Donner-Falco alliance expanded (March 11, 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 Falco’s Stephens Lake property. Covering 1,898 sq. km, the property is almost entirely covered by overburden and has been little-explored. In 1999, the Manitoba government and the Geological Survey of Canada released airborne magnetic geophysical data that, according to Falconbridge, shows a geophysical signature over the Stephens Lake property — a signature similar to that which exists in 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 1950s, and since then, four other major deposits have been defined over a distance of 200 km.

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

A Geotem airborne electromagnetic and magnetic geophysical survey will be launched shortly.

Donner can earn a half-interest in the property by spending $5 million before the end of 2006. It must spend at least $1 million per year to keep the option in good standing. In exchange, Falco has 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 exploration of the ground.

Falco 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 the company retains a 30% stake in the ground, it 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 teamed up to explore for Voisey’s Bay type nickel-copper-cobalt deposits outside of the South Voisey’s Bay joint venture property in Labrador.