Schulich hikes Starfield stake (May 12, 2008)

Famed mining entrepreneur Seymour Schulich has increased his holdings in Starfield Resources (SRU-T, SRFDF-O).

With a recent purchase of 2 million Starfield shares through his holding company Seytan Investment Management, Schulich now owns or controls more than 32 million Starfield shares, representing 10.6% of the issued and outstanding shares in the company.

Schulich says he believes Starfield’s Ferguson Lake project hosts a world-class nickel-copper deposit, despite its remote location in Nunavut. The recoverable gross value at the project at today’s metal prices is $500 per tonne, and the deposit can be mined as an open pit for the first few years, Schulich says. He also believes there is potential to increase the resource with further drilling. Plus, there is a platinum group metals-mineralized zone below the main zone, that could prove significant when it is explored.

Starfield president and CEO Andre Douchane says that according to a scoping study, a 285-km pipeline could be built between Ferguson Lake and Rankin Inlet. The ore would be sent to Rankin Inlet through the pipeline and processed there.

A National Instrument 43-101- compliant report completed for Ferguson Lake last year outlines an indicated resource of 15.3 million tonnes in the west zone, grading 1.75% copper and nickel, and an inferred resource of 28.9 million tonnes in all zones, grading 1.68% copper and nickel.

A scoping study released in March estimates capital costs at $1.35 billion, based on the 285-km pipeline with an electric power line along the same corridor. The study calculates a pretax internal rate of return at 27%, and a pretax net present value of $1.94 billion at a 10% discount rate.

The company plans to drill 20,000 metres at Ferguson Lake this year, in two phases.

In May, Starfield closed a private placement of 15 million flow-through shares at $1, and 5.5 million shares at 90, for a total of $20 million.