Nuinsco sells Rainy River

Nuinsco Resources (NWI-T) has sold its inactive Rainy River property in the Lake of the Woods region of northwestern Ontario.

The privately owned buyer has already paid $500,000, and will fork over another $2 million in eight equal quarterly payments; the first is slated for March. Another $2.5-million payment is due once commercial production or direct shipment of ore from the property begins. Nuinsco retains a $1-per-ton quarterly royalty, subject to an annual Consumer-Price-Index adjustment.

Nuinsco will also receive a 7% stake (on a fully diluted basis) in a new company being formed to hold the property. Nuinsco can maintain its stake by participating in future equity issues over the next five years.

Nuinsco CEO Warren Holmes says the transaction allows his company to realize some value from an undervalued and inactive asset. The sale is part of the company’s plan to rationalize its land holdings and better focus its activities.

In May, Nuinsco reported that the 17 Zone gold deposit at Rainy River was home to an indicated resources of just more than 1.7 million tonnes grading 1.6 grams gold and 4 grams silver per tonne. Inferred resources total 11 million tonnes of 1.3 grams gold and 3.6 grams silver. The resource also includes minor copper and zinc credits. The figures are based on a cutoff grade of 0.7 gram gold and a gold price of US$375 per oz.

The resource covers around 800 metres of strike to a vertical depth of around 200 metres. The zone averages 70 metres in width.