Expatriate exits Fox River (February 04, 2002)

Vancouver — The Hunter Dickinson group (HD) will end up with a 15.7% stake in cash-strapped Expatriate Resources (EXR-V) after the junior backed out of a $2.5-million deal to pick up a 12% stake in the Fox River nickel-copper-platinum-palladium property in Manitoba.

Over the past few months, the privately held group has been busy restructuring ownership of the property. Late last year, HD-led Amarc Resources (AHR-V) bought into the Fox River property through a reorganization agreement with sister company Rockwell Ventures (RCW-V). Amarc took over the project by assuming exploration expenditures of $2.5 million and issuing up to 1 million 2-year warrants initially exercisable at $1 each. As a result, the junior holds an option to earn a 60% interest in the property from Falconbridge (FL-T) by spending $12.5 million over five years.

Amarc then dealt a 12% interest in the Manitoba project to Expatriate in return for $1.3 million in exploration expenses for 2001 and $1.2 million in expenses for 2002. A $1.3 million loan from HD covered the initial payment. The loan consists of a convertible debenture bearing an 8% interest rate payable semi-annually. By not proceeding with the second half of the deal, Expatriate plans on converting the debenture into 7 million Expatriate shares. The shares will be subject to a four-month hold period and will give HD a major stake in Expatriate.

The Fox River project has been explored since the 1950’s with limited success. Inco (N-T) originally explored the property for nickel in the 1950s and 1970s. In the 1990s, Falco picked up where Inco left off and drilled 15 holes into the eastern section of the ultramafic sill. The sill is known to contain at least two horizons of platinum-palladium-bearing mineralization. At the base of the Upper Central Layered zone, mineralization has been identified over widths of up to 20 metres. Below this, the Lower Central Layered zone grades into a marginal zone that contains disseminated sulphides with platinum-palladium mineralization. Last year, Rockwell tested several geophysical anomalies with 12 drill holes but failed to cut any significant mineralization.