Muskox leaves Lonmin at the altar

Vancouver – Muskox Minerals (MSK-V) has dropped plans to form a joint venture with British-based platinum producer Lonmin on the junior’s platinum-palladium-copper-nickel project in Nunavut.

Under a memorandum of understanding signed in September, Lonmin would be granted an option to acquire an initial half-interest in the Muskox joint venture by spending $18.8 million on exploration over four years. Lonmin could then boost its stake by 10% by funding a feasibility study on any or all of the joint venture’s prospects. The company could earn an additional 5% interest by arranging financing for up to $500 million, then earn up to a further 5% by arranging $80 million in financing for each 1% increment.

The agreement called for Lonmin to subscribe to a private placement of 1.2 million Muskox units priced at $1 each, concurrent with the joint-venture agreement. Each unit would consist of one share and one purchase warrant entitling Lonmin to buy another share for $2 until four years from closing. The private placement, excluding exercise of the warrants, would have given Lonmin a 3.75% stake in Muskox.

Situated 500 km north of Yellowknife, the targetted intrusion is exposed as an elongated north-trending series of mafic-to-ultramafic rocks. Funnel-shaped in cross-section, it dips gently to the north; is 15 km wide in the north, narrowing to 600 metres in the south; is exposed for a strike length of 50 km; and continues beneath cover to the north for another 40 km.

The Muskox project comprises the entire intrusion, including its extension beneath cover to the north. With these dimensions, it ranks as one of the largest known layered mafic-ultramafic intrusions in the world. Muskox Minerals compares it to those that host the Bushveld platinum-palladium deposits in South Africa and the Voisey’s Bay nickel-copper-cobalt deposit in Newfoundland.

The junior began exploring the intrusion in 1995, and by 1997 it had acquired the rights to the entire intrusive complex. Earlier this summer, drilling on the Keel-1 and Keel-2 geophysical targets returned low-grade values. However, results from the latest hole drilled into the Southern Keel sector returned a more encouraging 8.4-metre section running 0.95% copper, 0.86% nickel, 0.12% cobalt and 0.15 gram palladium per tonne from 314.5 metres downhole.

Muskox, which gave no reasons for terminating the proposed joint venture agreement, continues to drill and run geophysical surveys over the property.