Ursa faces fight for Shakespeare

Toronto-based junior Ursa Major Minerals (UMJ-T) faces a fight over the future of its Shakespeare nickel-copper project near Sudbury, Ont., currently the subject of a feasibility study funded by North American Palladium (PDL-T).

Northern Financial, parent of brokerage house Northern Securities, announced that it was opposed to the deal with North American Palladium, which would divide Ursa Major’s interest in the project 60/40 with the majority share going to North American. Currently Ursa has an 80% interest, which will increase to 86% once the planned feasibility budget has been spent. The remaining 14% will be held by Falconbridge (FAL.LV-T).

Northern, acting for an investor group, and junior Forest Gate Resources (FGT-T), acting through a wholly-owned subsidiary called Blue Note Metals, amassed a 10% interest in Ursa. Blue Note said it was considering making an offer for “some or all” of the remaining Ursa shares.

The moves came in the run-up to a meeting on Sept. 29 placing the deal before Ursa shareholders for approval. Ursa’s board has already recommended the agreement, which would see North American fund the project through to feasibility, secure project financing, and pay Ursa $1.5 million in cash.

Blue Note’s intention was to combine the Ursa assets with projects dealt to it by Forest Gate, and with the Restigouche and Caribou zinc projects in New Brunswick, which Breakwater Resources (BWR-T) has agreed to sell. Caribou, which has a resource of 5.1 million tonnes grading 6.5% zinc and 3.4% lead, with 90 grams silver per tonne, has been in and out of production at least twice since 1990; metallurgical problems have caused it to close twice.

The feasibility study, nevertheless, has been modified to assess the economics of an expanded 4,500-tonne-per-day flotation plant. Earlier feasibility work had assessed both direct trucking of Shakespeare ore to the Falconbridge operations in Sudbury and a 4,000-tonne capacity mill.

Ontario regulatory agencies have issued permits for overburden removal and bulk sampling at Shakespeare and the feasibility study is supposed to be complete by year-end.

Shakespeare has a probable reserve of 7.3 million tonnes at average grades of 0.37% nickel, 0.39% copper and 0.02% cobalt, with 0.37 gram platinum, 0.4 gram palladium and 0.2 gram gold per tonne.