Rubicon eyes Point Leamington deposit

Two letters-of-intent pave the way for Rubicon Minerals (RMX-V) to acquire the Point Leamington massive sulphide deposit near Grand Falls, Nfld.

The deposit hosts an estimated resource of 13.2 million tonnes grading 0.48% copper and 2.25% zinc, plus 20.57 grams silver and 0.89 gram gold per tonne. Ownership is shared on a 75-25 basis by Noranda (NOR-T) and MFC Merchant Bank.

Under the agreement, Rubicon can acquire Noranda’s interest by issuing to that company 100,000 shares over the next four years, which would be additional to an already-paid sum of $21,032. MFC Merchant will relinquish its interest for a 0.5% net smelter return (NSR) on any future production.

Noranda retains a 1.5% NSR and can buy any concentrate produced from the property. Similarly, Rubicon has a right of first refusal on any future sale of the shares it issues in the deal.

The deposit adds significantly to Rubicon’s existing land position in the region, and the company says there is potential for expansion, based on a high-grade underground pocket of 1.6 million tonnes grading 0.43% copper, 7.34% zinc, 54.51 grams silver and 2.23 grams gold.

In related news, Thunderwood Resources (THS-T) has signed a deal to acquire Noranda’s Duck Pond property in west-central Newfoundland. To do so, the junior must spend $1.4 million on exploration over the next 18 months, as well as pay $3.5 million and advance the project to production in the following six years.

Noranda retains a 2% NSR and a back-in-right for a 50% interest in any resources discovered, which, when combined, contain a predetermined mass of copper and zinc.

Upon regulatory approval, Thunderwood will begin drilling three of four polymetallic deposits outlined on the property. The largest of these hosts 3.9 million tonnes averaging 3.8% copper, 1.1% lead, 6.7% zinc, 71 grams silver and 1.1 grams gold.

Furthermore, Thunderwood and Joutel Resources (JTL-T) have agreed to a revised merger deal to reflect the inclusion of Duck Pond. Should Thunderwood acquire that property, six shares in the company will be converted into one share and one warrant in the merged entity. Shareholders of Joutel are subject to the original offer (T.N.M., July 13-19/98).

Both companies have scheduled a shareholder vote for Oct. 27.