Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) has signed a binding letter of agreement with Tartisan Nickel Corp. (CSE:TN, OTCQX:TTSRF) to acquire a 0.5% gross revenue royalty on the Kenbridge Nickel project in Ontario.
The deal will cost Electric Royalties C$500,000 in cash and 2.5 million shares. Following the transaction, the company will also have the right to acquire another 0.5% GRR on the Kenbridge project within a period of 18 months for C$1.75 million in cash.
The company will also have the option to acquire a 1% GRR on the mining claims, mining leases and mineral tenures comprising the Kenbridge North Nickel project, located about 2.5 kilometers north, for $1 million, within 24 months from the date on which Tartisan publishes an initial technical report in respect of the Kenbridge North project.
“The Kenbridge deposit has been well drilled since discovery and though never previously mined, has seen extensive underground development by previous owners,” Electric royalties CEO Brendan Yurik said in a statement.
"We believe there is a lot of optionality and upside to Kenbridge as the exploration potential at depth is exciting. If the deposit's depth potential is realized, there could be a meaningful extension to the potential life-of-mine.”
The project has measured and indicated mineral resources of 3.445 million tonnes at 0.97% nickel (Ni), 0.52% copper (Cu) and 0.013% cobalt (Co), containing 74 million pounds (Mlb) of Ni, 39.1 Mlb of Cu and 1 Mlb of Co.
Its inferred mineral resources include 1.014 million tonnes at 1.47% Ni, 0.67% Cu and 0.011% Co, containing 32.7 Mlb of Ni, 14.9 Mlb of Cu and 0.2 Mlb of Co.
“The Kenbridge deposit could be positioned to quickly commence production once permitted, given its manageable initial capital cost of C$133.7 million, existing infrastructure, and local mining workforce,” Yurk said. “As a modestly sized underground operation, Kenbridge would have a relatively small environmental footprint which could enable more timely permitting.”
A preliminary economic assessment forecast a nine-year mine plan based on a 1,500-tonne-per-day underground mining and processing operation, the company said. The mine plan mines the potentially extractable tonnage of measured, indicated and inferred mineral resources which assumes overall dilution of 47% and a 94% mine recovery factor.
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