TORONTO -- MacDonald Mines Exploration Ltd. (TSX VENTURE:BMK) ("MacDonald" or the "Company") announces it has signed a Letter of Agreement to acquire a 75% interest in the Nielsen-Chisholm Property, a land package that bears strong similarity to the Company's land holdings in the James Bay Lowlands area of Ontario. The Property comes with the compelling added features of geological knowledge, proximal mines, mineral showings and a new helicopter borne VTEM survey. The Canadian corporation "210829 Ontario Limited" is the "Optionor".
The Property is proximal to a number of mineral occurrences with historical mineral resources which include, on trend, both magmatic nickel and VMS base metal deposits. MacDonald considered the merits of this joint-venture as it manages its exploration activities and expenditures in these very challenging economic times.
Geology/Potential of the Property
The Bob Lake area is surrounded by a number of important Ni-Cu deposits within the southern portion of the LaRonge Belt. Dr. Larry Hulbert, D.Sc., P. Geo., a consulting geologist who has extensive knowledge of the LaRonge district stated, "Compelling geophysical and geological attributes along with anomalous nickel and chrome lake sediment geochemistry suggest that the Bob Lake area is a highly prospective area for nickel-copper sulphide mineralization. This area is part of the much more extensive Proterozoic LaRonge - Lynn Lake Greenstone Belt. The Lynn Lake Greenstone Belt hosted the prolific Lynn Lake nickel-copper deposits which were mined continuously for 24 years by Sherritt Gordon Mines Ltd. The proximity of the Bob Lake area to the town of LaRonge, and the road and rail access to copper and nickel smelters at Flin Flon and Thompson make this a very attractive area to explore for nickel-copper sulphide deposits."
The Nielsen-Chisholm Property is located in the Bob Lake area in the LaRonge District of Saskatchewan, and covers an area of 201 km2. The Property is largely covered in outwash sand with somewhat limited outcrop exposure and this topography offered no previous prospecting opportunity. Apart from geological mapping carried out by the Saskatchewan Government there appears to be very little exploration work carried out in the past.
MacDonald's consultants Bill Nielsen, P. Geo. and Robin Chisholm, P. Geol. have conducted a preliminary review of available data and received an in-depth geophysical review and interpretation from Geotech's three key geophysicists in order to validate the property's exploration potential as reflected in the VTEM data.
Property is Surrounded by Other Deposits
Nickel-copper deposits like the Clam Lake, Gochager-MAL Lakes, and Nemeiben Lake deposits surround the Bob Lake area, and the prolific Lynn-Lake nickel-copper mining camp occurs in the northern portion of the belt. The Anglo Rouyn copper-gold mine is also situated in close proximity to the Property.
Nickel-copper deposits to the north (Gochager Lake, MAL Lake), and southwest (Clam Lake) of the Bob Lake area have massive sulphide drill hole intersections with nickel grades in the 2.6 to 3.4% range, and with unusually high nickel:copper ratios (6:1 to 8:1). The nickel:copper ratios of the sulphides are uncharacteristically high for the associated host rock and suggest the sulphides could be related to a more primitive coeval part of the magmatic system yet to be recognized. The Lynn Lake nickel-copper deposits were in continuous production for 24 years (1953-1976). Eleven discrete ore bodies were mined for a total mine grade and tonnage of 20,151,146 tonnes of 1.02% nickel, 0.53% copper.
The Anglo Rouyn
The Anglo Rouyn Mine is located approximately 10 km to the southeast of the Property and produced copper and gold from 1966 until 1972 (1.7Mt grading 1.7% copper, 1.2 g/t gold and 5.5 g/t silver). This deposit have affinities to a volcanogenic massive sulphide (VMS) deposit and it is believed that the Bob Lake area is underlain by similar geology to that which hosts the Anglo Rouyn deposit.
Geological mapping in the area covered by the recently completed airborne survey indicate that ultramafic rocks are also present. It appears that they have distinct geophysical signatures and consequently it is envisaged that favorable environments for nickel, copper and PGE deposits will be defined.
Kirk McKinnon, President and CEO of MacDonald Mines stated, "We decided to move forward because our collective group of exploration consultants strongly recommended this property. The added benefits of easy access from the town of LaRonge, which will provide major cost savings versus exploration in the James Bay area, also makes the project very attractive. We are now assessing all the available data and will move forward with a drill program in early March 2009 of approximately 2500 metres. We remain cognizant that we must continue to ensure the Company's ability to operate during these most difficult times, but we are also aware that there will be a turn in this economy and we need to position MacDonald with properties of qualified substance.
Terms of the Agreement
Subject to Exchange approval, the terms of the Agreement call for MacDonald to make aggregate cash payments to the Optionor of $50,000; $25,000 within 5 days of signing the Letter of Agreement (the Effective Date) and the remaining $25,000 on or before the second anniversary of the Effective Date. In addition, MacDonald will issue to the Optionor 750,000 common shares and 250,000 warrants; 500,000 common shares and 150,000 warrants within 30 days of the Effective Date and a further 250,000 shares and 100,000 warrants on or before the first anniversary of the Effective Date. The warrants are exercisable at $0.40 per share for a period of 24 months from date of issuance. In conjunction with this transaction, the Company has agreed to pay a finder's and consulting fee of 700,000 common shares in lieu of cash.
Exploration Update in James Bay Lowlands
The 2008 phase of MacDonald's James Bay exploration program concluded with the drilling on the Wellington Property. This property was drilled utilizing the First Nations Community of Summer Beaver as a base of operations. With the completion of drilling on Wellington, MacDonald has now concluded the 2008 drill program. It should be noted that the Company was successful in quantifying all target anomalies as outlined in the VTEM airborne survey.
<< Drill Results from 36 holes intersects non-economic Ni-Cu, PGM and VMS zones >>
Core samples from the summer and fall drill programs were sent to ALS Chemex's ISO 9001:2000 and ISO 17025:2005 accredited laboratory in Vancouver for analysis, and all the drill results have been received. The programs comprised a total of 5,637 metres in 36 diamond drill holes, and drilling encountered non-economic stringer and massive sulphides as well as several thick magnetite bodies. Lab analyses returned weakly anomalous values of Ni, Cu, Zn and PGMs from the drill-tested conductors. All drill holes successfully explained the nature of the anomalies being drill-tested.
MacDonald was able to conduct the exploration in a very efficient manner as drilling off the airborne on modeled targets gave clear interpretation of the drill targets. Many of the modeled targets possessed the same characteristics and features as the highly successful discoveries of Noront's Eagle One (Ni-Cu PGE) and Spider's McFaulds Lake (VMS) in 2007 and 2004 respectively. Randall Salo, P.Geo. is the Field Exploration Manager for MacDonald Mines and will be completing a thorough analysis of the exploration data.
Next Phase - James Bay Lowlands
While we are disappointed with the lack of overall drilling success, the Company has a healthy level of working capital and is well-positioned to continue exploration activities in James Bay in 2009. To date, exploration has been concentrated primarily in the area of the McNugget Property with operations being centred out of the Camp at Butler Lake. MacDonald has many more compelling target anomalies that will be modeled for the next drilling phase in 2009. The Company is currently conducting negotiations with the First Nation Communities in the selected exploration areas and needs to secure a memorandum of understanding, accommodation and agreement prior to beginning any exploration. We would expect to be ready to begin exploration in the late winter.
First Nations Community Relationships
MacDonald Mines is committed to conducting its exploration activities in an environmentally responsible and culturally sensitive manner. The Company's initial James Bay exploration was done working with the First Nations Community of Webequie, and MacDonald Mines is once again very pleased to announce that an accord was reached with the First Nations Community of Summer Beaver.
MacDonald's President Kirk McKinnon stated, "we are very pleased to have reached an agreement with the First Nations Community of the Summer Beaver. It is this early exploration that is very costly and is driven by managed risk-taking that is required for discovery success. While MacDonald's and the Community of Summer Beaver both benefit from on-going exploration, the real benefits can only be realized through the discovery of an economic deposit. We are thankful to Summer Beaver for welcoming us into the Community and we are pleased that we can utilize their facilities in order to realize cost-efficiencies, while concurrently investing into the Community's infrastructure and employing their members for various work efforts."
Randall Salo, P.Geo., Field Exploration Manager is the designated qualified person for the technical information contained in this press release.
WARNING: The statements made in this news release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from expectations and projections set out herein. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.
SOURCE: MacDonald Mines Exploration Ltd.
MacDonald Mines Exploration Ltd.: Email: firstname.lastname@example.org, Website: www.macdonaldmines.com, (800) 818-5442, (416) 364-4986, (416) 364-2753 (FAX), Brent Nykoliation, Vice President, Business Development; J. A. Kirk McKinnon, President & CEO; Richard Schler, Chief Operating Officer & CFO