NVE-Grand Nord JV With Falconbridge
NovaWest Resources Inc NVE
Shares issued 13,294,849 Jun 9 close $1.65
Wed 10 Jun 98 News Release
Also Falconbridge Ltd (FL)
Mr. Patrick O'Brien reports
NovaWest Resources has entered into a joint venture agreement with
Falconbridge, one of the world's leading mining companies, on
Falconbridge's Grand Nord project in northern Quebec. NovaWest will earn a
50 per cent interest in Falconbridge's seven permit Grand Nord project by
providing $1-million of exploration funds towards the 1998 first phase of
exploration. Logistical planning for the project is well under way, fuel
and supplies already on site, and field crews are to be mobilized
immediately. Falconbridge will be the operator. A technical committee for
the seven permits will be established immediately with Frank Puskas
representing the company, and in November 1998 a joint management committee
will be struck with Mr. Puskas and Patrick O'Brien representing NovaWest
Resources.
In 1997, the Quebec Ministry of Natural Resources completed one of the most
significant geochemical surveys ever completed in Canada. The survey
covered 351,000 square kilometres of northern Quebec, which is an area
equivalent to 25 per cent of the entire province of Quebec. Approximately
27,000 samples were taken. The entire area has the potential to host
economic quantities of nickel, copper, cobalt, platinum group minerals,
gold and other base and precious metals. In order to reduce the immense
direct costs associated with such a survey, five mining industry
participants worked with the government of Quebec, and partially financed
the project. Falconbridge was as participant in the program as were four
other Canadian exploration companies. In return, each of the industry
participants received exclusive access to the data until its public release
scheduled for November 1998. Once the data was received and processed, the
participants met in Quebec City to select favoured exploration permits. It
may be relevant to note that the order of permit selection was decided by
draw, with Falconbridge winning first pick overall.
The agreement also includes an area of interest agreement that encompasses
the entire 351,000 sq km area surveyed in the initial government of
Quebec's Grand Nord geochemical survey. The data derived from the survey
and from the entire area outside of the seven permits under the joint
venture, is confidential to Falconbridge and the other initial participants
in the survey until NOvember 1998. Falconbridge is free to use that data at
its discretion.
Once the data is made public by the Quebec government in November 1998, and
NovaWest Resources has had the opportunity to study the data, the company
has the right to purchase, until June 1999, a 50 per cent interest in any
additional mineral permits acquired by Falconbridge up to June 1999, within
the 351,000 sq km survey area. In order to exercise this right NovaWest
must reimburse Falconbridge 60 per cent of its acquisition costs which is
comprised of 50 per cent of its staking or permitting costs and an
additional 10 per cent to cover the administration and processing costs.
The agreement further provides that $400,000 of the $1-million being
provided by NovaWest, will be financed by the purchase of $400,000 of
common stock in the company by Falconbridge, by way of private placement.
The company will issue Falconbridge 250,000 shares at $1.60 per share. The
shares will be subject to a hold period as required by any governing
regulatory authorities. The proceeds will be used for exploration on the
Grand Nord project, and flow-through funds may be substituted at NovaWest's
discretion.
The Grand Nord project is the first project to be undertaken between
NovaWest and Falconbridge. In addition, the two companies are also in
negotiations regarding a second joint venture in northern Quebec.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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