Twin Mining and Kennecott strike deal on Jackson Inlet
TORONTO, April 15 /CNW/ - Twin Mining Corporation ("Twin") (TWG:TSX) is
pleased to announce that it has signed a binding letter of intent with
Kennecott Canada Exploration, Inc. ("Kennecott") pursuant to which Kennecott
may earn an interest in Twin's Jackson Inlet Project, located on the Brodeur
Peninsular in Nunavut, Canada. The letter of intent sets forth the principal
terms to be formalized in an Exploration Agreement with Option to Joint
Venture (the "Agreement") to be settled by the parties.
Summary of Material Terms:
- Kennecott will earn a 56% interest in the property by making
exploration expenditures of not less than C$10 Million and completing
a representative bulk sample within 4 years after execution of the
Agreement. A representative bulk sample is one with a recovery of not
less than 200 carats of diamonds greater than 1 mm in all three
dimensions from any contiguous kimberlite body. To the extent
completion of the representative bulk sample is delayed, Kennecott's
initial earned interest will be subject to a stepped reduction to a
minimum of 46% provided the initial earn-in conditions are satisfied
within 6 years.
- Kennecott may earn a further interest, to an aggregate of 71%, by
solely funding all JV costs and completing a feasibility study within
7 years or a 67% interest if the study is completed within 8 years or
a 62% interest if the study is completed after 8 years from the
execution date of the Agreement.
- Once Kennecott has completed the feasibility study it can elect to
earn a further 4% in the property by funding Twin's share of
development and construction costs and bringing the mine into
production within 10 years of the execution date of the Agreement.
- If within 2 years of feasibility, Kennecott has not elected to
develop a mine, Twin may present a development proposal and Kennecott
will have 60 days to elect to develop a mine in accordance with that
proposal, or to transfer management to Twin and dilute to a maximum
49% interest.
- Upon Kennecott earning an interest, the parties will form a joint
venture, with the majority interest holder managing the joint
venture.
- Each party will have a once-only right to elect to market its share
of diamonds, exercisable at the time a decision to commence
construction of a mine is made, otherwise all diamonds will be
marketed by the manager. In the event Kennecott elects to fund Twin's
share of costs it will market all diamonds produced from the property
for 5 years or until Twin has repaid its share of development and
construction costs whichever is the later.
- Kennecott will make a C$250,000 private placement in Twin's shares on
signing the Agreement and will thereafter, until it has earned its
interest in the property, subscribe to annual private placements of
C$250,000 in Twin's shares at a price per share equal to 130% of the
prevailing market price for Twin's shares at the time of each
subscription.
The exploration area contemplated under this agreement consists of
270,644 acres of the northern part (see claim location map on our website
www.twinmining.com) of Twin Mining's Brodeur land position. This property has
already yielded more than 50 carats of diamonds which were described by
Diamond Trading N.V. of Antwerp as notable for the "high color and purity
grading of the sawable and makeable stones and the absence of boart,
rejection, cubes and coated". Diamond Trading N.V. is a minority shareholder
of Twin. Twin's diamond exploration team discovered in 2003 eight (8)
kimberlite targets in the vicinity of Cargo2, a 1.7 km corridor of
diamondiferous kimberlite fragments near Cargo1 and 12 kimberlite indicator
mineral clusters. These discoveries underpin the diamond prospectivity of
Twin's land position.
Twin Mining is pleased to have Kennecott Canada Exploration, Inc. (an
affiliate of Kennecott Exploration Company of Salt Lake City, Utah, a wholly
owned subsidiary of Rio Tinto plc of London, UK) as a partner in pursuing the
potential of Jackson Inlet for the development of a diamond mine. Twin Mining
will benefit from this partnership as Rio Tinto (the world's largest mining
company) has global experience, including the Diavik mine in Canada's
Northwest Territories, in exploring for and mining of diamonds. Kennecott
recently discovered three kimberlites with coarse diamond content, near Twin's
Freightrain and Cargo1 pipes.
Joint planning of the 2004 exploration program is in progress and will be
announced shortly. Twin Mining is preparing plans for an exploration program
of the remaining 986,137 acres on the Brodeur peninsula.
Twin Mining, in addition to exploring its 100% owned Jackson Inlet and
TORNGAT diamond projects, is shortly completing a full feasibility study of
its 100% owned Atlanta Gold Project in Idaho U.S.A. and is exploring the
optioned Abitibi Gold projects in Quebec.
For further information: Hermann Derbuch, P.Eng., Chairman, President &
CEO, Tel.: (416) 777-0013, Fax: (416) 777-0014, E-mail:
info@twinmining.com |
