CanAlaska Uranium is broadening its base metal assets by purchasing the past-producing Manibridge nickel mine in Manitoba, Canada.
Owned by Pure Nickel (TSXV:NIC,OTC Pink:PNCKF), the mine is situated in Manitoba’s Thompson Nickel Belt, which CanAlaska says is the fifth-largest and third-highest-grade sulfide nickel belt in the world.
The agreement will see CanAlaska issue 300,000 shares of the company to Pure Nickel and 100,000 two-year warrants exercisable at $0.28 per share. CanAlaska will also pay $25,000 to gain full ownership of the Manibridge claims, which span 270 hectares.
The claims come with a small catch, however, due to a purchase agreement from 2007 between Pure Nickel and Glencore Canada (LSE:GLEN,OTC Pink:GLCNF). The previous agreement gives Glencore access to a back-in right, allowing the company to buy back a 50-percent interest should the claims discover a mineral resource of 15 million tonnes or greater.
Additionally, Glencore retains a 2-percent net smelter royalty and offtake and marketing rights for all concentrate or product produced.
Despite the company’s name, CanAlaska Uranium also holds base metal, gold and diamond assets, with the Manibridge acquisition joining the company’s Thompson Nickel Belt properties. In the historically significant belt, the company also owns the Strong, Hunter and North Manibridge properties.
“This is a strong addition to our property holdings in this area. We are starting to notice the geometry of the targets and how they fit with the folded geology and their response to newer geophysical surveys,” CanAlaska President Peter Dasler said in a statement.
“The addition of the Manibridge mine property secures our position in this exciting new discovery area, and provides additional substance for potential partners to rapidly develop with us.”
Pure Nickel’s president and CEO, David Russell, also commented on the acquisition, highlighting the strength of the now-consolidated adjacent claims.
“We believe consolidating the Manibridge mine claims with CanAlaska’s adjacent claims creates an exploration property with great potential. We look forward to benefiting from the future strength of CanAlaska’s shares and warrants as they continue to develop their uranium assets and build upon recent high-grade intercepts on the Manibridge North claims.”
Originally discovered in 1963, the Manibridge nickel deposit saw a production decision made in 1969 on an initial resource of 1.4 million tonnes at an average grade of 2.25 percent nickel and 0.27 percent copper. The mine operated from 1971 to 1977 as concentrate was shipped to Thompson, Manitoba, and Sudbury, Ontario.
As of Monday (March 25), nickel was trading at US$12,760 per tonne on the London Metal Exchange.
CanAlaska’s share price remained unchanged on the TSXV at C$0.27 per share as of 3:26 p.m. EST.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.