Millennium, PGM join forces at Lac des les

A merger between New Millennium Metals (PGM-V) and Platinum Group Metals (PTG-V) is designed to consolidate the juniors’ land positions in the Lac des les region of northwestern Ontario.

The deal, which has yet to be approved by shareholders and regulators, would see the combined entity retain the name Platinum Group Metals. Shareholders in the original PGM would recieve 1 share of the new company for every share held, while New Millennium shareholders would get one share of the new company for every 1.6 shares held.

“This is a decisive move to bring together two companies with excellent exploration projects in the Lac des les and Sudbury regions,” says PGM President Michael Jones. “We will have established a camp that effectively surrounds the existing [Lac des les] mine with numerous targets.”

PGM recently began exploring the 48-sq.-km Stucco palladium property, near Thunder Bay, Ont., about 30 km east of North American Palladium‘s (PDL-T) Lac des les palladium mine. Sulphide-bearing gabbros are known to exist in the area; a single hole, drilled in 1968, passed through 40 metres of such material, though none of the core was analyzed for platinum group metals.

PGM can earn a 60% interest in Stucco by spending $1 million on exploration, paying $65,000 in cash and completing a feasibility study. The company can also earn a 60% stake in the South Legris project, 11 km southeast of Lac des les, by spending $1 million, paying an additional $20,000, and completing a feasibility study.

About 12 km north of the Lac des les mine, New Millennium Metals recently uncovered a platinum-palladium-gold zone on the Shelby Lake property. Dubbed Stringer, the zone was discovered along strike from the Powder Hill prospect. Initial sampling returned up to 6 grams palladium, 0.9 gram platinum and 0.43 gram gold per tonne. New Millennium is earning a 60% stake in the property from fellow junior New Claymore Resources (NCS-V) by spending $1 million and issuing 25,000 shares.

The combined entity will also have a stake in the Agnew Lake property, west of Sudbury, plus a significant land position in the River Valley area, east of that city.

Jones will become president and chief executive officer of the combined company, with New Millennium CEO Frank Hallam joining the board of directors.

Meanwhile, PGM will issue up to $2 million worth of special warrants convertible into common shares. The financing is expected to close in late November.

In another deal, the company will arrange a private placement of special warrants priced at 25-30 apiece. Proceeds will approach $2 million.