NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: THUNDERWOOD RESOURCES INC.
TSE SYMBOL: THS
SEPTEMBER 23, 1998
Thunderwood Options Duck Pond Base Metal Property From
Noranda
TORONTO, ONTARIO--Thunderwood Resources Inc. announces that it has
signed a Letter Agreement with Noranda Mining and Exploration Inc.
giving Thunderwood the right to acquire a 100 percent interest in
Noranda's Duck Pond base metal property located in west-central
Newfoundland approximately 30 km southeast of the past-producing,
high grade, Buchans base metal mine. The property covers 7,927
hectares of mineral lands on which geological resources of over
6,000,000 tonnes of Cu-Zn-Ag-Au mineralization in four
volcanogenic massive sulphide deposits have been outlined to date.
The current resources include the Main Duck Pond deposit,
containing 3,880,000 tonnes grading 3.8 percent Cu, 1.1 percent
Pb, 6.7 percent Zn, 71.0 g/t Ag and 1.1 g/t Au, the Lower Duck
deposit, containing 1,000,000 tonnes grading 2.8 percent Cu, 1.4
percent Pb, 5.0 percent Zn, 32.5 g/t Ag and 0.6 g/t Au, the
Sleeper deposit containing 676,000 tonnes grading 1.7 percent Cu,
1.2 percent Pb, 8.7 percent Zn, 62.5 g/t Ag and 0.5 g/t Au and the
Boundary deposit, containing 446,000 tonnes grading 3.5 percent
Cu, 0.5 percent Pb, 3.5 percent Zn and 22.8 g/t Ag.
The Letter Agreement grants Thunderwood the right to acquire a 100
percent interest in the Duck Pond property from Noranda by:
(i) incurring $1.4 million of expenditures on the property by
March 31, 2000;
(ii) making a production decision on any deposit outlined on the
property by March 31, 2003 and placing any such deposit into
commercial production by March 31, 2006; and
(iii) making a cash payment of $500,000 to Noranda on or before
the earlier of March 31, 2003 and the making of a production
decision,
whereupon Thunderwood will be vested with a 100 percent interest
in the property subject to making a one time $3,000,000 cash
payment to Noranda upon achieving full production and paying to
Noranda a 2 percent Net Smelter Return Royalty ("NSR") on any
production therefrom.
The Letter Agreement further provides that, should geological
resources containing not less than 2.0 million Metal Units be
discovered on the property (total Metal Units = tonnes Cu metal x
2 + tonnes Zn metal), then Noranda has the option to reacquire a
50 percent interest in those resources (the "Buyback Option") by
conducting and financing a production feasibility study, arranging
the financing of all the pre-production development costs,
developing the resources to production within three years of
making a production decision and, at Thunderwood's request,
purchasing 1,500,000 common shares of Thunderwood at the market
price of the shares at the time of the exercise of the Buyback
Option.
Thunderwood intends to carry out a $1.4 million exploration
program consisting of surface diamond drilling to update the
mineral reserve database on the Duck Pond and Boundary deposits,
relogging of previous drill holes and additional metallurgical
studies. The results of this program, which is to be completed on
or before March 31, 2000, will form the basis for a decision to
proceed with an underground exploration program that would be
required in order to undertake detailed definition drilling and
extract a bulk sample for metallurgical testing necessary to
conduct a production feasibility study. Thunderwood is of the
opinion that the geological resources currently outlined in the
Duck Pond area have the potential to support a viable mining
operation.
Thunderwood also announces that the shareholders meeting to
consider the proposed merger with Joutel Resources Limited as
previously announced on June 30, 1998 will be held on October 27,
1998. Thunderwood and Joutel have also agreed that, subject to
execution of the definitive agreement with Noranda for the Duck
Pond acquisition, Thunderwood shareholders will also receive one
share purchase warrant of the merged company in addition to one
share of the merged company for every six shares of Thunderwood
currently held. Joutel shareholders will continue to receive one
share of the merged company for each six shares of Joutel
currently held. The foregoing warrants will entitle the holder
thereof to purchase one common share of the merged company on or
before June 30, 2000 for the greater of $0.25 and 120 percent of
the weighted average price per share of the merged company's
shares on The Toronto Stock Exchange for the 20 trading days
immediately following the merger. |
