measures 8 by 5 km. The company says there are numerous untested airborne electromagnetic anomalies on the property.

Up until February, Xstrata Nickel, a subsidiary of Xstrata (xta-l, xsraf-o), had an agreement with Benton for Goodchild. However, Xstrata terminated the agreement, leaving Benton with a 100% interest.

Grab samples collected by Benton have assayed up to 5.76% nickel. Xstrata reported grab sample assays of up to 6.72% nickel, 0.3% cobalt and 2 grams platinum group metals (PGMs) per tonne.

Benton also has the option to earn 100% in the South Goodchild property, located around the southern part of the ultramafic intrusion and is next to Benton’s 100%-owned Goodchild Lake nickel-copper project.

Stillwater is based in Montana, which is the only significant source of PGMs in the United States.